[Title 18 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2012 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

          Title 18

Conservation of Power and Water Resources


________________________

Parts 1 to 399

                         Revised as of April 1, 2012

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2012
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

[[Page ii]]

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 18:
          Chapter I--Federal Energy Regulatory Commission, 
          Department of Energy                                       3
  Finding Aids:
      Table of CFR Titles and Chapters........................    1217
      Alphabetical List of Agencies Appearing in the CFR......    1237
      List of CFR Sections Affected...........................    1247

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                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 18 CFR 1.101 refers 
                       to title 18, part 1, 
                       section 101.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, April 1, 2012), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 2001, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, 1973-1985, or 1986-2000, published in eleven separate 
volumes. For the period beginning January 1, 2001, a ``List of CFR 
Sections Affected'' is published at the end of each CFR volume.

``[RESERVED]'' TERMINOLOGY

    The term ``[Reserved]'' is used as a place holder within the Code of 
Federal Regulations. An agency may add regulatory information at a 
``[Reserved]'' location at any time. Occasionally ``[Reserved]'' is used 
editorially to indicate that a portion of the CFR was left vacant and 
not accidentally dropped due to a printing or computer error.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed as 
an approved incorporation by reference, please contact the agency that 
issued the regulation containing that incorporation. If, after 
contacting the agency, you find the material is not available, please 
notify the Director of the Federal Register, National Archives and 
Records Administration, 8601 Adelphi Road, College Park, MD 20740-6001, 
or call 202-741-6010.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Authorities 
and Rules. A list of CFR titles, chapters, subchapters, and parts and an 
alphabetical list of agencies publishing in the CFR are also included in 
this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.

[[Page vii]]

    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-741-6000 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, 8601 Adelphi Road, College Park, MD 
20740-6001 or e-mail [email protected].

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ELECTRONIC SERVICES

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information. Connect to NARA's web site at www.archives.gov/federal-
register.

    Michael L. White,
    Acting Director,
    Office of the Federal Register.
    April 1, 2012.







[[Page ix]]



                               THIS TITLE

    Title 18--Conservation of Power and Water Resources is composed of 
two volumes. The first volume containing parts 1--399, includes all 
current regulations of the Federal Energy Regulatory Commission, 
Department of Energy. The second volume, containing part 400 to end, 
includes all current regulations issued by the Delaware River Basin 
Commission, the Water Resources Council, the Susquehanna River Basin 
Commission, and the Tennessee Valley Authority as of April 1, 2012.

    The OMB control numbers for the Federal Energy Regulatory 
Commission, Department of Energy, appear in Sec.  389.101 of chapter I.

    For this volume, Bonnie Fritts was Chief Editor. The Code of Federal 
Regulations publication program is under the direction of Michael L. 
White, assisted by Ann Worley.


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           TITLE 18--CONSERVATION OF POWER AND WATER RESOURCES




                   (This book contains parts 1 to 399)

  --------------------------------------------------------------------
                                                                    Part

chapter i--Federal Energy Regulatory Commission, Department 
  of Energy.................................................           1


Abbreviations Used in This Chapter:
    M.c.f. = Thousand cubic feet. B.t.u. = British thermal units. ICC = 
  Interstate Commerce Commission.

[[Page 3]]



  CHAPTER I--FEDERAL ENERGY REGULATORY COMMISSION, DEPARTMENT OF ENERGY




  --------------------------------------------------------------------

                       SUBCHAPTER A--GENERAL RULES
Part                                                                Page
1               Rules of general applicability..............           9
1b              Rules relating to investigations............           9
1c              Prohibition of energy market manipulation...          14
2               General policy and interpretations..........          15
3               [Reserved]

3a              National security information...............          43
3b              Collection, maintenance, use, and 
                    dissemination of records of identifiable 
                    personal information....................          56
3c              Standards of conduct........................          68
          SUBCHAPTER B--REGULATIONS UNDER THE FEDERAL POWER ACT
4               Licenses, permits, exemptions, and 
                    determination of project costs..........          69
5               Integrated license application process......         139
6               Surrender or termination of license.........         171
8               Recreational opportunities and development 
                    at licensed projects....................         172
9               Transfer of license or lease of project 
                    property................................         173
11              Annual charges under Part I of the Federal 
                    Power Act...............................         174
12              Safety of water power projects and project 
                    works...................................         188
16              Procedures relating to takeover and 
                    relicensing of licensed projects........         201
20              Authorization of the issuance of securities 
                    by licensees and companies subject to 
                    sections 19 and 20 of the Federal Power 
                    Act.....................................         222
24              Declaration of intention....................         223
25              Application for vacation of withdrawal and 
                    for determination permitting restoration 
                    to entry................................         224
32              Interconnection of facilities...............         226
33              Applications under Federal Power Act section 
                    203.....................................         226
34              Application for authorization of the 
                    issuance of securities or the assumption 
                    of liabilities..........................         240

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35              Filing of rate schedules and tariffs........         244
36              Rules concerning applications for 
                    transmission services under section 211 
                    of the Federal Power Act................         320
37              Open access same-time information systems...         321
38              Business practice standards and 
                    communication protocols for public 
                    utilities...............................         330
39              Rules concerning certification of the 
                    Electric Reliability Organization; and 
                    procedures for the establishment, 
                    approval, and enforcement of electric 
                    reliability standards...................         331
40              Mandatory reliability standards for the 
                    bulk-power system.......................         340
41              Accounts, records, memoranda and disposition 
                    of contested audit findings and proposed 
                    remedies................................         341
42              Long-term firm transmission rights in 
                    organized electricity markets...........         343
45              Application for authority to hold 
                    interlocking positions..................         345
46              Public utility filing requirements and 
                    filing requirements for persons holding 
                    interlocking positions..................         351
50              Applications for permits to site interstate 
                    electric transmission facilities........         354
                SUBCHAPTER C--ACCOUNTS, FEDERAL POWER ACT
101             Uniform system of accounts prescribed for 
                    public utilities and licensees subject 
                    to the provisions of the Federal Power 
                    Act.....................................         364
104             Note [Reserved]

125             Preservation of records of public utilities 
                    and licensees...........................         494
   SUBCHAPTER D--APPROVED FORMS, FEDERAL POWER ACT AND PUBLIC UTILITY 
                     REGULATORY POLICIES ACT OF 1978
131             Forms.......................................         502
141             Statements and reports (schedules)..........         509
142-149         [Reserved]

             SUBCHAPTER E--REGULATIONS UNDER NATURAL GAS ACT
152             Application for exemption from the 
                    provisions of the Natural Gas Act 
                    pursuant to section 1(c) thereof and 
                    issuance of blanket certificates 
                    authorizing certain sales for resale....         515
153             Applications for authorization to construct, 
                    operate, or modify facilities used for 
                    the export or import of natural gas.....         516

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154             Rate schedules and tariffs..................         522
156             Applications for orders under section 7(a) 
                    of the Natural Gas Act..................         552
157             Applications for certificates of public 
                    convenience and necessity and for orders 
                    permitting and approving abandonment 
                    under section 7 of the Natural Gas Act..         559
158             Accounts, records, memoranda and disposition 
                    of contested audit findings and proposed 
                    remedies................................         603
                 SUBCHAPTER F--ACCOUNTS, NATURAL GAS ACT
201             Uniform system of accounts prescribed for 
                    natural gas companies subject to the 
                    provisions of the Natural Gas Act.......         606
204             Note [Reserved]

225             Preservation of records of natural gas 
                    companies...............................         752
              SUBCHAPTER G--APPROVED FORMS, NATURAL GAS ACT
250             Forms.......................................         760
260             Statements and reports (schedules)..........         762
    SUBCHAPTER H--PROCEDURES GOVERNING DETERMINATIONS FOR TAX CREDIT 
                                PURPOSES
270             Determination procedures....................         769
SUBCHAPTER I--OTHER REGULATIONS UNDER THE NATURAL GAS POLICY ACT OF 1978 
                         AND RELATED AUTHORITIES
280             General provisions applicable to Subchapter 
                    I.......................................         781
281             Natural gas curtailment under the Natural 
                    Gas Policy Act of 1978..................         781
284             Certain sales and transportation of natural 
                    gas under the Natural Gas Policy Act of 
                    1978 and related authorities............         793
286             Accounts, records, memoranda and disposition 
                    of contested audit findings and proposed 
                    remedies................................         822
 SUBCHAPTER J--REGULATIONS UNDER THE POWERPLANT AND INDUSTRIAL FUEL USE 
                               ACT OF 1978
287             Rules generally applicable to powerplant and 
                    industrial fuel use.....................         826
 SUBCHAPTER K--REGULATIONS UNDER THE PUBLIC UTILITY REGULATORY POLICIES 
                               ACT OF 1978
290             Collection of cost of service information 
                    under section 133 of the Public Utility 
                    Regulatory Policies Act of 1978.........         827

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292             Regulations under sections 201 and 210 of 
                    the Public Utility Regulatory Policies 
                    Act of 1978 with regard to small power 
                    production and cogeneration.............         828
294             Procedures for shortages of electric energy 
                    and capacity under section 206 of the 
                    Public Utility Regulatory Policies Act 
                    of 1978.................................         849
  SUBCHAPTER L--REGULATIONS FOR FEDERAL POWER MARKETING ADMINISTRATIONS
300             Confirmation and approval of the rates of 
                    Federal power marketing administrations.         852
301             Average system cost methodology for sales 
                    from utilities to Bonneville Power 
                    Administration under Northwest Power Act         858
                       SUBCHAPTERS M-O [RESERVED]
       SUBCHAPTER P--REGULATIONS UNDER THE INTERSTATE COMMERCE ACT
340             Rate schedules and tariffs..................         900
341             Oil pipeline tariffs: Oil pipeline companies 
                    subject to section 6 of the Interstate 
                    Commerce Act............................         901
342             Oil pipeline rate methodologies and 
                    procedures..............................         909
343             Procedural rules applicable to oil pipeline 
                    proceedings.............................         911
344             Filing quotations for U.S. Government 
                    shipments at reduced rates..............         913
346             Oil pipeline cost-of-service filing 
                    requirements............................         913
347             Oil pipeline depreciation studies...........         915
348             Oil pipeline applications for market power 
                    determinations..........................         917
349             Disposition of contested audit findings and 
                    proposed remedies.......................         918
        SUBCHAPTER Q--ACCOUNTS UNDER THE INTERSTATE COMMERCE ACT
351             Financial statements released by carriers...         921
352             Uniform systems of accounts prescribed for 
                    oil pipeline companies subject to the 
                    provisions of the Interstate Commerce 
                    Act.....................................         921
          SUBCHAPTER R--APPROVED FORMS, INTERSTATE COMMERCE ACT
356             Preservation of records for oil pipeline 
                    companies...............................         962

[[Page 7]]

357             Annual special or periodic reports: Carriers 
                    subject to part I of the Interstate 
                    Commerce Act............................         966
      SUBCHAPTER S--STANDARDS OF CONDUCT FOR TRANSMISSION PROVIDERS
358             Standards of conduct........................         969
                         SUBCHAPTER T [RESERVED]
 SUBCHAPTER U--REGULATIONS UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT 
             OF 2005, FEDERAL POWER ACT AND NATURAL GAS ACT
366             Books and records...........................         974
367             Uniform system of accounts for centralized 
                    service companies subject to the 
                    provisions of the Public Utility Holding 
                    Company Act Of 2005, Federal Power Act 
                    and Natural Gas Act.....................         984
368             Preservation of records of holding companies 
                    and service companies...................        1047
369             Statements and reports (schedules)..........        1054
                   SUBCHAPTER W--REVISED GENERAL RULES
375             The Commission..............................        1055
376             Organization, mission, and functions; 
                    operations during emergency conditions..        1077
380             Regulations implementing the National 
                    Environmental Policy Act................        1082
381             Fees........................................        1114
382             Annual charges..............................        1119
                     SUBCHAPTER X--PROCEDURAL RULES
385             Rules of practice and procedure.............        1123
388             Information and requests....................        1198
389             OMB control numbers for Commission 
                    information collection requirements.....        1210
390             Electronic registration.....................        1212
391-399         [Reserved]

[[Page 9]]



                       SUBCHAPTER A_GENERAL RULES



PART 1_RULES OF GENERAL APPLICABILITY--Table of Contents



             Subpart A_Definitions and Rules of Construction

Sec.
1.101 Definitions.
1.102 Words denoting number, gender and so forth.

    Authority: Dept. of Energy Organization Act, 42 U.S.C. 7101-7352; 
E.O. 12009, 3 CFR 142 (1978); Administrative Procedure Act, 5 U.S.C. Ch. 
5.



             Subpart A_Definitions and Rules of Construction



Sec. 1.101  Definitions.

    The definitions set forth in this section apply for purposes of this 
chapter, except as otherwise provided in this chapter:
    (a) Commission means the Federal Energy Regulatory Commission.
    (b) Chairman means the Chairman of the Commission.
    (c) Commissioner and Member mean a member of the Commission.
    (d) Secretary means the Secretary of the Commission.
    (e) Executive Director means the Executive Director of the 
Commission.
    (f) General Counsel means the General Counsel of the Commission.
    (g) DOE Act means the Department of Energy Organization Act.
    (h) DOE means the Department of Energy.
    (i) Administrative law judge means an officer appointed under 
section 3105 of title 5 of the United States Code.
    (j) Attorney means an attorney admitted to practice before the 
Supreme Court of the United States or the highest court of any State, 
territory of the United States, or the District of Columbia, or any 
other person with the requisite qualifications to represent others, who 
acts in a representative capacity for any participant before the 
Commission.
    (k) State Commission means the regulatory body of any State or 
municipality having jurisdiction to regulate rates or charges for the 
sale of electric energy or natural gas to consumers or for the 
transportation of oil by pipeline within the State or municipality.
    (l) Oath includes affirmation and sworn includes affirmed.

[Order 225, 47 FR 19022, May 3, 1982; 48 FR 786, Jan. 7, 1983]



Sec. 1.102  Words denoting number, gender and so forth.

    In determining the meaning of any provision of this chapter, unless 
the context indicates otherwise:
    (a) The singular includes the plural;
    (b) The plural includes the singular;
    (c) The present tense includes the future tense; and
    (d) Words of one gender include the other gender.

[Order 225, 47 FR 19022, May 3, 1982]



PART 1b_RULES RELATING TO INVESTIGATIONS--Table of Contents



Sec.
1b.1 Definitions.
1b.2 Scope.
1b.3 Scope of investigations.
1b.4 Types of investigations.
1b.5 Formal investigations.
1b.6 Preliminary investigations.
1b.7 Procedure after investigation.
1b.8 Requests for Commission investigations.
1b.9 Confidentiality of investigations.
1b.10 By whom conducted.
1b.11 Limitation on participation.
1b.12 Transcripts.
1b.13 Powers of persons conducting formal investigations.
1b.14 Subpoenas.
1b.15 Non-compliance with compulsory processes.
1b.16 Rights of witnesses.
1b.17 Appearance and practice before the Commission.
1b.18 Right to submit statements.
1b.19 Submissions.
1b.20 Request for confidential treatment.
1b.21 Enforcement hotline.

    Authority: 15 U.S.C. 717-717z, 3301-3432; 16 U.S.C. 792-828c, 2601-
2645; 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C. 1-85 (1988); 
E.O. 12009, 3 CFR 1978 Comp., p. 142.

    Source: 43 FR 27174, June 23, 1978, unless otherwise noted.

[[Page 10]]



Sec. 1b.1  Definitions.

    For purposes of this part--
    (a) Formal investigation means an investigation instituted by a 
Commission Order of Investigation.
    (b) Preliminary Investigation means an inquiry conducted by the 
Commission or its staff, other than a formal investigation.
    (c) Investigating officer means the individual(s) designated by the 
Commission in an Order of Investigation as Officer(s) of the Commission.
    (d) Enforcement Hotline is a forum in which to address quickly and 
informally any matter within the Commission's jurisdiction concerning 
natural gas pipelines, oil pipelines, electric utilities and 
hydroelectric projects.

[43 FR 27174, June 23, 1978, as amended by Order 602, 64 FR 17097, Apr. 
8, 1999]



Sec. 1b.2  Scope.

    This part applies to investigations conducted by the Commission but 
does not apply to adjudicative proceedings.



Sec. 1b.3  Scope of investigations.

    The Commission may conduct investigations relating to any matter 
subject to its jurisdiction.



Sec. 1b.4  Types of investigations.

    Investigations may be formal or preliminary, and public or private.



Sec. 1b.5  Formal investigations.

    The Commission may, in its discretion, initiate a formal 
investigation by issuing an Order of Investigation. Orders of 
Investigation will outline the basis for the investigation, the matters 
to be investigated, the officer(s) designated to conduct the 
investigation and their authority. The director of the office 
responsible for the investigation may add or delete Investigating 
Officers in the Order of Investigation.



Sec. 1b.6  Preliminary investigations.

    The Commission or its staff may, in its discretion, initiate a 
preliminary investigation. In such investigations, no process is issued 
or testimony compelled. Where it appears from the preliminary 
investigation that a formal investigation is appropriate, the staff will 
so recommend to the Commission.



Sec. 1b.7  Procedure after investigation.

    Where it appears that there has been or may be a violation of any of 
the provisions of the acts administered by the Commission or the rules, 
opinions or orders thereunder, the Commission may institute 
administrative proceedings, initiate injunctive proceedings in the 
courts, refer matters, where appropriate, to the other governmental 
authorities, or take other appropriate action.



Sec. 1b.8  Requests for Commission investigations.

    (a) Any individual, partnership, corporation, association, 
organization, or other Federal or State governmental entity, may request 
the Commission to institute an investigation.
    (b) Requests for investigations should set forth the alleged 
violation of law with supporting documentation and information as 
completely as possible. No particular forms or formal procedures are 
requested.
    (c) It is the Commission's policy not to disclose the name of the 
person or entity requesting an investigation except as required by law, 
or where such disclosure will aid the investigation.



Sec. 1b.9  Confidentiality of investigations.

    All information and documents obtained during the course of an 
investigation, whether or not obtained pursuant to subpoena, and all 
investigative proceedings shall be treated as nonpublic by the 
Commission and its staff except to the extent that (a) the Commission 
directs or authorizes the public disclosure of the investigation; (b) 
the information or documents are made a matter of public record during 
the course of an adjudicatory proceeding; or (c) disclosure is required 
by the Freedom of Information Act, 5 U.S.C. 552. Procedures by which 
persons submitting information to the Commission during the course of an 
investigation may specifically seek confidential treatment of 
information for purposes of Freedom of Information Act disclosure are 
set forth in 18 CFR part 3b and Sec. 1b.20. A request for confidential 
treatment of information for purposes of Freedom of Information Act 
disclosure shall not, however, prevent disclosure for law enforcement

[[Page 11]]

purposes or when disclosure is otherwise found appropriate in the public 
interest and permitted by law.



Sec. 1b.10  By whom conducted.

    Formal Commission investigations are conducted by the Commission or 
by an individual(s) designated and authorized in the Order of 
Investigation. Investigating Officers are officers within the meaning of 
the statutes administered by the Commission and are authorized to 
perform the duties of their office in accordance with the laws of the 
United States and the regulations of the Commission. Investigating 
Officers shall have such duties as the Commission may specify in an 
Order of Investigation.



Sec. 1b.11  Limitation on participation.

    There are no parties, as that term is used in adjudicative 
proceedings, in an investigation under this part and no person may 
intervene or participate as a matter of right in any investigation under 
this part.

[43 FR 27174, June 23, 1978, as amended by Order 756, 77 FR 4893, Feb. 
1, 2012]



Sec. 1b.12  Transcripts.

    Transcripts, if any, of investigative testimony shall be recorded 
solely by the official reporter, or by any other person or means 
designated by the investigating officer. A witness who has given 
testimony in an investigation shall be entitled, upon written request, 
to procure a transcript of the witness' own testimony on payment of the 
appropriate fees, except that in a non-public formal investigation, the 
office responsible for the investigation may for good cause deny such 
request. In any event, any witness or his counsel, upon proper 
identification, shall have the right to inspect the official transcript 
of the witness' own testimony.

[43 FR 27174, June 23, 1978, as amended by Order 225, 47 FR 19054, May 
3, 1982; Order 756, 77 FR 4893, Feb. 1, 2012]



Sec. 1b.13  Powers of persons conducting formal investigations.

    Any member of the Commission or the Investigating Officer, in 
connection with any formal investigation ordered by the Commission, may 
administer oaths and affirmations, subpoena witnesses, compel their 
attendance, take evidence, and require the production of any books, 
papers, correspondence, memoranda, contracts, agreements or other 
records relevant or material to the investigation.



Sec. 1b.14  Subpoenas.

    (a) Service of a subpoena upon a person named therein shall be made 
by the investigating officer (1) by personal delivery, (2) by certified 
mail, (3) by leaving a copy thereof at the principle office or place of 
business of the person to be served, (4) or by delivery to any person 
designated as agent for service or the person's attorney.
    (b) At the time for producing documents subpoenaed in an 
investigation, the subpoenaed party shall submit a statement stating 
that, if true, such person has made a diligent search for the subpoenaed 
documents and is producing all the documents called for by the subpoena. 
If any subpoenaed document(s) are not produced for any reason, the 
subpoenaed party shall state the reason therefor.
    (c) If any subpoenaed documents in an investigation are withheld 
because of a claim of the attorney-client privilege, the subpoenaed 
party shall submit a list of such documents which shall, for each 
document, identify the attorney involved, the client involved, the date 
of the document, the person(s) shown on the document to have prepared 
and/or sent the document, and the person(s) shown on the document to 
have received copies of the document.

[43 FR 27174, June 23, 1978, as amended by Order 756, 77 FR 4893, Feb. 
1, 2012]



Sec. 1b.15  Non-compliance with compulsory processes.

    In cases of failure to comply with Commission compulsory processes, 
appropriate action may be initiated by the Commission or the Attorney 
General, including but not limited to actions for enforcement or the 
imposition of penalties.

[[Page 12]]



Sec. 1b.16  Rights of witnesses.

    (a) Any person who is compelled or requested to furnish documentary 
evidence or testimony in a formal investigation shall, upon request, be 
shown the Commission's Order of Investigation. Copies of Orders of 
Investigation shall not be furnished, for their retention, to such 
persons requesting the same except with the express approval of the 
director of the office responsible for the investigation. Such approval 
shall not be given unless the director of the office responsible for the 
investigation, in the director's discretion is satisfied that there 
exist reasons consistent with the protection of privacy of persons 
involved in the investigation and with the unimpeded conduct of the 
investigation.
    (b) Any person compelled to appear, or who appears in person at a 
formal investigation by request or permission of the Investigating 
Officer may be accompanied, represented and advised by counsel, as 
provided by Sec. 385.2101 of this chapter and these rules, except that 
all witnesses shall be sequestered and, unless permitted in the 
discretion of the Investigating Officer, no witness or the counsel 
accompanying any such witness shall be permitted to be present during 
the examination of any other witness called in such proceeding. When 
counsel does represent more than one person in an investigation, for 
example, where the counsel is counsel to the witness and his employer, 
said counsel shall inform the Investigating Officer and each client of 
said counsel's possible conflict of interest in representing that client 
and, if said counsel appears with a witness giving testimony on the 
record in an investigation, counsel shall state on the record all 
persons said counsel represents in the investigation.
    (c) Any witness may be accompanied, represented, and advised by 
counsel as follows:
    (1) Counsel for a witness may advise the witness, in confidence, 
upon his initiative or the witness' with respect to any question, and if 
the witness refuses to answer a question, then the witness or counsel 
may briefly state on the record the legal grounds for such refusal.
    (2) Where it is claimed that the witness has a privilege to refuse 
to answer a question on the grounds of self-incrimination, the witness 
must assert the privilege personally.
    (3) Following completion of the examination of a witness, such 
witness may make a statement on the record and his counsel may on the 
record question the witness to enable the witness to clarify any of the 
witness' answers or to offer other evidence.
    (4) The Investigating Officer shall take all necessary action to 
regulate the course of the proceeding to avoid delay and prevent or 
restrain obstructionist or contumacious conduct or contemptuous 
language. Such officer may report to the Commission any instances where 
an attorney or representative has refused to comply with his directions, 
or has engaged in obstructionist or contumacious conduct or has used 
contemptuous language in the course of the proceeding. The Commission 
may thereupon take such further action as the circumstances may warrant, 
including suspension or disbarment of counsel from further appearance or 
practice before it, in accordance with Sec. 385.2101 of this chapter, 
or exclusion from further participation in the particular investigation.
    (d) Unless otherwise ordered by the Commission, in any public formal 
investigation, if the record shall contain implications of wrongdoing by 
any person, such person shall have the right to appear on the record; 
and in addition to the rights afforded other witnesses hereby, he shall 
have a reasonable opportunity of cross-examination and production of 
rebuttal testimony or documentary evidence. Reasonable shall mean 
permitting persons as full an opportunity to assert their position as 
may be granted consistent with administrative efficiency and with 
avoidance of undue delay. The determinations of reasonableness in each 
instance shall be made in the discretion of the investigating officer.

[43 FR 27174, June 23, 1978, as amended by Order 225, 47 FR 19054, May 
3, 1982]

[[Page 13]]



Sec. 1b.17  Appearance and practice before the Commission.

    The provisions of subpart U of part 385 of this chapters are 
specifically applicable to all investigations.

[43 FR 27174, June 23, 1978, as amended by Order 225, 47 FR 19054, May 
3, 1982]



Sec. 1b.18  Right to submit statements.

    Any person may, at any time during the course of an investigation, 
submit documents, statements of facts or memoranda of law for the 
purpose of explaining said person's position or furnishing evidence 
which said person considers relevant regarding the matters under 
investigation.



Sec. 1b.19  Submissions.

    In the event the Investigating Officer determines to recommend to 
the Commission that an entity be made the subject of a proceeding 
governed by part 385 of this chapter, or that an entity be made a 
defendant in a civil action to be brought by the Commission, the 
Investigating Officer shall, unless extraordinary circumstances make 
prompt Commission review necessary in order to prevent detriment to the 
public interest or irreparable harm, notify the entity that the 
Investigating Officer intends to make such a recommendation. Such notice 
shall provide sufficient information and facts to enable the entity to 
provide a response. Within 30 days of such notice, the entity may submit 
to the Investigating Officer a non-public response, which may consist of 
a statement of fact, argument, and/or memorandum of law, with such 
supporting documentation as the entity chooses, showing why a proceeding 
governed by part 385 of this chapter should not be instituted against 
said entity, or why said entity should not be made a defendant in a 
civil action brought by the Commission. If the response is submitted by 
the due date, the Investigating Officer shall present it to the 
Commission together with the Investigating Officer's recommendation. The 
Commission will consider both the Investigating Officer's recommendation 
and the entity's timely response in deciding whether to take further 
action.

[Order 711, 73 FR 29433, May 21, 2008]



Sec. 1b.20  Request for confidential treatment.

    Any person compelled to produce documents in an investigation may 
claim that some or all of the information contained in a particular 
document(s) is exempt from the mandatory public disclosure requirements 
of the Freedom of Information Act (5 U.S.C. 552), is information 
referred to in 18 U.S.C. 1905, or is otherwise exempt by law from public 
disclosure. In such case, the person making such claim shall, at the 
time said person produces the document to the officer conducting the 
investigation shall also produce a second copy of the document from 
which has been deleted the information for which the person wishes to 
claim confidential treatment. The person shall indicate on the original 
document that a request for confidential treatment is being made for 
some or all of the information in the document and shall file a 
statement specifying the specific statutory justification for non-
disclosure of the information for which confidential treatment is 
claimed. General claims of confidentiality are not sufficient. 
Sufficient information must be furnished for the officer conducting the 
investigation, or other appropriate official, to make an informed 
decision on the request for confidential treatment. If the person states 
that the information comes within the exception in 5 U.S.C. 552(b)(4) 
for trade secrets and commercial or financial information, the person 
shall include a statement specifying why the information is privileged 
or confidential. If the person filing a document does not submit a 
second copy of the document with the confidential information deleted, 
the Officer conducting the investigation may assume that there is no 
objection to public disclosure of the document in its entirety. The 
Commission retains the right to make the determination with regard to 
any claim of confidentiality. Notice of the decision by the 
investigating Officer or other appropriate official to deny a claim, in 
whole or in part, and an opportunity to respond shall be given to a 
person claiming confidentiality no less than 5 days before its public 
disclosure.

[[Page 14]]



Sec. 1b.21  Enforcement hotline.

    (a) The Hotline Staff may provide information to the public and give 
informal staff opinions. The opinions given are not binding on the 
General Counsel or the Commission.
    (b) Except as provided for in paragraph (g) of this section, any 
person may seek information or the informal resolution of a dispute by 
calling or writing to the Hotline at the telephone number and address in 
paragraph (f) of this section. The Hotline Staff will informally seek 
information from the caller and any respondent, as appropriate. The 
Hotline Staff will attempt to resolve disputes without litigation or 
other formal proceedings. The Hotline Staff may not resolve matters that 
are before the Commission in docketed proceedings.
    (c) All information and documents obtained through the Hotline Staff 
shall be treated as non-public by the Commission and its staff, 
consistent with the provisions of section 1b.9 of this part.
    (d) Calls to the Hotline may be made anonymously.
    (e) Any person who contacts the Hotline is not precluded from filing 
a formal action with the Commission if discussions assisted by Hotline 
Staff are unsuccessful at resolving the matter. A caller may terminate 
use of the Hotline procedure at any time.
    (f) The Hotline may be reached by calling (202) 502-8390 or 1-888-
889-8030 (toll free), by e-mail at [email protected], or writing to: 
Enforcement Hotline, Federal Energy Regulatory Commission, 888 First 
Street, NE., Washington, DC 20426.
    (g) Any person affected by either the construction or operation of a 
certificated natural gas pipeline under the Natural Gas Act or by the 
construction or operation of a project under the Federal Power Act may 
seek the informal resolution of a dispute by calling or writing the 
Commission's Dispute Resolution Service. The Dispute Resolution Service 
may be reached by calling the DRS Helpline toll-free at 1-877-337-2237, 
or by e-mail at [email protected], or writing to: Dispute Resolution 
Service, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426.
    (h) Any person who contacts the Dispute Resolution Service Helpline 
is not precluded from filing a formal action with the Commission if 
discussions assisted by the Dispute Resolution Service staff are 
unsuccessful at resolving the matter. A caller may terminate the use of 
alternative dispute resolution procedures at any time.

[Order 602, 64 FR 17097, Apr. 8, 1999, as amended by Order 647, 69 FR 
32438, June 10, 2004; Order 734, 75 FR 21505, Apr. 26, 2010]



PART 1c_PROHIBITION OF ENERGY MARKET MANIPULATION--Table of Contents



Sec.
1c.1 Prohibition of natural gas market manipulation.
1c.2 Prohibition of electric energy market manipulation.

    Authority: 15 U.S.C. 717-717z; 16 U.S.C. 791-825r, 2601-2645; 42 
U.S.C. 7101-7352.

    Source: 71 FR 4258, Jan. 26, 2006, unless otherwise noted.



Sec. 1c.1  Prohibition of natural gas market manipulation.

    (a) It shall be unlawful for any entity, directly or indirectly, in 
connection with the purchase or sale of natural gas or the purchase or 
sale of transportation services subject to the jurisdiction of the 
Commission,
    (1) To use or employ any device, scheme, or artifice to defraud,
    (2) To make any untrue statement of a material fact or to omit to 
state a material fact necessary in order to make the statements made, in 
the light of the circumstances under which they were made, not 
misleading, or
    (3) To engage in any act, practice, or course of business that 
operates or would operate as a fraud or deceit upon any entity.
    (b) Nothing in this section shall be construed to create a private 
right of action.



Sec. 1c.2  Prohibition of electric energy market manipulation.

    (a) It shall be unlawful for any entity, directly or indirectly, in 
connection with the purchase or sale of electric energy or the purchase 
or sale of transmission services subject to the jurisdiction of the 
Commission,

[[Page 15]]

    (1) To use or employ any device, scheme, or artifice to defraud,
    (2) To make any untrue statement of a material fact or to omit to 
state a material fact necessary in order to make the statements made, in 
the light of the circumstances under which they were made, not 
misleading, or
    (3) To engage in any act, practice, or course of business that 
operates or would operate as a fraud or deceit upon any entity.
    (b) Nothing in this section shall be construed to create a private 
right of action.



PART 2_GENERAL POLICY AND INTERPRETATIONS--Table of Contents



   Statements of General Policy and Interpretations of the Commission

Sec.
2.1 Initial notice; service; and information copies of formal documents.
2.1a Public suggestions, comments, proposals on substantial prospective 
          regulatory issues and problems.
2.1b Availability in contested cases of information acquired by staff 
          investigation.
2.1c Policy statement on consultation with Indian tribes in Commission 
          proceedings.

Statements of General Policy and Interpretations Under the Federal Power 
                                   Act

2.2 Transmission lines.
2.4 Suspension of rate schedules.
2.7 Recreational development at licensed projects.
2.8 [Reserved]
2.9 Conditions in preliminary permits and licenses--list of and 
          citations to ``P--'' and ``L--'' forms.
2.12 Calculation of taxes for property of public utilities and licensees 
          constructed or acquired after January 1, 1970.
2.13 Design and construction.
2.15 Specified reasonable rate of return.
2.17 Price discrimination and anticompetitive effect (price squeeze 
          issue).
2.18 Phased electric rate increase filings.
2.19 State and Federal comprehensive plans.
2.20 Good faith requests for transmission services and good faith 
          responses by transmitting utilities.
2.21 Regional Transmission Groups.
2.22 Pricing policy for transmission services provided under the Federal 
          Power Act.
2.23 Use of reserved authority in hydropower licenses to ameliorate 
          cumulative impacts.
2.24 Project decommissioning at relicensing.
2.25 Ratemaking treatment of the cost of emissions allowances in 
          coordination transactions.
2.26 Policies concerning review of applications under section 203.

 Statements of General Policy and Interpretations Under the Natural Gas 
                                   Act

2.51 [Reserved]
2.52 Suspension of rate schedules.
2.55 Definition of terms used in section 7(c).
2.57 Temporary certificates--pipeline companies.
2.60 Facilities and activities during an emergency--accounting treatment 
          of defense-related expenditures.
2.67 Calculation of taxes for property of pipeline companies constructed 
          or acquired after January 1, 1970.
2.69 [Reserved]
2.76 Regulatory treatment of payments made in lieu of take-or-pay 
          obligations.
2.78 Utilization and conservation of natural resources--natural gas.

Statement of General Policy To Implement Procedures for Compliance With 
              the National Environmental Policy Act of 1969

2.80 Detailed environmental statement.

Statement of General Policy To Implement the Economic Stabilization Act 
        of 1970, as Amended, and Executive Orders 11615 and 11627

2.100-2.102 [Reserved]
2.103 Statement of policy respecting take or pay provisions in gas 
          purchase contracts.
2.104 Mechanisms for passthrough of pipeline take-or-pay buyout and 
          buydown costs.
2.105 Gas supply charges.

                     Rules of General Applicability

2.201 [Reserved]

 Statements of General Policy and Interpretations under the Natural Gas 
                           Policy Act of 1978

2.300 Statement of policy concerning allegations of fraud, abuse, or 
          similar grounds under section 601(c) of the NGPA.

Statement of Interpretation Under the Public Utility Regulatory Policies 
                               Act of 1978

2.400 Statement of interpretation of waste concerning natural gas as the 
          primary energy source for qualifying small power production 
          facilities.

[[Page 16]]

 Statement of Penalty Reduction/Waiver Policy To Comply With the Small 
          Business Regulatory Enforcement Fairness Act of 1996

2.500 Penalty reduction/waiver policy for small entities.

Appendix A to Part 2--Guidance for Determining the Acceptable 
          Construction Area for Replacements
Appendix B to Part 2 [Reserved]
Appendix C to Part 2--Nationwide Proceeding Computation of Federal 
          Income Tax Allowance Independent Producers, Pipeline 
          Affiliates and Pipeline Producers Continental U.S.

    Authority: 5 U.S.C. 601; 15 U.S.C. 717-717z, 3301-3432; 16 U.S.C. 
792-828c, 2601-2645; 42 U.S.C. 4321-4370h, 7101-7352.

   Statements of General Policy and Interpretations of the Commission



Sec. 2.1  Initial notice; service; and information copies of formal documents.

    (a) Whenever appropriate, publication of an initial notice or order 
in the Federal Register shall be the primary means of informing 
interested persons and the general public that the proceeding to which 
the notice or order relates has been instituted before the Commission. 
The mailing or e-mailing of individual copies shall be confined to that 
which is required by law, by the Commission's rules and regulations, or 
by other considerations deemed valid by the Secretary in specific 
instances.
    (1) It is the policy of the Commission to publish notice in the 
Federal Register upon the institution of the following proceedings 
before the Commission:
    (i) Natural gas pipeline companies and public utility rate schedules 
and tariffs. (A) Initial rate schedule filings and changes in rates 
schedules proposed by public utilities and changes in rate schedules or 
tariffs proposed by natural gas pipeline companies, including purchased 
gas adjustment clauses.
    (B) Changes in rates proposed by natural gas pipeline companies for 
field sales.
    (C)-(D) [Reserved]
    (E) Tracking rate schedule or tariff filings made pursuant to 
settlement agreements.
    (F) Rate schedule or tariff filings made by natural gas pipeline 
companies or public utilities in compliance with Commission orders.
    (G) Reports of refunds by natural gas pipeline companies and public 
utilities.
    (H) [Reserved]
    (I) Complaints against natural gas pipeline companies and public 
utilities, unless otherwise directed.
    (ii) Interconnections, service and exportation pursuant to the 
Federal Power Act. (A) Applications for interconnection and service 
under section 202(b).
    (B)-(C) [Reserved]
    (D) Applications pursuant to section 207.
    (E) [Reserved]
    (iii) Hydroelectric, Federal Power Act. (A) Applications for 
preliminary permits pursuant to section 4(f).
    (B) Applications for licenses for constructed or unconstructed 
projects, or notice of declaration of intention, sections 4(e), 
23(a)(b).
    (C) Applications for amendment of license, unless otherwise 
directed.
    (D) Application for relicenses or nonpower licenses, or a 
recommendation for takeover, sections 14 and 15.
    (E) Applications for transfer of license, section 8.
    (F) Applications for surrender of license, section 6.
    (G) Proceeding for revocation or termination of license, sections 6, 
13, 26.
    (H) Issuance of annual licenses, section 15.
    (I) Lands withdrawn pursuant to an application for preliminary 
permit or license, and the vacation of such land withdrawals, section 
24.
    (J) Complaints against licensees, unless otherwise directed.
    (iv) Corporate electric. (A) Applications pursuant to sections 203, 
204, of the Federal Power Act, and applications or complaints pursuant 
to section 305 of the Federal Power Act.
    (v) Accounting, gas and electric. (A) Applications pursuant to 
sections 4, 23, 301, and 302 of the Federal Power Act.
    (B) Applications pursuant to sections 8 and 9 of the Natural Gas 
Act.
    (vi) Federal rates. (A) Application for confirmation and approval of 
rate schedules for Federal hydroelectric projects.
    (vii) Natural gas pipeline certificates, exportations, and 
importations, Natural

[[Page 17]]

Gas Act. (A) Applications for exemption under section 1(c).
    (B) Applications for authorization to import and export gas under 
section 3.
    (C) Applications for orders directing physical connection of 
facilities and sale of natural gas under section 7(a).
    (D) Applications for permission and approval to abandon under 
section 7(b).
    (E) Applications for permanent certificates under section 7(c).
    (F) [Reserved]
    (G) Complaints against natural gas pipeline companies, filed by 
individuals and companies, unless otherwise directed.
    (viii)-(ix) [Reserved]
    (x) Environmental statements. (A) Notice to be published pursuant to 
Order series 415.
    (xi) Miscellaneous, gas and electric. (A) Order instituting an 
investigation in which hearings are fixed or in which an opportunity is 
given for filing comments or petitions to intervene.
    (B) Show cause order, in which hearings are fixed or in which an 
opportunity is given for filing comments or petitions to intervene.
    (C) Order or notice consolidating proceedings for hearing purposes 
or severing a proceeding formerly consolidated for hearing purposes.
    (D) Applications for declaratory order, disclaimers of jurisdiction, 
or waiver of Commission regulations, unless otherwise directed.
    (E) Requests for redesignation, unless otherwise directed.
    (F) Requests for extension of time pursuant to Sec. 385.2008 of 
this chapter, unless otherwise directed.
    (G) Consolidations and severance pursuant to Sec. 375.302(f) of 
this chapter, unless otherwise directed.
    (H) Notice of correction of a document in any of the above 
categories.
    (I) Notice of meetings of advisory committees established by the 
Commission.
    (J) Notices of conferences in docketed rulemaking proceedings.
    (K) Proposed penalties under section 31 of the Federal Power Act.
    (L) Such other notices or orders as may be submitted by the 
Secretary for publication.
    (2) Otherwise directed, as referred to above, shall be interpreted 
to mean notice given by the discretion of the Secretary.
    (b) After notice has been given, the service of formal documents 
issued in a proceeding shall be confined to the parties of record or 
their attorneys, and the mailing or e-mailing of information copies 
shall be confined to that which is required by the Commission's rules 
and regulations, by courtesy in response to written requests for copies, 
or by other considerations deemed valid by the Secretary in specific 
instances.

(Secs. 308, 309; 49 Stat. 858; 16 U.S.C. 825g, 825h; secs. 15, 16; 52 
Stat. 829, 830; 15 U.S.C. 717n, 717o)

[Order 211, 24 FR 1345, Feb. 21, 1959, as amended by Order 463, 37 FR 
28054, Dec. 20, 1972; 38 FR 3192, Feb. 2, 1973; 44 FR 34941, June 18, 
1979; 45 FR 21224, Apr. 1, 1980; Order 541, 57 FR 21733, May 22, 1992; 
Order 603, 64 FR 26603, May 14, 1999; Order 2002, 68 FR 51115, Aug. 25, 
2003; Order 737, 75 FR 43402, July 26, 2010; Order 756, 77 FR 4893, Feb. 
1, 2012]



Sec. 2.1a  Public suggestions, comments, proposals on substantial prospective 

regulatory issues and problems.

    (a) The Commission by this policy statement explicitly encourages 
the public, including those persons subject to regulation by the 
Commission, to submit suggestions, comments, or proposals concerning 
substantial prospective regulatory policy issues and problems, the 
resolution of which will have a substantial impact upon those regulated 
by the Commission or others affected by the Commission's activities. 
This policy is intended to serve as a means of advising the Commission 
on a timely basis of potential significant issues and problems which may 
come before it in the course of its activities and to permit the 
Commission an early opportunity to consider argument regarding policy 
questions and administrative reforms in a general context rather than in 
the course of individual proceedings.
    (b) Upon receipt of suggestions, comments, or proposals pursuant to 
paragraph (a) of this section, the Commission shall review the matters 
raised and take whatever action is deemed necessary with respect to the 
filing, including, but not limited to, requesting further information 
from the filing

[[Page 18]]

party, the public, or the staff, or prescribing an informal public 
conference for initial discussion and consultation with the Commission, 
a Commissioner, or the Staff, concerning the matter(s) raised. In the 
absence of a notice of proposed rulemaking, any conferences or 
procedures undertaken pursuant to this section shall not be deemed by 
the Commission as meeting the requirements of the Administrative 
Procedure Act with respect to notice of rulemakings, but are to be 
utilized by the Commission as initial discussions for advice as a means 
of determining the need for Commission action, investigation or study 
prior to the issuance of a notice of proposed rulemaking to the extent 
required by the Administrative Procedure Act, 5 U.S.C. 553.
    (c) [Reserved]
    (d) A person may not invoke this policy as a means of advocating ex 
parte before the Commission a position in a proceeding pending at the 
Commission and any such filing will be rejected. Comments must relate to 
general conditions in industry or the public or policies or practices of 
the Commission which may need reform, review, or initial consideration 
by the Commission.

[Order No. 547, 41 FR 15004, Apr. 9, 1976, as amended by Order 225, 47 
FR 19054, May 3, 1982]



Sec. 2.1b  Availability in contested cases of information acquired by staff 

investigation.

    Pursuant to the Commission's authority under the Natural Gas Act, 
particularly subsection (b) of section 8 thereof, and under the Federal 
Power Act, particularly subsection (b) of section 301 thereof, upon 
request by a party to the proceedings, or as required in conjunction 
with the presentation of a Commission staff case of staff's cross-
examination of any other presentation therein, all relevant information 
acquired by Commission staff, including workpapers pursuant to any staff 
investigation conducted under sections 8, 10, or 14 of the Natural Gas 
Act, and sections 301, 304 or 307 of the Federal Power Act, shall, 
without further order of the Commission, be free from the restraints of 
said subsection (b) of section 8 of the Natural Gas Act, and subsection 
(b) of section 301 of the Federal Power Act, regarding the divulgence of 
information, with respect to any matter hereafter set for formal 
hearing.

[58 FR 38292, July 16, 1993]



Sec. 2.1c  Policy statement on consultation with Indian tribes in Commission 

proceedings.

    (a) The Commission recognizes the unique relationship between the 
United States and Indian tribes as defined by treaties, statutes, and 
judicial decisions. Indian tribes have various sovereign authorities, 
including the power to make and enforce laws, administer justice, and 
manage and control their lands and resources. Through several Executive 
Orders and a Presidential Memorandum, departments and agencies of the 
Executive Branch have been urged to consult with federally-recognized 
Indian tribes in a manner that recognizes the government-to-government 
relationship between these agencies and tribes. In essence, this means 
that consultation should involve direct contact between agencies and 
tribes and should recognize the status of the tribes as governmental 
sovereigns.
    (b) The Commission acknowledges that, as an independent agency of 
the federal government, it has a trust responsibility to Indian tribes 
and this historic relationship requires it to adhere to certain 
fiduciary standards in its dealings with Indian tribes.
    (c) The Commission will endeavor to work with Indian tribes on a 
government-to-government basis, and will seek to address the effects of 
proposed projects on tribal rights and resources through consultation 
pursuant to the Commission's trust responsibility, the Federal Power 
Act, the Natural Gas Act, the Public Utility Regulatory Policies Act, 
section 32 of the Public Utility Holding Company Act, the Interstate 
Commerce Act, the Outer Continental Shelf Lands Act, section 106 of the 
National Historic Preservation Act, and in the Commission's 
environmental and decisional documents.
    (d) As an independent regulatory agency, the Commission functions as 
a neutral, quasi-judicial body, rendering decisions on applications 
filed with it, and resolving issues among parties appearing before it, 
including Indian tribes. Therefore, the provisions of the

[[Page 19]]

Administrative Procedure Act and the Commission's rules concerning off-
the-record communications, as well as the nature of the Commission's 
licensing and certificating processes and of the Commission's review of 
jurisdictional rates, terms and conditions, place some limitations on 
the nature and type of consultation that the Commission may engage in 
with any party in a contested case. Nevertheless, the Commission will 
endeavor, to the extent authorized by law, to reduce procedural 
impediments to working directly and effectively with tribal governments.
    (e) The Commission, in keeping with its trust responsibility, will 
assure that tribal concerns and interests are considered whenever the 
Commission's actions or decisions have the potential to adversely affect 
Indian tribes or Indian trust resources.
    (f) The Commission will seek to engage tribes in high-level meetings 
to discuss general matters of importance, such as those that uniquely 
affect the tribes. Where appropriate, these meetings may be arranged for 
particular tribes, by region, or in some proceedings involving 
hydroelectric projects, by river basins.
    (g) The Commission will strive to develop working relationships with 
tribes and will seek to establish procedures to educate Commission staff 
about tribal governments and cultures and to educate tribes about the 
Commission's various statutory functions and programs. To assist in this 
effort, the Commission is establishing the position of tribal liaison. 
The tribal liaison will provide a point of contact and a resource for 
tribes for any proceeding at the Commission.
    (h) Concurrently with this policy statement, the Commission is 
issuing certain new regulations regarding the licensing of hydroelectric 
projects. In this connection, the Commission sets forth the following 
additional policies for the hydroelectric licensing process.
    (i) The Commission believes that the hydroelectric licensing process 
will benefit by more direct and substantial consultation between the 
Commission staff and Indian tribes. Because of the unique status of 
Indian tribes in relation to the Federal government, the Commission will 
endeavor to increase direct communications with tribal representatives 
in appropriate circumstances, recognizing that different issues and 
stages of a proceeding may call for different approaches, and there are 
some limitations that must be observed.
    (j) The Commission will seek to notify potentially-affected tribes 
about upcoming hydroelectric licensing processes, to discuss the 
consultation process and the importance of tribal participation, to 
learn more about each tribe's culture, and to establish case-by-case 
consultation procedures consistent with our ex parte rules.
    (k) In evaluating a proposed hydroelectric project, the Commission 
will consider any comprehensive plans prepared by Indian tribes or 
inter-tribal organizations for improving, developing, or conserving a 
waterway or waterways affected by a proposed project. The Commission 
will treat as a comprehensive plan, a plan that:
    (1) Is a comprehensive study of one or more of the beneficial uses 
of a waterway or waterways;
    (2) Includes a description of the standards applied, the data relied 
upon, and the methodology used in preparing the plan; and
    (3) Is filed with the Secretary of the Commission. See generally 18 
CFR 2.19.

[Order 635, 68 FR 46455, Aug. 6, 2003]

Statements of General Policy and Interpretations Under the Federal Power 
                                   Act

    Authority: Sections 2.2 through 2.13, issued under sec. 309, 49 
Stat. 858; 16 U.S.C. 825h, unless otherwise noted.



Sec. 2.2  Transmission lines.

    In a public statement dated March 7, 1941, the Commission announced 
its determination that transmission lines which are not primary lines 
transmitting power from the power house or appurtenant works of a 
project to the point of junction with the distribution system or with 
the interconnected primary transmission system as set forth in section 
3(11) of the Act are not within the licensing authority of the 
Commission, and directed that future applications filed with it for such 
licenses be referred for appropriate action to

[[Page 20]]

the Federal department having supervision over the lands or waterways 
involved.

[Order 141, 12 FR 8471, Dec. 19, 1947. Redesignated by Order 147, 13 FR 
8259, Dec. 23, 1948]



Sec. 2.4  Suspension of rate schedules.

    The Commission approved and adopted on May 29, 1945, the following 
conclusions as to its powers of suspension of rate schedules under 
section 205 of the act:
    (a) The Commission cannot suspend a rate schedule after its 
effective date.
    (b) The Commission can suspend any new schedule making any change in 
an existing filed rate schedule, including any rate, charge, 
classification, or service, or in any rule, regulation, or contract 
relating thereto, contained in the filed schedule.
    (c) Included in such changes which may be suspended are:
    (1) Increases.
    (2) Reductions.
    (3) Discriminatory changes.
    (4) Cancellation or notice of termination.
    (5) Changes in classification, service, rule, regulation or 
contract.
    (d) Immaterial, unimportant or routine changes will not be 
suspended.
    (e) During suspension, the prior existing rate schedule continues in 
effect and should not be changed during suspension.
    (f) Changes under escalator clauses may be suspended as changes in 
existing filed schedules.
    (g) Suspension of a rate schedule, within the ambit of the 
Commission's statutory authority is a matter within the discretion of 
the Commission.

(Natural Gas Act, 15 U.S.C. 717-717w (1976 & Supp. IV 1980); Federal 
Power Act, 16 U.S.C. 791a-828c (1976 & Supp. IV 1980); Dept. of Energy 
Organization Act, 42 U.S.C. 7101-7352 (Supp. IV 1980); E.O. 12009, 3 CFR 
part 142 (1978); 5 U.S.C. 553 (1976))

[Order 141, 12 FR 8471, Dec. 19, 1947. Redesignated by Order 147, 13 FR 
8259, Dec. 23, 1948, and amended by Order 303, 48 FR 24361, June 1, 
1983; Order 575, 60 FR 4852, Jan. 25, 1995]



Sec. 2.7  Recreational development at licensed projects.

    The Commission will evaluate the recreational resources of all 
projects under Federal license or applications therefor and seek, within 
its authority, the ultimate development of these resources, consistent 
with the needs of the area to the extent that such development is not 
inconsistent with the primary purpose of the project. Reasonable 
expenditures by a licensee for public recreational development pursuant 
to an approved plan, including the purchase of land, will be included as 
part of the project cost. The Commission will not object to licensees 
and operators of recreational facilities within the boundaries of a 
project charging reasonable fees to users of such facilities in order to 
help defray the cost of constructing, operating, and maintaining such 
facilities. The Commission expects the licensee to assume the following 
responsibilities:
    (a) To acquire in fee and include within the project boundary enough 
land to assure optimum development of the recreational resources 
afforded by the project. To the extent consistent with the other 
objectives of the license, such lands to be acquired in fee for 
recreational purposes shall include the lands adjacent to the exterior 
margin of any project reservoir plus all other project lands specified 
in any approved recreational use plan for the project.
    (b) To develop suitable public recreational facilities upon project 
lands and waters and to make provisions for adequate public access to 
such project facilities and waters and to include therein consideration 
of the needs of persons with disabilities in the design and construction 
of such project facilities and access.
    (c) To encourage and cooperate with appropriate local, State, and 
Federal agencies and other interested entities in the determination of 
public recreation needs and to cooperate in the preparation of plans to 
meet these needs, including those for sport fishing and hunting.
    (d) To encourage governmental agencies and private interests, such 
as operators of user-fee facilities, to assist in carrying out plans for 
recreation, including operation and adequate maintenance of recreational 
areas and facilities.
    (e) To cooperate with local, State, and Federal Government agencies 
in planning, providing, operating, and

[[Page 21]]

maintaining facilities for recreational use of public lands administered 
by those agencies adjacent to the project area.
    (f)(1) To comply with Federal, State and local regulations for 
health, sanitation, and public safety, and to cooperate with law 
enforcement authorities in the development of additional necessary 
regulations for such purposes.
    (2) To provide either by itself or through arrangement with others 
for facilities to process adequately sewage, litter, and other wastes 
from recreation facilities including wastes from watercraft, at 
recreation facilities maintained and operated by the licensee or its 
concessionaires.
    (g) To ensure public access and recreational use of project lands 
and waters without regard to race, color, sex, religious creed or 
national origin.
    (h) To inform the public of the opportunities for recreation at 
licensed projects, as well as of rules governing the accessibility and 
use of recreational facilities.

[Order 313, 30 FR 16198, Dec. 29, 1965, as amended by Order 375-B, 35 FR 
6315, Apr. 18, 1970; Order 508, 39 FR 16338, May 8, 1974; Order 2002, 68 
FR 51115, Aug. 25, 2003]



Sec. 2.8  [Reserved]



Sec. 2.9  Conditions in preliminary permits and licenses--list of and 

citations to ``P--'' and ``L--'' forms.

    (a) The Commission has approved several sets of standard conditions 
for normal inclusion in preliminary permits or licenses for 
hydroelectric developments. In a special situation, of course, the 
Commission in issuing a permit or license for a project will modify or 
eliminate a particular article (condition). For reference purposes the 
sets of conditions are designated as ``Forms''--those for preliminary 
permits are published in Form P-1, and those for licenses are published 
in Form L's. There are different Form L's for different types of 
licenses, and the forms have been revised from time to time. Thus at any 
given time there will be several series of standard forms applicable to 
the various vintages of different types of licenses. The forms and their 
revisions are published on the Commission's Web site (www.ferc.gov/
industries/hydropower/gen-info/comp-admin/l-forms.asp).
    (b) Forms currently in use may be obtained on the Commission's Web 
site or from Federal Energy Regulatory Commission, Washington, DC 20426.

(Secs. 3, 4, 15, 16, 301, 304, 308, and 309 (41 Stat. 1063-1066, 1068, 
1072, 1075; 49 Stat. 838, 839, 840, 841, 854-856, 858-859; 82 Stat. 617; 
16 U.S.C. 796, 797, 803, 808, 809, 816, 825, 825b, 825c, 825g, 825h, 
826i), as amended, secs. 8, 10, and 16 (52 Stat. 825-826, 830; 15 U.S.C. 
717g, 717i, 717o))

[Order 348, 32 FR 8521, June 14, 1967, as amended by Order 540, 40 FR 
51998, Nov. 7, 1975; Order 567, 42 FR 30612, June 16, 1977; Order 699, 
72 FR 45323, Aug. 14, 2007; Order 737, 75 FR 43402, July 26, 2010; Order 
756, 77 FR 4893, Feb. 1, 2012]



Sec. 2.12  Calculation of taxes for property of public utilities and licensees 

constructed or acquired after January 1, 1970.

    Pursuant to the provisions of section 441(a)(4)(A) of the Tax Reform 
Act of 1969, 83 Stat. 487, 625, public utilities and licensees regulated 
by the Commission under the Federal Power Act which have exercised the 
option provided by that section to change from flow through accounting 
will be permitted by the Commission, with respect to liberalized 
depreciation, to employ a normalization method for computing federal 
income taxes in their accounts and annual reports with respect to 
property constructed or acquired after January 1, 1970, to the extent 
with which such property increases the productive or operational 
capacity of the utility and is not a replacement of existing capacity. 
Such normalization will also be permitted for ratemaking purposes to the 
extent such rates are subject to the Commission's ratemaking authority. 
As to balances in Account 282 of the Uniform System of Accounts, 
``Accumulated deferred income taxes--Other property,'' it will remain 
the Commission's policy

[[Page 22]]

to deduct such balances from rate base in rate proceedings.

(Secs. 3, 4, 15, 16, 301, 304, 308, and 309 (41 Stat. 1063-1066, 1068, 
1072, 1075; 49 Stat. 838, 839, 840, 841, 854-856, 858-859; 82 Stat. 617; 
16 U.S.C. 796, 797, 803, 808, 809, 816, 825, 825b, 825c, 825g, 825h, 
826i), as amended, Secs. 8, 10, and 16 (52 Stat. 825-826, 830; 15 U.S.C. 
717g, 717i, 717o))

[Order 404, 35 FR 7964, May 23, 1970, as amended by Order 567, 42 FR 
30612, June 16, 1977]



Sec. 2.13  Design and construction.

    (a) The Commission recognizes the importance of protecting and 
enhancing natural, historic, scenic, and recreational values at projects 
licensed or proposed to be licensed under the Federal Power Act.
    (b) In furtherance of these polices, the Commission will not (1) 
permit the amendment of any license for the purpose of construction of 
additional facilities or (2) authorize the disposition of any interest 
in project lands for construction of any type, unless a showing is made 
that the construction will be designed to avoid or minimize conflict 
with the natural, historic, and scenic values and resources of the 
project area.

(Secs. 3, 4, 15, 16, 301, 304, 308, and 309 (41 Stat. 1063-1066, 1068, 
1072, 1075; 49 Stat. 838, 839, 840, 841, 854-856, 858-859; 82 Stat. 617; 
16 U.S.C. 796, 797, 803, 808, 809, 816, 825, 825b, 825c, 825g, 825h, 
826i), as amended, Secs. 8, 10, and 16 (52 Stat. 825-826, 830; 15 U.S.C. 
717g, 717i, 717o))

[Order 414, 35 FR 18586, Dec. 8, 1970, as amended by Order 567, 42 FR 
30612, June 16, 1977; Order 737, 75 FR 43402, July 26, 2010; Order 756, 
77 FR 4893, Feb. 1, 2012; 77 FR 8095, Feb. 14, 2012]



Sec. 2.15  Specified reasonable rate of return.

    (a) Pursuant to section 10(d) of the Federal Power Act, the 
Commission has determined that the specified reasonable rate of return 
used in computing amortization reserves for hydroelectric project 
licenses shall be calculated annually based on current capital ratios 
developed from an average of 13 monthly balances of amounts properly 
includible in the licensee's long-term debt and proprietary capital 
accounts, as listed in the Commission's Uniform System of Accounts. The 
cost rate for such ratios shall be the weighted average cost of long-
term debt and preferred stock for the year, and the cost of common 
equity shall be the interest rate on 10-year government bonds (reported 
as the Treasury Department's 10-year constant maturity series) computed 
on the monthly average for the year in question, plus four percentage 
points (400 basis points).
    (b) The Statement of Policy adopted herein shall be effective upon 
issuance of this order.
    (c) The Secretary shall cause prompt publication of this order to be 
made in the Federal Register.
    (d) All requests and suggestions not specifically dealt with herein 
are hereby denied.
    (e) The Secretary is hereby authorized to change the appropriate 
license article upon application by the licensees to reflect the 
specified reasonable rate of return as adopted herein.

[Order 550, 41 FR 27032, July 1, 1976]



Sec. 2.17  Price discrimination and anticompetitive effect (price squeeze 

issue).

    To implement compliance with the Supreme Court decision in F.P.C. v. 
Con-Way Corp., 426 U.S. 271 (1976), aff'g 510 F. 2d 1264 (D.C. Cir. 
1975) and to expedite the consideration of price squeeze issues in 
wholesale electric rate proceedings, the Commission adopts the following 
procedures for raising price squeeze issues which are to be followed 
unless they are demonstrated in an individual case to be inadequate:
    (a) Any wholesale customer, state commission or other interested 
person may file petitions to intervene alleging price discrimination and 
anticompetitive effects of the wholesale rates. In order to have the 
issue of price discrimination considered in the rate proceeding, the 
intervening customer or other interested person must support its 
allegation by a prima facie case. The elements of the prima facie case 
shall include at a minimum:
    (1) Specification of the filing utility's retail rate schedules with 
which the intervening wholesale customer is unable to compete due to 
purchased power costs;

[[Page 23]]

    (2) A showing that a competitive situation exists in that the 
wholesale customer competes in the same market as the filing utility;
    (3) A showing that the retail rates are lower than the proposed 
wholesale rates for comparable service;
    (4) The wholesale customer's prospective rate for comparable retail 
service, i.e. the rate necessary to recover bulk power costs (at the 
proposed wholesale rate) and distribution costs;
    (5) An indication of the reduction in the wholesale rate necessary 
to eliminate the price squeeze alleged.
    (b) Where price squeeze is alleged, the Commission shall, in the 
order granting intervention, direct the Administrative Law Judge to 
convene a prehearing conference within 15 days from the date of the 
order for the purpose of hearing intervenors' request for data required 
to present their case, including prima facie showing, on price squeeze 
issues.
    (c) Within 30 days from the date of the conference the filing 
utility shall respond to the data requests authorized by the 
Administrative Law Judge.
    (d) Within 30 days from the filing utility's response, the 
intervenors shall file their case-in-chief on price squeeze issues, 
which shall include their prima facie case, unless filed previously.
    (e) The burden of proof (i.e. the risk of nonpersuasion) to rebut 
the allegations of price squeeze and to justify the proposed rates are 
on the utility proposing the rates under section 205(e) of the Federal 
Power Act.
    (f) In proceedings where price squeeze is an issue, the Secretary 
shall include the state commission, agency or body which is responsible 
for regulation of retail rates in the state affected in the service list 
maintained under Sec. 385.2010(c) of this chapter.

[Order 563, 42 FR 16132, Mar. 25, 1977, as amended by Order 225, 47 FR 
19054, May 3, 1982]



Sec. 2.18  Phased electric rate increase filings.

    (a) In general, when a public utility files a phased rate increase, 
the Commission will determine the appropriate suspension period based on 
the total increase requested in all phases. If a utility files a rate 
increase within sixty days after filing another rate increase, the 
Commission will consider the filings together to be a phased rate 
increase request.
    (b) This policy will not be applied if the increase is phased:
    (1) To coordinate with new facilities coming on line;
    (2) To implement a rate moderation plan;
    (3) To avoid price squeeze;
    (4) To comply with a settlement approved by the Commission; or
    (5) If the utility makes a convincing showing that application of 
the policy would be harsh and inequitable and that, therefore, good 
cause has been shown not to apply the policy in the case.

[52 FR 11, Jan. 11, 1987]



Sec. 2.19  State and Federal comprehensive plans.

    (a) In determining whether the proposed hydroelectric project is 
best adapted to a comprehensive plan under section (10)(a)(1) of the 
Federal Power Act for improving or developing a waterway, the Commission 
will consider the extent to which the project is consistent with a 
comprehensive plan (where one exists) for improving, developing, or 
conserving a waterway or waterways affected by the project that is 
prepared by:
    (1) An agency established pursuant to Federal law that has the 
authority to prepare such a plan, or
    (2) A state agency, of the state in which the facility is or will be 
located, authorized to conduct such planning pursuant to state law.
    (b) The Commission will treat as a state or Federal comprehensive 
plan a plan that:
    (1) Is a comprehensive study of one or more of the beneficial uses 
of a waterway or waterways;
    (2) Includes a description of the standards applied, the data relied 
upon, and the methodology used in preparing the plan; and
    (3) Is filed with the Secretary of the Commission.

[Order 481-A, 53 FR 15804, May 4, 1988]

[[Page 24]]



Sec. 2.20  Good faith requests for transmission services and good faith 

responses by transmitting utilities.

    (a) General Policy. (1) This Statement of Policy is adopted in 
furtherance of the goals of sections 211(a) and 213(a) of the Federal 
Power Act, as amended and added by the Energy Policy Act of 1992.
    (2) Under section 211(a), the Commission may issue an order 
requiring a transmitting utility to provide transmission services 
(including any enlargement of transmission capacity necessary to provide 
such services) only if an applicant has made a request for transmission 
services to the transmitting utility that would be the subject of such 
order at least 60 days prior to its filing of an application for such 
order. The requirement in section 211(a) that an applicant make such a 
request will be met if such an applicant has, pursuant to section 213(a) 
of the FPA, made a good faith request to a transmitting utility to 
provide wholesale transmission services and requests specific rates and 
charges, and other terms and conditions.
    (3) It is the Commission's intention to apply the standards of this 
Statement of Policy when determining whether and when a valid ``good 
faith'' request for service was made.
    (4) It is the Commission's intention to encourage an open exchange 
of information that exhibits a reasonable degree of specificity and 
completeness between the party requesting transmission services and the 
transmitting utility.
    (5) The Commission intends to apply this Statement of Policy so as 
to carry out Congress' objective that, subject to appropriate terms and 
conditions and just and reasonable rates, in conformance with section 
212 of the FPA, access to the electric transmission system for the 
purposes of wholesale transactions be more widely available.
    (b) The Components of a good faith request. The Commission generally 
considers the following to constitute the minimum components of a good 
faith request for transmission services:
    (1) The identity, address, telephone number, and facsimile number of 
the party requesting transmission services, and the same information, if 
different, for the party's contact person or persons.
    (2) A statement that the party requesting transmission services is, 
or will be upon commencement of service, an entity eligible to request 
transmission under sections 211(a) and 213(a) of the FPA.
    (3) A statement that the request for transmission services is 
intended to satisfy the ``request for transmission services'' 
requirement under sections 211(a) and 213(a) of the FPA, and that the 
request is not a request for mandatory retail wheeling prohibited under 
section 212(h) of the FPA.
    (4) The party requesting transmission services should specify the 
character and nature of the services requested. Some types of service 
may require more detailed information than others. Where point-to-point 
service is requested, the party requesting transmission services should 
specify the anticipated point(s) of receipt to the transmitting 
utility's grid and the anticipated point(s) of delivery from the 
transmitting utility's grid. Where a party requesting transmission 
services requests additional flexibility to schedule multiple resources 
to meet its needs (e.g., network service), the request for services 
should contain a description of the requested services in sufficient 
detail to permit the transmitting utility to model the additional 
services on its transmission system.
    (5) The names of any other parties likely to provide transmission 
service to deliver electric energy to, and receive electric energy from, 
the transmitting utility's grid in connection with the requested 
transmission services.
    (6) The proposed dates for initiating and terminating the requested 
transmission services.
    (7) The total amount of transmission capacity being requested.
    (8) To the extent it is known or can be estimated, a description of 
the ``expected transaction profile'' including load factor data 
describing the hourly quantities of power and energy the party 
requesting transmission services would expect to deliver to the 
transmitting utility's grid at relevant points of interconnection. In 
the event delivery is to multiple points within

[[Page 25]]

the transmitting utility's electric control area, the requestor should 
describe, to the extent it is known or can be estimated, the expected 
load (over a given duration of time) at each such delivery point.
    (9) Whether firm or non-firm service is being requested. Where a 
party requests non-firm service, it should specify the priority of 
service it is willing to accept, or the conditions under which it is 
willing to accept interruption or curtailment, if known.
    (10) A statement as to whether the request is being made in response 
to a solicitation and a copy of the solicitation if publicly available. 
This will help the transmitting utility determine whether requests for 
transmission service are duplicative or mutually exclusive of requests 
filed by other parties.
    (11) The proposed rates, terms and conditions for the requested 
transmission services as required by section 213(a). It is not necessary 
for the requestor to propose a specific numerical rate. Rather, a party 
requesting transmission services can fulfill the rates, terms and 
conditions requirement by specifying a rate methodology (e.g., embedded 
or incremental cost) or by referencing an existing formula rate, 
transmission tariff, or transmission contract. The validity of the good 
faith request will not depend on the rates proposed by the party 
requesting transmission services. This requirement is not intended to 
allow utilities to delay responses to requests for transmission 
services, or to deny requests for transmission services on the basis of 
an overly rigid or technical approach to the ``rates, terms and 
conditions'' element of the request.
    (12) Any other information to facilitate the expeditious processing 
of its request. Such information will improve the negotiation process, 
reduce costs, and will improve chances to arrange the requested 
transmission without resorting to section 211 application procedures 
before the Commission.
    (c) Components of a Reply to a Good Faith Request. The Commission 
generally considers the following to constitute the minimum components 
of a reply to a good faith request for transmission services under 
section 213(a):
    (1) Unless the parties agree to a different time frame, the 
transmitting utility must acknowledge the request within 10 days of 
receipt. The acknowledgement must include a date by which a response 
will be sent to the party requesting transmission services and a 
statement of any fees associated with responding to the request (e.g., 
initial studies).
    (2) The transmitting utility may ask the applicant to provide 
clarification of only the information needed to evaluate and process a 
``good faith'' request. If the person requesting transmission services 
believes the transmitting utility is attempting to frustrate the process 
by making excessive requests for clarification, it may raise this issue 
if, and when, it files a request for a section 211 order with the 
Commission.
    (3) The transmitting utility must respond to a request within 60 
days of receipt or some other mutually agreed upon response date. If 
both parties agree to an alternative schedule, the agreement must be in 
writing and signed by both parties.
    (4) If the transmitting utility determines that it can provide all 
the requested services from existing capacity, it should respond by 
offering the party requesting transmission services an executable 
service agreement that at a minimum contains the following information:
    (i) A description of the proposed transmission rate and any other 
costs. It is not necessary for the proposed service agreement to contain 
a fully developed cost-of-service. However, the agreement should explain 
the basis for the charges for each component of service, including the 
unbundled components of any transmission rate as well as any other 
charges.
    (ii) The proposed service agreement should explicitly describe all 
of the applicable terms and conditions of the transmission services 
provided under the agreement.
    (iii) The transmitting utility should accompany the proposed service 
agreement with a clear statement of the time during which the offer to 
provide the transmission services will remain open. An open agreement 
offer may obligate the seller while imposing no

[[Page 26]]

countervailing obligation on the purchaser, and an unexecuted contract 
potentially ties up transmission facilities, thus jeopardizing the 
availability and price for subsequent requests that would use the same 
facilities. However, at a minimum, a transmitting utility should permit 
the party requesting transmission services sufficient time to review 
service agreements and coordinate multiple stages of joint transactions.
    (5) If the transmitting utility determines that it must construct 
additional facilities or modify existing facilities to provide all or 
part of the requested services, it must:
    (i) Identify the specific constraints and their duration that 
prevent it from providing all the requested services and explain how 
these constraints prevent it from providing all the requested services 
or the desired level of firmness.
    (ii) Provide to the applicant all studies, computer input and output 
data, planning, operating and other documents, work papers, assumptions 
and any other material that forms the basis for determining the 
constraints.
    (iii) Offer to the applicant an executable agreement under which the 
applicant agrees to reimburse the transmitting utility for all costs of 
performing any studies necessary to determine what changes to the 
transmitting utility's grid are needed to overcome the constraint and 
provide the requested services, their cost, and the estimated time to 
complete them. At a minimum, the proposed agreement should contain the 
following:
    (A) An estimate of the cost of the study and the time required to 
complete it, and
    (B) A commitment to supply to the party requesting transmission 
services all computer input and output data, planning, operating and 
other documents, work papers, assumptions and any other material used to 
perform the study.
    (iv) If a transmitting utility determines that it can provide part 
but not all of the requested services without building new facilities, 
it should inform the applicant of any portion of the requested services 
that can be performed without constructing additional facilities or 
modifying existing facilities. In effect, the transmitting utility may 
be able to treat such a request as two separate transactions--one for 
service on existing facilities and the other as a request involving 
expansion decisions. Furthermore, where there are alternative, less 
expensive means of satisfying all or a portion of a transmission 
request, the Commission expects the transmitting utility to explore such 
alternatives (e.g., redispatching certain generating units to alleviate 
a constraint).

[58 FR 38969, July 21, 1993]



Sec. 2.21  Regional Transmission Groups.

    (a) General policy. The Commission encourages Regional Transmission 
Groups (RTGs) as a means of enabling the market for electric power to 
operate in a more competitive and efficient way. The Commission believes 
that RTGs can provide a means of coordinating regional planning of the 
transmission system and assuring that system capabilities are always 
adequate to meet system demands. RTG agreements that contain components 
that satisfy paragraphs (b) and (c) of this section generally will be 
considered to be just, reasonable, and not unduly discriminatory or 
preferential under the Federal Power Act (FPA). The Commission 
encourages RTG agreements that contain as much detail as possible in all 
of the components listed, particularly if the RTG participants will be 
seeking Commission deference to decisions reached under an RTG 
agreement.
    (b) Organizational components. (1) An RTG agreement should provide 
for broad membership and, at a minimum, allow any entity that is subject 
to, or eligible to apply for, an order under section 211 of the FPA to 
be a member. An RTG agreement should encompass an area of sufficient 
size and contiguity to enable members to provide transmission services 
in a reliable, efficient, and competitive manner.
    (2) An RTG agreement should provide a means of adequate consultation 
and coordination with relevant state regulatory, siting, and other 
authorities.
    (3) An RTG agreement should include fair and nondiscriminatory 
governance

[[Page 27]]

and decision making procedures, including voting procedures.
    (c) Other components. (1) An RTG agreement should impose on member 
transmitting utilities an obligation to provide transmission services 
for other members, including the obligation to enlarge facilities, on a 
basis that is consistent with sections 205, 206, 211, 212 and 213 of the 
FPA. To the extent practicable and known, the RTG agreement should 
specify the terms and conditions under which transmission services will 
be offered.
    (2) An RTG agreement should require, at a minimum, the development 
of a coordinated transmission plan on a regional basis and the sharing 
of transmission planning information, with the goal of efficient use, 
expansion, and coordination of the interconnected electric system on a 
grid-wide basis. An RTG agreement should provide mechanisms to 
incorporate the transmission needs of non-members into regional plans. 
An RTG agreement should include as much detail as possible with regard 
to operational and planning procedures.
    (3) An RTG agreement should include voluntary dispute resolution 
procedures that provide a fair alternative to resorting in the first 
instance to section 206 complaints or section 211 proceedings.
    (4) An RTG agreement should include an exit provision for RTG 
members that leave the RTG, specifying the obligations of a departing 
member.
    (d) Filing procedures. Any proposed RTG agreement that in any manner 
affects or relates to the transmission of electric energy in interstate 
commerce by a public utility, or rates or charges for such transmission, 
must be filed with the Commission. Any public utility member of a 
proposed RTG may file the RTG agreement with the Commission on behalf of 
the other public utility members under section 205 of the FPA.

[58 FR 41632, Aug. 5, 1993]



Sec. 2.22  Pricing policy for transmission services provided under the Federal 

Power Act.

    (a) The Commission has adopted a Policy Statement on its pricing 
policy for transmission services provided under the Federal Power Act. 
That Policy Statement can be found at 69 FERC 61,086. The Policy 
Statement constitutes a complete description of the Commission's 
guidelines for assessing the pricing proposals. Paragraph (b) of this 
section is only a brief summary of the Policy Statement.
    (b) The Commission endorses transmission pricing flexibility, 
consistent with the principles and procedures set forth in the Policy 
Statement. It will entertain transmission pricing proposals that do not 
conform to the traditional revenue requirement as well as proposals that 
conform to the traditional revenue requirement. The Commission will 
evaluate ``conforming'' transmission pricing proposals using the 
following five principles, described more fully in the Policy Statement.
    (1) Transmission pricing must meet the traditional revenue 
requirement.
    (2) Transmission pricing must reflect comparability.
    (3) Transmission pricing should promote economic efficiency.
    (4) Transmission pricing should promote fairness.
    (5) Transmission pricing should be practical.
    (c) Under these principles, the Commission will also evaluate ``non-
conforming'' proposals which do not meet the traditional revenue 
requirement, and will require such proposals to conform to the 
comparability principle. Non-conforming proposals must include an open 
access comparability tariff and will not be allowed to go into effect 
prior to review and approval by the Commission under procedures 
described in the Policy Statement.

[59 FR 55039, Nov. 3, 1994]



Sec. 2.23  Use of reserved authority in hydropower licenses to ameliorate 

cumulative impacts.

    The Commission will address and consider cumulative impact issues at 
original licensing and relicensing to the fullest extent possible 
consistent with the Commission's statutory responsibility to avoid undue 
delay in the relicensing process and to avoid undue delay in the 
amelioration of individual project impacts at relicensing.

[[Page 28]]

To the extent, if any, that it is not possible to explore and address 
all cumulative impacts at relicensing, the Commission will reserve 
authority to examine and address such impacts after the new license has 
been issued, but will define that reserved authority as narrowly and 
with as much specificity as possible, particularly with respect to the 
purpose of reserving that authority. The Commission intends that such 
articles will describe, to the maximum extent possible, reasonably 
foreseeable future resource concerns that may warrant modifications of 
the licensed project. Before taking any action pursuant to such reserved 
authority, the Commission will publish notice of its proposed action and 
will provide an opportunity for hearing by the licensee and all 
interested parties. Hydropower licenses also contain standard 
``reopener'' articles (see Sec. 2.9 of this part) which reserve 
authority to the Commission to require, among other things, licensees of 
projects located in the same river basin to mitigate the cumulative 
impacts of those projects on the river basin. In light of the policy 
described above, the Commission will use the standard ``reopener'' 
articles to explore and address cumulative impacts only (except in 
extraordinary circumstances) where such impacts were not known at the 
time of licensing or are the result of changed circumstances. The 
Commission has authority under the Federal Power Act to require 
licensees, during the term of the license, to develop and provide data 
to the Commission on the cumulative impacts of licensed projects located 
in the same river basin. In issuing both new and original licenses, the 
Commission will coordinate the expiration dates of the licenses to the 
maximum extent possible, to maximize future consideration of cumulative 
impacts at the same time in contemporaneous proceedings at relicensing. 
The Commission's intention is to consider to the extent practicable 
cumulative impacts at the time of licensing and relicensing, and to 
eliminate the need to resort to the use of reserved authority.

[59 FR 66718, Dec. 28, 1994]



Sec. 2.24  Project decommissioning at relicensing.

    The Commission issued a statement of policy on project 
decommissioning at relicensing in Docket No. RM93-23-000 on December 14, 
1994.

[60 FR 347, Jan. 4, 1995]



Sec. 2.25  Ratemaking treatment of the cost of emissions allowances in 

coordination transactions.

    (a) General Policy. This Statement of Policy is adopted in 
furtherance of the goals of Title IV of the Clean Air Act Amendments of 
1990, Pub. L. 101-549, Title IV, 104 Stat. 2399, 2584 (1990).
    (b) Costing Emissions Allowances in Coordination Sales. If a public 
utility's coordination rate on file with the Commission provides for 
recovery of variable costs on an incremental basis, the Commission will 
allow recovery of the incremental costs of emissions allowances 
associated with a coordination sale. If a coordination rate does not 
reflect incremental costs, the public utility should propose alternative 
allowance costing methods or demonstrate that the coordination rate does 
not produce unreasonable results. The Commission finds that the cost to 
replace an allowance is an appropriate basis to establish the 
incremental cost.
    (c) Use of Indices. The Commission will allow public utilities to 
determine emissions allowance costs on the basis of an index or 
combination of indices of the current price of emissions allowances, 
provided that the public utility affords purchasing utilities the option 
of providing emissions allowances. Public utilities should explain and 
justify any use of different incremental cost indices for pricing 
coordination sales and making dispatch decisions.
    (d) Calculation of Amount of Emissions Allowances Associated With 
Coordination Transactions. Public utilities should explain the methods 
used to compute the amount of emissions allowances included in 
coordination transactions.
    (e) Timing. (1) Public utilities should provide information to 
purchasing utilities regarding the timing of opportunities for 
purchasers to stipulate whether they will purchase or return emissions 
allowances. A public utility may require a purchasing utility to 
declare,

[[Page 29]]

no later than the beginning of the coordination transaction:
    (i) Whether it will purchase or return emissions allowances; and
    (ii) If it will return emissions allowances, the date on which those 
allowances will be returned.
    (2) Public utilities may include in agreements with purchasing 
utilities non-discriminatory provisions for indemnification if the 
purchasing utility fails to provide emissions allowances by the date on 
which it declares that the allowances will be returned.
    (f) Other Costing Methods Not Precluded. The ratemaking treatment of 
emissions allowance costs endorsed in this Policy Statement does not 
preclude other approaches proposed by individual utilities on a case-by-
case basis.

[59 FR 65938, Dec. 22, 1994, as amended by Order 579, 60 FR 22261, May 
5, 1995]



Sec. 2.26  Policies concerning review of applications under section 203.

    (a) The Commission has adopted a Policy Statement on its policies 
for reviewing transactions subject to section 203. That Policy Statement 
can be found at 77 FERC ] 61,263 (1996). The Policy Statement is a 
complete description of the relevant guidelines. Paragraphs (b)-(e) of 
this section are only a brief summary of the Policy Statement.
    (b) Factors Commission will generally consider. In determining 
whether a proposed transaction subject to section 203 is consistent with 
the public interest, the Commission will generally consider the 
following factors; it may also consider other factors:
    (1) The effect on competition;
    (2) The effect on rates; and
    (3) The effect on regulation.
    (c) Effect on competition. Applicants should provide data adequate 
to allow analysis under the Department of Justice/Federal Trade 
Commission Merger Guidelines, as described in the Policy Statement and 
Appendix A to the Policy Statement.
    (d) Effect on rates. Applicants should propose mechanisms to protect 
customers from costs due to the merger. If the proposal raises 
substantial issues of relevant fact, the Commission may set this issue 
for hearing.
    (e) Effect on regulation. (1) Where the affected state commissions 
have authority to act on the transaction, the Commission will not set 
for hearing whether the transaction would impair effective regulation by 
the state commissions. The application should state whether the state 
commissions have this authority.
    (2) Where the affected state commissions do not have authority to 
act on the transaction, the Commission may set for hearing the issue of 
whether the transaction would impair effective state regulation.
    (f) Under section 203(a)(4) of the Federal Power Act (16 U.S.C. 
824b), in reviewing a proposed transaction subject to section 203, the 
Commission will also consider whether the proposed transaction will 
result in cross-subsidization of a non-utility associate company or 
pledge or encumbrance of utility assets for the benefit of an associate 
company, unless that cross-subsidization, pledge, or encumbrance will be 
consistent with the public interest.

[Order 592, 61 FR 68606, Dec. 30, 1996, as amended by Order 669-A, 71 FR 
28443, May 16, 2006]

 Statements of General Policy and Interpretations Under the Natural Gas 
                                   Act



Sec. 2.51  [Reserved]



Sec. 2.52  Suspension of rate schedules.

    The interpretation stated in Sec. 2.4 applies as well to the 
suspension of rate schedules under section 4 of the Natural Gas Act.

(Natural Gas Act, 15 U.S.C. 717-717w (1976 & Supp. IV 1980); Federal 
Power Act, 16 U.S.C. 791a-828c (1976 & Supp. IV 1980); Dept. of Energy 
Organization Act, 42 U.S.C. 7101-7352 (Supp. IV 1980); E.O. 12009, 3 CFR 
part 142 (1978); 5 U.S.C. 553 (1976))

[Order 303, 48 FR 24361, June 1, 1983]



Sec. 2.55  Definition of terms used in section 7(c).

    For the purposes of section 7(c) of the Natural Gas Act, as amended, 
the word facilities as used therein shall be interpreted to exclude:
    (a) Auxiliary installations. (1) Installations (excluding gas 
compressors)

[[Page 30]]

which are merely auxiliary or appurtenant to an authorized or proposed 
transmission pipeline system and which are installations only for the 
purpose of obtaining more efficient or more economical operation of the 
authorized or proposed transmission facilities, such as: Valves; drips; 
pig launchers/receivers; yard and station piping; cathodic protection 
equipment; gas cleaning, cooling and dehydration equipment; residual 
refining equipment; water pumping, treatment and cooling equipment; 
electrical and communication equipment; and buildings.
    (2) Advance notification. One of the following requirements will 
apply to any specified auxiliary installation. If auxiliary facilities 
are to be installed:
    (i) On existing transmission facilities, then no notification is 
required;
    (ii) On, or at the same time as, certificated facilities which are 
not yet in service (except those authorized under the automatic 
procedures of part 157 of subpart F of this chapter), then a description 
of the auxiliary facilities and their locations must be provided to the 
Commission at least 30 days in advance of their installation; or
    (iii) On, or at the same time as facilities that are proposed, then 
the auxiliary facilities must be described in the environmental report 
specified in Sec. 380.12 or in a supplemental filing while the 
application is pending.
    (b) Replacement of facilities. (1) Facilities which constitute the 
replacement of existing facilities that have or will soon become 
physically deteriorated or obsolete, to the extent that replacement is 
deemed advisable, if:
    (i) The replacement will not result in a reduction or abandonment of 
service through the facilities;
    (ii) The replacement facilities will have a substantially equivalent 
designed delivery capacity, will be located in the same right-of-way or 
on the same site as the facilities being replaced, and will be 
constructed using the temporary work space used to construct the 
original facility (See appendix A to this part 2 for guidelines on what 
is considered to be the appropriate work area in this context);
    (iii) Except as described in paragraph (b)(2) of this section, the 
company files notification of such activity with the Commission at least 
30 days prior to commencing construction.
    (2) Advance notification not required. The advance notification 
described in paragraph (b)(1)(iii) of this section is not required if:
    (i) The cost of the replacement project does not exceed the cost 
limit specified in Column 1 of Table I of Sec. 157.208(d) of this 
chapter; or
    (ii) U.S. Department of Transportation safety regulations require 
that the replacement activity be performed immediately;
    (3) Contents of the advance notification. The advance notification 
described in paragraph (b)(1)(iii) of this section must include the 
following information:
    (i) A brief description of the facilities to be replaced (including 
pipeline size and length, compression horsepower, design capacity, and 
cost of construction);
    (ii) Current U.S. Geological Survey 7.5-minute series topographic 
maps showing the location of the facilities to be replaced; and
    (iii) A description of the procedures to be used for erosion 
control, revegetation and maintenance, and stream and wetland crossings.
    (4) Annual report. On or before May 1 of each year, a company must 
file (in accordance with filing procedures posted on the Commission's 
Web site at http://www.ferc.gov.) an annual report that lists for the 
previous calendar year each replacement project that was completed 
pursuant to paragraph (b)(1) of this section and that was exempt from 
the advance notification requirement pursuant to paragraph (b)(2) of 
this section. For each such replacement project, the company must 
include all of the information described in paragraph (b)(3) of this 
section. Exception. A company does not have to include in this annual 
report any above-ground replacement project that did not involve 
compression facilities or the use of earthmoving equipment.

[[Page 31]]

    (c)-(d) [Reserved]

(Sec. 7, 52 Stat. 824; 15 U.S.C. 717f)

[Order 148, 14 FR 681, Feb. 16, 1949, as amended by Order 220, 25 FR 
2363, Mar. 19, 1960; Order 241, 27 FR 510, Jan. 18, 1962; Order 148-A, 
38 FR 11450, May 8, 1973; 55 FR 33015, Aug. 13, 1990; Order 544, 57 FR 
46495, Oct. 9, 1992; Order 544-A, 58 FR 57735, Oct. 27, 1993; Order 603, 
64 FR 26603, May 14, 1999; Order 603-A, 64 FR 54535, Oct. 7, 1999; 65 FR 
18221, Apr. 7, 2000; Order 737, 75 FR 43402, July 26, 2010; 77 FR 8095, 
Feb. 14, 2012]



Sec. 2.57  Temporary certificates--pipeline companies.

    The Federal Energy Regulatory Commission will exercise the emergency 
powers set forth in the second proviso of section 7(c) of the Natural 
Gas Act to authorize in appropriate cases, by issuance of temporary 
certificates, comparatively minor enlargements or extensions of an 
existing pipeline system. It will not be the policy of the Commission, 
however, to proceed summarily, i.e., without notice or hearing, in cases 
where the proposed construction is of major proportions. Pipeline 
companies are accordingly urged to conduct their planning and to submit 
their applications for authority sufficiently early so that compliance 
with the requirements relating to issuance of permanent certificates of 
public convenience and necessity (when those requirements are deemed 
applicable by the Commission) will not cause undue delay in the 
commencement of necessary construction.

(52 Stat. 824; 56 Stat. 83; 15 U.S.C. 717f)

[Gen. Policy 62-1, 26 FR 10098, Oct. 27, 1961, as amended by Order 737, 
75 FR 43402, July 26, 2010]



Sec. 2.60  Facilities and activities during an emergency--accounting treatment 

of defense-related expenditures.

    The Commission, cognizant of the need of the natural gas industry 
for advice with respect to the applicability of the Natural Gas Act and 
the Commission's regulations thereunder regarding activities and 
operations of natural gas companies taking security measures in 
preparation for a possible national emergency, sets forth the following 
interpretation and statement of policy:
    (a) Facilities. The definition of auxiliary installations in Sec. 
2.55(a) for which no certificate authority is necessary includes such 
defense-related facilities as (1) fallout shelters at compressor 
stations and other operating and maintenance camps; (2) emergency 
company headquarters or other similar installations; and (3) emergency 
communication equipment.
    (b) The Commission will consider reasonable investment in defense-
related facilities, such as those described in paragraph (a) of this 
section, to be prudent investment for ratemaking purposes.
    (c) When a person, not otherwise subject to the jurisdiction of the 
Commission, files an application for a certificate of public convenience 
and necessity authorizing the construction of facilities to be used 
solely for operation in a national emergency for the delivery of gas to, 
or receipt of gas from, a person subject to the Commission's 
jurisdiction, the Commission will consider a request by such applicant 
for waiver of the requirement to keep and maintain its accounts in 
accordance with the Uniform System of Accounts for Natural Gas Companies 
(parts 201 and 204 of this chapter) or to file the annual reports to the 
Commission required by Sec. Sec. 260.1 and 260.2 of this chapter.

(Secs. 3, 4, 15, 16, 301, 304, 308, and 309 (41 Stat. 1063-1066, 1068, 
1072, 1075; 49 Stat. 838, 839, 840, 841, 854-856, 858-859; 82 Stat. 617; 
16 U.S.C. 796, 797, 803, 808, 809, 816, 825, 825b, 825c, 825g, 825h, 
826i), as amended, secs. 8, 10, and 16 (52 Stat. 825-826, 830; 15 U.S.C. 
717g, 717i, 717o))

[Order 274, 28 FR 12866, Dec. 4, 1963, as amended by Order 567, 42 FR 
30612, June 16, 1977]



Sec. 2.67  Calculation of taxes for property of pipeline companies constructed 

or acquired after January 1, 1970.

    Pursuant to the provisions of section 441(a)(4)(A) of the Tax Reform 
Act of 1969, 83 Stat. 487, 625, natural gas pipeline companies which 
have exercised the option provided by that section to change from flow 
through accounting will be permitted by the Commission, with respect to 
liberalized depreciation, to employ a normalization method for computing 
Federal income taxes in their accounts and annual reports

[[Page 32]]

with respect to property constructed or acquired after January 1, 1970, 
to the extent to which such property increases the productive or 
operational capacity of the utility and is not a replacement of existing 
capacity. Such normalization will also be permitted for ratemaking 
purposes. As to balances in Account No. 282 of the Uniform System of 
Accounts, ``Accumulated deferred income taxes--Other property,'' it will 
remain the Commission's policy to deduct such balances from the rate 
base of natural gas pipeline companies in rate proceedings.

(Secs. 3, 4, 5, 8, 9, 10, 15, 16, 301, 304, 308, and 309 (41 Stat. 1063-
1066, 1068, 1072, 1075; 49 Stat. 838, 839, 840, 841, 854-856, 858-859; 
52 Stat. 822, 823, 825, 826; 76 Stat. 72; 82 Stat. 617; 16 U.S.C. 796, 
797, 803, 808, 809, 816, 825, 825b, 825c, 825g, 825h, 826i); as amended, 
secs. 8, 10, and 16 (52 Stat. 825-826, 830; 15 U.S.C. 717c, 717d, 717g, 
717h, 717i, 717o))

[Order 404, 35 FR 7964, May 23, 1970, as amended by Order 567, 42 FR 
30612, June 16, 1977]



Sec. 2.69  [Reserved]



Sec. 2.76  Regulatory treatment of payments made in lieu of take-or-pay 

obligations.

    With respect to payments made to a first seller of natural gas as 
consideration for waiving or revising any agreement for the first sale 
of natural gas, as defined by section (2)(21) of the Natural Gas Policy 
Act (NGPA), the Commission sets forth the following statement of general 
policy and interpretation of law.
    (a) Payments in consideration. A first seller of natural gas that 
receives payments as consideration for amending or waiving the take-or-
pay or similar minimum payment provisions of a contract for the first 
sale of natural gas is not in violation of section 504(a) of the NGPA.
    (b) Recovery in rates. A pipeline that makes any payments referred 
to under paragraph (a) of this section, to first sellers may file to 
recover such costs in any section 4(e) rate filing other than a filing 
to recover purchased gas costs.
    (c) Case-specific review. A pipeline's method of recovering these 
costs and how it should apportion them among customers will be addressed 
on a case-by-case basis in the context of individual rate case filings.
    (d) Customers' rights. When a pipeline seeks to recover payments 
referred to under paragraph (a) of this section, its customers will have 
the full opportunity contemplated by section 4 of the Natural Gas Act to 
raise questions as to the prudence of such payments, the apportionment 
of costs among customers proposed by the filing pipeline, and any other 
reasonably related matters.
    (e) Certificate amendments and abandonment. With regard to natural 
gas the sale of which is subject to the Commission's jurisdiction under 
the Natural Gas Act, if any payments referred to under paragraph (a) of 
this section are accompanied by a change in or a termination of, the 
first seller's contractual obligation to provide natural gas service, 
the Commission will, as a general policy under sections 7(c) and 7(b) of 
the Natural Gas Act, expeditiously grant any certificate amendments or 
abandonment authorizations, required to effectuate such contractual or 
service modifications.
    In cases where a producer abandonment application is based on 
payments made pursuant to this policy statement, the interstate pipeline 
making the payments will be deemed to have waived any right to oppose 
the abandonment.

[50 FR 16080, Apr. 24, 1985, as amended by Order 436, 50 FR 42487, Oct. 
18, 1985]



Sec. 2.78  Utilization and conservation of natural resources--natural gas.

    (a)(1) The national interests in the development and utilization of 
natural gas resources throughout the United States will be served by 
recognition and implementation of the following priority-of-service 
categories for use during periods of curtailed deliveries by 
jurisdictional pipeline companies:
    (i) Residential, small commercial (less than 50 Mcf on a peak day).
    (ii) Large commercial requirements (50 Mcf or more on a peak day), 
firm industrial requirements for plant protection, feedstock and process 
needs, and pipeline customer storage injection requirements.
    (iii) All industrial requirements not specified in paragraph 
(a)(1)(ii), (iv),

[[Page 33]]

(v), (vi), (vii), (viii), or (ix) of this section.
    (iv) Firm industrial requirements for boiler fuel use at less than 
3,000 Mcf per day, but more than 1,500 Mcf per day, where alternate fuel 
capabilities can meet such requirements.
    (v) Firm industrial requirements for large volume (3,000 Mcf or more 
per day) boiler fuel use where alternate fuel capabilities can meet such 
requirements.
    (vi) Interruptible requirements of more than 300 Mcf per day, but 
less than 1,500 Mcf per day, where alternate fuel capabilities can meet 
such requirements.
    (vii) Interruptible requirements of intermediate volumes (from 1,500 
Mcf per day through 3,000 Mcf per day), where alternate fuel 
capabilities can meet such requirements.
    (viii) Interruptible requirements of more than 3,000 Mcf per day, 
but less than 10,000 Mcf per day, where alternate fuel capabilities can 
meet such requirements.
    (ix) Interruptible requirements of more than 10,000 Mcf per day, 
where alternate fuel capabilities can meet such requirements.
    (2) The priorities-of-deliveries set forth above will be applied to 
the deliveries of all jurisdictional pipeline companies during periods 
of curtailment on each company's system; except, however, that, upon a 
finding of extraordinary circumstances after hearing initiated by a 
petition filed under Sec. 385.207 of this chapter, exceptions to those 
priorities may be permitted.
    (3) The above list of priorities requires the full curtailment of 
the lower priority category volumes to be accomplished before 
curtailment of any higher priority volumes is commenced. Additionally, 
the above list requires both the direct and indirect customers of the 
pipeline that use gas for similar purposes to be placed in the same 
category of priority.
    (4) The tariffs filed with this Commission should contain provisions 
that will reflect sufficient flexibility to permit pipeline companies to 
respond to emergency situations (including environmental emergencies) 
during periods of curtailment where supplemental deliveries are required 
to forestall irreparable injury to life or property.
    (b) Request for relief from curtailment shall be filed under Sec. 
385.1501 of this chapter. Those petitions shall use the priorities set 
forth in (paragraph (a)(1) of this section) above, the definitions 
contained in paragraph (b)(3) of this section and shall contain the 
following minimal information:
    (1) The specific amount of natural gas deliveries requested on peak 
day and monthly basis, and the type of contract under which the 
deliveries would be made.
    (2) The estimated duration of the relief requested.
    (3) A breakdown of all natural gas requirements on peak day and 
monthly bases at the plant site by specific end-uses.
    (4) The specific end-uses to which the natural gas requested will be 
utilized and should also reflect the scheduling within each particular 
end-use with and without the relief requested.
    (5) The estimated peak day and monthly volumes of natural gas which 
would be available with and without the relief requested from all 
sources of supply for the period specified in the request.
    (6) A description of existing alternate fuel capabilities on peak 
day and monthly bases broken down by end-uses as shown in paragraph 
(b)(3) of this section.
    (7) For the alternate fuels shown in paragraph (b)(5) of this 
section, provide a description of the existing storage facilities and 
the amount of present fuel inventory, names and addresses of existing 
alternate fuel suppliers, and anticipated delivery schedules for the 
period for which relief is sought.
    (8) The current price per million Btu for natural gas supplies and 
alternate fuels supplies.
    (9) A description of efforts to secure natural gas and alternate 
fuels, including documentation of contacts with the Federal Energy 
Office and any state or local fuel allocation agencies or public utility 
commission.
    (10) A description of all fuel conservation activities undertaken in 
the facility for which relief is sought.
    (11) If petitioner is a local natural gas distributor, a description 
of the

[[Page 34]]

currently effective curtailment program and details regarding any 
flexibility which may be available by effectuating additional 
curtailment to its existing industrial customers. The distributor should 
also provide a breakdown of the estimated disposition of its natural gas 
estimated to be available by end-use priorities established in paragraph 
(a)(1) of this section for the period for which relief is sought.
    (c) When used in paragraphs (a) and (b) of this section, the 
following terms will be defined as follows:
    (1) Residential. Service to customers which consists of direct 
natural gas usage in a residential dwelling for space heating, air 
conditioning, cooking, water heating, and other residential uses.
    (2) Commercial. Service to customers engaged primarily in the sale 
of goods or services including institutions and local, state, and 
federal government agencies for uses other than those involving 
manufacturing or electric power generation.
    (3) Industrial. Service to customers engaged primarily in a process 
which creates or changes raw or unfinished materials into another form 
or product including the generation of electric power.
    (4) Firm service. Service from schedules or contracts under which 
seller is expressly obligated to deliver specific volumes within a given 
time period and which anticipates no interruptions, but which may permit 
unexpected interruption in case the supply to higher priority customers 
is threatened.
    (5) Interruptible service. Service from schedules or contracts under 
which seller is not expressly obligated to deliver specific volumes 
within a given time period, and which anticipates and permits 
interruption on short notice, or service under schedules or contracts 
which expressly or impliedly require installation of alternate fuel 
capability.
    (6) Plant protection gas. Is defined as minimum volumes required to 
prevent physical harm to the plant facilities or danger to plant 
personnel when such protection cannot be afforded through the use of an 
alternate fuel. This includes the protection of such material in process 
as would otherwise be destroyed, but shall not include deliveries 
required to maintain plant production. For the purposes of this 
definition propane and other gaseous fuels shall not be considered 
alternate fuels.
    (7) Feedstock gas. Is defined as natural gas used as raw material 
for its chemical properties in creating an end product.
    (8) Process gas. Is defined as gas use for which alternate fuels are 
not technically feasible such as in applications requiring precise 
temperature controls and precise flame characteristics. For the purposes 
of this definition propane and other gaseous fuels shall not be 
considered alternate fuels.
    (9) Boiler fuel. Is considered to be natural gas used as a fuel for 
the generation of steam or electricity, including the utilization of gas 
turbines for the generation of electricity.
    (10) Alternate fuel capabilities. Is defined as a situation where an 
alternate fuel could have been utilized whether or not the facilities 
for such use have actually been installed; Provided, however, Where the 
use of natural gas is for plant protection, feedstock, or process uses 
and the only alternate fuel is propane or other gaseous fuel then the 
consumer will be treated as if he had no alternate fuel capability.

(Sec. 4, 52 Stat. 822, 76 Stat. 72 (15 U.S.C. 717c); Sec. 5, 52 Stat. 
823 (15 U.S.C. 717d); Sec. 7, 52 Stat. 824, 825, 56 Stat. 83, 84, 61 
Stat. 459 (15 U.S.C. 717f); Sec. 10, 52 Stat. 826 (15 U.S.C. 717i); Sec. 
14, 52 Stat. 820 (15 U.S.C. 717m); Sec. 15, 52 Stat. 829 (15 U.S.C. 
717n); Sec. 16, 52 Stat. 930 (15 U.S.C. 717o); Pub. L. 96-511, 94 Stat. 
2812 (44 U.S.C. 3501 et seq.))

[Order 467A, 38 FR 2171, Jan. 22, 1973, as amended by Order 467B, 38 FR 
6386, Mar. 9, 1973; Order 493-A, 38 FR 30433, Nov. 5, 1973; Order 467-C, 
39 FR 12984, Apr. 10, 1974; Order 225, 47 FR 19055, May 3, 1982]

Statement of General Policy To Implement Procedures for Compliance With 
              the National Environmental Policy Act of 1969

    Authority: Sections 2.80-2.82 issued under secs. 4, 10, 15, 307, 
309, 311 and 312 (41 Stat. 1065, 1066, 1068, 1070; 46 Stat. 798, 49 
Stat. 839, 840, 841, 942, 843, 844, 856, 857, 858, 859, 860, Stat. 501, 
82 Stat. 617; 16 U.S.C. 797, 803, 808, 825f, 825h, 825j, 825k), and the 
Natural Gas Act, particularly secs. 7 and 16 (52 Stat. 824, 825, 830, 56 
Stat. 83, 84; 61 Stat. 459; 15 U.S.C. 717f, 717o), and the National 
Environmental

[[Page 35]]

Policy Act of 1969, Pub. L. 91-190, approved January 1, 1970, 
particularly secs. 102 and 103 (83 Stat. 853, 854), unless otherwise 
noted.



Sec. 2.80  Detailed environmental statement.

    (a) It will be the general policy of the Federal Energy Regulatory 
Commission to adopt and to adhere to the objectives and aims of the 
National Environmental Policy Act of 1969 (NEPA) in its regulations 
promulgated for statutes under the jurisdiction of the Commission, 
including the Federal Power Act, the Natural Gas Act and the Natural Gas 
Policy Act. The National Environmental Policy Act of 1969 requires, 
among other things, all Federal agencies to include a detailed 
environmental statement in every recommendation or report on proposals 
for legislation and other major Federal actions significantly affecting 
the quality of the human environment.
    (b) Therefore, in compliance with the National Environmental Policy 
Act of 1969, the Commission staff will make a detailed environmental 
statement when the regulatory action taken by the Commission under the 
statutes under the jurisdiction of the Commission will have a 
significant environmental impact. The specific regulations implementing 
NEPA are contained in part 380 of the Commission's regulations.

[Order 486, 52 FR 47910, Dec. 17, 1987]

Statement of General Policy To Implement the Economic Stabilization Act 
        of 1970, as Amended, and Executive Orders 11615 and 11627

    Authority: Sections 2.90 through 2.102 issued under 84 Stat. 799, as 
amended, 85 Stat. 38, unless otherwise noted.



Sec. Sec. 2.100-2.102  [Reserved]



Sec. 2.103  Statement of policy respecting take or pay provisions in gas 

purchase contracts.

    (a) Recognizing that take or pay contract obligations may be 
shielding the prices of deregulated and other higher cost gas from 
market constraints, the Commission sets forth its general policy 
regarding prepayments for natural gas pursuant to take or pay provisions 
in gas contracts and amendments thereto between producers and interstate 
pipelines which become effective December 23, 1982. The provisions of 
this policy statement do not establish a binding norm but instead 
provide general guidance. In particular cases, both the underlying 
validity of the policy and its application to particular facts may be 
challenged and are subject to further consideration.
    (b) With respect to gas purchase contracts entered into on or after 
December 23, 1982, the Commission intends to apply a rebuttable 
presumption in general rate cases that prepayments to producers will not 
be given rate base treatment if the prepayments are made pursuant to 
take or pay requirements in such gas purchase contracts or amendments 
which exceed 75 percent of annual deliverability.

(Natural Gas Act, 15 U.S.C. 717-717w; Natural Gas Policy Act of 1978, 
Pub. L. No. 95-621, 92 Stat. 3350, 15 U.S.C. 3301-3432)

[47 FR 57269, Dec. 23, 1982]



Sec. 2.104  Mechanisms for passthrough of pipeline take-or-pay buyout and 

buydown costs.

    (a) General Policy. The Commission as a matter of policy will 
provide two distinct mechanisms for passthrough of take-or-pay buyout 
and buydown costs of interstate natural gas pipelines. The first is 
pursuant to existing Commission policy and practice. Under this method, 
pipelines may pass through prudently incurred take-or-pay buyout and 
buydown costs in their sales commodity rates. The second method is 
available to pipelines which agree to an equitable sharing of take-or-
pay costs and which transport under part 284 of this chapter. Qualifying 
pipelines may utilize the alternative passthrough mechanisms described 
in this section. Where a pipeline agrees to absorb from 25 to 50 percent 
of take-or-pay buyout and buydown costs, the Commission will permit the 
pipeline to recover through a fixed charge an amount equal to (but not 
greater than) the amount absorbed. Any remaining costs up to 50 percent 
of total buyout and buydown costs may be recovered either through a 
commodity rate surcharge or a volumetric surcharge on total throughput.

[[Page 36]]

    (b) Cost allocation procedures. A pipeline's volume-based surcharges 
must be based on the volumes which underlie its most recent Commission-
approved rates. Fixed charges must be based on each customer's 
cumulative deficiency in purchases in recent years (during which the 
current take-or-pay liabilities of the pipelines were incurred) measured 
in relation to that customer's purchases during a representative period 
during which take-or-pay liabilities were not incurred. The allocation 
formula employed must incorporate the following guidelines:
    (1) A representative base period must be selected. The base period 
must reflect a representative level of purchases by the pipeline's firm 
customers during a period preceding the onset of changed conditions 
which resulted in reduced purchases and growth of the take-or-pay 
problem.
    (2) Firm purchases by each customer during the base year under firm 
rate schedules or contracts for firm service must be determined.
    (3) Firm sales purchase deficiency volumes for each subsequent year 
must be determined.
    (4) A fixed charge based on each customer's cumulative deficiencies 
as compared to total cumulative deficiencies must be derived. The filing 
pipeline will be free to select for rate calculation and filing purposes 
a reasonable amortization period for buyout and buydown costs being 
recovered through fixed charges or volumetric surcharges. The pipeline 
will be entitled to interest at the rate set forth in part 154 of this 
chapter on unamortized amounts.
    (c) Implementing procedures. (1) Pipelines acting pursuant to this 
section may submit on or before December 31, 1990, a non-PGA rate filing 
under section 4(e) of the Natural Gas Act. Pipelines may include in 
their filings a fixed charge and a volumetric surcharge to recover 
buyout and buydown costs actually paid as of the date of filing plus 
similar costs which are known and measurable within the following nine 
months. Detailed support for the amounts claimed and for the calculation 
of customer surcharges must be provided. In addition, the pipeline must 
disclose and describe all consideration, both cash and noncash, given to 
producers in exchange for take-or-pay relief.
    (2) In any filings made under this section, pipelines must include 
proposals for periodic (preferably annual) adjustments to customer 
surcharges, together with any necessary accounting procedures, designed 
to assure that revenues recovered by the pipeline remain in balance with 
buyout and buydown costs covered by the filing and actually incurred by 
the pipeline.
    (d) Prudence. (1) The Commission will examine the issue of prudence 
if it is raised by a party in an individual proceeding. If it is raised, 
the pipeline will be required to demonstrate the prudence of take-or-pay 
buyout and buydown costs which it seeks to recover from its customers 
through both fixed and volume-based charges.
    (2) The Commission intends to exercise its authority to the full 
extent permitted by the Natural Gas Act to approve take-or-pay 
settlements. The Commission intends to approve uncontested take-or-pay 
settlements which are consistent with this section and found to be in 
the public interest. The Commission will also, if it appears reasonable 
and permissible to do so, approve contested settlements as to all 
consenting parties and initiate separate hearings to establish the rates 
for opposing parties. Alternatively, the Commission will approve 
contested settlements on the merits if supported by substantial evidence 
in the record. In any case where hearings are held as to the prudence of 
take-or-pay buyout and buydown costs, the Commission will permit the 
pipeline the opportunity to recover all take-or-pay costs found to be 
prudent from the contesting parties on a proportional basis, even if the 
amount allowed is greater than the amounts initially sought to be 
recovered by the pipeline.
    (e) Flowthrough by downstream pipelines. Downstream pipelines must 
flow through approved take-or-pay fixed charges based on the cumulative 
purchase deficiencies of their customers. Volumetrically-based 
surcharges must be flowed through on a volumetric basis. Customers of 
downstream pipelines have the right in connection with either PGA or 
general rate filings to

[[Page 37]]

challenge the purchasing practices of such pipelines. Remedies for 
purchasing practices found by the Commission to be imprudent will be 
determined on a case-by-case basis.
    (f) Ongoing proceedings. Pipeline rate proceedings pending September 
15, 1987 may be utilized as a forum for implementing the approved cost 
recovery mechanisms set forth in this section. Permission will be 
granted in cases where implementation of this policy in pending 
proceedings appears feasible, will not result in inordinate delay, or 
can be expected to result in unnecessary or cumulative rate filings with 
the Commission. In the event permission is granted, the presiding 
judge(s) will allow pipelines to supplement their filings to the extent 
necessary to assure compliance with the filing and data requirements set 
forth herein. The presiding judges shall also establish any procedures 
necessary to protect the rights of all parties. Any rates established 
pursuant to this section will be permitted to become effective only 
prospectively upon Commission approval.
    (g) Scope. This section does not go beyond the Commission's 
determination in the April 10, 1985, policy statement (Docket No. PL85-
1-000) that take-or-pay buyout and buydown costs do not violate the 
pricing provision of the Natural Gas Policy Act of 1978 (NGPA). It is 
not intended to affect take-or-pay prepayments made by pipelines and 
included in account 165 and in their rate bases. Nor does it address the 
issue of whether take-or-pay prepayments to a producer for gas not taken 
and which cannot be made up violate the Title I pricing provisions of 
the NGPA. This policy statement applies only to buyout and buydown costs 
paid by pipelines that are transporting under part 284 of this chapter, 
under existing contracts, and is not intended to disturb in any way 
take-or-pay settlements previously entered into between pipelines and 
their producer suppliers.

[Order 500, 52 FR 30351, Aug. 14, 1987, as amended at 52 FR 35539, Sept. 
22, 1987; Order 500-F, 53 FR 50924, Dec. 19, 1988; 54 FR 52394, Dec. 21, 
1989; Order 581, 60 FR 53064, Oct. 11, 1995]



Sec. 2.105  Gas supply charges.

    An interstate natural gas pipeline that transports under part 284 of 
this chapter may include in its tariff a charge, not related to 
facilities, for standing ready to supply gas to sales customers in 
accordance with the following principles:
    (a) The pipeline may not recover take-or-pay or similar charges from 
suppliers by any other means.
    (b) The pipeline must allow its sales customers to nominate levels 
of service freely within their firm sales entitlements or otherwise 
employ a mechanism for the renegotiation of levels of service at regular 
intervals.
    (c) The pipeline must announce prior to nominations by the customers 
a firm price or pricing formula for the service, and hold that price or 
pricing formula firm during the interval arranged in paragraph (b) of 
this section.
    (d) By nominating a new level of service lower than its current 
level, a customer has consented to any abandonment sought by the 
pipeline commensurate with the difference between the current level of 
service and the nominated level.

[Order 500, 52 FR 30352, Aug. 14, 1987; 52 FR 35539, Sept. 22, 1987, and 
54 FR 52394, Dec. 21, 1989]

                     Rules of General Applicability



Sec. 2.201  [Reserved]

 Statement of General Policy and Interpretations Under the Natural Gas 
                           Policy Act of 1978



Sec. 2.300  Statement of policy concerning allegations of fraud, abuse, or 

similar grounds under section 601(c) of the NGPA.

    Recognizing the potential for an increasing number of intervenor 
complaints predicated on the fraud, abuse, or similar grounds exception 
to guaranteed passthrough, the Commission sets forth the elements of a 
cognizable claim under section 601(c)(2) which it expects to apply in 
cases in which fraud, abuse, or similar grounds is raised. The 
provisions of this policy statement do not establish a binding

[[Page 38]]

norm but instead provide general guidance. In particular cases, both the 
underlying validity of the policy and its application to particular 
facts may be challenged and are subject to further consideration. The 
procedure prescribed conforms with the NGPA's general guarantee of 
passthrough by placing the burden of pleading the elements and proving 
the elements of a case on intervenors who would allege fraud, abuse, or 
similar grounds as a basis for denying passthrough of gas prices 
incurred by an interstate pipeline.
    (a) In order for the issue of fraud, as that term is used in section 
601(c) of the NGPA, to be considered in a proceeding, an intervenor or 
intervenors must file a complaint alleging that:
    (1) The interstate pipeline, any first seller who sells natural gas 
to the interstate pipeline, or both acting together, have made a 
fraudulent misrepresentation or concealment; and
    (2) Because of that fraudulent misrepresentation or concealment, the 
amount paid by the interstate pipeline to any first seller of natural 
gas was higher than it would have been absent the fraudulent conduct.
    (b) In order for the issue of abuse, as that term is used in section 
601(c) of the NGPA, to be considered in a proceeding, an intervenor or 
intervenors must file a complaint alleging that:
    (1) The interstate pipeline, a first seller who sells to the 
interstate pipeline, or both acting together, have made a negligent 
misrepresentation or concealment, or other misrepresentation or 
concealment in disregard of a duty; and
    (2) Because of that negligent misrepresentation or concealment, or 
other misrepresentation or concealment in disregard of a duty, the 
amount paid by the interstate pipeline to any first seller of natural 
gas was higher than it would have been absent the negligent 
misrepresentation or concealment, or other misrepresentation or 
concealment made in disregard of a duty.
    (c) In order for the issue of similar grounds, as that term is used 
in section 601(c) of the NGPA, to be considered in a proceeding, an 
intervenor or intervenors must file a complaint alleging that:
    (1) The interstate pipeline, any first seller who sells natural gas 
to the interstate pipeline, or both acting together, have made an 
innocent misrepresentation of fact; and
    (2) Because of that innocent misrepresentation of facts, the amount 
paid by the interstate pipeline to any first seller of natural gas was 
higher than it would have been absent the innocent misrepresentation of 
fact.

(Natural Gas Policy Act of 1978, Pub. L. 95-621, 92 Stat. 3350, (15 
U.S.C. 3301-3432))

[47 FR 6262, Feb. 11, 1982]

Statement of Interpretation Under the Public Utility Regulatory Policies 
                               Act of 1978



Sec. 2.400  Statement of interpretation of waste concerning natural gas as the 

primary energy source for qualifying small power production facilities.

    For purposes of deciding whether natural gas may be considered as 
waste as the primary energy source pursuant to Sec. 292.204(b)(1)(i) of 
this chapter, the Commission will use the criteria described in 
paragraphs (a), (b) and (c) of this section.
    (a) Category 1. Except as provided in paragraph (b) of this section, 
natural gas with a heating value of 300 Btu per standard cubic foot 
(scf) or below will be considered unmarketable.
    (b) Category 2. In determining whether natural gas with a heating 
value above 300 Btu but not more than 800 Btu per scf and natural gas 
produced in the Moxa Arch area is unmarketable, the Commission will 
consider the following information:
    (1) The percentages of the chemical components of the gas, the 
wellhead pressure, and the flow rate;
    (2) Whether the applicant offered the gas to all potential buyers 
located within 20 miles of the wellhead under terms and conditions 
commensurate with those prevailing in the region and that such potential 
buyers refused to buy the gas; and
    (3) A study, which may be submitted by an applicant, that evaluates 
the economics of upgrading the gas for sale and transporting the gas to 
a pipeline. The study should include estimates of the revenues which 
could be derived

[[Page 39]]

from the sale of the gas and the fixed and variable costs of upgrading.
    (c) Category 3. In determining whether natural gas with a heating 
value above 800 Btu per scf is marketable, the Commission will consider 
the information included in paragraph (b) of this section and whether:
    (1) The gas has actually been flared, vented to the atmosphere, or 
continuously injected into a non-producing zone for a period of one 
year, pursuant to legal authority; or
    (2) The gas has been certified as waste, i.e., suitable for 
disposal, by an appropriate state authority.

[Order 471, 52 FR 19310, May 22, 1987]

 Statement of Penalty Reduction/Waiver Policy To Comply With the Small 
          Business Regulatory Enforcement Fairness Act of 1996



Sec. 2.500  Penalty reduction/waiver policy for small entities.

    (a) It is the policy of the Commission that any small entity is 
eligible to be considered for a reduction or waiver of a civil penalty 
if it has no history of previous violations, and the violations at issue 
are not the product of willful or criminal conduct, have not caused loss 
of life or injury to persons, damage to property or the environment or 
endangered persons, property or the environment. An eligible small 
entity will be granted a waiver if it can also demonstrate that it 
performed timely remedial efforts, made a good faith effort to comply 
with the law and did not obtain an economic benefit from the violations. 
An eligible small entity that cannot meet the criteria for waiver of a 
civil penalty may be eligible for consideration of a reduced penalty. 
Upon the request of a small entity, the Commission will consider the 
entity's ability to pay before assessing a civil penalty.
    (b) Notwithstanding paragraph (a) of this section, the Commission 
reserves the right to waive or reduce civil penalties in appropriate 
individual circumstances where it determines that a waiver or reduction 
is warranted by the public interest.

[Order 594, 62 FR 15830, Apr. 3, 1997]



   Sec. Appendix A to Part 2--Guidance for Determining the Acceptable 

                   Construction Area for Replacements

    These guidelines shall be followed to determine what area may be 
used to construct the replacement facility. Specifically, they address 
what areas, in addition to the permanent right-of-way, may be used.
    Pipeline replacement must be within the existing right-of-way as 
specified by Sec. 2.55(b)(1)(ii). Construction activities for the 
replacement can extend outside the current permanent right-of-way if 
they are within the temporary and permanent right-of-way and associated 
work spaces used in the original installation.
    If documentation is not available on the location and width of the 
temporary and permanent rights-of-way and associated work space that was 
used to construct the original facility, the company may use the 
following guidance in replacing its facility, provided the appropriate 
easements have been obtained:
    a. Construction should be limited to no more than a 75-foot-wide 
right-of-way including the existing permanent right-of-way for large 
diameter pipeline (pipe greater than 12 inches in diameter) to carry out 
routine construction. Pipeline 12 inches in diameter and smaller should 
use no more than a 50-foot-wide right-of-way.
    b. The temporary right-of-way (working side) should be on the same 
side that was used in constructing the original pipeline.
    c. A reasonable amount of additional temporary work space on both 
sides of roads and interstate highways, railroads, and significant 
stream crossings and in side-slope areas is allowed. The size should be 
dependent upon site-specific conditions. Typical work spaces are:

------------------------------------------------------------------------
                Item                   Typical extra area (width/length)
------------------------------------------------------------------------
Two lane road (bored)...............  25-50 by 100 feet.
Four lane road (bored)..............  50 by 100 feet.
Major river (wet cut)...............  100 by 200 feet.
Intermediate stream (wet cut).......  50 by 100 feet.
Single railroad track...............  25-50 by 100 feet.
------------------------------------------------------------------------

    d. The replacement facility must be located within the permanent 
right-of-way or, in the case of nonlinear facilities, the cleared 
building site. In the case of pipelines this is assumed to be 50-feet-
wide and centered over the pipeline unless otherwise legally specified.
    However, use of the above guidelines for work space size is 
constrained by the physical evidence in the area. Areas obviously not 
cleared during the original construction, as evidenced by stands of 
mature trees, structures, or other features that exceed the age of the 
facility being replaced, should not

[[Page 40]]

be used for construction of the replacement facility.
    If these guidelines cannot be met, the company should consult with 
the Commission's staff to determine if the exemption afforded by Sec. 
2.55 may be used. If the exemption may not be used, construction 
authorization must be obtained pursuant to another regulation under the 
Natural Gas Act.

[Order 603, 64 FR 26603, May 14, 1999]



                  Sec. Appendix B to Part 2 [Reserved]

[[Page 41]]

   Appendix C to Part 2--Nationwide Proceeding Computation of Federal 
  Income Tax Allowance Independent Producers, Pipeline Affiliates and 
    Pipeline Producers Continental U.S.--1972 Data (Docket No. R-478)

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            (2)--Total                                  (5)--No                  (7)--Percentage
                                                      Schedule   Line                        excluding       (3)--Gas    (4)--Lease      lease      (6)--Total        lease       (8)--Allocated
      Line No.                  Particulars              No.     No.    (1)--Total \1\   production taxes    only \3\    separation    separation       \4\       separation gas  amount gas \6\
                                                                                                \2\                          \3\          \3\                          \5\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     production, exploration and development costs
 
2                     Direct and indirect lease            1-A     01     1,694,893,558     1,694,893,558   57,287,938  $144,679,567  $19,763,791  $221,731,296         90.33        207,740,782
                       costs and expenses.
2                     Taxes (except income and             A-1     02       210,335,720       210,335,720   16,507,630    20,431,444    4,360,024    41,299,098          9.33         39,323,337
                       production).
4                     Production taxes..............       1-A     03       479,424,297  ................   27,124,210    96,699,673   10,005,599   133,829,482         90.33        124,478,624
5                     Other lease expenses..........       1-A     04        61,102,433        61,102,433   17,527,077    24,988,900      336,427    42,852,404         90.33         40,435,977
6                     Depletion, depreciation and          1-A     05     1,716,823,070     1,716,823,070  105,999,777   297,881,312   25,502,048   429,383,137         90.33        400,578,014
                       amortization.
7                     Corporate general expense.....       1-A     06       278,845,909       278,845,909   13,611,337    25,077,796    3,579,728    42,268,861         90.33         39,843,838
8                     Area, district, division and         1-A     07       261,718,417        26,178,417    7,207,320    21,758,604    2,778,944    31,744,868         90.33         29,640,811
                       field expense.
9                     Miscellaneous lease revenues..       1-A     09      (12,203,136)      (12,203,136)  (1,348,729)   (2,768,788)    (314,067)   (4,431,584)         90.33        (4,163,842)
10                    Return on production rate base       1-A     13     2,505,272,672     2,505,272,672  186,055,524   427,939,601   69,857,212   663,852,337         90.33        622,470,578
                       at 15 percent.
11                    Exploration and development          1-A     15     1,673,945,853     1,673,945,853  ...........  ............  ...........  ............  ...............     594,971,262
                       costs and expenses.
12                    Return on exploration rate           1-A     16       588,558,894       588,558,894  ...........  ............  ...........  ............  ...............     234,604,103
                       base at 15 percent.
13                    Regulatory commission expense        1-A     17         6,514,279         6,514,279  ...........  ............  ...........  ............  ...............       6,514,852
                       including return.
                                                                      ==========================================================================================================================
14
15                     Total computed revenue.......  ........  .....     9,465,231,966     8,985,807,669  ...........  ............  ...........  ............  ...............   2,336,439,376
16 (gross income)
                                                                      --------------------------------------------------------------------------------------------------------------------------
17
18 revenue deductions
 
19                    Direct and indirect lease            1-A     01     1,694,893,558     1,694,893,558  ...........  ............  ...........  ............  ...............     207,740,872
                       costs and expenses.
20                    Taxes (except income and             1-A     02       210,335,720       210,335,720  ...........  ............  ...........  ............  ...............      39,323,377
                       production).
21                    Production taxes..............       1-A     03       479,424,297  ................  ...........  ............  ...........  ............  ...............     124,478,624
22                    Other lease expenses..........       1-A     04        61,102,433        61,102,433  ...........  ............  ...........  ............  ...............      40,435,977
23                    Book depletion................  ........  .....               \7\       283,121,242   24,287,986    61,675,828    6,177,596    92,141,410         90.33         86,177,357
                                                                          (283,121,142)
24                    Depreciation expense..........       1-A     05               \7\       654,604,447   30,223,586    94,010,520    7,007,662   131,241,768         90.33        122,150,951
                                                                          (654,604,447)
25                    Amortization of capitalized     ........  .....               \7\       779,097,382   51,488,205   142,194,964   12,316,790   205,999,959         90.33        192,249,706
                       IDC.                                               (779,097,382)
26                    Corporate general expense.....       1-A     06       278,845,909       278,845,909  ...........  ............  ...........  ............  ...............      39,843,838

[[Page 42]]

 
27                    Area, district, division and         1-A     07       261,718,417       261,718,417  ...........  ............  ...........  ............  ...............      29,640,811
                       field expense.
28                    Miscellaneous lease revenues..       1-A     09      (12,203,136)      (12,203,136)  ...........  ............  ...........  ............  ...............     (4,163,842)
29                    Exploration and development     ........  .....     1,673,945,853     1,673,945,853  ...........  ............  ...........  ............  ...............     594,971,262
                       costs and expenses.
30                    Regulatory commission expense.       4-A     01         6,384,384         6,394,384  ...........  ............  ...........  ............  ...............       6,394,384
                                                               ---------------------------------------------------------------------------------------------------------------------------------
31
32                     Total book expenses..........  ........  .....     6,371,380,505     5,891,856,209  ...........  ............  ...........  ............  ...............   1,479,243,227
                                                               ---------------------------------------------------------------------------------------------------------------------------------
33
34                    Production net income (line 15  ........  .....     3,093,951,461     3,093,951,460  ...........  ............  ...........  ............  ...............     857,190,149
                       less line 32).
                                                               ---------------------------------------------------------------------------------------------------------------------------------
35
36 tax adjustment--add (deduct)
 
37                    Amortization of capitalized     ........  .....       779,097,282       779,097,382  ...........  ............  ...........  ............  ...............     192,249,706
                       IDC.
38                    Estimated IDC capitalized in    ........  .....               \8\   (1,470,935,857)  ...........  ............  ...........  ............  ...............   (362,967,445)
                       1972.                                            (1,470,935,857)
39                    Interest expense (calculated).  ........  .....               \9\     (243,846,540)  ...........  ............  ...........  ............  ...............    (60,587,136)
                                                                          (243,846,540)
                                                               ---------------------------------------------------------------------------------------------------------------------------------
40
41                     Taxable income...............  ........  .....     2,158,266,445     2,158,266,445  ...........  ............  ...........  ............  ...............     625,891,274
                                                               ---------------------------------------------------------------------------------------------------------------------------------
42
43                     Federal income tax at 48       ........  .....     1,992,245,949     1,992,245,949  ...........  ............  ...........  ............  ...............            \10\
                       percent.                                                                                                                                                      577,745,791
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Lines 1 thru 15, col. (1). From Notice issued Sept. 12, 1974, app. A, p. 12, col. (d).
\2\ Production taxes have been deleted from col. (1).
\3\ From notice issued Sept. 12, 1974, app. A, p. 12, cols. (g), (h), and (i).
\4\ Col. (3) plus col. (4) plus col. (5).
\5\ Calculated on a modified British thermal unit basis (1.5 to 1).
\6\ Col. (7) times col. (4), plus cols. (3) and (5).
\7\ See composites mailed to all parties on Feb. 13, 1974.
\8\ Calculated, 188.8 percent (A R64-1-2) times $779,097,382 equals $1,470,935,857.
\9\ Calculated 0.0146 (interest rate) times $16,701,817,818 (app. A, schedule 2-A, (d), line 11, p. 13) equals $243,846,540.
\10\ $577,745,791 divided by 9,508,369,001 equals 6.08 cents per thousand cubic feet.


[Opinion 749, 41 FR 3092, Jan. 21, 1976]

[[Page 43]]

                            PART 3 [RESERVED]



PART 3a_NATIONAL SECURITY INFORMATION--Table of Contents



                                 General

Sec.
3a.1 Purpose.
3a.2 Authority.

                             Classification

3a.11 Classification of official information.
3a.12 Authority to classify official information.
3a.13 Classification responsibility and procedure.

                    Declassification and Downgrading

3a.21 Authority to downgrade and declassify.
3a.22 Declassification and downgrading.
3a.23 Review of classified material for declassification purposes.

              Classification Markings and Special Notations

3a.31 Classification markings and special notations.

                     Access to Classified Materials

3a.41 Access requirements.

                            Security Officers

3a.51 Designation of security officers.

              Storage and Custody of Classified Information

3a.61 Storage and custody of classified information.

                 Accountability for Classified Material

3a.71 Accountability for classified material.

                   Transmittal of Classified Material

3a.81 Transmittal of classified material.

                            Data Index System

3a.91 Data index system.

    Authority: 15 U.S.C. 717o; 16 U.S.C. 825h.

    Source: Order 470, 38 FR 5161, Feb. 26, 1973, unless otherwise 
noted.

                                 General



Sec. 3a.1  Purpose.

    This part 3a describes the Federal Energy Regulatory Commission 
program to govern the classification, downgrading, declassification, and 
safeguarding of national security information. The provisions and 
requirements cited herein are applicable to the entire agency except 
that material pertaining to personnel security shall be safeguarded by 
the Personnel Security Officer and shall not be considered classified 
material for the purpose of this part.

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 756, 77 FR 
4893, Feb. 1, 2012]



Sec. 3a.2  Authority.

    Official information or material referred to as classified in this 
part is expressly exempted from public disclosure by 5 U.S.C. 552(b)(1). 
Wrongful disclosure thereof is recognized in the Federal Criminal Code 
as providing a basis for prosecution. E.O. 11652, March 8, 1972 (37 FR 
5209, March 10, 1972), identifies the information to be protected, 
prescribes classification, downgrading, declassification, and 
safeguarding procedures to be followed and establishes a monitoring 
system to insure its effectiveness. National Security Council Directive 
Governing the Classification, Downgrading, Declassification and 
Safeguarding of National Security Information, May 17, 1972 (37 FR 
10053, May 19, 1972), implements E.O. 11652.

                             Classification



Sec. 3a.11  Classification of official information.

    (a) Security Classification Categories. Information or material 
which requires protection against unauthorized disclosure in the 
interest of the national defense or foreign relations of the United 
States (hereinafter collectively termed national security) is classified 
Top Secret, Secret or Confidential, depending upon the degree of its 
significance to national security. No other categories are to be used to 
identify official information or material requiring protection in the 
interest of national security, except as otherwise expressly provided by 
statute. These classification categories are defined as follows:
    (1) Top Secret. Top Secret refers to national security information 
or material which requires the highest degree of protection. The test 
for assigning Top Secret classification is whether its unauthorized 
disclosure could reasonably be expected to cause exceptionally

[[Page 44]]

grave damage to the national security. Examples of exceptionally grave 
damage include armed hostilities against the United States or its 
allies; disruption of foreign relations vitally affecting the national 
security; the compromise of vital national defense plans or complex 
cryptologic and communications intelligence systems; the revelation of 
sensitive intelligence operations; and the disclosure of scientific or 
technological developments vital to national security. This 
classification is to be used with the utmost restraint.
    (2) Secret. Secret refers to national security information or 
material which requires a substantial degree of protection. The test for 
assigning Secret classification shall be whether its unauthorized 
disclosure could reasonably be expected to cause serious damage to the 
national security. Examples of serious damage include disruption of 
foreign relations significantly affecting the national security; 
significant impairment of a program or policy directly related to the 
national security; revelation of significant military plans or 
intelligence operations; and compromise of significant scientific or 
technological developments relating to national security. The 
classification Secret shall be sparingly used.
    (3) Confidential. Confidential refers to national security 
information or material which requires protection, but not to the degree 
described in paragraphs (a) (1) and (2) of this section. The test for 
assigning Confidential classification shall be whether its unauthorized 
disclosure could reasonably be expected to cause damage to the national 
security.
    (b) Classified information will be assigned the lowest 
classification consistent with its proper protection. Documents will be 
classified according to their own content and not necessarily according 
to their relationship to other documents.
    (c) The overall classification of a file or group of physically 
connected documents will be at least as high as that of the most highly 
classified document therein. When put together as a unit or complete 
file, the classification of the highest classified document contained 
therein will be marked on a cover sheet, file folder (front and back), 
or other similar covering, and on any transmittal letters, comments, or 
endorsements.
    (d) Administrative Control Designations. These designations are not 
security classification designations, but are used to indicate a 
requirement to protect material from unauthorized disclosure. Material 
identified under the provisions of this subparagraph will be handled and 
protected in the same manner as material classified Confidential except 
that it will not be subject to the central control system described in 
Sec. 3a.71. Administrative Control designations are:
    (1) For Official Use Only. This designation is used to identify 
information which does not require protection in the interest of 
national security, but requires protection in accordance with statutory 
requirements or in the public interest and which is exempt from public 
disclosure under 5 U.S.C. 552(b) and Sec. 388.105(n) of this chapter.
    (2) Limited Official Use. This administrative control designation is 
used by the Department of State to identify nondefense information 
requiring protection from unauthorized access. Material identified with 
this notation must be limited to persons having a definite need to know 
in order to fulfill their official responsibilities.
    (e) A letter or other correspondence which transmits classified 
material will be classified at a level at least as high as that of the 
highest classified attachment or enclosure. This is necessary to 
indicate immediately to persons who receive or handle a group of 
documents the highest classification involved. If the transmittal 
document does not contain classified information, or if the information 
in it is classified lower than in an enclosure, the originator will 
include a notation to that effect. (See Sec. 3a.31(e).)

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 225, 47 FR 
19055, May 3, 1982]



Sec. 3a.12  Authority to classify official information.

    (a) The authority to classify information or material originally 
under E.O.

[[Page 45]]

11652 is restricted to those offices within the executive branch which 
are concerned with matters of national security, and is limited to the 
minimum number absolutely required for efficient administration.
    (b) The authority to classify information or material originally as 
Top Secret is to be exercised only by such officials as the President 
may designate in writing and by the heads of the following departments 
and agencies and such of their principal staff officials as the heads of 
these departments and agencies may designate in writing;

Such offices in the Executive Office of the President as the President 
may designate in writing.
Central Intelligence Agency.
Atomic Energy Commission.
Department of State.
Department of the Treasury.
Department of Defense.
Department of the Army.
Department of the Navy.
Department of the Air Force.
U.S. Arms Control and Disarmament Agency
Department of Justice.
National Aeronautics and Space Administration.
Agency for International Development.

    (c) The authority to classify information or material originally as 
Secret is exercised only by:
    (1) Officials who have Top Secret classification authority under 
Sec. 3a.11(b); and
    (2) The heads of the following departments and agencies and such 
principal staff officials as they may designate in writing:

Department of Transportation.
Federal Communications Commission.
Export-Import Bank of the United States.
Department of Commerce.
U.S. Civil Service Commission.
U.S. Information Agency.
General Services Administration.
Department of Health, Education, and Welfare.
Civil Aeronautics Board.
Federal Maritime Commission.
Federal Energy Regulatory Commission.
National Science Foundation.
Overseas Private Investment Corporation.

    (d) The authority to classify information or material originally as 
Confidential is exercised by officials who have Top Secret or Secret 
classification authority.
    (e) Pursuant to E.O. 11652, the authority to classify information or 
material originally as Secret or Confidential in the FERC shall be 
exercised only by the Chairman, the Vice Chairman, and the Executive 
Director. When an incumbent change occurs in these positions, the name 
of the new incumbent will be reported to the Interagency Classification 
Review Committee NSC.

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 756, 77 FR 
4893, Feb. 1, 2012]



Sec. 3a.13  Classification responsibility and procedure.

    (a) Each FERC official who has classifying authority (Sec. 3a.12) 
shall be held accountable for the propriety of the classifications 
attributed to him. Unnecessary classification and overclassification 
shall be avoided. Classification shall be solely on the basis of 
national security considerations. In no case shall information be 
classified in order to conceal inefficiency or administrative error, to 
prevent embarrassment to the FERC or any of its officials or employees, 
or to prevent for any other reason the release of information which does 
not require protection in the interest of national security.
    (b) Each classified document shall show on its face its 
classification and whether it is subject to or exempt from the General 
Declassification Schedule (Sec. 3a.22(b)). It also shall show the 
office of origin, the date of preparation and classification and, to the 
extent practicable, be so marked as to indicate which portions are 
classified, at what level, and which portions are not classified in 
order to facilitate excerpting and other use. Material which merely 
contains references to classified materials, which references do not 
reveal classified information, shall not be classified.
    (c) Material classified under this part shall indicate on its face 
the identity of the highest authority authorizing the classification. 
Where the individual who signs or otherwise authenticates a document or 
item has also authorized the classification, no further annotation as to 
his identity is required.

[[Page 46]]

    (d) Classified information or material furnished to the United 
States by a foreign government or international organization shall 
either retain its original classification or be assigned a U.S. 
classification. In either case, the classification shall assure a degree 
of protection equivalent to that required by the government or 
international organization which furnished the information or material.
    (e) Whenever information or material classified by an authorized 
official is incorporated in another document or other material by any 
person other than the classifier, the previously assigned security 
classification category shall be reflected thereon together with the 
identity of the classifier.
    (f) As a holder of classified information or material, the FERC 
shall observe and respect the classification assigned by the originator. 
If it is believed that there is unnecessary classification; that the 
assigned classification is improper, or that the document is subject to 
declassification under E.O. 11652, the FERC will so inform the 
originator who is then required by the Executive order to reexamine the 
classification.

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 756, 77 FR 
4893, Feb. 1, 2012]

                    Declassification and Downgrading



Sec. 3a.21  Authority to downgrade and declassify.

    (a) The authority to downgrade and declassify information or 
material shall be exercised as follows:
    (1) Information or material may be downgraded or declassified by the 
official authorizing the original classification, by a successor or by a 
supervisory official of either.
    (2) Downgrading and declassification authority may also be exercised 
by an official specifically authorized under regulations issued by the 
head of the Department listed in sections 2 A and B of E.O. 11652, March 
10, 1972.
    (3) In the case of classified information or material transferred 
pursuant to statute or Executive order in conjunction with a transfer of 
function and not merely for storage purposes, the receiving department 
or agency shall be deemed to be the originating department or agency for 
all purposes under E.O. 11652, including downgrading and 
declassification.
    (4) In the case of classified information or material not officially 
transferred under paragraph (a)(3) of this section, but originated in a 
department or agency which has since ceased to exist, each department or 
agency in possession shall be deemed to be the originating department or 
agency for all purposes. Such information or material may be downgraded 
and declassified after consulting with any other departments or agencies 
having an interest in the subject matter.
    (5) Classified information or material transferred to the General 
Services Administration for accession to the Archives of the United 
States shall be downgraded and declassified by the Archivist of the 
United States in accordance with E.O. 11652, directives of the President 
issued through the National Security Council, and pertinent regulations 
of the departments and agencies.



Sec. 3a.22  Declassification and downgrading.

    (a) When classified information of material no longer requires the 
level of protection assigned to it, it shall be downgraded or 
declassified in order to preserve the effectiveness and integrity of the 
classification system. The Chairman, Vice Chairman, and Executive 
Director exercise downgrading and declassification authority in the 
FERC.
    (b) Information and material classified prior to June 1, 1972, and 
assigned to Group 4 under E.O. 10501, as amended by E.O. 10964, unless 
declassified earlier by the original classifying authority, shall be 
declassified and downgraded in accordance with the following General 
Declassification Schedule.
    (1) Top Secret. Information or material originally classified TOP 
SECRET becomes automatically downgraded to Secret at the end of the 
second full calendar year following the year in which it was originated, 
downgraded to Confidential at the end of the fourth full calendar year 
following the year in which it was originated, and declassified at the 
end of the 10th full calendar year following the year in which it was 
originated.

[[Page 47]]

    (2) Secret. Information and material originally classified Secret 
becomes automatically downgraded to Confidential at the end of the 
second full calendar year following the year in which it was originated, 
and declassified at the end of the eighth full calendar year following 
the year in which it was originated.
    (3) Confidential. Information and material originally classified 
Confidential becomes automatically declassified at the end of the sixth 
full calendar year following the year in which it was originated.
    (c) To the fullest extent applicable, there shall be indicated on 
each such FERC originated classified document whether it can be 
downgraded or declassified at a date earlier than under the above 
schedule, or after a specified event, or upon the removal of classified 
attachments or enclosures. Classified information in the possession of 
the Federal Power Commission, but not bearing a marking for automatic 
downgrading or declassification, will be marked or designated by the 
Chairman or the Security Officer designated by Sec. 3a.51 hereof for 
automatic downgrading or declassification in accordance with the rules 
and regulations of the department or agency which originally classified 
the information or material.
    (d) When the FERC official having classification authority 
downgrades or cancels the classification of a document before its 
classification status changes automatically, each addressee to whom the 
document was transmitted shall be notified of the change unless the 
addressee has previously advised that the document was destroyed. 
Addressees must be notified similarly when it has been determined that a 
document must be upgraded.
    (e) When classified information from more than one source is 
incorporated into a new document or other material, the document or 
other material shall be classified, downgraded, or declassified in 
accordance with the provisions of E.O. 11652 and NSC directives 
thereunder applicable to the information requiring the greatest 
protection.
    (f) All information or material classified prior to June 1, 1972, 
other than that described in paragraph (b) of this section, is excluded 
from the General Classification Schedule. However, at any time after the 
expiration of 10 years from the date of origin it shall be subject to 
classification review and disposition by FERC provided:
    (1) A department or agency or member of the public requests review;
    (2) The request describes the record with sufficient particularity 
to enable FERC to identify it; and
    (3) The record can be obtained with a reasonable amount of effort.
    (g) All classified information or material which is 30 years old or 
more will be declassified under the following conditions:
    (1) All information and material classified after June 1, 1972, 
will, whether or not declassification has been requested, become 
automatically declassified at the end of 30 full calendar years after 
the date of its original classification except for such specifically 
identified information or material which the Chairman personally 
determines in writing to require continued protection because such 
continued protection is essential to the national security, or 
disclosure would place a person in immediate jeopardy. In such case, the 
Chairman also will specify the period of continued classification.
    (2) All information and material classified before June 1, 1972 and 
more than 30 years old will be systematically reviewed for 
declassification by the Archivist of the United States by the end of the 
30th full calendar year following the year in which it was originated. 
In his review, the Archivist will separate and keep protected only such 
information or material as is specifically identified by the Chairman in 
accordance with paragraph (g) (1) of this section. In such case, the 
Chairman also will specify the period of continued classification.
    (3) The Executive Director, acting for the Chairman, is assigned to 
assist the Archivist of the United States in the exercise of his 
responsibilities indicated in paragraph (g)(2) of this section. He will:
    (i) Provide guidance and assistance to archival employees in 
identifying and separating those materials originated in FERC which are 
deemed to require continued classification; and

[[Page 48]]

    (ii) Develop a list for submission to the Chairman which identifies 
the materials so separated, with recommendations concerning continued 
classification. The Chairman will then make the determination required 
under paragraphs (g) (1) and (2) of this section and cause a list to be 
created which identifies the documents included in the determination, 
indicates the reason for continued classification, and specifies the 
date on which such material shall be declassified.

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 756, 77 FR 
4893, Feb. 1, 2012]



Sec. 3a.23  Review of classified material for declassification purposes.

    (a) All information and material classified after June 1, 1972, and 
determined in accordance with Chapter 21, title 44, United States Code, 
to be of sufficient historical or other value to warrant preservation 
shall be systematically reviewed on a timely basis for the purpose of 
making such information and material publicly available according to the 
declassification determination at the time of classification. During 
each calendar year the FPC shall segregate to the maximum extent 
possible all such information and material warranting preservation and 
becoming declassified at or prior to the end of such year. Promptly 
after the end of such year the FERC, or the Archives of the United 
States if transferred thereto, shall make the declassified information 
and material available to the public to the extent permitted by law.
    (b) Departments and agencies and members of the public may direct 
requests for review for declassification, as described in Sec. 
3a.22(f), to:

Office of the Secretary, Federal Energy Regulatory Commission, 
Washington, DC 20426.


The Office of the Secretary will assign the request to the appropriate 
Bureau or Office for action and will acknowledge in writing the receipt 
of the request. If the request requires the rendering of services for 
which fair and equitable fees should be charged pursuant to Title 5 of 
the Independent Offices Appropriations Act, 1952, 31 U.S.C. 483a, the 
requester shall be so notified. The Bureau or Office which is assigned 
action will make a determination within 30 days of receipt or explain 
why further time is necessary. If at the end of 60 days from receipt of 
the request for review no determination has been made, the requester may 
apply to the FERC Review Committee (paragraph (g) of this section) for a 
determination. Should the Bureau or Office assigned the action on a 
request for review determine that under the criteria set forth in 
section 5(B) of E.O. 11652 continued classification is required, the 
requester will be notified promptly and, whenever possible, provided 
with a brief statement as to why the requested information or material 
cannot be declassified. The requester may appeal any such determination 
to the FERC Review Committee and the notice of determination will advise 
him of this right.
    (c) The FERC Review Committee will establish procedures to review 
and act within 30 days upon all applications and appeals regarding 
requests for declassification. The chairman, acting through the 
committee, is authorized to overrule previous determinations in whole or 
in part when, in its judgment, continued protection is no longer 
required. If the committee determines that continued classification is 
required under the criteria of section 5(B) of E.O. 11652, it will 
promptly so notify the requester and advise him that he may appeal the 
denial to the Interagency Classification Review Committee.
    (d) A request by a department or agency or a member of the public to 
review for declassification documents more than 30 years old shall be 
referred directly to the Archivist of the United States, and he shall 
have the requested documents reviewed for declassification. If the 
information or material requested has been transferred to the General 
Services Administration for accession into the Archives, the Archivist 
shall, together with the chairman, have the requested documents reviewed 
for declassification. Classification shall be continued in either case 
only when the chairman makes the personal determination indicated in 
Sec. 3a.22(g)(1).

[[Page 49]]

The Archivist shall notify the requester promptly of such determination 
and of his right to appeal the denial to the Interagency Classification 
Review Committee.
    (e) For purposes of administrative determinations under paragraph 
(b), (c), or (d) of this section, the burden is on the FERC to show that 
continued classification is warranted. Upon a determination that the 
classified material no longer warrants classification, it will be 
declassified and made available to the requester if not otherwise exempt 
from disclosure under section 552(b) of Title 5, U.S.C. (Freedom of 
Information Act) or other provisions of law.
    (f) A request for classification review must describe the document 
with sufficient particularity to enable the FERC to identify it and 
obtain it with a reasonable amount of effort. Whenever a request is 
deficient in its description of the record sought, the requester will be 
asked to provide additional identifying information whenever possible. 
Before denying a request on the ground that it is unduly burdensome, the 
requester will be asked to limit his request to records that are 
reasonably obtainable. If the requester then does not describe the 
records sought with sufficient particularity, or the record requested 
cannot be obtained with a reasonable amount of effort, the requester 
will be notified of the reasons why no action will be taken and of his 
right to appeal such decision.
    (g) The FERC Review Committee will consist of the Executive 
Director, as Committee Chairman, the Secretary, and the Director, Office 
of Public Information, as members. In addition to the activities 
described in this paragraph, the Review Committee has authority to act 
on all suggestions and complaints with respect to administration of E.O. 
11652 and this part 3a.
    (h) The FERC Review Committee is also responsible for recommending 
to the chairman appropriate administrative action to correct abuse or 
violation of any provision of E.O. 11652 or NSC directives thereunder, 
including notifications by warning letter, formal reprimand, and to the 
extent permitted by law, suspension without pay and removal.
    (i) The Chairman of the Review Committee will submit through the 
chairman, FERC, a report quarterly to the Interagency Classification 
Review Committee, NSC, of actions on classification review requests, 
classification abuses, and unauthorized disclosures.

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 756, 77 FR 
4893, Feb. 1, 2012]

              Classification Markings and Special Notations



Sec. 3a.31  Classification markings and special notations.

    (a) After the chairman, the vice chairman, or the executive director 
determines that classified information is contained in an original 
document or other item, the appropriate marking, i.e., Secret or 
Confidential, will be applied as indicated herein. In addition, each 
classified document will reflect its date of origin and the Bureau, 
Office, or Regional Office responsible for its preparation and issuance, 
and the identity of the highest authority authorizing the 
classification. Where the individual who signs or otherwise 
authenticates the document or other item has also authorized the 
classification, no further annotation as to his identity is required. 
Each classified document will also show on its face whether it is 
subject to or exempt from the General Declassification Schedule 
described in Sec. 3a.22(b).
    (1) For marking documents which are subject to the General 
Declassification Schedule, the following stamp will be used:

    (Top Secret, Secret, or Confidential) Classified by ------------. 
Subject to General Declassification Schedule of E.O. 11652, 
automatically downgraded at 2-year intervals and declassified on 
December 31, ------------ (insert year).

    (2) For marking documents which are to be automatically declassified 
on a given event or date earlier than the General Declassification 
Schedule the following stamp will be used:

    (Top Secret, Secret, or Confidential) Classified by ------------. 
Automatically declassified on -------------------- (effective date or 
event).


[[Page 50]]


    (3) For marking documents which are exempt from the General 
Declassification Schedule the following stamp will be used:

    (Top Secret, Secret, or Confidential) Classified by ------------. 
Exempt from General Declassification Schedule of E.O. 11652, Exemption 
Category (section 5B (1), (2), (3), or (4). Automatically declassified 
on -------------------- (effective date or event, if any).

    (b) Should the classifier fail to mark such document with one of the 
foregoing stamps, the document shall be deemed to be subject to the 
General Declassification Schedule. The person who signs or finally 
approves a document or other material containing classified information 
shall be deemed to be the classifier. If the classifier is other than 
such person he shall be identified on the stamp as indicated.
    (c) On documents, the classification markings Secret and 
Confidential will be stamped in red ink, printed, or written in letters 
considerably larger than those used in the text of the document. On 
documents which are typewritten in elite, pica or executive size type, 
the above markings should be in letters not less than three-sixteenths 
inch in height. No markings, other than those indicated above, are 
authorized to designate that a document or material requires protection 
in the interests of national security. The overall classification 
assigned to a document will be conspicuously marked on the top and 
bottom of each page and on the outside of the front and back covers, if 
any. Letters of transmittal, endorsements, routing slips, or any other 
papers of any size which conceal or partially conceal the cover, the 
title page, or first page, will bear the marking of the overall 
classification.
    (d) Whenever a classified document contains either more than one 
security classification category or unclassified information, each 
section, part or paragraph should be marked to the extent practicable to 
show its classification category or that it is unclassified.
    (e) Letters of transmittal or other covering documents which are 
classified solely because of classified enclosures or attachments, or 
which are classified in a lower category than such enclosures or 
attachments, will bear either of the following markings, as appropriate.
    (1) If the covering document is classified on its own, but has 
enclosures or attachments of a higher classification, or is a component 
(i.e., an endorsement or comment) or a file in which other components 
bear a higher classification:

Regarded________________________________________________________________
                                            (appropriate classification)
When separated from_____________________________________________________
                                 (identify higher classified components)

    (2) If unclassified when separated from its classified enclosures or 
attachments:

When the Attachments Are Removed, This Transmittal Letter Becomes 
Unclassified.

    (f) In addition to the classification category markings prescribed 
above, the first or title page of each classified document will contain 
instructions as appropriate, in accordance with the following:
    (1) Regarding instructions. The declassification and downgrading 
notation, as described in Sec. 3a.31(g) will be applied to classified 
documents only. The notation will not be carried forward to unclassified 
letters of transmittals or other cover documents. When such cover 
documents are classified by their own content, they will be annotated 
with the notwithstanding instructions which pertain to the enclosures.
    (2) ``Special Handling'' notation. Classified information will not 
be released or disclosed to any foreign national without proper specific 
authorization. This applies even when the classified material does not 
bear the special handling notice described below. The special handling 
notice indicated only that the material has been reviewed and a specific 
determination made that the information is not releasable to foreign 
nationals. If it is anticipated that the handling or distribution of a 
classified document will make it liable to inadvertent disclosure to 
foreign nationals it will be marked with a separate special handling 
notation, which will be carried forward to letters of transmittals or 
other cover documents. The notation reads:


[[Page 51]]



      Special Handling Required Not Releasable to Foreign Nationals

    (g) Whenever classified material is upgraded, downgraded, or 
declassified, the material will be marked to reflect:
    (1) The change in classification.
    (2) The authority for the action.
    (3) The effective date.
    (4) The person or unit taking the action.

When classification changes are made, the classification markings 
themselves will be changed or canceled, and each copy or item of the 
material will be marked with the citation of authority. The notation 
below will be used for this purpose:

Classification__________________________________________________________
                                                               (changed)
________________________________________________________________________
                                                              (canceled)
To______________________________________________________________________
Effective on____________________________________________________________
                                                                  (date)
Under authority of______________________________________________________
                                        (authorizing official or office)
By______________________________________________________________________
                                        (person or office taking action)

    (h) In addition to the foregoing marking requirements, warning 
notices shall be displayed prominently on classified documents or 
materials as prescribed below. When display of these warning notices on 
the documents or other materials is not feasible, the warnings shall be 
included in the written notification of the assigned classification.
    (1) Restricted data. For classified information or material 
containing restricted data as defined in the Atomic Energy Act of 1954, 
as amended:

                             Restricted Data

    This document contains restricted data as defined in the Atomic 
Energy Act of 1954. Its dissemination or disclosure to any unauthorized 
person is prohibited.

    (2) Formerly restricted data. For classified information or material 
containing solely Formerly Restricted Data, as defined in section 142.d, 
Atomic Energy Act of 1954, as amended:

                        Formerly Restricted Data

    Unauthorized disclosure subject to administrative and criminal 
sanctions. Handle as restricted data in foreign dissemination, section 
114.b., Atomic Energy Act, 1954.

    (3) Information other than restricted data or formerly restricted 
data. For classified information or material furnished to persons 
outside the Executive Branch of Government other than as described in 
paragraphs (h)(1) and (2) of this section.

                      National Security Information

    Unauthorized disclosure subject to criminal sanctions.

    (4) Sensitive intelligence information. For classified information 
or material relating to sensitive intelligence sources and methods, the 
following warning notice shall be used, in addition to and in 
conjunction with those prescribed in paragraph (h)(1), (2), or (3), of 
this section, as appropriate:

   Warning Notice--Sensitive Intelligence Sources and Methods Involved

                     Access to Classified Materials



Sec. 3a.41  Access requirements.

    (a) The Personnel Security Officer, on a continuing current basis, 
will certify to the Security Officer, the head of each bureau and office 
and each regional engineer, the names of officers and employees who have 
been granted a security clearance for access to classified material and 
the level of such clearance (Top Secret, Secret, Confidential). The 
Personnel Security Officer will maintain accurate and current listings 
of personnel who have been granted security clearances in accordance 
with the standards and criteria of Executive Orders 10450 and 10865 and 
as prescribed by this part.
    (b) In addition to a security clearance, staff members must have a 
need for access to classified information or material in connection with 
the performance of duties. The determination for the need-to-know will 
be made by the official having responsibility for the classified 
information or material.
    (c) When a staff member no longer requires access to classified 
information

[[Page 52]]

or material in connection with performance of official duties, the 
Personnel Security Officer will administratively withdraw the security 
clearance. Additionally, when a staff member no longer needs access to a 
particular security classification category, the security clearance will 
be adjusted to the classification category required. In both cases, this 
action will be without prejudice to the staff member's eligibility for a 
security clearance or upgrading of category should the need again arise.
    (d) Access to classified information or material originated by the 
FERC may be authorized to persons outside the Executive Branch of the 
Government engaged in historical research and to former Presidential 
appointees as provided in paragraphs VI B and C of the NSC directive 
dated May 17, 1972. The determination of access authorization will be 
made by the Chairman.
    (e) Except as otherwise provided in section 102 of the National 
Security Act of 1947, 61 Stat. 495, 50 U.S.C. 403, classified 
information or material originating in one department or agency shall 
not be disseminated outside any other department or agency to which it 
has been made available without the consent of the originating 
organization.

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 756, 77 FR 
4893, Feb. 1, 2012]

                            Security Officers



Sec. 3a.51  Designation of security officers.

    (a) The Director, Office of Administrative Operations (OAO) is 
designated as Top Secret Control Officer and Security Officer for 
classified material for the Federal Energy Regulatory Commission. The 
Director, OAO, will designate alternate Top Secret Control Officers and 
alternated Security Officers, who will be authorized, subject to such 
limitations as may be imposed by the Director, to perform the duties for 
which the Top Secret Control Officer and Security Officer is 
responsible. As used hereinafter, the terms Top Secret Control Officer 
and Security Officer shall be interpreted as including the alternate Top 
Secret Control Officers and Security Officers. The FERC Security Officer 
is authorized and directed to insure the proper application of the 
provisions of Executive Order 11652 and of this part.
    (b) Regional Engineers are designated as Regional Security Officers 
for the purpose of carrying out the functions assigned herein.
    (c) The Director, OAO, will appoint in writing appropriately cleared 
staff members to act as couriers for transmittal, as necessary, for 
classified information or material.

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 756, 77 FR 
4893, Feb. 1, 2012]

              Storage and Custody of Classified Information



Sec. 3a.61  Storage and custody of classified information.

    (a) Unless specifically authorized by the Chairman or Executive 
Director, classified information and materials within the Washington 
office will be stored only in GSA-approved security containers in the 
Office of Administrative Operations. Such containers will be of steel 
construction with built-in, three-position, dial-type, manipulation-
proof, changeable combination locks.
    (b) A custodian and one or more alternate custodians will be 
assigned responsibility for the security of each container under his 
jurisdiction in which classified information is stored. Such assignment 
will be made a matter of record by executing GSA Optional Form 63, 
Classified Container Registration, and affixing it to the container 
concerned. Custodians will be responsible for assuring that combinations 
are changed as required and that locking and checking functions are 
accomplished daily in compliance with paragraphs (g) and (h) of this 
section.
    (c) GSA Optional Form 63 is a 3-sheet form, each sheet having a 
specific purpose and disposition, as follows:
    (1) Sheet 1 records the names, addresses, and home telephone numbers 
of the custodian and alternate custodians. Sheet 1 is affixed to the 
outside of the container.
    (2) Sheet 2 records the combination of the container and is placed 
inside Sheet 3, which is an envelope.

[[Page 53]]

    (3) Sheet 3, an envelope, is a carbon copy of Sheet 1. When the 
container combination is recorded on Sheet 2, it is sealed inside Sheet 
3 which is then forwarded to the FERC Top Secret Control Officer.
    (d) GSA Optional Form 62, Safe or Cabinet Security Record, will be 
attached conspicuously to the outside of each container used to store 
classified information. The form is used to certify the opening and 
locking of a container, and the checking of a container at the end of 
each working day or whenever it is opened and locked during the day.
    (e) Combinations of containers used to store classified materials 
will be assigned classifications equal to the highest category of 
classified information stored therein. Active combinations are subject 
to the safeguarding and receipting requirements of this instruction. 
Superseded combinations become declassified automatically and 
certificates of destruction therefore are unnecessary.
    (f) Knowledge of or access to the combination of a container used 
for the storage of classified material will be given only to those 
appropriately cleared individuals who are authorized access to the 
information stored therein.
    (g) Combinations of containers used to store classified material 
will be changed at least once a year. A combination will be changed also 
whenever anyone knowing or having access to it is transferred; when the 
combination has been subjected to compromise; when the security 
classification of the container is upgraded; and at any other time as 
may be deemed necessary. Combinations to locks on security containers 
will be changed only by individuals having a security clearance equal to 
the highest category of classified material stored therein. Changing 
lock combinations is a responsibility of OAO. (See FPC Special 
Instruction No. AM 2162.2, Periodic Change of Combination on Locks.)
    (h) The individual who unlocks a container will indicate the date 
and time and initial entry on GSA Optional Form 62. At the close of each 
workday, or when the container is locked at earlier time, the individual 
locking the container will make the appropriate entry on GSA Optional 
Form 62. An individual other than the one who locked the container will 
check to insure that it is properly closed and locked and will make the 
appropriate entry on GSA Optional Form 62. When a container has not been 
opened during the day, the checker will enter the date and the notation 
``Not Opened'' and make appropriate entry in the ``Checked By'' column.
    (i) The red and white reversible ``Closed-Open'' cardboard sign will 
be used on all classified containers to indicate whether the container 
is open or locked.
    (j) Typewriter ribbons used in the preparation of classified 
information will be safeguarded in the manner appropriate for the degree 
of classification involved. Cloth ribbons are considered insecure until 
both upper and lower lines have been cycled through the typewriter at 
least twice. Carbon paper or film ribbons are insecure at all times 
since the imprint thereon cannot be obliterated and such ribbon must be 
destroyed as classified waste. Insecure ribbons will not be left in 
typewriters overnight but will be stored in appropriate classified 
container.

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 756, 77 FR 
4893, Feb. 1, 2012]

                 Accountability For Classified Material



Sec. 3a.71  Accountability for classified material.

    (a) The Office of Administrative Operations is the central control 
registry for the receipt and dispatch of classified material in the 
Washington office and maintains the accountability register of all 
classified material. In addition, each Regional Engineer will maintain 
an accountability register for classified material of which he has 
custody.
    (b) With the exception of the Chairman, Vice Chairman, and Executive 
Director, no individual, bureau, or office is authorized to receive, 
open, or dispatch classified material other than the authorized 
personnel in OAO or the Regional Engineers. Classified material

[[Page 54]]

received by other than the OAO or Regional Engineers will be delivered 
promptly and unopened to the Security Officer or Regional Engineer in 
order that it may be brought under accountable control.
    (c) Each classified document received by or originating in the FERC 
will be assigned an individual control number by the central control 
registry, OAO. Control numbers will be assigned serially within a 
calendar year. The first digit of the four-digit control number will 
indicate the calendar year in which the document was originated or 
received in the FERC. Control numbers assigned to top secret material 
will be separate from the sequence for other classified material and 
will be prefixed by the letters ``TS''. Examples:

9006--Sixth classified document controlled by the central control 
registry in calendar year 1969.
TS 1006--Sixth Top Secret document controlled by the central control 
registry in calendar year 1971.

    (d) The accounting system for control of classified documents will 
be effected through the use of FERC Form 55, Classified Document Control 
Record and Receipt. This form will be used to:
    (1) Register an accurate, unclassified description of the document; 
its assigned control number; and the date it is placed under 
accountability.
    (2) Serve as the accountability register for classified material.
    (3) Record all changes in status or custody of the document during 
its classification life or the period it is retained under 
accountability in the FERC.
    (4) Serve as the principal basis for all classified document 
inventory and tracer actions.
    (5) Serve as a receipt for the central control registry when the 
document is transferred.
    (e) For Top Secret documents only, an access register, FPC Form 
1286, Top Secret Access Record, for recording the names of all 
individuals having access to the document, will be prepared in addition 
to FPC Form 55. In addition, a physical inventory of all Top Secret 
documents will be conducted during June of each year by the Top Secret 
Control Officer and witnessed by a staff member holding a Top Secret 
clearance.
    (f) When classified documents are regraded, declassified, or 
destroyed, the change in status will be recorded in the file copy of FPC 
Form 55 in the central control registry.
    (g) Classified documents will not be reproduced by any means except 
on the specific written authority of the FPC Security Officer.
    (h) In the Washington Office, classified material will be destroyed 
by OAO and will be accomplished by burning in the presence of a 
destroying official and a witnessing official. Destroying and witnessing 
officials will be alternate Security Officers from OAO. A record of 
destruction of each classified document will be maintained on FPC Form 
1285. Classified Document Destruction Certificate. In addition, the date 
of destruction and the destruction certificate number will be recorded 
on the file copy of FPC Form 55 in the central control registry. The 
original signed copy of the destruction certificate will be retained in 
the central control registry. The duplicate copy will be retained by the 
destroying official. Regional Engineers will follow these instructions 
for destruction of classified material in their possession, except that 
the destroying official shall be the Regional Engineer and the 
witnessing official shall be any other individual having appropriate 
security clearance.
    (i) It is the responsibility of any staff member who has knowledge 
of the loss or possible compromise of classified information immediately 
to report the circumstances to the Director, OAO. The Director, OAO, 
will notify the originating Department and any other interested 
Department of the loss or possible compromise in order that a damage 
assessment can be conducted. An immediate inquiry will be initiated by 
the Director, OAO, for the purpose of taking corrective action and for 
recommendations to the chairman, through the Review Committee, for 
appropriate administrative, disciplinary, or legal action.

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 756, 77 FR 
4893, Feb. 1, 2012]

[[Page 55]]

                   Transmittal of Classified Material



Sec. 3a.81  Transmittal of classified material.

    (a) A continuous receipting system, using copies of FERC Form 55, 
will record all transfers of classified items between elements or 
officials within the FERC. Receipts for transmittal of classified items 
from the central registry to the first recipient will be acknowledged on 
copy number one (original) of FERC Form 55. This copy will be returned 
to and become part of the central register, where it will remain as an 
active record until the item is either destroyed or transmitted outside 
the FERC control registry system. Receipts for subsequent transmittals 
through the FERC will be recorded on the remaining copies of FERC Form 
55.
    (b) A recipient will acknowledge receipt and assumption of custody 
of classified material exactly as it is described on FPC Form 55. If it 
is determined that parts are missing, it is incorrectly numbered, or 
otherwise recorded in error on FPC Form 55. The recipient will not sign 
for the material but will return it promptly to the transmitting 
element, notifying them accordingly.
    (c) Whenever a classified or protected document is being internally 
transmitted, or is in use, it will be covered by either FERC Label 19, 
Top Secret Cover Sheet (yellow); FERC Label 20, Secret Cover Sheet 
(red); FERC Label 21, Confidential Cover Sheet (blue), or FERC Label 22, 
Official Use Only (Limited Official Use) green. In addition, the red 
back sheet, FERC Label 23, will be used. With the exception of the FERC 
Form 55, no transmittal paper or other material will be placed over the 
label, and no writing will be applied thereon.
    (d) The transmission or transfer of custody of classified material 
outside of the FERC Washington offices or the Regional Offices will be 
covered by FERC Form 1284, Classified Document Receipt and/or Tracer, 
prepared in duplicate (one post card and one paper copy). The post card 
will be enclosed, along with the material being transferred, in the 
inner envelope, wrapping or container, and the paper copy retained in 
the central registry pending return of the signed post card.
    (e) Classified material transmitted outside of the FERC Washington 
offices or the Regional Offices will be dispatched in two opaque 
envelopes or double wrapped in opaque wrapping paper. The outgoing 
material will be prepared for transmission by:
    (1) Preparing and enclosing an appropriate receipt (see paragraph 
(d) of this section) in the inner envelope or wrapping.
    (2) Addressing, return addressing, and sealing or taping the inner 
envelope or wrapping.
    (3) Marking the security classification and other required notations 
on the front and back of the inner cover. If the nature of the contents 
deem it necessary or advisable, the inner cover may be marked with the 
following or a similar notation ``To Be Opened By Addressee Only.'' When 
this notation is used, an appropriate ``Attention'' line must be 
contained in the address on the outer envelope to insure delivery to the 
intended recipient.
    (4) Enclosing the inner envelope or wrapping in an opaque outer 
envelope wrapper containing the appropriate address information. These 
outer covers will not contain any of the markings contained on the inner 
cover. If the outer cover does not fully conceal the markings on the 
inner envelope or wrapper, a sheet of plain paper should be folded 
around the inner wrapper to conceal the markings.
    (f) Transmittal of Top Secret information and material shall be 
effected preferably by oral discussion in person between the officials 
concerned. Otherwise the transmission of Top Secret information and 
material shall be by specifically designated personnel, by State 
Department diplomatic pouch, by a messenger-courier system especially 
created for that purpose, over authorized communications circuits in 
encrypted form or by other means authorized by the National Security 
Council.
    (g) Transmittal of material classified Secret or Confidential to any 
addressee in the 48 contiguous States and the District of Columbia, the 
State of Hawaii, the State of Alaska, the Commonwealth of Puerto Rico, 
and Canadian

[[Page 56]]

Government installations by the FERC Washington offices or the Regional 
offices will be by registered mail only. Transmittal outside these 
specified areas will be as stated in paragraph C(2), Appendix B, of the 
NSC Directive of May 17, 1972.

[Order 470, 38 FR 5161, Feb. 26, 1973, as amended by Order 756, 77 FR 
4893, Feb. 1, 2012]

                            Data Index System



Sec. 3a.91  Data index system.

    A data index system shall be established for Top Secret, Secret, and 
Confidential information in selected categories prescribed by the 
Interagency Classification Review Committee, in accordance with section 
VII of the National Security Council Directive Governing the 
Classification, Downgrading, Declassification, and Safeguarding of 
National Security Information, May 17, 1972.



PART 3b_COLLECTION, MAINTENANCE, USE, AND DISSEMINATION OF RECORDS OF 

IDENTIFIABLE PERSONAL INFORMATION--Table of Contents



                            Subpart A_General

Sec.
3b.1 Purpose.
3b.2 Definitions.
3b.3 Notice requirements.
3b.4 Government contractors.
3b.5 Legal guardians.

      Subpart B_Standards for Maintenance and Collection of Records

3b.201 Content of records.
3b.202 Collection of information from individuals concerned.
3b.203 Rules of conduct.
3b.204 Safeguarding information in manual and computer-based record 
          systems.

                Subpart C_Rules for Disclosure of Records

3b.220 Notification of maintenance of records to individuals concerned.
3b.221 Access of records to individuals concerned.
3b.222 Identification requirements.
3b.223 Fees.
3b.224 Requests to amend records and disputes thereon.
3b.225 Written consent for disclosure.
3b.226 Accounting of disclosures.
3b.227 Mailing lists.

                     Subpart D_Rules for Exemptions

3b.250 Specific exemptions.

    Authority: Federal Power Act, as amended, sec. 309, 49 Stat. 858-859 
(16 U.S.C. 825h); Natural Gas Act, as amended, sec. 16, 52 Stat. 830 (15 
U.S.C. 717o); and Pub. L. 93-579 (88 Stat. 1896).

    Source: Order 536, 40 FR 44288, Sept. 25, 1975, unless otherwise 
noted.



                            Subpart A_General



Sec. 3b.1  Purpose.

    Part 3b describes the Federal Energy Regulatory Commission's program 
to implement the provisions of the Privacy Act of 1974 (Pub. L. No. 93-
579, 88 Stat. 1896) to allow individuals to have a say in the collection 
and use of information which may be used in determinations affecting 
them. The program is structured to permit an individual to determine 
what records pertaining to him and filed under his individual name, or 
some other identifying particular, are collected, maintained, used or 
disseminated by the Commission, to permit him access to such records, 
and to correct or amend them, and to provide that the Commission 
collect, use, maintain and disseminate such information in a lawful 
manner for a necessary purpose.

[Order 536, 40 FR 44288, Sept. 25, 1975, as amended by Order 737, 75 FR 
43402, July 26, 2010]



Sec. 3b.2  Definitions.

    In this part:
    (a) Agency, as defined in 5 U.S.C. 551(1) as ``* * * each authority 
of the Government of the United States, whether or not it is within or 
subject to review by another agency, * * *'', includes any executive 
department, military department, Government corporation, Government 
controlled corporation, or other establishment in the executive branch 
of the Government (including the Executive Office of the President), or 
any independent regulatory agency [5 U.S.C. 552(e)];
    (b) Individual means a citizen of the United States or an alien 
lawfully admitted for permanent residence;
    (c) Maintain includes, maintain, collect, use, or disseminate;

[[Page 57]]

    (d) Record means any item, collection or grouping of information 
about an individual that is maintained by an agency, including, but not 
limited to, his education, financial transactions, medical history, and 
criminal or employment history and that contains his name, or the 
identifying number, symbol, or other identifying particular assigned to 
the individual, such as a finger or voice print or a photograph;
    (e) System of records means a group of any records under the control 
of any agency from which information is retrieved by the name of the 
individual or by some identifying number, symbol, or other identifying 
particular assigned to the individual;
    (f) Statistical record means a record in a system of records 
maintained for statistical research or reporting purposes only and not 
used in whole or in part in making any determination about an 
identifiable individual, except as provided by section 8 of title 13 of 
the United States Code;
    (g) Routine use means, with respect to the disclosure of a record, 
the use of such record for a purpose which is compatible with the 
purpose for which it was collected; and
    (h) Disclosure means either the transmittal of a copy of a record or 
the granting of access to a record, by oral, written, electronic or 
mechanical communication.



Sec. 3b.3  Notice requirements.

    (a) The Commission will publish at least annually in the Federal 
Register a notice identifying the systems of records currently 
maintained by the Commission. For each system of records, the notice 
will include the following information:
    (1) The name and location of the system;
    (2) The categories of individuals on whom records are maintained in 
the system;
    (3) The categories of records maintained in the system;
    (4) The specific statutory provision or executive order, or rule or 
regulation issued pursuant thereto, authorizing the maintenance of the 
information contained in the system;
    (5) Each routine use of the records contained in the system, 
including the categories of users and the purposes of such use;
    (6) The policies and practices regarding the storage, 
retrievability, access controls, and retention and disposal of the 
records;
    (7) The title and business address of the Commission official who is 
responsible for the system of records;
    (8) The procedures whereby an individual can be notified at his 
request if the system of records contains a record pertaining to him;
    (9) The procedures whereby an individual can be notified at his 
request how he can gain access to any record pertaining to him contained 
in the system of records, and how he can contest its contents; and
    (10) The categories of sources of records in the system.
    (b) At least thirty days prior to its operation, the Commission will 
publish in the Federal Register a notice of its intention to establish a 
new system of records reciting the information required pursuant to 
paragraphs (a) (1) through (10) of this section and notice of any major 
change to an existing system.
    (c) The Commission will publish in the Federal Register a notice of 
its intention to establish any new or intended routine use of the 
information in an existing system of records at least thirty days prior 
to the disclosure of the record for that routine use. A new routine use 
is one which involves disclosure of records for a new purpose compatible 
with the purpose for which the record is maintained or which involves 
disclosure to a new recipient or category of recipients. At a minimum, 
the notice will contain the following information:
    (1) The name of the system of records for which the routine use is 
to be established;
    (2) The authority authorizing the maintenance of the information 
contained in the system;
    (3) The categories of records maintained in the system;
    (4) The proposed routine use(s);
    (5) The categories of recipients for each proposed routine use; and
    (6) Reference to the public notice in the Federal Register under 
which the

[[Page 58]]

existing system had already been published.



Sec. 3b.4  Government contractors.

    Systems of records operated by a contractor, pursuant to a contract, 
on behalf of the Commission, which are designed to accomplish a 
Commission function, are considered, for the purposes of this part, to 
be maintained by the Commission. A contract covers any contract, written 
or oral, subject to the Federal Procurement Regulations. The contractual 
instrument will specify, to the extent consistent with the Commission's 
authority to require it, that the systems of records be maintained in 
accordance with the requirements of this part.



Sec. 3b.5  Legal guardians.

    For the purposes of this part, the parent of any minor, or the legal 
guardian of any individual who has been declared to be incompetent due 
to physical or mental incapacity or age by a court of competent 
jurisdiction, may act on behalf of the individual.



      Subpart B_Standards for Maintenance and Collection of Records



Sec. 3b.201  Content of records.

    (a) All records which are maintained by the Commission in a system 
of records will contain only such information about an individual that 
is relevant and necessary to accomplish a purpose of the Commission as 
required to be accomplished by statute or by executive order of the 
President. Pursuant to Sec. 3b.3(a)(4) of this part, the Commission 
will identify in the Federal Register the specific provisions in law 
which authorize it to maintain information in a system of records. In 
determining the relevance and necessity of records, the following 
considerations will govern:
    (1) Whether each item of information relates to the purposes, in 
law, for which the system is maintained;
    (2) The adverse consequences, if any, of not collecting the 
information;
    (3) Whether the need for the information could be met through the 
maintenance of the information in a non-individually identifiable form;
    (4) Whether the information in the record is required to be 
collected on every individual who is the subject of a record in the 
system or whether a sampling procedure would suffice;
    (5) The length of time it is necessary to retain the information;
    (6) The financial cost of maintaining the record as compared to the 
adverse consequences of not maintaining it; and
    (7) Whether the information, while generally relevant and necessary 
to accomplish a statutory purpose, is specifically relevant and 
necessary only in certain cases.
    (b) All records which the Commission maintains in a system of 
records and which are used to make a determination about an individual 
will be maintained with such accuracy, relevance, timeliness, and 
completeness as is reasonably necessary to assure fairness to the 
individual in the determination. Where practicable, in questionable 
instances, reverification of pertinent information with the individual 
to whom the record pertains may be appropriate. In pursuit of 
completeness in the collection of information, the Commission will limit 
its records to those elements of information which clearly bear on the 
determination for which the records are intended to be used, assuring 
that all elements necessary to the determination are present before the 
determination is made.
    (c) Prior to disseminating any records in a system of records, the 
Commission will make reasonable efforts to assure that such records are 
as accurate, relevant, timely, and complete as appropriate for the 
purposes for which they are collected and/or maintained, except when 
they are disclosed to a member of the public under the Freedom of 
Information Act, 5 U.S.C. 552, as amended, or to another agency.
    (d) No records of the Commission in a system of records shall 
describe how any individual exercises his First Amendment rights unless 
expressly authorized by statute or by the individual about whom the 
record is maintained or unless pertinent to and within the scope of an 
authorized law enforcement

[[Page 59]]

activity. The exercise of these rights includes, but is not limited to, 
religious and political beliefs, freedom of speech and of the press, and 
freedom of assembly and petition. In determining whether or not a 
particular activity constitutes the exercise of a right guaranteed by 
the First Amendment, the Commission will apply the broadest reasonable 
interpretation.



Sec. 3b.202  Collection of information from individuals concerned.

    (a) Any information collected by the Commission for inclusion in a 
system of records which may result in adverse determinations about an 
individual's rights, benefits, and privileges under Federal programs, 
will, to the greatest extent practicable, be collected directly from the 
subject individual (see paragraph (d) of this section).
    (b) The Commission will inform each individual whom it asks to 
supply information about himself, on the form which it uses to collect 
the information, or on a separate sheet that can be easily retained by 
the individual, in language which is explicit, informative, and easily 
understood, and not so lengthy as to deter an individual from reading 
it, of:
    (1) The specific provision of the statute or executive order of the 
President, including the brief title or subject of that statute or order 
which authorizes the solicitation of the information; whether disclosure 
of such information is mandatory or voluntary; and whether the 
Commission is authorized or required to impose penalties for failing to 
respond;
    (2) The principal purpose or purposes for which the information is 
intended to be used;
    (3) The routine uses which may be made of the information, as 
described in the Federal Register in the notice of the system of records 
in which the information is maintained, and which are relatable and 
necessary to a purpose described pursuant to paragraph (b)(2) of this 
section; and
    (4) The effects (beneficial and adverse) on the individual if any, 
of not providing all or any part of the requested information.
    (c) Social security numbers will not be required from individuals 
whom the Commission asks to supply information unless the disclosure of 
the number is required by Federal statute or unless disclosure is to the 
Commission maintaining a system of records in existence and operating 
before January 1, 1975, if such disclosure was required pursuant to a 
statute or regulation adopted prior to such date to verify the identity 
of an individual. When an individual is requested to disclose his social 
security number to the Commission, he will be informed under what 
statutory or other authority such number is solicited, what uses will be 
made of it, whether disclosure is mandatory or voluntary, and if it is 
mandatory, under what provisions of law or regulation.
    (d) The use of third-party sources to collect information about an 
individual may be appropriate in certain circumstances. In determining 
when the use of third-party sources would be appropriate, the following 
considerations will govern:
    (1) When the information needed can only be obtained from a third 
party;
    (2) When the cost of collecting the information directly from the 
individual concerned far exceeds the cost of collecting it from a third 
party;
    (3) When there is little risk that the information proposed to be 
collected from the third party, if inaccurate, could result in an 
adverse determination about the individual concerned.
    (4) When there is a need to insure the accuracy of information 
supplied by an individual by verifying it with a third party, or there 
is a need to obtain a qualitative assessment of the individual's 
capabilities or character; or
    (5) When there are provisions for verifying any third-party 
information with the individual concerned before making a determination 
based on that information.

Third party sources, where feasible, will be informed of the purposes 
for which information which they are asked to provide will be used. In 
appropriate circumstances, pursuant to 5 U.S.C. 552a(k) (2), (5), and 
(7), the Commission may assure a third party that his identity will not 
be revealed to the subject of the collected information.

[[Page 60]]



Sec. 3b.203  Rules of conduct.

    (a) The Executive Director of the Commission has the overall 
administrative responsibility for implementing the provisions of the 
Privacy Act of 1974 and overseeing the conduct of all Commission 
employees with respect to the act.
    (b) It is the responsibility of the Comptroller of the Commission, 
under the guidance of the Executive Director, to prepare the appropriate 
internal administrative procedures to assure that all persons involved 
in the design, development, or operation of any system of records, or in 
collecting, using, or disseminating any individual record, and who have 
access to any system of records, are informed of all rules and 
requirements of the Commission to protect the privacy of the individuals 
who are the subjects of the records, including the applicable provisions 
of the FERC Standards of Conduct for Employees, Special Government 
Employees and Commissioners.
    (c) The Director, Human Resources Division, is responsible for 
establishing and conducting an adequate training program for such 
persons whose official duties require access to and collection, 
maintenance, use, and dissemination of such records.
    (d) The General Counsel of the Commission is responsible for 
providing legal interpretation of the Privacy Act of 1974, and for 
preparing all agency rules and notices for official publication in 
compliance with the act.
    (e) Commission employees will be informed of all the implications of 
their actions in this area, including especially:
    (1) That there are criminal penalties for knowing and willful 
unauthorized disclosure of material within a system of records; for 
willful failure to publish a public notice of the existence of a system 
of records; and for knowingly and willfully requesting or obtaining 
records under false pretenses;
    (2) That the Commission may be subject to civil suit due to failure 
to amend an individual's record in accordance with his request or 
failure to review his request in conformity with Sec. 3b.224; refusal 
to comply with an individual's request of access to a record under Sec. 
3b.221; willful or intentional failure to maintain a record accurately 
pursuant to Sec. 3b.201(b) and consequently a determination is made 
which is adverse to the individual; or willful or intentional failure to 
comply with any other provision of the Privacy Act of 1974, or any rule 
promulgated thereunder, in such a way as to have an adverse effect upon 
an individual.

[Order 536, 40 FR 44288, Sept. 25, 1975, as amended by Order 737, 75 FR 
43402, July 26, 2010]



Sec. 3b.204  Safeguarding information in manual and computer-based record 

systems.

    (a) The administrative and physical controls to protect the 
information in the manual and computer-based record systems from 
unauthorized access or disclosure will be specified for each system in 
the Federal Register. The system managers, who are responsible for 
providing protection and accountability of such records at all times and 
for insuring that the records are secured in proper containers whenever 
they are not in use or under direct control of authorized persons, will 
be identified for each system of records in the Federal Register.
    (b) Whenever records in the manual or computer-based record systems, 
including input and output documents, punched cards, and magnetic tapes 
or disks, are not under the personal control of an authorized person, 
they will be stored in lockable containers and/or in a secured room, or 
in alternative storage systems which furnish an equivalent or greater 
degree of physical security. In this regard, the Commission may refer to 
security guidelines prepared by the General Services Administration, the 
Department of Commerce (National Bureau of Standards), or other agencies 
with appropriate knowledge and expertise.
    (c) Access to and use of records will only be permitted to persons 
pursuant to Sec. Sec. 3b.221, 3b.224, and 3b.225. Access to areas where 
records are stored will be limited to those persons whose official 
duties require work in such areas. Proper control of data, in any form, 
associated with the manual and computer-based record systems will be 
maintained at all times, including

[[Page 61]]

maintenance of an accounting of removal of the records from the storage 
area.



                Subpart C_Rules for Disclosure of Records



Sec. 3b.220  Notification of maintenance of records to individuals concerned.

    (a) Upon written request, either in person or by mail, to the 
appropriate system manager specified for each system of records, an 
individual will be notified whether a system of records maintained by 
the Commission and named by the individual contains a record or records 
pertaining to him and filed under his individual name, or some other 
identifying particular.
    (b) The system manager may require appropriate identification 
pursuant to Sec. 3b.222, and if necessary, may request from the 
individual additional information needed to locate the record which the 
individual should reasonably be expected to know, such as, but not 
limited to, date of birth, place of birth, and a parent's first name.
    (c) When practicable, the system manager will provide a written 
acknowledgement of the inquiry within ten days of receipt of the inquiry 
(excluding Saturdays, Sundays and legal public holidays) and 
notification of whether or not a system of records maintained by the 
Commission and named by the individual contains a record pertaining to 
him and filed under his individual name or some other identifying 
particular. If the system manager is unable to provide an answer within 
the ten-day period, he will so inform the individual in writing, stating 
the reasons therefor (for good cause shown), and when it is anticipated 
that notification will be made. Such an extension will not exceed 
fifteen days from receipt of the inquiry (excluding Saturdays, Sundays, 
and legal public holidays).
    (d) For good cause shown, as used in all sections of this part, 
includes circumstances such as the following: Where a search for and/or 
collection of requested records from inactive storage, field offices, or 
other establishments is required; where a voluminous amount of data is 
involved; where information on other individuals must be separated or 
expunged from the record; or where consultations are required with other 
agencies or with others having a substantial interest in the 
determination of the request.



Sec. 3b.221  Access of records to individuals concerned.

    (a) Upon written request, either in person or by mail, to the 
appropriate system manager specified for each system of records, any 
individual may gain access to records or information in a system of 
records pertaining to him and filed under his individual name, or some 
other identifying particular, to review and to have a copy made of all 
or any portion thereof in a form comprehensible to him.
    (b) A person of his own choosing may accompany the individual to 
whom the record pertains when the record is disclosed [see Sec. 
3b.222(e)].
    (c) Before disclosure, the following procedure may apply:

    Medical or psychological records will be disclosed directly to the 
individual to whom they pertain unless, in the judgment of the system 
manager, in consultation with a medical doctor or a psychologist, access 
to such records could have an adverse effect upon the individual. When 
the system manager and a doctor determine that the disclosure of such 
information could have an adverse effect upon the individual to whom it 
pertains, the system manager may transmit such information to a medical 
doctor named by the requesting individual.

    (d) The system manager will provide a written acknowledgement of the 
receipt of a request for access within ten days of receipt (excluding 
Saturdays, Sundays, and legal public holidays). Such acknowledgement 
may, if necessary, request any additional information needed to locate 
the record which the individual may reasonably be expected to know, and 
may require appropriate identification pursuant to Sec. 3b.222 of this 
part. No acknowledgment is required if access can be granted within the 
ten-day period.
    (1) If access can be granted, the system manager will notify the 
individual, in writing, as to when, and whether access will be granted 
in person or by mail, so that access will be

[[Page 62]]

provided within twenty days of the receipt of the request (excluding 
Saturdays, Sundays, and legal public holidays). If the system manager is 
unable to provide access within twenty days of receipt of the request, 
he will inform the individual in writing as to the reasons therefor (for 
good cause shown), and when it is anticipated that access will be 
granted. If the expected date of access indicated in the written 
notification to the individual cannot be met, the system manager will 
advise the individual in writing of the delay, the reasons therefor (for 
good cause shown), and of a revised date when access will be granted. 
Such extensions will not exceed thirty days from receipt of the request 
(excluding Saturdays, Sundays, and legal public holidays).
    (2) If access cannot be granted, the system manager will inform the 
individual, in writing, within twenty days of receipt of the request 
(excluding Saturdays, Sundays, and legal public holidays) of the refusal 
of his request; the reasons for the refusal; the right of the 
individual, within thirty days of receipt of the refusal, to request in 
writing a review of the refusal by the Chairman of the Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, or 
by an officer designated by the Chairman pursuant to Sec. 3b.224(f); 
and the right of the individual to seek advice or assistance from the 
system manager in obtaining such a review.
    (e) The Chairman, or officer designated pursuant to Sec. 3b.224(f), 
not later than thirty days (excluding Saturdays, Sundays, and legal 
public holidays) from the date of receipt of the individual's request 
for review will complete such review, unless, for good cause shown, the 
Chairman, or designated officer, extends the thirty-day period in 
writing to the individual with reasons for the delay and the approximate 
date on which the review is expected to be completed. Such an extension 
will not exceed thirty-five days from receipt of the request for review 
(excluding Saturdays, Sundays and legal public holidays). The Chairman, 
or designated officer, will make one of the following determinations:
    (1) Grant the individual access to the requested record and notify 
the individual, in writing, as to when, and whether access will be 
granted in person or by mail; or
    (2) Inform the individual in writing of the refusal, the reasons 
therefor, and the right of the individual to seek judicial review of the 
refusal of his request for access.
    (f)(1) The Commission will deny an individual access to the 
following records pertaining to him:
    (i) Information compiled in reasonable anticipation of a civil 
action or proceeding;
    (ii) Records listed in the Federal Register as exempt from certain 
provisions of the Privacy Act of 1974, pursuant to subpart D of this 
part; and
    (iii) Records which may be required to be withheld under other 
statutory provisions.
    (2) The Commission will not deny an individual access to a record 
pertaining to him because that record is permitted to be withheld from 
members of the public under the Freedom of Information Act, 5 U.S.C. 
552, as amended.
    (g) Disclosure of an original record will take place in the presence 
of the Commission representative having physical custody of the record.

[Order 536, 40 FR 44288, Sept. 25, 1975, as amended by Order 737, 75 FR 
43402, July 26, 2010]



Sec. 3b.222  Identification requirements.

    The appropriate system manager specified for each system of records 
will require reasonable identification from individuals to assure that 
records in a system of records are disclosed to the proper person. 
Identification requirements will be consistent with the nature of the 
records being disclosed.
    (a) Disclosure of records to the individual to whom the record 
pertains, or under whose name or some other identifying particular the 
record is filed, in person, requires that the individual show an 
identification card. Employee identification, a Medicare card, or a 
driver's license are examples of acceptable identification. Documents 
incorporating a picture and signature of the individual are preferred.
    (b) For records disclosed by mail, the system manager will require 
certain

[[Page 63]]

minimum identifying information: name, date of birth, or the system's 
personal identifier if known to the individual. A comparison of the 
signatures of the requester and those in the record will be used to 
determine identity.
    (c) If the system manager determines that the data in the record is 
so sensitive that unauthorized access could cause harm or embarrassment 
to the individual involved, a signed notarized statement asserting 
identity or some other reasonable means to verify identity will be 
required.
    (d) If an individual can provide no suitable information or 
documents for identification, the system manager will require a signed 
statement from the individual asserting his identity and stipulating 
that the individual understands that knowingly or willfully seeking or 
obtaining access to records about an individual under false pretenses is 
a misdemeanor punishable by a fine of up to $5,000.
    (e) The system manager will require an individual who wishes to be 
accompanied by another person when reviewing his records to furnish a 
signed written statement authorizing discussion of his records in the 
presence of the accompanying person.
    (f) The appropriate identification requirements of this section may 
be required by a system manager from an individual to whom a record does 
not pertain who seeks access to the record pursuant to Sec. 3b.225 of 
this part.
    (g) No individual will be denied notification of maintenance of a 
record pursuant to Sec. 3b.220 or access to a record pursuant to 
Sec. Sec. 3b.221 and 3b.224 for refusing to disclose a social security 
number.
    (h) No verification of identity will be required of individuals 
seeking notification of or access to records which are otherwise 
available to a member of the public under the Freedom of Information 
Act, 5 U.S.C. 552, as amended.



Sec. 3b.223  Fees.

    (a) Fees will be charged for the direct cost of duplication of 
records in a system of records when copies are requested by the 
individual seeking access to the records. Any person may obtain a copy 
of the Commission's schedule of fees by telephone, by mail or by coming 
in person to the office of the appropriate system manager who is 
responsible for the protection and accountability of the desired record. 
Requests for copies of requested records and payment therefor must be 
made to the system manager. Fees will only be charged for costs of $2 or 
more.
    (b) Where practicable, self-service duplication of requested 
documents may also be made on duplicating machines by the person 
requesting the records, on a reimbursable basis to the system manager, 
in the presence of the Commission representative having physical custody 
of the record. Where data has been extracted from one of the 
Commission's systems of records on magnetic tape or disks, or computer 
files, copies of the records of these files may be secured on a 
reimbursable basis upon written request to the appropriate system 
manager. The fee will vary for each requirement, depending on size and 
complexity.
    (c) No fee will be charged in the following instances:
    (1) When the system manager determines that he can grant access to 
records only by providing a copy of the record through the mail because 
he cannot provide reasonable means for the individual to have access in 
person;
    (2) For search and review of requested records to determine if they 
fall within the disclosure requirements of this part; and
    (3) When the system manager makes a copy of the record as a 
necessary part of the process of making it available for review.
    (d) Except for requests made by Government agencies, certification 
of copies of any official Commission record shall be accompanied by a 
fee of $2 per document.



Sec. 3b.224  Requests to amend records and disputes thereon.

    (a) Upon written request, either in person or by mail, to the 
appropriate system manager specified for each system of records, any 
individual may amend records in a system of records pertaining to him 
and filed under his individual name or some other identifying 
particular. Such requests should contain identifying information needed

[[Page 64]]

to locate the record, a brief description of the item or items of 
information to be amended, and information in support of the request for 
amendment. The individual may obtain assistance in preparing his request 
to amend a record from the appropriate system manager.
    (b) The system manager will provide a written acknowledgement of the 
receipt of a request to amend within ten days of receipt (excluding 
Saturdays, Sundays, and legal public holidays). Such an acknowledgement 
may, if necessary, request any additional information needed to make a 
determination which the individual may reasonably be expected to know, 
and verification of identity consistent with Sec. 3b.222. The 
acknowledgement will clearly describe the request and advise the 
individual requesting the amendment when he may expect to be notified of 
action taken on the request. No acknowledgement is required if the 
request can be reviewed, processed, and the individual notified of 
compliance or denial within the ten-day period.
    (c) The system manager will complete the review and advise the 
individual in writing of the results within twenty days of the receipt 
of the request (excluding Saturdays, Sundays, and legal public 
holidays). If the system manager is unable to complete the review within 
twenty days of the receipt of the request, he will inform the individual 
in writing as to the reasons therefor (for good cause shown) and when it 
is anticipated that the review will be completed. If the completion date 
for the review indicated in the acknowledgement cannot be met, the 
system manager will advise the individual in writing of the delay, the 
reasons therefor (for good cause shown), and of a revised date when the 
review may be expected to be completed. Such extensions will not exceed 
thirty days from receipt of the request (excluding Saturdays, Sundays, 
and legal public holidays). The system manager will take one of the 
following actions:
    (1) Make the requested correction or amendment; so advise the 
individual in writing; and, where an accounting of the disclosure of the 
record was made pursuant to Sec. 3b.226, advise all previous recipients 
of the record in writing of the fact that the amendment was made and the 
substance of the amendment [see Sec. 3b.225(d)]; or
    (2) Inform the individual in writing of the refusal to amend the 
record in accordance with the request; the reasons for the refusal 
including any of the standards which were employed pursuant to paragraph 
(d) of this section in conducting the review; the right of the 
individual, within thirty days of receipt of the refusal, to request in 
writing a review of the refusal by the Chairman of the Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, or 
by an officer designated by the Chairman pursuant to paragraph (f) of 
this section; and the right of the individual to seek advice or 
assistance from the system manager in obtaining such a review.
    (d) In reviewing a record in response to a request to amend, the 
system manager and the Chairman, or the officer he designates pursuant 
to paragraph (f) of this section, shall assess the accuracy, relevance, 
timeliness and completeness of the record. They shall consider the 
record in terms of the criteria established in Sec. 3b.201 of this 
part.
    (e) The Chairman, or officer designated pursuant to paragraph (f) of 
this section, not later than thirty days (excluding Saturdays, Sundays, 
and legal public holidays) from the date of receipt of the individual's 
request for review, will complete such review, unless, for good cause 
shown, the Chairman, or designated officer, extends the thirty-day 
period in a writing to the individual with reasons for the delay and the 
approximate date on which the review is expected to be completed. Such 
an extension will not exceed thirty-five days from receipt of the 
request for review (excluding Saturdays, Sundays, and legal public 
holidays). The Chairman, or designated officer, will make one of the 
following determinations:
    (1) Make the correction in accordance with the individual's request 
and proceed as in paragraph (c)(1) of this section; or
    (2) Inform the individual in writing of:
    (i) The refusal to amend the record in accordance with the request,

[[Page 65]]

    (ii) The reasons therefor, including any of the standards which were 
employed pursuant to paragraph (d) of this section in conducting the 
review;
    (iii) The right of the individual to file with the Chairman, or 
designated officer, a concise written statement setting forth the 
reasons for his disagreement with the decision;
    (iv) The fact that the statement of disagreement will be made 
available to anyone to whom the record is subsequently disclosed, 
together with the portion of the record which is disputed clearly noted, 
and, with, at the discretion of the Chairman, or designated officer, a 
brief statement by the Chairman, or designated officer, summarizing the 
reasons for refusing to amend the record;
    (v) Where an accounting of the disclosure of the record was made 
pursuant to Sec. 3b.226 of this part, the fact that prior recipients of 
the disputed record will be provided a copy of the individual's 
statement of disagreement, with the portion of the record which is 
disputed clearly noted, and, at the Chairman's or designated officer's 
discretion, the statement summarizing the refusal to amend [see Sec. 
3b.225(d)]; and
    (vi) The individual's right to seek judicial review of the refusal 
to amend.
    (f) The Chairman may designate, in writing, another officer of the 
Commission to act in his capacity for the purposes of this part. The 
officer will be organizationally independent of or senior to the system 
manager who made the initial determination and will conduct a review 
independent of the initial determination.

[Order 536, 40 FR 44288, Sept. 25, 1975, as amended by Order 737, 75 FR 
43402, July 26, 2010]



Sec. 3b.225  Written consent for disclosure.

    (a) The Commission will not disclose any record which is contained 
in a system of records by any means of communication to any person, or 
to any other agency, unless it has the written request by, or the prior 
written consent of, the individual to whom the record pertains and under 
whose individual name, or some other identifying particular, the record 
is filed. The written request or consent should include, at a minimum, 
the general purposes for or the types of recipients to whom disclosure 
may be made. The fact that an individual is informed of the purposes for 
which information will be used when information is collected pursuant to 
Sec. 3b.202(b)(2) will not constitute consent.
    (b) A written request or consent is not required if the disclosure 
is:
    (1) To those officers and employees of the Commission who have a 
need for the record in the performance of their duties;
    (2) Required under the provisions of the Freedom of Information Act, 
5 U.S.C. 552, as amended;
    (3) For a routine use as defined in Sec. 3b.2(g) of this part and 
as described in the public notice for each system of records;
    (4) To the Bureau of the Census for purposes of planning or carrying 
out a census or survey or related activity pursuant to the provisions of 
title 13 of the United States Code;
    (5) To a recipient who has provided the appropriate system manager 
specified for each system of records with advance adequate written 
assurance that the record will be used solely as a statistical research 
or reporting record, and the record is to be transferred in a form that 
is not individually identifiable. The written statement of assurance 
should include at a minimum:
    (i) A statement of the purpose for requesting the record; and
    (ii) Certification that the record will only be used for statistical 
purposes.

In addition to stripping personally identifying information from records 
released for statistical purposes, the system manager will ensure that 
the identity of the individual cannot reasonably be deduced or 
determined by combining various statistical records, or by reference to 
public records or other available sources of information;
    (6) To the National Archives of the United States, pursuant to 44 
U.S.C. 2103, as a record which has sufficient historical or other value 
to warrant its continued preservation by the United States Government, 
or for the evaluation by the Administrator of General Services or his 
designee to determine whether the record has such value;

[[Page 66]]

    (7) To another agency or to an instrumentality of any governmental 
jurisdiction within or under the control of the United States for a 
civil or criminal law enforcement activity if the activity is authorized 
by law, and if the head of the agency or instrumentality, or his 
delegated official, has made a written request to the appropriate system 
manager specifying the particular portion of the record desired and the 
law enforcement activity for which the record is being sought;
    (8) To a person pursuant to a showing of compelling circumstances 
affecting the health or safety of an individual (not necessarily the 
individual to whom the record pertains), if, upon disclosure, 
notification of such is sent to the last known address of the individual 
to whom the record pertains;
    (9) To either House of Congress, or to any committee or subcommittee 
thereof, on a matter within its jurisdiction;
    (10) To the Comptroller General, or any of his authorized 
representatives, in the course of the performance of the duties of the 
General Accounting Office; or
    (11) Pursuant to the order of a court of competent jurisdiction.
    (c) When a record is disclosed under compulsory legal process and 
such process becomes a matter of public record, the system manager will 
make reasonable efforts to notify the individual to whom the record 
pertains. A notice will be sent to the individual's last known address 
noted in the Commission's files.
    (d) The appropriate system manager shall notify all prior recipients 
of records, disclosure to whom an accounting was made pursuant to Sec. 
3b.226, of any amendments made to the records, including corrections, 
amendments and notations of dispute made pursuant to Sec. Sec. 
3b.224(c)(1) and 3b.224(e)(1) and (2)(v), within ten days of receipt of 
the corrected information or notation of dispute (excluding Saturdays, 
Sundays, and legal public holidays), except under unusual circumstances 
[see circumstances described in Sec. 3b.220(d)].
    (e) The content of the records disclosed under this section shall be 
maintained pursuant to the standards established in Sec. 3b.201(c).



Sec. 3b.226  Accounting of disclosures.

    (a) The appropriate system manager specified for each system of 
records will keep an accurate written account of all disclosures of 
records made to any person or to any other agency with the written 
consent or at the written request of the individual to whom the record 
pertains and pursuant to Sec. 3b.225(b)(3) through (11). The account 
will include the following information:
    (1) The date, nature, and purpose of each disclosure;
    (2) The name and address of the person or agency to whom the 
disclosure is made; and
    (3) A reference to the justification or basis upon which the release 
was made, including reference to any written document required as when 
records are released for statistical or law enforcement purposes 
pursuant to Sec. 3b.225(b) (5) and (7).
    (b) Each system manager will retain the accounting made under 
paragraph (a) of this section for at least five years from the date of 
disclosure for which the accounting is made, or the life of the record, 
which ever is longer.
    (c) Except for disclosures made for law enforcement purposes 
pursuant to Sec. 3b.225(b)(7), and unless the system of records has 
been exempted from this provision pursuant to subpart D of this part, 
each system manager will make the accounting made under paragraph (a) of 
this section available to the individual named in the record at his 
written request.
    (d) The accounting of disclosures is not a system of records under 
the definition in Sec. 3b.2(e) and no accounting will be maintained for 
disclosure of the accounting of disclosures.



Sec. 3b.227  Mailing lists.

    An individual's name and address maintained by the Commission will 
not be sold or rented for commercial or other solicitation purposes not 
related to the purposes for which the information was collected, unless 
such sale or rental is specifically authorized by law. This provision 
shall not be construed to require the withholding of names or addresses 
otherwise permitted to be made public, as pursuant to the Freedom of 
Information Act, 5 U.S.C. 552, as amended.

[[Page 67]]



                     Subpart D_Rules for Exemptions



Sec. 3b.250  Specific exemptions.

    Any system of records maintained by the Commission may be exempt 
from certain provisions of the Privacy Act of 1974, and the appropriate 
sections of this part promulgated pursuant thereto, if the following 
requirements are met:
    (a) The system of records falls within one or more of the following 
categories:
    (1) Records subject to the provisions of 5 U.S.C. 552(b)(1) as 
classified material;
    (2) Investigatory material compiled for law enforcement purposes 
[except to the extent that the system is more broadly exempt under 5 
U.S.C. 552a(j)(2) covering records maintained by an agency whose 
principal function pertains to the enforcement of criminal laws] 
provided, however, that is such record is used as a basis for denying an 
individual any right, privilege, or benefit to which the individual 
would be entitled in the absence of that record, the individual must be 
granted access to that record except to the extent that access would 
reveal the identity of a confidential source who furnished the 
information to the Government under an express promise that his identity 
would be held in confidence, or, prior to September 27, 1975, under an 
implied promise that his identity would be held in confidence;
    (3) Records maintained to provide protective services to the 
President of the United States or other individuals pursuant to 18 
U.S.C. 3056;
    (4) Records required by statute to be maintained and used solely as 
statistical records;
    (5) Investigatory material compiled solely for determining 
suitability, eligibility, or qualifications for Federal civilian 
employment, military service, Federal contracts, or access to classified 
information, but only to the extent that disclosure of such material 
would reveal the identity of a source who furnished information to the 
Government under an express promise that his identity would be held in 
confidence, or, prior to September 27, 1975, under an implied promise 
that his identity would be held in confidence;
    (6) Testing or examination material used solely to determine 
individual qualifications for appointment or promotion in the Federal 
service the disclosure of which would compromise the objectivity or 
fairness of the testing or examination process; or
    (7) Material used to evaluate potential for promotion in the armed 
services, but only to the extent that the disclosure of such material 
would reveal the identity of a source who furnished the information to 
the Government under an express promise that his identity would be held 
in confidence, or, prior to September 27, 1975, under an implied promise 
that his identity would be held in confidence;
    (b) Publication in the Federal Register is made in accordance with 
the requirements (including general public notice) of the Administrative 
Procedure Act, 5 U.S.C. 553, to include, at a minimum:
    (1) The name of the system of records;
    (2) The specific provision or provisions of the Privacy Act of 1974, 
and the appropriate sections of this part promulgated pursuant thereto, 
from which the system is to be exempted; and
    (3) The reasons for the exemption; and
    (c) The system of records is exempted from one or more of the 
following provisions of the Privacy Act and the appropriate sections of 
this part promulgated pursuant thereto:
    (1) 5 U.S.C. 552a(c)(3); 18 CFR 3b.226(c)--Making the accounting of 
disclosures available to the individual named in the record at his 
request;
    (2) 5 U.S.C. 552a(d); 18 CFR 3b.221, 3b.224--Granting an individual 
the right of access to his records and permitting him to request 
amendment of such;
    (3) 5 U.S.C. 552a(e)(1); 18 CFR 3b.201(a)--Requiring maintenance of 
relevant and necessary information in a system of records as required by 
statute or Executive order of the President;
    (4) 5 U.S.C. 552a(e)(4)(G); 18 CFR 3b.3(a)(8)--Requiring a 
description of procedures for determining if a system contains a record 
on an individual in

[[Page 68]]

the public notice of the system of records;
    (5) 5 U.S.C. 552a(e)(4)(H); 18 CFR 3b.3(a)(9)--Requiring a 
description of procedures for gaining access to and contesting the 
contents of a record in the public notice of the system of records;
    (6) 5 U.S.C. 552a(e)(4)(I); 18 CFR 3b.3(a)(10)--Requiring a 
description of the categories of the sources of records in the public 
notice of the system of records; and
    (7) 5 U.S.C. 552a(f); 18 CFR 3b.220-3b.224--Requiring agency rules 
for determining if an individual is the subject of a record, for 
handling requests for access, for granting requests for access, for 
amending records, and for fees.



PART 3c_STANDARDS OF CONDUCT--Table of Contents



Sec.
3c.1 Cross-reference to employee ethical conduct standards and financial 
          disclosure regulations.
3c.2 Nonpublic information.
3c.3 Reporting fraud, waste, abuse, and corruption and cooperation with 
          official inquiries.

    Authority: 15 U.S.C. 717g; 16 U.S.C. 825(b); 42 U.S.C. 7171, 7172.

    Source: Order 589, 61 FR 43415, Aug. 23, 1996, unless otherwise 
noted.



Sec. 3c.1  Cross-reference to employee ethical conduct standards and financial 

disclosure regulations.

    Employees of the Federal Energy Regulatory Commission (Commission) 
are subject to the executive branch-wide financial disclosure 
regulations at 5 CFR part 2634, the Standards of Ethical Conduct for 
Employees of the Executive Branch at 5 CFR part 2635, the Commission 
regulations at 5 CFR part 3401 which supplement the Standards of Ethical 
Conduct, and the executive branch-wide employee responsibilities and 
conduct regulation at 5 CFR part 735.



Sec. 3c.2  Nonpublic information.

    (a) Section 1264(d) (42 U.S.C. 16452(d)) of the Public Utility 
Holding Company Act of 2005, section 301(b) (16 U.S.C. 825(b)) of the 
Federal Power Act, and section 8(b) (15 U.S.C. 717g) of the Natural Gas 
Act prohibit any employee, in the absence of Commission or court 
direction, from divulging any fact or information which may come to his 
or her knowledge during the course of examination of books or other 
accounts.
    (b) The nature and time of any proposed action by the Commission are 
confidential and shall not be divulged to anyone outside the Commission. 
The Secretary of the Commission has the exclusive responsibility and 
authority for authorizing the initial public release of information 
concerning Commission proceedings.

[Order 589, 61 FR 43415, Aug. 23, 1996, as amended by Order 699, 72 FR 
45323, Aug. 14, 2007]



Sec. 3c.3  Reporting fraud, waste, abuse, and corruption and cooperation with 

official inquiries.

    (a) Employees shall, in fulfilling the obligation of 5 CFR 
2635.101(b)(11), report fraud, waste, abuse, and corruption in 
Commission programs, including on the part of Commission employees, 
contractors, subcontractors, grantees, or other recipients of Commission 
financial assistance, to the Office of Inspector General or other 
appropriate Federal authority.
    (b) All alleged violations of the ethical restrictions described in 
Sec. 3c.1 that are reported in accordance with paragraph (a) of this 
section to an appropriate authority within the Commission shall in turn 
be referred by that authority to the Designated Agency Ethics Official 
or his or her designee, or the Inspector General.
    (c) Employees shall cooperate with official inquiries by the 
Inspector General; they shall respond to questions truthfully under oath 
when required, whether orally or in writing, and must provide documents 
and other materials concerning matters of official interest. An employee 
is not required to respond to such official inquiries if answers or 
testimony may subject the employee to criminal prosecution.

[[Page 69]]



          SUBCHAPTER B_REGULATIONS UNDER THE FEDERAL POWER ACT



PART 4_LICENSES, PERMITS, EXEMPTIONS, AND DETERMINATION OF PROJECT COSTS--

Table of Contents



  Subpart A_Determination of Cost of Projects Constructed Under License

Sec.
4.1 Initial cost statement.
4.3 Report on project cost.
4.4 Service of report.
4.5 Time for filing protest.
4.6 Burden of proof.
4.7 Findings.

  Subpart B_Determination of Fair Value of Constructed Projects, Under 
                        Section 23(a) of the Act

4.10 Valuation data.
4.11 Reports.
4.12 Service of report.
4.13 Time for filing protest.
4.14 Hearing upon report.

 Subpart C_Determination of Cost of Constructed Projects not Subject to 
                        Section 23(a) of the Act

4.20 Initial statement.
4.21 Reports.
4.22 Service of report.
4.23 Time for filing protest.
4.24 Determination of cost.
4.25 Findings.

  Subpart D_Application for Preliminary Permit, License or Exemption: 
                           General Provisions

4.30 Applicability and definitions.
4.31 Initial or competing application: who may file.
4.32 Acceptance for filing or rejection; information to be made 
          available to the public; requests for additional studies.
4.33 Limitations on submitting applications.
4.34 Hearings on applications; consultation on terms and conditions; 
          motions to intervene; alternative procedures.
4.35 Amendment of application; date of acceptance.
4.36 Competing applications: deadlines for filing; notices of intent; 
          comparisons of plans of development.
4.37 Rules of preference among competing applications.
4.38 Consultation requirements.
4.39 Specifications for maps and drawings.

 Subpart E_Application for License for Major Unconstructed Project and 
                         Major Modified Project

4.40 Applicability.
4.41 Contents of application.

    Subpart F_Application for License for Major Project_Existing Dam

4.50 Applicability.
4.51 Contents of application.

  Subpart G_Application for License for Minor Water Power Projects and 
             Major Water Power Projects 5 Megawatts or Less

4.60 Applicability and notice to agencies.
4.61 Contents of application.

      Subpart H_Application for License for Transmission Line Only

4.70 Applicability.
4.71 Contents of application.

Subpart I_Application for Preliminary Permit; Amendment and Cancellation 
                          of Preliminary Permit

4.80 Applicability.
4.81 Contents of application.
4.82 Amendments.
4.83 Cancellation and loss of priority.
4.84 Surrender of permit.

      Subpart J_Exemption of Small Conduit Hydroelectric Facilities

4.90 Applicability and purpose.
4.91 [Reserved]
4.92 Contents of exemption application.
4.93 Action on exemption applications.
4.94 Standard terms and conditions of exemption.
4.95 Surrender of exemption.
4.96 Amendment of exemption.

Subpart K_Exemption of Small Hydroelectric Power Projects of 5 Megawatts 
                                 or Less

4.101 Applicability.
4.102 Surrender of exemption.
4.103 General provisions for case-specific exemption.
4.104 Amendment of exemption.
4.105 Action on exemption applications.

[[Page 70]]

4.106 Standard terms and conditions of case-specific exemption from 
          licensing.
4.107 Contents of application for exemption from licensing.
4.108 Contents of application for exemption from provisions other than 
          licensing.

             Subpart L_Application for Amendment of License

4.200 Applicability.
4.201 Contents of application.
4.202 Alteration and extension of license.

              Subpart M_Fees Under Section 30(e) of the Act

4.300 Purpose, definitions, and applicability.
4.301 Notice to fish and wildlife agencies and estimation of fees prior 
          to filing.
4.302 Fees at filing.
4.303 Post-filing procedures.
4.304 Payment.
4.305 Enforcement.

    Authority: 16 U.S.C. 792-828c, 2601-2645; 42 U.S.C. 7101-7352.

    Source: Order 141, 12 FR 8485, Dec. 19, 1947, unless otherwise 
noted.



  Subpart A_Determination of Cost of Projects Constructed Under License



Sec. 4.1  Initial cost statement.

    (a) Notification of Commission. When a project is constructed under 
a license issued under the Federal Power Act, the licensee shall, within 
one year after the original project is ready for service, file with the 
Commission a letter, in quadruplicate, declaring that the original costs 
have been booked in compliance with the Commission's Uniform System of 
Accounts and the books of accounts are ready for audit.
    (b) Licensee's books. The licensee's books of accounts for each 
project shall be maintained in such a fashion that each year's 
additions, betterments, and delections to the project may be readily 
ascertained.
    (c) Availability of information to the public. The information made 
available to the Commission in accordance with this section must be 
available to the public for inspection and copying when specifically 
requested.
    (d) Compliance with the Act. Compliance with the provisions of this 
section satisfies the filing requirements of section 4(b) of the Federal 
Power Act (16 U.S.C. 797(b)).

[Order 53, 44 FR 61948, Oct. 29, 1979]



Sec. 4.3  Report on project cost.

    (a) Scheduling an audit. When the original cost declaration letter, 
filed in accordance with Sec. 4.1 is received by the Commission, its 
representative will schedule and conduct an audit of the books, cost 
records, engineering reports, and other records supporting the project's 
original cost. The audit may include an inspection of the project works.
    (b) Project records. The cost records shall be supported by 
memorandum accounts reflecting the indirect and overhead costs prior to 
their spread to primary accounts as well as all the details of 
allocations including formulas utilized to spread the indirect and 
overhead costs to primary accounts.
    (c) Report by Commission staff. Upon completion of the audit, a 
report will be prepared for the Commission setting forth the audit 
findings and recommendations with respect to the cost as claimed.

[Order 53, 44 FR 61948, Oct. 29, 1979]



Sec. 4.4  Service of report.

    Copies of such report will be served upon said licensees, and copies 
will also be sent to the State public service commission, or if the 
State has no regulatory agency, to the Governor of the State where such 
project is located, and to such other parties as the Commission shall 
prescribe, and the report will be made available for public inspection 
at the time of service upon the licensee.

(Administrative Procedure Act, 5 U.S.C. 551-557 (1976); Federal Power 
Act, as amended, 16 U.S.C. 291-628 (1976 & Supp. V 1981), Dept. of 
Energy Organization Act 42 U.S.C. 7101-7352 (Supp. V 1981); E.O. 12009, 
3 CFR 142 (1978))

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 344, 48 FR 
49010, Oct. 24, 1983; Order 737, 75 FR 43402, July 26, 2010]



Sec. 4.5  Time for filing protest.

    Thirty days after service thereof will be allowed to such licensee 
within which to file a protest to such reports. If no protest is filed 
within the time allowed, the Commission will issue such

[[Page 71]]

order as may be appropriate. If a protest is filed, a public hearing 
will be ordered in accordance with subpart E of part 385 of this 
chapter.

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 225, 47 FR 
19056, May 3, 1982]



Sec. 4.6  Burden of proof.

    The burden of proof to sustain each item of claimed cost shall be 
upon the licensee and only such items as are in the opinion of the 
Commission supported by satisfactory proof may be entered in the 
electric plant accounts of the licensee.

[Order 53, 44 FR 61948, Oct. 29, 1979]



Sec. 4.7  Findings.

    (a) Commission determination. Final action by the Commission will be 
in the form of an order served upon all parties to the proceeding. One 
copy of the order will be furnished to the Secretary of Treasury by the 
Commission.
    (b) Adjustments to licensee's books. The licensee's books of account 
for the project shall be adjusted to conform to the actual legitimate 
cost as revised by the order of the Commission. These adjustments and 
the project may be audited by Commission representatives, as scheduled.

[Order 53, 44 FR 61948, Oct. 29, 1979]



  Subpart B_Determination of Fair Value of Constructed Projects, Under 

                        Section 23(a) of the Act



Sec. 4.10  Valuation data.

    (a) Notification of Commission. In every case arising under section 
23(a) of the Federal Power Act that requires the determination of the 
fair value of a project already constructed, the licensee shall, within 
six months after the date of issuance of a license, file with the 
Commission a letter, in quadruplicate.
    (b) Contents of letter. The letter referred to in paragraph (a) 
shall contain a statement to the effect that an inventory and appraisal 
in detail, as of the effective date of the license, of all property 
subject thereto and to be so valued has been completed. The letter shall 
also include a statement to the effect that the actual legitimate 
original cost, or if not known, the estimated original cost, and accrued 
depreciation of the property, classified by prime accounts as prescribed 
in the Commission's Uniform System of Accounts, have been established.
    (c) Licensee's books. The licensee's books of account for each 
project shall be maintained in such a fashion that each year's 
additions, betterments, and deletions to the projects may be readily 
ascertained.
    (d) Availability of information to the public. The information made 
available to the Commission in accordance with this section must be 
available for inspection and copying by the public when specifically 
requested.

[Order 53, 44 FR 61948, Oct. 29, 1979]



Sec. 4.11  Reports.

    Representatives of the Commission will inspect the project works, 
engineering reports, and other records of the project, check the 
inventory and make an appraisal of the property and an audit of the 
books, records, and accounts of the licensee relating to the property to 
be valued, and will prepare a report of their findings with respect to 
the inventory, appraisal, original cost, accrued depreciation, and fair 
value of the property.



Sec. 4.12  Service of report.

    A copy of such report will be served upon said licensee, and copies 
will also be sent to the State public service commission, or if the 
State has no regulatory agency, to the Governor of the State where such 
project is located. The report will be made available for public 
inspection at the time of service upon the licensee.

(Administrative Procedure Act, 5 U.S.C. 551-557 (1976); Federal Power 
Act, as amended, 16 U.S.C. 291-628 (1976 & Supp. V 1981), Dept. of 
Energy Organization Act 42 U.S.C. 7101-7352 (Supp. V 1981); E.O. 12009, 
3 CFR 142 (1978))

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 344, 48 FR 
49010, Oct. 24, 1983; Order 737, 75 FR 43402, July 26, 2010]

[[Page 72]]



Sec. 4.13  Time for filing protest.

    Thirty days after service thereof will be allowed to the licensee 
within which to file a protest to such report.



Sec. 4.14  Hearing upon report.

    (a) Public hearing. After the expiration of the time within which a 
protest may be filed, a public hearing will be ordered in accordance 
with subpart E of part 385 of this chapter.
    (b) Commission determination. After the conclusion of the hearing, 
the Commission will make a finding of fair value, accompanied by an 
order which will be served upon the licensee and all parties to the 
proceeding. One copy of the order shall be furnished to the Secretary of 
the Treasury by the Commission.
    (c) Adjustment to licensee's books. The licensee's books of account 
for the project shall be adjusted to conform to the fair value of the 
project as revised by the order of the Commission. These adjustments and 
the project may be audited by Commission representatives, as scheduled.

[Order 53, 44 FR 61949, Oct. 29, 1979, as amended by Order 225, 47 FR 
19056, May 3, 1982]



 Subpart C_Determination of Cost of Constructed Projects not Subject to 

                        Section 23(a) of the Act



Sec. 4.20  Initial statement.

    (a) Notification of Commission. In all cases where licenses are 
issued for projects already constructed, but which are not subject to 
the provisions of section 23(a) of the Act (49 Stat. 846; 16 U.S.C. 
816), the licensee shall, within 6 months after the date of issuance of 
license, file with the Commission a letter, in quadruplicate.
    (b) Contents of letter. The letter referred to in paragraph (a) of 
this section shall contain a statement to the effect that an inventory 
in detail of all property included under the license, as of the 
effective date of such license, has been completed. The letter shall 
also include a statement to the effect that actual legitimate original 
cost, or if not known, the estimated original cost, and accrued 
depreciation of the property, classified by prime accounts as prescribed 
in the Commission's Uniform System of Accounts, have been established.
    (c) Licensee's books. The licensee's books of account for each 
project shall be maintained in such a fashion that each year's 
additions, betterments, and deletions to the project may be readily 
ascertained.
    (d) Availability of information to the public. The information made 
available to the Commission in accordance with this section must be 
available for inspection and copying by the public when specifically 
requested.
    (e) Compliance with the Act. Compliance with the provisions of this 
section satisfies the filing requirements of section 4(b) of the Federal 
Power Act (16 U.S.C. 797(b)).

[Order 53, 44 FR 61949, Oct. 29, 1979]



Sec. 4.21  Reports.

    Representatives of the Commission will inspect the project works, 
engineering reports, and other records of the project, check the 
inventory and estimated depreciation, make an audit of the books, 
records, and accounts of the licensee relating to the property under 
license, and prepare a report of their findings with respect to the 
inventory, the original cost of the property, and the estimated accrued 
depreciation thereon.



Sec. 4.22  Service of report.

    Copies of such report will be served upon said licensees, and copies 
will also be sent to the State public service commission, or if the 
State has no regulatory agency, to the Governor of the State where such 
project is located, and to such other parties as the Commission shall 
prescribe, and the report will be made available for public inspection 
at the time of service upon the licensee.

(Administrative Procedure Act, 5 U.S.C. 551-557 (1976); Federal Power 
Act, as amended, 16 U.S.C. 291-628 (1976 & Supp. V 1981), Dept. of 
Energy Organization Act 42 U.S.C. 7101-7352 (Supp. V 1981); E.O. 12009, 
3 CFR 142 (1978))

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 344, 48 FR 
49010, Oct. 24, 1983; Order 737, 75 FR 43402, July 26, 2010]

[[Page 73]]



Sec. 4.23  Time for filing protest.

    Thirty days after service thereof will be allowed to such licensee 
within which to file a protest to such reports. If no protest is filed 
within the time allowed, the Commission will issue such order as may be 
appropriate. If a protest is filed, a public hearing will be ordered in 
accordance with subpart E of part 385 of this chapter.

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 225, 47 FR 
19056, May 3, 1982]



Sec. 4.24  Determination of cost.

    The Commission, after receipt of the reports, or after the 
conclusion of the hearing if one is held, will determine the amounts to 
be included in the electric plant accounts of the licensee as the cost 
of the property and the accrued depreciation thereon.



Sec. 4.25  Findings.

    (a) Commission determination. Final action by the Commission will be 
in the form of an order served upon all parties to the proceeding. One 
copy of the order shall be furnished to the Secretary of Treasury by the 
Commission.
    (b) Adjustment to licensee's books. The licensee's books of account 
for the project shall be adjusted to conform to the actual legitimate 
cost as revised by the order of the Commission. These adjustments and 
the project may be audited by Commission representatives, as scheduled.

[Order 53, 44 FR 61949, Oct. 29, 1979]



  Subpart D_Application for Preliminary Permit, License or Exemption: 

                           General Provisions

    Authority: Federal Power Act, as amended, 16 U.S.C. 792-828c; 
Department of Energy Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 
42 FR 46267; Public Utility Regulatory Policies Act of 1978, 16 U.S.C. 
2601-2645; Pub. L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.).



Sec. 4.30  Applicability and definitions.

    (a) (1) This subpart applies to applications for preliminary permit, 
license, or exemption from licensing.
    (2) Any potential applicant for an original license for which 
prefiling consultation begins on or after July 23, 2005 and which wishes 
to develop and file its application pursuant to this part, must seek 
Commission authorization to do so pursuant to the provisions of part 5 
of this chapter.
    (b) For the purposes of this part--
    (1)(i) Competing development application means any application for a 
license or exemption from licensing for a proposed water power project 
that would develop, conserve, and utilize, in whole or in part, the same 
or mutually exclusive water resources that would be developed, 
conserved, and utilized by a proposed water power project for which an 
initial preliminary permit or initial development application has been 
filed and is pending before the Commission.
    (ii) Competing preliminary permit application means any application 
for a preliminary permit for a proposed water power project that would 
develop, conserve, and utilize, in whole or in part, the same or 
mutually exclusive water resources that would be developed, conserved 
and utilized by a proposed water power project for which an initial 
preliminary permit or initial development application has been filed and 
is pending before the Commission.
    (2) Conduit means any tunnel, canal, pipeline, aqueduct, flume, 
ditch, or similar manmade water conveyance that is operated for the 
distribution of water for agricultural, municipal, or industrial 
consumption and not primarily for the generation of electricity. The 
term not primarily for the generation of electricity includes but is not 
limited to a conduit:
    (i) Which was built for the distribution of water for agricultural, 
municipal, or industrial consumption and is operated for such a purpose; 
and
    (ii) To which a hydroelectric facility has been or is proposed to be 
added.
    (3) Construction of a dam, for the purposes of provisions governing 
application for exemption of a small conduit hydroelectric facility, 
means any construction, repair, reconstruction, or modification of a dam 
that creates a new impoundment or increases the normal maximum surface 
elevation or the normal maximum surface area of an existing impoundment.
    (4)(i) Dam, for the purposes of provisions governing application for 
license

[[Page 74]]

of a major project--existing dam, means any structure for impounding or 
diverting water.
    (ii) Dam, for the purposes of provisions governing application for 
exemption of a small conduit hydroelectric facility, means any structure 
that impounds water.
    (iii) Dam, for the purposes of provisions governing application for 
exemption of a small hydroelectric power project, means any structure 
for impounding water, including any diversion structure that is designed 
to obstruct all or substantially all of the flow of a natural body of 
water.
    (5) Development application means any application for either a 
license or exemption from licensing for a proposed water power project.
    (6)(i) Existing dam, for the purposes of provisions governing 
application for license of a major project--existing dam, means any dam 
(as defined in paragraph (b)(4)(i) of this section) that has already 
been constructed and which does not require any construction or 
enlargement of impoundment structures other than repairs or 
reconstruction.
    (ii) Existing dam, for the purposes of provisions governing 
application for exemption of a small hydroelectric power project, means 
any dam, the construction of which was completed on or before July 22, 
2005, and which does not require any construction or enlargement of 
impoundment structures (other than repairs or reconstruction) in 
connection with the installation of any small hydroelectric power 
project.
    (7) Existing impoundment, for the purposes of provisions governing 
application for license of a major project--existing dam, means any body 
of water that an existing dam impounds.
    (8) Federal lands, for the purposes of provisions governing 
application for exemption of a small hydroelectric power project, means 
any lands to which the United States holds fee title.
    (9)(i) Fish and wildlife agencies means the United States Fish and 
Wildlife Service, the National Marine Fisheries Service, and the state 
agency in charge of administrative management over fish and wildlife 
resources of the state in which a proposed hydropower project is 
located.
    (ii) Fish and wildlife recommendation means any recommendation 
designed to protect, mitigate damages to, or enhance any wild member of 
the animal kingdom, including any migratory or nonmigratory mammal, 
fish, bird, amphibian, reptile, mollusk, crustacean, or other 
invertebrate, whether or not bred, hatched, or born in captivity, and 
includes any egg or offspring thereof, related breeding or spawning 
grounds, and habitat. A ``fish and wildlife recommendation'' includes a 
request for a study which cannot be completed prior to licensing, but 
does not include a request that the proposed project not be constructed 
or operated, a request for additional pre-licensing studies or analysis 
or, as the term is used in Sec. Sec. 4.34(e)(1) and 4.34(f)(3), a 
recommendation for facilities, programs, or other measures to benefit 
recreation or tourism.
    (10) Indian tribe means, in reference to a proposal to apply for a 
license or exemption for a hydropower project, an Indian tribe which is 
recognized by treaty with the United States, by federal statute, or by 
the U.S. Department of the Interior in its periodic listing of tribal 
governments in the Federal Register in accordance with 25 CFR 83.6(b), 
and whose legal rights as a tribe may be affected by the development and 
operation of the hydropower project proposed (as where the operation of 
the proposed project could interfere with the management and harvest of 
anadromous fish or where the project works would be located within the 
tribe's reservation).
    (11)(i) Initial development application means any acceptable 
application for either a license or exemption from licensing for a 
proposed water power project that would develop, conserve, and utilize, 
in whole or in part, water resources for which no other acceptable 
application for a license or exemption from licensing has been submitted 
for filing and is pending before the Commission.
    (ii) Initial preliminary permit application means any acceptable 
application for a preliminary permit for a proposed water power project 
that would develop, conserve, and utilize, in whole or

[[Page 75]]

in part, water resources for which no other acceptable preliminary 
permit application has been submitted for filing and is pending before 
the Commission.
    (12) Install or increase, for the purposes of provisions governing 
application for exemption of a small hydroelectric power project, means 
to add new generating capacity at a site that has no existing generating 
units, to replace or rehabilitate an abandoned or unused existing 
generating unit, or to increase the generating capacity of any existing 
power plant by installing an additional generating unit or by 
rehabilitating an operable generating unit in a way that increases its 
rated electric power output.
    (13) Licensed water power project means a project, as defined in 
section 3(11) of the Federal Power Act, that is licensed under Part I of 
the Federal Power Act.
    (14) Major modified project means any major project--existing dam, 
as defined in paragraph (b)(16) of this section, that would include:
    (i) Any repair, modification or reconstruction of an existing dam 
that would result in a significant change in the normal maximum surface 
area or the normal maximum surface elevation of an existing impoundment; 
or
    (ii) Any change in existing project works or operations that would 
result in a significant environmental impact.
    (15) Major unconstructed project means any unlicensed water power 
project that would:
    (i) Have a total installed generating capacity of more than 1.5 MW; 
and
    (ii) Use the water power potential of a dam and impoundment which, 
at the time application is filed, have not been constructed.
    (16) Major project--existing dam means a licensed or unlicensed, 
existing or proposed water power project that would:
    (i) Have a total installed generating capacity or more than 2,000 
horsepower (1.5 MW); and
    (ii) Not use the water power potential provided by any dam except an 
existing dam.
    (17) Minor water power project means any licensed or unlicensed, 
existing or proposed water power project that would have a total 
installed generation capacity of 2,000 horsepower (1.5 MW), or less.
    (18) New development, for the purposes of provisions governing 
application for license of a major project--existing dam, means any 
construction, installation, repair, reconstruction, or other change in 
the existing state of project works or appurtenant facilities, including 
any dredging and filling in project waters.
    (19) New license means any license, except an annual license issued 
under section 15 of the Federal Power Act, for a water power project 
that is issued under the Federal Power Act after the initial license for 
that project.
    (20)(i) Non-Federal lands, for the purposes of provisions governing 
application for exemption of a small conduit hydroelectric facility, 
means any lands except lands to which the United States holds fee title.
    (ii) Non-Federal lands, for the purposes of provisions governing 
application for exemption of a small hydroelectric power project, mean 
any lands other than Federal lands defined in paragraph (b)(8) of this 
section.
    (21) Person means any individual and, as defined in section 3 of the 
Federal Power Act, any corporation, municipality, or state.
    (22) Project, for the purposes of provisions governing application 
for exemption of a small hydroelectric power project, means:
    (i) The impoundment and any associated dam, intake, water conveyance 
facility, power plant, primary transmission line, and other appurtenant 
facility if a lake or similar natural impoundment or a manmade 
impoundment is used for power generation; or
    (ii) Any diversion structure other than a dam and any associated 
water conveyance facility, power plant, primary transmission line, and 
other appurtenant facility if a natural water feature other than a lake 
or similar natural impoundment is used for power generation.
    (23) Qualified exemption applicant means any person who meets the 
requirements specified in Sec. 4.31(b)(2) with respect to a small 
hydroelectric power project for which exemption from licensing is 
sought.

[[Page 76]]

    (24) Qualified license applicant means any person to whom the 
Commission may issue a license, as specified in section 4(e) of the 
Federal Power Act.
    (25) Ready for environmental analysis means the point in the 
processing of an application for an original or new license or exemption 
from licensing which has been accepted for filing, where substantially 
all additional information requested by the Commission has been filed 
and found adequate.
    (26) Real property interests, for the purposes of provisions 
governing application for exemption of a small conduit hydroelectric 
facility or a small hydroelectric power project, includes ownership in 
fee, rights-of-way, easements, or leaseholds.
    (27) Resource agency means a Federal, state, or interstate agency 
exercising administration over the areas of flood control, navigation, 
irrigation, recreation, fish and wildlife, water resource management 
(including water rights), or cultural or other relevant resources of the 
state or states in which a project is or will be located.
    (28) Small conduit hydroelectric facility means an existing or 
proposed hydroelectric facility that is constructed, operated, or 
maintained for the generation of electric power, and includes all 
structures, fixtures, equipment, and lands used and useful in the 
operation or maintenance of the hydroelectric facility, but excludes the 
conduit on which the hydroelectric facility is located or the 
transmission lines associated with the hydroelectric facility and which:
    (i) Utilizes for electric power generation the hydroelectric 
potential of a conduit;
    (ii) Is located entirely on non-Federal lands, as defined in 
paragraph (b)(20)(i) of this section;
    (iii) Has an installed generating capacity of 15 MW or less (40 MW 
in the case of a municipal water supply project);
    (iv) Is not an integral part of a dam;
    (v) Discharges the water it uses for power generation either:
    (A) Into a conduit;
    (B) Directly to a point of agricultural, municipal, or industrial 
consumption; or
    (C) Into a natural water body if a quantity of water equal to or 
greater than the quantity discharged from the hydroelectric facility is 
withdrawn from that water body downstream into a conduit that is part of 
the same water supply system as the conduit on which the hydroelectric 
facility is located; and
    (vi) Does not rely upon construction of a dam, which construction 
will create any portion of the hydrostatic head that the facility uses 
for power generation unless that construction would occur for 
agricultural, municipal, or industrial consumptive purposes even if 
hydroelectric generating facilities were not installed.
    (29) Small hydroelectric power project means any project in which 
capacity will be installed or increased after the date of notice of 
exemption or application under subpart K of this chapter, which will 
have a total installed capacity of not more than 5 MW, and which:
    (i) Would utilize for electric power generation the water power 
potential of an existing dam that is not owned or operated by the United 
States or by an instrumentality of the Federal Government, including the 
Tennessee Valley Authority; or
    (ii)(A) Would utilize for the generation of electricity a natural 
water feature, such as a natural lake, waterfall, or the gradient of a 
natural stream, without the need for a dam or man-made impoundment; and
    (B) Would not retain water behind any structure for the purpose of a 
storage and release operation.
    (30) PURPA benefits means benefits under section 210 of the Public 
Utility Regulatory Policies Act of 1978 (PURPA). Section 210(a) of PURPA 
requires electric utilities to purchase electricity from, and to sell 
electricity to, qualifying facilities.

[Order 413, 50 FR 11676, Mar. 25, 1985, as amended by Order 487, 52 FR 
48404, Dec. 22, 1987; Order 499, 53 FR 27001, July 18, 1988; Order 503, 
53 FR 36567, Sept. 21, 1988; Order 533, 56 FR 23146, May 20, 1991; 56 FR 
61154, Dec. 2, 1991; Order 533-A, 57 FR 10809, Mar. 31, 1992; 59 FR 
10577, Mar. 7, 1994; Order 2002, 68 FR 51115, Aug. 25, 2003; Order 699, 
72 FR 45323, Aug. 14, 2007]

[[Page 77]]



Sec. 4.31  Initial or competing application: who may file.

    (a) Application for a preliminary permit or a license. Any citizen, 
association of citizens, domestic corporation, municipality, or state 
may submit for filing an initial application or a competing application 
for a preliminary permit or a license for a water power project under 
Part I of the Federal Power Act.
    (b) Application for exemption of a small conduit hydroelectric 
facility--(1) Exemption from provisions other than licensing. Any 
citizen, association of citizens, domestic corporation, municipality, or 
state that has all of the real property interests in the lands necessary 
to develop and operate that project, or an option to obtain those 
interests, may apply for exemption of a small conduit hydroelectric 
facility from provisions of Part I of the Federal Power Act, other than 
licensing provisions.
    (2) Exemption from licensing. Any person having all the real 
property interests in the lands necessary to develop and operate the 
small conduit hydroelectric facility, or an option to obtain those 
interests, may apply for exemption of that facility from licensing under 
Part I of the Federal Power Act.
    (c) Application for case-specific exemption of a small hydroelectric 
power project--(1) Exemption from provisions other than licensing. Any 
qualified license applicant or licensee seeking amendment of its license 
may apply for exemption of the related project from provisions of Part I 
of the Federal Power Act other than licensing provisions.
    (2) Exemption from licensing--(i) Only Federal lands involved. If 
only rights to use or occupy Federal lands would be necessary to develop 
and operate the proposed small hydroelectric power project, any person 
may apply for exemption of that project from licensing.
    (ii) Some non-Federal lands involved. If real property interests in 
any non-Federal lands would be necessary to develop and operate the 
proposed small hydroelectric power project, any person who has all of 
the real property interests in non-Federal lands necessary to develop 
and operate that project, or an option to obtain those interests, may 
apply for exemption of that project from licensing.

[Order 413, 50 FR 11678, Mar. 25, 1985]



Sec. 4.32  Acceptance for filing or rejection; information to be made 

available to the public; requests for additional studies.

    (a) Each application must:
    (1) For a preliminary permit or license, identify every person, 
citizen, association of citizens, domestic corporation, municipality, or 
state that has or intends to obtain and will maintain any proprietary 
right necessary to construct, operate, or maintain the project;
    (2) For a preliminary permit or a license, identify (providing names 
and mailing addresses):
    (i) Every county in which any part of the project, and any Federal 
facilities that would be used by the project, would be located;
    (ii) Every city, town, or similar local political subdivision:
    (A) In which any part of the project, and any Federal facilities 
that would be used by the project, would be located; or
    (B) That has a population of 5,000 or more people and is located 
within 15 miles of the project dam;
    (iii) Every irrigation district, drainage district, or similar 
special purpose political subdivision:
    (A) In which any part of the project, and any Federal facilities 
that would be used by the project, would be located; or
    (B) That owns, operates, maintains, or uses any project facilities 
or any Federal facilities that would be used by the project;
    (iv) Every other political subdivision in the general area of the 
project that there is reason to believe would likely be interested in, 
or affected by, the application; and
    (v) All Indian tribes that may be affected by the project.
    (3)(i) For a license (other than a license under section 15 of the 
Federal Power Act) state that the applicant has made, either at the time 
of or before filing the application, a good faith effort to give 
notification by certified mail of the filing of the application to:

[[Page 78]]

    (A) Every property owner of record of any interest in the property 
within the bounds of the project, or in the case of the project without 
a specific boundary, each such owner of property which would underlie or 
be adjacent to any project works including any impoundments; and
    (B) The entities identified in paragraph (a)(2) of this section, as 
well as any other Federal, state, municipal or other local government 
agencies that there is reason to believe would likely be interested in 
or affected by such application.
    (ii) Such notification must contain the name, business address, and 
telephone number of the applicant and a copy of the Exhibit G contained 
in the application, and must state that a license application is being 
filed with the Commission.
    (4)(i) As to any facts alleged in the application or other materials 
filed, be subscribed and verified under oath in the form set forth in 
paragraph (a) (4)(ii) of this section by the person filing, an officer 
thereof, or other person having knowledge of the matters sent forth. If 
the subscription and verification is by anyone other than the person 
filing or an officer thereof, it shall include a statement of the 
reasons therefor.
    (ii) This (application, etc.) is executed in the

State of________________________________________________________________

County of_______________________________________________________________

by:--------------------

(Name)--------------------______________________________________________

(Address)_______________________________________________________________

being duly sworn, depose(s) and say(s) that the contents of this 
(application, etc.) are true to the best of (his or her) knowledge or 
belief. The undersigned applicant(s) has (have) signed the (application, 
etc.) this ------------ day of --------------, 19----.

________________________________________________________________________

(Applicant(s))

By:_____________________________________________________________________

    Subscribed and sworn to before me, a [Notary Public, or title of 
other official authorized by the state to notarize documents, as 
appropriate] of the State of ---------------- this day of --------------
, 19----.

/SEAL/ [if any]

________________________________________________________________________


(Notary Public, or other authorized official)

    (5) Contain the information and documents prescribed in the 
following sections of this chapter, according to the type of 
application:
    (i) Preliminary permit: Sec. 4.81;
    (ii) License for a minor water power project and a major water power 
project 5 MW or less: Sec. 4.61;
    (iii) License for a major unconstructed project and a major modified 
project: Sec. 4.41;
    (iv) License for a major project--existing dam: Sec. 4.51;
    (v) License for a transmission line only: Sec. 4.71;
    (vi) Nonpower license for a licensed project: Sec. 16.11;
    (vii) Exemption of a small conduit hydroelectric facility: Sec. 
4.92;
    (viii) Case-specific exemption of a small hydroelectric power 
project: Sec. 4.107; or
    (ix) License or exemption for a project located at a new dam or 
diversion where the applicant seeks PURPA benefits: Sec. 292.208.
    (b) (1) Each applicant for a preliminary permit, license, and 
transfer or surrender of license and each petitioner for surrender of an 
exemption must submit the application or petition to the Secretary of 
the Commission in accordance with filing procedures posted on the 
Commission's Web site at http://www.ferc.gov. The applicant or 
petitioner must serve one copy of the application or petition on the 
Director of the Commission's Regional Office for the appropriate region 
and on each resource agency, Indian tribe, and member of the public 
consulted pursuant to Sec. 4.38 or Sec. 16.8 of this chapter or part 5 
of this chapter. In the case of an application for a preliminary permit, 
the applicant must, if the Commission so directs, serve copies of the 
application on the U.S. Department of the Interior and the U.S. Army 
Corps of Engineers. The application may include reduced prints of maps 
and drawings conforming to Sec. 4.39(d). The originals (microfilm) of 
maps and drawings are not to be filed initially, but will be required 
pursuant to paragraph (d) of this section. The Commission may also ask 
for the filing of full-sized prints in appropriate cases.

[[Page 79]]

    (2) Each applicant for exemption must submit the application to the 
Secretary of the Commission in accordance with filing procedures posted 
on the Commission's Web site at http://www.ferc.gov. An applicant must 
serve one copy of the application on the Director of the Commission's 
Regional Office for the appropriate region and on each resource agency 
consulted pursuant to Sec. 4.38. For each application filed following 
October 23, 2003, maps and drawings must conform to the requirements of 
Sec. 4.39. The originals (microfilm) of maps and drawing are not to be 
filed initially, but will be requested pursuant to paragraph (d) of this 
section.
    (3)(i) An applicant must make information regarding its proposed 
project reasonably available to the public for inspection and 
reproduction, from the date on which the applicant files its application 
for a license or exemption until the licensing or exemption proceeding 
for the project is terminated by the Commission. This information 
includes a copy of the complete application for license or exemption, 
together with all exhibits, appendices and any amendments, and any 
comments, pleadings, supplementary or additional information, or 
correspondence filed by the applicant with the Commission in connection 
with the application.
    (ii) An applicant must delete from any information made available to 
the public under this section, specific site or property locations the 
disclosure of which would create a risk of harm, theft, or destruction 
of archeological or Native American cultural resources or to the site at 
which the sources are located, or would violate any federal law, 
including the Archaeological Resources Protection Act of l979, 16 U.S.C. 
470w-3, and the National Historic Preservation Act of 1966, 16 U.S.C. 
470hh.
    (4)(i) An applicant must make available the information specified in 
paragraph (b)(3) of this section in a form that is readily accessible, 
reviewable, and reproducible, at the same time as the information is 
filed with the Commission or required by regulation to be made 
available.
    (ii) An applicant must make the information specified in paragraph 
(b)(3) of this section available to the public for inspection:
    (A) At its principal place of business or at any other location that 
is more accessible to the public, provided that all the information is 
available in at least one location;
    (B) During regular business hours; and
    (C) In a form that is readily accessible, reviewable and 
reproducible.
    (iii) The applicant must provide a copy of the complete application 
(as amended) to a public library or other convenient public office 
located in each county in which the proposed project is located.
    (iv) An applicant must make requested copies of the information 
specified in paragraph (b)(3) of this section available either:
    (A) At its principal place of business or at any other location that 
is more accessible to the public, after obtaining reimbursement for 
reasonable costs of reproduction; or
    (B) Through the mail, after obtaining reimbursement for postage fees 
and reasonable costs of reproduction.
    (5) Anyone may file a petition with the Commission requesting access 
to the information specified in paragraph (b)(3) of this section if it 
believes that an applicant is not making the information reasonably 
available for public inspection or reproduction. The petition must 
describe in detail the basis for the petitioner's belief.
    (6) An applicant must publish notice twice of the filing of its 
application, no later than 14 days after the filing date, in a daily or 
weekly newspaper of general circulation in each county in which the 
project is located. The notice must disclose the filing date of the 
application and briefly summarize it, including the applicant's name and 
address, the type of facility applied for, its proposed location, the 
places where the information specified in paragraph (b)(3) of this 
section is available for inspection and reproduction, and the date by 
which any requests for additional scientific studies are due under 
paragraph (b)(7) of this section, and must state that the Commission 
will publish subsequent notices soliciting

[[Page 80]]

public participation if the application is found acceptable for filing. 
The applicant must promptly provide the Commission with proof of the 
publications of this notice.
    (7) If any resource agency, Indian tribe, or person believes that an 
additional scientific study should be conducted in order to form an 
adequate factual basis for a complete analysis of the application on its 
merits, the resource agency, Indian tribe, or person must file a request 
for the study with the Commission not later than 60 days after the 
application is filed and serve a copy of the request on the applicant. 
The Commission will issue public notice of the tendering for filing of 
each application for hydropower license or exemption; each such 
applicant must submit a draft of this notice to the Commission with its 
application. For any such additional study request, the requester must 
describe the recommended study and the basis for the request in detail, 
including who should conduct and participate in the study, its 
methodology and objectives, whether the recommended study methods are 
generally accepted in the Scientific community, how the study and 
information sought will be useful in furthering the resource goals that 
are affected by the proposed facilities, and approximately how long the 
study will take to complete, and must explain why the study objectives 
cannot be achieved using the data already available. In addition, in the 
case of a study request by a resource agency or Indian tribe that had 
failed to request the study during the pre-filing consultation process 
under Sec. 4.38 of this part or Sec. 16.8 of this chapter, the agency 
or Indian tribe must explain why this request was not made during the 
pre-filing consultation process and show good cause why its request for 
the study should be considered by the Commission.
    (8) An applicant may file a response to any such study request 
within 30 days of its filing, serving a copy of the response on the 
requester.
    (9) The requirements of paragraphs (b)(3) to (b)(8) of this section 
only apply to an application for license or exemption filed on or after 
May 20, 1991. Paragraphs (b)(3) and (b)(4) of this section do not apply 
to applications subject to the requirements of Sec. 16.7 of this 
chapter.
    (c)(1) Every applicant for a license or exemption for a project with 
a capacity of 80 megawatts or less must include in its application 
copies of the statements made under Sec. 4.38(b)(2)(vi).
    (2) If an applicant reverses a statement of intent not to seek PURPA 
benefits:
    (i) Prior to the Commission issuing a license or exemption, the 
reversal of intent will be treated as an amendment of the application 
under Sec. 4.35 and the applicant must:
    (A) Repeat the pre-filing consultation process under Sec. 4.38; and
    (B) Satisfy all the requirements in Sec. 292.208 of this chapter; 
or
    (ii) After the Commission issues a license or exemption for the 
project, the applicant is prohibited from obtaining PURPA benefits.
    (d) When any application is found to conform to the requirements of 
paragraphs (a), (b) and (c) of this section, the Commission or its 
delegate will:
    (1) Notify the applicant that the application has been accepted for 
filing, specifying the project number assigned and the date upon which 
the application was accepted for filing, and, for a license or exemption 
application, direct the filing of the originals (microfilm) of required 
maps and drawings;
    (2)(i) For an application for a preliminary permit or a license, 
issue public notice of the application as required in the Federal Power 
Act;
    (ii) For an application for exemption from licensing, publish notice 
once in a daily or weekly newspaper of general circulation in each 
county in which the project is or will be located; and
    (3) If the project affects lands of the United States, notify the 
appropriate Federal office of the application and the specific lands 
affected, pursuant to section 24 of the Federal Power Act.
    (4) For an application for a license seeking benefits under section 
210 of the Public Utility Regulatory Policies Act of 1978, as amended, 
for a project that would be located at a new dam or diversion, serve the 
public notice

[[Page 81]]

issued for the application under paragraph (d)(2)(i) of this section to 
interested agencies at the time the applicant is notified that the 
application is accepted for filing.
    (e) In order for an application to conform adequately to the 
requirements of paragraphs (a), (b) and (c) of this section and of Sec. 
4.38, an application must be completed fully. No blanks should be left 
in the application. No material or information required in the 
application should be omitted. If an applicant believes that its 
application conforms adequately without containing certain required 
material or information, it must explain in detail why the material or 
information is not being submitted and what steps were taken by the 
applicant to provide the material or information. If the Commission 
finds that an application does not adequately conform to the 
requirements of paragraphs (a), (b) and (c) of this section and of Sec. 
4.38, the Commission or its designee will consider the application 
either deficient or patently deficient.
    (1) Deficient applications. (i) An application that in the judgment 
of the Director of the Office of Energy Projects does not conform to the 
requirements of paragraphs (a), (b) and (c) of this section and of Sec. 
4.38, may be considered deficient. An applicant having a deficient 
application will be afforded additional time to correct deficiencies, 
not to exceed 45 days from the date of notification in the case of an 
application for a preliminary permit or exemption from licensing or 90 
days from the date of notification in the case of an application for 
license. Notification will be by letter or, in the case of minor 
deficiencies, by telephone. Any notification will specify the 
deficiencies to be corrected. Deficiencies must be corrected by 
submitting the specified materials or information to the Secretary of 
the Commission within the time specified in the notification of 
deficiency in accordance with filing procedures posted on the 
Commission's Web site at http://www.ferc.gov.
    (ii) Upon submission of a conforming application, action will be 
taken in accordance with paragraph (d) of this section.
    (iii) If the revised application is found not to conform to the 
requirements of paragraphs (a), (b) and (c) of this section and of Sec. 
4.38, or if the revisions are not timely submitted, the revised 
application will be rejected. Procedures for rejected applications are 
specified in paragraph (e)(2)(iii).
    (2) Patently deficient applications. (i) If, within 90 days of its 
filing date, the Director of the Office of Energy Projects determines 
that an application patently fails to substantially comply with the 
requirements of paragraph (a), (b), and (c) of this section and of Sec. 
4.38 of this part or Sec. 16.8 of this chapter, or is for a project 
that is precluded by law, the application will be rejected as patently 
deficient with the specification of the deficiencies that render the 
application patently deficient.
    (ii) If, after 90 days of its filing date, the Director of the 
Office of Energy Projects determines that an application patently fails 
to substantially comply with the requirements of paragraphs (a), (b), 
and (c) of this section and of Sec. 4.38 of this part or Sec. 16.8 of 
this chapter, or is for a project that is precluded by law:
    (A) The application will be rejected by order of the Commission, if 
the Commission determines it is patently deficient; or
    (B) The application will be considered deficient under paragraph 
(e)(1) of this section, if the Commission determines it is not patently 
deficient.
    (iii) Any application that is rejected may be resubmitted if the 
deficiencies are corrected and if, in the case of a competing 
application, the resubmittal is timely. The date the rejected 
application is resubmitted will be considered the new filing date for 
purposes of determining its timeliness under Sec. 4.36 and the 
disposition of competing applications under Sec. 4.37.
    (f) Any application will be considered accepted for filing as of the 
application filing date if the Secretary receives all of the information 
and documents necessary to conform to the requirements of paragraphs 
(a), (b) and (c) of this section and of Sec. 4.38 within the time 
prescribed by the Commission or its delegate under paragraph (e) of this 
section.
    (g) An applicant may be required to submit any additional 
information or

[[Page 82]]

documents that the Commission or its designee considers relevant for an 
informed decision on the application. The information or documents must 
take the form, and must be submitted within the time, that the 
Commission or its designee prescribes. An applicant may also be required 
to provide within a specified time additional copies of the complete 
application, or any of the additional information or documents that are 
filed, to the Commission or to any person, agency, or other entity that 
the Commission or its designee specifies. If an applicant fails to 
provide timely additional information, documents, or copies of submitted 
materials as required, the Commission or its designee may dismiss the 
application, hold it in abeyance, or take other appropriate action under 
this chapter or the Federal Power Act.
    (h) A prospective applicant, prior to submitting its application for 
filing, may seek advice from the Commission staff regarding the 
sufficiency of the application. For this purpose, five copies of the 
draft application should be submitted to the Director of the Division of 
Hydropower Licensing. An applicant or prospective applicant may confer 
with the Commission staff at any time regarding deficiencies or other 
matters related to its application. All conferences are subject to the 
requirements of Sec. 385.2201 of this chapter governing ex parte 
communications. The opinions or advice of the staff will not bind the 
Commission or any person delegated authority to act on its behalf.
    (i) Intervention in any preliminary permit proceeding will not 
constitute intervention in any subsequent licensing or exemption 
proceeding.
    (j) Any application, the effectiveness of which is conditioned upon 
the future occurrence of any event or circumstance, will be rejected.
    (k) Critical Energy Infrastructure Information. (1) If this section 
requires an applicant to reveal Critical Energy Infrastructure 
Information (CEII), as defined in Sec. 388.113(c) of this chapter, to 
any person, the applicant shall omit the CEII from the information made 
available and insert the following in its place:
    (i) A statement that CEII is being withheld;
    (ii) A brief description of the omitted information that does not 
reveal any CEII; and
    (iii) This statement: ``Procedures for obtaining access to Critical 
Energy Infrastructure Information (CEII) may be found at 18 CFR 388.113. 
Requests for access to CEII should be made to the Commission's CEII 
Coordinator.''
    (2) The applicant, in determining whether information constitutes 
CEII, shall treat the information in a manner consistent with any 
filings that applicant has made with the Commission and shall to the 
extent practicable adhere to any previous determinations by the 
Commission or the CEII Coordinator involving the same or like 
information.
    (3) The procedures contained in Sec. Sec. 388.112 and 388.113 of 
this chapter regarding designation of, and access to, CEII, shall apply 
in the event of a challenge to a CEII designation or a request for 
access to CEII. If it is determined that information is not CEII or that 
a requester should be granted access to CEII, the applicant will be 
directed to make the information available to the requester.
    (4) Nothing in this section shall be construed to prohibit any 
persons from voluntarily reaching arrangements or agreements calling for 
the disclosure of CEII.

[Order 413, 50 FR 11678, Mar. 25, 1985]

    Editorial Note: For Federal Register citations affecting Sec. 4.32, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and at www.fdsys.gov.



Sec. 4.33  Limitations on submitting applications.

    (a) Limitations on submission and acceptance of a preliminary permit 
application. The Commission will not accept an application for a 
preliminary permit for project works that:
    (1) Would develop, conserve, and utilize, in whole or in part, the 
same water resources that would be developed, conserved, and utilized by 
a project for which there is an unexpired preliminary permit.

[[Page 83]]

    (2) Would interfere with a licensed project in a manner that, absent 
the licensee's consent, would be precluded by Section 6 of the Federal 
Power Act.
    (3) Would develop, conserve, and utilize, in whole or in part, the 
same water resources that would be developed, conserved, and utilized by 
a project for which an initial development application has been filed 
unless the preliminary permit application is filed not later than the 
time allowed under Sec. 4.36(a) for the filing of applications in 
competition against an initial application for a preliminary permit that 
would develop, conserve, and utilize, in whole or in part, the same 
resources.
    (b) Limitations on submissions and acceptance of a license 
application. The Commission will not accept an application for a license 
or project works that would develop, conserve, or utilize, in whole or 
part, the same water resources that would be developed, conserved, and 
utilized by a project for which there is:
    (1) An unexpired preliminary permit, unless the permittee has 
submitted an application for license; or
    (2) An unexpired license, except as provided for in Section 15 of 
the Federal Power Act.
    (c) Limitations on submission and acceptance of an application for a 
license that would affect an exempted project. (1) Except as permitted 
under Sec. 4.33(c)(2), Sec. 4.94(d), or Sec. 4.106 (c), (e) or (f), 
the Commission will not accept an application for a license for project 
works that are already exempted from licensing under this part.
    (2) If a project is exempted from licensing pursuant to Sec. 4.103 
or Sec. 4.109 and real property interests in any non-Federal lands 
would be necessary to develop or operate the project, any person who is 
both a qualified license applicant and has any of those real property 
interests in non-Federal lands may submit a license application for that 
project. If a license application is submitted under this clause, any 
other qualified license applicant may submit a competing license 
application in accordance with Sec. 4.36.
    (d) Limitations on submission and acceptance of exemption 
applications--(1) Unexpired permit or license. (i) If there is an 
unexpired permit in effect for a project, the Commission will accept an 
application for exemption of that project from licensing only if the 
exemption applicant is the permittee. Upon acceptance for filing of the 
permittee's application, the permit will be considered to have expired.
    (ii) If there is an unexpired license in effect for a project, the 
Commission will accept an application for exemption of that project from 
licensing only if the exemption applicant is the licensee.
    (2) Pending license applications. If an accepted license application 
for a project was submitted by a permittee before the preliminary permit 
expired, the Commission will not accept an application for exemption of 
that project from licensing submitted by a person other than the former 
permittee.
    (3) Submitted by qualified exemption applicant. If the first 
accepted license application for a project was filed by a qualified 
exemption applicant, the applicant may request that its license 
application be treated initially as an application for exemption from 
licensing by so notifying the Commission in writing and, unless only 
rights to use or occupy Federal lands would be necessary to develop and 
operate the project, by submitting documentary evidence showing that the 
applicant holds the real property interests required under Sec. 4.31. 
Such notice and documentation must be submitted not later than the last 
date for filing protests or motions to intervene prescribed in the 
public notice issued for its license application under Sec. 4.32(d)(2).
    (e) Priority of exemption applicant's earlier permit or license 
application. Any accepted preliminary permit or license application 
submitted by a person who later applies for exemption of the project 
from licensing will retain its validity and priority under this subpart 
until the preliminary permit or license application is withdrawn or the 
project is exempted from licensing.

[Order 413, 50 FR 11680, Mar. 25, 1985, as amended by Order 499, 53 FR 
27002, July 18, 1988; Order 2002, 68 FR 51116, Aug. 25, 2003; Order 699, 
72 FR 45324, Aug. 14, 2007]

[[Page 84]]



Sec. 4.34  Hearings on applications; consultation on terms and conditions; 

motions to intervene; alternative procedures.

    (a) Trial-type hearing. The Commission may order a trial-type 
hearing on an application for a preliminary permit, a license, or an 
exemption from licensing upon either its own motion or the motion of any 
interested party of record. Any trial-type hearing will be limited to 
the issues prescribed by order of the Commission. In all other cases the 
hearings will be conducted by notice and comment procedures.
    (b) Notice and comment hearings. All comments (including mandatory 
and recommended terms and conditions or prescriptions) on an application 
for exemption or license must be filed with the Commission no later than 
60 days after issuance by the Commission of public notice declaring that 
the application is ready for environmental analysis. All reply comments 
must be filed within 105 days of that notice. All comments and reply 
comments and all other filings described in this section must be served 
on all persons listed in the service list prepared by the Commission, in 
accordance with the requirements of Sec. 385.2010 of this chapter. If a 
party or interceder (as defined in Sec. 385.2201 of this Chapter) 
submits any written material to the Commission relating to the merits of 
an issue that may affect the responsibilities of a particular resource 
agency, the party or interceder must also serve a copy of the submission 
on this resource agency. The Commission may allow for longer comment or 
reply comment periods if appropriate. A commenter or reply commenter may 
obtain an extension of time from the Commission only upon a showing of 
good cause or extraordinary circumstances in accordance with Sec. 
385.2008 of this chapter. Late-filed fish and wildlife recommendations 
will not be subject to the requirements of paragraphs (e), (f)(1)(ii), 
and (f)(3) of this section, and late-filed terms and conditions or 
prescriptions will not be subject to the requirements of paragraphs 
(f)(1)(iv), (f)(1)(v), and (f)(2) of this section. Late-filed fish and 
wildlife recommendations, terms and conditions, or prescriptions will be 
considered by the Commission under section 10(a) of the Federal Power 
Act if such consideration would not delay or disrupt the proceeding.
    (1) Agencies responsible for mandatory terms and conditions and 
presentations. Any agency responsible for mandatory terms and conditions 
or prescriptions for licenses or exemptions, pursuant to sections 4(e), 
18, and 30(c) of the Federal Power Act and section 405(d) of the Public 
Utility Regulatory Policies Act of l978, as amended, must provide these 
terms and conditions or prescriptions in its initial comments filed with 
the Commission pursuant to paragraph (b) of this section. In those 
comments, the agency must specifically identify and explain the 
mandatory terms and conditions or prescriptions and their evidentiary 
and legal basis. In the case of an application prepared other than 
pursuant to part 5 of this chapter, if ongoing agency proceedings to 
determine the terms and conditions or prescriptions are not completed by 
the date specified, the agency must submit to the Commission by the due 
date:
    (i) Preliminary terms and conditions or prescriptions and a schedule 
showing the status of the agency proceedings and when the terms and 
conditions or prescriptions are expected to become final; or
    (ii) A statement waiving the agency's right to file the terms and 
conditions or prescriptions or indicating the agency does not intend to 
file terms and conditions or prescriptions.
    (2) Fish and Wildlife agencies and Indian tribes. All fish and 
wildlife agencies must set forth any recommended terms and conditions 
for the protection, mitigation of damages to, or enhancement of fish and 
wildlife, pursuant to the Fish and Wildlife Coordination Act and section 
10(j) of the Federal Power Act, in their initial comments filed with the 
Commission by the date specified in paragraph (b) of this section. All 
Indian tribes must submit recommendations (including fish and wildlife 
recommendations) by the same date. In those comments, a fish and 
wildlife agency or Indian tribe must discuss its understanding of the 
resource issues presented by the proposed facilities and the evidentiary

[[Page 85]]

basis for the recommended terms and conditions.
    (3) Other Government agencies and members of the public. Resource 
agencies, other governmental units, and members of the public must file 
their recommendations in their initial comments by the date specified in 
paragraph (b) of this section. The comments must clearly identify all 
recommendations and present their evidentiary basis.
    (4) Submittal of modified recommendations, terms and conditions or 
prescriptions. (i) If the information and analysis (including reasonable 
alternatives) presented in a draft environmental document, issued for 
comment by the Commission, indicate a need to modify the recommendations 
or terms and conditions or prescriptions previously submitted to the 
Commission pursuant to paragraphs (b)(1), (b)(2), or (b)(3) of this 
section, the agency, Indian tribe, or member of the public must file 
with the Commission any modified recommendations or terms and conditions 
or prescriptions on the proposed project (and reasonable alternatives) 
no later than the due date for comments on the draft environmental 
impact statement. Modified recommendations or terms and conditions or 
prescriptions must be clearly distinguished from comments on the draft 
document.
    (ii) If an applicant files an amendment to its application that 
would materially change the project's proposed plans of development, as 
provided in Sec. 4.35, an agency, Indian tribe or member of the public 
may modify the recommendations or terms and conditions or prescriptions 
it previously submitted to the Commission pursuant to paragraphs (b)(1), 
(b)(2), or (b)(3) of this section no later than the due date specified 
by the Commission for comments on the amendment.
    (5)(i) With regard to certification requirements for a license 
applicant under section 401(a)(1) of the Federal Water Pollution Control 
Act (Clean Water Act), an applicant shall file within 60 days from the 
date of issuance of the notice of ready for environmental analysis:
    (A) A copy of the water quality certification;
    (B) A copy of the request for certification, including proof of the 
date on which the certifying agency received the request; or
    (C) Evidence of waiver of water quality certification as described 
in paragraph (b)(5)(ii) of this section.
    (ii) In the case of an application process using the alternative 
procedures of paragraph 4.34(i), the filing requirement of paragraph 
(b)(5)(i) shall apply upon issuance of notice the Commission has 
accepted the application as provided for in paragraph 4.32(d) of this 
part.
    (iii) A certifying agency is deemed to have waived the certification 
requirements of section 401(a)(1) of the Clean Water Act if the 
certifying agency has not denied or granted certification by one year 
after the date the certifying agency received a written request for 
certification. If a certifying agency denies certification, the 
applicant must file a copy of the denial within 30 days after the 
applicant received it.
    (c) Additional procedures. If necessary or appropriate the 
Commission may require additional procedures (e.g., a pre-hearing 
conference, further notice and comment on specific issues or oral 
argument). A party may request additional procedures in a motion that 
clearly and specifically sets forth the procedures requested and the 
basis for the request. Replies to such requests may be filed within 15 
days of the request.
    (d) Consultation procedures. Pursuant to the Federal Power Act and 
the Public Utility Regulatory Policies Act of 1978, as amended, the 
Commission will coordinate as appropriate with other government agencies 
responsible for mandatory terms and conditions for exemptions and 
licenses for hydropower projects. Pursuant to the Federal Power Act and 
the Fish and Wildlife Coordination Act, the Commission will consult with 
fish and wildlife agencies concerning the impact of a hydropower 
proposal on fish and wildlife and appropriate terms and conditions for 
license to adequately and equitably protect, mitigate damages to, and 
enhance fish and wildlife (including related spawning grounds and 
habitat). Pursuant to the Federal Power Act and the

[[Page 86]]

Endangered Species Act, the Commission will consult with the U.S. Fish 
and Wildlife Service or the National Marine Fisheries Service, as 
appropriate, concerning the impact of a hydropower proposal on 
endangered or threatened species and their critical habitat.
    (e) Consultation on recommended fish and wildlife conditions; 
Section 10(j) process. (1) In connection with its environmental review 
of an application for license, the Commission will analyze all terms and 
conditions timely recommended by fish and wildlife agencies pursuant to 
the Fish and Wildlife Coordination Act for the protection, mitigation of 
damages to, and enhancement of fish and wildlife (including related 
spawning grounds and habitat) affected by the development, operation, 
and management of the proposed project. Submission of such 
recommendations marks the beginning of the process under section 10(j) 
of the Federal Power Act.
    (2) The agency must specifically identify and explain the 
recommendations and the relevant resource goals and objectives and their 
evidentiary or legal basis. The Commission may seek clarification of any 
recommendation from the appropriate fish and wildlife agency. If the 
Commission's request for clarification is communicated in writing, 
copies of the request will be sent by the Commission to all parties, 
affected resource agencies, and Indian tribes, which may file a response 
to the request for clarification within the time period specified by the 
Commission. If the Commission believes any fish and wildlife 
recommendation may be inconsistent with the Federal Power Act or other 
applicable law, the Commission will make a preliminary determination of 
inconsistency in the draft environmental document or, if none, the 
environmental assessment. The preliminary determination, for any 
recommendations believed to be inconsistent, shall include an 
explanation why the Commission believes the recommendation is 
inconsistent with the Federal Power Act or other applicable law, 
including any supporting analysis and conclusions, and an explanation of 
how the measures recommended in the environmental document would 
adequately and equitably protect, mitigate damages to, and enhance, fish 
and wildlife (including related spawning grounds and habitat) affected 
by the development, operation, and management of the project.
    (3) Any party, affected resource agency, or Indian tribe may file 
comments in response to the preliminary determination of inconsistency, 
including any modified recommendations, within the time frame allotted 
for comments on the draft environmental document or, if none, the time 
frame for comments on the environmental analysis. In this filing, the 
fish and wildlife agency concerned may also request a meeting, telephone 
or video conference, or other additional procedure to attempt to resolve 
any preliminary determination of inconsistency.
    (4) The Commission shall attempt, with the agencies, to reach a 
mutually acceptable resolution of any such inconsistency, giving due 
weight to the recommendations, expertise, and statutory responsibilities 
of the fish and wildlife agency. If the Commission decides, or an 
affected resource agency requests, the Commission will conduct a 
meeting, telephone, or video conference, or other procedures to address 
issues raised by its preliminary determination of inconsistency and 
comments thereon. The Commission will give at least 15 days' advance 
notice to each party, affected resource agency, or Indian tribe, which 
may participate in the meeting or conference. Any meeting, conference, 
or additional procedure to address these issues will be scheduled to 
take place within 90 days of the date the Commission issues a 
preliminary determination of inconsistency. The Commission will prepare 
a written summary of any meeting held under this subsection to discuss 
section 10(j) issues, including any proposed resolutions and supporting 
analysis, and a copy of the summary will be sent to all parties, 
affected resource agencies, and Indian tribes.
    (5) The section 10(j) process ends when the Commission issues an 
order granting or denying the license application in question. If, after 
attempting to resolve inconsistencies between the fish and wildlife 
recommendations of a

[[Page 87]]

fish and wildlife agency and the purposes and requirements of the 
Federal Power Act or other applicable law, the Commission does not adopt 
in whole or in part a fish and wildlife recommendation of a fish and 
wildlife agency, the Commission will publish the findings and statements 
required by section 10(j)(2) of the Federal Power Act.
    (f) Licenses and exemption conditions and required findings--(1) 
License conditions. (i) All licenses shall be issued on the conditions 
specified in section 10 of the Federal Power Act and such other 
conditions as the Commission determines are lawful and in the public 
interest.
    (ii) Subject to paragraph (f)(3) of this section, fish and wildlife 
conditions shall be based on recommendations timely received from the 
fish and wildlife agencies pursuant to the Fish and Wildlife 
Coordination Act.
    (iii) The Commission will consider the timely recommendations of 
resource agencies, other governmental units, and members of the public, 
and the timely recommendations (including fish and wildlife 
recommendations) of Indian tribes affected by the project.
    (iv) Licenses for a project located within any Federal reservation 
shall be issued only after the findings required by, and subject to any 
conditions that may be timely received pursuant to, section 4(e) of the 
Federal Power Act.
    (v) The Commission will require the construction, maintenance, and 
operation by a licensee at its own expense of such fishways as may be 
timely prescribed by the Secretary of Commerce or the Secretary of the 
Interior, as appropriate, pursuant to section 18 of the Federal Power 
Act.
    (2) Exemption conditions. Any exemption from licensing issued for 
conduit facilities, as provided in section 30 of the Federal Power Act, 
or for small hydroelectric power projects having a proposed installed 
capacity of 5,000 kilowatts or less, as provided in section 405(d) of 
the Public Utility Regulatory Policies Act of 1978, as amended, shall 
include such terms and conditions as the fish and wildlife agencies may 
timely determine are appropriate to carry out the responsibilities 
specified in section 30(c) of the Federal Power Act.
    (3) Required findings. If, after attempting to resolve 
inconsistencies between the fish and wildlife recommendations of a fish 
and wildlife agency and the purposes and requirements of the Federal 
Power Act or other applicable law, the Commission does not adopt in 
whole or in part a fish and wildlife recommendation of a fish and 
wildlife agency, the Commission will publish the findings and statements 
required by section 10(j)(2) of the Federal Power Act.
    (g) Application. The provisions of paragraphs (b) through (d) and 
(f) of this section apply only to applications for license or exemption; 
paragraph (e) applies only to applications for license.
    (h) Unless otherwise provided by statute, regulation or order, all 
filings in hydropower hearings, except those conducted by trial-type 
procedures, shall conform to the requirements of subpart T of part 385 
of this chapter.
    (i) Alternative procedures. (1) An applicant may submit to the 
Commission a request to approve the use of alternative procedures for 
pre-filing consultation and the filing and processing of an application 
for an original, new or subsequent hydropower license or exemption that 
is subject to Sec. 4.38 or Sec. 16.8 of this chapter, or for the 
amendment of a license that is subject to the provisions of Sec. 4.38.
    (2) The goal of such alternative procedures shall be to:
    (i) Combine into a single process the pre-filing consultation 
process, the environmental review process under the National 
Environmental Policy Act and administrative processes associated with 
the Clean Water Act and other statutes;
    (ii) Facilitate greater participation by and improve communication 
among the potential applicant, resource agencies, Indian tribes, the 
public and Commission staff in a flexible pre-filing consultation 
process tailored to the circumstances of each case;
    (iii) Allow for the preparation of a preliminary draft environmental 
assessment by an applicant or its contractor or consultant, or of a 
preliminary draft environmental impact statement by a contractor or 
consultant chosen by the Commission and funded by the applicant;

[[Page 88]]

    (iv) Promote cooperative efforts by the potential applicant and 
interested entities and encourage them to share information about 
resource impacts and mitigation and enhancement proposals and to narrow 
any areas of disagreement and reach agreement or settlement of the 
issues raised by the hydropower proposal; and
    (v) Facilitate an orderly and expeditious review of an agreement or 
offer of settlement of an application for a hydropower license, 
exemption or amendment to a license.
    (3) A potential hydropower applicant requesting the use of 
alternative procedures must:
    (i) Demonstrate that a reasonable effort has been made to contact 
all resource agencies, Indian tribes, citizens' groups, and others 
affected by the applicant's proposal, and that a consensus exists that 
the use of alternative procedures is appropriate under the 
circumstances;
    (ii) Submit a communications protocol, supported by interested 
entities, governing how the applicant and other participants in the pre-
filing consultation process, including the Commission staff, may 
communicate with each other regarding the merits of the applicant's 
proposal and proposals and recommendations of interested entities; and
    (iii) Serve a copy of the request on all affected resource agencies 
and Indian tribes and on all entities contacted by the applicant that 
have expressed an interest in the alternative pre-filing consultation 
process.
    (4) As appropriate under the circumstances of the case, the 
alternative procedures should include provisions for:
    (i) Distribution of an initial information package and conduct of an 
initial information meeting open to the public;
    (ii) The cooperative scoping of environmental issues (including 
necessary scientific studies), the analysis of completed studies and any 
further scoping; and
    (iii) The preparation of a preliminary draft environmental 
assessment or preliminary draft environmental impact statement and 
related application.
    (5)(i) If the potential applicant's request to use the alternative 
procedures is filed prior to July 23, 2005, the Commission will give 
public notice in the Federal Register inviting comment on the 
applicant's request to use alternative procedures. The Commission will 
consider any such comments in determining whether to grant or deny the 
applicant's request to use alternative procedures. Such a decision will 
not be subject to interlocutory rehearing or appeal.
    (ii) If the potential applicant's request to use the alternative 
procedures is filed on or after July 23, 2005 and prior to the deadline 
date for filing a notification of intent to seek a new or subsequent 
license required by Sec. 5.5 of this chapter, the Commission will give 
public notice and invite comments as provided for in paragraph (i)(5)(i) 
of this section. Commission approval of the potential applicant's 
request to use the alternative procedures prior to the deadline date for 
filing of the notification of intent does not waive the potential 
applicant's obligation to file the notification of intent required by 
Sec. 5.5 of this chapter and Pre-Application Document required by Sec. 
5.6 of this chapter.
    (iii) If the potential applicant's request to use the alternative 
procedures is filed on or after July 23, 2005 and is at the same time as 
the notification of intent to seek a new or subsequent license required 
by Sec. 5.5, the public notice and comment procedures of part 5 of this 
chapter shall apply.
    (6) If the Commission accepts the use of alternative procedures, the 
following provisions will apply.
    (i) To the extent feasible under the circumstances of the 
proceeding, the Commission will give notice in the Federal Register and 
the applicant will give notice, in a local newspaper of general 
circulation in the county or counties in which the project is located, 
of the initial information meeting and the scoping of environmental 
issues. The applicant will also send notice of these stages to a mailing 
list approved by the Commission.
    (ii) Every six months, the applicant shall file with the Commission 
a report summarizing the progress made in the

[[Page 89]]

pre-filing consultation process and referencing the applicant's public 
file, where additional information on that process can be obtained. 
Summaries or minutes of meetings held in the process may be used to 
satisfy this filing requirement. The applicant must also file with the 
Commission a copy of its initial information package, each scoping 
document, and the preliminary draft environmental review document. All 
filings with the Commission under this section must include the number 
of copies required by paragraph (h) of this section, and the applicant 
shall send a copy of these filings to each participant that requests a 
copy.
    (iii) At a suitable location, the applicant will maintain a public 
file of all relevant documents, including scientific studies, 
correspondence, and minutes or summaries of meetings, compiled during 
the pre-filing consultation process. The Commission will maintain a 
public file of the applicant's initial information package, scoping 
documents, periodic reports on the pre-filing consultation process, and 
the preliminary draft environmental review document.
    (iv) An applicant authorized to use alternative procedures may 
substitute a preliminary draft environmental review document and 
additional material specified by the Commission instead of Exhibit E to 
its application and need not supply additional documentation of the pre-
filing consultation process. The applicant will file with the Commission 
the results of any studies conducted or other documentation as directed 
by the Commission, either on its own motion or in response to a motion 
by a party to the licensing or exemption proceeding.
    (v) Pursuant to the procedures approved, the participants will set 
reasonable deadlines requiring all resource agencies, Indian tribes, 
citizens' groups, and interested persons to submit to the applicant 
requests for scientific studies during the pre-filing consultation 
process, and additional requests for studies may be made to the 
Commission after the filing of the application only for good cause 
shown.
    (vi) During the pre-filing process the Commission may require the 
filing of preliminary fish and wildlife recommendations, prescriptions, 
mandatory conditions, and comments, to be submitted in final form after 
the filing of the application; no notice that the application is ready 
for environmental analysis need be given by the Commission after the 
filing of an application pursuant to these procedures.
    (vii) Any potential applicant, resource agency, Indian tribe, 
citizens' group, or other entity participating in the alternative pre-
filing consultation process may file a request with the Commission to 
resolve a dispute concerning the alternative process (including a 
dispute over required studies), but only after reasonable efforts have 
been made to resolve the dispute with other participants in the process. 
No such request shall be accepted for filing unless the entity 
submitting it certifies that it has been served on all other 
participants. The request must document what efforts have been made to 
resolve the dispute.
    (7) If the potential applicant or any resource agency, Indian tribe, 
citizens' group, or other entity participating in the alternative pre-
filing consultation process can show that it has cooperated in the 
process but a consensus supporting the use of the process no longer 
exists and that continued use of the alternative process will not be 
productive, the participant may petition the Commission for an order 
directing the use by the potential applicant of appropriate procedures 
to complete its application. No such request shall be accepted for 
filing unless the entity submitting it certifies that it has been served 
on all other participants. The request must recommend specific 
procedures that are appropriate under the circumstances.
    (8) The Commission may participate in the pre-filing consultation 
process and assist in the integration of this process and the 
environmental review process in any case, including appropriate cases 
where the applicant, contractor, or consultant funded by the applicant 
is not preparing a preliminary draft environmental assessment or 
preliminary draft environmental impact statement, but where staff 
assistance is available and could expedite the proceeding.

[[Page 90]]

    (9) If this section requires an applicant to reveal Critical Energy 
Infrastructure Information (CEII), as defined by Sec. 388.113(c) of 
this chapter, to any person, the applicant shall follow the procedures 
set out in Sec. 4.32(k).

[Order 533, 56 FR 23148, May 20, 1991, as amended at 56 FR 61155, Dec. 
2, 1991; Order 540, 57 FR 21737, May 22, 1992; Order 596, 62 FR 59810, 
Nov. 5, 1997; Order 2002, 68 FR 51116, Aug. 25, 2003; Order 643, 68 FR 
52094, Sept. 2, 2003; 68 FR 61742, Oct. 30, 2003; Order 756, 77 FR 4893, 
Feb. 1, 2012]



Sec. 4.35  Amendment of application; date of acceptance.

    (a) General rule. Except as provided in paragraph (d) of this 
section, if an applicant amends its filed application as described in 
paragraph (b) of this section, the date of acceptance of the application 
under Sec. 4.32(f) is the date on which the amendment to the 
application was filed.
    (b) Paragraph (a) of this section applies if an applicant:
    (1) Amends its filed license or preliminary permit application in 
order to change the status or identity of the applicant or to materially 
amend the proposed plans of development; or
    (2) Amends its filed application for exemption from licensing in 
order to materially amend the proposed plans of development, or
    (3) Amends its filed application in order to change its statement of 
intent of whether or not it will seek benefits under section 210 of 
PURPA, as originally filed under Sec. 4.32(c)(1).
    (c) An application amended under paragraph (a) is a new filing for:
    (1) The purpose of determining its timeliness under Sec. 4.36 of 
this part;
    (2) Disposing of competing applications under Sec. 4.37; and
    (3) Reissuing public notice of the application under Sec. 
4.32(d)(2).
    (d) If an application is amended under paragraph (a) of this 
section, the Commission will rescind any acceptance letter already 
issued for the application.
    (e) Exceptions. This section does not apply to:
    (1) Any corrections of deficiencies made pursuant to Sec. 
4.32(e)(1);
    (2) Any amendments made pursuant to Sec. 4.37(b)(4) by a State or a 
municipality to its proposed plans of development to make them as well 
adapted as the proposed plans of an applicant that is not a state or a 
municipality;
    (3) Any amendments made pursuant to Sec. 4.37(c)(2) by a priority 
applicant to its proposed plans of development to make them as well 
adapted as the proposed plans of an applicant that is not a priority 
applicant;
    (4) Any amendments made by a license or an exemption applicant to 
its proposed plans of development to satisfy requests of resource 
agencies or Indian tribes submitted after an applicant has consulted 
under Sec. 4.38 or concerns of the Commission; and
    (5)(i) Any license or exemption applicant with a project located at 
a new dam or diversion who is seeking PURPA benefits and who:
    (A) Has filed an adverse environmental effects (AEE) petition 
pursuant to Sec. 292.211 of this chapter; and
    (B) Has proposed measures to mitigate the adverse environmental 
effects which the Commission, in its initial determination on the AEE 
petition, stated the project will have.
    (ii) This exception does not protect any proposed mitigative 
measures that the Commission finds are a pretext to avoid the 
consequences of materially amending the application or are outside the 
scope of mitigating the adverse environmental effects.
    (f) Definitions. (1) For the purposes of this section, a material 
amendment to plans of development proposed in an application for a 
license or exemption from licensing means any fundamental and 
significant change, including but not limited to:
    (i) A change in the installed capacity, or the number or location of 
any generating units of the proposed project if the change would 
significantly modify the flow regime associated with the project;
    (ii) A material change in the location, size, or composition of the 
dam, the location of the powerhouse, or the size and elevation of the 
reservoir if the change would:
    (A) Enlarge, reduce, or relocate the area of the body of water that 
would lie between the farthest reach of the proposed impoundment and the 
point of discharge from the powerhouse; or

[[Page 91]]

    (B) Cause adverse environmental impacts not previously discussed in 
the original application; or
    (iii) A change in the number of discrete units of development to be 
included within the project boundary.
    (2) For purposes of this section, a material amendment to plans of 
development proposed in an application for a preliminary permit means a 
material change in the location of the powerhouse or the size and 
elevation of the reservoir if the change would enlarge, reduce, or 
relocate the area of the body of water that would lie between the 
farthest reach of the proposed impoundment and the point of discharge 
from the powerhouse.
    (3) For purposes of this section, a change in the status of an 
applicant means:
    (i) The acquisition or loss of preference as a state or a 
municipality under section 7(a) of the Federal Power Act; or
    (ii) The loss of priority as a permittee under section 5 of the 
Federal Power Act.
    (4) For purposes of this section, a change in the identity of an 
applicant means a change that either singly, or together with previous 
amendments, causes a total substitution of all the original applicants 
in a permit or a license application.

[Order 413, 50 FR 11680, Mar. 25, 1985, as amended by Order 499, 53 FR 
27002, July 18, 1988; Order 533, 56 FR 23149, May 20, 1991; Order 2002, 
68 FR 51115, Aug. 25, 2003; Order 756, 77 FR 4893, Feb. 1, 2012]



Sec. 4.36  Competing applications: deadlines for filing; notices of intent; 

comparisons of plans of development.

    The public notice of an initial preliminary permit application or an 
initial development application shall prescribe the deadline for filing 
protests and motions to intervene in that proceeding (the prescribed 
intervention deadline).
    (a) Deadlines for filing applications in competition with an initial 
preliminary permit application. (1) Any preliminary permit application 
or any development application not filed pursuant to a notice of intent 
must be submitted for filing in competition with an initial preliminary 
permit application not later than the prescribed intervention deadline.
    (2) Any preliminary permit application filed pursuant to a notice of 
intent must be submitted for filing in competition with an initial 
preliminary permit application not later than 30 days after the 
prescribed intervention deadline.
    (3) Any development application filed pursuant to a notice of intent 
must be submitted for filing in competition with an initial preliminary 
permit application not later than 120 days after the prescribed 
intervention deadline.
    (b) Deadlines for filing applications in competition with an initial 
development application. (1) Any development application not filed 
pursuant to a notice of intent must be submitted for filing in 
competition with an initial development application not later than the 
prescribed intervention deadline.
    (2) Any development application filed pursuant to a notice of intent 
must be submitted for filing in competition with an initial development 
application not later than 120 days after the prescribed intervention 
deadline.
    (3) If the Commission has accepted an application for exemption of a 
project from licensing and the application has not yet been granted or 
denied, the applicant for exemption may submit a license application for 
the project if it is a qualified license applicant. The pending 
application for exemption from licensing will be considered withdrawn as 
of the date the Commission accepts the license application for filing. 
If a license application is accepted for filing under this provision, 
any qualified license applicant may submit a competing license 
application not later than the prescribed intervention deadline set for 
the license application.
    (4) Any preliminary permit application must be submitted for filing 
in competition with an initial development application not later than 
the deadlines prescribed in paragraphs (a)(1) and (a)(2) for the 
submission of preliminary permit applications filed in competition with 
an initial preliminary permit application.
    (c) Notices of intent. (1) Any notice of intent to file an 
application in competition with an initial preliminary

[[Page 92]]

permit or an initial development application must be submitted for 
filing not later than the prescribed intervention deadline for the 
initial application.
    (2) A notice of intent must include:
    (i) The exact name, business address, and telephone number of the 
prospective applicant; and
    (ii) An unequivocal statement of intent to submit a preliminary 
permit application or a development application (specify which type of 
application).
    (d) Requirements for competing applications. (1) Any competing 
application must:
    (i) Conform to all requirements for filing an initial application; 
and
    (ii) Include proof of service of a copy of the competing application 
on the person(s) designated in the public notice of the initial 
application for service of pleadings, documents, or communications 
concerning the initial application.
    (2) Comparisons of plans of development. (i) After the deadline for 
filing applications in competition against an initial development 
application has expired, the Commission will notify each license and 
exemption applicant of the identity of the other applicants.
    (ii) Not later than 14 days after the Commission serves the 
notification described in paragraph (d)(2)(i) of this section, if a 
license or exemption applicant has not already done so, it must serve a 
copy of its application on each of the other license and exemption 
applicants.
    (iii) Not later than 60 days after the Commission serves the 
notification described in paragraph (d)(2)(i) of this section, each 
license and exemption applicant must file with the Commission a detailed 
and complete statement of how its plans are as well or better adapted 
than are the plans of each of the other license and exemption applicants 
to develop, conserve, and utilize in the public interest the water 
resources of the region. These statements should be supported by any 
technical analyses that the applicant deems appropriate to support its 
proposed plans of development.

[Order 413, 50 FR 11680, Mar. 25, 1985; 50 FR 23947, June 7, 1985]



Sec. 4.37  Rules of preference among competing applications.

    Except as provided in Sec. 4.33(e), the Commission will select 
among competing applications on the following bases:
    (a) If an accepted application for a preliminary permit and an 
accepted application for a license propose project works that would 
develop, conserve, and utilize, in whole or in part, the same water 
resources, and the applicant for a license has demonstrated its ability 
to carry out its plans, the Commission will favor the license applicant 
unless the permit applicant substantiates in its filed application that 
its plans are better adapted to develop, conserve, and utilize in the 
public interest the water resources of the region.
    (b) If two or more applications for preliminary permits or two or 
more applications for licenses (not including applications for a new 
license under section 15 of the Federal Power Act) are filed by 
applicants for project works that would develop, conserve, and utilize, 
in whole or in part, the same water resources, and if none of the 
applicants is a preliminary permittee whose application for license was 
accepted for filing within the permit period, the Commission will select 
between or among the applicants on the following bases:
    (1) If both or neither of two applicants are either a municipality 
or a state, the Commission will favor the applicant whose plans are 
better adapted to develop, conserve, and utilize in the public interest 
the water resources of the region, taking into consideration the ability 
of each applicant to carry out its plans.
    (2) If both of two applicants are either a municipality or a state, 
or neither of them is a municipality or a state, and the plans of the 
applicants are equally well adapted to develop, conserve, and utilize in 
the public interest the water resources of the region, taking into 
consideration the ability of each applicant to carry out its plans, the 
Commission will favor the applicant with the earliest application 
acceptance date.
    (3) If one of two applicants is a municipality or a state, and the 
other is

[[Page 93]]

not, and the plans of the municipality or a state are at least as well 
adapted to develop, conserve, and utilize in the public interest the 
water resources of the region, the Commission will favor the 
municipality or state.
    (4) If one of two applicant is a municipality or a state, and the 
other is not, and the plans of the applicant who is not a municipality 
or a state are better adapted to develop, conserve, and utilize in the 
public interest the water resources of the region, the Commission will 
inform the municipality or state of the specific reasons why its plans 
are not as well adapted and afford a reasonable period of time for the 
municipality or state to render its plans at least as well adapted as 
the other plans. If the plans of the municipality or state are rendered 
at least as well adapted within the time allowed, the Commission will 
favor the municipality or state. If the plans are not rendered at least 
as well adapted within the time allowed, the Commission will favor the 
other applicant.
    (c) If two or more applications for licenses are filed for project 
works which would develop, conserve, and utilize, in whole or in part, 
the same water resources, and one of the applicants was a preliminary 
permittee whose application was accepted for filing within the permit 
period (priority applicant), the Commission will select between or among 
the applicants on the following bases:
    (1) If the plans of the priority applicant are at least as well 
adapted as the plans of each other applicant to develop, conserve, and 
utilize in the public interest the water resources of the region, taking 
into consideration the ability of each applicant to carry out its plans, 
the Commission will favor the priority applicant.
    (2) If the plans of an applicant who is not a priority applicant are 
better adapted than the plans of the priority applicant to develop, 
conserve, and utilize in the public interest the water resources of the 
region, taking into consideration the ability of each applicant to carry 
out its plans, the Commission will inform the priority applicant of the 
specific reasons why its plans are not as well adapted and afford a 
reasonable period of time for the priority applicant to render its plans 
at least as well adapted as the other plans. If the plans of the 
priority applicant are rendered at least as well adapted within the time 
allowed, then the Commission will favor the priority applicant. If the 
plans of the priority applicant are not rendered as well adapted within 
the time allowed, the criteria specified in paragraph (b) will govern.
    (3) The criteria specified in paragraph (b) will govern selection 
among applicants other than the priority applicant.
    (d) With respect to a project for which an application for an 
exemption from licensing has been accepted for filing, the Commission 
will select among competing applications on the following bases:
    (1) If an accepted application for a preliminary permit and an 
accepted application for exemption from licensing propose to develop 
mutually exclusive small hydroelectric power projects, the Commission 
will favor the applicant whose substantiated plans in the application 
received by the Commission are better adapted to develop, conserve, and 
utilize in the public interest the water resources of the region. If the 
substantiated plans are equally well adapted, the Commission will favor 
the application for exemption from licensing.
    (2) If an application for a license and an application for exemption 
from licensing, or two or more applications for exemption from licensing 
are each accepted for filing and each proposes to develop a mutually 
exclusive project, the Commission will favor the applicant whose plans 
are better adapted to develop, conserve, and utilize in the public 
interest the water resources of the region. If the plans are equally 
well adapted, the Commission will favor the applicant with the earliest 
application acceptance date.
    (e) A municipal applicant must provide evidence that the 
municipality is competent under applicable state and local laws to 
engage in the business of developing, transmitting, utilizing, or 
distributing power, or such applicant will be considered a non-municipal 
applicant for the purpose of determining

[[Page 94]]

the disposition of competing applications.

[Order 413, 50 FR 11682, Mar. 25, 1985, as amended by Order 2002, 68 FR 
51117, Aug. 25, 2003]



Sec. 4.38  Consultation requirements.

    (a) Requirement to consult. (1) Before it files any application for 
an original license or an exemption from licensing that is described in 
paragraph (a)(6) of this section, a potential applicant must consult 
with the relevant Federal, State, and interstate resource agencies, 
including the National Marine Fisheries Service, the United States Fish 
and Wildlife Service, the National Park Service, the United States 
Environmental Protection Agency, the Federal agency administering any 
United States lands or facilities utilized or occupied by the project, 
the appropriate State fish and wildlife agencies, the appropriate State 
water resource management agencies, the certifying agency under section 
401(a)(1) of the Federal Water Pollution Control Act (Clean Water Act), 
33 U.S.C. Sec. 1341(c)(1), and any Indian tribe that may be affected by 
the proposed project.
    (2) Each requirement in this section to contact or consult with 
resource agencies or Indian tribes shall be construed to require as well 
that the potential applicant contact or consult with members of the 
public.
    (3) If a potential applicant for an original license commences first 
stage pre-filing consultation on or after July 23, 2005 it shall file a 
notification of intent to file a license application pursuant to Sec. 
5.5 and a pre-application document pursuant to the provisions of Sec. 
5.6.
    (4) The Director of the Office of Energy Projects will, upon 
request, provide a list of known appropriate Federal, state, and 
interstate resource agencies, Indian tribes, and local, regional, or 
national non-governmental organizations likely to be interested in any 
license application proceeding.
    (5) An applicant for an exemption from licensing or an applicant for 
a license seeking benefits under section 210 of the Public Utility 
Regulatory Policies Act, as amended, for a project that would be located 
at a new dam or diversion must, in addition to meeting the requirements 
of this section, comply with the consultation requirements in Sec. 
4.301.
    (6) The pre-filing consultation requirements of this section apply 
only to an application for:
    (i) Original license;
    (ii) Exemption;
    (iii) Amendment to an application for original license or exemption 
that materially amends the proposed plans of development as defined in 
Sec. 4.35(f)(1);
    (iv) Amendment to an existing license that would increase the 
capacity of the project as defined in Sec. 4.201(b); or
    (v) Amendment to an existing license that would not increase the 
capacity of the project as defined in Sec. 4.201(b), but that would 
involve:
    (A) The construction of a new dam or diversion in a location where 
there is no existing dam or diversion;
    (B) Any repair, modification, or reconstruction of an existing dam 
that would result in a significant change in the normal maximum surface 
area or elevation of an existing impoundment; or
    (C) The addition of new water power turbines other than to replace 
existing turbines.
    (7) Before it files a non-capacity related amendment as defined in 
Sec. 4.201(c), an applicant must consult with the resource agencies and 
Indian tribes listed in paragraph (a)(1) of this section to the extent 
that the proposed amendment would affect the interests of the agencies 
or tribes. When consultation is necessary, the applicant must, at a 
minimum, provide the resource agencies and Indian tribes with copies of 
the draft application and allow them at least 60 days to comment on the 
proposed amendment. The amendment as filed with the Commission must 
summarize the consultation with the resource agencies and Indian tribes 
on the proposed amendment, propose reasonable protection, mitigation, or 
enhancement measures to respond to impacts identified as being caused by 
the proposed amendment, and respond to any objections, recommendations, 
or conditions submitted by the agencies or Indian tribes. Copies of all 
written correspondence between the applicant, the agencies,

[[Page 95]]

and the tribes must be attached to the application.
    (8) This section does not apply to any application for a new 
license, a nonpower license, a subsequent license, or surrender of a 
license subject to sections 14 and 15 of the Federal Power Act.
    (9) If a potential applicant has any doubt as to whether a 
particular application or amendment would be subject to the pre-filing 
consultation requirements of this section or if a waiver of the pre-
filing requirements would be appropriate, the applicant may file a 
written request for clarification or waiver with the Director, Office of 
Energy Projects.
    (b) First stage of consultation. (1) A potential applicant for an 
original license that commences pre-filing consultation on or after July 
23, 2005 must, at the time it files its notification of intent to seek a 
license pursuant to Sec. 5.5 of this chapter and a pre-application 
document pursuant to Sec. 5.6 of this chapter and, at the same time, 
provide a copy of the pre-application document to the entities specified 
in Sec. 5.6(a) of this chapter.
    (2) A potential applicant for an original license that commences 
pre-filing consultation under this part prior to July 23, 2005 or for an 
exemption must promptly contact each of the appropriate resource 
agencies, affected Indian tribes, and members of the public likely to be 
interested in the proceeding; provide them with a description of the 
proposed project and supporting information; and confer with them on 
project design, the impact of the proposed project (including a 
description of any existing facilities, their operation, and any 
proposed changes), reasonable hydropower alternatives, and what studies 
the applicant should conduct. The potential applicant must provide to 
the resource agencies, Indian tribes and the Commission the following 
information:
    (i) Detailed maps showing project boundaries, if any, proper land 
descriptions of the entire project area by township, range, and section, 
as well as by state, county, river, river mile, and closest town, and 
also showing the specific location of all proposed project facilities, 
including roads, transmission lines, and any other appurtenant 
facilities;
    (ii) A general engineering design of the proposed project, with a 
description of any proposed diversion of a stream through a canal or 
penstock;
    (iii) A summary of the proposed operational mode of the project;
    (iv) Identification of the environment to be affected, the 
significant resources present, and the applicant's proposed 
environmental protection, mitigation, and enhancement plans, to the 
extent known at that time;
    (v) Streamflow and water regime information, including drainage 
area, natural flow periodicity, monthly flow rates and durations, mean 
flow figures illustrating the mean daily streamflow curve for each month 
of the year at the point of diversion or impoundment, with location of 
the stream gauging station, the method used to generate the streamflow 
data provided, and copies of all records used to derive the flow data 
used in the applicant's engineering calculations;
    (vi) (A) A statement (with a copy to the Commission) of whether or 
not the applicant will seek benefits under section 210 of PURPA by 
satisfying the requirements for qualifying hydroelectric small power 
production facilities in Sec. 292.203 of this chapter;
    (B) If benefits under section 210 of PURPA are sought, a statement 
on whether or not the applicant believes diversion (as that term is 
defined in Sec. 292.202(p) of this chapter) and a request for the 
agencies' view on that belief, if any;
    (vii) Detailed descriptions of any proposed studies and the proposed 
methodologies to be employed; and
    (viii) Any statement required by Sec. 4.301(a) of this part.
    (3) (i) A potential exemption applicant and a potential applicant 
for an original license that commences pre-filing consultation;
    (A) On or after July 23, 2005 pursuant to part 5 of this chapter and 
receives approval from the Commission to use the license application 
procedures of part 4 of this chapter; or
    (B) Elects to commence pre-filing consultation under part 4 of this 
chapter prior to July 23, 2005; must:

[[Page 96]]

    (1) Hold a joint meeting at a convenient place and time, including 
an opportunity for a site visit, with all pertinent agencies, Indian 
tribes, and members of the public to explain the applicant's proposal 
and its potential environmental impact, to review the information 
provided, and to discuss the data to be obtained and studies to be 
conducted by the potential applicant as part of the consultation 
process;
    (2) Consult with the resource agencies, Indian tribes and members of 
the public on the scheduling and agenda of the joint meeting; and
    (3) No later than 15 days in advance of the joint meeting, provide 
the Commission with written notice of the time and place of the meeting 
and a written agenda of the issues to be discussed at the meeting.
    (ii) The joint meeting must be held no earlier than 30 days, but no 
later than 60 days, from, as applicable;
    (A) The date of the Commission's approval of the potential 
applicant's request to use the license application procedures of this 
part pursuant to the provisions of part 5 of this chapter; or
    (B) The date of the potential applicant's letter transmitting the 
information required by paragraph (b)(2) of this section, in the case of 
a potential exemption applicant or a potential license applicant that 
commences pre-filing consultation under this part prior to July 23, 
2005.
    (4) Members of the public must be informed of and invited to attend 
the joint meeting held pursuant to paragraph (b)(3) of this section by 
means of the public notice provision published in accordance with 
paragraph (g) of this section. Members of the public attending the 
meeting are entitled to participate in the meeting and to express their 
views regarding resource issues that should be addressed in any 
application for license or exemption that may be filed by the potential 
applicant. Attendance of the public at any site visit held pursuant to 
paragraph (b)(3) of this section will be at the discretion of the 
potential applicant. The potential applicant must make either audio 
recordings or written transcripts of the joint meeting, and must 
promptly provide copies of these recordings or transcripts to the 
Commission and, upon request, to any resource agency, Indian tribe, or 
member of the public.
    (5) Not later than 60 days after the joint meeting held under 
paragraph (b)(3) of this Section (unless extended within this time 
period by a resource agency, Indian tribe, or members of the public for 
an additional 60 days by sending written notice to the applicant and the 
Director of the Office of Energy Projects within the first 60 day 
period, with an explanation of the basis for the extension), each 
interested resource agency and Indian tribe must provide a potential 
applicant with written comments:
    (i) Identifying its determination of necessary studies to be 
performed or the information to be provided by the potential applicant;
    (ii) Identifying the basis for its determination;
    (iii) Discussing its understanding of the resource issues and its 
goals and objectives for these resources;
    (iv) Explaining why each study methodology recommended by it is more 
appropriate than any other available methodology alternatives, including 
those identified by the potential applicant pursuant to paragraph 
(b)(2)(vii) of this section;
    (v) Documenting that the use of each study methodology recommended 
by it is a generally accepted practice; and
    (vi) Explaining how the studies and information requested will be 
useful to the agency, Indian tribe, or member of the public in 
furthering its resource goals and objectives that are affected by the 
proposed project.
    (6)(i) If a potential applicant and a resource agency or Indian 
tribe disagree as to any matter arising during the first stage of 
consultation or as to the need to conduct a study or gather information 
referenced in paragraph (c)(2) of this section, the potential applicant 
or resource agency or Indian tribe may refer the dispute in writing to 
the Director of the Office of Energy Projects (Director) for resolution.
    (ii) At the same time as the request for dispute resolution is 
submitted to the Director, the entity referring the

[[Page 97]]

dispute must serve a copy of its written request for resolution on the 
disagreeing party and any affected resource agency or Indian tribe, 
which may submit to the Director a written response to the referral 
within 15 days of the referral's submittal to the Director.
    (iii) Written referrals to the Director and written responses 
thereto pursuant to paragraphs (b)(6)(i) or (b)(6)(ii) of this section 
must be filed with the Commission in accordance with the Commission's 
Rules of Practice and Procedure, and must indicate that they are for the 
attention of the Director pursuant to Sec. 4.38(b)(6).
    (iv) The Director will resolve the disputes by letter provided to 
the potential applicant and all affected resource agencies and Indian 
tribes.
    (v) If a potential applicant does not refer a dispute regarding a 
request for a potential applicant to obtain information or conduct 
studies (other than a dispute regarding the information specified in 
paragraph (b)(2) of this section), or a study to the Director under 
paragraph (b)(6) of this section, or if a potential applicant disagrees 
with the Director's resolution of a dispute regarding a request for 
information (other than a dispute regarding the information specified in 
paragraph (b)(2) of this section) or a study, and if the potential 
applicant does not provide the requested information or conduct the 
requested study, the potential applicant must fully explain the basis 
for its disagreement in its application.
    (vi) Filing and acceptance of an application will not be delayed, 
and an application will not be considered deficient or patently 
deficient pursuant to Sec. 4.32(e)(1) or (e)(2) of this part, merely 
because the application does not include a particular study or 
particular information if the Director had previously found, under 
paragraph (b)(6)(iv) of this section, that each study or information is 
unreasonable or unnecessary for an informed decision by the Commission 
on the merits of the application or use of the study methodology 
requested is not a generally accepted practice.
    (7) The first stage of consultation ends when all participating 
agencies and Indian tribes provide the written comments required under 
paragraph (b)(5) of this section or 60 days after the joint meeting held 
under paragraph (b)(3) of this section, whichever occurs first, unless a 
resource agency or Indian tribe timely notifies the applicant and the 
Director of Energy Projects of its need for more time to provide written 
comments under paragraph (b)(5) of this section, in which case the first 
stage of consultation ends when all participating agencies and Indian 
tribes provide the written comments required under paragraph (b)(5) of 
this section or 120 days after the joint meeting held under paragraph 
(b)(5) of this section, whichever occurs first.
    (c) Second stage of consultation. (1) Unless determined to be 
unnecessary by the Director pursuant to paragraph (b)(6) of this 
section, a potential applicant must diligently conduct all reasonable 
studies and obtain all reasonable information requested by resource 
agencies and Indian tribes under paragraph (b) of this section that are 
necessary for the Commission to make an informed decision regarding the 
merits of the application. These studies must be completed and the 
information obtained:
    (i) Prior to filing the application, if the results:
    (A) Would influence the financial (e.g., instream flow study) or 
technical feasibility of the project (e.g., study of potential mass soil 
movement); or
    (B) Are needed to determine the design or location of project 
features, reasonable alternatives to the project, the impact of the 
project on important natural or cultural resources (e.g., resource 
surveys), or suitable mitigation or enhancement measures, or to minimize 
impact on significant resources (e.g., wild and scenic river, anadromous 
fish, endangered species, caribou migration routes);
    (ii) After filing the application but before issuance of a license 
or exemption, if the applicant otherwise complied with the provisions of 
paragraph (b)(2) of this section and the study or information gathering 
would take longer to conduct and evaluate than the time between the 
conclusion of the first stage of consultation and the expiration of the 
applicant's preliminary

[[Page 98]]

permit or the application filing deadline set by the Commission;
    (iii) After a new license or exemption is issued, if the studies can 
be conducted or the information obtained only after construction or 
operation of proposed facilities, would determine the success of 
protection, mitigation, or enhancement measures (e.g., post-construction 
monitoring studies), or would be used to refine project operation or 
modify project facilities.
    (2) If, after the end of the first stage of consultation as defined 
in paragraph (b)(7) of this section, a resource agency or Indian tribe 
requests that the potential applicant conduct a study or gather 
information not previously identified and specifies the basis and 
reasoning for its request, under paragraphs (b)(5) (i)-(vi) of this 
section, the potential applicant must promptly initiate the study or 
gather the information, unless the study or information is unreasonable 
or unnecessary for an informed decision by the Commission on the merits 
of the application or use of the methodology requested by a resource 
agency or Indian tribe for conducting the study is not a generally 
accepted practice. The applicant may refer any such request to the 
Director of the Office of Energy Projects for dispute resolution under 
the procedures set forth in paragraph (b)(6) of this section and need 
not conduct prior to filing any study determined by the Director to be 
unreasonable or unnecessary or to employ a methodology that is not 
generally accepted.
    (3)(i) The results of studies and information-gathering referenced 
in paragraphs (c)(1)(ii) and (c)(2) of this section will be treated as 
additional information; and
    (ii) Filing and acceptance of an application will not be delayed and 
an application will not be considered deficient or patently deficient 
pursuant to Sec. 4.32 (e)(1) or (e)(2) merely because the study or 
information gathering is not complete before the application is filed.
    (4) A potential applicant must provide each resource agency and 
Indian tribe with:
    (i) A copy of its draft application that:
    (A) Indicates the type of application the potential applicant 
expects to file with the Commission; and
    (B) Responds to any comments and recommendations made by any 
resource agency and Indian tribe either during the first stage of 
consultation or under paragraph (c)(2) of this section;
    (ii) The results of all studies and information-gathering either 
requested by that resource agency or Indian tribe in the first stage of 
consultation (or under paragraph (c)(2) of this section if available) or 
which pertain to resources of interest to that resource agency or Indian 
tribe and which were identified by the potential applicant pursuant to 
paragraph (b)(2)(vii) of this section, including a discussion of the 
results and any proposed protection, mitigation, or enhancement 
measures; and
    (iii) A written request for review and comment.
    (5) A resource agency or Indian tribe will have 90 days from the 
date of the potential applicant's letter transmitting the paragraph 
(c)(4) information to it to provide written comments on the information 
submitted by a potential applicant under paragraph (c)(4) of this 
section.
    (6) If the written comments provided under paragraph (c)(5) of this 
section indicate that a resource agency or Indian tribe has a 
substantive disagreement with a potential applicant's conclusions 
regarding resource impacts or its proposed protection, mitigation, or 
enhancement measures, the potential applicant will:
    (i) Hold a joint meeting with the disagreeing resource agency or 
Indian tribe and other agencies with similar or related areas of 
interest, expertise, or responsibility not later than 60 days from the 
date of the written comments of the disagreeing agency or Indian tribe 
to discuss and to attempt to reach agreement on its plan for 
environmental protection, mitigation, or enhancement measures;
    (ii) Consult with the disagreeing agency or Indian tribe and other 
agencies with similar or related areas of interest, expertise, or 
responsibility on the scheduling of the joint meeting; and

[[Page 99]]

    (iii) At least 15 days in advance of the meeting, provide the 
Commission with written notice of the time and place of the meeting and 
a written agenda of the issues to be discussed at the meeting.
    (7) The potential applicant and any disagreeing resource agency or 
Indian tribe may conclude a joint meeting with a document embodying any 
agreement among them regarding environmental protection, mitigation, or 
enhancement measures and any issues that are unresolved.
    (8) The potential applicant must describe all disagreements with a 
resource agency or Indian tribe on technical or environmental 
protection, mitigation, or enhancement measures in its application, 
including an explanation of the basis for the applicant's disagreement 
with the resource agency or Indian tribe, and must include in its 
application any document developed pursuant to paragraph (c)(7) of this 
section.
    (9) A potential applicant may file an application with the 
Commission if:
    (i) It has complied with paragraph (c)(4) of this section and no 
resource agency or Indian tribe has responded with substantive 
disagreements by the deadline specified in paragraph (c)(5) of this 
section; or
    (ii) It has complied with paragraph (c)(6) of this section and a 
resource agency or Indian tribe has responded with substantive 
disagreements.
    (10) The second stage of consultation ends:
    (i) Ninety days after the submittal of information pursuant to 
paragraph (c)(4) of this section in cases where no resource agency or 
Indian tribe has responded with substantive disagreements; or
    (ii) At the conclusion of the last joint meeting held pursuant to 
paragraph (c)(6) of this section in cases where a resource agency or 
Indian tribe has responded with substantive disagreements.
    (d) Third stage of consultation. (1) The third stage of consultation 
is initiated by the filing of an application for a license or exemption, 
accompanied by a transmittal letter certifying that at the same time 
copies of the application are being mailed to the resource agencies, 
Indian tribes, other government offices, and consulted members of the 
public specified in paragraph (d)(2) of this section.
    (2) As soon as an applicant files such application documents with 
the Commission, or promptly after receipt in the case of documents 
described in paragraph (d)(2)(iii) of this section, as the Commission 
may direct the applicant must serve on every resource agency, Indian 
tribes, and member of the public consulted, and on other government 
offices copies of:
    (i) Its application for a license or an exemption from licensing;
    (ii) Any deficiency correction, revision, supplement, response to 
additional information request, or amendment to the application; and
    (iii) Any written correspondence from the Commission requesting the 
correction of deficiencies or the submittal of additional information.
    (e) Waiver of compliance with consultation requirements. (1) If a 
resource agency or Indian tribe waives in writing compliance with any 
requirement of this section, a potential applicant does not have to 
comply with that requirement as to that agency or tribe.
    (2) If a resource agency or Indian tribe fails to timely comply with 
a provision regarding a requirement of this section, a potential 
applicant may proceed to the next sequential requirement of this section 
without waiting for the resource agency or Indian tribe to comply.
    (3) The failure of a resource agency or Indian tribe to timely 
comply with a provision regarding a requirement of this section does not 
preclude its participation in subsequent stages of the consultation 
process.
    (4) Following October 23, 2003, a potential license applicant 
engaged in pre-filing consultation under part 4 may during first stage 
consultation request to incorporate into pre-filing consultation any 
element of the integrated license application process provided for in 
part 5 of this chapter. Any such request must be accompanied by a:
    (i) Specific description of how the element of the part 5 license 
application would fit into the pre-filing consultation process under 
this part; and

[[Page 100]]

    (ii) Demonstration that the potential license applicant has made 
every reasonable effort to contact all resource agencies, Indian tribes, 
non-governmental organizations, and others affected by the applicant's 
proposal, and that a consensus exists in favor of incorporating the 
specific element of the part 5 process into the pre-filing consultation 
under this part.
    (f) Application requirements documenting consultation and any 
disagreements with resource agencies. An applicant must show in Exhibit 
E of its application that it has met the requirements of paragraphs (b) 
through (d) and paragraphs (g) and (h) of this section, and must include 
a summary of the consultation process and:
    (1) Any resource agency's or Indian tribe's letters containing 
comments, recommendations, and proposed terms and conditions;
    (2) Any letters from the public containing comments and 
recommendations;
    (3) Notice of any remaining disagreement with a resource agency or 
Indian tribe on:
    (i) The need for a study or the manner in which a study should be 
conducted and the applicant's reasons for disagreement, and
    (ii) Information on any environmental protection, mitigation, or 
enhancement measure, including the basis for the applicant's 
disagreement with the resource agency or Indian tribe;
    (4) Evidence of any waivers under paragraph (e) of this section;
    (5) Evidence of all attempts to consult with a resource agency or 
Indian tribe, copies of related documents showing the attempts, and 
documents showing the conclusion of the second stage of consultation;
    (6) An explanation of how and why the project would, would not, or 
should not, comply with any relevant comprehensive plan as defined in 
Sec. 2.l9 of this chapter and a description of any relevant resource 
agency or Indian tribe determination regarding the consistency of the 
project with any such comprehensive plan;
    (7) A description of how the applicant's proposal addresses the 
significant resource issues raised at the joint meeting held pursuant to 
paragraph (b)(3) of this section; and
    (8) A list containing the name and address of every federal, state, 
and interstate resource agency and Indian tribe with which the applicant 
consulted pursuant to paragraph (a)(1) of this section.
    (g) Public participation. (1) At least 14 days in advance of the 
joint meeting held pursuant to paragraph (b)(3) of this section, the 
potential applicant must publish notice, at least once, of the purpose, 
location, and timing of the joint meeting, in a daily or weekly 
newspaper published in each county in which the proposed project or any 
part thereof is situated. The notice shall include a summary of the 
major issues to be discussed at the joint meeting.
    (2)(i) A potential applicant must make available to the public for 
inspection and reproduction the information specified in paragraph 
(b)(2) of this section from the date on which the notice required by 
paragraph (g)(1) of this section is first published until a final order 
is issued on any license application.
    (ii) The provisions of Sec. 4.32(b) will govern the form and manner 
in which the information is to be made available for public inspection 
and reproduction.
    (iii) A potential applicant must make available to the public for 
inspection at the joint meeting required by paragraph (b)(3) of this 
section at least two copies of the information specified in paragraph 
(b)(2) of this section.
    (h) Critical Energy Infrastructure Information. If this section 
requires an applicant to reveal Critical Energy Infrastructure 
Information (CEII), as defined by Sec. 388.113(c) of this chapter, to 
any person, the applicant shall follow the procedures set out in Sec. 
4.32(k).

[Order 533, 56 FR 23153, May 20, 1991, as amended at 56 FR 61155, Dec. 
2, 1991; Order 2002, 68 FR 51117, Aug. 25, 2003; Order 643, 68 FR 52094, 
Sept. 2, 2003; 68 FR 61742, Oct. 30, 2003; Order 756, 77 FR 4894, Feb. 
1, 2012]



Sec. 4.39  Specifications for maps and drawings.

    All required maps and drawings must conform to the following 
specifications, except as otherwise prescribed in this chapter:

[[Page 101]]

    (a) Each original map or drawing must consist of a print on silver 
or gelatin 35mm microfilm mounted on Type D (3\1/4\[sec] by 7\3/8\[sec]) 
aperture cards. Full-sized prints of maps and drawings must be on sheets 
no smaller than 24 by 36 inches and no larger than 28 by 40 inches. A 
space five inches high by seven inches wide must be provided in the 
lower right hand corner of each sheet. The upper half of this space must 
bear the title, numerical and graphical scale, and other pertinent 
information concerning the map or drawing. The lower half of the space 
must be left clear. Exhibit G drawings must be stamped by a registered 
land surveyor. If the drawing size specified in this paragraph limits 
the scale of structural drawings (exhibit F drawings) described in 
paragraph (c) of this section, a smaller scale may be used for those 
drawings. Potential applicants or licensees may be required to file maps 
or drawings in electronic format as directed by the Commission.
    (b) Each map must have a scale in full-sized prints no smaller than 
one inch equals 0.5 miles for transmission lines, roads, and similar 
linear features and no smaller than one inch equals 1,000 feet for other 
project features, including the project boundary. Where maps at this 
scale do not show sufficient detail, large scale maps may be required. 
Each map must have:
    (1) True and magnetic meridians;
    (2) State, county, and town lines; and
    (3) Boundaries of public lands and reservations of the United States 
[see 16 U.S.C. 796 (1) and (2)], if any. If a public land survey is 
available, the maps must show all lines of that survey crossing the 
project area and all official subdivisions of sections for the public 
lands and reservations, including lots and irregular tracts, as 
designated on the official plats of survey that may be obtained from the 
Bureau of Land Management, Washington, DC, or examined in the local land 
survey office; to the extent that a public land survey is not available 
for public lands and reservations of the United States, the maps must 
show the protractions of townships and section lines, which, if 
possible, must be those recognized by the Federal agency administering 
those lands.
    (c) Drawings depicting details of project structures must have a 
scale in full-sized prints no smaller than:
    (1) One inch equals 50 feet for plans, elevations, and profiles; and
    (2) One inch equals 10 feet for sections.
    (d) Each map or drawing must be drawn and lettered to be legible 
when it is reduced to a print that is 11 inches on its shorter side. 
Following notification to the applicant that the application has been 
accepted for filing [see Sec. 4.31(c)], prints reduced to that size 
must be bound in each copy of the application which is required to be 
submitted to the Commission or provided to any person, agency, or other 
entity.
    (e) The maps and drawings showing project location information and 
details of project structures must be filed in accordance with the 
Commission's instructions on submission of Critical Energy 
Infrastructure Information in Sec. Sec. 388.112 and 388.113 of 
subchapter X of this chapter.

[Order 54, 44 FR 61334, Oct. 25, 1979. Redesignated by Order 413, 50 FR 
11678, Mar. 25, 1985; Order 2002, 68 FR 51119, Aug. 25, 2003; 68 FR 
61742, Oct. 30, 2003; Order 756, 77 FR 4894, Feb. 1, 2012]



 Subpart E_Application for License for Major Unconstructed Project and 

                         Major Modified Project



Sec. 4.40  Applicability.

    (a) Applicability. The provisions of this subpart apply to any 
application for an initial license for a major unconstructed project 
that would have a total installed capacity of more than 5 megawatts, and 
any application for an initial or new license for a major modified 
project with a total installed capacity more than 5 megawatts. An 
applicant for license for any major unconstructed or major modified 
water power project that would have a total installed generating 
capacity of 5 megawatts or less must submit application under subpart G 
(Sec. Sec. 4.60 and 4.61).
    (b) Guidance from Commission staff. A prospective applicant for a 
license for a major unconstructed project or major modified project may 
seek advice from the Commission's Office of Energy Projects regarding 
the applicability of

[[Page 102]]

this subpart to its project [see Sec. 4.32(h)], including the 
determinations whether any proposed repair, modification or 
reconstruction of an existing dam would result in a significant change 
in the normal maximum surface elevation of an existing impoundment, or 
whether any proposed change in existing project works or operation would 
result in a significant environmental impact.

[Order 184, 46 FR 55936, Nov. 13, 1981, as amended by Order 413, 50 FR 
11683, Mar. 25, 1985; Order 499, 53 FR 27002, July 18, 1988; Order 2002, 
68 FR 51119, Aug. 25, 2003]



Sec. 4.41  Contents of application.

    Any application under this subpart must contain the following 
information in the form prescribed:

    (a) Initial statement.

             Before the Federal Energy Regulatory Commission

    Application for License for Major Unconstructed Project or Major 
                            Modified Project

    (1) [Name of applicant] applies to the Federal Energy Regulatory 
Commission for a [license or new license, as appropriate] for the [name 
of project] water power project, as described in the attached exhibits. 
[Specify any previous FERC project number designation.]
    (2) The location of the proposed project is:

State or territory:_____________________________________________________
County:_________________________________________________________________
Township or nearby town:________________________________________________
Stream or other body of water:__________________________________________

    (3) The exact name, business address, and telephone number of the 
applicant are:

________________________________________________________________________
________________________________________________________________________

    (4) The applicant is a (citizen of the United States, association of 
citizens of the United States, domestic corporation, municipality, or 
State, as appropriate) and (is/is not) claiming preference under section 
7(a) of the Federal Power Act. See 16 U.S.C. 796.
    (5)(i) The statutory or regulatory requirements of the state(s) in 
which the project would be located and that affect the project as 
proposed with respect to bed and banks and to the appropriation, 
diversion, and use of water for power purposes, and with respect to the 
right to engage in the business of developing, transmitting, and 
distributing power and in any other business necessary to accomplish the 
purposes of the license under the Federal Power Act, are: [provide 
citation and brief identification of the nature of each requirement; if 
the applicant is a municipality, the applicant must submit copies of 
applicable state or local laws or a municipal charter or, if such laws 
or documents are not clear, any other appropriate legal authority, 
evidencing that the municipality is competent under such laws to engage 
in the business of developing, transmitting, utilizing, or distributing 
power.]
    (ii) The steps which the applicant has taken, or plans to take, to 
comply with each of the laws cited above are: [provide brief description 
for each requirement]

    (b) Exhibit A is a description of the project. If the project 
includes more than one dam with associated facilities, each dam and the 
associated component parts must be described together as a discrete 
development. The description for each development must contain:
    (1) The physical composition, dimensions, and general configuration 
of any dams, spillways, penstocks, powerhouses, tailraces or other 
structures proposed to be included as part of the project;
    (2) The normal maximum water surface area and normal maximum water 
surface elevation (mean sea level), gross storage capacity of any 
impoundments to be included as part of the project;
    (3) The number, type and rated capacity of any proposed turbines or 
generators to be included as part of the project;
    (4) The number, length, voltage and interconnections of any primary 
transmission lines proposed to be included a part of the project [See 16 
U.S.C. 796(11)];
    (5) The description of any additional mechanical, electrical, and 
transmission equipment appurtenant to the project; and
    (6) All lands of the United States, including lands patented subject 
to the provisions of section 24 of the Act, 16 U.S.C. 818, that are 
enclosed within the project boundary described under paragraph (h) of 
this section (Exhibit G), identified and tabulated by legal subdivisions 
of a public land survey, by the best available legal description. The 
tabulation must show the total acreage of the lands of the United States 
within the project boundary.

[[Page 103]]

    (c) Exhibit B is a statement of project operation and resource 
utilization. If the project includes more than one dam with associated 
facilities, the information must be provided separately for each 
discrete development. The exhibit must contain:
    (1) A description of each alternative site considered in selecting 
of the proposed site;
    (2) A description of any alternative facility designs, processes, 
and operations that were considered.
    (3) A statement as to whether operation of the power plant will be 
manual or automatic, an estimate of the annual plant factor, and a 
statement of how the project will be operated during adverse, mean, and 
high water years;
    (4) An estimate of the dependable capacity and average annual energy 
production in kilowatt-hours (or mechanical equivalent), supported by 
the following data:
    (i) The minimum, mean, and maximum recorded flows in cubic feet per 
second of the stream or other body of water at the powerplant intake or 
point of diversion, with a specification of any adjustment made for 
evaporation, leakage minimum flow releases (including duration of 
releases) or other reductions in available flow; monthly flow duration 
curves indicating the period of record and the gauging stations used in 
deriving the curves; and a specification of the critical streamflow used 
to determine the dependable capacity;
    (ii) An area-capacity curve showing the gross storage capacity and 
usable storage capacity of the impoundment, with a rule curve showing 
the proposed operation of the impoundment and how the usable storage 
capacity is to be utilized;
    (iii) The estimated minimum and maximum hydraulic capacity of the 
powerplant in terms of flow and efficiency (cubic feet per second at 
one-half, full and best gate), and the corresponding generator output in 
kilowatts;
    (iv) A tailwater rating curve; and
    (v) A curve showing powerplant capability versus head and specifying 
maximum, normal, and minimum heads;
    (5) A statement of system and regional power needs and the manner in 
which the power generated at the project is to be utilized, including 
the amount of power to be used on-site, if any, supported by the 
following data:
    (i) Load curves and tabular data, if appropriate;
    (ii) Details of conservation and rate design programs and their 
historic and projected impacts on system loads; and
    (iii) The amount of power to be sold and the identity of proposed 
purchaser(s); and
    (6) A statement of the applicant's plans for future development of 
the project or of any other existing or proposed water power project on 
the affected stream or other body of water, indicating the approximate 
location and estimated installed capacity of the proposed developments.
    (d) Exhibit C is a proposed construction schedule for the project. 
The information required may be supplemented with a bar chart. The 
construction schedule must contain:
    (1) The proposed commencement and completion dates of any new 
construction, modification, or repair of major project works;
    (2) The proposed commencement date of first commercial operation of 
each new major facility and generating unit; and
    (3) If any portion of the proposed project consists of previously 
constructed, unlicensed water power structures or facilities, a 
chronology of original completion dates of those structures or 
facilities specifying dates (approximate dates must be identified as 
such) of:
    (i) Commencement and completion of construction or installation;
    (ii) Commencement of first commercial operation; and
    (iii) Any additions or modifications other than routine maintenance.
    (e) Exhibit D is a statement of project costs and financing. The 
exhibit must contain:
    (1) A statement of estimated costs of any new construction, 
modification, or repair, including:
    (i) The cost of any land or water rights necessary to the 
development;
    (ii) The total cost of all major project works;

[[Page 104]]

    (iii) Indirect construction costs such as costs of construction 
equipment, camps, and commissaries;
    (iv) Interest during construction; and
    (v) Overhead, construction, legal expenses, and contingencies;
    (2) If any portion of the proposed project consists of previously 
constructed, unlicensed water power structures or facilities, a 
statement of the original cost of those structures or facilities 
specifying for each, to the extent possible, the actual or approximate 
total costs (approximate costs must be identified as such) of:
    (i) Any land or water rights necessary to the existing project 
works;
    (ii) All major project works; and
    (iii) Any additions or modifications other than routine maintenance;
    (3) If the applicant is a licensee applying for a new license, and 
is not a municipality or a state, an estimate of the amount which would 
be payable if the project were to be taken over pursuant to section 14 
of the Federal Power Act, 16 U.S.C. 807, upon expiration of the license 
in effect including:
    (i) Fair value;
    (ii) Net investment; and
    (iii) Severance damages;
    (4) A statement of the estimated average annual cost of the total 
project as proposed, specifying any projected changes in the costs 
(life-cycle costs) over the estimated financing or licensing period if 
the applicant takes such changes into account, including:
    (i) Cost of capital (equity and debt);
    (ii) Local, state, and Federal taxes;
    (iii) Depreciation or amortization,
    (iv) Operation and maintenance expenses, including interim 
replacements, insurance, administrative and general expenses, and 
contingencies; and
    (v) The estimated capital cost and estimated annual operation and 
maintenance expense of each proposed environmental measure;
    (5) A statement of the estimated annual value of project power based 
on a showing of the contract price for sale of power or the estimated 
average annual cost of obtaining an equivalent amount of power (capacity 
and energy) from the lowest cost alternative source of power, specifying 
any projected changes in the costs (life-cycle costs) of power from that 
source over the estimated financing or licensing period if the applicant 
takes such changes into account;
    (6) A statement describing other electric energy alternatives, such 
as gas, oil, coal and nuclear-fueled powerplants and other conventional 
and pumped storage hydroelectric plants;
    (7) A statement and evaluation of the consequences of denial of the 
license application and a brief perspective of what future use would be 
made of the proposed site if the proposed project were not constructed;
    (8) A statement specifying the sources and extent of financing and 
annual revenues available to the applicant to meet the costs identified 
in paragraphs (e) (1) and (4) of this section;
    (9) An estimate of the cost to develop the license application; and
    (10) The on-peak and off-peak values of project power, and the basis 
for estimating the values, for projects which are proposed to operate in 
a mode other than run-of-river.
    (f) Exhibit E is an Environmental Report. Information provided in 
the report must be organized and referenced according to the itemized 
subparagraphs below. See Sec. 4.38 for consultation requirements. The 
Environmental Report must contain the following information, 
commensurate with the scope of the project:
    (1) General description of the locale. The applicant must provide a 
general description of the environment of the proposed project area and 
its immediate vicinity. The description must include location and 
general information helpful to an understanding of the environmental 
setting.
    (2) Report on water use and quality. The report must discuss water 
quality and flows and contain baseline data sufficient to determine the 
normal and seasonal variability, the impacts expected during 
construction and operation, and any mitigative, enhancement, and 
protective measures proposed by the applicant. The report must be 
prepared in consultation with the state and Federal agencies with 
responsibility for management of water quality and quantity in the 
affected

[[Page 105]]

stream or other body of water. The report must include:
    (i) A description of existing instream flow uses of streams in the 
project area that would be affected by construction and operation; 
estimated quantities of water discharged from the proposed project for 
power production; and any existing and proposed uses of project waters 
for irrigation, domestic water supply, industrial and other purposes;
    (ii) A description of the seasonal variation of existing water 
quality for any stream, lake, or reservoir that would be affected by the 
proposed project, including (as appropriate) measurements of: 
significant ions, chlorophyll a, nutrients, specific conductance, pH, 
total dissolved solids, total alkalinity, total hardness, dissolved 
oxygen, bacteria, temperature, suspended sediments, turbidity and 
vertical illumination;
    (iii) A description of any existing lake or reservoir and any of the 
proposed project reservoirs including surface area, volume, maximum 
depth, mean depth, flushing rate, shoreline length, substrate 
classification, and gradient for streams directly affected by the 
proposed project;
    (iv) A quantification of the anticipated impacts of the proposed 
construction and operation of project facilities on water quality and 
downstream flows, such as temperature, turbidity and nutrients;
    (v) A description of measures recommended by Federal and state 
agencies and the applicant for the purpose of protecting or improving 
water quality and stream flows during project construction and 
operation; an explanation of why the applicant has rejected any measures 
recommended by an agency; and a description of the applicant's 
alternative measures to protect or improve water quality stream flow;
    (vi) A description of groundwater in the vicinity of the proposed 
project, including water table and artesian conditions, the hydraulic 
gradient, the degree to which groundwater and surface water are 
hydraulically connected, aquifers and their use as water supply, and the 
location of springs, wells, artesian flows and disappearing streams; a 
description of anticipated impacts on groundwater and measures proposed 
by the applicant and others for the mitigation of impacts on 
groundwater; and
    (3) Report on fish, wildlife, and botanical resources. The applicant 
must provide a report that describes the fish, wildlife, and botanical 
resources in the vicinity of the proposed project; expected impacts of 
the project on these resources; and mitigation, enhancement, or 
protection measures proposed by the applicant. The report must be 
prepared in consultation with the state agency or agencies with 
responsibility for these resources, the U.S. Fish and Wildlife Service, 
the National Marine Fisheries Service (if the proposed project may 
affect anadromous, estuarine, or marine fish resources), and any state 
or Federal agency with managerial authority over any part of the 
proposed project lands. The report must contain:
    (i) A description of existing fish, wildlife, and plant communities 
of the proposed project area and its vicinity, including any downstream 
areas that may be affected by the proposed project and the area within 
the transmission line corridor or right-of-way. A map of vegetation 
types should be included in the description. For species considered 
important because of their commercial or recreational value, the 
information provided should include temporal and spatial distributions 
and densities of such species. Any fish, wildlife, or plant species 
proposed or listed as threatened or endangered by the U.S. Fish and 
Wildlife Service or National Marine Fisheries Service [see 50 CFR 17.11 
and 17.12] must be identified;
    (ii) A description of the anticipated impacts on fish, wildlife and 
botanical resources of the proposed construction and operation of 
project facilities, including possible changes in size, distribution, 
and reproduction of essential population of these resources and any 
impacts on human utilization of these resources;
    (iii) A description of any measures or facilities recommended by 
state or Federal agencies for the mitigation of impacts on fish, 
wildlife, and botanical

[[Page 106]]

resources, or for the protection or enhancement of these resources, the 
impact on threatened or endangered species, and an explanation of why 
the applicant has determined any measures or facilities recommended by 
an agency are inappropriate as well as a description of alternative 
measures proposed by applicant to protect fish, wildlife and botanical 
resources; and
    (iv) The following materials and information regarding any 
mitigation measures or facilities, identified under clause (iii), 
proposed for implementation or construction:
    (A) Functional design drawings;
    (B) A description of proposed operation and maintenance procedures 
for any proposed measures or facilities;
    (C) An implementation, construction and operation schedule for any 
proposed measures or facilities;
    (D) An estimate of the costs of construction, operation, and 
maintenance of any proposed facilities or implementation of any 
measures;
    (E) A statement of the sources and amount of financing for 
mitigation measures or facilities; and
    (F) A map or drawing showing, by the use of shading, crosshatching 
or other symbols, the identity and location of any proposed measures or 
facilities.
    (4) Report on historic and archaeological resources. The applicant 
must provide a report that discusses any historical and archaeological 
resources in the proposed project area, the impact of the proposed 
project on those resources and the avoidance, mitigation, and protection 
measures proposed by the applicant. The report must be prepared in 
consultation with the State Historic Preservation Officer (SHPO) and the 
National Park Service of the U.S. Department of Interior. The report 
must contain:
    (i) A description of any discovery measures, such as surveys, 
inventories, and limited subsurface testing work, recommended by the 
specified state and Federal agencies for the purpose of locating, 
identifying, and assessing the significance of historic and 
archaeological resources that would be affected by construction and 
operation of the proposed project, together with a statement of the 
applicant's position regarding the acceptability of the recommendations;
    (ii) The results of surveys, inventories, and subsurface testing 
work recommended by the state and Federal agencies listed above, 
together with an explanation by the applicant of any variations from the 
survey, inventory, or testing procedures recommended;
    (iii) An identification (without providing specific site or property 
locations) of any historic or archaeological site in the proposed 
project area, with particular emphasis on sites or properties either 
listed in, or recommended by the SHPO for inclusion in, the National 
Register of Historic Places that would be affected by the construction 
of the proposed project;
    (iv) A description of the likely direct and indirect impacts of 
proposed project construction or operation on sites or properties either 
listed in, or recommended as eligible for, the National Register of 
Historic Places;
    (v) A management plan for the avoidance of, or mitigation of, 
impacts on historic or archaeological sites and resources based upon the 
recommendations of the state and Federal agencies listed above and 
containing the applicant's explanation of variations from those 
recommendations; and
    (vi) The following materials and information regarding the 
mitigation measures described under paragraph (f)(4)(v) of this section:
    (A) A schedule for implementing the mitigation proposals;
    (B) An estimate of the cost of the measures; and
    (C) A statement of the sources and extent of financing.
    (vii) The applicant must provide five copies (rather than the eight 
copies required under Sec. 4.32(b)(1) of the Commission's regulations) 
of any survey, inventory, or subsurface testing reports containing 
specific site and property information, and including maps and 
photographs showing the location and any required alteration of historic 
and archaeological resources in relation to proposed project facilities.
    (5) Report on socio-economic impacts. The applicant must provide a 
report which identifies and quantifies the impacts of constructing and 
operating the

[[Page 107]]

proposed project on employment, population, housing, personal income, 
local governmental services, local tax revenues and other factors within 
the towns and counties in the vicinity of the proposed project. The 
report must include:
    (i) A description of the socio-economic impact area;
    (ii) A description of employment, population and personal income 
trends in the impact area;
    (iii) An evaluation of the impact of any substantial in-migration of 
people on the impact area's governmental facilities and services, such 
as police, fire, health and educational facilities and programs;
    (iv) On-site manpower requirements and payroll during and after 
project construction, including a projection of total on-site employment 
and construction payroll provided by month;
    (v) Numbers of project construction personnel who:
    (A) Currently reside within the impact area;
    (B) Would commute daily to the construction site from places 
situated outside the impact area; and
    (C) Would relocate on a temporary basis within the impact area;
    (vi) A determination of whether the existing supply of available 
housing within the impact area is sufficient to meet the needs of the 
additional population;
    (vii) Numbers and types of residences and business establishments 
that would be displaced by the proposed project, procedures to be 
utilized to acquire these properties, and types and amounts of 
relocation assistance payments that would be paid to the affected 
property owners and businesses; and
    (viii) A fiscal impact analysis evaluating the incremental local 
government expenditures in relation to the incremental local government 
revenues that would result from the construction of the proposed 
project. Incremental expenditures may include, but are not be limited 
to, school operating costs, road maintenance and repair, public safety, 
and public utility costs.
    (6) Report on geological and soil resources. The applicant must 
provide a report on the geological and soil resources in the proposed 
project area and other lands that would be directly or indirectly 
affected by the proposed action and the impacts of the proposed project 
on those resources. The information required may be supplemented with 
maps showing the location and description of conditions. The report must 
contain:
    (i) A detailed description of geological features, including bedrock 
lithology, stratigraphy, structural features, glacial features, 
unconsolidated deposits, and mineral resources;
    (ii) A detailed description of the soils, including the types, 
occurrence, physical and chemical characteristics, erodability and 
potential for mass soil movement;
    (iii) A description showing the location of existing and potential 
geological and soil hazards and problems, including earthquakes, faults, 
seepage, subsidence, solution cavities, active and abandoned mines, 
erosion, and mass soil movement, and an identification of any large 
landslides or potentially unstable soil masses which could be aggravated 
by reservoir fluctuation;
    (iv) A description of the anticipated erosion, mass soil movement 
and other impacts on the geological and soil resources due to 
construction and operation of the proposed project; and
    (v) A description of any proposed measures or facilities for the 
mitigation of impacts on soils.
    (7) Report on recreational resources. The applicant must prepare a 
report containing a proposed recreation plan describing utilization, 
design and development of project recreational facilities, and public 
access to the project area. Development of the plan should include 
consideration of the needs of the physically handicapped. Public and 
private recreational facilities provided by others that would abut the 
project should be noted in the report. The report must be prepared in 
consultation with appropriate local, regional, state and Federal 
recreation agencies and planning commissions, the National Park Service 
of the U.S. Department of the Interior, and any other state or Federal 
agency with managerial responsibility for any part of the project lands. 
The report must contain:

[[Page 108]]

    (i) A description of any areas within or in the vicinity of the 
proposed project boundary that are included in, or have been designated 
for study for inclusion in:
    (A) The National Wild and Scenic Rivers Systems (see 16 U.S.C. 
1271);
    (B) The National Trails System (see 16 U.S.C. 1241); or
    (C) A wilderness area designated under the Wilderness Act (see 16 
U.S.C. 1132);
    (ii) A detailed description of existing recreational facilities 
within the project vicinity, and the public recreational facilities 
which are to be provided by the applicant at its sole cost or in 
cooperation with others no later than 3 years from the date of first 
commercial operation of the proposed project and those recreation 
facilities planned for future development based on anticipated demand. 
When public recreation facilities are to be provided by other entities, 
the applicant and those entities should enter into an agreement on the 
type of facilities to be provided and the method of operation. Copies of 
agreements with cooperating entities are to be appended to the plan;
    (iii) A provision for a shoreline buffer zone that must be within 
the project boundary, above the normal maximum surface elevation of the 
project reservoir, and of sufficient width to allow public access to 
project lands and waters and to protect the scenic, public recreational, 
cultural, and other environmental values of the reservoir shoreline;
    (iv) Estimates of existing and future recreational use at the 
project, in daytime and overnight visitation (recreation days), with a 
description of the methodology used in developing these data;
    (v) A development schedule and cost estimates of the construction, 
operation, and maintenance of existing, initial, and future public 
recreational facilities, including a statement of the source and extent 
of financing for such facilities;
    (vi) A description of any measures or facilities recommended by the 
agencies consulted for the purpose of creating, preserving, or enhancing 
recreational opportunities at the proposed project, and for the purpose 
of ensuring the safety of the public in its use of project lands and 
waters, including an explanation of why the applicant has rejected any 
measures or facilities recommended by an agency; and
    (vii) A drawing or drawings, one of which describes the entire 
project area, clearly showing:
    (A) The location of project lands, and the types and number of 
existing recreational facilities and those proposed for initial 
development, including access roads and trails, and facilities for 
camping, picnicking, swimming, boat docking and launching, fishing and 
hunting, as well as provisions for sanitation and waste disposal;
    (B) The location of project lands, and the type and number of 
recreational facilities planned for future development;
    (C) The location of all project lands reserved for recreational uses 
other than those included in paragraphs (f)(7)(vii) (A) and (B) of this 
section; and
    (D) The project boundary (excluding surveying details) of all areas 
designated for recreational development, sufficiently referenced to the 
appropriate Exhibit G drawings to show that all lands reserved for 
existing and future public recreational development and the shoreline 
buffer zone are included within the project boundary. Recreational 
cottages, mobile homes and year-round residences for private use are not 
to be considered as public recreational facilities, and the lands on 
which these private facilities are to be developed are not to be 
included within the proposed project boundary.
    (8) Report on aesthetic resources. The applicant must provide a 
report that describes the aesthetic resources of the proposed project 
area, the expected impacts of the project on these resources, and the 
mitigation, enhancement or protection measures proposed. The report must 
be prepared following consultation with Federal, state, and local 
agencies having managerial responsibility for any part of the proposed 
project lands or lands abutting those lands. The report must contain:
    (i) A description of the aesthetic character of lands and waters 
directly

[[Page 109]]

and indirectly affected by the proposed project facilities;
    (ii) A description of the anticipated impacts on aesthetic resources 
from construction activity and related equipment and material, and the 
subsequent presence of proposed project facilities in the landscape;
    (iii) A description of mitigative measures proposed by the 
applicant, including architectural design, landscaping, and other 
reasonable treatment to be given project works to preserve and enhance 
aesthetic and related resources during construction and operation of 
proposed project facilities; and
    (iv) Maps, drawings and photographs sufficient to provide an 
understanding of the information required under this paragraph. Maps or 
drawings may be consolidated with other maps or drawings required in 
this exhibit and must conform to the specifications of Sec. 4.39.
    (9) Report on land use. The applicant must provide a report that 
describes the existing uses of the proposed project lands and adjacent 
property, and those land uses which would occur if the project is 
constructed. The report may reference the discussions of land uses in 
other sections of this exhibit. The report must be prepared following 
consultation with local and state zoning or land management authorities, 
and any Federal or state agency with managerial responsibility for the 
proposed project or abutting lands. The report must include:
    (i) A description of existing land use in the proposed project area, 
including identification of wetlands, floodlands, prime or unique 
farmland as designated by the Natural Resources Conservation Service of 
the U.S. Department of Agriculture, the Special Area Management Plan of 
the Office of Coastal Zone Management, National Oceanic and Atmospheric 
Administration, and lands owned or subject to control by government 
agencies;
    (ii) A description of the proposed land uses within and abutting the 
project boundary that would occur as a result of development and 
operation of the project; and
    (iii) Aerial photographs, maps, drawings or other graphics 
sufficient to show the location, extent and nature of the land uses 
referred to in this section.
    (10) Alternative locations, designs, and energy sources. The 
applicant must provide an environment assessment of the following:
    (i) Alternative sites considered in arriving at the selection of the 
proposed project site;
    (ii) Alternative facility designs, processes, and operations that 
were considered and the reasons for their rejection;
    (iii) Alternative electrical energy sources, such as gas, oil, coal, 
and nuclear-fueled power plants, purchased power or diversity exchange, 
and other conventional and pumped-storage hydroelectric plants; and
    (iv) The overall consequences if the license application is denied.
    (11) List of literature. Exhibit E must include a list of all 
publications, reports, and other literature which were cited or 
otherwise utilized in the preparation of any part of the environmental 
report.
    (g) Exhibit F consists of general design drawings of the principal 
project works described under paragraph (b) of this section (Exhibit A) 
and supporting information used as the basis of design. If the Exhibit F 
submitted with the application is preliminary in nature, applicant must 
so state in the application. The drawings must conform to the 
specifications of Sec. 4.39.
    (1) The drawings must show all major project structures in 
sufficient detail to provide a full understanding of the project, 
including:
    (i) Plans (overhead view);
    (ii) Elevations (front view);
    (iii) Profiles (side view); and
    (iv) Sections.
    (2) The applicant may submit preliminary design drawings with the 
application. The final Exhibit F may be submitted during or after the 
licensing process and must show the precise plans and specifications for 
proposed structures. If the project is licensed on the basis of 
preliminary designs, the applicant must submit a final Exhibit F for 
Commission approval prior to commencement of any construction of the 
project.
    (3) Supporting design report. The applicant must furnish, at a 
minimum, the

[[Page 110]]

following supporting information to demonstrate that existing and 
proposed structures are safe and adequate to fulfill their stated 
functions and must submit such information in a separate report at the 
time the application is filed. The report must include:
    (i) An assessment of the suitability of the site and the reservoir 
rim stability based on geological and subsurface investigations, 
including investigations of soils and rock borings and tests for the 
evaluation of all foundations and construction materials sufficient to 
determine the location and type of dam structure suitable for the site;
    (ii) Copies of boring logs, geology reports and laboratory test 
reports;
    (iii) An identification of all borrow areas and quarry sites and an 
estimate of required quantities of suitable construction material;
    (iv) Stability and stress analyses for all major structures and 
critical abutment slopes under all probable loading conditions, 
including seismic and hydrostatic forces induced by water loads up to 
the Probable Maximum Flood as appropriate; and
    (v) The bases for determination of seismic loading and the Spillway 
Design Flood in sufficient detail to permit independent staff 
evaluation.
    (4) The applicant must submit two copies of the supporting design 
report described in paragraph (g)(3) of this section at the time 
preliminary and final design drawings are submitted to the Commission 
for review. If the report contains preliminary drawings, it must be 
designated a ``Preliminary Supporting Design Report.''
    (h) Exhibit G is a map of the project that must conform to the 
specifications of Sec. 4.39. In addition, to the other components of 
Exhibit G, the Applicant must provide the project boundary data in a 
geo-referenced electronic format--such as ArcView shape files, GeoMedia 
files, MapInfo files, or any similar format. The electronic boundary 
data must be positionally accurate to 40 feet, in 
order to comply with the National Map Accuracy Standards for maps at a 
1:24,000 scale (the scale of USGS quadrangle maps). The electronic 
exhibit G data must include a text file describing the map projection 
used (i.e., UTM, State Plane, Decimal Degrees, etc.), the map datum 
(i.e., feet, meters, miles, etc.). Three sets of the maps must be 
submitted on compact disk or other appropriate electronic media. If more 
than one sheet is used for the paper maps, the sheets must be numbered 
consecutively, and each sheet must bear a small insert sketch showing 
the entire project and indicate that portion of the project depicted on 
that sheet. Each sheet must contain a minimum of three known reference 
points. The latitude and longitude coordinates, or state plane 
coordinates, of each reference point must be shown. If at any time after 
the application is filed there is any change in the project boundary, 
the applicant must submit, within 90 days following the completion of 
project construction, a final exhibit G showing the extent of such 
changes. The map must show:
    (1) Location of the project and principal features. The map must 
show the location of the project as a whole with reference to the 
affected stream or other body of water and, if possible, to a nearby 
town or any other permanent monuments or objects, such as roads, 
transmission lines or other structures, that can be noted on the map and 
recognized in the field. The map must also show the relative locations 
and physical interrelationships of the principal project works and other 
features described under paragraph (b) of this section (Exhibit A).
    (2) Project boundary. The map must show a project boundary enclosing 
all project works and other features described under paragraph (b) of 
this section (Exhibit A) that are to be licensed. If accurate survey 
information is not available at the time the application is filed, the 
applicant must so state, and a tentative boundary may be submitted. The 
boundary must enclose only those lands necessary for operation and 
maintenance of the project and for other project purposes, such as 
recreation, shoreline control, or protection of environmental resources 
(see paragraph (f) of this section (Exhibit E)). Existing residential, 
commercial, or other structures may be included within the boundary only 
to the extent that underlying lands are needed for project purposes 
(e.g., for flowage, public recreation, shoreline control, or

[[Page 111]]

protection of environmental resources). If the boundary is on land 
covered by a public survey, ties must be shown on the map at sufficient 
points to permit accurate platting of the position of the boundary 
relative to the lines of the public land survey. If the lands are not 
covered by a public land survey, the best available legal description of 
the position of the boundary must be provided, including distances and 
directions from fixed monuments or physical features. The boundary must 
be described as follows:
    (i) Impoundments. (A) The boundary around a project impoundment must 
be described by one of the following:
    (1) Contour lines, including the contour elevation (preferred 
method);
    (2) Specified courses and distances (metes and bounds);
    (3) If the project lands are covered by a public land survey, lines 
upon or parallel to the lines of the survey; or
    (4) Any combination of the above methods.
    (B) The boundary must be located no more than 200 feet (horizontal 
measurement) from the exterior margin of the reservoir, defined by the 
normal maximum surface elevation, except where deviations may be 
necessary in describing the boundary according to the above methods or 
where additional lands are necessary for project purposes, such as 
public recreation, shoreline control, or protection of environmental 
resources.
    (ii) Continuous features. The boundary around linear (continuous) 
project features such as access roads, transmission lines, and conduits 
may be described by specified distances from center lines or offset 
lines of survey. The width of such corridors must not exceed 200 feet 
unless good cause is shown for a greater width. Several sections of a 
continuous feature may be shown on a single sheet with information 
showing the sequence of contiguous sections.
    (iii) Noncontinuous features. (A) The boundary around noncontinuous 
project works such as dams, spillways, and powerhouses must be described 
by one of the following:
    (1) Contour lines;
    (2) Specified courses and distances;
    (3) If the project lands are covered by a public land survey, lines 
upon or parallel to the lines of the survey; or
    (4) Any combination of the above methods.
    (B) The boundary must enclose only those lands that are necessary 
for safe and efficient operation and maintenance of the project or for 
other specified project purposes, such as public recreation or 
protection of environmental resources.
    (3) Federal lands. Any public lands and reservations of the United 
States (Federal lands) [see 16 U.S.C. 796 (1) and (2)] that are within 
the project boundary, such as lands administered by the U.S. Forest 
Service, Bureau of Land Management, or National Park Service, or Indian 
tribal lands, and the boundaries of those Federal lands, must be 
identified as such on the map by:
    (i) Legal subdivisions of a public land survey of the affected area 
(a protraction of identified township and section lines is sufficient 
for this purpose); and
    (ii) The Federal agency, identified by symbol or legend, that 
maintains or manages each identified subdivision of the public land 
survey within the project boundary; or
    (iii) In the absence of a public land survey, the location of the 
Federal lands according to the distances and directions from fixed 
monuments or physical features. When a Federal survey monument or a 
Federal bench mark will be destroyed or rendered unusable by the 
construction of project works, at least two permanent, marked witness 
monuments or bench marks must be established at accessible points. The 
maps show the location (and elevation, for bench marks) of the survey 
monument or bench mark which will be destroyed or rendered unusable, as 
well as of the witness monuments or bench marks. Connecting courses and 
distances from the witness monuments or bench marks to the original must 
also be shown.
    (iv) The project location must include the most current information 
pertaining to affected Federal lands as described under Sec. 
4.81(b)(5).

[[Page 112]]

    (4) Non-Federal lands. For those lands within the project boundary 
not identified under paragraph (h)(3) of this section, the map must 
identify by legal subdivision:
    (i) Lands owned in fee by the applicant and lands that the applicant 
plans to acquire in fee; and
    (ii) Lands over which the applicant has acquired or plans to acquire 
rights to occupancy and use other than fee title, including rights 
acquired or to be acquired by easement or lease.

[Order 184, 46 FR 55936, Nov. 13, 1981; 48 FR 4459, Feb. 1, 1983, as 
amended by Order 413, 50 FR 11684, Mar. 25, 1985; Order 464, 52 FR 5449, 
Feb. 23, 1987; Order 540, 57 FR 21737, May 22, 1992; Order 2002, 68 FR 
51119, Aug. 25, 2003; 68 FR 61742, Oct. 30, 2003; 68 FR 63194, Nov. 7, 
2003; 68 FR 69957, Dec. 16, 2003; Order 699, 72 FR 45324, Aug. 14, 2007]



    Subpart F_Application for License for Major Project_Existing Dam

    Authority: Federal Power Act, as amended (16 U.S.C. 792-828c); 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601-2645); 
Department of Energy Organization Act (42 U.S.C. 7101-7352); E.O. 12009, 
42 FR 46267; Pub. L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.).



Sec. 4.50  Applicability.

    (a) Applicability. (1) Except as provided in paragraph (a)(2) of 
this section, the provisions of this subpart apply to any application 
for either an initial license or new license for a major project--
existing dam that is proposed to have a total installed capacity of more 
than 5 megawatts.
    (2) This subpart does not apply to any major project--existing dam 
(see Sec. 4.40) that is proposed to entail or include:
    (i) Any repair, modification or reconstruction of an existing dam 
that would result in a significant change in the normal maximum surface 
area or normal maximum surface elevation of an existing impoundment; or
    (ii) Any new development or change in project operation that would 
result in a significant environmental impact.
    (3) An applicant for license for any major project--existing dam 
that would have a total installed capacity of 5 megawatts or less must 
submit application under subpart G (Sec. Sec. 4.60 and 4.61).
    (b) Guidance from Commission staff. A prospective applicant for a 
major license--existing dam may seek advice from the Commission staff 
regarding the applicability of these sections to its project (see Sec. 
4.32(h)), including the determinations whether any proposed repair or 
reconstruction of an existing dam would result in a significant change 
in the normal maximum surface area or the normal maximum surface 
elevation of an existing impoundment, or whether any proposed new 
development or change in project operation would result in a significant 
environmental impact.

[Order 59, 44 FR 67651, Nov. 27, 1979, as amended by Order 184, 46 FR 
55942, Nov. 13, 1981; Order 413, 50 FR 11684, Mar. 25, 1985; Order 499, 
53 FR 27002, July 18, 1988]



Sec. 4.51  Contents of application.

    An application for license under this subpart must contain the 
following information in the form specified. As provided in paragraph 
(f) of this section, the appropriate Federal, state, and local resource 
agencies must be given the opportunity to comment on the proposed 
project, prior to filing of the application for license for major 
project--existing dam. Information from the consultation process must be 
included in this Exhibit E, as appropriate.
    (a) Initial statement.

             Before the Federal Energy Regulatory Commission

         Application for License for Major Project--Existing Dam

    (1) (Name of applicant) applies to the Federal Energy Regulatory 
Commission for a (license or new license, as appropriate) for the (name 
of project) water power project, as described in the attached exhibits. 
(Specify any previous FERC project number designation.)
    (2) The location of the project is:

State or territory:_____________________________________________________
County:_________________________________________________________________
Township or nearby town:________________________________________________
Stream or other body of water:__________________________________________

    (3) The exact name and business address of the applicant are:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________


[[Page 113]]

________________________________________________________________________
    The exact name and business address of each person authorized to act 
as agent for the applicant in this application are:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

    (4) The applicant is a [citizen of the United States, association of 
citizens of the United States, domestic corporation, municipality, or 
state, as appropriate] and (is/is not) claiming preference under section 
7(a) of the Federal Power Act. See 16 U.S.C. 796.
    (5)(i) The statutory or regulatory requirements of the state(s) in 
which the project would be located that affect the project as proposed, 
with respect to bed and banks and to the appropriation, diversion, and 
use of water for power purposes, and with respect to the right to engage 
in the business of developing, transmitting, and distributing power and 
in any other business necessary to accomplish the purposes of the 
license under the Federal Power Act, are: [Provide citation and brief 
identification of the nature of each requirement; if the applicant is a 
municipality, the applicant must submit copies of applicable state and 
local laws or a municipal charter, or, if such laws or documents are not 
clear, other appropriate legal authority, evidencing that the 
municipality is competent under such laws to engage in the business of 
developing, transmitting, utilizing, or distributing power.]
    (ii) The steps which the applicant has taken or plans to take to 
comply with each of the laws cited above are: (provide brief description 
for each law).
    (6) The applicant must provide the name and address of the owner of 
any existing project facilities. If the dam is federally owned or 
operated, provide the name of the agency.

    (b) Exhibit A is a description of the project. This exhibit need not 
include information on project works maintained and operated by the U.S. 
Army Corps of Engineers, the Bureau of Reclamation, or any other 
department or agency of the United States, except for any project works 
that are proposed to be altered or modified. If the project includes 
more than one dam with associated facilities, each dam and the 
associated component parts must be described together as a discrete 
development. The description for each development must contain:
    (1) The physical composition, dimensions, and general configuration 
of any dams, spillways, penstocks, powerhouses, tailraces, or other 
structures, whether existing or proposed, to be included as part of the 
project;
    (2) The normal maximum surface area and normal maximum surface 
elevation (mean sea level), gross storage capacity, and usable storage 
capacity of any impoundments to be included as part of the project;
    (3) The number, type, and rated capacity of any turbines or 
generators, whether existing or proposed, to be included as part of the 
project;
    (4) The number, length, voltage, and interconnections of any primary 
transmission lines, whether existing or proposed, to be included as part 
of the project (see 16 U.S.C. 796(11));
    (5) The specifications of any additional mechanical, electrical, and 
transmission equipment appurtenant to the project; and
    (6) All lands of the United States that are enclosed within the 
project boundary described under paragraph (h) of this section (Exhibit 
G), identified and tabulated by legal subdivisions of a public land 
survey of the affected area or, in the absence of a public land survey, 
by the best available legal description. The tabulation must show the 
total acreage of the lands of the United States within the project 
boundary.
    (c) Exhibit B is a statement of project operation and resource 
utilization. If the project includes more than one dam with associated 
facilities, the information must be provided separately for each such 
discrete development. The exhibit must contain:
    (1) A statement whether operation of the powerplant will be manual 
or automatic, an estimate of the annual plant factor, and a statement of 
how the project will be operated during adverse, mean, and high water 
years;
    (2) An estimate of the dependable capacity and average annual energy 
production in kilowatt-hours (or a mechanical equivalent), supported by 
the following data:
    (i) The minimum, mean, and maximum recorded flows in cubic feet per 
second of the stream or other body of water at the powerplant intake or 
point of diversion, with a specification of any adjustments made for 
evaporation, leakage, minimum flow releases (including duration of 
releases), or other reductions in available flow;

[[Page 114]]

monthly flow duration curves indicating the period of record and the 
gauging stations used in deriving the curves; and a specification of the 
period of critical streamflow used to determine the dependable capacity;
    (ii) An area-capacity curve showing the gross storage capacity and 
usable storage capacity of the impoundment, with a rule curve showing 
the proposed operation of the impoundment and how the usable storage 
capacity is to be utilized;
    (iii) The estimated hydraulic capacity of the powerplant (minimum 
and maximum flow through the powerplant) in cubic feet per second;
    (iv) A tailwater rating curve; and
    (v) A curve showing powerplant capability versus head and specifying 
maximum, normal, and minimum heads;
    (3) A statement, with load curves and tabular data, if necessary, of 
the manner in which the power generated at the project is to be 
utilized, including the amount of power to be used on-site, if any, the 
amount of power to be sold, and the identity of any proposed purchasers; 
and
    (4) A statement of the applicant's plans, if any, for future 
development of the project or of any other existing or proposed water 
power project on the stream or other body of water, indicating the 
approximate location and estimated installed capacity of the proposed 
developments.
    (d) Exhibit C is a construction history and proposed construction 
schedule for the project. The construction history and schedules must 
contain:
    (1) If the application is for an initial license, a tabulated 
chronology of construction for the existing projects structures and 
facilities described under paragraph (b) of this section (Exhibit A), 
specifying for each structure or facility, to the extent possible, the 
actual or approximate dates (approximate dates must be identified as 
such) of:
    (i) Commencement and completion of construction or installation;
    (ii) Commencement of commercial operation; and
    (iii) Any additions or modifications other than routine maintenance; 
and
    (2) If any new development is proposed, a proposed schedule 
describing the necessary work and specifying the intervals following 
issuance of a license when the work would be commenced and completed.
    (e) Exhibit D is a statement of costs and financing. The statement 
must contain:
    (1) If the application is for an initial license, a tabulated 
statement providing the actual or approximate original cost (approximate 
costs must be identified as such) of:
    (i) Any land or water right necessary to the existing project; and
    (ii) Each existing structure and facility described under paragraph 
(b) of this section (Exhibit A).
    (2) If the applicant is a licensee applying for a new license, and 
is not a municipality or a state, an estimate of the amount which would 
be payable if the project were to be taken over pursuant to section 14 
of the Federal Power Act upon expiration of the license in effect [see 
16 U.S.C. 807], including:
    (i) Fair value;
    (ii) Net investment; and
    (iii) Severance damages.
    (3) If the application includes proposals for any new development, a 
statement of estimated costs, including:
    (i) The cost of any land or water rights necessary to the new 
development; and
    (ii) The cost of the new development work, with a specification of:
    (A) Total cost of each major item;
    (B) Indirect construction costs such as costs of construction 
equipment, camps, and commissaries;
    (C) Interest during construction; and
    (D) Overhead, construction, legal expenses, taxes, administrative 
and general expenses, and contingencies.
    (4) A statement of the estimated average annual cost of the total 
project as proposed specifying any projected changes in the costs (life-
cycle costs) over the estimated financing or licensing period if the 
applicant takes such changes into account, including:
    (i) Cost of capital (equity and debt);
    (ii) Local, state, and Federal taxes;
    (iii) Depreciation and amortization;
    (iv) Operation and maintenance expenses, including interim 
replacements, insurance, administrative and

[[Page 115]]

general expenses, and contingencies; and
    (v) The estimated capital cost and estimated annual operation and 
maintenance expense of each proposed environmental measure.
    (5) A statement of the estimated annual value of project power, 
based on a showing of the contract price for sale of power or the 
estimated average annual cost of obtaining an equivalent amount of power 
(capacity and energy) from the lowest cost alternative source, 
specifying any projected changes in the cost of power from that source 
over the estimated financing or licensing period if the applicant takes 
such changes into account.
    (6) A statement specifying the sources and extent of financing and 
annual revenues available to the applicant to meet the costs identified 
in paragraphs (e) (3) and (4) of this section.
    (7) An estimate of the cost to develop the license application;
    (8) The on-peak and off-peak values of project power, and the basis 
for estimating the values, for projects which are proposed to operate in 
a mode other than run-of-river; and
    (9) The estimated average annual increase or decrease in project 
generation, and the estimated average annual increase or decrease of the 
value of project power, due to a change in project operations (i.e., 
minimum bypass flows; limits on reservoir fluctuations).
    (f) Exhibit E is an Environmental Report. Information provided in 
the report must be organized and referenced according to the itemized 
subparagraphs below. See Sec. 4.38 for consultation requirements. The 
Environmental Report must contain the following information, 
commensurate with the scope of the proposed project:
    (1) General description of the locale. The applicant must provide a 
general description of the environment of the project and its immediate 
vicinity. The description must include general information concerning 
climate, topography, wetlands, vegetative cover, land development, 
population size and density, the presence of any floodplain and the 
occurrence of flood events in the vicinity of the project, and any other 
factors important to an understanding of the setting.
    (2) Report on water use and quality. The report must discuss the 
consumptive use of project waters and the impact of the project on water 
quality. The report must be prepared in consultation with the state and 
Federal agencies with responsibility for management of water quality in 
the affected stream or other body of water. Consultation must be 
documented by appending to the report a letter from each agency 
consulted that indicates the nature, extent, and results of the 
consultation. The report must include:
    (i) A description (including specified volume over time) of existing 
and proposed uses of project waters for irrigation, domestic water 
supply, steam-electric plant, industrial, and other consumptive 
purposes;
    (ii) A description of existing water quality in the project 
impoundment and downstream water affected by the project and the 
applicable water quality standards and stream segment classifications;
    (iii) A description of any minimum flow releases specifying the rate 
of flow in cubic feet per second (cfs) and duration, changes in the 
design of project works or in project operation, or other measures 
recommended by the agencies consulted for the purposes of protecting or 
improving water quality, including measures to minimize the short-term 
impacts on water quality of any proposed new development of project 
works (for any dredging or filling, refer to 40 CFR part 230 and 33 CFR 
320.3(f) and 323.3(e)) \1\;
---------------------------------------------------------------------------

    \1\ 33 CFR part 323 was revised at 47 FR 31810, July 22, 1982, and 
Sec. 323.3(e) no longer exists.
---------------------------------------------------------------------------

    (iv) A statement of the existing measures to be continued and new 
measures proposed by the applicant for the purpose of protecting or 
improving water quality, including an explanation of why the applicant 
has rejected any measures recommended by an agency and described under 
paragraph (f)(2)(iii) of this section.
    (v) A description of the continuing impact on water quality of 
continued

[[Page 116]]

operation of the project and the incremental impact of proposed new 
development of project works or changes in project operation; and
    (3) Report on fish, wildlife, and botanical resources. The report 
must discuss fish, wildlife, and botanical resources in the vicinity of 
the project and the impact of the project on those resources. The report 
must be prepared in consultation with any state agency with 
responsibility for fish, wildlife, and botanical resources, the U.S. 
Fish and Wildlife Service, the National Marine Fisheries Service (if the 
project may affect anadromous fish resources subject to that agency's 
jurisdiction), and any other state or Federal agency with managerial 
authority over any part of the project lands. Consultation must be 
documented by appending to the report a letter from each agency 
consulted that indicates the nature, extent, and results of the 
consultation. The report must include:
    (i) A description of the fish, wildlife, and botanical resources of 
the project and its vicinity, and of downstream areas affected by the 
project, including identification of any species listed as threatened or 
endangered by the U.S. Fish and Wildlife Service (See 50 CFR 17.11 and 
17.12);
    (ii) A description of any measures or facilities recommended by the 
agencies consulted for the mitigation of impacts on fish, wildlife, and 
botanical resources, or for the protection or improvement of those 
resources;
    (iii) A statement of any existing measures or facilities to be 
continued or maintained and any measures or facilities proposed by the 
applicant for the mitigation of impacts on fish, wildlife, and botanical 
resources, or for the protection or improvement of such resources, 
including an explanation of why the applicant has rejected any measures 
or facilities recommended by an agency and described under paragraph 
(f)(3)(ii) of this section.
    (iv) A description of any anticipated continuing impact on fish, 
wildlife, and botanical resources of continued operation of the project, 
and the incremental impact of proposed new development of project works 
or changes in project operation; and
    (v) The following materials and information regarding the measures 
and facilities identified under paragraph (f)(3)(iii) of this section:
    (A) Functional design drawings of any fish passage and collection 
facilities, indicating whether the facilities depicted are existing or 
proposed (these drawings must conform to the specifications of Sec. 
4.39 regarding dimensions of full-sized prints, scale, and legibility);
    (B) A description of operation and maintenance procedures for any 
existing or proposed measures or facilities;
    (C) An implementation or construction schedule for any proposed 
measures or facilities, showing the intervals following issuance of a 
license when implementation of the measures or construction of the 
facilities would be commenced and completed;
    (D) An estimate of the costs of construction, operation, and 
maintenance, of any proposed facilities, and of implementation of any 
proposed measures, including a statement of the sources and extent of 
financing; and
    (E) A map or drawing that conforms to the size, scale, and 
legibility requirements of Sec. 4.39 showing by the use of shading, 
cross-hatching, or other symbols the identity and location of any 
measures or facilities, and indicating whether each measure or facility 
is existing or proposed (the map or drawings in this exhibit may be 
consolidated).
    (4) Report on historical and archeological resources. The report 
must discuss the historical and archeological resources in the project 
area and the impact of the project on those resources. The report must 
be prepared in consultation with the State Historic Preservation Officer 
and the National Park Service. Consultation must be documented by 
appending to the report a letter from each agency consulted that 
indicates the nature, extent, and results of the consultation. The 
report must contain:
    (i) Identification of any sites either listed or determined to be 
eligible for inclusion in the National Register of Historic Places that 
are located in the project area, or that would be affected by operation 
of the project or by new

[[Page 117]]

development of project facilities (including facilities proposed in this 
exhibit);
    (ii) A description of any measures recommended by the agencies 
consulted for the purpose of locating, identifying, and salvaging 
historical or archaeological resources that would be affected by 
operation of the project, or by new development of project facilities 
(including facilities proposed in this exhibit), together with a 
statement of what measures the applicant proposes to implement and an 
explanation of why the applicant rejects any measures recommended by an 
agency.
    (iii) The following materials and information regarding the survey 
and salvage activities described under paragraph (f)(4)(ii) of this 
section:
    (A) A schedule for the activities, showing the intervals following 
issuance of a license when the activities would be commenced and 
completed; and
    (B) An estimate of the costs of the activities, including a 
statement of the sources and extent of financing.
    (5) Report on recreational resources. The report must discuss 
existing and proposed recreational facilities and opportunities at the 
project. The report must be prepared in consultation with local, state, 
and regional recreation agencies and planning commissions, the National 
Park Service, and any other state or Federal agency with managerial 
authority over any part of the project lands. Consultation must be 
documented by appending to the report a letter from each agency 
consulted indicating the nature, extent, and results of the 
consultation. The report must contain:
    (i) A description of any existing recreational facilities at the 
project, indicating whether the facilities are available for public use;
    (ii) An estimate of existing and potential recreational use of the 
project area, in daytime and overnight visits;
    (iii) A description of any measures or facilities recommended by the 
agencies consulted for the purpose of creating, preserving, or enhancing 
recreational opportunities at the project and in its vicinity (including 
opportunities for the handicapped), and for the purpose of ensuring the 
safety of the public in its use of project lands and waters;
    (iv) A statement of the existing measures or facilities to be 
continued or maintained and the new measures or facilities proposed by 
the applicant for the purpose of creating, preserving, or enhancing 
recreational opportunities at the project and in its vicinity, and for 
the purpose of ensuring the safety of the public in its use of project 
lands and waters, including an explanation of why the applicant has 
rejected any measures or facilities recommended by an agency and 
described under paragraph (f)(5)(iii) of this section; and
    (v) The following materials and information regarding the measures 
and facilities identified under paragraphs (f)(5) (i) and (iv) of this 
section:
    (A) Identification of the entities responsible for implementing, 
constructing, operating, or maintaining any existing or proposed 
measures or facilities;
    (B) A schedule showing the intervals following issuance of a license 
at which implementation of the measures or construction of the 
facilities would be commenced and completed;
    (C) An estimate of the costs of construction, operation, and 
maintenance of any proposed facilities, including a statement of the 
sources and extent of financing;
    (D) A map or drawing that conforms to the size, scale, and 
legibility requirements of Sec. 4.39 showing by the use of shading, 
cross-hatching, or other symbols the identity and location of any 
facilities, and indicating whether each facility is existing or proposed 
(the maps or drawings in this exhibit may be consolidated); and
    (vi) A description of any areas within or in the vicinity of the 
proposed project boundary that are included in, or have been designated 
for study for inclusion in, the National Wild and Scenic Rivers System, 
or that have been designated as wilderness area, recommended for such 
designation, or designated as a wilderness study area under the 
Wilderness Act.
    (6) Report on land management and aesthetics. The report must 
discuss the

[[Page 118]]

management of land within the proposed project boundary, including 
wetlands and floodplains, and the protection of the recreational and 
scenic values of the project. The report must be prepared following 
consultation with local and state zoning and land management authorities 
and any Federal or state agency with managerial authority over any part 
of the project lands. Consultation must be documented by appending to 
the report a letter from each agency consulted indicating the nature, 
extent, and results of the consultation. The report must contain:
    (i) A description of existing development and use of project lands 
and all other lands abutting the project impoundment;
    (ii) A description of the measures proposed by the applicant to 
ensure that any proposed project works, rights-of-way, access roads, and 
other topographic alterations blend, to the extent possible, with the 
surrounding environment; (see, e.g., 44 F.P.C. 1496, et seq.);
    (iii) A description of wetlands or floodplains within, or adjacent 
to, the project boundary, any short-term or long-term impacts of the 
project on those wetlands or floodplains, and any mitigative measures in 
the construction or operation of the project that minimize any adverse 
impacts on the wetlands or floodplains;
    (iv) A statement, including an analysis of costs and other 
constraints, of the applicant's ability to provide a buffer zone around 
all or any part of the impoundment, for the purpose of ensuring public 
access to project lands and waters and protecting the recreational and 
aesthetic values of the impoundment and its shoreline;
    (v) A description of the applicant's policy, if any, with regard to 
permitting development of piers, docks, boat landings, bulkheads, and 
other shoreline facilities on project lands and waters; and
    (vi) Maps or drawings that conform to the size, scale and legibility 
requirements of Sec. 4.39, or photographs, sufficient to show the 
location and nature of the measures proposed under paragraph (f)(6)(ii) 
of this section (maps or drawings in this exhibit may be consolidated).
    (7) List of literature. The report must include a list of all 
publications, reports, and other literature which were cited or 
otherwise utilized in the preparation of any part of the environmental 
report.
    (g) Exhibit F. See Sec. 4.41(g) of this chapter.
    (h) Exhibit G. See Sec. 4.41(h) of this chapter.

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 123, 46 FR 
9029, Jan. 28, 1981; Order 183, 46 FR 55251, Nov. 9, 1981; Order 184, 46 
FR 55942, Nov. 13, 1981; Order 413, 50 FR 11684, Mar. 25, 1985; Order 
464, 52 FR 5449, Feb. 23, 1987; Order 540, 57 FR 21737, May 22, 1992; 
Order 2002, 68 FR 51120, Aug. 25, 2003; 68 FR 61742, Oct. 30, 2003]



  Subpart G_Application for License for Minor Water Power Projects and 

             Major Water Power Projects 5 Megawatts or Less



Sec. 4.60  Applicability and notice to agencies.

    (a) Applicability. The provisions of this subpart apply to any 
application for an initial license or a new license for:
    (1) A minor water power project, as defined in Sec. 4.30(b)(17);
    (2) Any major project--existing dam, as defined in Sec. 
4.30(b)(16), that has a total installed capacity of 5 MW or less; or
    (3) Any major unconstructed project or major modified project, as 
defined in Sec. 4.30 (b) (15) and (14) respectively, that has a total 
installed capacity of 5 MW or less.
    (b) Notice to agencies. The Commission will supply interested 
Federal, state, and local agencies with notice of any application for 
license for a water power project 5 MW or less and request comment on 
the application. Copies of the application will be available for 
inspection at the Commission's Public Reference Room. The applicant 
shall also furnish copies of the filed application to any Federal, 
state, or local agency that so requests.

[[Page 119]]

    (c) Unless an applicant for a license for a minor water power 
project requests in its application that the Commission apply the 
following provisions of Part I of the Federal Power Act when it issues a 
minor license for a project, the Commission, unless it determines it 
would not be in the public interest to do so, will waive:
    (1) Section 4(b), insofar as it requires a licensee to file a 
statement showing the actual legitimate costs of construction of a 
project;
    (2) Section 4(e), insofar as it relates to approval by the Chief of 
Engineers and the Secretary of the Army of plans affecting navigation;
    (3) Section 6, insofar as it relates to the acceptance and 
expression in the license of terms and conditions of the Federal Power 
Act that are waived in the licensing order;
    (4) Section 10(c), insofar as it relates to a licensee's maintenance 
of depreciation reserves;
    (5) Sections 10(d) and 10(f);
    (6) Section 14, with the exception of the right of the United States 
or any state or municipality to take over, maintain, and operate a 
project through condemnation proceedings; and
    (7) Sections 15, 16, 19, 20 and 22.

[Order 413, 50 FR 11685, Mar. 25, 1985, as amended by Order 513, 54 FR 
23806, June 2, 1989; Order 2002, 68 FR 51120, Aug. 25, 2003]



Sec. 4.61  Contents of application.

    (a) General instructions--(1) Entry upon land. No work may be 
started on any proposed project works until the applicant receives a 
signed license from the Commission. Acceptance of an application does 
not authorize entry upon public lands or reservations of the United 
States for any purpose. The applicant should determine whether any 
additional Federal, state, or local permits are required.
    (2) Exhibits F and G must be submitted on separate drawings. 
Drawings for Exhibits F and G must have identifying title blocks and 
bear the following certification: ``This drawing is a part of the 
application for license made by the undersigned this -------------- day 
of --------------, 19----.''
    (3) Each application for a license for a water power project 5 
megawatts or less must include the information requested in the initial 
statement and lettered exhibits described by paragraphs (b) through (f) 
of this section, and must be provided in the form specified. The 
Commission reserves the right to require additional information, or 
another filing procedure, if data provided indicate such action to be 
appropriate.
    (b) Initial statement.

             Before the Federal Energy Regulatory Commission

Application for License for a [Minor Water Power Project, or Major Water 
           Power Project, 5 Megawatts or Less, as Appropriate]

    (1) ---------- (Name of Applicant) applies to the Federal Energy 
Regulatory Commission for ---------- (license or new license, as 
appropriate) for the ---------- (name of project) water power project, 
as described hereinafter. (Specify any previous FERC project number 
designation.)
    (2) The location of the project is:
State or territory:_____________________________________________________
County:_________________________________________________________________
Township or nearby town:________________________________________________
Stream or other body of water:__________________________________________
    (3) The exact name, address, and telephone number of the applicant 
are:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (4) The exact name, address, and telephone number of each person 
authorized to act as agent for the applicant in this application, if 
applicable, are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (5) The applicant is a ------ [citizen of the United States, 
association of citizens of the United States, domestic corporation, 
municipality, or State, as appropriate] and (is/is not) claiming 
preference under section 7(a) of the Federal Power Act. See 16 U.S.C. 
796.
    (6)(i) The statutory or regulatory requirements of the state(s) in 
which the project would be located that affect the project as proposed 
with respect to bed and banks and the appropriation, diversion, and use 
of water for power purposes, and with respect to the right to engage in 
the business of developing, transmitting, and distributing power and in 
any other business necessary to accomplish the purposes of the license 
under the Federal Power Act, are: [provide citation and brief 
identification of the nature of each requirement; if the applicant is a 
municipality, the applicant must submit copies of applicable state or 
local laws or a municipal charter or, if such laws or documents are not

[[Page 120]]

clear, any other appropriate legal authority, evidencing that the 
municipality is competent under such laws to engage in the business of 
developing, transmitting, utilizing, or distributing power.]
    (ii) The steps which the applicant has taken or plans to take to 
comply with each of the laws cited above are: [provide brief description 
for each requirement]
    (7) Brief project description
    (i) Proposed installed generating capacity ------ MW.
    (ii) Check appropriate box:
    [ballot] existing dam [ballot] unconstructed dam
    [ballot] existing dam, major modified project (see Sec. 
4.30(b)(14))
    (8) Lands of the United States affected (shown on Exhibit G):

 
                                                (Name)           (Acres)
 
  (i) National Forest................  ........................  .......
  (ii) Indian Reservation............  ........................  .......
  (iii) Public Lands Under             ........................  .......
   Jurisdiction of.
  (iv) Other.........................  ........................  .......
  (v) Total U.S. Lands...............  ........................  .......
 

    (vi) Check appropriate box:
 [ballot] Surveyed land [ballot] Unsurveyed land
    (9) Construction of the project is planned to start within ---- 
months, and is planned to be completed within ---- months, from the date 
of issuance of license.

    (c) Exhibit A is a description of the project and the proposed mode 
of operation.
    (1) The exhibit must include, in tabular form if possible, as 
appropriate:
    (i) The number of generating units, including auxiliary units, the 
capacity of each unit, and provisions, if any, for future units;
    (ii) The type of hydraulic turbine(s);
    (iii) A description of how the plant is to be operated, manual or 
automatic, and whether the plant is to be used for peaking;
    (iv) The estimated average annual generation in kilowatt-hours or 
mechanical energy equivalent;
    (v) The estimated average head on the plant;
    (vi) The reservoir surface area in acres and, if known, the net and 
gross storage capacity;
    (vii) The estimated minimum and maximum hydraulic capacity of the 
plant (flow through the plant) in cubic feet per second and estimated 
average flow of the stream or water body at the plant or point of 
diversion; for projects with installed capacity of more than 1.5 
megawatts, monthly flow duration curves and a description of the 
drainage area for the project site must be provided;
    (viii) Sizes, capacities, and construction materials, as 
appropriate, of pipelines, ditches, flumes, canals, intake facilities, 
powerhouses, dams, transmission lines, and other appurtenances; and
    (ix) The estimated cost of the project.
    (x) The estimated capital costs and estimated annual operation and 
maintenance expense of each proposed environmental measure.
    (2) State the purposes of project (for example, use of power 
output).
    (3) An estimate of the cost to develop the license application; and
    (4) The on-peak and off-peak values of project power, and the basis 
for estimating the values, for projects which are proposed to operate in 
a mode other than run-of-river.
    (5) The estimated average annual increase or decrease in project 
generation, and the estimated average annual increase or decrease of the 
value of project power due to a change in project operations (i.e., 
minimum bypass flows, limiting reservoir fluctuations) for an 
application for a new license;
    (6) The remaining undepreciated net investment, or book value of the 
project;
    (7) The annual operation and maintenance expenses, including 
insurance, and administrative and general costs;
    (8) A detailed single-line electrical diagram;
    (9) A statement of measures taken or planned to ensure safe 
management, operation, and maintenance of the project.
    (d) Exhibit E is an Environmental Report.
    (1) For major unconstructed and major modified projects 5 MW or 
less. Any application must contain an Exhibit E conforming with the data 
and consultation requirements of Sec. 4.41(f) of this chapter, if the 
application is for license for a water power project which has or is 
proposed to have a total installed generating capacity greater

[[Page 121]]

than 1.5 MW but not greater than 5 MW, and which:
    (i) Would use the water power potential of a dam and impoundment 
which, at the time of application, has not been constructed (see Sec. 
4.30(b)(15)); or
    (ii) Involves any repair, modification or reconstruction of an 
existing dam that would result in a significant change in the normal 
maximum surface area or elevation of an existing impoundment or involves 
any change in existing project works or operations that would result in 
a significant environmental impact (see Sec. 4.30(b)(14)).
    (2) For minor projects and major projects at existing dams 5 MW or 
less. An application for license for either a minor water power project 
with a total proposed installed generating capacity of 1.5 MW or less or 
a major project--existing dam with a proposed total installed capacity 
of 5 MW or less must contain an Exhibit E under this subparagraph. See 
Sec. 4.38 for consultation requirements. The Environmental Report must 
contain the following information:
    (i) A description, including any maps or photographs which the 
applicant considers appropriate, of the environmental setting of the 
project, including vegetative cover, fish and wildlife resources, water 
quality and quantity, land and water uses, recreational uses, historical 
and archeological resources, and scenic and aesthetic resources. The 
report must include a discussion of endangered or threatened plant and 
animal species, any critical habitats, and any sites included in, or 
eligible for inclusion in, the National Register of Historic Places. The 
applicant may obtain assistance in the preparation of this information 
from state natural resources agencies, the state historic preservation 
officer, and from local offices of Federal natural resources agencies.
    (ii) A description of the expected environmental impacts from 
proposed construction or development and the proposed operation of the 
power project, including any impacts from any proposed changes in the 
capacity and mode of operation of the project if it is already 
generating electric power, and an explanation of the specific measures 
proposed by the applicant, the agencies, and others to protect and 
enhance environmental resources and values and to mitigate adverse 
impacts of the project on such resources. The applicant must explain its 
reasons for not undertaking any measures proposed by any agency 
consulted.
    (iii) A description of the steps taken by the applicant in 
consulting with Federal, state, and local agencies with expertise in 
environmental matters during the preparation of this exhibit prior to 
filing the application for license with the Commission. In this report, 
the applicant must:
    (A) Indicate which agencies were consulted during the preparation of 
the environmental report and provide copies of letters or other 
documentation showing that the applicant consulted or attempted to 
consult with each of the relevant agencies (specifying each agency) 
before filing the application, including any terms or conditions of 
license that those agencies have determined are appropriate to prevent 
loss of, or damage to, natural resources; and
    (B) List those agencies that were provided copies of the application 
as filed with the Commission, the date or dates provided, and copies of 
any letters that may be received from agencies commenting on the 
application.
    (iv) Any additional information the applicant considers important.
    (e) Exhibit F. See Sec. 4.41(g) of this chapter.
    (f) Exhibit G. See Sec. 4.41(h) of this chapter.

[Order 185, 46 FR 55949, Nov. 13, 1981, as amended by Order 413, 50 FR 
11685, Mar. 25, 1985; Order 464, 52 FR 5449, Feb. 23, 1987; Order 513, 
54 FR 23806, June 2, 1989; Order 2002, 68 FR 51120, Aug. 25, 2003; 68 FR 
61742, Oct. 30, 2003]



      Subpart H_Application for License for Transmission Line Only



Sec. 4.70  Applicability.

    This subpart applies to any application for license issued solely 
for a transmission line that transmits power from a licensed water power 
project to

[[Page 122]]

the point of junction with the distribution system or with the 
interconnected primary transmission system.

[Order 184, 46 FR 55942, Nov. 13, 1981, as amended by Order 2002, 68 FR 
51120, Aug. 25, 2003; 68 FR 61742, Oct. 30, 2003]



Sec. 4.71  Contents of application.

    An application for license for transmission line only must contain 
the following information in the form specified.
    (a) Initial statement.

             Before the Federal Energy Regulation Commission

           Application for License for Transmission Line Only

    (1) [Name of applicant] applies to the Federal Energy Regulatory 
Commission for a [license or new license, as appropriate] for the [name 
of project] transmission line only, as described in the attached 
exhibits, that is connected with FERC Project No. ------, for which a 
license [was issued, or application was made, as appropriate] on the --
------------ day of --------------, 19----.
    (2) The location of the transmission line would be:
State or territory:_____________________________________________________
County:_________________________________________________________________
Township or nearby town:________________________________________________
    (3) The proposed use or market for the power to be transmitted.
    (4) The exact name, business address, and telephone number of the 
applicant are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (5) The applicant is a [citizen of the United States, association of 
citizens of the United States, domestic corporation, municipality, or 
State, as appropriate] and (is/is not) claiming preference under section 
7(a) of the Federal Power Act. See 16 U.S.C. 796.
    (6)(i) [For any applicant which, at the time of application for 
license for transmission line only, is a non-licensee.] The statutory or 
regulatory requirements of the state(s) in which the project would be 
located and that affect the project as proposed with respect to bed and 
banks and to the appropriation, diversion, and use of water for power 
purposes, and with respect to the right to engage in the business of 
developing, transmitting, and distributing power and in any other 
business necessary to accomplish the purposes of the license under the 
Federal Power Act, are: [provide citation and brief identification of 
the nature of each requirement; if the applicant is a municipality, the 
applicant must submit copies of applicable state or local laws or a 
municipal charter or, if such laws or documents are not clear, other 
appropriate legal authority, evidencing that the municipality is 
competent under such laws to engage in the business of developing, 
transmitting, utilizing, or distributing power.]
    (ii) [For any applicant which, at the time of application for 
license for transmission line only, is a licensee.] The statutory or 
regulatory requirements of the state(s) in which the transmission line 
would be located and that affect the project as proposed with respect to 
bed and banks and to the appropriation, diversion, and use of water for 
power purposes, are: [provide citations and brief identification of the 
nature of each requirement.]
    (iii) The steps which the applicant has taken or plans to take to 
comply with each of the laws cited above are: [provide brief 
descriptions for each law.]

    (b) Required exhibits. The application must contain the following 
exhibits, as appropriate:
    (1) For any transmission line that, at the time the application is 
filed, is not constructed and is proposed to be connected to a licensed 
water power project with an installed generating capacity of more than 5 
MW--Exhibits A, B, C, D, E, F, and G under Sec. 4.41 of this chapter;
    (2) For any transmission line that, at the time the application is 
filed, is not constructed and is proposed to be connected to a licensed 
water power project with an installed generating capacity of 5 MW or 
less--Exhibits E, F, and G under Sec. 4.61 of this chapter; and
    (3) For any transmission line that, at the time the application is 
filed, has been constructed and is proposed to be connected to any 
licensed water power project--Exhibits E, F, and G under Sec. 4.61 of 
this chapter.

[Order 184, 46 FR 55942, Nov. 13, 1981, as amended by Order 413, 50 FR 
11685, Mar. 25, 1985; Order 699, 72 FR 45324, Aug. 14, 2007]



Subpart I_Application for Preliminary Permit; Amendment and Cancellation 

                          of Preliminary Permit

    Authority: Federal Power Act, as amended 16 U.S.C. 792-828c; 
Department of Energy Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 
42 FR 46267; Public Utility Regulatory Policies Act of 1978, 16 U.S.C. 
2601-2645, unless otherwise noted.

[[Page 123]]



Sec. 4.80  Applicability.

    Sections 4.80 through 4.83 pertain to preliminary permits under Part 
I of the Federal Power Act. The sole purpose of a preliminary permit is 
to secure priority of application for a license for a water power 
project under Part I of the Federal Power Act while the permittee 
obtains the data and performs the acts required to determine the 
feasibility of the project and to support an application for a license.

[Order 54, 44 FR 61336, Oct. 25, 1979, as amended by Order 413, 50 FR 
11685, Mar. 25, 1985]



Sec. 4.81  Contents of application.

    Each application for a preliminary permit must include the following 
initial statement and numbered exhibits containing the information and 
documents specified:
    (a) Initial statement:

             Before the Federal Energy Regulatory Commission

                   Application for Preliminary Permit

    (1) [Name of applicant] applies to the Federal Energy Regulatory 
Commission for a preliminary permit for the proposed [name of project] 
water power project, as described in the attached exhibits. This 
application is made in order that the applicant may secure and maintain 
priority of application for a license for the project under Part I of 
the Federal Power Act while obtaining the data and performing the acts 
required to determine the feasibility of the project and to support an 
application for a license.
    (2) The location of the proposed project is:

State or territory:_____________________________________________________
County:_________________________________________________________________
Township or nearby town:________________________________________________
Stream or other body of water:__________________________________________
________________________________________________________________________
    (3) The exact name, business address, and telephone number of the 
applicant are:

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

    The exact name and business address of each person authorized to act 
as agent for the applicant in this application are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (4) [Name of applicant] is a [citizen, association, citizens, 
domestic corporation, municipality, or State, as appropriate] and (is/is 
not) claiming preference under section 7(a) of the Federal Power Act. 
[If the applicant is a municipality, the applicant must submit copies of 
applicable state or local laws or a municipal charter or, if such laws 
or documents are not clear, any other appropriate legal authority, 
evidencing that the municipality is competent under such laws to engage 
in the business of development, transmitting, utilizing, or distributing 
power].
    (5) The proposed term of the requested permit is [period not to 
exceed 36 months].
    (6) If there is any existing dam or other project facility, the 
applicant must provide the name and address of the owner of the dam and 
facility. If the dam is federally owned or operated, provide the name of 
the agency.

    (b) Exhibit 1 must contain a description of the proposed project, 
specifying and including, to the extent possible:
    (1) The number, physical composition, dimensions, general 
configuration and, where applicable, age and condition, of any dams, 
spillways, penstocks, powerhouses, tailraces, or other structures, 
whether existing or proposed, that would be part of the project;
    (2) The estimated number, surface area, storage capacity, and normal 
maximum surface elevation (mean sea level) of any reservoirs, whether 
existing or proposed, that would be part of the project;
    (3) The estimated number, length, voltage, interconnections, and, 
where applicable, age and condition, of any primary transmission lines 
whether existing or proposed, that would be part of the project [see 16 
U.S.C. 796(11)];
    (4) The total estimated average annual energy production and 
installed capacity (provide only one energy and capacity value), the 
hydraulic head for estimating capacity and energy output, and the 
estimated number, rated capacity, and, where applicable, the age and 
condition, of any turbines and generators, whether existing or proposed, 
that would be part of the project works;
    (5) All lands of the United States that are enclosed within the 
proposed project boundary described under paragraph (d)(3)(i) of this 
section, identified and tabulated on a separate sheet by legal 
subdivisions of a public land survey of the affected area, if available. 
If the project boundary includes lands of the United States, such lands 
must be identified on a completed land description form (FERC Form 587), 
provided

[[Page 124]]

by the Commission. The project location must identify any Federal 
reservation, Federal tracts, and townships of the public land surveys 
(or official protractions thereof if unsurveyed). A copy of the form 
must also be sent to the Bureau of Land Management state office where 
the project is located;
    (6) Any other information demonstrating in what manner the proposed 
project would develop, conserve, and utilize in the public interest the 
water resources of the region.
    (c) Exhibit 2 is a description of studies conducted or to be 
conducted with respect to the proposed project, including field studies. 
Exhibit 2 must supply the following information:
    (1) General requirement. For any proposed project, a study plan 
containing a description of:
    (i) Any studies, investigations, tests, or surveys that are proposed 
to be carried out, and any that have already taken place, for the 
purposes of determining the technical, economic, and financial 
feasibility of the proposed project, taking into consideration its 
environmental impacts, and of preparing an application for a license for 
the project; and
    (ii) The approximate locations and nature of any new roads that 
would be built for the purpose of conducting the studies; and
    (2) Work plan for new dam construction. For any development within 
the project that would entail new dam construction, a work plan and 
schedule containing:
    (i) A description, including the approximate location, of any field 
study, test, or other activity that may alter or disturb lands or waters 
in the vicinity of the proposed project, including floodplains and 
wetlands; measures that would be taken to minimize any such disturbance; 
and measures that would be taken to restore the altered or disturbed 
areas; and
    (ii) A proposed schedule (a chart or graph may be used), the total 
duration of which does not exceed the proposed term of the permit, 
showing the intervals at which the studies, investigations, tests, and 
surveys, identified under this paragraph are proposed to be completed.
    (iii) For purposes of this paragraph, new dam construction means any 
dam construction the studies for which would require test pits, borings, 
or other foundation exploration in the field.
    (3) Waiver. The Commission may waive the requirements of paragraph 
(c)(2) pursuant to Sec. 385.207 of this chapter, upon a showing by the 
applicant that the field studies, tests, and other activities to be 
conducted under the permit would not adversely affect cultural resources 
or endangered species and would cause only minor alterations or 
disturbances of lands and waters, and that any land altered or disturbed 
would be adequately restored.
    (4) Exhibit 2 must contain a statement of costs and financing, 
specifying and including, to the extent possible:
    (i) The estimated costs of carrying out or preparing the studies, 
investigations, tests, surveys, maps, plans or specifications identified 
under paragraph (c) of this section;
    (ii) The expected sources and extent of financing available to the 
applicant to carry out or prepare the studies, investigations, tests, 
surveys, maps, plans, or specifications identified under paragraph (c) 
of this section; and
    (d) Exhibit 3 must include a map or series of maps, to be prepared 
on United States Geological Survey topographic quadrangle sheets or 
similar topographic maps of a State agency, if available. The maps need 
not conform to the precise specifications of Sec. 4.39 (a) and (b). If 
the scale of any base map is not sufficient to show clearly and legibly 
all of the information required by this paragraph, the maps submitted 
must be enlarged to a scale that is adequate for that purpose. (If 
Exhibit 3 comprises a series of maps, it must also include an index 
sheet showing, by outline, the parts of the entire project covered by 
each map of the series.) The maps must show:
    (1) The location of the project as a whole with reference to the 
affected stream or other body of water and, if possible, to a nearby 
town or any permanent monuments or objects that can be noted on the maps 
and recognized in the field;
    (2) The relative locations and physical interrelationships of the 
principal

[[Page 125]]

project features identified under paragraph (b) of this section;
    (3) A proposed boundary for the project, enclosing:
    (i) All principal project features identified under paragraph (b) of 
this section, including but not limited to any dam, reservoir, water 
conveyance facilities, powerplant, transmission lines, and other 
appurtenances; if the project is located at an existing Federal dam, the 
Federal dam and impoundment must be shown, but may not be included 
within the project boundary;
    (ii) Any non-Federal lands and any public lands or reservations of 
the United States [see 16 U.S.C. 796 (1) and (2)] necessary for the 
purposes of the project. To the extent that those public lands or 
reservations are covered by a public land survey, the project boundary 
must enclose each of and only the smallest legal subdivisions (quarter-
quarter section, lots, or other subdivisions, identified on the map by 
subdivision) that may be occupied in whole or in part by the project.
    (4) Areas within or in the vicinity of the proposed project boundary 
which are included in or have been designated for study for inclusion in 
the National Wild and Scenic Rivers System; and
    (5) Areas within the project boundary that, under the provisions of 
the Wilderness Act, have been:
    (i) Designated as wilderness area;
    (ii) Recommended for designation as wilderness area; or
    (iii) Designated as wilderness study area.

(Federal Power Act, as amended, 16 U.S.C. 792-828c (1976); Department of 
Energy Organization Act, 42 U.S.C. 7101-7352 (Supp. IV 1980); E.O. 
12009, 3 CFR part 142 (1978); 5 U.S.C. 553 (Supp. IV 1980))

[Order 54, 44 FR 61336, Oct. 25, 1979, as amended by Order 123, 46 FR 
9029, Jan. 28, 1981; 46 FR 11811, Feb. 11, 1981; Order 225, 47 FR 19056, 
May 3, 1982; Order 413, 50 FR 11685, Mar. 25, 1985; Order 2002, 68 FR 
51120, Aug. 25, 2003; Order 655, 70 FR 33828, June 10, 2005; Order 699, 
72 FR 45324, Aug. 14, 2007; Order 756, 77 FR 4894, Feb. 1, 2012]



Sec. 4.82  Amendments.

    (a) Any permittee may file an application for amendment of its 
permit, including any extension of the term of the permit that would not 
cause the total term to exceed three years. (Transfer of a permit is 
prohibited by section 5 of the Federal Power Act.) Each application for 
amendment of a permit must conform to any relevant requirements of Sec. 
4.81 (b), (c), (d), and (e).
    (b) If an application for amendment of a preliminary permit requests 
any material change in the proposed project, public notice of the 
application will be issued as required in Sec. 4.32(d)(2)(i).
    (c) If an application to extend the term of a permit is submitted 
not less than 30 days prior to the termination of the permit, the permit 
term will be automatically extended (not to exceed a total term for the 
permit of three years) until the Commission acts on the application for 
an extension. The Commission will not accept extension requests that are 
filed less than 30 days prior to the termination of the permit.

[Order 413, 50 FR 11685, Mar. 25, 1985, as amended by Order 499, 53 FR 
27002, July 18, 1988]



Sec. 4.83  Cancellation and loss of priority.

    (a) The Commission may cancel a preliminary permit after notice and 
opportunity for hearing if the permittee fails to comply with the 
specific terms and conditions of the permit. The Commission may also 
cancel a permit for other good cause shown after notice and opportunity 
for hearing. Cancellation of a permit will result in loss of the 
permittee's priority of application for a license for the proposed 
project.
    (b) Failure of a permittee to file an acceptable application for a 
license before the permit expires will result in loss of the permittee's 
priority of application for a license for the proposed project.

[Order 413, 50 FR 11686, Mar. 25, 1985]



Sec. 4.84  Surrender of permit.

    A permittee must submit a petition to the Commission before the 
permittee may voluntarily surrender its permit. Unless the Commission 
issues an order to the contrary, the permit will remain in effect 
through the thirtieth day after the Commission issues a public notice of 
receipt of the petition.

[Order 413, 50 FR 11686, Mar. 25, 1985]

[[Page 126]]



      Subpart J_Exemption of Small Conduit Hydroelectric Facilities



Sec. 4.90  Applicability and purpose.

    This subpart implements section 30 of the Federal Power Act and 
provides procedures for obtaining an exemption for constructed or 
unconstructed small conduit hydroelectric facilities, as defined in 
Sec. 4.30(b)(28), from all or part of the requirements of Part I of the 
Federal Power Act, including licensing, and the regulations issued under 
Part I.

[Order 76, 45 FR 28090, Apr. 28, 1980, as amended by Order 413, 50 FR 
11686, Mar. 25, 1985; Order 2002, 68 FR 51121, Aug. 25, 2003]



Sec. 4.91  [Reserved]



Sec. 4.92  Contents of exemption application.

    (a) An application for exemption for this subpart must include:
    (1) An introductory statement, including a declaration that the 
facility for which application is made meets the requirements of Sec. 
4.30(b)(28), the facility qualifies but for the discharge requirement of 
Sec. 4.30(b)(28)(v), the introductory statement must identify that fact 
and state that the application is accompanied by a petition for waiver 
of Sec. 4.30(b)(28)(v), filed pursuant to Sec. 385.207 of this 
chapter);
    (2) Exhibits A, E, F, and G.
    (3) An appendix containing documentary evidence showing that the 
applicant has the real property interests required under Sec. 4.31(b); 
and
    (4) Identification of all Indian tribes that may be affected by the 
project.
    (b) Introductory Statement. The introductory statement must be set 
forth in the following format:

             Before the Federal Energy Regulatory Commission

   Application for Exemption for Small Conduit Hydroelectric Facility

    [Name of applicant] applies to the Federal Energy Regulatory 
Commission for an exemption for the [name of facility], a small conduit 
hydroelectric facility that meets the requirements of [insert the 
following language, as appropriate: ``Sec. 4.30(b)(28) of this 
subpart'' or ``Sec. 4.30(b)(28) of this subpart, except paragraph 
(b)(28)(v)''], from certain provisions of Part I of the Federal Power 
Act.

The location of the facility is:
State or Territory:_____________________________________________________

County:_________________________________________________________________

Township or nearby town:________________________________________________

The exact name and business address of each applicant is:

________________________________________________________________________

The exact name and business address of each person authorized to act as 
agent for the applicant in this application is:

________________________________________________________________________

    [Name of applicant] is [a citizen of the United States, an 
association of citizens of the United States, a municipality, State, or 
a corporation incorporated under the laws of (specify the United States 
or the state of incorporation, as appropriate), as appropriate].
    The provisions of Part I of the Federal Power Act for which 
exemption is requested are:
    [List here all sections or subsections for which exemption is 
requested.]
    [If the facility does not meet the requirement of Sec. 
4.30(b)(28)(v), add the following sentence: ``This application is 
accompanied by a petition for waiver of Sec. 4.30(b)(28)(v), submitted 
pursuant to 18 CFR 385.207.'']

    (c) Exhibit A. Exhibit A must describe the small conduit 
hydroelectric facility and proposed mode of operation with appropriate 
references to Exhibits F and G. To the extent feasible the information 
in this exhibit may be submitted in tabular form. The following 
information must be included:
    (1) A brief description of any conduits and associated consumptive 
water supply facilities, intake facilities, powerhouses, and any other 
structures associated with the facility.
    (2) The proximate natural sources of water that supply the related 
conduit.
    (3) The purposes for which the conduit is used.
    (4) The number of generating units, including auxiliary units, the 
capacity of each unit, and provisions, if any, for future units.
    (5) The type of each hydraulic turbine.
    (6) A description of how the plant is to be operated, manually or 
automatically, and whether the plant is to be used for peaking.
    (7) Estimations of:
    (i) The average annual generation in kilowatt hours;
    (ii) The average head of the plant;

[[Page 127]]

    (iii) The hydraulic capacity of the plant (flow through the plant) 
in cubic feet per second;
    (iv) The average flow of the conduit at the plant or point of 
diversion (using best available data and explaining the sources of the 
data and the method of calculation); and
    (v) The average amount of the flow described in paragraph (c)(7)(iv) 
of this section available for power generation.
    (8) The planned date for beginning construction of the facility.
    (9) If the hydroelectric facility discharges directly into a natural 
body of water and a petition for waiver of Sec. 4.30(b)(28)(v) has not 
been submitted, evidence that a quantity of water equal to or greater 
than the quantity discharged from the hydroelectric facility is 
withdrawn from that water body downstream into a conduit that is part of 
the same water supply system as the conduit on which the hydroelectric 
facility is located.
    (10) If the hydroelectric facility discharges directly to a point of 
agricultural, municipal, or industrial consumption, a description of the 
nature and location of that point of consumption.
    (11) A description of the nature and extent of any construction of a 
dam that would occur in association with construction of the proposed 
small conduit hydroelectric facility, including a statement of the 
normal maximum surface area and normal maximum surface elevation of any 
existing impoundment before and after that construction; and any 
evidence that the construction would occur for agricultural, municipal, 
or industrial consumptive purposes even if hydroelectric generating 
facilities were not installed.
    (d) Exhibit G. Exhibit G is a map of the project and boundary and 
must conform to the specifications of Sec. 4.41(h) of this chapter.
    (e) Exhibit E. This exhibit is an Environmental Report. It must be 
prepared pursuant to Sec. 4.38 and must include the following 
information, commensurate with the scope and environmental impact of the 
facility's construction and operation:
    (1) A description of the environmental setting in the vicinity of 
the facility, including vegetative cover, fish and wildlife resources, 
water quality and quantity, land and water uses, recreational use, 
socio-economic conditions, historical and archeological resources, and 
visual resources. The report must give special attention to endangered 
or threatened plant and animal species, critical habitats, and sites 
eligible for or included on the National Register of Historic Places. 
The applicant may obtain assistance in the preparation of this 
information from State natural resources agencies, the State historic 
preservation officer, and from local offices of Federal natural 
resources agencies.
    (2) A description of the expected environmental impacts resulting 
from the continued operation of an existing small conduit hydroelectric 
facility, or from the construction and operation of a proposed small 
conduit hydroelectric facility, including a discussion of the specific 
measures proposed by the applicant and others to protect and enhance 
environmental resources and to mitigate adverse impacts of the facility 
on them.
    (3) A description of alternative means of obtaining an amount of 
power equivalent to that provided by the proposed or existing facility.
    (4) Any additional information the applicant considers important.
    (f) Exhibit F. Exhibit F is a set of drawings showing the structures 
and equipment of the small conduit hydroelectric facility and must 
conform to the specifications of Sec. 4.41(g) of this chapter.

[Order 76, 45 FR 28090, Apr. 28, 1980, as amended by Order 413, 50 FR 
11686, Mar. 25, 1985; Order 533, 56 FR 23153, May 20, 1991; Order 2002, 
68 FR 51121, Aug. 25, 2003; Order 699, 72 FR 45324, Aug. 14, 2007]



Sec. 4.93  Action on exemption applications.

    (a) An application for exemption that does not meet the eligibility 
requirements of Sec. 4.30(b)(28)(v) may be accepted, provided the 
application has been accompanied by a request for waiver under Sec. 
4.92(a)(1) and the waiver request has not been denied. Acceptance of an 
application that has been accompanied by a request for waiver under 
Sec. 4.92(a)(1) does not constitute a ruling on the

[[Page 128]]

waiver request, unless expressly stated in the acceptance.
    (b) The Commission will circulate a notice of application for 
exemption to interested agencies and Indian tribes at the time the 
applicant is notified that the application is accepted for filing.
    (c) In granting an exemption the Commission may prescribe terms or 
conditions in addition to those set forth in Sec. 4.94, in order to:
    (1) Protect the quality or quantity of the related water supply for 
agricultural, municipal, or industrial consumption;
    (2) Otherwise protect life, health, or property;
    (3) Avoid or mitigate adverse environmental impact; or
    (4) Conserve, develop, or utilize in the public interest the water 
power resources of the region.
    (d) Conversion to license application. (1) If an application for 
exemption under this subpart is denied by the Commission, the applicant 
may convert the exemption application into an application for license 
for the hydroelectric project.
    (2) The applicant must provide the Commission with written 
notification, within 30 days after the date of issuance of the order 
denying exemption, that it intends to convert the exemption application 
into a license application. The applicant must submit to the Commission, 
no later than 90 days after the date of issuance of the order denying 
exemption, additional information that is necessary to conform the 
exemption application to the relevant regulations for a license 
application.
    (3) If all the information timely submitted is found sufficient, 
together with the application for exemption, to conform to the relevant 
regulations for a license application, the converted application will be 
considered accepted for filing as of the date that the exemption 
application was accepted for filing.

[Order 76, 45 FR 28090, Apr. 28, 1980, as amended by Order 413, 50 FR 
11687, Mar. 25, 1985; Order 533, 56 FR 23153, May 20, 1991; Order 2002, 
68 FR 51121, Aug. 25, 2003]



Sec. 4.94  Standard terms and conditions of exemption.

    Any exemption granted under Sec. 4.93 for a small conduit 
hydroelectric facility is subject to the following standard terms and 
conditions:
    (a) Article 1. The Commission reserves the right to conduct 
investigations under sections 4(g), 306, 307, and 311 of the Federal 
Power Act with respect to any acts, complaints, facts, conditions, 
practices, or other matters related to the construction, operation, or 
maintenance of the exempt facility. If any term or condition of the 
exemption is violated, the Commission may revoke the exemption, issue a 
suitable order under section 4(g) of the Federal Power Act, or take 
appropriate action for enforcement, forfeiture, or penalties under Part 
III of the Federal Power Act.
    (b) Article 2. The construction, operation, and maintenance of the 
exempt project must comply with any terms and conditions that the United 
States Fish and Wildlife Service, the National Marine Fisheries Service, 
and any state fish and wildlife agencies have determined are appropriate 
to prevent loss of, or damage to, fish or wildlife resources or 
otherwise to carry out the purposes of the Fish and Wildlife 
Coordination Act, as specified in exhibit E of the application for 
exemption from licensing or in the comments submitted in response to the 
notice of exemption application.
    (c) Article 3. The Commission may revoke this exemption if actual 
construction of any proposed generating facilities has not begun within 
two years or has not been completed within four years from the effective 
date of this exemption. If an exemption is revoked under this article, 
the Commission will not accept from the prior exemption holder a 
subsequent application for exemption from licensing or a notice of 
exemption from licensing for the same project within two years of the 
revocation.
    (d) Article 4. In order to best develop, conserve, and utilize in 
the public interest the water resources of the region, the Commission 
may require that the exempt facilities be modified in structure or 
operation or may revoke this exemption.

[[Page 129]]

    (e) Article 5. The Commission may revoke this exemption if, in the 
application process, material discrepancies, inaccuracies, or falsehoods 
were made by or on behalf of the applicant.
    (f) Article 6. Before transferring any property interests in the 
exempt project, the exemption holder must inform the transferee of the 
terms and conditions of the exemption. Within 30 days of transferring 
the property interests, the exemption holder must inform the Commission 
of the identity and address of the transferee.

[Order 76, 45 FR 28090, Apr. 28, 1980, as amended by Order 413, 50 FR 
11687, Mar. 25, 1985; Order 413-A, 56 FR 31331, July 10, 1991]



Sec. 4.95  Surrender of exemption.

    (a) To voluntarily surrender its exemption, a holder of an exemption 
for a small conduit hydroelectric facility must file a petition with the 
Commission.
    (b)(1) If construction has begun, prior to filing a petition with 
the Commission, the exemption holder must consult with the fish and 
wildlife agencies in accordance with Sec. 4.38, substituting for the 
information required under Sec. 4.38(b)(1) information appropriate to 
the disposition and restoration of the project works and lands. The 
petition must set forth the exemption holder's plans with respect to 
disposition and restoration of the project works and lands.
    (2) If construction has begun, public notice of the petition will be 
given, and, at least 30 days thereafter, the Commission will act upon 
the petition.
    (c) If no construction has begun, unless the Commission issues an 
order to the contrary, the exemption will remain in effect through the 
thirtieth day after the Commission issues a public notice of receipt of 
the petition. New applications involving the site of the surrendered 
exemption may be filed on the next business day.
    (d) Exemptions may be surrendered only upon fulfillment by the 
exemption holder of such obligations under the exemption as the 
Commission may prescribe and, if construction has begun, upon such 
conditions with respect to the disposition of such project works and 
restoration of project lands as may be determined by the Commission and 
the Federal and state fish and wildlife agencies.

[Order 413, 50 FR 11687, Mar. 25, 1985]



Sec. 4.96  Amendment of exemption.

    (a) An exemption holder must construct and operate its project as 
described in the exemption application approved by the Commission or its 
delegate.
    (b) If an exemption holder desires to change the design, location, 
method of construction or operation of its project, it must first notify 
the appropriate Federal and state fish and wildlife agencies and inform 
them in writing of the changes it intends to implement. If these 
agencies determine that the changes would not cause the project to 
violate the terms and conditions imposed by the agencies, and if the 
changes would not materially alter the design, location, method of 
construction or operation of the project, the exemption holder may 
implement the changes. If any of these agencies determines that the 
changes would cause the project to violate the terms and conditions 
imposed by the agencies, or if the changes would materially alter the 
design, location, method of construction or the operation of the project 
works, the exemption holder may not implement the changes without first 
acquiring authorization from the Commission to amend its exemption, or 
acquiring a license that authorizes the project, as changed.
    (c) An application to amend an exemption may be filed only by the 
holder of the exemption. An application to amend an exemption will be 
governed by the Commission's regulations governing applications for 
exemption. The Commission will not accept applications in competition 
with an application to amend an exemption, unless the Director of the 
Office of Energy Projects determines that it is in the public interest 
to do so.

[Order 413, 50 FR 11687, Mar. 25, 1985, as amended by Order 699, 72 FR 
45324, Aug. 14, 2007]

[[Page 130]]



Subpart K_Exemption of Small Hydroelectric Power Projects of 5 Megawatts 

                                 or Less



Sec. 4.101  Applicability.

    This subpart provides procedures for exemption on a case-specific 
basis from all or part of Part I of the Federal Power Act (Act), 
including licensing, for small hydroelectric power projects as defined 
in Sec. 4.30(b)(29).

(Energy Security Act of 1980, Pub. L. 96-294, 94 Stat. 611; Federal 
Power Act, as amended (16 U.S.C. 792-828c); Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2601-2645); and the Department of Energy 
Organization Act (42 U.S.C. 7101-7352); E.O. 12009, 3 CFR 142 (1978))

[Order 202, 47 FR 4243, Jan. 29, 1982, as amended by Order 413, 50 FR 
11687, Mar. 25, 1985; Order 482, 52 FR 39630, Oct. 23, 1987; Order 2002, 
68 FR 51121, Aug. 25, 2003]



Sec. 4.102  Surrender of exemption.

    (a) To voluntarily surrender its exemption, a holder of an exemption 
for a small hydroelectric power project must file a petition with the 
Commission.
    (b)(1) If construction has begun, prior to filing a petition with 
the Commission, the exemption holder must consult with the fish and 
wildlife agencies in accordance with Sec. 4.38, substituting for the 
information required under Sec. 4.38(b)(1) information appropriate to 
the disposition and restoration of the project works and lands. The 
petition must set forth the exemption holder's plans with respect to 
disposition and restoration of the project works and lands.
    (2) If construction has begun, public notice of the petition will be 
given, and, at least 30 days thereafter, the Commission will act upon 
the petition. New applications involving the site may be filed on the 
next business day.
    (c) If no construction had begun, unless the Commission issues an 
order to the contrary, the surrender will take effect at the close of 
the thirtieth day after the Commission issues a public notice of receipt 
of the petition. New applications involving the site may be filed on the 
next business day.
    (d) Exemptions may be surrendered only upon fulfillment by the 
exemption holder of such obligations under the exemption as the 
Commission may prescribe and, if construction has begun, upon such 
conditions with respect to the disposition of such project works and 
restoration of project lands as may be determined by the Commission and 
the Federal and state fish and wildlife agencies.
    (e) Where occupancy of United States lands or reservations has been 
permitted by a Federal agency having supervision over such lands, the 
exemption holder must concurrently notify that agency of the petition to 
surrender and of the steps that will be taken to restore the affected 
U.S. lands or reservations.

[Order 413, 50 FR 11688, Mar. 25, 1985]



Sec. 4.103  General provisions for case-specific exemption.

    (a) Exemptible projects. Subject to the provisions in paragraph (b) 
of this section, Sec. 4.31(c), and Sec. Sec. 4.105 and 4.106, the 
Commission may exempt on a case-specific basis any small hydroelectric 
power project from all or part of Part I of the Act, including licensing 
requirements. Any applications for exemption for a project shall conform 
to the requirements of Sec. Sec. 4.107 or 4.108, as applicable.
    (b) Limitation for licensed water power project. The Commission will 
not accept for filing an application for exemption from licensing for 
any project that is only part of a licensed water power project.
    (c) Waiver. In applying for case-specific exemption from licensing, 
a qualified exemption applicant may petition under Sec. 385.207 of this 
chapter for waiver of any specific provision of Sec. Sec. 4.102 through 
4.107. The Commission will grant a waiver only if consistent with 
section 408 of the Energy Security Act of 1980.

[Order 413, 50 FR 11688, Mar. 25, 1985, as amended by Order 503, 53 FR 
36568, Sept. 21, 1988]



Sec. 4.104  Amendment of exemption.

    (a) An exemption holder must construct and operate its project as 
described in the exemption application approved by the Commission or its 
delegate.
    (b) If an exemption holder desires to change the design, location, 
method of

[[Page 131]]

construction or operation of its project, it must first notify the 
appropriate Federal and state fish and wildlife agencies and inform them 
in writing of the changes it intends to implement. If these agencies 
determine that the changes would not cause the project to violate the 
terms and conditions imposed by the agencies, and if the changes would 
not materially alter the design, location, method of construction or 
operation of the project, the exemption holder may implement the 
changes. If any of these agencies determines that the changes would 
cause the project to violate the terms and conditions imposed by that 
agency, or if the changes would materially alter the design, location, 
method of construction or the operation of the project works, the 
exemption holder may not implement the changes without first acquiring 
authorization from the Commission to amend its exemption or acquiring a 
license for the project works that authorizes the project, as changed.
    (c) An application to amend an exemption may be filed only by the 
holder of an exemption. An application to amend an exemption will be 
governed by the Commission's regulations governing applications for 
exemption. The Commission will not accept applications in competition 
with an application to amend an exemption, unless the Director of the 
Office of Energy Projects determines that it is in the public interest 
to do so.

[Order 413, 50 FR 11688, Mar. 25, 1985, as amended by Order 699, 72 FR 
45324, Aug. 14, 2007]



Sec. 4.105  Action on exemption applications.

    (a) Exemption from provisions other than licensing. An application 
for exemption of a small hydroelectric power project from provisions of 
Part I of the Act other than the licensing requirement will be processed 
and considered as part of the related application for license or 
amendment of license.
    (b)(1) Consultation. The Commission will circulate a notice of 
application for exemption from licensing to interested agencies and 
Indian tribes at the time the applicant is notified that the application 
is accepted for filing.
    (2) Non-standard terms and conditions. In approving any application 
for exemption from licensing, the Commission may prescribe terms or 
conditions in addition to those set forth in Sec. 4.106 in order to:
    (i) Protect the quality or quantity of the related water supply;
    (ii) Otherwise protect life, health, or property;
    (iii) Avoid or mitigate adverse environmental impact; or
    (iv) Better conserve, develop, or utilize in the public interest the 
water resources of the region.

(Energy Security Act of 1980, Pub. L. 96-294, 94 Stat. 611; Federal 
Power Act, as amended (16 U.S.C. 792-828c); Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2601-2645); and the Department of Energy 
Organization Act (42 U.S.C. 7101-7352); E.O. 12009, 3 CFR 142 (1978))

[Order 106, 45 FR 76123, Nov. 18, 1980, as amended by Order 202, 47 FR 
4246, Jan. 29, 1982; Order 413, 50 FR 11688, Mar. 25, 1985; Order 533, 
56 FR 23154, May 20, 1991]



Sec. 4.106  Standard terms and conditions of case-specific exemption from 

licensing.

    Any case-specific exemption from licensing granted for a small 
hydroelectric power project is subject to the following standard terms 
and conditions:
    (a) Article 1. The Commission reserves the right to conduct 
investigations under sections 4(g), 306, 307, and 311 of the Federal 
Power Act with respect to any acts, complaints, facts, conditions, 
practices, or other matters related to the construction, operation, or 
maintenance of the exempt project. If any term or condition of the 
exemption is violated, the Commission may revoke the exemption, issue a 
suitable order under section 4(g) of the Federal Power Act, or take 
appropriate action for enforcement, forfeiture, or penalties under Part 
III of the Federal Power Act.
    (b) Article 2. The construction, operation, and maintenance of the 
exempt project must comply with any terms and conditions that the United 
States Fish and Wildlife Service, the National Marine Fisheries Service, 
and any state fish and wildlife agencies have determined are appropriate 
to prevent loss of, or damage to, fish or wildlife

[[Page 132]]

resources or otherwise to carry out the purposes of the Fish and 
Wildlife Coordination Act, as specified in exhibit E of the application 
for exemption from licensing or in the comments submitted in response to 
the notice of exemption application.
    (c) Article 3. The Commission may revoke this exemption if actual 
construction of any proposed generating facilities has not begun within 
two years or has not been completed within four years from the date on 
which this exemption was granted. If an exemption is revoked under this 
article, the Commission will not accept from the prior exemption holder 
a subsequent application for exemption from licensing for the same 
project within two years of the revocation.
    (d) Article 4. This exemption is subject to the navigation servitude 
of the United States if the project is located on navigable waters of 
the United States.
    (e) Article 5. This exemption does not confer any right to use or 
occupy any Federal lands that may be necessary for the development or 
operation of the project. Any right to use or occupy any Federal lands 
for those purposes must be obtained from the administering Federal land 
agencies. The Commission may accept a license application submitted by 
any qualified license applicant and revoke this exemption, if any 
necessary right to use or occupy Federal lands for those purposes has 
not been obtained within one year from the date on which this exemption 
was granted.
    (f) Article 6. In order to best develop, conserve, and utilize in 
the public interest the water resources of the region, the Commission 
may require that the exempt facilities be modified in structure or 
operation or may revoke this exemption.
    (g) Article 7. The Commission may revoke this exemption if, in the 
application process, material discrepancies, inaccuracies, or falsehoods 
were made by or on behalf of the applicant.
    (h) Article 8. Any exempted small hydroelectric power project that 
utilizes a dam that is more than 33 feet in height above streambed, as 
defined in 18 CFR 12.31(c) of this chapter, impounds more than 2,000 
acre-feet of water, or has a significant or high hazard potential, as 
defined in 33 CFR part 222, is subject to part 12 of the Commission's 
regulations, part 12 of this title (as they may be amended from time to 
time):
    (i) Article 9. Before transferring any property interests in the 
exempt project, the exemption holder must inform the transferee of the 
terms and conditions of the exemption. Within 30 days of transferring 
the property interests, the exemption holder must inform the Commission 
of the identity and address of the transferee.

[Order 106, 45 FR 76123, Nov. 18, 1980; 45 FR 77420, Nov. 24, 1980, as 
amended by Order 202, 47 FR 4246, Jan. 29, 1982; Order 413, 50 FR 11688, 
Mar. 25, 1985; Order 482, 52 FR 39630, Oct. 23, 1987; Order 413-A, 56 FR 
31331, July 10, 1991; Order 756, 77 FR 4894, Feb. 1, 2012]



Sec. 4.107  Contents of application for exemption from licensing.

    (a) General requirements. An application for exemption from 
licensing submitted under this subpart must contain the introductory 
statement, the exhibits described in this section, and, if the project 
structures would use or occupy any lands other than Federal lands, an 
appendix containing documentary evidence showing that applicant has the 
real property interests required under Sec. 4.31(c)(2)(ii). The 
applicant must identify in its application all Indian tribes that may be 
affected by the project.
    (b) Introductory statement. The application must include an 
introductory statement that conforms to the following format:

             Before the Federal Energy Regulatory Commission

  Application for Exemption of Small Hydroelectric Power Project From 
                                Licensing

    (1) [Name of applicant] applies to the Federal Energy Regulatory 
Commission for an exemption for [name of project], a small hydroelectric 
power project that is proposed to have an installed capacity of 5 
megawatts or less, from licensing under the Federal Power Act. [If 
applicable: The project is currently licensed as FERC Project No. ------
--.]
    (2) The location of the project is:
[State or territory]____________________________________________________
________________________________________________________________________
[County]________________________________________________________________
[Township or nearby town]_______________________________________________
________________________________________________________________________

[[Page 133]]

[Stream or body of water]_______________________________________________
________________________________________________________________________
    (3) The exact name and business address of each applicant are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (4) The exact name and business address of each person authorized to 
act as agent for the applicant in this application are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (5) [Name of applicant] is [specify, as appropriate: a citizen of 
the United States or other identified nation; an association of citizens 
of the United States or other identified nation; a municipality; a 
state; or a corporation incorporated under the laws of (specify the 
United States or the state or nation of incorporation, as appropriate).]

    (c) Exhibit A. Exhibit A must describe the small hydroelectric power 
project and its proposed mode of operation. To the extent feasible, the 
information in this exhibit may be submitted in tabular form. The 
applicant must submit the following information:
    (1) A brief description of any existing dam and impoundment proposed 
to be utilized by the small hydroelectric power project and any other 
existing or proposed project works and appurtenant facilities, including 
intake facilities, diversion structures, powerhouses, primary 
transmission lines, penstocks, pipelines, spillways, and other 
structures, and the sizes, capacities, and construction materials of 
those structures.
    (2) The number of existing and proposed generating units at the 
project, including auxiliary units, the capacity of each unit, any 
provisions for future units, and a brief description of any plans for 
retirement or rehabilitation of existing generating units.
    (3) The type of each hydraulic turbine of the small hydroelectric 
power project.
    (4) A description of how the power plant is to be operated, that is, 
run-of-river or peaking.
    (5) A graph showing a flow duration curve for the project. Identify 
stream gauge(s) and period of record used. If a synthetic record is 
utilized, provide details concerning its derivation. Furnish 
justification for selection of installed capacity if the hydraulic 
capacity of proposed generating unit(s) plus the minimum flow 
requirements, if not usable for power production, is less than the 
stream flow that is exceeded 25 percent of the time.
    (6) Estimations of:
    (i) The average annual generation in kilowatt-hours;
    (ii) The average and design head of the power plant;
    (iii) The hydraulic capacity of each turbine of the power plant 
(flow through the plant) in cubic feet per second;
    (iv) The number of surface acres of the man-made or natural 
impoundment used, if any, at its normal maximum surface elevation and 
its net and gross storage capacities in acre-feet.
    (7) The planned date for beginning and completing the proposed 
construction or development of generating facilities.
    (8) A description of the nature and extent of any repair, 
reconstruction, or other modification of a dam that would occur in 
association with construction or development of the proposed small 
hydroelectric power project, including a statement of the normal maximum 
surface area and normal maximum surface elevation of any existing 
impoundment before and after construction.
    (d) Exhibit G. Exhibit G is a map of the project and boundary and 
must conform to the specifications of Sec. 4.41(h) of this chapter.
    (e) Exhibit E. This exhibit is an environmental report that must 
include the following information, commensurate with the scope and 
environmental impact of the construction and operation of the small 
hydroelectric power project. See Sec. 4.38 for consultation 
requirements.
    (1) A description of the environmental setting of the project, 
including vegetative cover, fish and wildlife resources, water quality 
and quantity, land and water uses, recreational uses, historical and 
archeological resources, and scenic and aesthetic resources. The report 
must list any endangered or threatened plant and animal species, any 
critical habitats, and any sites eligible for or included on the 
National Register of Historic Places. The applicant may obtain 
assistance in the preparation of this information from state natural 
resources agencies, the state

[[Page 134]]

historic preservation officer, and from local offices of Federal natural 
resources agencies.
    (2) A description of the expected environmental impacts from the 
proposed construction or development and the proposed operation of the 
small hydroelectric power project, including any impacts from any 
proposed changes in the capacity and mode of operation of the project if 
it is already generating electric power, and an explanation of the 
specific measures proposed by the applicant, the agencies consulted, and 
others to protect and enhance environmental resources and values and to 
mitigate adverse impacts of the project on such resources.
    (3) Any additional information the applicant considers important.
    (f) Exhibit F. Exhibit F is a set of drawings showing the structures 
and equipment of the small hydroelectric facility and must conform to 
the specifications of Sec. 4.41(g) of this chapter.

[Order 106, 45 FR 76123, Nov. 18, 1980, as amended by Order 225, 47 FR 
19056, May 3, 1982; Order 413, 50 FR 11689, Mar. 25, 1985; Order 494, 53 
FR 15381, Apr. 29, 1988; Order 533, 56 FR 23154, May 20, 1991; Order 
2002, 68 FR 51121, Aug. 25, 2003; Order 699, 72 FR 45324, Aug. 14, 2007]



Sec. 4.108  Contents of application for exemption from provisions other than 

licensing.

    An application for exemption of a small hydroelectric power project 
from provisions of Part I of the Act other than the licensing 
requirement need not be prepared according to any specific format, but 
must be included as an identified appendix to the related application 
for license or amendment of license. The application for exemption must 
list all sections or subsections of Part I of the Act for which 
exemption is requested.

[Order 106, 45 FR 76123, Nov. 18, 1980]



             Subpart L_Application for Amendment of License



Sec. 4.200  Applicability.

    This part applies to any application for amendment of a license, if 
the applicant seeks to:
    (a) Make a change in the physical features of the project or its 
boundary, or make an addition, betterment, abandonment, or conversion, 
of such character as to constitute an alteration of the license;
    (b) Make a change in the plans for the project under license; or
    (c) Extend the time fixed in the license for commencement or 
completion of project works.

[Order 184, 46 FR 55943, Nov. 13, 1981, as amended by Order 2002, 68 FR 
51121, Aug. 25, 2003]



Sec. 4.201  Contents of application.

    An application for amendment of a license for a water power project 
must contain the following information in the form specified.
    (a) Initial statement.

             Before the Federal Energy Regulatory Commission

                  Application for Amendment of License

    (1) [Name of applicant] applies to the Federal Energy Regulatory 
Commission for an amendment of license for the [name of project] water 
power project.
    (2) The exact name, business address, and telephone number of the 
applicant are:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
    (3) The applicant is a [citizen of the United States, association of 
citizens of the United States, domestic corporation, municipality, or 
state, as appropriate, see 16 U.S.C. 796], licensee for the water power 
project, designated as Project No. ------ in the records of the Federal 
Energy Regulatory Commission, issued on the ------------ day of --------
------, 19----.
    (4) The amendments of license proposed and the reason(s) why the 
proposed changes are necessary, are: [Give a statement or description]
    (5)(i) The statutory or regulatory requirements of the state(s) in 
which the project would be located that affect the project as proposed 
with respect to bed and banks and to the appropriation, diversion, and 
use of water for power purposes are: [provide citation and brief 
identification of the nature of each requirement.]
    (ii) The steps which the applicant has taken or plans to take to 
comply with each of the laws cited above are: [provide brief description 
for each law.]

    (b) Required exhibits for capacity related amendments. Any 
application to amend a license for a hydropower

[[Page 135]]

project that involves additional capacity not previously authorized, and 
that would increase the actual or proposed total installed capacity of 
the project, would result in an increase in the maximum hydraulic 
capacity of the project of 15 percent or more, and would result in an 
increase in the installed name-plate capacity of 2 megawatts or more, 
must contain the following exhibits, or revisions or additions to any 
exhibits on file, commensurate with the scope of the licensed project:
    (1) For amendment of a license for a water power project that, at 
the time the application is filed, is not constructed and is proposed to 
have a total installed generating capacity of more than 5 MW--Exhibits 
A, B, C, D, E, F, and G under Sec. 4.41 of this chapter;
    (2) For amendment of a license for a water power project that, at 
the time the application is filed, is not constructed and is proposed to 
have a total installed generating capacity of 1.5 MW or less--Exhibits 
E, F, and G under Sec. 4.61 of this chapter;
    (3) For amendment of a license for a water power project that, at 
the time the application is filed, is not constructed and is proposed to 
have a total installed generating capacity of 5 MW or less, but more 
than 1.5 MW--Exhibits F and G under Sec. 4.61 of this chapter, and 
Exhibit E under Sec. 4.41 of this chapter;
    (4) For amendment of a license for a water power project that, at 
the time the application for amendment is filed, has been constructed, 
and is proposed to have a total installed generating capacity of 5 MW or 
less--Exhibit E, F and G under Sec. 4.61 of this chapter;
    (5) For amendment of a license for a water power project that, at 
the time the application is filed, has been constructed and is proposed 
to have a total installed generating capacity of more than 5 MW--
Exhibits A, B, C, D, E, F, and G under Sec. 4.51 of this chapter.
    (c) Required exhibits for non-capacity related amendments. Any 
application to amend a license for a water power project that would not 
be a capacity related amendment as described in paragraph (b) of this 
section must contain those exhibits that require revision in light of 
the nature of the proposed amendments.
    (d) Consultation and waiver. (1) If an applicant for license 
amendment under this subpart believes that any exhibit required under 
paragraph (b) of this section is inappropriate with respect to the 
particular amendment of license sought by the applicant, a petition for 
waiver of the requirement to submit such exhibit may be submitted to the 
Commission under Sec. 385.207 of this chapter, after consultation with 
the Commission's Division of Hydropower Compliance and Administration.
    (2) A licensee wishing to file an application for amendment of 
license under this section may seek advice from the Commission staff 
regarding which exhibits(s) must be submitted and whether the proposed 
amendment is consistent with the scope of the existing licensed project.

[Order 184, 46 FR 55943, Nov. 13, 1981, as amended by Order 225, 47 FR 
19056, May 3, 1982; 48 FR 4459, Feb. 1, 1983; 48 FR 16653, Apr. 19, 
1983; Order 413, 50 FR 11689, Mar. 25, 1985; Order 533, 56 FR 23154, May 
20, 1991; Order 756, 77 FR 4894, Feb. 1, 2012]



Sec. 4.202  Alteration and extension of license.

    (a) If it is determined that approval of the application for 
amendment of license would constitute a significant alteration of 
license pursuant to section 6 of the Act, 16 U.S.C. 799, public notice 
of such application shall be given at least 30 days prior to action upon 
the application.
    (b) Any application for extension of time fixed in the license for 
commencement or completion of construction of project works must be 
filed with the Commission not less than three months prior to the date 
or dates so fixed.

[Order 184, 46 FR 55943, Nov. 13, 1981]



              Subpart M_Fees Under Section 30(e) of the Act

    Source: Order 487, 52 FR 48404, Dec. 22, 1987, unless otherwise 
noted.



Sec. 4.300  Purpose, definitions, and applicability.

    (a) Purpose. This subpart implements the amendments of section 30 of 
the Federal Power Act enacted by section

[[Page 136]]

7(c) of the Electric Consumers Protection Act of 1986 (ECPA). It 
establishes procedures for reimbursing fish and wildlife agencies for 
costs incurred in connection with applications for an exemption from 
licensing and applications for licenses seeking benefits under section 
210 of the Public Utility Regulatory Policies Act of 1978, as amended, 
for a project that would impound or divert the water of a natural 
watercourse by means of a new dam or diversion.
    (b) Definitions. For the purposes of this subpart--
    (1) Cost means an expenditure made by a fish and wildlife agency:
    (i) On or after the effective date of this regulation for an 
application filed on or after the effective date of this regulation; and
    (ii) Directly related to setting mandatory terms and conditions for 
a proposed project pursuant to section 30(c) of the Federal Power Act.
    (2) Cost statement means a statement of the total costs for which a 
fish and wildlife agency requests reimbursement including an itemized 
schedule of costs including, but not limited to, costs of fieldwork and 
testing, contract costs, travel costs, personnel costs, and 
administrative and overhead costs.
    (3) Mandatory terms and conditions means terms and conditions of a 
license or exemption that a fish and wildlife agency determines are 
appropriate to prevent loss of, or damage to, fish and wildlife 
resources pursuant to section 30(c) of the Federal Power Act.
    (4) New dam or diversion license applicant means an applicant for a 
license for a project that would impound or divert the water of a 
natural watercourse by means of a new dam or diversion, as defined in 
section 210(k) of the Public Utility Regulatory Policies Act of 1978, as 
amended.
    (5) PURPA benefits means benefits under section 210 of the Public 
Utility Regulatory Policies Act of 1978, as amended.
    (6) Section 30(c) application means an application for an exemption 
from licensing or a new dam or diversion license application seeking 
PURPA benefits.
    (c) Applicability. Except as provided in paragraph (d) of this 
section, this subpart applies to:
    (1) Any application for exemption filed on or after the effective 
date of these regulations for costs incurred by fish and wildlife 
agencies after the effective date of these regulations;
    (2) Any new dam or diversion license application seeking PURPA 
benefits filed on or after April 16, 1988;
    (3) Any new dam or diversion license application seeking PURPA 
benefits filed after the effective date of this regulation, but before 
April 16, 1988, if the applicant fails to demonstrate in a monetary 
resources petition filed with the Commission pursuant to Sec. 292.208 
of this chapter that, before October 16, 1986, it had committed 
substantial monetary resources directly related to the development of 
the proposed project and to the diligent and timely completion of all 
requirements of the Commission for filing an acceptable application; and
    (4) Any new dam or diversion license application seeking PURPA 
benefits filed after the effective date of this regulation, if the 
application is not accepted for filing before October 16, 1989.
    (d) Exceptions. (1) This subpart does not apply to any new dam or 
diversion license application seeking PURPA benefits if the moratorium 
described in section 8(e) of ECPA is in effect. The moratorium will end 
at the expiration of the first full session of Congress following the 
session during which the Commission reports to Congress on the results 
of the study required under section 8(d) of ECPA.
    (2) This subpart does not apply to any new dam or diversion license 
application seeking PURPA benefits for a project located at a Government 
dam, as defined in section 3(10) of the Federal Power Act, at which non-
Federal hydroelectric development is permissible.



Sec. 4.301  Notice to fish and wildlife agencies and estimation of fees prior 

to filing.

    (a) Notice to agencies--(1) New dam or diversion license applicants. 
During the

[[Page 137]]

initial stage or pre-filing agency consultation under Sec. 4.38(b)(1), 
a prospective new dam or diversion license applicant must inform each 
fish and wildlife agency consulted in writing with a copy to the 
Commission whether it will seek PURPA benefits.
    (2) Exemption applicants. During the initial stage of pre-filing 
agency consultation under Sec. 4.38(b)(1), a prospective exemption 
applicant must notify each fish and wildlife agency consulted that it 
will seek an exemption from licensing.
    (b) Estimate of fees. Within the comment period provided in Sec. 
4.38(c)(5), a fish and wildlife agency must provide a prospective 
section 30(c) applicant with a reasonable estimate of the total costs 
the agency anticipates it will incur to set mandatory terms and 
conditions for the proposed project. An agency may provide an applicant 
with an updated estimate as it deems necessary. If an agency believes 
that its most recent estimate will be exceeded by more than 25 percent, 
it must supply the prospective applicant or applicant with a new 
estimate and submit a copy to the Commission.

[Order 141, 12 FR 8485, Dec. 19, 1947, as amended by Order 756, 77 FR 
4894, Feb. 1, 2012]



Sec. 4.302  Fees at filing.

    (a) Filing requirement. A section 30(c) application must be 
accompanied by a fee or a bond, together with copies of the most recent 
cost estimates provided by fish and wildlife agencies pursuant to Sec. 
4.301(b).
    (b) Amount. The fee required under paragraph (a) of this section 
must be in an amount equal to 50 percent of the most recent cost 
estimates provided by fish and wildlife agencies pursuant to Sec. 
4.301(b). In lieu of this amount, an applicant may provide an unlimited 
term surety bond from a company on the Department of Treasury's list of 
companies certified to write surety bonds. Applicants bonded by a 
company whose certification by the Department of the Treasury lapses 
must provide evidence of purchase of another bond from a certified 
company. A bond must be for an amount no less than 100 percent of the 
agencies' most recent cost estimates pursuant to Sec. 4.301(b).
    (c) Failure to file. The Commission will reject a section 30(c) 
application if the applicant fails to comply with the provisions of 
paragraphs (a) and (b) of this section.



Sec. 4.303  Post-filing procedures.

    (a) Submission of cost statement--1) Accepted applications. Within 
60 days after the last date for filing mandatory terms and conditions 
pursuant to Sec. 4.32(c)(4) for a new dam or diversion license 
application seeking PURPA benefits, Sec. 4.93(b) for an application for 
exemption of a small conduit hydroelectric facility, or Sec. 
4.105(b)(1) for an application for case-specific exemption of a small 
hydroelectric power project, a fish and wildlife agency must file with 
the Commission a cost statement of the reasonable costs the agency 
incurred in setting mandatory terms and conditions for the proposed 
project. An agency may request, in writing, along with any supporting 
documentation an extension of this 60-day period.
    (2) Rejected, withdrawn or dismissed applications. The Director of 
the Office of Energy Projects (Director) will, by letter, notify each 
fish and wildlife agency if a section 30(c) application is rejected, 
withdrawn or dismissed. Within 60 days from the date of notification, a 
fish and wildlife agency must file with the Commission a cost statement 
of the reasonable costs the agency incurred prior to the date the 
application was rejected, withdrawn, or dismissed. An agency may submit 
a written request for an extension of this 60-day period along with any 
supporting documentation.
    (b) If an agency has not submitted a cost statement or extension 
request within the time provided in paragraph (a)(2) of this section, it 
waives its right to receive fees for that project pursuant to this 
subpart.
    (c) Billing. After the Commission receives a cost statement from all 
fish and wildlife agencies as required by paragraph (a) of this section, 
the Commission will bill the section 30(c) applicant. The bill will 
show:
    (1) The cost statement submitted to the Commission by each fish and 
wildlife agency;
    (2) Any amounts already paid by the applicant pursuant to Sec. 
4.302; and

[[Page 138]]

    (3)(i) The amount due, if the amount already paid by the applicant 
pursuant to Sec. 4.302 is less than the total of all the cost 
statements; or
    (ii) The amount to be refunded to the applicant, if the amount 
already paid by the applicant pursuant to Sec. 4.302 is more than the 
total of all the cost statements.
    (d) Within 45 days from the date of a bill issued under paragraph 
(b) of this section, a section 30(c) applicant must pay in full to the 
Commission any remaining amounts due on the cost statements regardless 
of whether any of these amounts are in dispute.
    (e) Dispute procedures--(1) When to dispute. Any dispute regarding 
the reasonableness of any fish and wildlife agency cost statement must 
be made within 45 days from the date of a bill issued under paragraph 
(b) of this section.
    (2) Assessment of disputed cost statements The burden of showing 
that an agency's cost statement is unreasonable is on the applicant. 
However, a fish and wildlife agency must supply the disputing applicant 
and the Commission with the documentation necessary to support its cost 
statement. The Director of the Office of Energy Projects will determine 
the reasonableness of a disputed fish and wildlife agency cost 
statement. The Director's decision will be in writing. The Director will 
notify the disputing applicant and the fish and wildlife agency of the 
decision by letter. Any decision of the Director may be appealed by 
either party pursuant to 18 CFR 385.1902. In deciding whether or not a 
disputed cost statement is reasonable, the Director will review the 
application, the disputed cost statement and any other documentation 
relating to the particular environmental problems associated with the 
disputing applicant's proposed project. The Director will consider such 
factors as:
    (i) The time the fish and wildlife agency spent reviewing the 
application;
    (ii) The proportion of the cost statement to the time the fish and 
wildlife agency spent reviewing the application;
    (iii) Whether the fish and wildlife agency's expenditures conform to 
Federal expenditure guidelines for such items as travel, per diem, 
personnel, and contracting; and
    (iv) Whether the studies conducted by the agency, if any, are 
duplicative, limited to the proposed project area, unnecessary to 
determine the impacts to or mitigation measures for the particular fish 
and wildlife resources affected by the proposed project, or otherwise 
unnecessary to set terms and conditions for the proposed project.
    (3) Unreasonable cost statements. If the Director determines that a 
disputed fish and wildlife agency cost statement is unreasonable, the 
disputing applicant and the fish and wildlife agency will be afforded 45 
days from the date of notification to attempt to reach an agreement 
regarding the reimbursable costs of the agency. If the disputing 
applicant and the fish and wildlife agency fail to reach an agreement on 
the disputed cost statement within 45 days from the date of 
notification, the Director will determine the costs that the agency 
should reasonably have incurred.
    (f) Refunds. (1) If the amount paid by a section 30(c) applicant 
under Sec. 4.302 exceeds the total amount of the cost statements 
submitted by fish and wildlife agencies under paragraph (a) of this 
section, the Commission will notify the Treasury to refund the 
difference to the applicant within 45 days from the date of the bill 
issued to the applicant under paragraph (b) of this section.
    (2) If the amount paid by a section 30(c) applicant exceeds the 
amount determined to be reasonable by the Director pursuant to paragraph 
(d)(2) of this section, the Commission will notify the Treasury to 
refund the difference to the applicant within 45 days of the resolution 
of all dispute proceedings.

[Order 487, 52 FR 48404, Dec. 22, 1987, as amended by Order 647, 69 FR 
32438, June 10, 2004]



Sec. 4.304  Payment.

    (a) A payment required under this subpart must be made by check 
payable to the United States Treasury. The check must indicate that the 
payment is for ECPA Fees.
    (b) If a payment required under this subpart is not made within the 
time

[[Page 139]]

period prescribed for making such payment, interest and penalty charges 
will be assessed. Interest and penalty charges will be computed in 
accordance with 31 U.S.C. 3717 and 4 CFR part 102.
    (c) The Commission will not issue a license or exemption, unless the 
applicant has made full payments of any fees due under Sec. 4.303(c).



Sec. 4.305  Enforcement.

    (a) The Commission may take any appropriate action permitted by law 
if a section 30(c) applicant does not make a payment required under this 
subpart. The Commission will not be liable to any fish and wildlife 
agency for failure to collect any amounts under this subpart.
    (b) If the Commission is unable to collect the full amount due by a 
section 30(c) applicant on behalf of more than one agency, the amount 
the Commission does collect will be distributed to the agencies on a 
pro-rata basis except if an agency's cost statement is greater than its 
most recent estimate to the applicant under Sec. 4.301(b), then the 
difference between the estimate and the cost statement will not be 
reimbursed until any amounts owed to other agencies have been paid.



PART 5_INTEGRATED LICENSE APPLICATION PROCESS--Table of Contents



Sec.
5.1 Applicability, definitions, and requirement to consult.
5.2 Document availability
5.3 Process selection.
5.4 Acceleration of a license expiration date.
5.5 Notification of intent.
5.6 Pre-application document.
5.7 Tribal consultation.
5.8 Notice of commencement of proceeding and scoping document, or of 
          approval to use traditional licensing process or alternative 
          procedures.
5.9 Comments and information or study requests.
5.10 Scoping document 2.
5.11 Potential Applicant's proposed study plan and study plan meetings.
5.12 Comments on proposed study plan.
5.13 Revised study plan and study plan determination.
5.14 Formal study dispute resolution process.
5.15 Conduct of studies.
5.16 Preliminary licensing proposal.
5.17 Filing of application.
5.18 Application content.
5.19 Tendering notice and schedule.
5.20 Deficient applications.
5.21 Additional information.
5.22 Notice of acceptance and ready for environmental analysis.
5.23 Response to notice.
5.24 Applications not requiring a draft NEPA document.
5.25 Applications requiring a draft NEPA document.
5.26 Section 10(j) process.
5.27 Amendment of application.
5.28 Competing applications.
5.29 Other provisions.
5.30 Critical Energy Infrastructure Information.
5.31 Transition provision.

    Authority: 16 U.S.C. 792-828c, 2601-2645; 42 U.S.C. 7101-7352.

    Source: Order 2002, 68 FR 51121, Aug. 25, 2003, unless otherwise 
noted.



Sec. 5.1  Applicability, definitions, and requirement to consult.

    (a) This part applies to the filing and processing of an application 
for an:
    (1) Original license;
    (2) New license for an existing project subject to Sections 14 and 
15 of the Federal Power Act; or
    (3) Subsequent license.
    (b) Definitions. The definitions in Sec. 4.30(b) of this chapter 
and Sec. 16.2 of this chapter apply to this chapter.
    (c) Who may file. Any citizen, association of citizens, domestic 
corporation, municipality, or state may develop and file a license 
application under this part.
    (d) Requirement to consult. (1) Before it files any application for 
an original, new, or subsequent license under this part, a potential 
applicant must consult with the relevant Federal, state, and interstate 
resource agencies, including as appropriate the National Marine 
Fisheries Service, the United States Fish and Wildlife Service, Bureau 
of Indian Affairs, the National Park Service, the United States 
Environmental Protection Agency, the Federal agency administering any 
United States lands utilized or occupied by the project, the appropriate 
state fish and wildlife agencies, the appropriate state water resource 
management agencies, the certifying agency or Indian tribe under Section 
401(a)(1) of the Federal Water Pollution Control Act (Clean

[[Page 140]]

Water Act), 33 U.S.C. 1341(c)(1)), the agency that administers the 
Coastal Zone Management Act, 16 U.S.C. Sec. 1451-1465, any Indian tribe 
that may be affected by the project, and members of the public. A 
potential license applicant must file a notification of intent to file a 
license application pursuant to Sec. 5.5 and a pre-application document 
pursuant to the provisions of Sec. 5.6.
    (2) The Director of the Office of Energy Projects will, upon 
request, provide a list of known appropriate Federal, state, and 
interstate resource agencies, Indian tribes, and local, regional, or 
national non-governmental organizations likely to be interested in any 
license application proceeding.
    (e) Purpose. The purpose of the integrated licensing process 
provided for in this part is to provide an efficient and timely 
licensing process that continues to ensure appropriate resource 
protections through better coordination of the Commission's processes 
with those of Federal and state agencies and Indian tribes that have 
authority to condition Commission licenses.
    (f) Default process. Each potential original, new, or subsequent 
license applicant must use the license application process provided for 
in this part unless the potential applicant applies for and receives 
authorization from the Commission under this part to use the licensing 
process provided for in:
    (1) 18 CFR part 4, Subparts D-H and, as applicable, part 16 (i.e., 
traditional process), pursuant to paragraph (c) of this section; or
    (2) Section 4.34(i) of this chapter, Alternative procedures.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61742, Oct. 30, 2003; 68 
FR 69957, Dec. 16, 2003]



Sec. 5.2  Document availability.

    (a) Pre-application document. (1) From the date a potential license 
applicant files a notification of intent to seek a license pursuant to 
Sec. 5.5 until any related license application proceeding is terminated 
by the Commission, the potential license applicant must make reasonably 
available to the public for inspection at its principal place of 
business or another location that is more accessible to the public, the 
pre-application document and any materials referenced therein. These 
materials must be available for inspection during regular business hours 
in a form that is readily accessible, reviewable, and reproducible.
    (2) The materials specified in paragraph (a)(1) of this section must 
be made available to the requester at the location specified in 
paragraph (a)(1) of this section or through the mail, or otherwise. 
Except as provided in paragraph (a)(3) of this section, copies of the 
pre-application document and any materials referenced therein must be 
made available at their reasonable cost of reproduction plus, if 
applicable, postage.
    (3) A potential licensee must make requested copies of the materials 
specified in paragraph (a)(1) of this section available to the United 
States Fish and Wildlife Service, the National Marine Fisheries Service, 
the state agency responsible for fish and wildlife resources, any 
affected Federal land managing agencies, and Indian tribes without 
charge for the costs of reproduction or postage.
    (b) License application. (1) From the date on which a license 
application is filed under this part until the licensing proceeding for 
the project is terminated by the Commission, the license applicant must 
make reasonably available to the public for inspection at its principal 
place of business or another location that is more accessible to the 
public, a copy of the complete application for license, together with 
all exhibits, appendices, and any amendments, pleadings, supplementary 
or additional information, or correspondence filed by the applicant with 
the Commission in connection with the application. These materials must 
be available for inspection during regular business hours in a form that 
is readily accessible, reviewable, and reproducible at the same time as 
the information is filed with the Commission or required by regulation 
to be made available.
    (2) The applicant must provide a copy of the complete application 
(as amended) to a public library or other convenient public office 
located in each county in which the proposed project is located.
    (3) The materials specified in paragraph (b)(1) of this section must 
be

[[Page 141]]

made available to the requester at the location specified in paragraph 
(b)(1) of this section or through the mail. Except as provided in 
paragraph (b)(4) of this section, copies of the license application and 
any materials referenced therein must be made available at their 
reasonable cost of reproduction plus, if applicable, postage.
    (4) A licensee applicant must make requested copies of the materials 
specified in paragraph (b)(1) of this section available to the United 
States Fish and Wildlife Service, the National Marine Fisheries Service, 
and the state agency responsible for fish and wildlife resources, any 
affected Federal land managing agencies, and Indian tribes without 
charge for the costs of reproduction or postage.
    (c) Confidentiality of cultural information. A potential applicant 
must delete from any information made available to the public under 
paragraphs (a) and (b) of this section, specific site or property 
locations the disclosure of which would create a risk of harm, theft, or 
destruction of archeological or native American cultural resources or of 
the site at which the sources are located, or would violate any Federal 
law, include the Archeological Resources Protection Act of 1979, 16 
U.S.C. 470w-3, and the National Historic Preservation Act of 1966, 16 
U.S.C. 470hh.
    (d) Access. Anyone may file a petition with the Commission 
requesting access to the information specified in paragraphs (a) or (b) 
of this section if it believes that the potential applicant or applicant 
is not making the information reasonably available for public inspection 
or reproduction. The petition must describe in detail the basis for the 
petitioner's belief.



Sec. 5.3  Process selection.

    (a)(1) Notwithstanding any other provision of this part or of parts 
4 and 16 of this chapter, a potential applicant for a new, subsequent, 
or original license may until July 23, 2005 elect to use the licensing 
procedures of this part or the licensing procedures of parts 4 and 16.
    (2) Any potential license applicant that files its notification of 
intent pursuant to Sec. 5.5 and pre-application document pursuant to 
Sec. 5.6 after July 23, 2005 must request authorization to use the 
licensing procedures of parts 4 and 16, as provided for in paragraphs 
(b)-(f) of this section.
    (b) A potential license applicant may file with the Commission a 
request to use the traditional licensing process or alternative 
procedures pursuant to this Section with its notification of intent 
pursuant to Sec. 5.5.
    (c)(1)(i) An application for authorization to use the traditional 
process must include justification for the request and any existing 
written comments on the potential applicant's proposal and a response 
thereto.
    (ii) A potential applicant requesting authorization to use the 
traditional process should address the following considerations:
    (A) Likelihood of timely license issuance;
    (B) Complexity of the resource issues;
    (C) Level of anticipated controversy;
    (D) Relative cost of the traditional process compared to the 
integrated process;
    (E) The amount of available information and potential for 
significant disputes over studies; and
    (F) Other factors believed by the applicant to be pertinent
    (2) A potential applicant requesting the use of Sec. 4.34(i) 
alternative procedures of this chapter must:
    (i) Demonstrate that a reasonable effort has been made to contact 
all agencies, Indian tribes, and others affected by the applicant's 
request, and that a consensus exists that the use of alternative 
procedures is appropriate under the circumstances;
    (ii) Submit a communications protocol, supported by interested 
entities, governing how the applicant and other participants in the pre-
filing consultation process, including the Commission staff, may 
communicate with each other regarding the merits of the potential 
applicant's proposal and proposals and recommendations of interested 
entities; and
    (iii) Provide a copy of the request to all affected resource 
agencies and Indian tribes and to all entities contacted by the 
applicant that have expressed an interest in the alternative pre-filing 
consultation process.

[[Page 142]]

    (d)(1) The potential applicant must provide a copy of the request to 
use the traditional process or alternative procedures to all affected 
resource agencies, Indian tribes, and members of the public likely to be 
interested in the proceeding. The request must state that comments on 
the request to use the traditional process or alternative procedures, as 
applicable, must be filed with the Commission within 30 days of the 
filing date of the request and, if there is no project number, that 
responses must reference the potential applicant's name and address.
    (2) The potential applicant must also publish notice of the filing 
of its notification of intent, of the pre-application document, and of 
any request to use the traditional process or alternative procedures no 
later than the filing date of the notification of intent in a daily or 
weekly newspaper of general circulation in each county in which the 
project is located. The notice must:
    (i) Disclose the filing date of the request to use the traditional 
process or alternative procedures, and the notification of intent and 
pre-application document;
    (ii) Briefly summarize these documents and the basis for the request 
to use the traditional process or alternative procedures;
    (iii) Include the potential applicant's name and address, and 
telephone number, the type of facility proposed to be applied for, its 
proposed location, the places where the pre-application document is 
available for inspection and reproduction;
    (iv) Include a statement that comments on the request to use the 
traditional process or alternative procedures are due to the Commission 
and the potential applicant no later than 30 days following the filing 
date of that document and, if there is no project number, that responses 
must reference the potential applicant's name and address;
    (v) State that comments on any request to use the traditional 
process should address, as appropriate to the circumstances of the 
request, the:
    (A) Likelihood of timely license issuance;
    (B) Complexity of the resource issues;
    (C) Level of anticipated controversy;
    (D) Relative cost of the traditional process compared to the 
integrated process; and
    (E) The amount of available information and potential for 
significant disputes over studies; and
    (F) Other factors believed by the commenter to be pertinent; and
    (vi) State that respondents must submit comments to the Secretary of 
the Commission in accordance with filing procedures posted on the 
Commission's Web site at http://www.ferc.gov.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61742, Oct. 30, 2003, as 
amended by Order 737, 75 FR 43402, July 26, 2010]



Sec. 5.4  Acceleration of a license expiration date.

    (a) Request for acceleration. (1) No later than five and one-half 
years prior to expiration of an existing license, a licensee may file 
with the Commission, in accordance with the formal filing requirements 
in subpart T of part 385 of this chapter, a written request for 
acceleration of the expiration date of its existing license, containing 
the statements and information specified in Sec. 16.6(b) of this 
chapter and a detailed explanation of the basis for the acceleration 
request.
    (2) If the Commission grants the request for acceleration pursuant 
to paragraph (c) of this section, the Commission will deem the request 
for acceleration to be a notice of intent under Sec. 16.6 of this 
chapter and, unless the Commission directs otherwise, the licensee must 
make available the Pre-Application Document provided for in Sec. 5.6 no 
later than 90 days from the date that the Commission grants the request 
for acceleration.
    (b) Notice of request for acceleration. (1) Upon receipt of a 
request for acceleration, the Commission will give notice of the 
licensee's request and provide a 45-day period for comments by 
interested persons by:
    (i) Publishing notice in the Federal Register;
    (ii) Publishing notice once in a daily or weekly newspaper published 
in the county or counties in which the project or any part thereof or 
the lands affected thereby are situated; and
    (iii) Notifying appropriate Federal, state, and interstate resource 
agencies

[[Page 143]]

and Indian tribes, and non-governmental organizations likely to be 
interested, by electronic means if practical, otherwise by mail.
    (2) The notice issued pursuant to paragraphs (b)(1)(A) and (B) and 
the written notice given pursuant to paragraph (b)(1)(C) will be 
considered as fulfilling the notice provisions of Sec. 16.6(d) of this 
chapter should the Commission grant the acceleration request and will 
include an explanation of the basis for the licensee's acceleration 
request.
    (c) Commission order. If the Commission determines it is in the 
public interest, the Commission will issue an order accelerating the 
expiration date of the license to not less than five years and 90 days 
from the date of the Commission order.

[Order 2002, 68 FR 51121, Aug. 25, 2003, as amended by Order 653, 70 FR 
8724, Feb. 23, 2005]



Sec. 5.5  Notification of intent.

    (a) Notification of intent. A potential applicant for an original, 
new, or subsequent license, must file a notification of its intent to do 
so in the manner provided for in paragraphs (b) and (c) of this section.
    (b) Requirement to notify. In order for a non-licensee to notify the 
Commission that it intends to file an application for an original, new, 
or subsequent license, or for an existing licensee to notify the 
Commission whether or not it intends to file an application for a new or 
subsequent license, a potential license applicant must file with the 
Secretary of the Commission in accordance with filing procedures posted 
on the Commission's Web site at http://www.ferc.gov, a letter that 
contains the following information:
    (1) The potential applicant or existing licensee's name and address.
    (2) The project number, if any.
    (3) The license expiration date, if any.
    (4) An unequivocal statement of the potential applicant's intention 
to file an application for an original license, or, in the case of an 
existing licensee, to file or not to file an application for a new or 
subsequent license.
    (5) The type of principal project works licensed, if any, such as 
dam and reservoir, powerhouse, or transmission lines.
    (6) The location of the project by state, county, and stream, and, 
when appropriate, by city or nearby city.
    (7) The installed plant capacity, if any.
    (8) The names and mailing addresses of:
    (i) Every county in which any part of the project is located, and in 
which any Federal facility that is used or to be used by the project is 
located;
    (ii) Every city, town, or similar political subdivision;
    (A) In which any part of the project is or is to be located and any 
Federal facility that is or is to be used by the project is located, or
    (B) That has a population of 5,000 or more people and is located 
within 15 miles of the existing or proposed project dam;
    (iii) Every irrigation district, drainage district, or similar 
special purpose political subdivision:
    (A) In which any part of the project is or is proposed to be located 
and any Federal facility that is or is proposed to be used by the 
project is located; or
    (B) That owns, operates, maintains, or uses any project facility or 
any Federal facility that is or is proposed to be used by the project;
    (iv) Every other political subdivision in the general area of the 
project or proposed project that there is reason to believe would be 
likely to be interested in, or affected by, the notification; and
    (v) Affected Indian tribes.
    (c) Requirement to distribute. Before it files any application for 
an original, new, or subsequent license, a potential license applicant 
proposing to file a license application pursuant to this part or to 
request to file a license application pursuant to part 4 of this chapter 
and, as appropriate, part 16 of this chapter (i.e., the ``traditional 
process''), including an application pursuant to Sec. 4.34(i) 
alternative procedures of this chapter must distribute to appropriate 
Federal, state, and interstate resource agencies, Indian tribes, local 
governments, and members of the public likely to be interested in the 
proceeding the notification of intent provided for in paragraph (a) of 
this section.

[[Page 144]]

    (d) When to notify. An existing licensee or non-licensee potential 
applicant must notify the Commission as required in paragraph (b) of 
this section at least five years, but not more than five and one-half 
years, before the existing license expires.
    (e) Non-Federal representatives. A potential license applicant may 
at the same time it files its notification of intent and distributes its 
pre-application document, request to be designated as the Commission's 
non-Federal representative for purposes of consultation under section 7 
of the Endangered Species Act and the joint agency regulations 
thereunder at 50 CFR part 402, Section 305(b) of the Magnuson-Stevens 
Fishery Conservation and Management Act and the implementing regulations 
at 50 CFR 600.920. A potential license applicant may at the same time 
request authorization to initiate consultation under section 106 of the 
National Historic Preservation Act and the implementing regulations at 
36 CFR 800.2(c)(4).
    (f) Procedural matters. The provisions of subpart F of part 16 of 
this chapter apply to projects to which this part applies.
    (g) Construction of regulations. The provisions of this part and 
parts 4 and 16 shall be construed in a manner that best implements the 
purposes of each part and gives full effect to applicable provisions of 
the Federal Power Act.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 69957, Dec. 16, 2003, as 
amended by Order 737, 75 FR 43402, July 26, 2010]



Sec. 5.6  Pre-application document.

    (a) Pre-application document. (1) Simultaneously with the filing of 
its notification of intent to seek a license as provided for in Sec. 
5.5, and before it files any application for an original, new, or 
subsequent license, a potential applicant for a license to be filed 
pursuant to this part or part 4 of this chapter and, as appropriate, 
part 16 of this chapter, must file with the Secretary of the Commission 
in accordance with filing procedures posted on the Commission's Web site 
at http://www.ferc.gov and distribute to the appropriate Federal, state, 
and interstate resource agencies, Indian tribes, local governments, and 
members of the public likely to be interested in the proceeding, the 
pre-application document provided for in this section.
    (2) The agencies referred to in paragraph (a)(1) of this section 
include: Any state agency with responsibility for fish, wildlife, and 
botanical resources, water quality, coastal zone management plan 
consistency certification, shoreline management, and water resources; 
the U.S. Fish and Wildlife Service; the National Marine Fisheries 
Service; Environmental Protection Agency; State Historic Preservation 
Officer; Tribal Historic Preservation Officer; National Park Service; 
local, state, and regional recreation agencies and planning commissions; 
local and state zoning agencies; and any other state or Federal agency 
or Indian tribe with managerial authority over any part of project lands 
and waters.
    (b) Purpose of pre-application document. (1) The pre-application 
document provides the Commission and the entities identified in 
paragraph (a) of this section with existing information relevant to the 
project proposal that is in the potential applicant's possession or that 
the potential applicant can obtain with the exercise of due diligence. 
This existing, relevant, and reasonably available information is 
distributed to these entities to enable them to identify issues and 
related information needs, develop study requests and study plans, and 
prepare documents analyzing any license application that may be filed. 
It is also a precursor to the environmental analysis section of the 
Preliminary Licensing Proposal or draft license application provided for 
in Sec. 5.16, Exhibit E of the final license application, and the 
Commission's scoping document(s) and environmental impact statement or 
environmental assessment under the National Environmental Policy Act 
(NEPA).
    (2) A potential applicant is not required to conduct studies in 
order to generate information for inclusion in the pre-application 
document. Rather, a potential applicant must exercise due diligence in 
determining what information exists that is relevant to describing the 
existing environment and potential impacts of the project proposal

[[Page 145]]

(including cumulative impacts), obtaining that information if the 
potential applicant does not already possess it, and describing or 
summarizing it as provided for in paragraph (d) of this section. Due 
diligence includes, but is not limited to, contacting appropriate 
agencies and Indian tribes that may have relevant information and review 
of Federal and state comprehensive plans filed with the Commission and 
listed on the Commission's Web site at http://www.ferc.gov.
    (c) Form and distribution protocol--(1) General requirements. As 
specifically provided for in the content requirements of paragraph (d) 
of this section, the pre-application document must describe the existing 
and proposed (if any) project facilities and operations, provide 
information on the existing environment, and existing data or studies 
relevant to the existing environment, and any known and potential 
impacts of the proposed project on the specified resources.
    (2) Availability of source information and studies. The sources of 
information on the existing environment and known or potential resource 
impacts included in the descriptions and summaries must be referenced in 
the relevant section of the document, and in an appendix to the 
document. The information must be provided upon request to recipients of 
the pre-application document. A potential applicant must provide the 
requested information within 20 days from receipt of the request. 
Potential applicants and requesters are strongly encouraged to use 
electronic means or compacts disks to distribute studies and other forms 
of information, but a potential applicant must, upon request, provide 
the information in hard copy form. The potential applicant is also 
strongly encouraged to include with the pre-application document any 
written protocol for distribution consistent with this paragraph to 
which it has agreed with agencies, Indian tribes, or other entities.
    (d) Content requirements--(1) Process plan and schedule. The pre-
application document must include a plan and schedule for all pre-
application activity that incorporates the time frames for pre-filing 
consultation, information gathering, and studies set forth in this part. 
The plan and schedule must include a proposed location and date for the 
scoping meeting and site visit required by Sec. 5.8(b)(3)(viii).
    (2) Project location, facilities, and operations. The potential 
applicant must include in the pre-application document:
    (i) The exact name and business address, and telephone number of 
each person authorized to act as agent for the applicant;
    (ii) Detailed maps showing lands and waters within the project 
boundary by township, range, and section, as well as by state, county, 
river, river mile, and closest town, and also showing the specific 
location of any Federal and tribal lands, and the location of proposed 
project facilities, including roads, transmission lines, and any other 
appurtenant facilities;
    (iii) A detailed description of all existing and proposed project 
facilities and components, including:
    (A) The physical composition, dimensions, and general configuration 
of any dams, spillways, penstocks, canals, powerhouses, tailraces, and 
other structures proposed to be included as part of the project or 
connected directly to it;
    (B) The normal maximum water surface area and normal maximum water 
surface elevation (mean sea level), gross storage capacity of any 
impoundments;
    (C) The number, type, and minimum and maximum hydraulic capacity and 
installed (rated) capacity of any proposed turbines or generators to be 
included as part of the project;
    (D) The number, length, voltage, and interconnections of any primary 
transmission lines proposed to be included as part of the project, 
including a single-line diagram showing the transfer of electricity from 
the project to the transmission grid or point of use; and
    (E) An estimate of the dependable capacity, average annual, and 
average monthly energy production in kilowatt hours (or mechanical 
equivalent);
    (iv) A description of the current (if applicable) and proposed 
operation of the project, including any daily or seasonal ramping rates, 
flushing flows, reservoir operations, and flood control operations.

[[Page 146]]

    (v) In the case of an existing licensed project;
    (A) A complete description of the current license requirements; 
i.e., the requirements of the original license as amended during the 
license term;
    (B) A summary of project generation and outflow records for the five 
years preceding filing of the pre-application document;
    (C) Current net investment; and
    (D) A summary of the compliance history of the project, if 
applicable, including a description of any recurring situations of non-
compliance.
    (vi) A description of any new facilities or components to be 
constructed, plans for future development or rehabilitation of the 
project, and changes in project operation.
    (3) Description of existing environment and resource impacts--(i) 
General requirements. A potential applicant must, based on the existing, 
relevant, and reasonably available information, include a discussion 
with respect to each resource that includes:
    (A) A description of the existing environment as required by 
paragraphs (d)(3)(ii)-(xiii) of this section;
    (B) Summaries (with references to sources of information or studies) 
of existing data or studies regarding the resource;
    (C) A description of any known or potential adverse impacts and 
issues associated with the construction, operation or maintenance of the 
proposed project, including continuing and cumulative impacts; and
    (D) A description of any existing or proposed project facilities or 
operations, and management activities undertaken for the purpose of 
protecting, mitigating impacts to, or enhancing resources affected by 
the project, including a statement of whether such measures are required 
by the project license, or were undertaken for other reasons. The type 
and amount of the information included in the discussion must be 
commensurate with the scope and level of resource impacts caused or 
potentially caused by the proposed project. Potential license applicants 
are encouraged to provide photographs or other visual aids, as 
appropriate, to supplement text, charts, and graphs included in the 
discussion.
    (ii) Geology and soils. Descriptions and maps showing the existing 
geology, topography, and soils of the proposed project and surrounding 
area. Components of the description must include:
    (A) A description of geological features, including bedrock 
lithology, stratigraphy, structural features, glacial features, 
unconsolidated deposits, and mineral resources at the project site;
    (B) A description of the soils, including the types, occurrence, 
physical and chemical characteristics, erodability and potential for 
mass soil movement;
    (C) A description of reservoir shorelines and streambanks, 
including:
    (1) Steepness, composition (bedrock and unconsolidated deposits), 
and vegetative cover; and
    (2) Existing erosion, mass soil movement, slumping, or other forms 
of instability, including identification of project facilities or 
operations that are known to or may cause these conditions.
    (iii) Water resources. A description of the water resources of the 
proposed project and surrounding area. This must address the quantity 
and quality (chemical/physical parameters) of all waters affected by the 
project, including but not limited to the project reservoir(s) and 
tributaries thereto, bypassed reach, and tailrace. Components of the 
description must include:
    (A) Drainage area;
    (B) The monthly minimum, mean, and maximum recorded flows in cubic 
feet per second of the stream or other body of water at the powerplant 
intake or point of diversion, specifying any adjustments made for 
evaporation, leakage, minimum flow releases, or other reductions in 
available flow;
    (C) A monthly flow duration curve indicating the period of record 
and the location of gauging station(s), including identification 
number(s), used in deriving the curve; and a specification of the 
critical streamflow used to determine the project's dependable capacity;
    (D) Existing and proposed uses of project waters for irrigation, 
domestic water supply, industrial and other purposes, including any 
upstream or downstream requirements or constraints to accommodate those 
purposes;

[[Page 147]]

    (E) Existing instream flow uses of streams in the project area that 
would be affected by project construction and operation; information on 
existing water rights and water rights applications potentially 
affecting or affected by the project;
    (F) Any federally-approved water quality standards applicable to 
project waters;
    (G) Seasonal variation of existing water quality data for any 
stream, lake, or reservoir that would be affected by the proposed 
project, including information on:
    (1) Water temperature and dissolved oxygen, including seasonal 
vertical profiles in the reservoir;
    (2) Other physical and chemical parameters to include, as 
appropriate for the project; total dissolved gas, pH, total hardness, 
specific conductance, cholorphyll a, suspended sediment concentrations, 
total nitrogen (mg/L as N), total phosphorus (mg/L as P), and fecal 
coliform (E. Coli) concentrations;
    (H) The following data with respect to any existing or proposed lake 
or reservoir associated with the proposed project; surface area, volume, 
maximum depth, mean depth, flushing rate, shoreline length, substrate 
composition; and
    (I) Gradient for downstream reaches directly affected by the 
proposed project.
    (iv) Fish and aquatic resources. A description of the fish and other 
aquatic resources, including invasive species, in the project vicinity. 
This section must discuss the existing fish and macroinvertebrate 
communities, including the presence or absence of anadromous, 
catadromous, or migratory fish, and any known or potential upstream or 
downstream impacts of the project on the aquatic community. Components 
of the description must include:
    (A) Identification of existing fish and aquatic communities;
    (B) Identification of any essential fish habitat as defined under 
the Magnuson-Stevens Fishery Conservation and Management Act and 
established by the National Marine Fisheries Service; and
    (C) Temporal and spacial distribution of fish and aquatic 
communities and any associated trends with respect to:
    (1) Species and life stage composition;
    (2) Standing crop;
    (3) Age and growth data;
    (4) Spawning run timing; and
    (5) The extent and location of spawning, rearing, feeding, and 
wintering habitat.
    (v) Wildlife and botanical resources. A description of the wildlife 
and botanical resources, including invasive species, in the project 
vicinity. Components of this description must include:
    (A) Upland habitat(s) in the project vicinity, including the 
project's transmission line corridor or right-of-way and a listing of 
plant and animal species that use the habitat(s); and
    (B) Temporal or spacial distribution of species considered important 
because of their commercial, recreational, or cultural value.
    (vi) Wetlands, riparian, and littoral habitat. A description of the 
floodplain, wetlands, riparian habitats, and littoral in the project 
vicinity. Components of this description must include:
    (A) A list of plant and animal species, including invasive species, 
that use the wetland, littoral, and riparian habitat;
    (B) A map delineating the wetlands, riparian, and littoral habitat; 
and
    (C) Estimates of acreage for each type of wetland, riparian, or 
littoral habitat, including variability in such availability as a 
function of storage at a project that is not operated in run-of-river 
mode.
    (vii) Rare, threatened and endangered species. A description of any 
listed rare, threatened and endangered, candidate, or special status 
species that may be present in the project vicinity. Components of this 
description must include:
    (A) A list of Federal- and state-listed, or proposed to be listed, 
threatened and endangered species known to be present in the project 
vicinity;
    (B) Identification of habitat requirements;
    (C) References to any known biological opinion, status reports, or 
recovery plan pertaining to a listed species;
    (D) Extent and location of any federally-designated critical 
habitat, or

[[Page 148]]

other habitat for listed species in the project area; and
    (E) Temporal and spatial distribution of the listed species within 
the project vicinity.
    (viii) Recreation and land use. A description of the existing 
recreational and land uses and opportunities within the project 
boundary. The components of this description include:
    (A) Text description illustrated by maps of existing recreational 
facilities, type of activity supported, location, capacity, ownership 
and management;
    (B) Current recreational use of project lands and waters compared to 
facility or resource capacity;
    (C) Existing shoreline buffer zones within the project boundary;
    (D) Current and future recreation needs identified in current State 
Comprehensive Outdoor Recreation Plans, other applicable plans on file 
with the Commission, or other relevant local, state, or regional 
conservation and recreation plans;
    (E) If the potential applicant is an existing licensee, its current 
shoreline management plan or policy, if any, with regard to permitting 
development of piers, boat docks and landings, bulkheads, and other 
shoreline facilities on project lands and waters;
    (F) A discussion of whether the project is located within or 
adjacent to a:
    (1) River segment that is designated as part of, or under study for 
inclusion in, the National Wild and Scenic River System; or
    (2) State-protected river segment;
    (G) Whether any project lands are under study for inclusion in the 
National Trails System or designated as, or under study for inclusion 
as, a Wilderness Area.
    (H) Any regionally or nationally important recreation areas in the 
project vicinity;
    (I) Non-recreational land use and management within the project 
boundary; and
    (J) Recreational and non-recreational land use and management 
adjacent to the project boundary.
    (ix) Aesthetic resources. A description of the visual 
characteristics of the lands and waters affected by the project. 
Components of this description include a description of the dam, natural 
water features, and other scenic attractions of the project and 
surrounding vicinity. Potential applicants are encouraged to supplement 
the text description with visual aids.
    (x) Cultural resources. A description of the known cultural or 
historical resources of the proposed project and surrounding area. 
Components of this description include:
    (A) Identification of any historic or archaeological site in the 
proposed project vicinity, with particular emphasis on sites or 
properties either listed in, or recommended by the State Historic 
Preservation Officer or Tribal Historic Preservation Officer for 
inclusion in, the National Register of Historic Places;
    (B) Existing discovery measures, such as surveys, inventories, and 
limited subsurface testing work, for the purpose of locating, 
identifying, and assessing the significance of historic and 
archaeological resources that have been undertaken within or adjacent to 
the project boundary; and
    (C) Identification of Indian tribes that may attach religious and 
cultural significance to historic properties within the project boundary 
or in the project vicinity; as well as available information on Indian 
traditional cultural and religious properties, whether on or off of any 
federally-recognized Indian reservation (A potential applicant must 
delete from any information made available under this section specific 
site or property locations, the disclosure of which would create a risk 
of harm, theft, or destruction of archaeological or Native American 
cultural resources or to the site at which the resources are located, or 
would violate any Federal law, including the Archaeological Resources 
Protection Act of 1979, 16 U.S.C. 470w-3, and the National Historic 
Preservation Act of 1966, 16 U.S.C. 470hh).
    (xi) Socio-economic resources. A general description of socio-
economic conditions in the vicinity of the project. Components of this 
description include general land use patterns (e.g., urban, 
agricultural, forested), population patterns, and sources of employment 
in the project vicinity.

[[Page 149]]

    (xii) Tribal resources. A description of Indian tribes, tribal 
lands, and interests that may be affected by the project Components of 
this description include:
    (A) Identification of information on resources specified in 
paragraphs (d)(2)(ii)-(xi) of this section to the extent that existing 
project construction and operation affecting those resources may impact 
tribal cultural or economic interests, e.g., impacts of project-induced 
soil erosion on tribal cultural sites; and
    (B) Identification of impacts on Indian tribes of existing project 
construction and operation that may affect tribal interests not 
necessarily associated with resources specified in paragraphs 
(d)(3)(ii)-(xi) of this Section, e.g., tribal fishing practices or 
agreements between the Indian tribe and other entities other than the 
potential applicant that have a connection to project construction and 
operation.
    (xiii) River basin description. A general description of the river 
basin or sub-basin, as appropriate, in which the proposed project is 
located, including information on:
    (A) The area of the river basin or sub-basin and length of stream 
reaches therein;
    (B) Major land and water uses in the project area;
    (C) All dams and diversion structures in the basin or sub-basin, 
regardless of function; and
    (D) Tributary rivers and streams, the resources of which are or may 
be affected by project operations;
    (4) Preliminary issues and studies list. Based on the resource 
description and impacts discussion required by paragraph (d)(3) of this 
section; the pre-application document must include with respect to each 
resource area identified above, a list of:
    (i) Issues pertaining to the identified resources;
    (ii) Potential studies or information gathering requirements 
associated with the identified issues;
    (iii) Relevant qualifying Federal and state or tribal comprehensive 
waterway plans; and
    (iv) Relevant resource management plans.
    (5) Summary of contacts. An appendix summarizing contacts with 
Federal, state, and interstate resource agencies, Indian tribes, non-
governmental organizations, or other members of the public made in 
connection with preparing the pre-application document sufficient to 
enable the Commission to determine if due diligence has been exercised 
in obtaining relevant information.
    (e) If applicable, the applicant must also provide a statement of 
whether or not it will seek benefits under section 210 of the Public 
Utility Regulatory Policies Act of 1978 (PURPA) by satisfying the 
requirements for qualifying hydroelectric small power production 
facilities in Sec. 292.203 of this chapter. If benefits under section 
210 of PURPA are sought, a statement of whether or not the applicant 
believes the project is located at a new dam or diversion (as that term 
is defined in Sec. 292.202(p) of this chapter), and a request for the 
agencies' view on that belief, if any.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 69957, Dec. 16, 2003, as 
amended by Order 737, 75 FR 43402, July 26, 2010]



Sec. 5.7  Tribal consultation.

    A meeting shall be held no later than 30 days following filing of 
the notification of intent required by Sec. 5.5 between each Indian 
tribe likely to be affected by the potential license application and the 
Commission staff if the affected Indian tribe agrees to such meeting.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61742, Oct. 30, 2003]



Sec. 5.8  Notice of commencement of proceeding and scoping document, or of 

approval to use traditional licensing process or alternative procedures.

    (a) Notice. Within 60 days of the notification of intent required 
under Sec. 5.5, filing of the pre-application document pursuant to 
Sec. 5.6, and filing of any request to use the traditional licensing 
process or alternative procedures, the Commission will issue a notice of 
commencement of proceeding and scoping document or of approval of a 
request to use the traditional licensing process or alternative 
procedures.

[[Page 150]]

    (b) Notice contents. The notice shall include:
    (1) The decision of the Director of the Office of Energy Projects on 
any request to use the traditional licensing process or alternative 
procedures.
    (2) If appropriate, a request by the Commission to initiate informal 
consultation under section 7 of the Endangered Species Act and the joint 
agency regulations thereunder at 50 CFR part 402, section 305(b) of the 
Magnuson-Stevens Fishery Conservation and Management Act and 
implementing regulations at 50 CFR 600.920, or section 106 of the 
National Historic Preservation Act and implementing regulations at 36 
CFR 800.2, and, if applicable, designation of the potential applicant as 
the Commission's non-federal representative.
    (3) If the potential license application is to be developed and 
filed pursuant to this part, notice of:
    (i) The applicant's intent to file a license application;
    (ii) The filing of the pre-application document;
    (iii) Commencement of the proceeding;
    (iv) A request for comments on the pre-application document 
(including the proposed process plan and schedule);
    (v) A statement that all communications to or from the Commission 
staff related to the merits of the potential application must be filed 
with the Commission;
    (vi) The request for other Federal or state agencies or Indian 
tribes to be cooperating agencies for purposes of developing an 
environmental document;
    (vii) The Commission's intent with respect to preparation of an 
environmental impact statement; and
    (viii) A public scoping meeting and site visit to be held within 30 
days of the notice.
    (c) Scoping Document 1. At the same time the Commission issues the 
notice provided for in paragraph (a) of this Section, the Commission 
staff will issue Scoping Document 1. Scoping Document 1 will include:
    (1) An introductory section describing the purpose of the scoping 
document, the date and time of the scoping meeting, procedures for 
submitting written comments, and a request for information or study 
requests from state and Federal resource agencies, Indian tribes, non-
governmental organizations, and individuals;
    (2) Identification of the proposed action, including a description 
of the project's location, facilities, and operation, and any proposed 
protection and enhancement measures, and other alternatives to the 
proposed action, including alternatives considered but eliminated from 
further study, and the no action alternative;
    (3) Identification of resource issues to be analyzed in the 
environmental document, including those that would be cumulatively 
affected along with a description of the geographic and temporal scope 
of the cumulatively affected resources;
    (4) A list of qualifying Federal and state comprehensive waterway 
plans;
    (5) A list of qualifying tribal comprehensive waterway plans;
    (6) A process plan and schedule and a draft outline of the 
environmental document; and
    (7) A list of recipients.
    (d) Scoping meeting and site visit. The purpose of the public 
meeting and site visit is to:
    (1) Initiate issues scoping pursuant to the National Environmental 
Policy Act;
    (2) Review and discuss existing conditions and resource management 
objectives;
    (3) Review and discuss existing information and make preliminary 
identification of information and study needs;
    (4) Review, discuss, and finalize the process plan and schedule for 
pre-filing activity that incorporates the time periods provided for in 
this part and, to the extent reasonably possible, maximizes coordination 
of Federal, state, and tribal permitting and certification processes, 
including consultation under section 7 of the Endangered Species Act and 
water quality certification or waiver thereof under section 401 of the 
Clean Water Act; and
    (5) Discuss the appropriateness of any Federal or state agency or 
Indian tribe

[[Page 151]]

acting as a cooperating agency for development of an environmental 
document pursuant to the National Environmental Policy Act.
    (e) Method of notice. The public notice provided for in this section 
will be given by:
    (1) Publishing notice in the Federal Register;
    (2) Publishing notice in a daily or weekly newspaper published in 
the county or counties in which the project or any part thereof or the 
lands affected thereby are situated, and, as appropriate, tribal 
newspapers;
    (3) Notifying appropriate Federal, state, and interstate resource 
agencies, state water quality and coastal zone management plan 
consistency certification agencies, Indian tribes, and non-governmental 
organizations, by electronic means if practical, otherwise by mail.

[Order 2002, 68 FR 51121, Aug. 25, 2003, as amended by Order 653, 70 FR 
8724, Feb. 23, 2005]



Sec. 5.9  Comments and information or study requests.

    (a) Comments and study requests. Comments on the pre-application 
document and the Commission staff's Scoping Document 1 must be filed 
with the Commission within 60 days following the Commission's notice of 
consultation procedures issued pursuant to Sec. 5.8. Comments, 
including those by Commission staff, must be accompanied by any 
information gathering and study requests, and should include information 
and studies needed for consultation under section 7 of the Endangered 
Species Act and water quality certification under Section 401 of the 
Clean Water Act.
    (b) Content of study request. Any information or study request must:
    (1) Describe the goals and objectives of each study proposal and the 
information to be obtained;
    (2) If applicable, explain the relevant resource management goals of 
the agencies or Indian tribes with jurisdiction over the resource to be 
studied;
    (3) If the requester is not a resource agency, explain any relevant 
public interest considerations in regard to the proposed study;
    (4) Describe existing information concerning the subject of the 
study proposal, and the need for additional information;
    (5) Explain any nexus between project operations and effects 
(direct, indirect, and/or cumulative) on the resource to be studied, and 
how the study results would inform the development of license 
requirements;
    (6) Explain how any proposed study methodology (including any 
preferred data collection and analysis techniques, or objectively 
quantified information, and a schedule including appropriate field 
season(s) and the duration) is consistent with generally accepted 
practice in the scientific community or, as appropriate, considers 
relevant tribal values and knowledge; and
    (7) Describe considerations of level of effort and cost, as 
applicable, and why any proposed alternative studies would not be 
sufficient to meet the stated information needs.
    (c) Applicant seeking PURPA benefits; estimate of fees. If a 
potential applicant has stated that it intends to seek PURPA benefits, 
comments on the pre-application document by a fish and wildlife agency 
must provide the potential applicant with a reasonable estimate of the 
total costs the agency anticipates it will incur in order to set 
mandatory terms and conditions for the proposed project. An agency may 
provide a potential applicant with an updated estimate as it deems 
necessary. If any agency believes that its most recent estimate will be 
exceeded by more than 25 percent, it must supply the potential applicant 
with a new estimate and submit a copy to the Commission.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61742, Oct. 30, 2003; 68 
FR 69957, Dec. 16, 2003, as amended by Order 699, 72 FR 45324, Aug. 14, 
2007]



Sec. 5.10  Scoping Document 2.

    Within 45 days following the deadline for filing of comments on 
Scoping Document 1, the Commission staff shall, if necessary, issue 
Scoping Document 2.

[[Page 152]]



Sec. 5.11  Potential Applicant's proposed study plan and study plan meetings.

    (a) Within 45 days following the deadline for filing of comments on 
the pre-application document, including information and study requests, 
the potential applicant must file with the Commission a proposed study 
plan.
    (b) The potential applicant's proposed study plan must include with 
respect to each proposed study:
    (1) A detailed description of the study and the methodology to be 
used;
    (2) A schedule for conducting the study;
    (3) Provisions for periodic progress reports, including the manner 
and extent to which information will be shared; and sufficient time for 
technical review of the analysis and results; and
    (4) If the potential applicant does not adopt a requested study, an 
explanation of why the request was not adopted, with reference to the 
criteria set forth in Sec. 5.9(b).
    (c) The potential applicant's proposed study plan must also include 
provisions for the initial and updated study reports and meetings 
provided for in Sec. 5.15.
    (d) The applicant's proposed study plan must:
    (1) Describe the goals and objectives of each study proposal and the 
information to be obtained;
    (2) Address any known resource management goals of the agencies or 
Indian tribes with jurisdiction over the resource to be studied;
    (3) Describe existing information concerning the subject of the 
study proposal, and the need for additional information;
    (4) Explain any nexus between project operations and effects 
(direct, indirect, and/or cumulative) on the resource to be studied;
    (5) Explain how any proposed study methodology (including any 
preferred data collection and analysis techniques, or objectively 
quantified information, and a schedule including appropriate field 
season(s) and the duration) is consistent with generally accepted 
practice in the scientific community or, as appropriate, considers any 
known tribal interests;
    (6) Describe considerations of level of effort and cost, as 
applicable.
    (e) The potential applicant's proposed study plan must be 
accompanied by a proposal for conducting a study plan meeting or 
meetings during the 90-day period provided for in Sec. 5.12 for the 
purpose of clarifying the potential applicant's proposed study plan and 
any initial information gathering or study requests, and to resolve any 
outstanding issues with respect to the proposed study plan. The initial 
study plan meeting must be held no later than 30 days after the deadline 
date for filing of the potential applicant's proposed study plan.



Sec. 5.12  Comments on proposed study plan.

    Comments on the potential applicant's proposed study plan, including 
any revised information or study requests, must be filed within 90 days 
after the proposed study plan is filed. This filing must also include an 
explanation of any study plan concerns and any accommodations reached 
with the potential applicant regarding those concerns. Any proposed 
modifications to the potential applicant's proposed study plan must 
address the criteria in Sec. 5.9(b).



Sec. 5.13  Revised study plan and study plan determination.

    (a) Within 30 days following the deadline for filing comments on the 
potential applicant's proposed study plan, as provided for in Sec. 
5.12, the potential applicant must file a revised study plan for 
Commission approval. The revised study plan shall include the comments 
on the proposed study plan and a description of the efforts made to 
resolve differences over study requests. If the potential applicant does 
not adopt a requested study, it must explain why the request was not 
adopted, with reference to the criteria set forth in Sec. 5.9(b).
    (b) Within 15 days following filing of the potential applicant's 
revised study plan, participants may file comments thereon.
    (c) Within 30 days following the date the potential applicant files 
its revised study plan, the Director of Energy

[[Page 153]]

Projects will issue a Study Plan Determination with regard to the 
potential applicant's study plan, including any modifications determined 
to be necessary in light of the record.
    (d) If no notice of study dispute is filed pursuant to Sec. 5.14 
within 20 days of the Study Plan Determination, the study plan as 
approved in the Study Plan Determination shall be deemed to be approved 
and the potential applicant shall proceed with the approved studies. If 
a potential applicant fails to obtain or conduct a study as required by 
Study Plan Determination, its license application may be considered 
deficient.



Sec. 5.14  Formal study dispute resolution process.

    (a) Within 20 days of the Study Plan Determination, any Federal 
agency with authority to provide mandatory conditions on a license 
pursuant to FPA Section 4(e), 16 U.S.C. 797(e), or to prescribe fishways 
pursuant to FPA Section 18, 16 U.S.C. 811, or any agency or Indian tribe 
with authority to issue a water quality certification for the project 
license under section 401 of the Clean Water Act, 42 U.S.C. 1341, may 
file a notice of study dispute with respect to studies pertaining 
directly to the exercise of their authorities under sections 4(e) and 18 
of the Federal Power Act or section 401 of the Clean Water Act.
    (b) The notice of study dispute must explain how the disputing 
agency's or Indian tribe's study request satisfies the criteria set 
forth in Sec. 5.9(b), and shall identify and provide contact 
information for the panel member designated by the disputing agency or 
Indian tribe, as discussed in paragraph (d) of this section.
    (c) Studies and portions of study plans approved in the Study Plan 
Determination that are not the subject of a notice of dispute shall be 
deemed to be approved, and the potential applicant shall proceed with 
those studies or portions thereof.
    (d) Within 20 days of a notice of study dispute, the Commission will 
convene one or more three-person Dispute Resolution Panels, as 
appropriate to the circumstances of each proceeding. Each such panel 
will consist of:
    (1) A person from the Commission staff who is not otherwise involved 
in the proceeding, and who shall serve as the panel chair;
    (2) One person designated by the Federal or state agency or Indian 
tribe that filed the notice of dispute who is not otherwise involved in 
the proceeding; and
    (3) A third person selected by the other two panelists from a pre-
established list of persons with expertise in the resource area. The two 
panelists shall make every reasonable effort to select the third panel 
member. If however no third panel member has been selected by the other 
two panelists within 15 days, an appropriate third panel member will be 
selected at random from the list of technical experts maintained by the 
Commission.
    (e) If more than one agency or Indian tribe files a notice of 
dispute with respect to the decision in the preliminary determination on 
any information-gathering or study request, the disputing agencies or 
Indian tribes must select one person to represent their interests on the 
panel.
    (f) The list of persons available to serve as a third panel member 
will be posted, as revised from time-to-time, on the hydroelectric page 
of the Commission's Web site. A person on the list who is requested and 
willing to serve with respect to a specific dispute will be required to 
file with the Commission at that time a current statement of their 
qualifications, a statement that they have had no prior involvement with 
the proceeding in which the dispute has arisen, or other financial or 
other conflict of interest.
    (g) All costs of the panel members representing the Commission staff 
and the agency or Indian tribe which filed the notice of dispute will be 
borne by the Commission or the agency or Indian tribe, as applicable. 
The third panel member will serve without compensation, except for 
certain allowable travel expenses as defined in 31 CFR part 301.
    (h) To facilitate the delivery of information to the dispute 
resolution panel, the identity of the panel members and their addresses 
for personal service

[[Page 154]]

with respect to a specific dispute resolution will be posted on the 
hydroelectric page of the Commission's Web site.
    (i) No later than 25 days following the notice of study dispute, the 
potential applicant may file with the Commission and serve upon the 
panel members comments and information regarding the dispute.
    (j) Prior to engaging in deliberative meetings, the panel shall hold 
a technical conference for the purpose of clarifying the matters in 
dispute with reference to the study criteria. The technical conference 
shall be chaired by the Commission staff member of the panel. It shall 
be open to all participants, and the panel shall receive information 
from the participants as it deems appropriate.
    (k) No later than 50 days following the notice of study dispute, the 
panel shall make and deliver to the Director of the Office of Energy 
Projects a finding, with respect to each information or study request in 
dispute, concerning the extent to which each criteria set forth in Sec. 
5.9(b) is met or not met, and why, and make recommendations regarding 
the disputed study request based on its findings. The panel's findings 
and recommendations must be based on the record in the proceeding. The 
panel shall file with its findings and recommendations all of the 
materials received by the panel. Any recommendation for the potential 
applicant to provide information or a study must include the technical 
specifications, including data acquisition techniques and methodologies.
    (l) No later than 70 days from the date of filing of the notice of 
study dispute, the Director of the Office of Energy Projects will review 
and consider the recommendations of the panel, and will issue a written 
determination. The Director's determination will be made with reference 
to the study criteria set forth in Sec. 5.9(b) and any applicable law 
or Commission policies and practices, will take into account the 
technical expertise of the panel, and will explain why any panel 
recommendation was rejected, if applicable. The Director's determination 
shall constitute an amendment to the approved study plan.



Sec. 5.15  Conduct of studies.

    (a) Implementation. The potential applicant must gather information 
and conduct studies as provided for in the approved study plan and 
schedule.
    (b) Progress reports. The potential applicant must prepare and 
provide to the participants the progress reports provided for in Sec. 
5.11(b)(3). Upon request of any participant, the potential applicant 
will provide documentation of study results.
    (c) Initial study report. (1) Pursuant to the Commission-approved 
study plan and schedule provided for in Sec. 5.13 or no later than one 
year after Commission approval of the study plan, whichever comes first, 
the potential applicant must prepare and file with the Commission an 
initial study report describing its overall progress in implementing the 
study plan and schedule and the data collected, including an explanation 
of any variance from the study plan and schedule. The report must also 
include any modifications to ongoing studies or new studies proposed by 
the potential applicant.
    (2) Within 15 days following the filing of the initial study report, 
the potential applicant shall hold a meeting with the participants and 
Commission staff to discuss the study results and the potential 
applicant's and or other participant's proposals, if any, to modify the 
study plan in light of the progress of the study plan and data 
collected.
    (3) Within 15 days following the meeting provided for in paragraph 
(c)(2) of this section, the potential applicant shall file a meeting 
summary, including any modifications to ongoing studies or new studies 
proposed by the potential applicant.
    (4) Any participant or the Commission staff may file a disagreement 
concerning the applicant's meeting summary within 30 days, setting forth 
the basis for the disagreement. This filing must also include any 
modifications to ongoing studies or new studies proposed by the 
Commission staff or other participant.
    (5) Responses to any filings made pursuant to paragraph (c)(4) of 
this section must be filed within 30 days.
    (6) No later than 30 days following the due date for responses 
provided for

[[Page 155]]

in paragraph (c)(5) of this section, the Director will resolve the 
disagreement and amend the approved study plan as appropriate.
    (7) If no participant or the Commission staff files a disagreement 
concerning the potential applicant's meeting summary and request to 
amend the approved study plan within 30 days, any proposed amendment 
shall be deemed to be approved.
    (d) Criteria for modification of approved study. Any proposal to 
modify an ongoing study pursuant to paragraphs (c)(1)-(4) of this 
section must be accompanied by a showing of good cause why the proposal 
should be approved, and must include, as appropriate to the facts of the 
case, a demonstration that:
    (1) Approved studies were not conducted as provided for in the 
approved study plan; or
    (2) The study was conducted under anomalous environmental conditions 
or that environmental conditions have changed in a material way.
    (e) Criteria for new study. Any proposal for new information 
gathering or studies pursuant to paragraphs (c)(1)-(4) of this section 
must be accompanied by a showing of good cause why the proposal should 
be approved, and must include, as appropriate to the facts of the case, 
a statement explaining:
    (1) Any material changes in the law or regulations applicable to the 
information request;
    (2) Why the goals and objectives of any approved study could not be 
met with the approved study methodology;
    (3) Why the request was not made earlier;
    (4) Significant changes in the project proposal or that significant 
new information material to the study objectives has become available; 
and
    (5) Why the new study request satisfies the study criteria in Sec. 
5.9(b).
    (f) Updated study report. Pursuant to the Commission-approved study 
plan and schedule provided for in Sec. 5.13, or no later than two years 
after Commission approval of the study plan and schedule, whichever 
comes first, the potential applicant shall prepare and file with the 
Commission an updated study report describing its overall progress in 
implementing the study plan and schedule and the data collected, 
including an explanation of any variance from the study plan and 
schedule. The report must also include any modifications to ongoing 
studies or new studies proposed by the potential applicant. The review, 
comment, and disagreement resolution provisions of paragraphs (c)(2)-(7) 
of this section shall apply to the updated study report. Any proposal to 
modify an ongoing study must be accompanied by a showing of good cause 
why the proposal should be approved as set forth in paragraph (d) of 
this section. Any proposal for new information gathering or studies is 
subject to paragraph (e) of this section except that the proponent must 
demonstrate extraordinary circumstances warranting approval. The 
applicant must promptly proceed to complete any remaining undisputed 
information-gathering or studies under its proposed amendments to the 
study plan, if any, and must proceed to complete any information-
gathering or studies that are the subject of a disagreement upon the 
Director's resolution of the disagreement.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61742, Oct. 30, 2003]



Sec. 5.16  Preliminary licensing proposal.

    (a) No later than 150 days prior to the deadline for filing a new or 
subsequent license application, if applicable, the potential applicant 
must file for comment a preliminary licensing proposal.
    (b) The preliminary licensing proposal must:
    (1) Clearly describe, as applicable, the existing and proposed 
project facilities, including project lands and waters;
    (2) Clearly describe, as applicable, the existing and proposed 
project operation and maintenance plan, to include measures for 
protection, mitigation, and enhancement measures with respect to each 
resource affected by the project proposal; and
    (3) Include the potential applicant's draft environmental analysis 
by resource area of the continuing and incremental impacts, if any, of 
its preliminary licensing proposal, including the results of its studies 
conducted under the approved study plan.
    (c) A potential applicant may elect to file a draft license 
application which

[[Page 156]]

includes the contents of a license application required by Sec. 5.18 
instead of the Preliminary Licensing Proposal. A potential applicant 
that elects to file a draft license application must include notice of 
its intent to do so in the updated study report required by Sec. 
5.15(f).
    (d) A potential applicant that has been designated as the 
Commission's non-Federal representative may include a draft Biological 
Assessment, draft Essential Fish Habitat Assessment, and draft Historic 
Properties Management Plan with its Preliminary Licensing Proposal or 
draft license application.
    (e) Within 90 days of the date the potential applicant files the 
Preliminary Licensing Proposal or draft license application, 
participants and the Commission staff may file comments on the 
Preliminary Licensing Proposal or draft application, which may include 
recommendations on whether the Commission should prepare an 
Environmental Assessment (with or without a draft Environmental 
Assessment) or an Environmental Impact Statement. Any participant whose 
comments request new information, studies, or other amendments to the 
approved study plan must include a demonstration of extraordinary 
circumstances, pursuant to the requirements of Sec. 5.15(f).
    (f) A waiver of the requirement to file the Preliminary Licensing 
Proposal or draft license application may be requested, based on a 
consensus of the participants in favor of such waiver.



Sec. 5.17  Filing of application.

    (a) Deadline--new or subsequent license application. An application 
for a new or subsequent license must be filed no later than 24 months 
before the existing license expires.
    (b) Subsequent licenses. An applicant for a subsequent license must 
file its application under part I of the Federal Power Act. The 
provisions of section 7(a) of the Federal Power Act do not apply to 
licensing proceedings involving a subsequent license.
    (c) Rejection or dismissal of application. If the Commission rejects 
or dismisses an application for a new or subsequent license filed under 
this part pursuant to the provisions of Sec. 5.20, the application may 
not be refiled after the new or subsequent license application filing 
deadline specified in paragraph (a) of this section.
    (d)(1) Filing and service. Each applicant for a license under this 
part must submit the application to the Commission's Secretary for 
filing pursuant to the requirements of subpart T of part 385 of this 
chapter. The applicant must serve one copy of the application on the 
Director of the Commission's Regional Office for the appropriate region 
and on each resource agency, Indian tribe, or member of the public 
consulted pursuant to this part.
    (2) An applicant must publish notice twice of the filing of its 
application, no later than 14 days after the filing date in a daily or 
weekly newspaper of general circulation in each county in which the 
project is located. The notice must disclose the filing date of the 
application and briefly summarize it, including the applicant's name and 
address, the type of facility applied for, its proposed location, and 
the places where the information specified in Sec. 5.2(b) is available 
for inspection and reproduction. The applicant must promptly provide the 
Commission with proof of the publication of this notice.
    (e) PURPA benefits. (1) Every application for a license for a 
project with a capacity of 80 megawatts or less must include in its 
application copies of the statements made under Sec. 4.38(b)(2)(vi).
    (2) If an applicant reverses a statement of intent not to seek PURPA 
benefits:
    (i) Prior to the Commission issuing a license, the reversal of 
intent will be treated as an amendment of the application under Sec. 
4.35 of this chapter and the applicant must:
    (A) Repeat the pre-filing consultation process under this part; and
    (B) Satisfy all the requirements in Sec. 292.208 of this chapter; 
or
    (ii) After the Commission issues a license for the project, the 
applicant is prohibited from obtaining PURPA benefits.
    (f) Limitations on submitting applications. The provisions of 
Sec. Sec. 4.33(b), (c), and (e) of this chapter apply to license 
applications filed under this Section.
    (g) Applicant notice. An applicant for a subsequent license that 
proposes to

[[Page 157]]

expand an existing project to encompass additional lands must include in 
its application a statement that the applicant has notified, by 
certified mail, property owners on the additional lands to be 
encompassed by the project and governmental agencies and subdivisions 
likely to be interested in or affected by the proposed expansion.

[Order 2002, 68 FR 51121, Aug. 25, 2003, as amended by Order 756, 77 FR 
4893, Feb. 1, 2012]



Sec. 5.18  Application content.

    (a) General content requirements. Each license application filed 
pursuant to this part must:
    (1) Identify every person, citizen, association of citizens, 
domestic corporation, municipality, or state that has or intends to 
obtain and will maintain any proprietary right necessary to construct, 
operate, or maintain the project;
    (2) Identify (providing names and mailing addresses):
    (i) Every county in which any part of the project, and any Federal 
facilities that would be used by the project, would be located;
    (ii) Every city, town, or similar local political subdivision:
    (A) In which any part of the project, and any Federal facilities 
that would be used by the project, would be located; or
    (B) That has a population of 5,000 or more people and is located 
within 15 miles of the project dam;
    (iii) Every irrigation district, drainage district, or similar 
special purpose political subdivision:
    (A) In which any part of the project, and any Federal facilities 
that would be used by the project, would be located; or
    (B) That owns, operates, maintains, or uses any project facilities 
that would be used by the project;
    (iv) Every other political subdivision in the general area of the 
project that there is reason to believe would likely be interested in, 
or affected by, the application; and
    (v) All Indian tribes that may be affected by the project.
    (3)(i) For a license (other than a license under section 15 of the 
Federal Power Act) state that the applicant has made, either at the time 
of or before filing the application, a good faith effort to give 
notification by certified mail of the filing of the application to:
    (A) Every property owner of record of any interest in the property 
within the bounds of the project, or in the case of the project without 
a specific project boundary, each such owner of property which would 
underlie or be adjacent to any project works including any impoundments; 
and
    (B) The entities identified in paragraph (a)(2) of this section, as 
well as any other Federal, state, municipal or other local government 
agencies that there is reason to believe would likely be interested in 
or affected by such application.
    (ii) Such notification must contain the name, business address, and 
telephone number of the applicant and a copy of the Exhibit G contained 
in the application, and must state that a license application is being 
filed with the Commission.
    (4)(i) As to any facts alleged in the application or other materials 
filed, be subscribed and verified under oath in the form set forth in 
paragraph (a)(3)(B) of this Section by the person filing, an officer 
thereof, or other person having knowledge of the matters set forth. If 
the subscription and verification is by anyone other than the person 
filing or an officer thereof, it must include a statement of the reasons 
therefor.
    (ii) This application is executed in the:

 State of_______________________________________________________________
 County of______________________________________________________________
 By:____________________________________________________________________
 (Name)_________________________________________________________________
 (Address)______________________________________________________________

being duly sworn, depose(s) and say(s) that the contents of this 
application are true to the best of (his or her) knowledge or belief. 
The undersigned Applicant(s) has (have) signed the application this ---- 
day of ------------------, 2------.
________________________________________________________________________
(Applicant(s))
 By:____________________________________________________________________

    Subscribed and sworn to before me, a [Notary Public, or title of 
other official authorized by the state to notarize documents, as 
appropriate] this ---- day of --------------------, 2------.
/SEAL [if any]
(Notary Public, or other authorized official)


[[Page 158]]


    (5) Contain the information and documents prescribed in the 
following Sections of this chapter, except as provided in paragraph (b) 
of this Section, according to the type of application:
    (i) License for a minor water power project and a major water power 
project 5 MW or less: Sec. 4.61 (General instructions, initial 
statement, and Exhibits A, F, and G);
    (ii) License for a major unconstructed project and a major modified 
project: Sec. 4.41 of this chapter (General instructions, initial 
statement, Exhibits A, B, C, D, F, and G);
    (iii) License for a major project--existing dam: Sec. 4.51 of this 
chapter (General instructions, initial statement, Exhibits A, B, C, D, 
F, and G); or
    (iv) License for a project located at a new dam or diversion where 
the applicant seeks PURPA benefits: Sec. 292.208 of this chapter.
    (b) Exhibit E--Environmental Exhibit. The specifications for Exhibit 
E in Sec. Sec. 4.41, 4.51, or 4.61 of this chapter shall not apply to 
applications filed under this part. The Exhibit E included in any 
license application filed under this part must address the resources 
listed in the Pre-Application Document provided for in Sec. 5.6; follow 
the Commission's ``Preparing Environmental Assessments: Guidelines for 
Applicants, Contractors, and Staff,'' as they may be updated from time-
to-time; and meet the following format and content requirements:
    (1) General description of the river basin. Describe the river 
system, including relevant tributaries; give measurements of the area of 
the basin and length of stream; identify the project's river mile 
designation or other reference point; describe the topography and 
climate; and discuss major land uses and economic activities.
    (2) Cumulative effects. List cumulatively affected resources based 
on the Commission's Scoping Document, consultation, and study results. 
Discuss the geographic and temporal scope of analysis for those 
resources. Describe how resources are cumulatively affected and explain 
the choice of the geographic scope of analysis. Include a brief 
discussion of past, present, and future actions, and their effects on 
resources based on the new license term (30-50 years). Highlight the 
effect on the cumulatively affected resources from reasonably 
foreseeable future actions. Discuss past actions' effects on the 
resource in the Affected Environment Section.
    (3) Applicable laws. Include a discussion of the status of 
compliance with or consultation under the following laws, if applicable:
    (i) Section 401 of the Clean Water Act. The applicant must file a 
request for a water quality certification (WQC), as required by Section 
401 of the Clean Water Act no later than the deadline specified in Sec. 
5.23(b). Potential applicants are encouraged to consult with the 
certifying agency or tribe concerning information requirements as early 
as possible.
    (ii) Endangered Species Act (ESA). Briefly describe the process used 
to address project effects on Federally listed or proposed species in 
the project vicinity. Summarize any anticipated environmental effects on 
these species and provide the status of the consultation process. If the 
applicant is the Commission's non-Federal designee for informal 
consultation under the ESA, the applicant's draft biological assessment 
must be included.
    (iii) Magnuson-Stevens Fishery Conservation and Management Act. 
Document from the National Marine Fisheries Service (NMFS) and/or the 
appropriate Regional Fishery Management Council any essential fish 
habitat (EFH) that may be affected by the project. Briefly discuss each 
managed species and life stage for which EFH was designated. Include, as 
appropriate, the abundance, distribution, available habitat, and habitat 
use by the managed species. If the project may affect EFH, prepare a 
draft ``EFH Assessment'' of the impacts of the project. The draft EFH 
Assessment should contain the information outlined in 50 CFR 600.920(e).
    (iv) Coastal Zone Management Act (CZMA). Section 307(c)(3) of the 
CZMA requires that all Federally licensed and permitted activities be 
consistent with approved state Coastal Zone Management Programs. If the 
project is located within a coastal zone boundary

[[Page 159]]

or if a project affects a resource located in the boundaries of the 
designated coastal zone, the applicant must certify that the project is 
consistent with the state Coastal Zone Management Program. If the 
project is within or affects a resource within the coastal zone, provide 
the date the applicant sent the consistency certification information to 
the state agency, the date the state agency received the certification, 
and the date and action taken by the state agency (for example, the 
agency will either agree or disagree with the consistency statement, 
waive it, or ask for additional information). Describe any conditions 
placed on the state agency's concurrence and assess the conditions in 
the appropriate section of the license application. If the project is 
not in or would not affect the coastal zone, state so and cite the 
coastal zone program office's concurrence.
    (v) National Historic Preservation Act (NHPA). Section 106 of NHPA 
requires the Commission to take into account the effect of licensing a 
hydropower project on any historic properties, and allow the Advisory 
Council on Historic Preservation (Advisory Council) a reasonable 
opportunity to comment on the proposed action. ``Historic Properties'' 
are defined as any district, site, building, structure, or object that 
is included in or eligible for inclusion in the National Register of 
Historic Places (NRHP). If there would be an adverse effect on historic 
properties, the applicant may include a Historic Properties Management 
Plan (HPMP) to avoid or mitigate the effects. The applicant must include 
documentation of consultation with the Advisory Council, the State 
Historic Preservation Officer, Tribal Historic Preservation Officer, 
National Park Service, members of the public, and affected Indian 
tribes, where applicable.
    (vi) Pacific Northwest Power Planning and Conservation Act (Act). If 
the project is not within the Columbia River Basin, this section shall 
not be included. The Columbia River Basin Fish and Wildlife Program 
(Program) developed under the Act directs agencies to consult with 
Federal and state fish and wildlife agencies, appropriate Indian tribes, 
and the Northwest Power Planning Council (Council) during the study, 
design, construction, and operation of any hydroelectric development in 
the basin. Section 12.1A of the Program outlines conditions that should 
be provided for in any original or new license. The program also 
designates certain river reaches as protected from development. The 
applicant must document consultation with the Council, describe how the 
act applies to the project, and how the proposal would or would not be 
consistent with the program.
    (vii) Wild and Scenic Rivers and Wilderness Acts. Include a 
description of any areas within or in the vicinity of the proposed 
project boundary that are included in, or have been designated for study 
for inclusion in, the National Wild and Scenic Rivers System, or that 
have been designated as wilderness area, recommended for such 
designation, or designated as a wilderness study area under the 
Wilderness Act.
    (4) Project facilities and operation. Provide a description of the 
project to include:
    (i) Maps showing existing and proposed project facilities, lands, 
and waters within the project boundary;
    (ii) The configuration of any dams, spillways, penstocks, canals, 
powerhouses, tailraces, and other structures;
    (iii) The normal maximum water surface area and normal maximum water 
surface elevation (mean sea level), gross storage capacity of any 
impoundments;
    (iv) The number, type, and minimum and maximum hydraulic capacity 
and installed (rated) capacity of existing and proposed turbines or 
generators to be included as part of the project;
    (v) An estimate of the dependable capacity, and average annual 
energy production in kilowatt hours (or mechanical equivalent);
    (vi) A description of the current (if applicable) and proposed 
operation of the project, including any daily or seasonal ramping rates, 
flushing flows, reservoir operations, and flood control operations.
    (5) Proposed action and action alternatives. (i) The environmental 
document must explain the effects of the

[[Page 160]]

applicant's proposal on resources. For each resource area addressed 
include:
    (A) A discussion of the affected environment;
    (B) A detailed analysis of the effects of the applicant's licensing 
proposal and, if reasonably possible, any preliminary terms and 
conditions filed with the Commission; and
    (C) Any unavoidable adverse impacts.
    (ii) The environmental document must contain, with respect to the 
resources listed in the Pre-Application Document provided for in Sec. 
5.6, and any other resources identified in the Commission's scoping 
document prepared pursuant to the National Environmental Policy Act and 
Sec. 5.8, the following information, commensurate with the scope of the 
project:
    (A) Affected environment. The applicant must provide a detailed 
description of the affected environment or area(s) to be affected by the 
proposed project by each resource area. This description must include 
the information on the affected environment filed in the Pre-Application 
Document provided for in Sec. 5.6, developed under the applicant's 
approved study plan, and otherwise developed or obtained by the 
applicant. This section must include a general description of socio-
economic conditions in the vicinity of the project including general 
land use patterns (e.g., urban, agricultural, forested), population 
patterns, and sources of employment in the project vicinity.
    (B) Environmental analysis. The applicant must present the results 
of its studies conducted under the approved study plan by resource area 
and use the data generated by the studies to evaluate the beneficial and 
adverse environmental effects of its proposed project. This section must 
also include, if applicable, a description of any anticipated continuing 
environmental impacts of continued operation of the project, and the 
incremental impact of proposed new development of project works or 
changes in project operation. This analysis must be based on the 
information filed in the Pre-Application Document provided for in Sec. 
5.6, developed under the applicant's approved study plan, and other 
appropriate information, and otherwise developed or obtained by the 
Applicant.
    (C) Proposed environmental measures. The applicant must provide, by 
resource area, any proposed new environmental measures, including, but 
not limited to, changes in the project design or operations, to address 
the environmental effects identified above and its basis for proposing 
the measures. The applicant must describe how each proposed measure 
would protect or enhance the existing environment, including, where 
possible, a non-monetary quantification of the anticipated environmental 
benefits of the measure. This section must also include a statement of 
existing measures to be continued for the purpose of protecting and 
improving the environment and any proposed preliminary environmental 
measures received from the consulted resource agencies, Indian tribes, 
or the public. If an applicant does not adopt a preliminary 
environmental measure proposed by a resource agency, Indian tribe, or 
member of the public, it must include its reasons, based on project-
specific information.
    (D) Unavoidable adverse impacts. Based on the environmental 
analysis, discuss any adverse impacts that would occur despite the 
recommended environmental measures. Discuss whether any such impacts are 
short- or long-term, minor or major, cumulative or site-specific.
    (E) Economic analysis. The economic analysis must include 
annualized, current cost-based information. For a new or subsequent 
license, the applicant must include the cost of operating and 
maintaining the project under the existing license. For an original 
license, the applicant must estimate the cost of constructing, 
operating, and maintaining the proposed project. For either type of 
license, the applicant should estimate the cost of each proposed 
resource protection, mitigation, or enhancement measure and any specific 
measure filed with the Commission by agencies, Indian tribes, or members 
of the public when the application is filed. For an existing license, 
the applicant's economic analysis must estimate the value of 
developmental resources associated with the project under the current 
license and the applicant's proposal. For an original license, the 
applicant must estimate the value

[[Page 161]]

of the developmental resources for the proposed project. As applicable, 
these developmental resources may include power generation, water 
supply, irrigation, navigation, and flood control. Where possible, the 
value of developmental resources must be based on market prices. If a 
protection, mitigation, or enhancement measure reduces the amount or 
value of the project's developmental resources, the applicant must 
estimate the reduction.
    (F) Consistency with comprehensive plans. Identify relevant 
comprehensive plans and explain how and why the proposed project would, 
would not, or should not comply with such plans and a description of any 
relevant resource agency or Indian tribe determination regarding the 
consistency of the project with any such comprehensive plan.
    (G) Consultation Documentation. Include a list containing the name, 
and address of every Federal, state, and interstate resource agency, 
Indian tribe, or member of the public with which the applicant consulted 
in preparation of the Environmental Document.
    (H) Literature cited. Cite all materials referenced including final 
study reports, journal articles, other books, agency plans, and local 
government plans.
    (iii) The applicant must also provide in the Environmental Document:
    (A) Functional design drawings of any fish passage and collection 
facilities or any other facilities necessary for implementation of 
environmental measures, indicating whether the facilities depicted are 
existing or proposed (these drawings must conform to the specifications 
of Sec. 4.39 of this chapter regarding dimensions of full-sized prints, 
scale, and legibility);
    (B) A description of operation and maintenance procedures for any 
existing or proposed measures or facilities;
    (C) An implementation or construction schedule for any proposed 
measures or facilities, showing the intervals following issuance of a 
license when implementation of the measures or construction of the 
facilities would be commenced and completed;
    (D) An estimate of the costs of construction, operation, and 
maintenance, of any proposed facilities, and of implementation of any 
proposed environmental measures.
    (E) A map or drawing that conforms to the size, scale, and 
legibility requirements of Sec. 4.39 of this chapter showing by the use 
of shading, cross-hatching, or other symbols the identity and location 
of any measures or facilities, and indicating whether each measure or 
facility is existing or proposed (the map or drawings in this exhibit 
may be consolidated).
    (c) Exhibit H. The information required to be provided by this 
paragraph (c) must be included in the application as a separate exhibit 
labeled ``Exhibit H.''
    (1) Information to be provided by an applicant for new license: 
Filing requirements--(i) Information to be supplied by all applicants. 
All Applicants for a new license under this part must file the following 
information with the Commission:
    (A) A discussion of the plans and ability of the applicant to 
operate and maintain the project in a manner most likely to provide 
efficient and reliable electric service, including efforts and plans to:
    (1) Increase capacity or generation at the project;
    (2) Coordinate the operation of the project with any upstream or 
downstream water resource projects; and
    (3) Coordinate the operation of the project with the applicant's or 
other electrical systems to minimize the cost of production.
    (B) A discussion of the need of the applicant over the short and 
long term for the electricity generated by the project, including:
    (1) The reasonable costs and reasonable availability of alternative 
sources of power that would be needed by the applicant or its customers, 
including wholesale customers, if the applicant is not granted a license 
for the project;
    (2) A discussion of the increase in fuel, capital, and any other 
costs that would be incurred by the applicant or its customers to 
purchase or generate power necessary to replace the output of the 
licensed project, if the applicant is not granted a license for the 
project;
    (3) The effect of each alternative source of power on:

[[Page 162]]

    (i) The applicant's customers, including wholesale customers;
    (ii) The applicant's operating and load characteristics; and
    (iii) The communities served or to be served, including any 
reallocation of costs associated with the transfer of a license from the 
existing licensee.
    (C) The following data showing need and the reasonable cost and 
availability of alternative sources of power:
    (1) The average annual cost of the power produced by the project, 
including the basis for that calculation;
    (2) The projected resources required by the applicant to meet the 
applicant's capacity and energy requirements over the short and long 
term including:
    (i) Energy and capacity resources, including the contributions from 
the applicant's generation, purchases, and load modification measures 
(such as conservation, if considered as a resource), as separate 
components of the total resources required;
    (ii) A resource analysis, including a statement of system reserve 
margins to be maintained for energy and capacity; and
    (iii) If load management measures are not viewed as resources, the 
effects of such measures on the projected capacity and energy 
requirements indicated separately;
    (iv) For alternative sources of power, including generation of 
additional power at existing facilities, restarting deactivated units, 
the purchase of power off-system, the construction or purchase and 
operation of a new power plant, and load management measures such as 
conservation: The total annual cost of each alternative source of power 
to replace project power; the basis for the determination of projected 
annual cost; and a discussion of the relative merits of each 
alternative, including the issues of the period of availability and 
dependability of purchased power, average life of alternatives, relative 
equivalent availability of generating alternatives, and relative impacts 
on the applicant's power system reliability and other system operating 
characteristics; and the effect on the direct providers (and their 
immediate customers) of alternate sources of power.
    (D) If an applicant uses power for its own industrial facility and 
related operations, the effect of obtaining or losing electricity from 
the project on the operation and efficiency of such facility or related 
operations, its workers, and the related community.
    (E) If an applicant is an Indian tribe applying for a license for a 
project located on the tribal reservation, a statement of the need of 
such Indian tribe for electricity generated by the project to foster the 
purposes of the reservation.
    (F) A comparison of the impact on the operations and planning of the 
applicant's transmission system of receiving or not receiving the 
project license, including:
    (1) An analysis of the effects of any resulting redistribution of 
power flows on line loading (with respect to applicable thermal, 
voltage, or stability limits), line losses, and necessary new 
construction of transmission facilities or upgrading of existing 
facilities, together with the cost impact of these effects;
    (2) An analysis of the advantages that the applicant's transmission 
system would provide in the distribution of the project's power; and
    (3) Detailed single-line diagrams, including existing system 
facilities identified by name and circuit number, that show system 
transmission elements in relation to the project and other principal 
interconnected system elements. Power flow and loss data that represent 
system operating conditions may be appended if applicants believe such 
data would be useful to show that the operating impacts described would 
be beneficial.
    (G) If the applicant has plans to modify existing project facilities 
or operations, a statement of the need for, or usefulness of, the 
modifications, including at least a reconnaissance-level study of the 
effect and projected costs of the proposed plans and any alternate 
plans, which in conjunction with other developments in the area would 
conform with a comprehensive plan for improving or developing the 
waterway and for other beneficial public uses as defined in Section 
10(a)(1) of the Federal Power Act.

[[Page 163]]

    (H) If the applicant has no plans to modify existing project 
facilities or operations, at least a reconnaissance-level study to show 
that the project facilities or operations in conjunction with other 
developments in the area would conform with a comprehensive plan for 
improving or developing the waterway and for other beneficial public 
uses as defined in Section 10(a)(1) of the Federal Power Act.
    (I) A statement describing the applicant's financial and personnel 
resources to meet its obligations under a new license, including 
specific information to demonstrate that the applicant's personnel are 
adequate in number and training to operate and maintain the project in 
accordance with the provisions of the license.
    (J) If an applicant proposes to expand the project to encompass 
additional lands, a statement that the applicant has notified, by 
certified mail, property owners on the additional lands to be 
encompassed by the project and governmental agencies and subdivisions 
likely to be interested in or affected by the proposed expansion.
    (K) The applicant's electricity consumption efficiency improvement 
program, as defined under Section 10(a)(2)(C) of the Federal Power Act, 
including:
    (1) A statement of the applicant's record of encouraging or 
assisting its customers to conserve electricity and a description of its 
plans and capabilities for promoting electricity conservation by its 
customers; and
    (2) A statement describing the compliance of the applicant's energy 
conservation programs with any applicable regulatory requirements.
    (L) The names and mailing addresses of every Indian tribe with land 
on which any part of the proposed project would be located or which the 
applicant reasonably believes would otherwise be affected by the 
proposed project.
    (ii) Information to be provided by an applicant licensee. An 
existing licensee that applies for a new license must provide:
    (A) The information specified in paragraph (c)(1) of this section.
    (B) A statement of measures taken or planned by the licensee to 
ensure safe management, operation, and maintenance of the project, 
including:
    (1) A description of existing and planned operation of the project 
during flood conditions;
    (2) A discussion of any warning devices used to ensure downstream 
public safety;
    (3) A discussion of any proposed changes to the operation of the 
project or downstream development that might affect the existing 
Emergency Action Plan, as described in subpart C of part 12 of this 
chapter, on file with the Commission;
    (4) A description of existing and planned monitoring devices to 
detect structural movement or stress, seepage, uplift, equipment 
failure, or water conduit failure, including a description of the 
maintenance and monitoring programs used or planned in conjunction with 
the devices; and
    (5) A discussion of the project's employee safety and public safety 
record, including the number of lost-time accidents involving employees 
and the record of injury or death to the public within the project 
boundary.
    (C) A description of the current operation of the project, including 
any constraints that might affect the manner in which the project is 
operated.
    (D) A discussion of the history of the project and record of 
programs to upgrade the operation and maintenance of the project.
    (E) A summary of any generation lost at the project over the last 
five years because of unscheduled outages, including the cause, 
duration, and corrective action taken.
    (F) A discussion of the licensee's record of compliance with the 
terms and conditions of the existing license, including a list of all 
incidents of noncompliance, their disposition, and any documentation 
relating to each incident.
    (G) A discussion of any actions taken by the existing licensee 
related to the project which affect the public.
    (H) A summary of the ownership and operating expenses that would be 
reduced if the project license were transferred from the existing 
licensee.
    (I) A statement of annual fees paid under part I of the Federal 
Power Act for the use of any Federal or Indian

[[Page 164]]

lands included within the project boundary.
    (iii) Information to be provided by an applicant who is not an 
existing licensee. An applicant that is not an existing licensee must 
provide:
    (A) The information specified in paragraph (c)(1) of this section.
    (B) A statement of the applicant's plans to manage, operate, and 
maintain the project safely, including:
    (1) A description of the differences between the operation and 
maintenance procedures planned by the applicant and the operation and 
maintenance procedures of the existing licensee;
    (2) A discussion of any measures proposed by the applicant to 
implement the existing licensee's Emergency Action Plan, as described in 
subpart C of part 12 of this chapter, and any proposed changes;
    (3) A description of the applicant's plans to continue safety 
monitoring of existing project instrumentation and any proposed changes; 
and
    (4) A statement indicating whether or not the applicant is 
requesting the licensee to provide transmission services under section 
15(d) of the Federal Power Act.
    (d) Consistency with comprehensive plans. An application for license 
under this part must include an explanation of why the project would, 
would not, or should not, comply with any relevant comprehensive plan as 
defined in Sec. 2.19 of this chapter and a description of any relevant 
resource agency or Indian tribe determination regarding the consistency 
of the project with any such comprehensive plan.
    (e) Response to information requests. An application for license 
under this Section must respond to any requests for additional 
information-gathering or studies filed with comments on its preliminary 
licensing proposal or draft license application. If the license 
applicant agrees to do the information-gathering or study, it must 
provide the information or include a plan and schedule for doing so, 
along with a schedule for completing any remaining work under the 
previously approved study plan, as it may have been amended. If the 
applicant does not agree to any additional information-gathering or 
study requests made in comments on the draft license application, it 
must explain the basis for declining to do so.
    (f) Maps and drawings. All required maps and drawings must conform 
to the specifications of Sec. 4.39 of this chapter.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61742, Oct. 30, 2003; 68 
FR 69957, Dec. 16, 2003; Order 699, 72 FR 45324, Aug. 14, 2007; Order 
756, 77 FR 4894, Feb. 1, 2012]



Sec. 5.19  Tendering notice and schedule.

    (a) Notice. Within 14 days of the filing date of any application for 
a license developed pursuant to this part, the Commission will issue 
public notice of the tendering for filing of the application. The 
tendering notice will include a preliminary schedule for expeditious 
processing of the application, including dates for:
    (1) Issuance of the acceptance for filing and ready for 
environmental analysis notice provided for in Sec. 5.22.
    (2) Filing of recommendations, preliminary terms and conditions, and 
fishway prescriptions;
    (3) Issuance of a draft environmental assessment or environmental 
impact statement, or an environmental assessment not preceded by a 
draft.
    (4) Filing of comments on the draft environmental assessment or 
environmental impact statement, as applicable;
    (5) Filing of modified recommendations, mandatory terms and 
conditions, and fishway prescriptions in response to a draft NEPA 
document or Environmental Analysis, if no draft NEPA document is issued;
    (6) Issuance of a final NEPA document, if any;
    (7) In the case of a new or subsequent license application, a 
deadline for submission of final amendments, if any, to the application; 
and
    (8) Readiness of the application for Commission decision.
    (b) Modifications to process plan and schedule. The tendering notice 
shall also include any known modifications to the schedules developed 
pursuant to Sec. 5.8 for completion of consultation under section 7 of 
the Endangered Species Act and water quality certification under section 
401 of the Clean Water Act.

[[Page 165]]

    (c) Method of notice. The public notice provided for in paragraphs 
(a) and (b) of this Section will be given by:
    (1) Publishing notice in the Federal Register; and
    (2) Notifying appropriate Federal, state, and interstate resource 
agencies, state water quality and coastal zone management plan 
consistency certification agencies, Indian tribes, and non-governmental 
organizations, by electronic means if practical, otherwise by mail.
    (d) Resolution of pending information requests. Within 30 days of 
the filing date of any application for a license developed pursuant to 
this part, the Director of the Office of Energy Projects will issue an 
order resolving any requests for additional information-gathering or 
studies made in comments on the preliminary licensing proposal or draft 
license application.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61742, Oct. 30, 2003; 68 
FR 69957, Dec. 16, 2003; Order 653, 70 FR 8724, Feb. 23, 2005]



Sec. 5.20  Deficient applications.

    (a) Deficient applications. (1) If an applicant believes that its 
application conforms adequately to the pre-filing consultation and 
filing requirements of this part without containing certain required 
materials or information, it must explain in detail why the material or 
information is not being submitted and what steps were taken by the 
applicant to provide the material or information.
    (2) Within 30 days of the filing date of any application for a 
license under this part, the Director of the Office of Energy Projects 
will notify the applicant if, in the Director's judgment, the 
application does not conform to the prefiling consultation and filing 
requirements of this part, and is therefore considered deficient. An 
applicant having a deficient application will be afforded additional 
time to correct the deficiencies, not to exceed 90 days from the date of 
notification. Notification will be by letter or, in the case of minor 
deficiencies, by telephone. Any notification will specify the 
deficiencies to be corrected. Deficiencies must be corrected by 
submitting an a filing pursuant to the requirements of subpart T of part 
385 of this chapter within the time specified in the notification of 
deficiency.
    (3) If the revised application is found not to conform to the 
prefiling consultation and filing requirements of this part, or if the 
revisions are not timely submitted, the revised application will be 
rejected. Procedures for rejected applications are specified in 
paragraph (b)(3) of this section.
    (b) Patently deficient applications. (1) If, within 30 days of its 
filing date, the Director of the Office of Energy Projects determines 
that an application patently fails to substantially comply with the 
prefiling consultation and filing requirements of this part, or is for a 
project that is precluded by law, the application will be rejected as 
patently deficient with the specification of the deficiencies that 
render the application patently deficient.
    (2) If, after 30 days following its filing date, the Director of the 
Office of Energy Projects determines that an application patently fails 
to comply with the prefiling consultation and filing requirements of 
this part, or is for a project that is precluded by law:
    (i) The application will be rejected by order of the Commission, if 
the Commission determines that it is patently deficient; or
    (ii) The application will be considered deficient under paragraph 
(a)(2) of this Section, if the Commission determines that it is not 
patently deficient.
    (3) Any application for an original license that is rejected may be 
submitted if the deficiencies are corrected and if, in the case of a 
competing application, the resubmittal is timely. The date the rejected 
application is resubmitted will be considered the new filing date for 
purposes of determining its timeliness under Sec. 4.36 of this chapter 
and the disposition of competing applications under Sec. 4.37 of this 
chapter.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61743, Oct. 30, 2003]



Sec. 5.21  Additional information.

    An applicant may be required to submit any additional information or 
documents that the Commission considers relevant for an informed 
decision on the application. The information or documents must take the 
form, and must be submitted within the time,

[[Page 166]]

that the Commission prescribes. An applicant may also be required to 
provide within a specified time additional copies of the complete 
application, or any of the additional information or documents that are 
filed, to the Commission or to any person, agency, Indian tribe or other 
entity that the Commission specifies. If an applicant fails to provide 
timely additional information, documents, or copies of submitted 
materials as required, the Commission may dismiss the application, hold 
it in abeyance, or take other appropriate action under this chapter or 
the Federal Power Act.



Sec. 5.22  Notice of acceptance and ready for environmental analysis.

    (a) When the Commission has determined that the application meets 
the Commission's requirements as specified in Sec. Sec. 5.18 and 5.19, 
the approved studies have been completed, any deficiencies in the 
application have been cured, and no other additional information is 
needed, it will issue public notice as required in the Federal Power 
Act:
    (1) Accepting the application for filing and specifying the date 
upon which the application was accepted for filing (which will be the 
application filing date if the Secretary receives all of the information 
and documents necessary to conform to the requirements of Sec. Sec. 5.1 
through 5.21, as applicable, within the time frame prescribed in Sec. 
5.20 or Sec. 5.21);
    (2) Finding that the application is ready for environmental 
analysis;
    (3) Requesting comments, protests, and interventions;
    (4) Requesting recommendations, preliminary terms and conditions, 
and preliminary fishway prescriptions, including all supporting 
documentation; and
    (5) Establishing the date for final amendments to applications for 
new or subsequent licenses; and
    (6) Updating the schedule issued with the tendering notice for 
processing the application.
    (b) If the project affects lands of the United States, the 
Commission will notify the appropriate Federal office of the application 
and the specific lands affected, pursuant to Section 24 of the Federal 
Power Act.
    (c) For an application for a license seeking benefits under Section 
210 of the Public Utility Regulatory Polices Act of 1978, as amended, 
for a project that would be located at a new dam or diversion, the 
Applicant must serve the public notice issued under paragraph (a)(1) of 
this Section to interested agencies at the time the applicant is 
notified that the application is accepted for filing.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61743, Oct. 30, 2003]



Sec. 5.23  Response to notice.

    (a) Comments and reply comments. Comments, protests, interventions, 
recommendations, and preliminary terms and conditions or preliminary 
fishway prescriptions must be filed no later than 60 days after the 
notice of acceptance and ready for environmental analysis. All reply 
comments must be filed within 105 days of that notice.
    (b) Water quality certification. (1) With regard to certification 
requirements for a license applicant under Section 401(a)(1) of the 
Federal Water Pollution Control Act (Clean Water Act), the license 
applicant must file no later than 60 days following the date of issuance 
of the notice of acceptance and ready for environmental analysis provide 
for in Sec. 5.22:
    (i) A copy of the water quality certification;
    (ii) A copy of the request for certification, including proof of the 
date on which the certifying agency received the request; or
    (iii) Evidence of waiver of water quality certification as described 
in paragraph (b)(5)(2) of this Section.
    (2) A certifying agency is deemed to have waived the certification 
requirements of section 401(a)(1) of the Clean Water Act if the 
certifying agency has not denied or granted certification by one year 
after the date the certifying agency received a written request for 
certification. If a certifying agency denies certification, the 
applicant must file a copy of the denial within 30 days after the 
applicant received it.
    (3) Notwithstanding any other provision in 18 CFR part 4, subpart B, 
any application to amend an existing license, and any application to 
amend a

[[Page 167]]

pending application for a license, requires a new request for water 
quality certification pursuant to Sec. 4.34(b)(5) of this chapter if 
the amendment would have a material adverse impact on the water quality 
in the discharge from the project or proposed project.



Sec. 5.24  Applications not requiring a draft NEPA document.

    (a) If the Commission determines that a license application will be 
processed with an environmental assessment rather than an environmental 
impact statement and that a draft environmental assessment will not be 
required, the Commission will issue the environmental assessment for 
comment no later than 120 days from the date responses are due to the 
notice of acceptance and ready for environmental analysis.
    (b) Each environmental assessment issued pursuant to this paragraph 
must include draft license articles, a preliminary determination of 
consistency of each fish and wildlife agency recommendation made 
pursuant to Federal Power Act section 10(j) with the purposes and 
requirements of the Federal Power Act and other applicable law, as 
provided for in Sec. 5.26, and any preliminary mandatory terms and 
conditions and fishway prescriptions.
    (c) Comments on an environmental assessment issued pursuant to 
paragraph (a) of this section, including comments in response to the 
Commission's preliminary determination with respect to fish and wildlife 
agency recommendations and on preliminary mandatory terms and conditions 
or fishway prescriptions, must be filed no later than 30 or 45 days 
after issuance of the environmental assessment, as specified in the 
notice accompanying issuance of the environmental assessment, as should 
any revisions to supporting documentation.
    (d) Modified mandatory prescriptions or terms and conditions must be 
filed no later than 60 days following the date for filing of comments 
provided for in paragraph (c) of this section, as specified in the 
notice accompanying issuance of the environmental analysis.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61743, Oct. 30, 2003]



Sec. 5.25  Applications requiring a draft NEPA document.

    (a) If the Commission determines that a license application will be 
processed with an environmental impact statement, or a draft and final 
environmental assessment, the Commission will issue the draft 
environmental impact statement or environmental assessment for comment 
no later than 180 days from the date responses are due to the notice of 
acceptance and ready for environmental analysis provided for in Sec. 
5.22.
    (b) Each draft environmental document will include for comment draft 
license articles, a preliminary determination of the consistency of each 
fish and wildlife agency recommendation made pursuant to section 10(j) 
of the Federal Power Act with the purposes and requirements of the 
Federal Power Act and other applicable law, as provided for in Sec. 
5.26, and any preliminary mandatory terms and conditions and fishways 
prescriptions.
    (c) Comments on a draft environmental document issued pursuant to 
paragraph (b) of this section, including comments in response to the 
Commission's preliminary determination with respect to fish and wildlife 
agency recommendations and on preliminary mandatory terms and conditions 
or prescriptions must be filed no later than 30 or 60 days after 
issuance of the draft environmental document, as specified in the notice 
accompanying issuance of the draft environmental document.
    (d) Modified mandatory prescriptions or terms and conditions must be 
filed no later than 60 days following the date for filing of comments 
provided for in paragraph (c) of this section.
    (e) The Commission will issue a final environmental document within 
90 days following the date for filing of modified mandatory 
prescriptions or terms and conditions.



Sec. 5.26  Section 10(j) process.

    (a) In connection with its environmental review of an application 
for license, the Commission will analyze all terms and conditions timely 
recommended by fish and wildlife agencies

[[Page 168]]

pursuant to the Fish and Wildlife Coordination Act for the protection, 
mitigation of damages to, and enhancement of fish and wildlife 
(including related spawning grounds and habitat) affected by the 
development, operation, and management of the proposed project. 
Submission of such recommendations marks the beginning of the process 
under section 10(j) of the Federal Power Act.
    (b) The agency must specifically identify and explain the 
recommendations and the relevant resource goals and objectives and their 
evidentiary or legal basis. The Commission may seek clarification of any 
recommendation from the appropriate fish and wildlife agency. If the 
Commission's request for clarification is communicated in writing, 
copies of the request will be sent by the Commission to all parties, 
affected resource agencies, and Indian tribes, which may file a response 
to the request for clarification within the time period specified by the 
Commission. If the Commission believes any fish and wildlife 
recommendation may be inconsistent with the Federal Power Act or other 
applicable law, the Commission will make a preliminary determination of 
inconsistency in the draft environmental document or, if none, the 
environmental assessment. The preliminary determination, for any 
recommendations believed to be inconsistent, shall include an 
explanation why the Commission believes the recommendation is 
inconsistent with the Federal Power Act or other applicable law, 
including any supporting analysis and conclusions and an explanation of 
how the measures recommended in the environmental document would 
adequately and equitably protect, mitigate damages to, and enhance, fish 
and wildlife (including related spawning grounds and habitat) affected 
by the development, operation, and management of the project.
    (c) Any party, affected resource agency, or Indian tribe may file 
comments in response to the preliminary determination of inconsistency, 
including any modified recommendations, within the time frame allotted 
for comments on the draft environmental document or, if none, the time 
frame for comments on the environmental assessment. In this filing, the 
fish and wildlife agency concerned may also request a meeting, telephone 
or video conference, or other additional procedure to attempt to resolve 
any preliminary determination of inconsistency.
    (d) The Commission shall attempt, with the agencies, to reach a 
mutually acceptable resolution of any such inconsistency, giving due 
weight to the recommendations, expertise, and statutory responsibilities 
of the fish and wildlife agency. If the Commission decides, or an 
affected resource agency requests, the Commission will conduct a 
meeting, telephone or video conference, or other procedures to address 
issues raised by its preliminary determination of inconsistency and 
comments thereon. The Commission will give at least 15 days' advance 
notice to each party, affected resource agency, or Indian tribe, which 
may participate in the meeting or conference. Any meeting, conference, 
or additional procedure to address these issues will be scheduled to 
take place within 90 days of the date the Commission issues a 
preliminary determination of inconsistency. The Commission will prepare 
a written summary of any meeting held under this paragraph to discuss 
section 10(j) issues, including any proposed resolutions and supporting 
analysis, and a copy of the summary will be sent to all parties, 
affected resource agencies, and Indian tribes.
    (e) The section 10(j) process ends when the Commission issues an 
order granting or denying the license application in question. If, after 
attempting to resolve inconsistencies between the fish and wildlife 
recommendations of a fish and wildlife agency and the purposes and 
requirements of the Federal Power Act or other applicable law, the 
Commission does not adopt in whole or in part a fish and wildlife 
recommendation of a fish and wildlife agency, the Commission will 
publish the findings and statements required by section 10(j)(2) of the 
Federal Power Act.



Sec. 5.27  Amendment of application.

    (a) Procedures. If an Applicant files an amendment to its 
application that would materially change the project's

[[Page 169]]

proposed plans of development, as provided in Sec. 4.35 of this 
chapter, an agency, Indian tribe, or member of the public may modify the 
recommendations or terms and conditions or prescriptions it previously 
submitted to the Commission pursuant to Sec. Sec. 5.20-5.26. Such 
modified recommendations, terms and conditions, or prescriptions must be 
filed no later than the due date specified by the Commission for 
comments on the amendment.
    (b) Date of acceptance. The date of acceptance of an amendment of 
application for an original license filed under this part is governed by 
the provisions of Sec. 4.35 of this chapter.
    (c) New and subsequent licenses. The requirements of Sec. 4.35 of 
this chapter do not apply to an application for a new or subsequent 
license, except that the Commission will reissue a public notice of the 
application in accordance with the provisions of Sec. 4.32(d)(2) of 
this chapter if a material amendment, as that term is used in Sec. 
4.35(f) of this chapter, is filed.
    (d) Deadline. All amendments to an application for a new or 
subsequent license, including the final amendment, must be filed with 
the Commission and served on all competing applicants no later than the 
date specified in the notice issued under Sec. 5.22.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61743, Oct. 30, 2003]



Sec. 5.28  Competing applications.

    (a) Site access for a competing applicant. The provisions of Sec. 
16.5 of this chapter shall govern site access for a potential license 
application to be filed in competition with an application for a new or 
subsequent license by an existing licensee pursuant to this part, except 
that references in Sec. 16.5 to the pre-filing consultation provisions 
in parts 4 and 16 of this chapter shall be construed in a manner 
compatible with the effective administration of this part.
    (b) Competing applications. The provisions of Sec. 4.36 of this 
chapter shall apply to competing applications for original, new, or 
subsequent licenses filed under this part.
    (c) New or subsequent license applications--final amendments; better 
adapted statement. Where two or more mutually exclusive competing 
applications for new or subsequent license have been filed for the same 
project, the final amendment date and deadlines for complying with 
provisions of Sec. 4.36(d)(2) (ii) and (iii) of this chapter 
established pursuant to the notice issued under Sec. 5.22 will be the 
same for all such applications.
    (d) Rules of preference among competing applicants. The Commission 
will select among competing applications according to the provisions of 
Sec. 4.37 of this chapter.

[Order 2002, 68 FR 51121, Aug. 25, 2003; 68 FR 61743, Oct. 30, 2003]



Sec. 5.29  Other provisions.

    (a) Filing requirement. Unless otherwise provided by statute, 
regulation or order, all filings in hydropower hearings, except those 
conducted by trial-type procedures, must conform to the requirements of 
18 CFR part 385, subpart T of this chapter.
    (b) Waiver of compliance with consultation requirements. (1) If an 
agency, Indian tribe, or member of the public waives in writing 
compliance with any consultation requirement of this part, an applicant 
does not have to comply with the requirement as to that agency, Indian 
tribe, or member of the public.
    (2) If an agency, Indian tribe, member of the public fails to timely 
comply with a provision regarding a requirement of this section, an 
applicant may proceed to the next sequential requirement of this section 
without waiting for the agency, Indian tribe, or member of the public.
    (c) Requests for privileged treatment of pre-filing submission. If a 
potential Applicant requests privileged treatment of any information 
submitted to the Commission during pre-filing consultation (except for 
the information specified in Sec. 5.4), the Commission will treat the 
request in accordance with the provisions in Sec. 388.112 of this 
chapter until the date the application is filed with the Commission.
    (d) Conditional applications. Any application, the effectiveness of 
which is conditioned upon the future occurrence of any event or 
circumstance, will be rejected.

[[Page 170]]

    (e) Trial-type hearing. The Commission may order a trial-type 
hearing on an application for a license under this part either upon its 
own motion or the motion of any interested party of record. Any trial-
type hearing will be limited to the issues prescribed by order of the 
Commission. In all other cases, the hearings will be conducted by notice 
and comment procedures.
    (f) Notice and comment hearings. (1) All comments and reply comments 
and all other filings described in this part must be served on all 
persons on the service list prepared by the Commission, in accordance 
with the requirements of Sec. 385.2010 of this chapter. If a party 
submits any written material to the Commission relating to the merits of 
an issue that may affect the responsibility of particular resource 
agency, the party must also serve a copy of the submission on that 
resource agency.
    (2) The Director of Energy Projects may waive or modify any of the 
provisions of this part for good cause. A commenter or reply commenter 
may obtain an extension of time from the Commission only upon a showing 
of good cause or extraordinary circumstances in accordance with Sec. 
385.2008 of this chapter.
    (3) Late-filed recommendations by fish and wildlife agencies 
pursuant to the Fish and Wildlife Coordination Act and section 10(j) of 
the Federal Power Act for the protection, mitigation of damages to, and 
enhancement of fish and wildlife affected by the development, operation, 
and management of the proposed project and late-filed terms and 
conditions or prescriptions filed pursuant to sections 4(e) and 18 of 
the Federal Power Act, respectively, will be considered by Commission 
under section 10(a) of the Federal Power Act if such consideration would 
not delay or disrupt the proceeding.
    (g) Settlement negotiations. (1) The Commission will consider, on a 
case-by-case basis, requests for a short suspension of the procedural 
schedule for the purpose of participants conducting settlement 
negotiations, where it determines that the suspension will not adversely 
affect timely action on a license application. In acting on such 
requests, the Commission will consider, among other things:
    (i) Whether requests for suspension of the procedural schedule have 
previously been made or granted;
    (ii) Whether the request is supported by a consensus of participants 
in the proceeding and an explanation of objections to the request 
expressed by any participant;
    (iii) The likelihood that a settlement agreement will be filed 
within the requested suspension period; and
    (iv) Whether the requested suspension is likely to cause any new or 
subsequent license to be issued after the expiration of the existing 
license.
    (2) The Commission reserves the right to terminate any suspension of 
the procedural schedule if it concludes that insufficient progress is 
being made toward the filing of a settlement agreement.
    (h) License conditions and required findings. (1) All licenses shall 
be issued on the conditions specified in Section 10 of the Federal Power 
Act and such other conditions as the Commission determines are lawful 
and in the public interest.
    (2) Subject to paragraph (f)(3) of this section, fish and wildlife 
conditions shall be based on recommendations timely received from the 
fish and wildlife agencies pursuant to the Fish and Wildlife 
Coordination Act.
    (3) The Commission will consider the timely recommendations of 
resource agencies, other governmental units, and members of the public, 
and the timely recommendations (including fish and wildlife 
recommendations) of Indian tribes affected by the project.
    (4) Licenses for a project located within any Federal reservation 
shall be issued only after the findings required by, and subject to any 
conditions that may be timely filed pursuant to section 4(e) of the 
Federal Power Act.
    (5) The Commission will require the construction, maintenance, and 
operation of such fishways as may be timely prescribed by the Secretary 
of Commerce or the Secretary of the Interior, as appropriate, pursuant 
to section 18 of the Federal Power Act.
    (i) Standards and factors for issuing a new license. (1) In 
determining whether a final proposal for a new license under section 15 
of the Federal Power Act is

[[Page 171]]

best adapted to serve the public interest, the Commission will consider 
the factors enumerated in sections 15(a)(2) and (a)(3) of the Federal 
Power Act.
    (2) If there are only insignificant differences between the final 
applications of an existing licensee and a competing Applicant after 
consideration of the factors enumerated in section 15(a)(2) of the 
Federal Power Act, the Commission will determine which Applicant will 
receive the license after considering:
    (i) The existing licensee's record of compliance with the terms and 
conditions of the existing license; and
    (ii) The actions taken by the existing licensee related to the 
project which affect the public.
    (iii) An existing licensee that files an application for a new 
license in conjunction with an entity or entities that are not currently 
licensees of all or part of the project will not be considered an 
existing licensee for the purpose of the insignificant differences 
provision of section 15(a)(2) of the Federal Power Act.
    (j) Fees under section 30(e) of the Federal Power Act. The 
requirements of 18 CFR part 4, subpart M, of this chapter, fees under 
section 30(e) of the Federal Power Act, apply to license applications 
developed under this part.



Sec. 5.30  Critical energy infrastructure information.

    If any action required by this part requires a potential Applicant 
or Applicant to reveal Critical Energy Infrastructure Information, as 
defined by Sec. 388.113(c) of this chapter, to the public, the 
Applicant must follow the procedures set out in Sec. 4.32(k) of this 
chapter.



Sec. 5.31  Transition provision.

    This part shall apply to license applications for which the deadline 
for filing a notification of intent to seek a new or subsequent license, 
or for filing a notification of intent to file an original license 
application, as required by Sec. 5.5 of this part, is July 23, 2005 or 
later.



PART 6_SURRENDER OR TERMINATION OF LICENSE--Table of Contents



Sec.
6.1 Application for surrender.
6.2 Surrender of license.
6.3 Termination of license.
6.4 Termination by implied surrender.
6.5 Annual charges.

    Authority: Secs. 6, 10(i), 13, 41 Stat. 1067, 1068, 1071, as 
amended, sec. 309, 49 Stat. 858; 16 U.S.C. 799, 803(i), 806, 825h; Pub. 
L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.), unless otherwise 
noted.



Sec. 6.1  Application for surrender.

    Every application for surrender of a license shall state the reason 
therefor; and, except in the case of an application for surrender of a 
license for a minor project, or for a transmission line only, shall be 
executed by the licensee and filed in the same form and manner as the 
application for license, and shall be accompanied by the license and all 
amendments thereof. Public notice of such application shall be given at 
least 30 days prior to action upon the application.

(Secs. 308 and 309; 49 Stat. 858, 859 (16 U.S.C. 825g, 825h))

[Order No. 570, 42 FR 40191, Aug. 9, 1977]

    Cross References: For application for license, general provisions, 
see Sec. Sec. 4.30 to 4.33, inclusive, of this chapter. For application 
for license for proposed major project or minor part thereof, see 
Sec. Sec. 4.40 to 4.41, inclusive, of this chapter. For application for 
license for constructed major project or minor part thereof, see 
Sec. Sec. 4.50 and 4.51 of this chapter.



Sec. 6.2  Surrender of license.

    Licenses may be surrendered only upon the fulfillment by the 
licensee of such obligations under the license as the Commission may 
prescribe, and, if the project works authorized under the license have 
been constructed in whole or in part, upon such conditions with respect 
to the disposition of such works as may be determined by the Commission. 
Where project works have been constructed on lands of the United States 
the licensee will be required to restore the lands to a condition 
satisfactory to the Department having supervision over such lands and 
annual charges will continue until such

[[Page 172]]

restoration has been satisfactorily completed.

[Order 175, 19 FR 5217, Aug. 18, 1954]



Sec. 6.3  Termination of license.

    Licenses may be terminated by written order of the Commission not 
less than 90 days after notice thereof shall have been mailed to the 
licensee by certified mail to the last address whereof the Commission 
has been notified by the licensee, if there is failure to commence 
actual construction of the project works within the time prescribed in 
the license, or as extended by the Commission. Upon like notice, the 
authority granted under a license with respect to any separable part of 
the project works may be terminated if there is failure to begin 
construction of such separable part within the time prescribed or as 
extended by the Commission.

(Administrative Procedure Act, 5 U.S.C. 551-557 (1976); Federal Power 
Act, as amended, 16 U.S.C. 291-628 (1976 & Supp. V 1981), Dept. of 
Energy Organization Act 42 U.S.C. 7101-7352 (Supp. V 1981); E.O. 12009, 
3 CFR 142 (1978))

[Order 141, 12 FR 8491, Dec. 19, 1947, as amended by Order 344, 48 FR 
49010, Oct. 24, 1983]



Sec. 6.4  Termination by implied surrender.

    If any licensee holding a license subject to the provisions of 
section 10(i) of the Act shall cause or suffer essential project 
property to be removed or destroyed, or become unfit for use, without 
replacement, or shall abandon, or shall discontinue good faith operation 
of the project for a period of three years, the Commission will deem it 
to be the intent of the licensee to surrender the license; and not less 
than 90 days after public notice may in its discretion terminate the 
license.

[Order 141, 12 FR 8491, Dec. 19, 1947]



Sec. 6.5  Annual charges.

    Annual charges arising under a license surrendered or terminated 
shall continue until the effective date set forth in the Commission's 
order with respect to such surrender or termination.

[Order 175, 19 FR 5217, Aug. 18, 1954]

    Cross Reference: For annual charges, see part 11 of this chapter.



PART 8_RECREATIONAL OPPORTUNITIES AND DEVELOPMENT AT LICENSED PROJECTS--Table 

of Contents



Sec.
8.1 Publication of license conditions relating to recreation.
8.2 Posting of project lands as to recreational use and availability of 
          information.
8.3 Discrimination prohibited.
8.11 Information respecting use and development of public recreational 
          opportunities.

    Authority: 5 U.S.C. 551-557; 16 U.S.C. 791a-825r; 42 U.S.C. 7101-
7352.



Sec. 8.1  Publication of license conditions relating to recreation.

    Following the issuance or amendment of a license, the licensee shall 
make reasonable efforts to keep the public informed of the availability 
of project lands and waters for recreational purposes, and of the 
license conditions of interest to persons who may be interested in the 
recreational aspects of the project or who may wish to acquire lands in 
its vicinity. Such efforts shall include but not be limited to: the 
publication of notice in a local newspaper once each week for 4 weeks of 
the project's license conditions which relate to public access to and 
the use of the project waters and lands for recreational purposes, 
recreational plans, installation of recreation and fish and wildlife 
facilities, reservoir water surface elevations, minimum water releases 
or rates of change of water releases and such other conditions of 
general public interest as the Commission may designate in the order 
issuing or amending the license.

[Order 299, 30 FR 7313, June 3, 1965]



Sec. 8.2  Posting of project lands as to recreational use and availability of 

information.

    (a) Following the issuance or amendment of a license, the licensee 
shall post and shall maintain at all points of public access which are 
required by the license (or at such access points as are specifically 
designated for this purpose by the licensee) and at such other

[[Page 173]]

points as are subsequently prescribed by the Commission on its own 
motion or upon the recommendation of a public recreation agency 
operating in the area in which the project is located, a conspicuous 
sign giving the name of the project and the owner of the project, a 
statement that it is licensed by the Commission and the project number, 
directions to the areas of the project which are available for public 
recreation use, permissible times and activities, and other regulations 
regarding such use, and advising that further information may be 
obtained at local offices of the licensee in the vicinity of the 
project. In addition, the licensee shall post at such locations 
conspicuous notice that the recreation facilities are open to all 
members of the public without discrimination.
    (b) The licensee shall make available for inspection at its local 
offices in the vicinity of the project the recreation plan approved by 
the Commission and the entire license instrument, properly indexed for 
easy reference to the license conditions designated for publications in 
Sec. 8.1.

[Order 299, 30 FR 7313, June 3, 1965, as amended by Order 341, 32 FR 
6488, Apr. 27, 1967; 32 FR 11640, Aug. 11, 1967]



Sec. 8.3  Discrimination prohibited.

    Every licensee maintaining recreation facilities for the use of the 
public at a licensed project, or employing or permitting any other 
person to maintain such facilities, shall permit, or require such other 
person to permit, equal and unobstructed use of such facilities to all 
members of the public without regard to race, color, religious creed or 
national origin.

[Order 341, 32 FR 6488, Apr. 27, 1967]



Sec. 8.11  Information respecting use and development of public recreational 

opportunities.

    (a) Applicability. (1) Except as provided in paragraph (b) of this 
section, each licensee of a project under major or minor Commission 
license shall prepare with respect to each development within such 
project a FERC Form No. 80 and submit them to the Secretary of the 
Commission in accordance with filing procedures posted on the 
Commission's Web site at http://www.ferc.gov.
    (2) FERC Form No. 80 is due on April 1, 2009, for data compiled 
during the calendar year ending December 31, 2008. Thereafter, FERC Form 
No. 80 is due on April 1 of every sixth year for data compiled during 
the previous calendar year.
    (3) A copy of the Form No. 80 should be retained by the respondent 
licensee in its file.
    (b) Initial Form No. 80 filings. Each licensee of an unconstructed 
project shall file an initial Form No. 80 after such project has been in 
operation for a full calendar year prior to the filing deadline. Each 
licensee of an existing (constructed) project shall file an initial Form 
No. 80 after such project has been licensed for a full calendar year 
prior to the filing deadline.
    (c) Exemptions. A licensee who has filed a Form No. 80 may request 
an exemption from any further filing of the form for any development 
that has no existing or potential recreational use or only a minor 
existing or potential recreational use (as indicated by fewer than 100 
recreation days of use during the previous calendar year) by submitting 
a statement not later than 6 months prior to the due date for the next 
filing, stating that Form No. 80 has been filed previously for such 
development and setting out the basis for believing that the development 
has no existing or potential recreational use or a minor existing or 
potential recreational use.

(Approved by the Office of Management and Budget under control number 
1902-0106)

[46 FR 50059, Oct. 9, 1981, as amended by 49 FR 5073, Feb. 10, 1984; 
Order 419, 50 FR 20096, May 14, 1985; Order 540, 57 FR 21737, May 22, 
1992; Order 699, 72 FR 45324, Aug. 14, 2007; Order 737, 75 FR 43403, 
July 26, 2010]



PART 9_TRANSFER OF LICENSE OR LEASE OF PROJECT PROPERTY--Table of Contents



                   Application for Transfer of License

Sec.
9.1 Filing.
9.2 Contents of application.
9.3 Transfer.

                Application for Lease of Project Property

9.10 Filing.


[[Page 174]]


    Authority: Sec. 8, 41 Stat. 1068, sec. 309, 49 Stat. 858; 16 U.S.C. 
801, 825h; Pub. L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.)

    Cross Reference: For application for approval of transfer of 
license, see Sec. 131.20 of this chapter.

                   Application for Transfer of License



Sec. 9.1  Filing.

    Any licensee desiring to transfer a license or rights thereunder 
granted, and the person, association, corporation, State, or 
municipality desiring to acquire the same, shall jointly or severally 
file an application for approval of such transfer and acquisition. Such 
application shall be verified, shall conform to Sec. 131.20 of this 
chapter, and shall be filed in accordance with Sec. 4.32 of this 
chapter.

[Order 501, 39 FR 2267, Jan. 18, 1974, as amended by Order 2002, 68 FR 
51139, Aug. 25, 2003]



Sec. 9.2  Contents of application.

    Every application for approval of such transfer and acquisition by 
the proposed transferee shall set forth in appropriate detail the 
qualifications of the transferee to hold such license and to operate the 
property under license, which qualifications shall be the same as those 
required of applicants for license.

[Order 141, 12 FR 8491, Dec. 19, 1947]

    Cross References: For administrative rules relating to applicants 
for license, see part 385 of this chapter. For regulations as to 
licenses and permits, see part 4 of this chapter.



Sec. 9.3  Transfer.

    (a) Approval by the Commission of transfer of a license is 
contingent upon the transfer of title to the properties under license, 
delivery of all license instruments, and a showing that such transfer is 
in the public interest. The transferee shall be subject to all the 
conditions of the license and to all the provisions and conditions of 
the act, as though such transferee were the original licensee and shall 
be responsible for the payment of annual charges which accrue prior to 
the date of transfer.
    (b) When the Commission shall have approved the transfer of the 
license, its order of approval shall be forwarded to the transferee for 
acknowledgment of acceptance. Unless application for rehearing is filed, 
or unless the order is stayed by the Commission, the order shall become 
final thirty (30) days from date of issuance and the acknowledgment of 
acceptance shall be filed in triplicate with the Commission within sixty 
(60) days from date of issuance accompanied by a certified copy of the 
deed of conveyance or other instrument evidencing transfer of the 
property under license, together with evidence of the recording thereof.

[Order 175, 19 FR 5217, Aug. 18, 1954]

                Application for Lease of Project Property



Sec. 9.10  Filing.

    Any licensee desiring to lease the project property covered by a 
license or any part thereof, where the lessee is granted the exclusive 
occupancy, possession, or use of project works for purposes of 
generating, transmitting, or distributing power, and the person, 
association, or corporation, State, or municipality desiring to acquire 
the project property by lease, must file the proposed lease together 
with the application in accordance with Sec. 4.32(b)(1) of this 
chapter. The application and the Commission's action on it will, in 
general, be subject to the provisions of Sec. Sec. 9.1 through 9.3.

[Order 737, 75 FR 43403, July 26, 2010]



PART 11_ANNUAL CHARGES UNDER PART I OF THE FEDERAL POWER ACT--Table of 

Contents



 Subpart A_Charges for Costs of Administration, Use of Tribal Lands and 
           Other Government Lands, and Use of Government Dams

Sec.
11.1 Costs of administration.
11.2 Use of government lands.
11.3 Use of government dams, excluding pumped storage projects.
11.4 Use of government dams for pumped storage projects, and use of 
          tribal lands.
11.5 Exemption of minor projects.
11.6 Exemption of State and municipal licensees and exemptees.
11.7 Effective date.
11.8 Adjustment of annual charges.

[[Page 175]]

                Subpart B_Charges for Headwater Benefits

11.10 General provision; waiver and exemption; definitions.
11.11 Energy gains method of determining headwater benefits charges.
11.12 Determination of section 10(f) costs.
11.13 Energy gains calculations.
11.14 Procedures for establishing charges without an energy gains 
          investigation.
11.15 Procedures for determining charges by energy gains investigation.
11.16 Filing requirements.
11.17 Procedures for payment of charges and costs.

                      Subpart C_General Procedures

11.20 Time for payment.
11.21 Penalties.

    Authority: 16 U.S.C. 792-828c; 42 U.S.C. 7101-7352.



 Subpart A_Charges for Costs of Administration, Use of Tribal Lands and 

           Other Government Lands, and Use of Government Dams



Sec. 11.1  Costs of administration.

    (a) Authority. Pursuant to section 10(e) of the Federal Power Act 
and section 3401 of the Omnibus Budget Reconciliation Act of 1986, the 
Commission will assess reasonable annual charges against licensees and 
exemptees to reimburse the United States for the costs of administration 
of the Commission's hydropower regulatory program.
    (b) Scope. The annual charges under this section will be charged to 
and allocated among:
    (1) All licensees of projects of more than 1.5 megawatts of 
installed capacity; and
    (2) All holders of exemptions under either section 30 of the Federal 
Power Act or sections 405 and 408 of the Public Utility Regulatory 
Policies Act of 1978, as amended by section 408 of the Energy Security 
Act of 1980, but only if the exemption was issued subsequent to April 
21, 1995 and is for a project of more than 1.5 megawatts of installed 
capacity.
    (3) If the exemption for a project of more than 1.5 megawatts of 
installed capacity was issued subsequent to April 21, 1995 but pursuant 
to an application filed prior to that date, the exemptee may credit 
against its annual charge any filing fee paid pursuant to Sec. 381.601 
of this chapter, which was removed effective April 21, 1995, 18 CFR 
381.601 (1994), until the total of all such credits equals the filing 
fee that was paid.
    (c) Licenses and exemptions other than State or municipal. For 
licensees and exemptees, other than State or municipal:
    (1) A determination shall be made for each fiscal year of the costs 
of administration of Part I of the Federal Power Act chargeable to such 
licensees or exemptees, from which shall be deducted any administrative 
costs that are stated in the license or exemption or fixed by the 
Commission in determining headwater benefit payments.
    (2) For each fiscal year the costs of administration determined 
under paragraph (c)(1) of this section will be assessed against such 
licenses or exemptee in the proportion that the annual charge factor for 
each such project bears to the total of the annual charge factors under 
all such outstanding licenses and exemptions.
    (3) The annual charge factor for each such project shall be found as 
follows:
    (i) For a conventional project the factor is its authorized 
installed capacity plus 112.5 times its annual energy output in millions 
of kilowatt-hours.
    (ii) For a pure pumped storage project the factor is its authorized 
installed capacity.
    (iii) For a mixed conventional-pumped storage project the factor is 
its authorized installed capacity plus 112.5 times its gross annual 
energy output in millions of kilowatt-hours less 75 times the annual 
energy used for pumped storage pumping in million of kilowatt-hours.
    (iv) For purposes of determining their annual charges factor, 
projects that are operated pursuant to an exemption will be deemed to 
have an annual energy output of zero.
    (4) To enable the Commission to determine such charges annually, 
each licensee whose authorized installed capacity exceeds 1.5 megawatts 
must file with the Commission, on or before November 1 of each year, a 
statement under oath showing the gross amount of power generated (or 
produced by

[[Page 176]]

nonelectrical equipment) and the amount of power used for pumped storage 
pumping by the project during the preceding fiscal year, expressed in 
kilowatt hours. If any licensee does not report the gross energy output 
of its project within the time specified above, the Commission's staff 
will estimate the energy output and this estimate may be used in lieu of 
the filings required by this section made by such licensee after 
November 1.
    (5) For unconstructed projects, the assessments start on the date of 
commencement of project construction. For constructed projects, the 
assessments start on the effective date of the license or exemption, 
except for any new capacity authorized therein. The assessments for new 
authorized capacity start on the date of commencement of construction of 
such new capacity. In the event that construction commences during a 
fiscal year, the charges will be prorated based on the date on which 
construction commenced.
    (d) State and municipal licensees and exemptees. For State or 
municipal licensees and exemptees:
    (1) A determination shall be made for each fiscal year of the cost 
of administration under Part I of the Federal Power Act chargeable to 
such licensees and exemptees, from which shall be deducted any 
administrative costs that are stated in the license or exemption or that 
are fixed by the Commission in determining headwater benefit payments.
    (2) An exemption will be granted to a licensee or exemptee to the 
extent, if any, to which it may be entitled under section 10(e) of the 
Act provided the data is submitted as requested in paragraphs (d) (4) 
and (5) of this section.
    (3) For each fiscal year the total actual cost of administration as 
determined under paragraph (d)(1) of this section will be assessed 
against each such licensee or exemptee (except to the extent of the 
exemptions granted pursuant to paragraph (d)(2) of this section) in the 
proportion that the authorized installed capacity of each such project 
bears to the total such capacity under all such outstanding licenses or 
exemptions.
    (4) To enable the Commission to compute on the bill for annual 
charges the exemption to which State and municipal licensees and 
exemptees are entitled because of the use of power by the licensee or 
exemptee for State or municipal purposes, each such licensee or exemptee 
must file with the Commission, on or before November 1 of each year, a 
statement under oath showing the following information with respect to 
the power generated by the project and the disposition thereof during 
the preceding fiscal year, expressed in kilowatt-hours:
    (i) Gross amount of power generated by the project.
    (ii) Amount of power used for station purposes and lost in 
transmission, etc.
    (iii) Net amount of power available for sale or use by licensee or 
exemptee, classified as follows:
    (A) Used by licensee or exemptee.
    (B) Sold by licensee or exemptee.
    (5) When the power from a licensed or exempted project owned by a 
State or municipality enters into its electric system, making it 
impracticable to meet the requirements of this section with respect to 
the disposition of project power, such licensee or exemptee may, in lieu 
thereof, furnish similar information with respect to the disposition of 
the available power of the entire electric system of the licensee or 
exemptee.
    (6) The assessments commence on the date of commencement of project 
operation. In the event that project operation commences during a fiscal 
year, the charges will be prorated based on the date on which operation 
commenced.
    (e) Transmission lines. For projects involving transmission lines 
only, the administrative charge will be stated in the license.
    (f) Maximum charge. No licensed or exempted project's annual charge 
may exceed a maximum charge established each year by the Commission to 
equal 2.0 percent of the adjusted Commission costs of administration of 
the hydropower regulatory program. For every project with an annual 
charge determined to be above the maximum charge, that project's annual 
charge will be set at the maximum charge, and any amount above the 
maximum

[[Page 177]]

charge will be reapportioned to the remaining projects. The 
reapportionment will be computed using the method outlined in paragraphs 
(c) and (d) of this section (but excluding any project whose annual 
charge is already set at the maximum amount). This procedure will be 
repeated until no project's annual charge exceeds the maximum charge.
    (g) Commission's costs. (1) With respect to costs incurred by the 
Commission, the assessment of annual charges will be based on an 
estimate of the costs of administration of Part I of the Federal Power 
Act that will be incurred during the fiscal year in which the annual 
charges are assessed. After the end of the fiscal year, the assessment 
will be recalculated based on the costs of administration that were 
actually incurred during that fiscal year; the actual costs will be 
compared to the estimated costs; and the difference between the actual 
and estimated costs will be carried over as an adjustment to the 
assessment for the subsequent fiscal year.
    (2) The issuance of bills based on the administrative costs incurred 
by the Commission during the year in which the bill is issued will 
commence in 1993. The annual charge for the administrative costs that 
were incurred in fiscal year 1992 will be billed in 1994. At the 
licensee's option, the charge may be paid in three equal annual 
installments in fiscal years 1994, 1995, and 1996, plus any accrued 
interest. If the licensee elects the three-year installment plan, the 
Commission will accrue interest (at the most recent yield of two-year 
Treasury securities) on the unpaid charges and add the accrued interest 
to the installments billed in fiscal years 1995 and 1996.
    (h) In making their annual reports to the Commission on their costs 
in administering Part I of the Federal Power Act, the United States Fish 
and Wildlife Service and the National Marine Fisheries Service are to 
deduct any amounts that were deposited into their Treasury accounts 
during that year as reimbursements for conducting studies and reviews 
pursuant to section 30(e) of the Federal Power Act.
    (i) Definition. As used in paragraphs (c) and (d) of this section, 
authorized installed capacity means the lesser of the ratings of the 
generator or turbine units. The rating of a generator is the product of 
the continuous-load capacity rating of the generator in kilovolt-amperes 
(kVA) and the system power factor in kW/kVA. If the licensee or exemptee 
does not know its power factor, a factor of 1.0 kW/kVA will be used. The 
rating of a turbine is the product of the turbine's capacity in 
horsepower (hp) at best gate (maximum efficiency point) opening under 
the manufacturer's rated head times a conversion factor of 0.75 kW/hp. 
If the generator or turbine installed has a rating different from that 
authorized in the license or exemption, or the installed generator is 
rewound or otherwise modified to change its rating, or the turbine is 
modified to change its rating, the licensee or exemptee must apply to 
the Commission to amend its authorized installed capacity to reflect the 
change.
    (j) Transition. For a license having the capacity of the project for 
annual charge purposes stated in horsepower, that capacity shall be 
deemed to be the capacity stated in kilowatts elsewhere in the license, 
including any amendments thereto.

[60 FR 15047, Mar. 22, 1995, as amended by Order 584, 60 FR 57925, Nov. 
24, 1995]



Sec. 11.2  Use of government lands.

    (a) Reasonable annual charges for recompensing the United States for 
the use, occupancy, and enjoyment of its lands (other than lands 
adjoining or pertaining to Government dams or other structures owned by 
the United States Government) or its other property, will be fixed by 
the Commission. In fixing such charges the Commission may take into 
consideration such factors as commercial value, the most profitable use 
for which the lands or other property may be suited, the beneficial 
purpose for which said lands or other property have been or may be used, 
and such other factors as the Commission may deem pertinent.
    (b) Pending further order of the Commission and subject to 
adjustments as conditions may warrant, annual charges for the use of 
government lands will be payable in advance, and will be set on the 
basis of the schedule

[[Page 178]]

of rental fees for linear rights-of-way as set out on the Commission's 
Web site (http://www.ferc.gov). Annual charges for transmission line 
rights-of-way will be equal to the per-acre charges established by the 
above schedule. Annual charges for other project lands will be equal to 
twice the charges established by the schedule. The Commission, by its 
designee the Executive Director, will update its fees schedule to 
reflect changes in land values established by the Forest Service. The 
Executive Director will publish the updated fee schedule in the Federal 
Register.
    (c)(1) The annual land use charge payable for the nine month 
transition year of the implementation of this rule (1987) will be 
payable in three equal installments, with an installment included in the 
land use charges bills for 1988, 1989, and 1990.
    (2) The charge for one year will equal an amount as computed under 
the procedures outlined in this section, or twice the previous full 
normal year's bill (not including the installments described in 
paragraph (c)(1) of this section), whichever is less.
    (d) The minimum annual charge for use of Government lands under any 
license will be $25.
    (e) No licensee under a license issued prior to August 26, 1935, 
shall be required to pay annual charges in an amount greater than that 
prescribed in such license, except as may be otherwise provided in the 
license.

[Order 560, 42 FR 1229, Jan. 6, 1977; 42 FR 6366, Feb. 2, 1977. 
Redesignated at 51 FR 24318, July 3, 1986; Order No. 469, 52 FR 18209, 
May 14, 1987; 53 FR 44859, Nov. 7, 1988; Order 756, 77 FR 4894, Feb. 1, 
2012]



Sec. 11.3  Use of government dams, excluding pumped storage projects.

    (a) General rule. (1) Any licensee whose non-Federal project uses a 
Government dam or other structure for electric power generation and 
whose annual charges are not already specified in final form in the 
license must pay the United States an annual charge for the use of that 
dam or other structure as determined in accordance with this section. 
Payment of such annual charge is in addition to any reimbursement paid 
by a licensee for costs incurred by the United States as a direct result 
of the licensee's project development at such Government dam.
    (2) Any licensee that is obligated under the terms of a license 
issued on or before September 16, 1986 to pay specified annual charges 
for the use of a Government dam must continue to pay the annual charges 
prescribed in the project license pending any readjustment of the annual 
charge for the project made pursuant to section 10(e) of the Federal 
Power Act.
    (b) Graduated flat rates. Annual charges for the use of Government 
dams or other structures owned by the United States are 1 mill per 
kilowatt-hour for the first 40 gigawatt-hours of energy a project 
produces, 1\1/2\ mills per kilowatt-hour for over 40 up to and including 
80 gigawatt-hours, and 2 mills per kilowatt-hour for any energy the 
project produces over 80 gigawatt-hours.
    (c) Information reporting. (1) Except as provided in paragraph 
(c)(2) of this section, each licensee must file with the Commission, on 
or before November 1 of each year, a sworn statement showing the gross 
amount of energy generated during the preceding fiscal year and the 
amount of energy provided free of charge to the Government. The 
determination of the annual charge will be based on the gross energy 
production less the energy provided free of charge to the Government.
    (2) A licensee who has filed these data under another section of 
part 11 or who has submitted identical data with FERC or the Energy 
Information Administration for the same fiscal year is not required to 
file the information described in paragraph (c)(1) of this section. 
Referenced filings should be identified by company name, date filed, 
docket or project number, and form, number.
    (d) Credits. A licensee may file a request with the Director of the 
Office of Energy Projects for a credit for contractual payments made for 
construction, operation, and maintenance of a Government dam at any time 
before 30 days after receiving a billing for annual charges determined 
under this section. The Director, or his designee, will grant such a 
credit only when the licensee demonstrates that a credit is reasonably 
justified. The Director, or

[[Page 179]]

his designee, shall consider, among other factors, the contractual 
arrangements between the licensee and the Federal agency which owns the 
dam and whether these arrangements reveal clearly that substantial 
payments are being made for power purposes, relevant legislation, and 
other equitable factors.

[Order 379, 49 FR 22778, June 1, 1984, as amended by Order 379-A, 49 FR 
33862, Aug. 27, 1984. Redesignated at 51 FR 24318, July 3, 1986; Order 
No. 469, 52 FR 18209, May 14, 1987; 52 FR 33802, Sept. 8, 1987; 53 FR 
44859, Nov. 7, 1988; Order 647, 69 FR 32438, June 10, 2004]



Sec. 11.4  Use of government dams for pumped storage projects, and use of 

tribal lands.

    (a) General Rule. The Commission will determine on a case-by-case 
basis under section 10(e) of the Federal Power Act the annual charges 
for any pumped storage project using a Government dam or other structure 
and for any project using tribal lands within Indian reservations.
    (b) Information reporting. (1) Except as provided in paragraph 
(b)(2) of this section a Licensee whose project includes pumped storage 
facilities must file with the Commission, on or before November 1 of 
each year, a sworn statement showing the gross amount of energy 
generated during the preceding fiscal year, and the amount of energy 
provided free of charge to the Government, and the amount of energy used 
for pumped storage pumping.
    (2) A licensee who has filed these data under another section of 
part 11 or who has submitted identical data with FERC or the Energy 
Information Administration for the same fiscal year is not required to 
file the information required in paragraph (b)(1) of this section. 
Referenced filings should be identified by company name, date filed, 
docket or project number, and form number.
    (c) Commencing in 1993, the annual charges for any project using 
tribal land within Indian reservations will be billed during the fiscal 
year in which the land is used, for the use of that land during that 
year.

[Order 379, 49 FR 22778, June 1, 1984. Redesignated at 51 FR 24318, July 
3, 1986; Order 469, 52 FR 18209, May 14, 1987; 52 FR 33802, Sept. 8, 
1987; Order 551, 58 FR 15770, Mar. 24, 1993]



Sec. 11.5  Exemption of minor projects.

    No exemption will be made from payment of annual charges for the use 
of Government dams or tribal lands within Indian reservations but 
licenses may be issued without charges other than for such use for the 
development, transmission, or distribution of power for domestic, 
mining, or other beneficial use in minor projects.

[Order 141, 12 FR 8492, Dec. 19, 1947. Redesignated by Order 379, 49 FR 
22778, June 1, 1984. Redesignated at 51 FR 24318, July 3, 1986]



Sec. 11.6  Exemption of State and municipal licensees and exemptees.

    (a) Bases for exemption. A State or municipal licensee or exemptee 
may claim total or partial exemption from the assessment of annual 
charges upon one or more of the following grounds:
    (1) The project was primarily designed to provide or improve 
navigation;
    (2) To the extent that power generated, transmitted, or distributed 
by the project was sold directly or indirectly to the public (ultimate 
consumer) without profit;
    (3) To the extent that power generated, transmitted, or distributed 
by the project was used by the licensee for State or municipal purposes.
    (b) Projects primarily for navigation. No State or municipal 
licensee shall be entitled to exemption from the payment of annual 
charges on the ground that the project was primarily designed to provide 
or improve navigation unless the licensee establishes that fact from the 
actual conditions under which the project was constructed and was 
operated during the calendar year for which the charge is made.
    (c) State or municipal use. A State or municipal licensee shall be 
entitled to exemption from the payment of annual charges for the project 
to the extent that power generated, transmitted, or distributed by the 
project is used by the licensee itself for State or municipal purposes, 
such as lighting streets,

[[Page 180]]

highways, parks, public buildings, etc., for operating licensee's water 
or sewerage system, or in performing other public functions of the 
licensee.
    (d) Sales to public. No State or municipal licensee shall be 
entitled to exemption from the payment of annual charges on the ground 
that power generated, transmitted, or distributed by the project is sold 
to the public without profit, unless such licensee shall show:
    (1) That it maintains an accounting system which segregates the 
operations of the licensed project and reflects with reasonable accuracy 
the revenues and expenses of the project;
    (2) That an income statement, prepared in accordance with the 
Commission's Uniform System of Accounts, shows that the revenues from 
the sale of project power do not exceed the total amount of operating 
expenses, maintenance, depreciation, amortization, taxes, and interest 
on indebtedness, applicable to the project property. Periodic accruals 
or payments for redemption of the principal of bonds or other 
indebtedness may not be deducted in determining the net profit of the 
project.
    (e) Sales for resale. Notwithstanding compliance by a State or 
municipal licensee with the requirements of paragraph (d) of this 
section, it shall be subject to the payment of annual charges to the 
extent that electric power generated, transmitted, or distributed by the 
project is sold to another State, municipality, person, or corporation 
for resale, unless the licensee shall show that the power was sold to 
the ultimate consumer without profit. The matter of whether or not a 
profit was made is a question of fact to be established by the licensee.
    (f) Interchange of power. Notwithstanding compliance by a State or 
municipal licensee with the requirements of paragraph (d) of this 
section, it shall be subject to the payment of annual charges to the 
extent that power generated, transmitted, or distributed by the project 
was supplied under an interchange agreement to a State, municipality, 
person, or corporation for sale at a profit (which power was not offset 
by an equivalent amount of power received under such interchange 
agreement) unless the licensee shall show that the power was sold to 
ultimate consumers without profit.
    (g) Construction period. During the period when the licensed project 
is under construction and is not generating power, it will be considered 
as operating without profit within the meaning of this section, and 
licensee will be entitled to total exemption from the payment of annual 
charges, except as to those charges relating to the use of a Government 
dam or tribal lands within Indian reservations.
    (h) Optional showing. When the power from the licensed project 
enters into the electric power system of the State or municipal 
licensee, making it impracticable to meet the requirements set forth in 
this section with respect to the operations of the project only, such 
licensee may, in lieu thereof, furnish the same information with respect 
to the operations of said electric power system as a whole.
    (i) Application for exemption. Applications for exemption from 
payment of annual charges shall be signed by an authorized executive 
officer or chief accounting officer of the licensee or exemptee and 
verified under oath. The application must be filed with the Secretary of 
the Commission in accordance with filing procedures posted on the 
Commission's Web site at http://www.ferc.gov within the time allowed (by 
Sec. 11.20) for the payment of the annual charges. If the licensee or 
exemptee, within the time allowed for the payment of the annual charges, 
files notice that it intends to file an application for exemption, an 
additional period of 30 days is allowed within which to complete and 
file the application for exemption. The filing of an application for 
exemption does not by itself alleviate the requirement to pay the annual 
charges, nor does it exonerate the licensee or exemptee from the 
assessment of penalties under Sec. 11.21. If a bill for annual charges 
becomes payable after an application for an exemption has been filed and 
while

[[Page 181]]

the application is still pending for decision, the bill may be paid 
under protest and subject to refund.

[Order 143, 13 FR 6681, Nov. 13, 1948. Redesignated and amended by Order 
379, 49 FR 22778, June 1, 1984. Redesignated at 51 FR 24318, July 3, 
1986; 60 FR 15048, Mar. 22, 1995; Order 737, 75 FR 43403, July 26, 2010]



Sec. 11.7  Effective date.

    All annual charges imposed under this subpart will be computed 
beginning on the effective date of the license unless some other date is 
fixed in the license.

[51 FR 24318, July 3, 1986]



Sec. 11.8  Adjustment of annual charges.

    All annual charges imposed under this subpart continue in effect as 
fixed unless changed as authorized by law.

[51 FR 24318, July 3, 1986]



                Subpart B_Charges for Headwater Benefits

    Source: Order 453, 51 FR 24318, July 3, 1986, unless otherwise 
noted.



Sec. 11.10  General provision; waiver and exemptions; definitions.

    (a) Headwater benefits charges. (1) The Commission will assess or 
approve charges under this subpart for direct benefits derived from 
headwater projects constructed by the United States, a licensee, or a 
pre-1920 permittee. Charges under this subpart will amount to an 
equitable part of the annual costs of interest, maintenance, and 
depreciation expenses of such headwater projects and the costs to the 
Commission of determining headwater benefits charges. Except as provided 
in paragraph (b) of this section, the owner of any non-Federal 
downstream project that receives headwater benefits must pay charges 
determined under this subpart.
    (2) Headwater benefits are the additional electric generation at a 
downstream project that results from regulation of the flow of the river 
by the headwater, or upstream, project, usually by increasing or 
decreasing the release of water from a storage reservoir.
    (b) Waiver and exemptions. The owner of a downstream project with 
installed generating capacity of 1.5 MW (2000 horsepower) or less or for 
which the Commission has granted an exemption from section 10(f) is not 
required to pay headwater benefits charges.
    (c) Definitions. For purposes of this subpart:
    (1) Energy gains means the difference between the number of 
kilowatt-hours of energy produced at a downstream project with the 
headwater project and that which would be produced without the headwater 
project.
    (2) Generation means gross generation of electricity at a 
hydroelectric project, including generation needed for station use or 
the equivalent for direct drive units, measured in kilowatt-hours. It 
does not include energy used for or derived from pumping in a pumped 
storage facility.
    (3) Headwater project costs means the total costs of an upstream 
project constructed by the United States, a licensee, or pre-1920 
permittee.
    (4) Separable cost means the difference between the cost of a 
multiple-function headwater project with and without any particular 
function.
    (5) Remaining benefits means the difference between the separable 
cost of a specific function in a multiple-function project and the 
lesser of:
    (i) The benefits of that function in the project, as determined by 
the responsible Federal agency at the time the project or function was 
authorized; or
    (ii) The cost of the most likely alternative single-function project 
providing the same benefits.
    (6) Joint-use cost means the difference between the total project 
cost and the total separable costs. Joint-use costs are allocated among 
the project functions according to each function's percentage of the 
total remaining benefits.
    (7) Specific power cost means that portion of the headwater project 
costs that is directly attributable to the function of power generation 
at the headwater project, including, but not limited to, the cost of the 
electric generators, turbines, penstocks, and substation.
    (8) Joint-use power cost means the portion of the joint-use cost 
allocated to the power function of the project.

[[Page 182]]

    (9) Section 10(f) costs means the annual interest, depreciation, and 
maintenance expense portion of the joint-use power cost, including costs 
of non-power functions required by statute to be paid by revenues from 
the power function.
    (10) Party means:
    (i) The owner of a non-Federal downstream hydroelectric project 
which is directly benefited by a headwater project constructed by the 
United States, a licensee, or a pre-1920 permittee;
    (ii) The owner of a headwater project constructed by the United 
States, a licensee, or a pre-1920 permittee;
    (iii) An operating agency of, or an agency marketing power from, a 
headwater project constructed by the United States; or
    (iv) Any party, as defined in Sec. 385.102(c) of this chapter.
    (11) Final charge means a charge assessed on an annual basis to 
recover section 10(f) costs and which represents the final determination 
of the charge for the period for which headwater benefits are assessed. 
Final charges may be established retroactively, to finalize an interim 
charge, or prospectively.
    (12) Interim charge means a charge assessed to recover section 10(f) 
costs for a specified period of headwater benefits pending determination 
of a final charge for that period.
    (13) Investment cost means the sum of:
    (i) Project construction costs, including cost of land, labor and 
materials, cost of pre- and post-authorization investigations, and cost 
of engineering, supervision, and administration during construction of 
the project; and
    (ii) Interest during construction.

[Order 453, 51 FR 24318, July 3, 1986, as amended by Order 699, 72 FR 
45324, Aug. 14, 2007]



Sec. 11.11  Energy gains method of determining headwater benefits charges.

    (a) Applicability. This section applies to any determination of 
headwater benefits charges, unless:
    (1) The Commission has approved headwater benefits charges pursuant 
to an existing coordination agreement among the parties;
    (2) The parties reach, and the Commission approves, a settlement 
with respect to headwater benefits charges, pursuant to Sec. 11.14(a) 
of this subpart; or
    (3) Charges may be assessed under Sec. 11.14(b).
    (b) General rule--(1) Summary. Except as provided in paragraph 
(b)(3) of this section, a headwater benefits charge for a downstream 
project is determined under this subpart by apportioning the section 
10(f) costs of the headwater project among the headwater project and all 
downstream projects that are not exempt from or waived from headwater 
benefits charges under Sec. 11.10(b) of this chapter, according to each 
project's share of the total energy benefits to those projects resulting 
from the headwater project.
    (2) Calculation; headwater benefits formula. The annual headwater 
benefits charge for a downstream project is derived by multiplying the 
section 10(f) cost by the ratio of the energy gains received by the 
downstream project to the sum of total energy gains received by all 
downstream projects (except those projects specified in Sec. 11.10(b) 
of this chapter) plus the energy generated at the headwater project that 
is assigned to the joint-use power cost, as follows:
[GRAPHIC] [TIFF OMITTED] TC14NO91.093

In which:

P=annual payment to be made for headwater benefits received by a 
downstream project,
Cp=annual section 10(f) cost of the headwater project,
En=annual energy gains received at a downstream project, or 
group of projects if owned by one entity,
Ed=annual energy gains received at all downstream projects 
(except those specified in Sec. 11.10(b) of this chapter), and
Ej=portion of the annual energy generated at the headwater 
project assigned to the joint-use power cost.

    (3) If power generation is not a function of the headwater project, 
section 10(f) costs will be apportioned only among the downstream 
projects.
    (4) If the headwater project is constructed after the downstream 
project, liability for headwater benefits charges will accrue beginning 
on the day on which any energy losses at the downstream project due to 
filling the headwater reservoir have been offset by

[[Page 183]]

subsequent energy gains. If the headwater project is constructed prior 
to the downstream project, liability for headwater benefits charges will 
accrue beginning on the day on which benefits are first realized by the 
downstream project.
    (5) No final charge assessed by the Commission under this subpart 
may exceed 85 percent of the value of the energy gains. If a party 
demonstrates, within the time specified in Sec. 11.17(b)(3) for 
response to a preliminary assessment, that any final charge assessed 
under this subpart, not including the cost of the investigation assessed 
under Sec. 11.17(c), exceeds 85 percent of the value of the energy 
gains provided to the downstream project for the period for which the 
charge is assessed, the Commission will reduce the charge to not more 
than 85 percent of the value. For purposes of this paragraph, the value 
of the energy gains is the cost of obtaining an equivalent amount of 
electricity from the most likely alternative source during the period 
for which the charge is assessed.



Sec. 11.12  Determination of section 10(f) costs.

    (a) for non-Federal headwater projects. If the headwater project was 
constructed by a licensee or pre-1920 permittee and a party requests the 
Commission to determine charges, the Commission will determine on a 
case-by-case basis what portion of the annual interest, maintenance, and 
depreciation costs of the headwater project constitutes the section 
10(f) costs, for purposes of this subpart.
    (b) For Federal headwater projects. (1) If the headwater project was 
constructed or is operated by the United States, and the Commission has 
not approved a settlement between the downstream project owner and the 
headwater project owner, the section 10(f) cost will be determined by 
deriving, from information provided by the headwater project owner 
pursuant to Sec. 11.16 of this subpart, the joint-use power cost and 
the portion of the annual joint-use power cost that represents the 
interest, maintenance, and depreciation costs of the project.
    (2) If power is not an authorized function of the headwater project, 
the section 10(f) cost is the annual interest, maintenance, and 
depreciation portion of the headwater project costs designated as the 
joint-use power cost, derived by deeming a power function at the 
project. The value of the benefits assigned to the deemed power 
function, for purposes of determining the value of remaining benefits of 
the joint-use power cost, is the total value of downstream energy gains 
included in the headwater benefits formula.
    (3) For purposes of this paragraph, total value of downstream energy 
gains means the lesser of:
    (i) The cost of generating an equivalent amount of electricity at 
the most likely alternative facility at the time the headwater project 
became operational; or
    (ii) The incremental cost of installing electrical generation at the 
headwater project at the time the project became operational.



Sec. 11.13  Energy gains calculations.

    (a) Energy gains at a downstream project. (1) Energy gains at a 
downstream project are determined by simulating operation of the 
downstream project with and without the effects of the headwater 
project. Except for determinations which are not complex or in which 
headwater benefits are expected to be small, calculations will be made 
by application of the Headwater Benefits Energy Gains Model, as 
presented in The Headwater Benefits Energy Gains (HWBEG) Model 
Description and Users Manual, which is available for the National 
Technical Information Service, U.S. Department of Commerce, 5285 Port 
Royal Road, Springfield, VA 22161.
    (2) If more than one headwater project provide energy gains to a 
downstream project, the energy gains at the downstream project are 
attributed to the headwater projects according to the time sequence of 
commencement of operation in which each headwater project provided 
energy gains at the downstream project, by:
    (i) Crediting the headwater project that is first in time with the 
amount of energy gains that it provided to the downstream project prior 
to operation of the headwater project that is next in time; and

[[Page 184]]

    (ii) Crediting any subsequent headwater project with the additional 
increment of energy gains provided by it to the downstream project.
    (3) Annual energy losses at a downstream project, or group of 
projects owned by the same entity, that are attributable to the 
headwater project will be subtracted from energy gains for the same 
annual period at the downstream project or group of projects. A net loss 
in one calendar year will be subtracted from net gains in subsequent 
years until no net loss remains.
    (b) Energy generated at the headwater project. (1) Except as 
provided in paragraphs (b)(2) and (b)(3) of this section, the portion of 
the total annual energy generation at the headwater project that is to 
be attributed to the joint-use power cost is derived by multiplying the 
total annual generation at the headwater project and the ratio of the 
project investment cost assigned to the joint-use power cost to the sum 
of the investment cost assigned to both the specific power cost and the 
joint-use power cost of the headwater project, as follows:
[GRAPHIC] [TIFF OMITTED] TC14NO91.112

In which:

Ej=annual energy generated at the headwater project to be 
attributed to the joint-use power cost,
E=total annual generation at the headwater project,
Cj=project investment costs assigned to the joint-use power 
cost, and
Cs=project investment costs assigned to specific power costs.

    (2) If the headwater project contains a pumped storage facility, 
calculation of the portion of the total annual energy generation at the 
headwater project that is attributable to the joint-use power cost will 
be determined on a case-by-case basis.
    (3) If no power is generated at the headwater project, the amount of 
energy attributable to the joint-use power cost under this section is 
the total of all downstream energy gains included in the headwater 
benefits formula.



Sec. 11.14  Procedures for establishing charges without an energy gains 

investigation.

    (a) Settlements. (1) Owners of downstream and headwater projects 
subject to this subpart may negotiate a settlement for headwater 
benefits charges. Settlements must be filed with the Commission for its 
approval, according to the provisions of Sec. 385.602.
    (2) If the headwater project is a Federal project, any settlement 
under this section must result in headwater benefits payments that 
approximate those that would result under the energy gains method.
    (b) Continuation of previous headwater benefits determinations. (1) 
For any downstream project being assessed headwater benefit charges on 
or before September 16, 1986, the Commission will continue to assess 
charges to that project on the same basis until changes occur in the 
river basin, including hydrology or project development, that affect 
headwater benefits.
    (2) Any procedures that apply to Sec. 11.17(b)(5) of this subpart 
will apply to any prospectively fixed charges that are continued under 
this paragraph.



Sec. 11.15  Procedures for determining charges by energy gains investigation.

    (a) Purpose of investigations; limitation. Except as permitted under 
Sec. 11.14, the Commission will conduct an investigation to obtain 
information for establishing headwater benefits charges under this 
subpart. The Commission will investigate and determine charges for a 
project downstream from a non-Federal headwater project only if the 
parties are unable to agree to a settlement and one of the parties 
requests the Commission to determine charges.
    (b) Notification. The Commission will notify each downstream project 
owner and each headwater project owner when it initiates an 
investigation under this section, and the period of project operations 
to be studied will be specified. An investigation will continue until a 
final charge has been established for all years studied in the 
investigation.
    (c) Jurisdictional objections. If any project owner wishes to object 
to the assessment of a headwater benefits

[[Page 185]]

charge on jurisdictional grounds, such objection must:
    (1) Be raised within 30 days after the notice of the investigation 
is issued; and
    (2) State in detail the grounds for its objection.
    (d) Investigations. (1) For any downstream project for which a final 
charge pursuant to an investigation has never been established, the 
Commission will conduct an initial investigation to determine a final 
charge.
    (2) The Commission may, for good cause shown by a party or on its 
own motion, initiate a new investigation of a river basin to determine 
whether, because of any change in the hydrology, project development, or 
other characteristics of the river basin that effects headwater 
benefits, it should:
    (i) Establish a new final charge to replace a final charge 
previously established under Sec. 11.17(b)(5); or
    (ii) Revise any variable of the headwater benefits formula that has 
become a constant in calculating a final charge.
    (3) Scope of investigations. (i) The Commission will establish a 
final charge pursuant to an investigation based on information available 
to the Commission through the annual data submission requirements of 
Sec. 11.16, if such information is adequate to establish a reasonably 
accurate final charge.
    (ii) If the information available to the Commission is not 
sufficient to provide a reasonably accurate calculation of the final 
charge, the Commission will request additional data and conduct any 
studies, including studies of the hydrology of the river basin and 
project operations, that it determines necessary to establish the 
charge.



Sec. 11.16  Filing requirements.

    (a) Applicability. (1) Any party subject to a headwater benefits 
determination under this subpart must supply project-specific data, in 
accordance with this section, by February 1 of each year for data from 
the preceding calendar year.
    (2) Within 30 days of notice of initiation of an investigation under 
Sec. 11.15, a party must supply project-specific data, in accordance 
with this section, for the years specified in the notice.
    (b) Data required from owner of the headwater project. The owner of 
any headwater project constructed by the United States, a licensee, or a 
pre-1920 permittee that is upstream from a non-Federal hydroelectric 
project must submit the following:
    (1) Name and location of the headwater project, including the name 
of the stream on which it is located.
    (2) The total nameplate rating of installed generating capacity of 
the project, expressed in kilowatts, with the portion of total capacity 
that represents pumped storage generating capacity separately 
designated.
    (3) A description of the total storage capacity of the reservoir and 
allocation of storage capacity to each of its functions, such as dead 
storage, power storage, irrigation storage, and flood control storage. 
Identification, by reservoir elevation, of the portion of the reservoir 
assigned to each of its respective storage functions.
    (4) An elevation-capacity curve, or a tabulation of reservoir pool 
elevations with corresponding reservoir storage capacities.
    (5) A copy of rule curves, coordination contracts, agreements, or 
other relevant data governing the release of water from the reservoir, 
including a separate statement of their effective dates.
    (6) A curve or tabulation showing actual reservoir pool elevations 
throughout the immediately preceding calendar year and for each year 
included in an investigation.
    (7) The total annual gross generation of the hydroelectric plant in 
kilowatt-hours, not including energy from pumped storage operation.
    (8) The total number of kilowatt-hours of energy produced from 
pumped storage operation.
    (9) The investigation costs attributed to the power generation 
function of the project as of the close of the calendar year or at a 
specified date during the year, categorized according to that portion 
that is attributed to the specific power costs, and that portion that is 
attributed to the joint-use power costs.
    (10) The portion of the joint-use power cost, and other costs 
required by law to be allocated to joint-use power

[[Page 186]]

cost, each item shown separately, that are attributable to the annual 
costs of interest, maintenance, and depreciation, identifying the annual 
interest rate and the method used to compute the depreciation charge, or 
the interest rate and period used to compute amortization if used in 
lieu of depreciation, including any differing interest rates used for 
major replacements or rehabilitation.
    (c) Data required from owners of downstream projects. The owner of 
any hydroelectric project which is downstream from a headwater project 
constructed by the United States, a licensee, or pre-1920 permittee must 
submit the following:
    (1) Name and location of the downstream project, including the name 
of the stream on which it is located.
    (2) Total nameplate rating of the installed generating capacity of 
the plant, expressed in kilowatts, with the portion of total capacity 
that represents pumped storage generating capacity separately 
designated.
    (3) Record of daily gross generation, not including energy used for 
pumped storage, and any unit outage which may have occurred.
    (4) The total number of kilowatt-hours of energy produced from 
pumped storage operation.
    (d) Abbreviated data submissions. (1) For those items in paragraphs 
(b) and (c) of this section in which data for the current period are the 
same as data furnished for a prior period, the data need not be 
resubmitted if the owner identifies the last period for which the data 
were reported.
    (2) The Commission will notify the project owner that certain data 
items in paragraphs (b) and (c) are no longer required to be submitted 
annually if:
    (i) A variable in the headwater benefits formula has become a 
constant; or
    (ii) A prospective final charge, as described in Sec. 11.17(b)(5), 
has been established.
    (e) Additional data. Owners of headwater projects or downstream 
projects must furnish any additional data required by the Commission 
staff under paragraph (a) of this section and may provide other data 
which they consider relevant.



Sec. 11.17  Procedures for payment of charges and costs.

    (a) Payment for benefits from a non-Federal headwater project. Any 
billing procedures and payments determined between a non-Federal 
headwater project owner and a downstream project owner will occur 
according to the agreement of those parties.
    (b) Charges and payment for benefits from a Federal headwater 
project--(1) Interim charges. (i) If the Commission has not established 
a final charge and an investigation is pending, the Commission will 
issue a downstream project owner a bill for the interim charge and costs 
and a staff report explaining the calculation of the interim charge.
    (ii) An interim charge will be a percentage of the estimate by the 
Commission staff of what the final charge will be, as follows:
    (A) 100 percent of the estimated final charge if the Commission 
previously has completed an investigation of the project for which it is 
assessed; or
    (B) 80 percent of the estimated final charge if the Commission has 
not completed an investigation of the project for which it is assessed.
    (iii) When a final charge is established for a period for which an 
interim charge was paid, the Commission will apply the amount paid to 
the final charge.
    (2) Preliminary assessment of a final charge. Unless the project 
owner was assessed a final charge in the previous year, the Commission 
will issue to the downstream project owner a preliminary assessment of 
any final charge when it is determined. A staff technical report 
explaining the basis of the assessment will be enclosed with the 
preliminary assessment. Copies of the preliminary assessment will be 
mailed to all parties.
    (3) Opportunity to respond. After issuance of a preliminary 
assessment of a final charge, parties may respond in writing within 60 
days after the preliminary assessment.
    (4) Order and bill. (i) After the opportunity for written response 
by the parties to the preliminary assessment of a final charge, the 
Commission will issue to the downstream project owner an order 
establishing the final charge. Copies of the order will be mailed to all

[[Page 187]]

parties. A bill will be issued for the amount of the final charge and 
costs.
    (ii) If a final charge is not established prospectively under 
paragraph (b)(5) of this section, the Commission will issue an order and 
a bill for the final charge and costs each year until prospective final 
charges are established. After the Commission issues an order 
establishing a prospective final charge, a bill will be issued annually 
for the amount of the final charge and costs.
    (5) Prospective final charges. When the Commission determines that 
historical data, including the hydrology, development, and other 
characteristics of the river basin, demonstrate sufficient stability to 
project average energy gains and section 10(f) costs, the Commission 
will issue to the downstream project owner an order establishing the 
final charge from future years. Copies of the order will be mailed to 
all parties. The prospective final charge will remain in effect until a 
new investigation is initiated under Sec. 11.15(d)(2).
    (6) Payment under protest. Any payment of a final charge required by 
this section may be made under protest if a party is also appealing the 
final charge pursuant to Sec. 385.1902, or requesting rehearing. If 
payment is made under protest, that party will avoid any penalty for 
failure to pay under Sec. 11.21.
    (7) Accounting for payments pending appeal or rehearing. The 
Commission will retain any payment received for final charges from bills 
issued pursuant to this section in a special account. No disbursements 
to the U.S. Treasury will be made from the account until 31 days after 
the bill is issued. If an appeal under Sec. 385.1902 or a request for 
rehearing is filed by any party, no disbursements to the U.S. Treasury 
will be made until final disposition of the appeal or request for 
rehearing.
    (c) Charges for costs of determinations of headwater benefits 
charges. (1) Any owner of a downstream project that benefits from a 
Federal headwater project must pay to the United States the cost of 
making any investigation, study, or determination relating to the 
assessment of the relevant headwater benefits charge under this subpart.
    (2) If any owner of a headwater or downstream project requests that 
the Commission determine headwater benefits charges for benefits 
provided by non-Federal headwater projects, the headwater project owners 
must pay a pro rata share of 50 percent of the cost of making the 
investigation and determination, in proportion to the benefits provided 
by their projects, and the downstream project owners must pay a pro rata 
share of the remaining 50 percent in proportion to the energy gains 
received by their projects.
    (3) Any charge assessed under this paragraph is separate from and 
will be added to, any final or interim charge under this subpart.



                      Subpart C_General Procedures



Sec. 11.20  Time for payment.

    Annual charges must be paid no later than 45 days after rendition of 
a bill by the Commission. If the licensee or exemptee believes that the 
bill is incorrect, no later than 45 days after its rendition the 
licensee or exemptee may file an appeal of the bill with the Chief 
Financial Officer. No later than 30 days after the date of issuance of 
the Chief Financial Officer's decision on the appeal, the licensee or 
exemptee may file a request for rehearing of that decision pursuant to 
Sec. 385.713 of this chapter. In the event that a timely appeal to the 
Chief Financial Officer or a timely request to the Commission for 
rehearing is filed, the payment of the bill may be made under protest, 
and subject to refund pending the outcome of the appeal or rehearing.

[60 FR 15048, Mar. 22, 1995]



Sec. 11.21  Penalties.

    If any person fails to pay annual charges within the periods 
specified in Sec. 11.20, a penalty of 5 percent of the total delinquent 
amount will be assessed and added to the total charges for the first 
month or part of month in which payment is delinquent. An additional 
penalty of 3 percent for each full month thereafter will be assessed 
until the charges and penalties are satisfied in accordance with law. 
The Commission may, by order, waive any penalty imposed by this 
subsection, for good cause shown.

[51 FR 24318, July 3, 1986]

[[Page 188]]



PART 12_SAFETY OF WATER POWER PROJECTS AND PROJECT WORKS--Table of Contents



                      Subpart A_General Provisions

Sec.
12.1 Applicability.
12.2 Rules of construction.
12.3 Definitions.
12.4 Staff administrative responsibility and supervisory authority.
12.5 Responsibilities of licensee or applicant.

                      Subpart B_Reports and Records

12.10 Reporting safety-related incidents.
12.11 Reporting modifications of the project or project works.
12.12 Maintenance of records.
12.13 Verification form.

                    Subpart C_Emergency Action Plans

12.20 General requirements.
12.21 Exemptions.
12.22 Contents of emergency action plan.
12.23 Time for filing emergency action plan.
12.24 Review and updating of plans.
12.25 Posting and readiness.

             Subpart D_Inspection by Independent Consultant

12.30 Applicability.
12.31 Definitions.
12.32 General inspection requirement.
12.33 Exemption.
12.34 Approval of independent consultant.
12.35 Specific inspection requirements.
12.36 Emergency corrective measures.
12.37 Report of the independent consultant.
12.38 Time for inspections and reports.
12.39 Taking corrective measures after the report.

        Subpart E_Other Responsibilities of Applicant or Licensee

12.40 Quality control programs.
12.41 Monitoring instruments.
12.42 Warning and safety devices.
12.43 Power and communication lines and gas pipelines.
12.44 Testing spillway gates.

    Authority: 16 U.S.C. 792-828c; 42 U.S.C. 7101-7352; E.O. 12009, 3 
CFR 1978 Comp., p. 142.

    Source: Order 122, 46 FR 9036, Jan. 28, 1981, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 12 appear at 69 FR 
32438, June 10, 2004.



                      Subpart A_General Provisions



Sec. 12.1  Applicability.

    (a) Except as otherwise provided in this part or ordered by the 
Commission or its authorized representative, the provisions of this part 
apply to:
    (1) Any project licensed under Part I of the Federal Power Act;
    (2) Any unlicensed constructed project for which the Commission has 
determined that an application for license must be filed under Part I of 
the Act; and
    (3) Any project exempted from licensing under Part I of the Federal 
Power Act, pursuant to subparts J or K of part 4 of this chapter, to the 
extent that the Commission has conditioned the exemption on compliance 
with any particular provisions of this part.
    (b) The provisions of this part apply to a project that uses a 
Government dam only with respect to those project works, lands, and 
waters specifically licensed by the Commission.



Sec. 12.2  Rules of construction.

    (a) If any term, condition, article, or other provision in a project 
license is similar to any provision of this part, the licensee must 
comply with the relevant provision of this part, unless the Commission 
or the Director of the Office of Energy Projects Licensing determines 
that compliance with the relevant provision of the license will better 
protect life, health, or property.
    (b) A licensee may request from the Director of the Office of Energy 
Projects Licensing a ruling on the applicability to its actions of any 
provision of its license that is similar to a provision of this part. A 
ruling by the Director may be appealed under Sec. 385.207 of this 
chapter.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended by Order 225, 47 FR 
19056, May 3, 1982; 49 FR 29370, July 20, 1984]



Sec. 12.3  Definitions.

    (a) General rule. For purposes of this part, terms defined in 
section 3 of the Federal Power Act, 16 U.S.C. 796, have the same meaning 
as they have under the Act.

[[Page 189]]

    (b) Definitions. The following definitions apply for the purposes of 
this part:
    (1) Applicant means any person, state, or municipality that has 
applied for a license for an unlicensed, constructed project and any 
owner of an unlicensed, constructed project for which the Commission has 
determined that an application for license must be filed.
    (2) Owner means any person, state, or municipality, or combination 
thereof, that has a real property interests in a water power project 
sufficient to operate and maintain the project works.
    (3) Authorized Commission representative means the Director of the 
Office of Energy Projects Licensing, the Director of the Division of 
Inspections, the Regional Engineer, or any other member of the 
Commission staff whom the Commission may specifically designate.
    (4) Condition affecting the safety of a project or project works 
means any condition, event, or action at the project which might 
compromise the safety, stability, or integrity of any project work or 
the ability of any project work to function safely for its intended 
purposes, including navigation, water power development, or other 
beneficial public uses; or which might otherwise adversely affect life, 
health, or property. Conditions affecting the safety of a project or 
project works include, but are not limited to:
    (i) Unscheduled rapid draw-down of impounded water;
    (ii) Failure of any facility that controls the release or storage of 
impounded water, such as a gate or a valve;
    (iii) Failure or unusual movement, subsidence, or settlement of any 
part of a project work;
    (iv) Unusual concrete deterioration or cracking, including 
development of new cracks or the lengthening or widening of existing 
cracks;
    (v) Piping, slides, or settlements of materials in any dam, 
abutment, dike, or embankment;
    (vi) Significant slides or settlements of materials in areas 
adjacent to reservoirs;
    (vii) Significant damage to slope protection;
    (viii) Unusual instrumentation readings;
    (ix) New seepage or leakage or significant gradual increase in pre-
existing seepage or leakage;
    (x) Sinkholes;
    (xi) Significant instances of vandalism or sabotage;
    (xii) Natural disasters, such as floods, earthquakes, or volcanic 
activity;
    (xiii) Any other signs of instability of any project work.
    (5) Constructed project means any project with an existing dam.
    (6) Dam means any structure for impounding or diverting water.
    (7) Development means that part of a project comprising an 
impoundment and its associated dams, forebays, water conveyance 
facilities, power plants, and other appurtenant facilities. A project 
may comprise one or more developments.
    (8) Modification means any activity, including repair or 
reconstruction, that in any way changes the physical features of the 
project from the state reflected in the plans or drawings or other 
documents filed with the Commission.
    (9) Project emergency means an impending or actual sudden release of 
water at the project caused by natural disaster, accident, or failure of 
project works.
    (10) Regional Engineer means the person in charge of the 
Commission's regional office for the region (Atlanta, Chicago, Portland, 
New York, or San Francisco) where a particular project is located.
    (11) Act means the Federal Power Act.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended at 49 FR 29370, July 
20, 1984; Order 647, 69 FR 32438, June 10, 2004]



Sec. 12.4  Staff administrative responsibility and supervisory authority.

    (a) Administrative responsibility. The Director of the Office of 
Energy Projects is responsible for administering the Commission's 
project safety program and reports directly to the Chairman of the 
Federal Energy Regulatory Commission.
    (b) Supervisory authority of the Regional Engineer or other 
authorized representative. (1) Any water power project

[[Page 190]]

and the construction, operation, maintenance, use, repair, or 
modification of any project works are subject to the inspection and the 
supervision of the Regional Engineer or any other authorized Commission 
representative for the purpose of:
    (i) Achieving or protecting the safety, stability, and integrity of 
the project works or the ability of any project work to function safely 
for its intended purposes, including navigation, water power 
development, or other beneficial public uses; or
    (ii) Otherwise protecting life, health, or property.
    (2) For the purposes set forth in paragraph (b)(1) of this section, 
a Regional Engineer or other authorized Commission representative may:
    (i) Test or inspect any water power project or project works or 
require that the applicant or licensee perform such tests or inspections 
or install monitoring instruments;
    (ii) Require an applicant or a licensee to submit reports or 
information, regarding:
    (A) The design, construction, operation, maintenance, use, repair, 
or modification of a water power project or project works; and
    (B) Any condition affecting the safety of a project or project works 
or any death or injury that occurs at, or might be attributable to, the 
water power project;
    (iii) Require an applicant or a licensee to modify:
    (A) Any emergency action plan filed under subpart C of this part; or
    (B) Any plan of corrective measures, including related schedules, 
submitted after the report of an independent consultant pursuant to 
Sec. 12.37 or any other inspection report;
    (iv) Require an applicant or licensee to take any other action with 
respect to the design, construction, operation, maintenance, repair, 
use, or modification of the project or its works that is, in the 
judgment of the Regional Engineer or other authorized Commission 
representative, necessary or desirable.
    (v) Establish the time for an applicant or licensee to provide a 
schedule for or to perform any actions specified in this paragraph.
    (c) Appeal, stay, rescission, or amendment of order or directive. 
(1) Any order or directive issued under this section or under the 
provisions of subparts B through E of this part by a Regional Engineer 
or other authorized Commission representative may be appealed to the 
Commission under Sec. 385.207 of this chapter.
    (2) Any order or directive issued under this section by a Regional 
Engineer or other authorized Commission representative is immediately 
effective and remains in effect until:
    (i) The Regional Engineer or other authorized Commission 
representative who issued the order or directive rescinds or amends that 
order or directive or stays its effect; or
    (ii) The Commission stays the effect of the order or directive, or 
amends or rescinds the order or directive on appeal.
    (3) An appeal or motion for rescission, amendment, or stay of any 
order or directive issued under this section must contain a full 
explanation of why granting the appeal or the request for rescission or 
amendment of the order or directive, or for stay for the period 
requested, will not endanger life, health, or property.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended by Order 225, 47 FR 
19056, May 3, 1982; 49 FR 29370, July 20, 1984; Order 756, 77 FR 4894, 
Feb. 1, 2012]



Sec. 12.5  Responsibilities of licensee or applicant.

    A licensee or applicant must use sound and prudent engineering 
practices in any action relating to the design, construction, operation, 
maintenance, use, repair, or modification of a water power project or 
project works.



                      Subpart B_Reports and Records



Sec. 12.10  Reporting safety-related incidents.

    (a) Conditions affecting the safety of a project or its works--1) 
Oral reports. An applicant or licensee must report by telephone to the 
Regional Engineer any condition affecting the safety of a project or 
projects works, as defined in Sec. 12.3(b)(4). The initial oral report 
must be made as soon as practicable after that condition is discovered, 
without

[[Page 191]]

unduly interfering with any necessary or appropriate emergency repair, 
alarm, or other emergency action procedure.
    (2) Written reports. Following the initial oral report required in 
paragraph (a)(1), the applicant or licensee must submit to the Regional 
Engineer a written report on the condition affecting the safety of the 
project or project works verified in accordance with Sec. 12.13. The 
written report must be submitted within the time specified by the 
Regional Engineer and must contain any information the Regional Engineer 
directs, including:
    (i) The causes of the condition;
    (ii) A description of any unusual occurrences or operating 
circumstances preceding the condition;
    (iii) An account of any measure taken to prevent worsening of the 
condition;
    (iv) A detailed description of any damage to project works and the 
status of any repair;
    (v) A detailed description of any personal injuries;
    (vi) A detailed description of the nature and extent of any private 
property damages; and
    (vii) Any other relevant information requested by the Regional 
Engineer.
    (3) The level of detail required in any written report must be 
commensurate with the severity and complexity of the condition.
    (b) Deaths or serious injuries. (1) Promptly after becoming aware of 
any drowning or other accident resulting in death or serious injury that 
occurs at the project, the applicant or licensee must report that 
drowning or other accident to the Regional Engineer in writing, 
including a description of the cause and location of the accident.
    (2) The written report of any death or serious injury considered or 
alleged to be project related must also describe any remedial actions 
taken or proposed to avoid or reduce the chance of similar occurrences 
in the future and be verified in accordance with Sec. 12.13.
    (3) Accidents that are not project-related may be reported by 
providing a copy of a clipping from a newspaper article, if available.
    (4) For the purposes of this paragraph, project-related includes any 
deaths or serious injuries involving a dam, spillway, intake, or power 
line, or which take place at or immediately above or below a dam.



Sec. 12.11  Reporting modifications of the project or project works.

    (a) Reporting requirement. Regardless of whether a particular 
modification is permitted without specific prior Commission approval, an 
applicant or licensee must report any modification of the project or 
project works to the Regional Engineer in writing, verified in 
accordance with Sec. 12.13, at the time specified in paragraph (b) of 
this section.
    (b) Time of reporting. (1) Any modification that is an emergency 
measure taken in response to a condition affecting the safety of the 
project or project works must be submitted with the report of that 
condition required by Sec. 12.10(a)(2).
    (2) In all other instances, the modification must be reported at 
least 60 days before work on the modification begins.



Sec. 12.12  Maintenance of records.

    (a) Kinds of records--1) General rule. Except as provided in 
paragraph (a)(2) of this section, the applicant or licensee must 
maintain as permanent project records in addition to those required in 
part 125 of this chapter, the following information:
    (i) Engineering and geological data relating to design, 
construction, maintenance, repair, or modification of the project, 
including design memoranda and drawings, laboratory and other testing 
reports, geologic data (such as maps, sections, or logs of exploratory 
borings or trenches, foundation treatment, and excavation), plans and 
specifications, inspection and quality control reports, as built 
construction drawings, designers' operating criteria, photographs, and 
any other data necessary to demonstrate that construction, maintenance, 
repair, or modification of the project has been performed in accordance 
with plans and specifications;
    (ii) Instrumentation observations and data collected during 
construction, operation, or maintenance of the project, including 
continuously maintained tabular records and graphs illustrating

[[Page 192]]

the data collected pursuant to Sec. 12.41; and
    (iii) The operational and maintenance history of the project, 
including:
    (A) The dates, times, nature, and causes of any complete or partial 
unscheduled shut-down, suspension of project operations, or reservoir 
filling restrictions related to the safety of the project or project 
works; and
    (B) Any reports of project modifications, conditions affecting the 
safety of the project or project works, or deaths or serious injuries at 
the project.
    (2) Exception. The applicant or licensee is not required to maintain 
as permanent project records any information specified in paragraph 
(a)(1) of this section that was or reasonably would have been prepared 
before the applicant or licensee acquired control of the project and 
that the applicant or the licensee never acquired or reasonably could 
have acquired.
    (b) Location of records--1) Original records. The applicant or 
licensee must maintain the originals of all permanent project records at 
a central location, such as the project site or the main business office 
of the applicant or licensee, secure from damage from any conceivable 
failure of the project works and convenient for inspection. The 
applicant or licensee must keep the Regional Engineer advised of the 
location of the permanent project records.
    (2) Record copies. If the originals of the permanent project records 
are maintained at a central location other than the project site, the 
applicant or licensee must maintain at the project site copies of at 
least the project Exhibit G or L (design drawings), instrumentation 
data, and operational history that are necessary to the safe and 
efficient operation of the project.
    (3) In accordance with the provisions of part 125 of this chapter, 
the applicant or licensee may maintain original records, or record 
copies at the project site, in microform, if appropriate equipment is 
readily available to view the records.
    (c) Transfer of records. If the project is taken over by the United 
States at the end of a license term or the Commission issues a new 
license to a different licensee, the prior licensee must transfer the 
originals of all permanent project records to the custody of the 
administering Federal agency or department or to the new licensee.



Sec. 12.13  Verification form.

    If a document submitted in accordance with the provisions of this 
part must be verified, the form of verification attached to the document 
must be the following:

State of [ ],
County of [ ], ss:
    The undersigned, being first duly sworn, states that [he, she] has 
read the above document and knows the contents of it, and that all of 
the statements contained in that document are true and correct, to the 
best of [his, her] knowledge and belief.

________________________________________________________________________
[Name of person signing]

    Sworn to and subscribed before me this [day] of [month], [year].

[Seal]

________________________________________________________________________

[Signature of notary public or other state or local official authorized 
by law to notarize documents.]



                    Subpart C_Emergency Action Plans



Sec. 12.20  General requirements.

    (a) Unless provided with a written exemption pursuant to Sec. 
12.21, every applicant or licensee must develop and file with the 
Regional Engineer three copies of an emergency action plan and 
appendices, verified in accordance with Sec. 12.13.
    (b) The emergency action plan must be:
    (1) Developed in consultation and cooperation with appropriate 
Federal, state, and local agencies responsible for public health and 
safety; and
    (2) Designed to provide early warning to upstream and downstream 
inhabitants, property owners, operators of water-related facilities, 
recreational users, and other persons in the vicinity who might be 
affected by a project emergency as defined in Sec. 12.3(b)(9).



Sec. 12.21  Exemptions.

    (a) Grant of exemption. Except as provided in paragraph (b), if an 
applicant or licensee satisfactorily demonstrates

[[Page 193]]

that no reasonably foreseeable project emergency would endanger life, 
health, or property, the Regional Engineer may exempt the applicant or 
licensee from filing an emergency action plan.
    (b) No exemption. A licensee or applicant may not be exempted from 
the requirements of Sec. 12.22(c) for a radiological response plan.
    (c) Conditions of exemptions. (1) An applicant or licensee who 
receives an exemption from filing an emergency action plan has the 
continuing responsibility to review circumstances upstream and 
downstream from the project to determine if, as a result of changed 
circumstances, a project emergency might endanger life, health, or 
property.
    (2) Promptly after the applicant or licensee learns that, as a 
result of any change in circumstances, a project emergency might 
endanger life, health, or property, the applicant or licensee must 
inform the Regional Engineer of that changed condition without unduly 
delaying the preparation and implementation of the emergency action 
plan.
    (3) Comprehensive review of the necessity for an emergency action 
plan must be conducted at least once each year.
    (d) Revocation of exemption. (1) The Regional Engineer may revoke an 
exemption granted under this section if it is determined that, as a 
result of any change in circumstances, a project emergency might 
endanger life, health, or property.
    (2) If an exemption is revoked, the applicant or licensee must file 
an emergency action plan within the time specified by the Regional 
Engineer.



Sec. 12.22  Contents of emergency action plan.

    (a) Contents--(1) The plan itself. An emergency action plan must 
conform with the guidelines established, and from time to time revised, 
by the Director of the Office of Energy Projects Licensing (available 
from the division of Inspections or the Regional Engineer) to provide:
    (i) Instructions to project operators and attendants and other 
responsible personnel about the actions they are to take during a 
project emergency;
    (ii) Detailed plans for notifying potentially affected persons, 
appropriate Federal, state, and local agencies, including public safety 
and law enforcement bodies, and medical units; and
    (iii) Procedures for controlling the flow of water, including 
actions to reduce in-flows to reservoirs, such as limiting outflows from 
upstream dams or control structures, and actions to reduce downstream 
flows, such as increasing or decreasing outflows from downstream dams or 
control structures, on the waterway on which the project is located or 
its tributaries.
    (2) Appendix to the plan. Each copy of the emergency action plan 
submitted to the Regional Engineer must be accompanied by an appendix 
conforming with the guidelines established by the Director of the Office 
of Energy Projects Licensing that contains:
    (i) Plans for training project operators, attendants, and other 
responsible personnel to respond properly during a project emergency, 
including instructions on the procedures to be followed throughout a 
project emergency and the manner in which the licensee will periodically 
review the knowledge and understanding that these personnel have of 
those procedures;
    (ii) A summary of the study used for determining the upstream and 
downstream areas that may be affected by sudden release of water, 
including a summary of all criteria and assumptions used in the study 
and, if required by the Regional Engineer, inundation maps; and
    (iii) Documentation of consultations with Federal, state, and local 
agencies, including public safety and law enforcement bodies, and 
medical units.
    (b) Special factors. The applicant or licensee must take into 
account in its emergency action plan the time of day, particularly hours 
of darkness, in establishing the proper actions and procedures for use 
during a project emergency.
    (c) Additional requirements for projects near nuclear power plants--
1) Radiological response plan. If the personnel operating any powerhouse 
or any spillway control facilities, such as gates or valves, of a 
project would be located within ten miles of a nuclear power plant 
reactor, the applicant or licensee

[[Page 194]]

must file, separately or as a supplement to any required emergency 
action plan, a radiological response plan that provides for emergency 
procedures to be taken if an accident or other incident results in the 
release of radioactive materials from the nuclear power plant reactor.
    (2) A radiological response plan must:
    (i) To the maximum extent practicable, include sufficient procedural 
safeguards to ensure that, during or following an accident or other 
incident involving the nearby nuclear power plant reactor, the project 
may be safely operated and, if evacuation is necessary, the project may 
be left unattended without danger to the safety of any project dam or to 
life, health, or safety upstream or downstream from the project; and
    (ii) Explain the provisions, developed after consultation with the 
direct purchasers of project power, for cessation, curtailment, or 
continuation of generation of electric power at the project during or 
following an accident or other incident involving the nearby nuclear 
power plant reactor.
    (3) Time of filing radiological response plan. (i) For a constructed 
project with an otherwise acceptable emergency action plan on file, any 
radiological response plan required must be filed:
    (A) If an operating license for the nuclear power plant has been 
issued on or before March 1, 1981, not later than three months from 
March 1, 1981; or
    (B) In all other instances, not later than three months after the 
date an operating license for the nuclear power plant is issued.
    (ii) For any project not described in Sec. 12.22(c)(3)(i), any 
radiological response plan required must be filed contemporaneously with 
the emergency action plan or, if the project has been exempted from 
filing an emergency action plan, at the time the emergency action plan 
would otherwise have been required to be filed pursuant to Sec. 12.23.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended at 49 FR 29370, July 
20, 1984]



Sec. 12.23  Time for filing emergency action plan.

    (a) Unconstructed project. (1) Except as set forth in paragraph 
(a)(2), the emergency action plan for an unconstructed project must be 
filed no later than 60 days before the initial filling of the project 
reservoir begins.
    (2) Temporary impoundment during construction. (i) For any 
unconstructed project, if a temporary impoundment would be created 
during construction, such as through construction of temporary or 
permanent cofferdams or large sediment control structures, and an 
accident to or failure of the impounding structures might endanger 
construction workers or otherwise endanger public health or safety, a 
temporary construction emergency action plan must be filed no later than 
60 days before construction begins.
    (ii) No later than 60 days before the initial filling of a project 
reservoir begins at a project for which a temporary emergency action 
plan has been filed the applicant or licensee must file modifications to 
that plan or a new plan, taking into account the differences in 
circumstances between the construction and post-construction periods.
    (b) Unlicensed constructed project. (1) If the Commission has 
determined on or before March 1, 1981 that a license is required for an 
unlicensed constructed project, the emergency action plan for that 
project must be filed no later than:
    (i) Six months after March 1, 1981; or
    (ii) Any earlier date specified by the Commission or its authorized 
representative.
    (2) Except as set forth in paragraph (b)(1) of this section, the 
emergency action plan for an unlicensed constructed project must be 
filed no later than the earliest of:
    (i) Six months after the date that a license application is filed;
    (ii) Six months after the date that the Commission issues an order 
determining that licensing is required; or
    (iii) A date specified by the Commission or its authorized 
representative.
    (c) Licensed constructed project. If a licensed constructed project 
does not have an acceptable emergency action plan on file on March 1, 
1981 the emergency action plan must be filed no later than:
    (1) Six months after March 1, 1981; or

[[Page 195]]

    (2) Any earlier date specified by the Commission or its authorized 
representative.
    (d) For good cause shown, the Regional Engineer may grant an 
extension of time for filing all or any part of an emergency action 
plan.



Sec. 12.24  Review and updating of plans.

    (a) The emergency action plan must be continually updated to reflect 
any changes in the names or titles of project operators and attendants 
and other personnel with specified responsibilities for actions in an 
emergency and any changes in names of persons to call, telephone 
numbers, radio call signals, or other information critical to providing 
notification to affected persons, Federal, state, and local agencies, 
and medical units.
    (b) An applicant or licensee has continuing responsibility to review 
the adequacy of the emergency action plan in light of any significant 
changes in upstream or downstream circumstances which might affect water 
flows or the location or extent of the areas, persons, or property that 
might be harmed in a project emergency.
    (c) Promptly after an applicant or licensee learns of any change in 
circumstances described in paragraph (b) of this section, the applicant 
or licensee must:
    (1) Inform the Regional Engineer of that change in circumstances;
    (2) Consult and cooperate with appropriate Federal, state, and local 
agencies responsible for public health and safety to determine any 
advisable revisions to the emergency action plan; and
    (3) File with the Regional Engineer three copies of any revisions to 
the appropriate studies, maps, plans, procedures, or other information 
in the emergency action plan itself or its appendices that have changed 
as a result of that consultation.
    (d) An applicant or licensee must conduct a comprehensive review of 
the adequacy of the emergency action plan at least once each year.



Sec. 12.25  Posting and readiness.

    (a) A copy of the current emergency action plan itself must be 
posted in a prominent location readily accessible to the licensee's or 
applicant's operating personnel who are responsible for controlling 
water flows and for notifying public health and safety agencies and 
affected persons.
    (b) Each licensee or applicant must annually test the state of 
training and readiness of key licensee or applicant personnel 
responsible for responding properly during a project emergency to ensure 
that they know and understand the procedures to be followed throughout a 
project emergency.



             Subpart D_Inspection by Independent Consultant



Sec. 12.30  Applicability.

    This subpart applies to any licensed project development that has a 
dam:
    (a) That is more than 32.8 feet (10 meters) in height above 
streambed, as defined in Sec. 12.31(c);
    (b) That impounds an impoundment with a gross storage capacity of 
more than 2,000 acre-feet (2.5 million cubic meters); or
    (c) That has a high hazard potential and is determined by the 
Regional Engineer or other authorized Commission representative to 
require inspection by an independent consultant under this subpart.



Sec. 12.31  Definitions.

    For purposes of this subpart:
    (a) Independent consultant means any person who:
    (1) Is a licensed professional engineer;
    (2) Has at least 10 years experience and expertise in dam design and 
construction and in the investigation of the safety of existing dams; 
and
    (3) Is not, and has not been within two years before being retained 
to perform an inspection under this subpart, an employee of the licensee 
or its affiliates or an agent acting on behalf of the licensee or its 
affiliates.
    (b) Dam that has a high hazard potential means any dam whose 
failure, in the judgment of the Commission or its authorized 
representative, might endanger human life or cause significant property 
damage, or which meets the criteria for high hazard potential as defined 
by the Corps of Engineers in 33 CFR part 222.

[[Page 196]]

    (c) Height above streambed means:
    (1) For a dam with a spillway, the vertical distance from the lowest 
elevation of the natural streambed at the downstream toe of the dam to 
the maximum water storage elevation possible without any discharge from 
the spillway. The maximum water storage elevation is:
    (i) For gated spillways, the elevation of the tops of the gates;
    (ii) For ungated spillways, the elevation of the spillway crest or 
the top of any flashboards, whichever is higher;
    (2) For a dam without a spillway, the vertical distance from the 
lowest elevation of the natural streambed at the downstream tow of the 
dam to the lowest point on the crest of the dam.
    (d) Gross storage capacity means the maximum possible volume of 
water impounded by a dam with zero spill, that is, without the discharge 
of water over the dam or a spillway.
    (e) The Director of the Office of Energy Projects Licensing may, for 
good cause shown, grant a waiver of the 10 year requirement in paragraph 
(a)(2) of this section. Any petition for waiver under this paragraph 
must be filed in accordance with Sec. 1.7(b) of this chapter.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended at 49 FR 29370, July 
20, 1984]



Sec. 12.32  General inspection requirement.

    In accordance with the procedures in Sec. 12.35, the project works 
of each development to which this subpart applies, excluding 
transmission and transformation facilities and generating equipment, 
must be periodically inspected and evaluated by or under the 
responsibility and direction of at least one independent consultant, who 
may be a member of a consulting firm, to identify any actual or 
potential deficiencies, whether in the condition of those project works 
or in the quality or adequacy of project maintenance, surveillance, or 
methods of operation, that might endanger public safety.



Sec. 12.33  Exemption.

    (a) Upon written request from the licensee, the Director of the 
Office of Energy Projects Licensing may grant an exemption from the 
requirements of this subpart in extraordinary circumstances that clearly 
establish good cause for exemption.
    (b) Good cause for exemption may include the finding that the 
development in question has no dam except dams that meet the criteria 
for low hazard potential as defined by the Corps of Engineers in 33 CFR 
part 222.

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended at 49 FR 29370, July 
20, 1984]



Sec. 12.34  Approval of independent consultant.

    At least 60 days before the initiation of an inspection under this 
subpart, the licensee must submit to the Director of the Office of 
Energy Projects Licensing for approval, with a copy to the Regional 
Engineer, a detailed resume that (a) describes the experience of the 
independent consultant; and, (b) shows that the consultant is an 
independent consultant as defined in Sec. 12.31(a).

[Order 122, 46 FR 9036, Jan. 28, 1981, as amended at 49 FR 29370, July 
20, 1984]



Sec. 12.35  Specific inspection requirements.

    (a) Scope of inspection. The inspection by the independent 
consultant shall include:
    (1) Due consideration of all relevant reports on the safety of the 
development made by or written under the direction of Federal or state 
agencies, submitted under Commission regulations, or made by other 
consultants;
    (2) Physical field inspection of the project works and review and 
assessment of all relevant data concerning:
    (i) Settlement;
    (ii) Movement;
    (iii) Erosion;
    (iv) Seepage;
    (v) Leakage;
    (vi) Cracking;
    (vii) Deterioration;
    (viii) Seismicity;
    (ix) Internal stress and hydrostatic pressures in project structures 
or their foundations or abutments;
    (x) The functioning of foundation drains and relief wells;
    (xi) The stability of critical slopes adjacent to a reservoir or 
project works; and
    (xii) Regional and site geological conditions; and
    (3) Specific evaluation of:

[[Page 197]]

    (i) The adequacy of spillways;
    (ii) The effects of overtopping of nonoverflow structures;
    (iii) The structural adequacy and stability of structures under all 
credible loading conditions;
    (iv) The relevant hydrological data accumulated since the project 
was constructed or last inspected under this subpart;
    (v) The history of the performance of the project works through 
analysis of data from monitoring instruments; and
    (vi) The quality and adequacy of maintenance, surveillance, and 
methods of project operations for the protection of public safety.
    (b) Evaluation of spillway adequacy. The adequacy of any spillway 
must be evaluated by considering hazard potential which would result 
from failure of the project works during flood flows.
    (1) If structural failure would present a hazard to human life or 
cause significant property damage, the independent consultant must 
evaluate the ability of project works to withstand the loading or 
overtopping which may occur from a flood up to the probable maximum 
flood or the capacity of spillways to prevent the reservoir from rising 
to an elevation that would endanger the project works.
    (2) If structural failure would not present a hazard to human life 
of cause significant property damage, spillway adequacy may be evaluated 
by means of a design flood of lesser magnitude than the probable maximum 
flood, if the report of the independent consultant pursuant to Sec. 
12.37 provides a detailed explanation of the bases for the finding that 
structural failure would not present a hazard to human life or cause 
significant property damage.



Sec. 12.36  Emergency corrective measures.

    If, in the course of an inspection, an independent consultant 
discovers any condition for which emergency corrective measures are 
advisable, the independent consultant must immediately notify the 
licensee and the licensee must report that condition to the Regional 
Engineer pursuant to Sec. 12.10(a) of this part.



Sec. 12.37  Report of the independent consultant.

    (a) General requirement. Following inspection of a project 
development as required under this subpart, the independent consultant 
must prepare a report and the licensee must file three copies of that 
report with the Regional Engineer. The report must conform to the 
provisions of this section and be satisfactory to the authorized 
Commission representative.
    (b) General information in the initial report. (1) The initial 
report filed under this subpart for any project development must 
contain:
    (i) A description of the project development;
    (ii) A map of the region indicating the location of the project 
development;
    (iii) Plans, elevations, and sections of the principal project 
works;
    (iv) A summary of the design assumptions, design analyses, spillway 
design flood, and the factors of safety used to evaluate the structural 
adequacy and stability of the project works; and
    (v) A summary of the geological conditions that may affect the 
safety of the project works.
    (2) To the extent that the information and analyses required in 
paragraph (b)(1) of this section, are contained in a report of an 
independent consultant prepared and filed in compliance with Commission 
regulations in effect before March 1, 1981 the information and analyses 
may be incorporated by specific reference into the first report prepared 
and filed under this subpart.
    (c) Information required for all reports. Any report of an 
independent consultant filed under this subpart must contain the 
information specified in this paragraph.
    (1) Monitoring information. The report must contain monitoring 
information that includes time-versus-reading graphs depicting data 
compiled from any existing critical or representative monitoring 
instruments that measure the behavior, movement, deflection, or loading 
of project works or from which the stability, performance, or 
functioning of the structures may be determined.

[[Page 198]]

    (i) Any monitoring data plotted on graphs must be presented in a 
manner that will facilitate identification and analysis of trends. The 
data may be summarized to facilitate graphical representation.
    (ii) Plan and sectional drawings of project structures sufficient to 
show the location of all critical or representative existing monitoring 
instruments must be included. If these drawings have been included in a 
previous report prepared and filed by an independent consultant, they 
may be incorporated by specific reference to that earlier report.
    (2) Analyses. The report must:
    (i) Analyze the safety of the project works and the maintenance and 
methods of operation of the development fully in light of the 
independent consultant's reviews, field inspections, assessments, and 
evaluations described in Sec. 12.35;
    (ii) Identify any changes in the information and analyses required 
by paragraph (b) of this section that have occurred since the last 
report by an independent consultant under this subpart and analyze the 
implications of those changes; and
    (iii) Analyze the adequacy of existing monitoring instruments, 
periodic observation programs, and other methods of monitoring project 
works and conditions effecting the safety of the project or project 
works with respect to the development.
    (3) Incorporation by reference. To the extent that conditions, 
assumptions, and available information have not changed since the last 
previous report by an independent consultant under this subpart, the 
analyses required under paragraphs (c)(2)(i) and (ii) of this section 
may be incorporated by specific reference to the last previous report.
    (4) Recommendations. Based on the independent consultant's field 
observations and evaluations of the project works and the maintenance, 
surveillance, and methods of operation of the development, the report 
must contain the independent consultant's recommendations on:
    (i) Any corrective measures necessary for the structures or for the 
maintenance or surveillance procedures or methods of operation of the 
project works;
    (ii) A reasonable time to carry out each corrective measure; and
    (iii) Any new or additional monitoring instruments, periodic 
observations, or other methods of monitoring project works or conditions 
that may be required.
    (5) Dissenting views. If the inspection and report were conducted 
and prepared by more than one independent consultant, the report must 
clearly indicate any dissenting views concerning the analyses or 
recommendations of the report that might be held by any individual 
consultant.
    (6) List of participants. The report must identify all professional 
personnel who have participated in the inspection of the project or in 
preparation of the report and the independent consultant who directed 
those activities.
    (7) Statement of independence. The independent consultant must 
declare that all conclusions and recommendations in the report are made 
independently of the licensee, its employees, and its representatives.
    (8) Signature. The report must be signed by each independent 
consultant responsible for the report.



Sec. 12.38  Time for inspections and reports.

    (a) General rule. After the initial inspection and report under this 
subpart for a project development, a new inspection under this subpart 
must be completed and the report on it filed not later than five years 
from the date the last report on an inspection was to be filed under 
this subpart.
    (b) Initial inspection and report. (1) For any development that has 
a dam that is more than 32.8 feet (10 meters) in height above streambed 
or impounds an impoundment with a gross storage capacity of more than 
2,000 acre feet (2.5 million cubic meters), which development was 
constructed before the date of issuance of the order licensing or 
amending a license to include that development, the initial inspection 
under this subpart must be completed and the report on it filed not 
later than two years after the date of issuance of the order licensing 
the development or

[[Page 199]]

amending the license to include the development.
    (2) For any development that was constructed after the date of 
issuance of the order licensing or amending a license to include the 
development, the initial inspection under this subpart must be completed 
and the report on it filed not later than five years from the date of 
first commercial operation, or the date on which the impoundment first 
reaches its normal maximum surface elevation, whichever occurs first.
    (3) For any development not set forth in either subparagraph (b)(1) 
or (b)(2), the initial inspection under this subpart must be completed 
and the report on it filed by a date specified by the Regional Engineer. 
The filing date must not be more than two years after the date of 
notification that an inspection and report under this subpart are 
required.
    (4) The last independent consultant's inspection and report made for 
a development before March 1, 1981 in compliance with the Commission's 
rules then in effect is deemed to fulfill the requirements for an 
initial inspection and report under this subpart for that development, 
except that the first report filed under this subpart for that 
development after March 1, 1981 must contain the information and 
analyses required by Sec. 12.37(b).
    (c) Extension of time. For good cause shown, the Regional Engineer 
may extend the time for filing an independent consultant's report under 
this subpart.



Sec. 12.39  Taking corrective measures after the report.

    (a) Corrective plan and schedule. (1) Not later than 60 days after 
the report of the independent consultant is filed with the Regional 
Engineer, the licensee must submit to the Regional Engineer three copies 
of a plan and schedule for designing and carrying out any corrective 
measures that the licensee proposes.
    (2) The plan and schedule may include any proposal, including taking 
no action, that the licensee considers a preferable alternative to any 
corrective measure recommended in the report of the independent 
consultant. Any proposed alternative must be accompanied by the 
licensee's complete justification and detailed analysis and evaluation 
in support of that alternative.
    (b) Carrying out the plan. The licensee must complete all corrective 
measures in accordance with the plan and schedule submitted to, and 
approved or modified by, the Regional Engineer.
    (c) Extension of time. For good cause shown, the Regional Engineer 
may extend the time for filing the plan and schedule required by this 
section.



        Subpart E_Other Responsibilities of Applicant or Licensee



Sec. 12.40  Quality control programs.

    (a) General rule. During any construction, repair, or modification 
of project works, including any corrective measures taken pursuant to 
Sec. 12.39 of this part, the applicant or licensee must maintain any 
quality control program that may be required by the Regional Engineer, 
commensurate with the scope of the work and meeting any requirements or 
standards set by the Regional Engineer. If a quality control program is 
required, the construction, repair, or modification may not begin until 
the Regional Engineer has approved the program.
    (b) If the construction, repair, or modification work is performed 
by a construction contractor, quality control inspection must be 
performed by the licensee, the design engineer, or an independent firm, 
other than the construction contractor, directly accountable to the 
licensee. This paragraph is not intended to prohibit additional quality 
control inspections by the construction contractor, or a firm 
accountable to the construction contractor, for the construction 
contractor's purposes.
    (c) If the construction, repair, or modification of project works is 
performed by the applicant's or licensee's own personnel, the applicant 
or licensee must provide for separation of authority within its 
organization to make certain that the personnel responsible for quality 
control inspection are, to the satisfaction of the Regional Engineer or 
other authorized Commission representative, independent from the 
personnel who are responsible for

[[Page 200]]

the construction, repair or modification.



Sec. 12.41  Monitoring instruments.

    (a) In designing a project, a licensee must make adequate provision 
for installing and maintaining appropriate monitoring instrumentation 
whenever any physical condition that might affect the stability of a 
project structure has been discovered or is anticipated. The 
instrumentation must be satisfactory to the Regional Engineer and may 
include, for example, instruments to monitor movement of joints, 
foundation or embankment deformation, seismic effects, hydrostatic pore 
pressures, structural cracking, or internal stresses on the structure.
    (b) If an applicant or licensee discovers any condition affecting 
the safety of the project or project works during the course of 
construction or operation, the applicant or licensee must install and 
maintain any monitoring devices and instruments that may be required by 
the Regional Engineer or other authorized Commission representative to 
monitor that condition.



Sec. 12.42  Warning and safety devices.

    To the satisfaction of, and within a time specified by, the Regional 
Engineer, an applicant or licensee must install, operate, and maintain 
any signs, lights, sirens, barriers, or other safety devices that may 
reasonably be necessary or desirable to warn the public of fluctuations 
in flow from the project or otherwise to protect the public in the use 
of project lands and waters.



Sec. 12.43  Power and communication lines and gas pipelines.

    (a) A licensee must take all reasonable precautions, and comply with 
all reasonable specifications that may be provided by the Regional 
Engineer, to ensure that any power or communication line or gas pipeline 
that is located over, under, or in project waters does not obstruct 
navigation for recreational or commercial purposes or otherwise endanger 
public safety.
    (b) Clearances between any power or communication line constructed 
after March 1, 1981 and any vessels using project waters must be at 
least sufficient to conform to any applicable requirements of the 
National Electrical Safety Code in effect at the time the power or 
communication line is constructed.
    (c) The Regional Engineer may require a licensee or applicant to 
provide signs at or near power or communication lines to advise the 
public of the clearances for any power or communication lines located 
over, under, or in project waters.



Sec. 12.44  Testing spillway gates.

    (a) General requirement. An applicant or licensee must make adequate 
provision, to the satisfaction of the Regional Engineer or other 
authorized Commission representative, to ensure that all spillway gates 
are operable at all times, particularly during adverse weather 
conditions.
    (b) Annual test. (1) At least once each year, each spillway gate at 
a project must be operated to spill water, either during regular project 
operation or on a test basis.
    (2) If an applicant or licensee does not operate each spillway gate 
on a test basis during the periodic inspection by the Commission staff, 
the applicant or licensee must submit to the Regional Engineer at least 
once each year a written statement, verified in accordance with Sec. 
12.13, that each spillway has been operated at least once during the 
twelve months preceding the inspection.
    (c) Load-test of standby power. (1) An applicant or licensee must 
load-test the standby emergency power for spillway gate operation at 
regular intervals, but not less than once during each year, and submit 
to the Regional Engineer, at least once each year, a written statement, 
verified in accordance with Sec. 12.13, describing the intervals at 
which the standby emergency power was load-tested during the year 
preceding the inspection.
    (2) The Commission staff may direct that a spillway gate be operated 
using standby emergency power during the periodic inspection.

[[Page 201]]



PART 16_PROCEDURES RELATING TO TAKEOVER AND RELICENSING OF LICENSED PROJECTS--

Table of Contents



                      Subpart A_General Provisions

Sec.
16.1 Applicability.
16.2 Definitions.
16.3 Public notice of projects under expiring licenses.
16.4 Acceleration of a license expiration date.
16.5 Site access for a competing applicant.

Subpart B_Applications for Projects Subject to Sections 14 and 15 of the 
                            Federal Power Act

16.6 Notification procedures under section 15 of the Federal Power Act.
16.7 Information to be made available to the public at the time of 
          notification of intent under section 15(b) of the Federal 
          Power Act.
16.8 Consultation requirements.
16.9 Applications for new licenses and nonpower licenses for projects 
          subject to sections 14 and 15 of the Federal Power Act.
16.10 Information to be provided by an applicant for new license: Filing 
          requirements.
16.11 Nonpower licenses.
16.12 Application for exemption from licensing by a licensee whose 
          license is subject to sections 14 and 15 of the Federal Power 
          Act.
16.13 Standards and factors for issuing a new license.

Subpart C_Takeover Provisions for Projects Subject to Sections 14 and 15 
                        of the Federal Power Act

16.14 Departmental recommendation for takeover.
16.15 Commission recommendation to Congress.
16.16 Motion for stay by Federal department or agency.
16.17 Procedures upon Congressional authorization of takeover.

Subpart D_Annual Licenses for Projects Subject to Sections 14 and 15 of 
                          the Federal Power Act

16.18 Annual licenses for projects subject to sections 14 and 15 of the 
          Federal Power Act.

  Subpart E_Projects With Minor and Minor Part Licenses Not Subject to 
               Sections 14 and 15 of the Federal Power Act

16.19 Procedures for an existing licensee of a minor hydroelectric power 
          project or of a minor part of a hydroelectric power project 
          with a license not subject to sections 14 and 15 of the 
          Federal Power Act.
16.20 Applications for subsequent license for a project with an expiring 
          license not subject to sections 14 and 15 of the Federal Power 
          Act.
16.21 Operation of projects with a minor or minor part license not 
          subject to sections 14 and 15 of the Federal Power Act after 
          expiration of a license.
16.22 Application for an exemption by a licensee with a minor or minor 
          part license for a project not subject to sections 14 and 15 
          of the Federal Power Act.

                      Subpart F_Procedural Matters

16.23 Failure to file timely notices of intent.
16.24 Prohibitions against filing applications for new license, nonpower 
          license, exemption, or subsequent license.
16.25 Disposition of a project for which no timely application is filed 
          following a notice of intent to file.
16.26 Disposition of a project for which no timely application is filed 
          following a notice of intent not to file.

    Authority: 16 U.S.C. 791a-825r; 42 U.S.C. 7101-7352.

    Source: Order 513, 54 FR 23806, June 2, 1989, unless otherwise 
noted.



                      Subpart A_General Provisions



Sec. 16.1  Applicability.

    This part applies to the filing and processing of an application 
for:
    (a) A new license, a nonpower license, or an exemption from 
licensing for a hydroelectric project with an existing license subject 
to the provisions of sections 14 and 15 of the Federal Power Act.
    (b) A subsequent license or an exemption from licensing for a 
hydroelectric

[[Page 202]]

project with an existing minor license or minor part license not subject 
to the provisions of sections 14 and 15 of the Federal Power Act because 
those sections were waived pursuant to section 10(i) of the Federal 
Power Act.
    (c) Any potential applicant for a new or subsequent license for 
which the deadline for the notice of intent required by Sec. 16.6 falls 
on or after July 23, 2005 and which wishes to develop and file its 
application pursuant to this part, must seek Commission authorization to 
do so pursuant to the provisions of part 5 of this chapter.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 2002, 68 FR 
51139, Aug. 25, 2003]



Sec. 16.2  Definitions.

    For purposes of this part:
    (a) New license means a license, except an annual license, for a 
water power project that is issued under section 15(a) of the Federal 
Power Act after an original license expires.
    (b) New license application filing deadline, as provided in section 
15(c)(1) of the Federal Power Act, is the date 24 months before the 
expiration of an existing license.
    (c) Nonpower license means a license for a nonpower project issued 
under section 15(b) of the Federal Power Act.
    (d) Subsequent license means a license for a water power project 
issued under Part I of the Federal Power Act after a minor or minor part 
license that is not subject to sections 14 and 15 of the Federal Power 
Act expires.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 513-A, 55 FR 
15, Jan. 2, 1990; Order 533, 56 FR 23154, May 20, 1991]



Sec. 16.3  Public notice of projects under expiring licenses.

    In addition to the notice of a licensee's intent to file or not to 
file an application for a new license provided in Sec. 16.6(d), the 
Commission will publish, in its annual report and annually in the 
Federal Register, a table showing the projects whose licenses will 
expire during the succeeding six years. The table will:
    (a) List the licenses according to their expiration dates; and
    (b) Contain the following information: license expiration date; 
licensee's name; project number; type of principal project works 
licensed, e.g., dam and reservoir, powerhouse, transmission lines; 
location by state, county, and stream; location by city or nearby city 
when appropriate; whether the existing license is subject to sections 14 
and 15 of the Federal Power Act; and plant installed capacity.



Sec. 16.4  Acceleration of a license expiration date.

    (a) Request for acceleration. (1) A licensee may file with the 
Commission, in accordance with the formal filing requirements in subpart 
T of part 385 of this chapter, a written request for acceleration of the 
expiration date of its existing license, containing the statements and 
information specified in Sec. 16.6(b) and a detailed explanation of the 
basis for the acceleration request.
    (2) If the Commission grants the request for acceleration pursuant 
to paragraph (c), the Commission will deem the request for acceleration 
to be a notice of intent under Sec. 16.6 and, unless the Commission 
directs otherwise, the licensee shall make available the information 
specified in Sec. 16.7 no later than 90 days from the date that the 
Commission grants the request for acceleration.
    (b) Notice of request for acceleration. (1) Upon receipt of a 
request for acceleration, the Commission will give notice of the 
licensee's request and provide a 45-day period for comments by 
interested persons by:
    (i) Publishing notice in the Federal Register;
    (ii) Publishing notice once in a daily or weekly newspaper published 
in the county or counties in which the project or any part thereof or 
the lands affected thereby are situated; and
    (iii) Notifying appropriate Federal, state, and interstate resource 
agencies and Indian tribes by mail.
    (2) The notice issued pursuant to paragraphs (1) (i) and (ii) and 
the written notice given pursuant to paragraph (1)(iii) will be 
considered as fulfilling the notice provisions of Sec. 16.6(d) should 
the Commission grant the acceleration request and will include an 
explanation of the basis for the licensee's acceleration request.

[[Page 203]]

    (c) Commission order. If the Commission determines it is in the 
public interest, the Commission will issue an order accelerating the 
expiration date of the license to not less than five years and 90 days 
from the date of the Commission order.



Sec. 16.5  Site access for a competing applicant.

    (a) Access. If a potential applicant for a new license, subsequent 
license, or nonpower license for a project has complied with the first 
stage consultation provisions of Sec. 16.8(b)(1) and has notified the 
existing licensee in writing of the need for and extent of the access 
required, the existing licensee must allow the potential applicant to 
enter upon or into designated land, buildings, or other property in the 
project area at a reasonable time and under reasonable conditions, 
including, but not limited to, reasonable liability conditions, 
conditions for compensation to the existing licensee for all reasonable 
costs incurred in providing access, including energy generation lost as 
a result of modification of project operations that may be necessary to 
provide access, and in a manner that will not adversely affect the 
environment, for the purposes of:
    (1) Conducting a study or gathering information required by a 
resource agency under Sec. 16.8 or by the Commission pursuant to Sec. 
4.32 of this chapter;
    (2) Conducting a study or gathering information not covered by 
paragraph (a)(1) but necessary to prepare an application for new 
license, subsequent license, or nonpower license; or
    (3) Holding a site visit for a resource agency under Sec. 16.8.
    (b)(1) Disputes. Except as specified by paragraph (b)(2), disputes 
regarding the timing and conditions of access for the purposes specified 
in paragraphs (a) (1), (2), or (3) of this section and the need for the 
studies or information specified in paragraph (a)(2) may be referred to 
the Director of the Office of Energy Projects for resolution in the 
manner specified in Sec. 16.8(b)(5) prior to the providing of access.
    (2) Disputes regarding the amount of compensation to be paid the 
existing licensee for access may be referred to the Director of the 
Office of Energy Projects for resolution in the manner specified in 
Sec. 16.8(b)(5) after the access has been provided.



Subpart B_Applications for Projects Subject to Sections 14 and 15 of the 

                            Federal Power Act



Sec. 16.6  Notification procedures under section 15 of the Federal Power Act.

    (a) Applicability. This section applies to a licensee of an existing 
project subject to sections 14 and 15 of the Federal Power Act.
    (b) Requirement to notify. In order to notify the Commission under 
section 15 of the Federal Power Act whether a licensee intends to file 
or not to file an application for new license, the licensee must file 
with the Secretary of the Commission in accordance with filing 
procedures posted on the Commission's Web site at http://www.ferc.gov a 
letter, that contains the following information:
    (1) The licensee's name and address.
    (2) The project number.
    (3) The license expiration date.
    (4) An unequivocal statement of the licensee's intention to file or 
not to file an application for a new license.
    (5) The type of principal project works licensed, such as dam and 
reservoir, powerhouse, or transmission lines.
    (6) Whether the application is for a power or nonpower license.
    (7) The location of the project by state, county and stream, and, 
when appropriate, by city or nearby city.
    (8) The installed plant capacity.
    (9) The location or locations of all the sites where the information 
required under Sec. 16.7 is available to the public.
    (10) The names and mailing addresses of:
    (i) Every county in which any part of the project is located, and in 
which any Federal facility that is used by the project is located;
    (ii) Every city, town, or similar local political subdivision:
    (A) In which any part of the project is located and any Federal 
facility that is used by the project is located, or

[[Page 204]]

    (B) That has a population of 5,000 or more people and is located 
within 15 miles of the project dam,
    (iii) Every irrigation district, drainage district, or similar 
special purpose political subdivision:
    (A) In which any part of the project is located and any Federal 
facility that is used by the project is located, or
    (B) That owns, operates, maintains, or uses any project facility or 
any Federal facility that is used by the project;
    (iv) Every other political subdivision in the general area of the 
project that there is reason to believe would be likely to be interested 
in, or affected by, the notification;
    (v) Affected Indian tribes.
    (c) When to notify. (1) Except as provided in paragraph (c)(2) of 
this section, if a license expires on or after October 17, 1992, the 
licensee must notify the Commission as required in paragraph (b) of this 
section at least five years, but no more than five and one-half years, 
before the existing license expires.
    (2) The requirement in paragraph (c)(1) of this section does not 
apply if a licensee filed notice more than five and one-half years 
before its existing license expired and before the effective date of 
this rule.
    (d) Commission notice. Upon receipt of the notification required 
under paragraph (c) of this Section, the Commission will provide notice 
of the licensee's intent to file or not to file an application for a new 
license by:
    (1) If the notification is filed prior to July 23, 2005;
    (i) Publishing notice in the Federal Register;
    (ii) Publishing notice once in a daily or weekly newspaper published 
in the county or counties in which the project or any part thereof or 
the lands affected thereby are situated; and
    (iii) Notifying the appropriate Federal and state resource agencies, 
state water quality and coastal zone management consistency certifying 
agencies, and Indian tribes, by electronic means if practical, otherwise 
by mail.
    (2) If the notification is filed on or after July 23, 2005, pursuant 
to the provisions of Sec. 5.8 of this chapter.

[Order 496, 53 FR 15810, May 4, 1988. Redesignated and amended by Order 
513, 54 FR 23807, June 2, 1989; Order 2002, 68 FR 51139, Aug. 25, 2003; 
Order 653, 70 FR 8724, Feb. 23, 2005; Order 737, 75 FR 43403, July 26, 
2010]



Sec. 16.7  Information to be made available to the public at the time of 

notification of intent under section 15(b) of the Federal Power Act.

    (a) Applicability. This section applies to a licensee of an existing 
project subject to sections 14 and 15 of the Federal Power Act.
    (b) Requirement to make information available. A licensee must make 
the information specified in paragraph (d) of this section reasonably 
available to the public for inspection and reproduction, from the date 
on which the licensee notifies the Commission pursuant to Sec. 16.6(b) 
of this part until the date any relicensing proceeding for the project 
is terminated.
    (c) Requirement to supplement information. A licensee must 
supplement the information it is required to make available under the 
provisions of paragraph (d) with any additional information developed 
after the filing of a notice of intent.
    (d) Information to be made available. (1) A licensee for which the 
deadline for filing a notification of intent to seek a new or subsequent 
license is on or after July 23, 2005 must, at the time it files a 
notification of intent to seek a license pursuant to Sec. 5.5 of this 
chapter, provide a copy of the pre-application document required by 
Sec. 5.6 of this chapter to the entities specified in that paragraph.
    (2) A licensee for which the deadline for filing a notification of 
intent to seek a new or subsequent license is prior to July 23, 2005, 
and which elects to seek a license pursuant to this part must make the 
following information regarding its existing project reasonably 
available to the public as provided in paragraph (b) of this section:
    (i) The following construction and operation information:
    (A) The original license application and the order issuing the 
license and any subsequent license application and

[[Page 205]]

subsequent order issuing a license for the existing project, including
    (1) Approved Exhibit drawings, including as-built exhibits,
    (2) Any order issuing amendments or approving exhibits,
    (3) Any order issuing annual licenses for the existing project;
    (B) All data relevant to whether the project is and has been 
operated in accordance with the requirements of each license article, 
including minimum flow requirements, ramping rates, reservoir elevation 
limitations, and environmental monitoring data;
    (C) A compilation of project generation and respective outflow with 
time increments not to exceed one hour, unless use of another time 
increment can be justified, for the period beginning five years before 
the filing of a notice of intent;
    (D) Any public correspondence related to the existing project;
    (E) Any report on the total actual annual generation and annual 
operation and maintenance costs for the period beginning five years 
before the filing of a notice of intent;
    (F) Any reports on original project costs, current net investment, 
and available funds in the amortization reserve account;
    (G) A current and complete electrical single-line diagram of the 
project showing the transfer of electricity from the project to the area 
utility system or point of use; and
    (H) Any bill issued to the existing licensee for annual charges 
under Section 10(e) of the Federal Power Act.
    (ii) The following safety and structural adequacy information:
    (A) The most recent emergency action plan for the project or a 
letter exempting the project from the emergency action plan requirement;
    (B) Any independent consultant's reports required by part 12 of this 
chapter and filed on or after January 1, 1981;
    (C) Any report on operation or maintenance problems, other than 
routine maintenance, occurring within the five years preceding the 
filing of a notice of intent or within the most recent five-year period 
for which data exists, and associated costs of such problems under the 
Commission's Uniform System of Accounts;
    (D) Any construction report for the existing project; and
    (E) Any public correspondence relating to the safety and structural 
adequacy of the existing project.
    (iii) The following fish and wildlife resources information:
    (A) Any report on the impact of the project's construction and 
operation on fish and wildlife resources;
    (B) Any existing report on any threatened or endangered species or 
critical habitat located in the project area, or affected by the 
existing project outside the project area;
    (C) Any fish and wildlife management plan related to the project 
area prepared by the existing licensee or any resource agency; and
    (D) Any public correspondence relating to the fish and wildlife 
resources within the project area.
    (iv) The following recreation and land use resources information:
    (A) Any report on past and current recreational uses of the project 
area;
    (B) Any map showing recreational facilities and areas reserved for 
future development in the project area, designated or proposed 
wilderness areas in the project area; Land and Water Conservation Fund 
lands in the project area, and designated or proposed Federal or state 
wild and scenic river corridors in the project area.
    (C) Any documentation listing the entity responsible for operating 
and maintaining any existing recreational facilities in the project 
area; and
    (D) Any public correspondence relating to recreation and land use 
resources within the project area.
    (v) The following cultural resources information:
    (A) Except as provided in paragraph (d)(2)(v)(B) of this section, a 
licensee must make available:
    (1) Any report concerning documented archeological resources 
identified in the project area;
    (2) Any report on past or present use of the project area and 
surrounding areas by Native Americans; and
    (3) Any public correspondence relating to cultural resources within 
the project area.
    (B) A licensee must delete from any information made available under 
paragraph (d)(2)(v)(A) of this section,

[[Page 206]]

specific site or property locations the disclosure of which would create 
a risk of harm, theft, or destruction of archeological or Native 
American cultural resources or to the site at which the resources are 
located, or would violate any Federal law, including the Archeological 
Resources Protection Act of 1979, 16 U.S.C. 470w-3, and the National 
Historic Preservation Act of 1966, 16 U.S.C. 470hh.
    (vi) The following energy conservation information under section 
10(a)(2)(C) of the Federal Power Act related to the licensee's efforts 
to conserve electricity or to encourage conservation by its customers 
including:
    (A) Any plan of the licensee;
    (B) Any public correspondence; and
    (C) Any other pertinent information relating to a conservation plan.
    (3)-(6) [Reserved]
    (7)(i) If paragraph (d) of this section requires an applicant to 
reveal Critical Energy Infrastructure Information (CEII), as defined in 
Sec. 388.113(c) of this chapter, to any person, the applicant shall 
omit the CEII from the information made available and insert the 
following in its place:
    (A) A statement that CEII is being withheld;
    (B) A brief description of the omitted information that does not 
reveal any CEII; and
    (C) This statement: ``Procedures for obtaining access to Critical 
Energy Infrastructure Information (CEII) may be found at 18 CFR 388.113. 
Requests for access to CEII should be made to the Commission's CEII 
Coordinator.''
    (ii) The applicant, in determining whether information constitutes 
CEII, shall treat the information in a manner consistent with any 
filings that applicant has made with the Commission and shall to the 
extent practicable adhere to any previous determinations by the 
Commission or the CEII Coordinator involving the same or like 
information.
    (iii) The procedures contained in Sec. Sec. 388.112 and 388.113 of 
this chapter regarding designation of, and access to, CEII, shall apply 
in the event of a challenge to a CEII designation or a request for 
access to CEII. If it is determined that information is not CEII or that 
a requester should be granted access to CEII, the applicant will be 
directed to make the information available to the requester.
    (iv) Nothing in this section shall be construed to prohibit any 
persons from voluntarily reaching arrangements or agreements calling for 
the disclosure of CEII.
    (e) Form, place, and hours of availability, and cost of 
reproduction. (1) A licensee must make the information specified in 
paragraph (d) of this section, or the pre-application document, as 
applicable, available to the public for inspection:
    (i) At its principal place of business or at any other location or 
locations that are more accessible to the public, provided that all of 
the information is available in at least one location;
    (ii) During regular business hours; and
    (iii) In a form that is readily accessible, reviewable, and 
reproducible.
    (2) Except as provided in paragraph (d)(3) of this section, a 
licensee must make requested copies of the information specified in 
paragraph (c) of this section available either:
    (i) At its principal place of business or at any other location or 
locations that are more accessible to the public, after obtaining 
reimbursement for reasonable costs of reproduction; or
    (ii) Through the mail, after obtaining reimbursement for postage 
fees and reasonable costs of reproduction.
    (3) A licensee must make requested copies of the information 
specified in paragraph (d) of this section available to the United 
States Fish and Wildlife Service, the National Marine Fisheries Service, 
Indian tribes, and the state agency responsible for fish and wildlife 
resources without charge for the costs of reproduction or postage.
    (f) Unavailability of required information. Anyone may file a 
petition with the Commission requesting access to the information 
specified in paragraph (d) of this section if it believes that a 
licensee is not making the information reasonably available for public 
inspection or reproduction. The petition must describe in detail the 
basis for the petitioner's belief.
    (g) Public correspondence. A licensee may compile and make available 
in one

[[Page 207]]

file all the public correspondence required to be made available for 
inspection and reproduction by Sec. 16.7(d)(1)(iv), (d)(2)(v), 
(d)(3)(iv), (d)(4)(iv), and (d)(6)(ii).

[Order 496, 53 FR 15810, May 4, 1988. Redesignated by Order 513, 54 FR 
23807, June 2, 1989; Order 513-C, 55 FR 10768, Mar. 23, 1990; Order 
2002, 68 FR 51139, Aug. 25, 2003; Order 643, 68 FR 52095, Sept. 2, 2003]



Sec. 16.8  Consultation requirements.

    (a) Requirement to consult. (1) Before it files any application for 
a new license, a nonpower license, an exemption from licensing, or, 
pursuant to Sec. 16.25 or Sec. 16.26 of this part, a surrender of a 
project, a potential applicant must consult with the relevant Federal, 
State, and interstate resource agencies, including the National Marine 
Fisheries Service, the United States Fish and Wildlife Service, the 
National Park Service, the United States Environmental Protection 
Agency, the Federal agency administering any United States lands or 
facilities utilized or occupied by the project, the appropriate state 
fish and wildlife agencies, the appropriate State water resource 
management agencies, the certifying agency under section 401(a)(1) of 
the Federal Water Pollution Control Act (Clean Water Act), 33 U.S.C. 
1341(c)(1), and any Indian tribe that may be affected by the project.
    (2) Each requirement in this section to contact or consult with 
resource agencies or Indian tribes shall require as well that the 
potential Applicant contact or consult with members of the public.
    (3) If the potential applicant for a new or subsequent license 
commences first stages pre-filing consultation under this part on or 
after July 23, 2005, it must file a notification of intent to file a 
license application pursuant to Sec. 5.5 of this chapter and a pre-
application document pursuant to the provisions of Sec. 5.6 of this 
chapter.
    (4) The Director of the Office of Energy Projects will, upon 
request, provide a list of known appropriate Federal, state, and 
interstate resource agencies, and Indian tribes, and local, regional, or 
national non-governmental organizations likely to be interested in any 
license application proceeding.
    (5)(i) Before it files an amendment that would be considered as 
material under Sec. 4.35 of this part, to any application subject to 
this section, an applicant must consult with the resource agencies and 
Indian tribes listed in paragraph (a)(1) of this section and allow such 
agencies and tribes at least 60 days to comment on a draft of the 
proposed amendment and to submit recommendations and conditions to the 
applicant. The amendment as filed with the Commission must summarize the 
consultation with the resource agencies and Indian tribes on the 
proposed amendment and respond to any obligations, recommendations or 
conditions submitted by the agencies or Indian tribes.
    (ii) If an applicant has any doubt as to whether a particular 
amendment would be subject to the pre-filing consultation requirements 
of this section, the applicant may file a written request for 
clarification with the Director, Office of Energy Projects.
    (b) First stage of consultation. (1) A potential Applicant for a new 
or subsequent license must, at the time it files its notification of 
intent to seek a license pursuant to Sec. 5.5 of this chapter, provide 
a copy of the pre-application document required by Sec. 5.6 of this 
chapter to the entities specified in Sec. 5.6(a) of this chapter.
    (2) A potential applicant for a nonpower license or exemption or a 
potential applicant which elects to use the licensing procedures of 
Parts 4 or 16 of this chapter prior to July 23, 2005, must promptly 
contact each of the appropriate resource agencies, Indian tribes, and 
members of the public listed in paragraph (a)(1) of this section, and 
the Commission with the following information:
    (i) Detailed maps showing existing project boundaries, if any, 
proper land descriptions of the entire project area by township, range, 
and section, as well as by state, county, river, river mile, and closest 
town, and also showing the specific location of all existing and 
proposed project facilities, including roads, transmission lines, and 
any other appurtenant facilities;
    (ii) A general engineering design of the existing project and any 
proposed

[[Page 208]]

changes, with a description of any existing or proposed diversion of a 
stream through a canal or penstock;
    (iii) A summary of the existing operational mode of the project and 
any proposed changes;
    (iv) Identification of the environment affected or to be affected, 
the significant resources present and the applicant's existing and 
proposed environmental protection, mitigation, and enhancement plans, to 
the extent known at that time;
    (v) Streamflow and water regime information, including drainage 
area, natural flow periodicity, monthly flow rates and durations, mean 
flow figures illustrating the mean daily streamflow curve for each month 
of the year at the point of diversion or impoundment, with location of 
the stream gauging station, the method used to generate the streamflow 
data provided, and copies of all records used to derive the flow data 
used in the applicant's engineering calculations;
    (vi) Detailed descriptions of any proposed studies and the proposed 
methodologies to be employed; and
    (vii) Any statement required by Sec. 4.301(a) of this chapter.
    (3)(i) A potential applicant for an exemption, a new or subsequent 
license for which the deadline for filing a notification of intent to 
seek a license is prior to July 23, 2005 and which elects to commence 
pre-filing consultation under this part, or a new or subsequent license 
for which the deadline for filing a notification of intent to seek a 
license is on or after July 23, 2005 and which receives Commission 
approval to use the license application procedures of this part must:
    (A) Hold a joint meeting, including an opportunity for a site visit, 
with all pertinent agencies, Indian tribes and members of the public to 
review the information and to discuss the data and studies to be 
provided by the potential applicant as part of the consultation process; 
and
    (B) Consult with the resource agencies, Indian tribes and members of 
the public on the scheduling of the joint meeting; and provide each 
resource agency, Indian tribe, member of the public, and the Commission 
with written notice of the time and place of the joint meeting and a 
written agenda of the issues to be discussed at the meeting at least 15 
days in advance.
    (ii) The joint meeting must be held no earlier than 30 days, and no 
later than 60 days from, as applicable:
    (A) The date of the potential applicant's letter transmitting the 
information required by paragraph (b)(2) of this section, in the case of 
a potential exemption applicant or a potential license applicant that 
commences pre-filing consultation under this part prior to July 23, 
2005; or
    (B) The date of the Commission's approval of the potential license 
applicant's request to use the license application procedures of this 
part pursuant to the provisions of part 5, in the case of a potential 
license applicant for which the deadline for filing a notification of 
intent to seek a license is on or after July 23, 2005.
    (4) Members of the public are invited to attend the joint meeting 
held pursuant to paragraph (b)(3) of this section. Members of the public 
attending the meeting are entitled to participate fully in the meeting 
and to express their views regarding resource issues that should be 
addressed in any application for a new license that may be filed by the 
potential applicant. Attendance of the public at any site visit held 
pursuant to paragraph (b)(3) of this section shall be at the discretion 
of the potential applicant. The potential applicant must make either 
audio recordings or written transcripts of the joint meeting, and must 
upon request promptly provide copies of these recordings or transcripts 
to the Commission and any resource agency and Indian tribe.
    (5) Unless otherwise extended by the Director of Office of Energy 
Projects pursuant to paragraph (b)(6) of this section, not later than 60 
days after the joint meeting held under paragraph (b)(3) of this section 
each interested resource agency, and Indian tribe, and member of the 
public must provide a potential applicant with written comments:
    (i) Identifying its determination of necessary studies to be 
performed or information to be provided by the potential applicant;

[[Page 209]]

    (ii) Identifying the basis for its determination;
    (iii) Discussing its understanding of the resource issues and its 
goals objectives for these resources;
    (iv) Explaining why each study methodology recommended by it is more 
appropriate than any other available methodology alternatives, including 
those identified by the potential applicant pursuant to paragraph 
(b)(2)(vi) of this section;
    (v) Documenting that the use of each study methodology recommended 
by it is a generally accepted practice; and
    (vi) Explaining how the studies and information requested will be 
useful to the agency, Indian tribe, or member of the public in 
furthering its resource goals and objectives.
    (6)(i) If a potential applicant and a resource agency, Indian tribe, 
or member of the public disagree as to any matter arising during the 
first stage of consultation or as to the need to conduct a study or 
gather information referenced in paragraph (c)(2) of this section, the 
potential applicant or resource agency, or Indian tribe, or member of 
the public may refer the dispute in writing to the Director of the 
Office of Energy Projects (Director) for resolution.
    (ii) The entity referring the dispute must serve a copy of its 
written request for resolution on the disagreeing party at the time the 
request is submitted to the Director. The disagreeing party may submit 
to the Director a written response to the referral within 15 days of the 
referral's submittal to the Director.
    (iii) Written referrals to the Director and written responses 
thereto pursuant to paragraphs (b)(6)(i) or (b)(6)(ii) of this section 
must be filed with the Secretary of the Commission in accordance with 
the Commission's Rules of Practice and Procedure, and must indicate that 
they are for the attention of the Director of the Office of Energy 
Projects pursuant to Sec. 16.8(b)(6).
    (iv) The Director will resolve disputes by an order directing the 
potential applicant to gather such information or conduct such study or 
studies as, in the Director's view, is reasonable and necessary.
    (v) If a resource agency, Indian tribe, or member of the public 
fails to refer a dispute regarding a request for a potential applicant 
to obtain information or conduct studies (other than a dispute regarding 
the information specified in paragraph (b)(1) or (b)(2) of this section, 
as applicable), the Commission will not entertain the dispute following 
the filing of the license application.
    (vi) If a potential applicant fails to obtain information or conduct 
a study as required by the Director pursuant to paragraph (b)(6)(iv) of 
this section, its application will be considered deficient.
    (7) Unless otherwise extended by the Director pursuant to paragraph 
(b)(6) of this section, the first stage of consultation ends when all 
participating agencies, Indian tribes, and members of the public provide 
the written comments required under paragraph (b)(5) of this section or 
60 days after the joint meeting held under paragraph (b)(3) of this 
section, whichever occurs first.
    (c) Second stage of consultation. (1) Unless determined otherwise by 
the Director of the Office of Energy Projects pursuant to paragraph 
(b)(6) of this section, a potential applicant must complete all 
reasonable and necessary studies and obtain all reasonable and necessary 
information requested by resource agencies and Indian tribes under 
paragraph (b):
    (i) Prior to filing the application, if the results:
    (A) Would influence the financial (e.g., instream flow study) or 
technical feasibility of the project (e.g., study of potential mass soil 
movement); or
    (B) Are needed to determine the design or location of project 
features, reasonable alternatives to the project, the impact of the 
project on important natural or cultural resources (e.g., resource 
surveys), suitable mitigation or enhancement measures, or to minimize 
impact on significant resources (e.g., wild and scenic river, anadromous 
fish, endangered species, caribou migration routes);
    (ii) After filing the application but before license issuance, if 
the applicant complied with the provisions of paragraph (b)(1) or (b)(2) 
of this section, as applicable, no later than four years

[[Page 210]]

prior to the expiration date of the existing license and the results:
    (A) Would be those described in paragraphs (c)(1)(i) (A) or (B) of 
this section; and
    (B) Would take longer to conduct and evaluate than the time between 
the conclusion of the first stage of consultation and the new license 
application filing deadline.
    (iii) After a new license is issued, if the studies can be conducted 
or the information obtained only after construction or operation of 
proposed facilities, would determine the success of protection, 
mitigation, or enhancement measures (e.g., post-construction monitoring 
studies), or would be used to refine project operation or modify project 
facilities.
    (2) If, after the end of the first stage of consultation as defined 
in paragraph (b)(7) of this section, a resource agency, Indian tribe, or 
member of the public requests that the potential applicant conduct a 
study or gather information not previously identified and specifies the 
basis for its request, under paragraphs (b)(5)(i)-(vi) of this section, 
the potential applicant will promptly initiate the study or gather the 
information, unless the Director of the Office of Energy Projects 
determines under paragraph (b)(5) of this section either that the study 
or information is unreasonable or unnecessary or that use of the 
methodology requested by a resource agency or Indian tribe for 
conducting the study is not a generally accepted practice.
    (3) (i) The results of studies and information gathering referenced 
in paragraphs (c)(1)(ii) and (c)(2) of this section will be treated as 
additional information; and
    (ii) Filing and acceptance of an application will not be delayed and 
an application will not be considered deficient or patently deficient 
pursuant to Sec. 4.32 (e)(1) or (e)(2) of this chapter merely because 
the study or information gathering is not complete before the 
application is filed.
    (4) A potential applicant must provide each resource agency and 
Indian tribe with:
    (i) A copy of its draft application that:
    (A) Indicates the type of application the potential applicant 
expects to file with the Commission; and
    (B) Responds to any comments and recommendations made by any 
resource agency or Indian tribe either during the first stage of 
consultation or under paragraph (c)(2) of this section;
    (ii) The results of all studies and information gathering either 
requested by that resource agency or Indian tribe in the first stage of 
consultation (or under paragraph (c)(2) of this section if available) or 
which pertains to resources of interest to that resource agency or 
Indian tribe and which were identified by the potential applicant 
pursuant to paragraph (b)(2)(vi) of this section, including a discussion 
of the results and any proposed protection, mitigation, or enhancement 
measure; and
    (iii) A written request for review and comment.
    (5) A resource agency or Indian tribe will have 90 days from the 
date of the potential applicant's letter transmitting the paragraph 
(c)(4) of this section information to it to provide written comments on 
the information submitted by a potential applicant under paragraph 
(c)(4) of this section.
    (6) If the written comments provided under paragraph (c)(5) of this 
section indicate that a resource agency or Indian tribe has a 
substantive disagreement with a potential applicant's conclusions 
regarding resource impacts or its proposed protection, mitigation, or 
enhancement measures, the potential applicant will:
    (i) Hold at least one joint meeting with the disagreeing resource 
agency or Indian tribe and other agencies with similar or related areas 
of interest, expertise, or responsibility not later than 60 days from 
the date of the disagreeing agency's or Indian tribe's written comments 
to discuss and to attempt to reach agreement on its plan for 
environmental protection, mitigation, or enhancement measures; and
    (ii) Consult with the disagreeing agency or Indian tribe and other 
agencies with similar or related areas of interest, expertise, or 
responsibility on the scheduling of the joint meeting and

[[Page 211]]

provide the disagreeing resource agency or Indian tribe, other agencies 
with similar or related areas of interest, expertise, or responsibility, 
and the Commission with written notice of the time and place of each 
meeting and a written agenda of the issues to be discussed at the 
meeting at least 15 days in advance.
    (7) The potential applicant and any disagreeing resource agency or 
Indian tribe may conclude a joint meeting with a document embodying any 
agreement among them regarding environmental protection, mitigation, or 
enhancement measures and any issues that are unresolved.
    (8) The potential applicant must describe all disagreements with a 
resource agency or Indian tribe on technical or environmental 
protection, mitigation, or enhancement measures in its application, 
including an explanation of the basis for the applicant's disagreement 
with the resource agency or Indian tribe, and must include in its 
application any document developed pursuant to paragraph (c)(7) of this 
section.
    (9) A potential applicant may file an application with the 
Commission if:
    (i) It has complied with paragraph (c)(4) of this section and no 
resource agency or Indian tribe has responded with substantive 
disagreements by the deadline specified in paragraph (c)(5) of this 
section; or
    (ii) It has complied with paragraph (c)(6) of this section if any 
resource agency or Indian tribe has responded with substantive 
disagreements.
    (10) The second stage of consultation ends:
    (i) Ninety days after the submittal of information pursuant to 
paragraph (c)(4) of this section in cases where no resource agency or 
Indian tribe has responded with substantive disagreements; or
    (ii) At the conclusion of the last joint meeting held pursuant to 
paragraph (c)(6) of this section in cases where a resource agency or 
Indian tribe has responded with substantive disagreements.
    (d) Third stage of consultation. (1) The third stage of consultation 
is initiated by the filing of an application for a new license, nonpower 
license, exemption from licensing, or surrender of license, accompanied 
by a transmittal letter certifying that at the same time copies of the 
application are being distributed to the resource agencies, Indian 
tribes, and other government offices specified in paragraph (d)(2) of 
this section and Sec. 16.10(f) of this part, if applicable.
    (2) As soon as an applicant files such application documents with 
the Commission, or promptly after receipt in the case of documents 
described in paragraph (d)(2)(iii) of this section, as the Commission 
may direct, the applicant must serve on every resource agency and Indian 
tribe consulted, on other government offices, and, in the case of 
applications for surrender or nonpower license, any state, municipal, 
interstate, or Federal agency which is authorized to assume regulatory 
supervision over the land, waterways, and facilities covered by the 
application for surrender or nonpower license, copies of:
    (i) Its application for a new license, a nonpower license, an 
exemption from licensing, or a surrender of the project;
    (ii) Any deficiency correction, revision, supplement, response to 
additional information request, or amendment to the application; and
    (iii) Any written correspondence from the Commission requesting the 
correction of deficiencies or the submittal of additional information.
    (e) Resource agency or Indian tribe waiver of compliance with 
consultation requirement. (1) If a resource agency or Indian tribe 
waives in writing compliance with any requirement of this section, a 
potential applicant does not have to comply with that requirement as to 
that agency or Indian tribe.
    (2) If a resource agency or Indian tribe fails to timely comply with 
a provision regarding a requirement of this section, a potential 
applicant may proceed to the next sequential requirement of this section 
without waiting for the resource agency or Indian tribe to comply.
    (3) The failure of a resource agency or Indian tribe to timely 
comply with a provision regarding a requirement of this section does not 
preclude its participation in subsequent stages of the consultation 
process.

[[Page 212]]

    (4) Following July 23, 2003 a potential license applicant engaged in 
pre-filing consultation under this part may during first stage 
consultation request to incorporate into pre-filing consultation any 
element of the integrated license application process provided for in 
part 5 of this chapter. Any such request must be accompanied by a:
    (i) Specific description of how the element of the part 5 license 
application would fit into the pre-filing consultation process under 
this part; and
    (ii) Demonstration that the potential license applicant has made 
every reasonable effort to contact all resource agencies, Indian tribes, 
non-governmental organizations, and others affected by the potential 
applicant's proposal, and that a consensus exists in favor of 
incorporating the specific element of the part 5 process into the pre-
filing consultation under this part.
    (f) Application requirements documenting consultation and any 
disagreements with resource agencies or Indian tribes. An applicant must 
show in Exhibit E of its application that it has met the requirements of 
paragraphs (b) through (d) of this section, and Sec. 16.8(i), and must 
include:
    (1) Any resource agency's or Indian tribe's letters containing 
comments, recommendations, and proposed terms and conditions;
    (2) Any letters from the public containing comments and 
recommendations;
    (3) Notice of any remaining disagreement with a resource agency or 
Indian tribe on:
    (i) The need for a study or the manner in which a study should be 
conducted and the applicant's reasons for disagreement, and
    (ii) Information on any environmental protection, mitigation, or 
enhancement measure, including the basis for the applicant's 
disagreement with the resource agency or Indian tribe.
    (4) Evidence of any waivers under paragraph (e) of this section;
    (5) Evidence of all attempts to consult with a resource agency or 
Indian tribe, copies of related documents showing the attempts, and 
documents showing the conclusion of the second stage of consultation;
    (6) An explanation of how and why the project would, would not, or 
should not, comply with any relevant comprehensive plan as defined in 
Sec. 2.19 of this chapter and a description of any relevant resource 
agency or Indian tribe determination regarding the consistency of the 
project with any such comprehensive plan;
    (7) A description of how the applicant's proposal addresses the 
significant resource issues raised by members of the public during the 
joint meeting held pursuant to paragraph (b)(2) of this section.
    (g) Requests for privileged treatment of pre-filing submission. If a 
potential applicant requests privileged treatment of any information 
submitted to the Commission during pre-filing consultation (except for 
the information specified in paragraph (b)(1) of this section), the 
Commission will treat the request in accordance with the provisions in 
Sec. 388.112 of this chapter until the date the application is filed 
with the Commission.
    (h) Other meetings. Prior to holding a meeting with a resource 
agency or Indian tribe, other than a joint meeting pursuant to paragraph 
(b)(3)(i) or (c)(6)(i) of this section, a potential applicant must 
provide the Commission and each resource agency or Indian tribe (with an 
area of interest, expertise, or responsibility similar or related to 
that of the resource agency or Indian tribe with which the potential 
applicant is to meet) with written notice of the time and place of each 
meeting and a written agenda of the issues to be discussed at the 
meeting at least 15 days in advance.
    (i) Public participation. (1) At least 14 days in advance of the 
joint meeting held pursuant to paragraph (b)(3), the potential applicant 
must publish notice, at least once, of the purpose, location, and timing 
of the joint meeting, in a daily or weekly newspaper published in the 
county or counties in which the existing project or any part thereof or 
the lands affected thereby are situated. The notice shall include a copy 
of the written agenda of the issues to be discussed at the joint meeting 
prepared pursuant to paragraph (b)(3)(ii) of this section.

[[Page 213]]

    (2)(i) A potential applicant must make available to the public for 
inspection and reproduction the information specified in paragraph 
(b)(1) of this section from the date on which the notice required by 
paragraph (i)(1) of this section is first published until a final order 
is issued on the license application.
    (ii) The provisions of Sec. 16.7(e) shall govern the form and 
manner in which the information is to be made available for public 
inspection and reproduction.
    (iii) A potential applicant must make available to the public for 
inspection at the joint meeting required by paragraph (b)(3) of this 
section the information specified in paragraph (b)(2) of this section.
    (j) Critical Energy Infrastructure Information. If this section 
requires an applicant to reveal Critical Energy Infrastructure 
Information (CEII), as defined by Sec. 388.113(c) of this chapter, to 
any person, the applicant shall follow the procedures set out in Sec. 
16.7(d)(7).

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 513-A, 55 FR 
16, Jan. 2, 1990; Order 533, 56 FR 23154, May 20, 1991; 56 FR 61156, 
Dec. 2, 1991; Order 2002, 68 FR 51140, Aug. 25, 2003; Order 643, 68 FR 
52095, Sept. 2, 2003; 68 FR 61743, Oct. 30, 2003]



Sec. 16.9  Applications for new licenses and nonpower licenses for projects 

subject to sections 14 and 15 of the Federal Power Act.

    (a) Applicability. This section applies to an applicant for a new 
license or nonpower license for a project subject to sections 14 and 15 
of the Federal Power Act.
    (b) Filing requirement. (1) An applicant for a license under this 
section must file its application at least 24 months before the existing 
license expires.
    (2) An application for a license under this section must meet the 
requirements of Sec. 4.32 (except that the Director of the Office of 
Energy Projects may provide more than 90 days in which to correct 
deficiencies in applications) and, as appropriate, Sec. Sec. 4.41, 
4.51, or 4.61 of this chapter.
    (3) The requirements of Sec. 4.35 of this chapter do not apply to 
an application under this section, except that the Commission will 
reissue a public notice of the application in accordance with the 
provisions of Sec. 16.9(d)(1) if an amendment described in Sec. 
4.35(f) of this chapter is filed.
    (4) If the Commission rejects or dismisses an application pursuant 
to the provisions of Sec. 4.32 of this chapter, the application may not 
be refiled after the new license application filing deadline specified 
in Sec. 16.9(b)(1).
    (c) Final amendments. All amendments to an application, including 
the final amendment, must be filed with the Commission and served on all 
competing applicants no later than the date specified in the notice 
issued under paragraph (d)(2).
    (d) Commission notice. (1) Upon acceptance of an application for a 
new license or a nonpower license, the Commission will give notice of 
the application and of the dates for comment, intervention, and protests 
by:
    (i) Publishing notice in the Federal Register;
    (ii) Publishing notice once every week for four weeks in a daily or 
weekly newspaper published in the county or counties in which the 
project or any part thereof or the lands affected thereby are situated; 
and
    (iii) Notifying appropriate Federal, state, and interstate resource 
agencies, Indian tribes, and non-governmental organizations, by 
electronic means if practical, otherwise by mail.
    (2) Within 60 days after the new license application filing 
deadline, the Commission will issue a notice on the processing deadlines 
established under Sec. 4.32 of this chapter, estimated dates for 
further processing deadlines under Sec. 4.32 of this chapter, deadlines 
for complying with the provisions of Sec. 4.36(d)(2) (ii) and (iii) of 
this chapter in cases where competing applications are filed, and the 
date for final amendments and will:
    (i) Publish the notice in the Federal Register;
    (ii) Provide the notice to appropriate Federal, state, and 
interstate resource agencies and Indian tribes, by electronic means if 
practical, otherwise by mail; and
    (iii) Serve the notice on all parties to the proceedings pursuant to 
Sec. 385.2010 of this chapter.
    (3) Where two or more mutually exclusive competing applications have 
been filed for the same project, the

[[Page 214]]

final amendment date and deadlines for complying with the provisions of 
Sec. 4.36(d)(2) (ii) and (iii) of this chapter established pursuant to 
the notice issued under paragraph (d)(2) of this section will be the 
same for all such applications.
    (4) The provisions of Sec. 4.36(d)(2)(i) of this chapter will not 
be applicable to applications filed pursuant to this section.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 2002, 68 FR 
51142, Aug. 25, 2003; Order 653, 70 FR 8724, Feb. 23, 2005]



Sec. 16.10  Information to be provided by an applicant for new license: Filing 

requirements.

    (a) Information to be supplied by all applicants. All applicants for 
a new license under this part must file the following information with 
the Commission:
    (1) A discussion of the plans and ability of the applicant to 
operate and maintain the project in a manner most likely to provide 
efficient and reliable electric service, including efforts and plans to:
    (i) Increase capacity or generation at the project;
    (ii) Coordinate the operation of the project with any upstream or 
downstream water resource projects; and
    (iii) Coordinate the operation of the project with the applicant's 
or other electrical systems to minimize the cost of production.
    (2) A discussion of the need of the applicant over the short and 
long term for the electricity generated by the project, including:
    (i) The reasonable costs and reasonable availability of alternative 
sources of power that would be needed by the applicant or its customers, 
including wholesale customers, if the applicant is not granted a license 
for the project;
    (ii) A discussion of the increase in fuel, capital, and any other 
costs that would be incurred by the applicant or its customers to 
purchase or generate power necessary to replace the output of the 
licensed project, if the applicant is not granted a license for the 
project;
    (iii) The effect of each alternative source of power on:
    (A) The applicant's customers, including wholesale customers;
    (B) The applicant's operating and load characteristics; and
    (C) The communities served or to be served, including any 
reallocation of costs associated with the transfer of a license from the 
existing licensee.
    (3) The following data showing need and the reasonable cost and 
availability of alternative sources of power:
    (i) The average annual cost of the power produced by the project, 
including the basis for that calculation;
    (ii) The projected resources required by the applicant to meet the 
applicant's capacity and energy requirements over the short and long 
term including:
    (A) Energy and capacity resources, including the contributions from 
the applicant's generation, purchases, and load modification measures 
(such as conservation, if considered as a resource), as separate 
components of the total resources required;
    (B) A resource analysis, including a statement of system reserve 
margins to be maintained for energy and capacity; and
    (C) If load management measures are not viewed as resources, the 
effects of such measures on the projected capacity and energy 
requirements indicated separately;
    (iii) For alternative sources of power, including generation of 
additional power at existing facilities, restarting deactivated units, 
the purchase of power off-system, the construction or purchase and 
operation of a new power plant, and load management measures such as 
conservation:
    (A) The total annual cost of each alternative source of power to 
replace project power;
    (B) The basis for the determination of projected annual cost; and
    (C) A discussion of the relative merits of each alternative, 
including the issues of the period of availability and dependability of 
purchased power, average life of alternatives, relative equivalent 
availability of generating alternatives, and relative impacts on the 
applicant's power system reliability and other system operating 
characteristics; and
    (iv) The effect on the direct providers (and their immediate 
customers) of alternate sources of power.

[[Page 215]]

    (4) If an applicant uses power for its own industrial facility and 
related operations, the effect of obtaining or losing electricity from 
the project on the operation and efficiency of such facility or related 
operations, its workers, and the related community.
    (5) If an applicant is an Indian tribe applying for a license for a 
project located on the tribal reservation, a statement of the need of 
such tribe for electricity generated by the project to foster the 
purposes of the reservation.
    (6) A comparison of the impact on the operations and planning of the 
applicant's transmission system of receiving or not receiving the 
project license, including:
    (i) An analysis of the effects of any resulting redistribution of 
power flows on line loading (with respect to applicable thermal, 
voltage, or stability limits), line losses, and necessary new 
construction of transmission facilities or upgrading of existing 
facilities, together with the cost impact of these effects;
    (ii) An analysis of the advantages that the applicant's transmission 
system would provide in the distribution of the project's power; and
    (iii) Detailed single-line diagrams, including existing system 
facilities identified by name and circuit number, that show system 
transmission elements in relation to the project and other principal 
interconnected system elements. Power flow and loss data that represent 
system operating conditions may be appended if applicants believe such 
data would be useful to show that the operating impacts described would 
be beneficial.
    (7) If the applicant has plans to modify existing project facilities 
or operations, a statement of the need for, or usefulness of, the 
modifications, including at least a reconnaissance-level study of the 
effect and projected costs of the proposed plans and any alternate 
plans, which in conjunction with other developments in the area would 
conform with a comprehensive plan for improving or developing the 
waterway and for other beneficial public uses as defined in section 
10(a)(1) of the Federal Power Act.
    (8) If the applicant has no plans to modify existing project 
facilities or operations, at least a reconnaissance-level study to show 
that the project facilities or operations in conjunction with other 
developments in the area would conform with a comprehensive plan for 
improving or developing the waterway and for other beneficial public 
uses as defined in section 10(a)(1) of the Federal Power Act.
    (9) A statement describing the applicant's financial and personnel 
resources to meet its obligations under a new license, including 
specific information to demonstrate that the applicant's personnel are 
adequate in number and training to operate and maintain the project in 
accordance with the provisions of the license.
    (10) If an applicant proposes to expand the project to encompass 
additional lands, a statement that the applicant has notified, by 
certified mail, property owners on the additional lands to be 
encompassed by the project and governmental agencies and subdivisions 
likely to be interested in or affected by the proposed expansion.
    (11) The applicant's electricity consumption efficiency improvement 
program, as defined under section 10(a)(2)(C) of the Federal Power Act, 
including:
    (i) A statement of the applicant's record of encouraging or 
assisting its customers to conserve electricity and a description of its 
plans and capabilities for promoting electricity conservation by its 
customers; and
    (ii) A statement describing the compliance of the applicant's energy 
conservation programs with any applicable regulatory requirements.
    (12) The names and mailing addresses of every Indian tribe with land 
on which any part of the proposed project would be located or which the 
applicant reasonably believes would otherwise be affected by the 
proposed project.
    (b) Information to be provided by an applicant who is an existing 
licensee. An existing licensee that applies for a new license must 
provide:
    (1) The information specified in paragraph (a).
    (2) A statement of measures taken or planned by the licensee to 
ensure safe management, operation, and maintenance of the project, 
including:

[[Page 216]]

    (i) A description of existing and planned operation of the project 
during flood conditions;
    (ii) A discussion of any warning devices used to ensure downstream 
public safety;
    (iii) A discussion of any proposed changes to the operation of the 
project or downstream development that might affect the existing 
Emergency Action Plan, as described in subpart C of part 12 of this 
chapter, on file with the Commission;
    (iv) A description of existing and planned monitoring devices to 
detect structural movement or stress, seepage, uplift, equipment 
failure, or water conduit failure, including a description of the 
maintenance and monitoring programs used or planned in conjunction with 
the devices; and
    (v) A discussion of the project's employee safety and public safety 
record, including the number of lost-time accidents involving employees 
and the record of injury or death to the public within the project 
boundary.
    (3) A description of the current operation of the project, including 
any constraints that might affect the manner in which the project is 
operated.
    (4) A discussion of the history of the project and record of 
programs to upgrade the operation and maintenance of the project.
    (5) A summary of any generation lost at the project over the last 
five years because of unscheduled outages, including the cause, 
duration, and corrective action taken.
    (6) A discussion of the licensee's record of compliance with the 
terms and conditions of the existing license, including a list of all 
incidents of noncompliance, their disposition, and any documentation 
relating to each incident.
    (7) A discussion of any actions taken by the existing licensee 
related to the project which affect the public.
    (8) A summary of the ownership and operating expenses that would be 
reduced if the project license were transferred from the existing 
licensee.
    (9) A statement of annual fees paid under Part I of the Federal 
Power Act for the use of any Federal or Indian lands included within the 
project boundary.
    (c) Information to be provided by an applicant who is not an 
existing licensee. An applicant that is not an existing licensee must 
provide:
    (1) The information specified in paragraph (a).
    (2) A statement of the applicant's plans to manage, operate, and 
maintain the project safely, including:
    (i) A description of the differences between the operation and 
maintenance procedures planned by the applicant and the operation and 
maintenance procedures of the existing licensee;
    (ii) A discussion of any measures proposed by the applicant to 
implement the existing licensee's Emergency Action Plan, as described in 
subpart C of part 12 of this chapter, and any proposed changes;
    (iii) A description of the applicant's plans to continue safety 
monitoring of existing project instrumentation and any proposed changes; 
and
    (iv) A statement indicating whether or not the applicant is 
requesting the licensee to provide transmission services under section 
15(d) of the Federal Power Act.
    (d) Inclusion in application. The information required to be 
provided by this section must be included in the application as a 
separate exhibit labeled ``Exhibit H.''

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 533, 56 FR 
23154, May 20, 1991; 56 FR 61156, Dec. 2, 1991; Order 2002, 68 FR 51142, 
Aug. 25, 2003]



Sec. 16.11  Nonpower licenses.

    (a) Information to be provided by all applicants for nonpower 
licenses. (1) An applicant for a nonpower license must provide the 
following information in its application:
    (i) The information required by Sec. Sec. 4.51 or 4.61 of this 
chapter, as appropriate;
    (ii) A description of the nonpower purpose for which the project is 
to be used;
    (iii) A showing of how the nonpower use conforms with a 
comprehensive plan for improving or developing the waterway and for 
other beneficial public uses as defined in section 10(a)(1) of the 
Federal Power Act;
    (iv) A statement of any impact that converting the project to 
nonpower use may have on the power supply of the

[[Page 217]]

system served by the project, including the additional cost of power if 
an alternative generating source is used to offset the loss of the 
project's generation;
    (v) A statement identifying the state, municipal, interstate, or 
Federal agency, which is authorized and willing to assume regulatory 
supervision over the land, waterways, and facilities to be included 
within the nonpower project;
    (vi) Copies of written communication and documentation of oral 
communication that the applicant may have had with any jurisdictional 
agency or governmental unit authorized and willing to assume regulatory 
control over the project and the point of time at which the agency or 
unit would assume regulatory control;
    (vii) A statement that demonstrates that the applicant has complied 
with the requirements of Sec. 16.8(d)(2);
    (viii) A proposal that shows the manner in which the applicant plans 
to remove or otherwise dispose of the project's power facilities;
    (ix) Any proposal to repair or rehabilitate any nonpower facilities;
    (x) A statement of the costs associated with removing the project's 
power facilities and with any necessary restoration and rehabilitation 
work; and
    (xi) A statement that demonstrates that the applicant has resources 
to ensure the integrity and safety of the remaining project facilities 
and to maintain the nonpower functions of the project until the 
governmental unit or agency assumes regulatory control over the project.
    (2) [Reserved]
    (b) Termination of a proceeding for a nonpower license. The 
Commission may deny an application for a nonpower license and turn the 
project over to any agency that has jurisdiction over the land or 
reservations if:
    (1) An existing project is located on public lands or reservations 
of the United States;
    (2) Neither the existing licensee nor any other entity has filed an 
application for a new license for the project;
    (3) No one has filed a recommendation to take over the project 
pursuant to Sec. 16.14; and
    (4) The agency that has jurisdiction over the land or reservations 
demonstrates that it is able and willing to:
    (i) Accept immediate responsibility for the nonpower use of the 
project; and.
    (ii) Pay the existing licensee for its net investment in the project 
and any severance damages specified in section 14(a) of the Federal 
Power Act.
    (c) Termination of nonpower license. A nonpower license will be 
terminated by Commission order when the Commission determines that a 
state, municipal, interstate, or Federal agency has jurisdiction over, 
and is willing to assume regulatory responsibility for, the land, 
waterways, and facilities included within the nonpower license.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 2002, 68 FR 
51142, Aug. 25, 2003]



Sec. 16.12  Application for exemption from licensing by a licensee whose 

license is subject to sections 14 and 15 of the Federal Power Act.

    (a) An existing licensee whose license is subject to sections 14 and 
15 of the Federal Power Act may apply for an exemption for the project.
    (b) An applicant for an exemption under paragraph (a) must meet the 
requirements of subpart K or subpart J of part 4 of this chapter, and 
Sec. Sec. 16.5, 16.6, 16.7, 16.8, 16.9(b) (1), (2) (except the 
requirement to comply with Sec. Sec. 4.41, 4.51, or 4.61 of this 
chapter), 16.9(c), 16.10(a), 16.10(b), and 16.10(d).
    (c) The Commission will process an application by an existing 
licensee for an exemption for the project in accordance with Sec. Sec. 
16.9(b)(3), 16.9(b)(4), and 16.9(d).
    (d) If a license application is filed in competition with an 
application for exemption filed by the existing licensee, the Commission 
will decide among the competing applications in accordance with the 
standards of Sec. 16.13 and not in accordance with the provisions of 
Sec. 4.37(d)(2) of this chapter.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 699, 72 FR 
45324, Aug. 14, 2007]



Sec. 16.13  Standards and factors for issuing a new license.

    (a) In determining whether a final proposal for a new license under 
section 15 of the Federal Power Act is best adapted to serve the public 
interest,

[[Page 218]]

the Commission will consider the factors enumerated in sections 15(a)(2) 
and (a)(3) of the Federal Power Act.
    (b) If there are only insignificant differences between the final 
applications of an existing licensee and a competing applicant after 
consideration of the factors enumerated in section 15(a)(2) of the 
Federal Power Act, the Commission will determine which applicant will 
receive the license after considering:
    (1) The existing licensee's record of compliance with the terms and 
conditions of the existing license; and
    (2) The actions taken by the existing licensee related to the 
project which affect the public.
    (c) An existing licensee that files an application for a new license 
in conjunction with an entity or entities that are not currently 
licensees of all or part of the project will not be considered an 
existing licensee for the purpose of the insignificant differences 
provision of section 15(a)(2) of the Federal Power Act.



Subpart C_Takeover Provisions for Projects Subject to Sections 14 and 15 

                        of the Federal Power Act



Sec. 16.14  Departmental recommendation for takeover.

    (a) A Federal department or agency may file a recommendation that 
the United States exercise its right to take over a hydroelectric power 
project with a license that is subject to sections 14 and 15 of the 
Federal Power Act. The recommendation must:
    (1) Be filed no earlier than five years before the license expires 
and no later than the end of the comment period specified by the 
Commission in:
    (i) A notice of application for a new license, a nonpower license, 
or an exemption for the project; or
    (ii) A notice of an amendment to an application for a new license, a 
nonpower license, or an exemption;
    (2) Be filed in accordance with the formal requirements for filings 
in subpart T of part 385 of the Commission's regulations and be served 
on each relevant Federal and state resource agency, all applicants for 
new license, nonpower license or exemption, and any other party to the 
proceeding;
    (3) Specify the project works that would be taken over by the United 
States;
    (4) Describe the proposed Federal operation of the project, 
including any plans for its redevelopment, and discuss the manner in 
which takeover would serve the public interest as fully as non-Federal 
development and operation;
    (5) State whether the agency intends to undertake the operation of 
the project; and
    (6) Include the information required by Sec. Sec. 4.41, 4.51, or 
4.61 of this chapter, as appropriate.
    (b) A department or agency that files a takeover recommendation 
becomes a party to the proceeding.
    (c) An applicant or potential applicant for a new license, a 
nonpower license, or an exemption that involves a takeover 
recommendation may file a reply to the recommendation, within 120 days 
from the date the takeover recommendation is filed with the Commission. 
The reply must be filed with the Commission in accordance with part 385 
of the Commission's regulations and a copy of such a reply must be 
served on the agency recommending the takeover and on any other party to 
the proceeding.



Sec. 16.15  Commission recommendation to Congress.

    Upon receipt of a recommendation from any Federal department or 
agency, a proposal of any party, or on the Commission's own motion, and 
after notice and opportunity for hearing, the Commission may determine 
that a project may be taken over by the United States, issue an order on 
its findings and recommendations, and forward a copy to Congress.



Sec. 16.16  Motion for stay by Federal department or agency.

    (a) Within 30 days of the date on which an order granting a new 
license or exemption is issued, a Federal department or agency that has 
filed a takeover recommendation under Sec. 16.14 may file a motion 
under Sec. 385.212 of this

[[Page 219]]

chapter to request a stay of the effective date of the license or 
exemption order.
    (b)(1) If a Federal department or agency files a motion under 
paragraph (a), the Commission will stay the effective date of the order 
issuing the license or exemption for two years.
    (2) The stay issued under paragraph (b)(1) of this section may be 
terminated either:
    (i) Upon motion of the department or agency that requested the stay; 
or
    (ii) By action of Congress.
    (c) The Commission will notify Congress if:
    (1) An order granting a stay under paragraph (b)(1) of this section 
is issued;
    (2) Any license or exemption order becomes effective by reason of 
the termination of a stay; or
    (3) Any license or exemption order becomes effective by reason of 
the expiration of a stay.
    (d) The Commission's order granting the license or exemption will 
automatically become effective:
    (1) Thirty days after issuance, if no request for stay is filed, 
provided that no appeal or rehearing is filed;
    (2) When the period of the stay expires; or
    (3) When the stay is terminated under paragraph (b)(2) of this 
section.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 699, 72 FR 
45324, Aug. 14, 2007]



Sec. 16.17  Procedures upon Congressional authorization of takeover.

    If Congress authorizes the takeover of a hydroelectric power project 
as provided under section 14 of the Federal Power Act:
    (a) The Commission or the Director of the Office of Energy Projects 
will notify the existing licensee in writing of the authorization at 
least two years before the takeover occurs; and
    (b) The licensee must present any claim for compensation to the 
Commission:
    (1) Within six months of issuance of the notice of takeover; and
    (2) As provided in section 14 of the Federal Power Act.



Subpart D_Annual Licenses for Projects Subject to Sections 14 and 15 of 

                          the Federal Power Act



Sec. 16.18  Annual licenses for projects subject to sections 14 and 15 of the 

Federal Power Act.

    (a) This section applies to projects with licenses subject to 
sections 14 and 15 of the Federal Power Act.
    (b) The Commission will issue an annual license to an existing 
licensee under the terms and conditions of the existing license upon 
expiration of its existing license to allow:
    (1) The licensee to continue to operate the project while the 
Commission reviews any applications for a new license, a nonpower 
license, an exemption, or a surrender;
    (2) The orderly removal of a project, if the United States does not 
take over a project and no new power or nonpower license or exemption 
will be issued; or
    (3) The orderly transfer of a project to:
    (i) The United States, if takeover is elected; or
    (ii) A new licensee, if a new power or nonpower license is issued to 
that licensee.
    (c) An annual license issued under this section will be considered 
renewed automatically without further order of the Commission, unless 
the Commission orders otherwise.
    (d) In issuing an annual license, the Commission may incorporate 
additional or revised interim conditions if necessary and practical to 
limit adverse impacts on the environment.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 513-A, 55 FR 
18, Jan. 2, 1990; Order 540, 57 FR 21738, May 22, 1992]

[[Page 220]]



  Subpart E_Projects With Minor and Minor Part Licenses Not Subject to 

               Sections 14 and 15 of the Federal Power Act



Sec. 16.19  Procedures for an existing licensee of a minor hydroelectric power 

project or of a minor part of a hydroelectric power project with a license not 

subject to sections 14 and 15 of the Federal Power Act.

    (a) Applicability. This section applies to an existing licensee of a 
minor hydroelectric power project or of a minor part of a hydroelectric 
power project that is not subject to sections 14 and 15 of the Federal 
Power Act.
    (b) Notification procedures. (1) An existing licensee with a minor 
license or a license for a minor part of a hydroelectric project must 
file a notice of intent pursuant to Sec. 16.6(b).
    (2) If the license of an existing licensee expires on or after 
October 17, 1994, the licensee must notify the Commission as required 
under Sec. 16.6(b) at least five years before the expiration of the 
existing license.
    (3) The Commission will give notice of a licensee's intent to file 
or not to file an application for a subsequent license in accordance 
with Sec. 16.6(d).
    (c) Requirement to make information available. (1) Except as 
provided in paragraph (c)(2) of this section, a licensee must make the 
information described in Sec. 16.7 available to the public for 
inspection and reproduction when it gives notice to the Commission under 
paragraph (b).
    (2) The requirement of paragraph (c)(1) of this section does not 
apply if an applicant filed an application for a subsequent license on 
or before July 3, 1989.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 2002, 68 FR 
51142, Aug. 25, 2003; Order 699, 72 FR 45324, Aug. 14, 2007]



Sec. 16.20  Applications for subsequent license for a project with an expiring 

license not subject to sections 14 and 15 of the Federal Power Act.

    (a) Applicability. This section applies to an application for 
subsequent license for a project with an expiring license that is not 
subject to sections 14 and 15 of the Federal Power Act.
    (b) Licensing proceeding. (1) An applicant for a license for a 
project with an expiring license not subject to sections 14 and 15 of 
the Federal Power Act must file its application under Part I of the 
Federal Power Act.
    (2) The provisions of section 7(a) of the Federal Power Act do not 
apply to licensing proceedings involving an application described in 
paragraph (b)(1).
    (c) Requirement to file. An applicant must file an application for 
subsequent license at least 24 months before the expiration of the 
existing license.
    (d) Requirements for and processing of applications. An application 
for subsequent license must meet the requirements of, and will be 
processed in accordance with, Sec. Sec. 16.5, 16.8, 16.9(b)(2), 
16.9(b)(3), 16.9(b)(4), 16.9(c), and 16.9(d).
    (e) Applicant notice. An applicant for subsequent license or 
exemption that proposes to expand an existing project to encompass 
additional lands must include in its application a statement that the 
applicant has notified, by certified mail, property owners on the 
additional lands to be encompassed by the project and governmental 
agencies and subdivisions likely to be interested in or affected by the 
proposed expansion.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 2002, 68 FR 
51142, Aug. 25, 2003]



Sec. 16.21  Operation of projects with a minor or minor part license not 

subject to sections 14 and 15 of the Federal Power Act after expiration of a 

license.

    (a) A licensee of a minor or minor part project not subject to 
sections 14 and 15 of the Federal Power Act that has filed an 
application for a subsequent license or exemption may continue to 
operate the project in accordance with the terms and conditions of the 
license after the minor or minor part license expires until the 
Commission acts on its application.
    (b) If the licensee of a minor or minor part project not subject to 
sections 14 and 15 of the Federal Power Act has not filed an application 
for a subsequent license or exemption, the Commission may issue an order 
requiring the licensee to continue to operate its project in accordance 
with the terms

[[Page 221]]

and conditions of the license until the Commission either acts on any 
applications for subsequent license timely filed by another entity or 
takes action pursuant to Sec. Sec. 16.25 or 16.26.



Sec. 16.22  Application for an exemption by a licensee with a minor or minor 

part license for a project not subject to sections 14 and 15 of the Federal 

Power Act.

    (a) Applicability. This section applies to an existing licensee with 
a license for a project not subject to sections 14 and 15 of the Federal 
Power Act.
    (b) Information requirements. An applicant for an exemption must 
meet the requirements of, and will be processed in accordance with, 
subpart K or subpart J of part 4 of this chapter, and Sec. Sec. 16.5, 
16.8, 16.9(b)(2) (except the requirement to comply with Sec. Sec. 4.41, 
4.51, or 4.61 of this chapter), Sec. Sec. 16.9(b)(3), 16.9(b)(4), 
16.9(c), and 16.9(d).
    (c) Standard of comparison. If an application for subsequent license 
is filed in competition with an application for exemption by an existing 
licensee, the Commission will decide among competing applications in 
accordance with the standards of Sec. 16.13 and not in accordance with 
the provisions of Sec. 4.37(d)(2) of this chapter.

[Order 513, 54 FR 23806, June 2, 1989, as amended by Order 699, 72 FR 
45324, Aug. 14, 2007]



                      Subpart F_Procedural Matters



Sec. 16.23  Failure to file timely notices of intent.

    (a) An existing licensee of a water power project with a license 
subject to sections 14 and 15 of the Federal Power Act that fails to 
file a notice of intent pursuant to Sec. 16.6(b) by the deadlines 
specified in Sec. l6.6(c) shall be deemed to have filed a notice of 
intent indicating that it does not intend to file an application for new 
license, nonpower license, or exemption.
    (b) An existing licensee of a water power project with a license not 
subject to sections 14 and 15 of the Federal Power Act that fails to 
file a notice of intent pursuant to Sec. 16.6(b) by the deadlines 
specified in Sec. 16.20(c) shall be deemed to have filed a notice of 
intent indicating that it does not intend to file an application for 
subsequent license or exemption.



Sec. 16.24  Prohibitions against filing applications for new license, nonpower 

license, exemption, or subsequent license.

    (a) Licenses subject to sections 14 and 15 of the Federal Power Act. 
(1) An existing licensee with a license subject to sections 14 and 15 of 
the Federal Power Act that informs the Commission that it does not 
intend to file an application for new license, nonpower license, or 
exemption for a project, as required by Sec. 16.6, may not file an 
application for new license, nonpower license, or exemption for the 
project, either individually or in conjunction with an entity or 
entities that are not currently licensees of the project.
    (2) An existing licensee with a license subject to sections 14 and 
15 of the Federal Power Act that fails to file an application for new 
license, nonpower license, or exemption for a project at least 24 months 
before the expiration of the existing license for the project may not 
file an application for new license, nonpower license, or exemption for 
the project, either individually or in conjunction with an entity or 
entities that are not currently licensees of the project.
    (b) Licenses not subject to sections 14 and 15 of the Federal Power 
Act. (1) An existing licensee with a license not subject to sections 14 
and 15 of the Federal Power Act that informs the Commission that it does 
not intend to file an application for subsequent license or exemption 
for a project, as required by Sec. 16.6, may not file an application 
for subsequent license or exemption for the project, either individually 
or in conjunction with an entity or entities that are not currently 
licensees of the project.
    (2) An existing licensee with a license not subject to sections 14 
and 15 of the Federal Power Act that fails to file an application for 
subsequent license or exemption for a project by the deadlines specified 
in Sec. 16.20(c) may not file an application for subsequent license or 
exemption for the project, either individually or in conjunction with an 
entity or entities that are not currently licensees of the project.

[[Page 222]]



Sec. 16.25  Disposition of a project for which no timely application is filed 

following a notice of intent to file.

    (a) If an existing licensee that indicates in the notice filed 
pursuant to Sec. 16.6 that it will file an application for new license, 
nonpower license, subsequent license, or an exemption does not file its 
application individually or in conjunction with an entity or entities 
that are not currently licensees of the project at least 24 months 
before its existing license expires in the case of licenses subject to 
sections 14 and 15 of the Federal Power Act, or by the deadlines 
specified in Sec. 16.20(c) in the case of licenses not subject to 
sections 14 and 15 of the Federal Power Act, and no other applicant 
files an application within the appropriate time or all pending 
applications filed before the applicable filing deadline are 
subsequently rejected or dismissed pursuant to Sec. 4.32 of this 
chapter, the Commission will publish in the Federal Register and once in 
a daily or weekly newspaper published in the county or counties in which 
the project or any part thereof or the lands affected thereby are 
situated, notice soliciting applications from potential applicants other 
than the existing licensee.
    (b) A potential applicant that files a notice of intent within 90 
days from the date of the public notice issued pursuant to paragraph 
(a):
    (1) May apply for a license under Part I of the Federal Power Act 
and part 4 of this chapter (except Sec. 4.38) within 18 months of the 
date on which it files its notice; and
    (2) Must comply with the requirements of Sec. 16.8 and, if the 
project would have a total installed capacity of over 2,000 horsepower, 
Sec. 16.10.
    (c) The existing licensee must file a schedule for the filing of a 
surrender application for the project, for the approval of the Director 
of the Office of Energy Projects, 90 days:
    (1) After the due date established for any notice of intent issued 
under paragraph (a), if no notices of intent were received; or
    (2) After the due date for any application filed under paragraph 
(b)(1), if no application has been filed.
    (d) Any application for surrender must be filed according to the 
approved schedule, must comply with the requirements of Sec. 16.8 and 
part 6 of this chapter, and must provide for disposition of any project 
facility.



Sec. 16.26  Disposition of a project for which no timely application is filed 

following a notice of intent not to file.

    (a) If an existing licensee indicates in the notice filed pursuant 
to Sec. 16.6 that it will not file an application for new license, 
nonpower license, subsequent license, or exemption and no other 
applicant files an application at least 24 months before the existing 
license expires in the case of licenses subject to sections 14 and 15 of 
the Federal Power Act, or by the deadlines specified in Sec. 16.20(c) 
in the case of licenses not subject to sections 14 and 15 of the Federal 
Power Act, the Director of the Office of Energy Projects will provide 
the existing licensee with written notice that no timely applications 
for the project have been filed.
    (b) The existing licensee, within 90 days from the date of the 
written notice provided in paragraph (a), must file a schedule for the 
filing of a surrender application for the project for the approval of 
the Director of the Office of Energy Projects.
    (c) Any application for surrender must be filed according to the 
approved schedule, must comply with the requirements of Sec. 16.8 and 
part 6 of this chapter, and must provide for disposition of any project 
facility.



PART 20_AUTHORIZATION OF THE ISSUANCE OF SECURITIES BY LICENSEES AND COMPANIES 

SUBJECT TO SECTIONS 19 AND 20 OF THE FEDERAL POWER ACT--Table of Contents



Sec.
20.1 Applicability.
20.2 Regulation of issuance of securities.

    Authority: Secs. 3(16), 19, 20, 41 Stat. 1063, 1073; secs. 201, 309, 
49 Stat. 838, 858; 16 U.S.C. 796 (16), 812, 813, 825k.

    Source: Order 170, 19 FR 2013, Apr. 8, 1954, unless otherwise noted.



Sec. 20.1  Applicability.

    (a) Without special proceeding for regulation. Every security issue 
within the scope of the jurisdiction conferred upon

[[Page 223]]

the Commission by sections 19 and 20 of the Federal Power Act shall be 
subject to the provisions of Sec. 20.2, except a security issue by a 
person organized and operating in a State under the laws of which its 
security issues are regulated by a State commission, or by any one 
described in subsection 201(f) of the act. No other security issue 
within the scope of sections 19 and 20 shall be subject to Sec. 20.2 
except as provided in paragraph (b) of this section.
    (b) Reservation of possibility of regulation in other cases. Not 
later than 10 days prior to any proposed security issuance which is 
within the scope of section 19 or section 20 of the act, but excepted by 
paragraph (a) of this section, any person or state entitled to do so 
under section 19 or section 20, may file a complaint or request in 
accordance with the applicable rules of the Commission, or the 
Commission upon its own motion may by order initiate a proceeding, 
raising the question whether issuance of such security should be 
subjected by Commission order to the provisions of Sec. 20.2. After 
notice of such filing or order, and until such request or complaint is 
denied or dismissed or the proceeding initiated by such order is 
terminated without subjecting the issuance of the security to the 
provisions of Sec. 20.2, the security in question shall not be issued 
except it be issued subject to and in compliance with Sec. 20.2.



Sec. 20.2  Regulation of issuance of securities.

    The licensee or other person issuing or proposing to issue any 
security subjected to this section by or pursuant to Sec. 20.1, shall 
be subject to and shall comply with the same requirements as the 
Commission would administer to it if it were a public utility issuing 
the security within the meaning and subject to the requirements of 
section 204 of the Act and part 34 of this subchapter.

    Cross Reference: For applications for authorization of the issuance 
of securities or the assumption of liabilities, see part 34 of this 
chapter.



PART 24_DECLARATION OF INTENTION--Table of Contents



    Authority: 16 U.S.C. 791a-825r; 44 U.S.C. 3501 et seq.; 42 U.S.C. 
7101-7352.



Sec. 24.1  Filing.

    A declaration of intention under the provisions of section 23(b) of 
the Act shall be filed with the Secretary of the Commission in 
accordance with filing procedures posted on the Commission's Web site at 
http://www.ferc.gov. The declaration shall give the name and post office 
address of the person to whom correspondence in regard to it shall be 
addressed, and shall be accompanied by:
    (a) A brief description of the proposed project and its purposes, 
including such data as maximum height of the dams, a storage capacity 
curve of the reservoir or reservoirs showing the maximum, average, and 
minimum operating pool levels, the initial and ultimate installed 
capacity of the project, the rated horsepower and head on the turbines, 
and a curve of turbine discharge versus output at average and minimum 
operating heads.
    (b)(1) A general map (one tracing and three prints) of any 
convenient size and scale, showing the stream or streams to be utilized 
and the approximate location and the general plan of the project.
    (2) Also a detailed map of the proposed project area showing all 
Federal lands, and lands owned by States, if any, occupied by the 
project.
    (3) A profile of the river within the vicinity of the project 
showing the location of the proposed project and any existing 
improvements in the river.
    (4) A duration curve and hydrograph for the natural and proposed 
regulated flows at the dam site. Furnish references to the published 
stream flow records used and submit copies of any unpublished records 
used in preparation of these curves.
    (c) (1) A definite statement of the proposed method of utilizing 
storage or pondage seasonally, weekly and daily, during periods of low 
and normal flows after the plant is in operation and the system load has 
grown to the extent

[[Page 224]]

that the capacity of the plant is required to meet the load. For 
example, furnish:
    (i) Hydrographs covering a 10-day low water period showing the 
natural flow of the stream and the effect thereon caused by operations 
of the proposed power plant:
    (ii) Similar hydrographs covering a 10-day period during which the 
discharge of the stream approximates average recorded yearly flow, and
    (iii) Similar hydrographs covering a low water year using average 
monthly flows.
    (2) A system load curve, both daily and monthly, and the position on 
the load curve that the proposed project would have occupied had it been 
in operation.
    (3) A proposed annual rule of operation for the storage reservoir or 
reservoirs.

[Order 175, 19 FR 5217, Aug. 18, 1954, as amended by Order 260, 28 FR 
315, Jan. 11, 1963; Order 540, 57 FR 21738, May 22, 1992; Order 737, 75 
FR 43403, July 26, 2010]



PART 25_APPLICATION FOR VACATION OF WITHDRAWAL AND FOR DETERMINATION 

PERMITTING RESTORATION TO ENTRY--Table of Contents



Sec.
25.1 Contents of application.
25.2 Hearings.



Sec. 25.1  Contents of application.

    Any application for vacation of a reservation effected by the filing 
of an application for preliminary permit or license, or for a 
determination under the provisions of section 24 of the Act permitting 
restoration for location, entry, or selection under the public lands 
laws, or such lands reserved or classified as power sites shall, unless 
the subject lands are National Forest Lands, be filed with the Bureau of 
Land Management, Department of the Interior, at the Bureau's office in 
Washington, DC or at the appropriate regional or field office of the 
Bureau. If the lands included in such application are National Forest 
Lands, the application shall be filed with the U.S. Forest Service, 
Department of Agriculture at the Forest Service's office in Washington, 
DC, or at the appropriate regional office of the U.S. Forest Service. 
Such application shall contain the following data: (a) Full name of 
applicant; (b) post-office address; (c) description of land by legal 
subdivisions, including section, township, range, meridian, county, 
State, and river basin (both main and tributary) in which the land is 
located; (d) public land act under which entry is intended to be made if 
land is restored to entry; (e) the use to which it is proposed to put 
the land, and a statement as to its suitability for the intended use.

(Secs. 24, 309, 41 Stat. 1075, as amended; 49 Stat. 858; 16 USC. 818, 
825h)

[Order 175, 19 FR 5218, Aug. 18, 1954, as amended by Order 346, 32 FR 
7495, May 20, 1967]

    Cross Reference: For entries subject to section 24 of the Federal 
Power Act, see also 43 CFR subpart 2320.



Sec. 25.2  Hearings.

    A hearing upon such an application may be ordered by the Commission 
in its discretion and shall be in accordance with the provisions of 
subpart E of part 385 of this chapter.

    Note 1: On April 17, 1922, the Commission made the following general 
determination:

    (a) That where lands of the United States have heretofore been, or 
hereafter may be, reserved or classified as power sites, such 
reservation or classification being made solely because such lands are 
either occupied by power transmission lines or their occupancy and use 
for such purposes has been applied for or authorized under appropriate 
laws of the United States, and such lands have otherwise no value for 
power purposes, and are not occupied in trespass, the Commission 
determines that the value of such lands so reserved or classified, or so 
applied for or authorized, will not be injured or destroyed for the 
purposes of power development by location, entry, or selection under the 
public land laws, subject to the reservation of section 24 of the 
Federal Water Power Act (41 Stat. 1075; 16 U.S.C. 818).
    (b) That when notice is given to the Secretary of the Interior of 
reservations made under the provisions of section 24 of the Federal 
Water Power Act,

[[Page 225]]

such notice shall indicate what lands so reserved, if any, may, in 
accordance with the determination of the preceding paragraph, be 
declared open to location, entry, or selection, subject to the 
reservation of said section 24. Second Annual Report, page 128.

    Note 2: On February 16, 1937, the Commission took the following 
action:
    Consent to Establishment of Grazing Districts, Issuance of Grazing 
Permits, and Leasing for Grazing Purposes Under the Act of June 28, 
1934, as Amended, Government Lands Reserved for Power Purposes
    Upon request under date of November 2, 1936, by the acting director, 
Division of Grazing, Department of the Interior, for consent of the 
Commission, pursuant to the act of June 28, 1934 (48 Stat. 1269), to the 
establishment of grazing districts and the issuance of grazing permits 
on lands of the United States withdrawn, classified, or otherwise 
reserved for power purposes, except in those instances where grazing 
will interfere with such purposes; and
    Upon request under date of December 7, 1936, by the Acting Secretary 
of the Interior for consent of the Commission, pursuant to the Act of 
June 28, 1934 (48 Stat. 1269), as amended by the Act of June 26, 1936 
(49 Stat. 1976), to the leasing under section 15 of said Act as amended, 
of isolated tracts of lands of the United States, withdrawn for power 
purposes:
    The Commission upon consideration of the matter finds and 
determines: That the establishment of grazing districts, the issuance of 
grazing permits, and the leasing for grazing purposes, under said Act as 
amended, of lands of the United States theretofore or thereafter 
withdrawn, classified or otherwise reserved for power purposes, but not 
including lands embraced within the project area of any power project 
theretofore licensed by the Commission or otherwise authorized by the 
United States, will not injure or destroy the value of such lands for 
the purposes of power development nor otherwise abridge the jurisdiction 
of the Commission; Provided, That such grazing districts shall be 
established and such permits and leases for grazing permits issued 
subject to the following conditions:
    (1) That the establishment of the grazing district or the issuance 
of the grazing permit or lease for grazing purposes shall in no wise 
diminish or affect the jurisdiction of the Commission at any time to 
issue permits or licenses pursuant to the provisions of the Federal 
Power Act (49 Stat. 838; 16 U.S.C., Sup., 791-819); and that the 
issuance by the Commission of a license shall immediately and 
automatically terminate such grazing district, permit, or lease for 
grazing purposes as to all lands within the project area described in 
such license;
    (2) That the establishment of the grazing district or the issuance 
of the grazing permit or lease for grazing purposes involving lands 
withdrawn for power purposes shall in no wise diminish or affect the 
jurisdiction of the Commission at any time to make further 
determinations that the value of any such lands for the purposes of 
power development will not be injured or destroyed by location entry or 
selection, as provided by section 24 of the Act and none of such lands 
shall be declared open, otherwise than as hereinbefore provided, to 
location, entry or selection except upon such further determination by 
the Commission; and any such further determination shall immediately and 
automatically terminate such grazing district, permit, or lease for 
grazing purposes as to any lands involved in such further determination.
    Now, therefore, the Commission consents to the establishment of such 
grazing districts and the issuance of grazing permits and leases for 
grazing purposes of lands of the United States reserved for power 
purposes subject to the conditions hereinabove set out;
    Provided, however, That this determination and consent shall be 
effective for lands embraced within grazing districts, as of the date of 
the establishment of such districts, and for isolated tracts of lands 
leased for grazing purposes, it shall be in effect when such leases are 
issued, provided that notice thereof is received by this Commission from 
the Bureau of Land Management, Department of the Interior, within 30 
days thereafter, such notice to include full legal description of the 
lands,

[[Page 226]]

withdrawn for power purposes which are involved.

(Secs. 24, 308, 39, 41 Stat. 1075, as amended, 40 Stat. 858; 16 U.S.C. 
818, 825g, 825h)

[Order 141, 12 FR 8493, Dec. 19, 1947, as amended by Order 225, 47 FR 
19056, May 3, 1982]

    Cross Reference: For regulations of the Bureau of Land Management, 
relating to grazing, see the Index to title 43 Chapter II.



PART 32_INTERCONNECTION OF FACILITIES--Table of Contents



    Application for an Order Directing the Establishment of Physical 
                        Connection of Facilities

Sec.
32.1 Contents of the application.
32.2 Required exhibits.
32.3 Other information.
32.4 Filing procedure.

    Authority: 42 U.S.C. 7101-7352; E.O. No. 12,009, 3 CFR 1978 Comp., 
p. 142; 31 U.S.C. 9701; 16 U.S.C. 791a-825r; 16 U.S.C. 2601-2645 (1988).

    Source: Order 141, 12 FR 8494, Dec. 19, 1947, unless otherwise 
noted.

    Application for an Order Directing the Establishment of Physical 
                        Connection of Facilities



Sec. 32.1  Contents of the application.

    Every application under section 202(b) of the Act shall set forth 
the following information:
    (a) The exact legal name of the applicant and of all persons named 
as parties in the application.
    (b) The name, title, and post office address of the person to whom 
correspondence in regard to the application shall be addressed.
    (c) The person named in the application who is a public utility 
subject to the act.
    (d) The State or States in which each electric utility named in the 
application operates, together with a brief description of the business 
of and territory, by counties and States, served by such utility.
    (e) Description of the proposed interconnection, showing proposed 
location, capacity and type of construction.
    (f) Reasons why the proposed connection, of facilities will be in 
the public interest.
    (g) What steps, if any, have been taken to secure voluntary 
interconnection under the provisions of section 202(a) of the Act.

[Order 141, 12 FR 8494, Dec. 19, 1947, as amended by Order 427, 36 FR 
5596, Mar. 25, 1971; Order 435, 50 FR 40357, Oct. 3, 1985; Order 737, 75 
FR 43403, July 26, 2010]



Sec. 32.2  Required exhibits.

    There shall be filed with the application and as a part thereof the 
following exhibits:

    Exhibit A. Statement of the estimated capital cost of all facilities 
required to establish the connection, and the estimated annual cost of 
operating such facilities.
    Exhibit B. A general or key map on a scale not greater than 20 miles 
to the inch showing, in separate colors, the territory served by each 
utility, and the location of the facilities used for the generation and 
transmission of electric energy, indicating on said map the points 
between which connection may be established most economically.



Sec. 32.3  Other information.

    The Commission may require additional information when it appears to 
be pertinent in a particular case.



Sec. 32.4  Filing procedure.

    All applications under Part 32 must be filed with the Secretary of 
the Commission in accordance with filing procedures posted on the 
Commission's Web site at http://www.ferc.gov.

[Order 737, 75 FR 43403, July 26, 2010]



PART 33_APPLICATIONS UNDER FEDERAL POWER ACT SECTION 203--Table of Contents



Sec.
33.1 Applicability, definitions, and blanket authorizations.
33.2 Contents of application--general information requirements.
33.3 Additional information requirements for applications involving 
          horizontal competitive impacts.
33.4 Additional information requirements for applications involving 
          vertical competitive impacts.
33.5 Proposed accounting entries.
33.7 Verification.
33.8 Number of copies.
33.9 Protective order.
33.10 Additional information.
33.11 Commission procedures for the consideration of applications under 
          section 203 of the FPA.


[[Page 227]]


    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352.

    Source: Order 642, 65 FR 71014, Nov. 28, 2000, unless otherwise 
noted.



Sec. 33.1  Applicability, definitions, and blanket authorizations.

    (a) Applicability. (1) The requirements of this part will apply to 
any public utility seeking authorization under section 203 of the 
Federal Power Act to:
    (i) Sell, lease, or otherwise dispose of the whole of its facilities 
subject to the jurisdiction of the Commission, or any part thereof of a 
value in excess of $10 million;
    (ii) Merge or consolidate, directly or indirectly, such facilities 
or any part thereof with those of any other person, by any means 
whatsoever;
    (iii) Purchase, acquire, or take any security with a value in excess 
of $10 million of any other public utility; or
    (iv) Purchase, lease, or otherwise acquire an existing generation 
facility:
    (A) That has a value in excess of $10 million; and
    (B) That is used in whole or in part for wholesale sales in 
interstate commerce by a public utility.
    (2) The requirements of this part shall also apply to any holding 
company in a holding company system that includes a transmitting utility 
or an electric utility if such holding company seeks to purchase, 
acquire, or take any security with a value in excess of $10 million of, 
or, by any means whatsoever, directly or indirectly, merge or 
consolidate with, a transmitting utility, an electric utility company, 
or a holding company in a holding company system that includes a 
transmitting utility, or an electric utility company, with a value in 
excess of $10 million.
    (b) Definitions. For the purposes of this part, as used in section 
203 of the Federal Power Act (16 U.S.C. 824b).
    (1) Existing generation facility means a generation facility that is 
operational at or before the time the section 203 transaction is 
consummated. ``The time the transaction is consummated'' means the point 
in time when the transaction actually closes and control of the facility 
changes hands. ``Operational'' means a generation facility for which 
construction is complete (i.e., it is capable of producing power). The 
Commission will rebuttably presume that section 203(a) applies to the 
transfer of any existing generation facility unless the utility can 
demonstrate with substantial evidence that the generator is used 
exclusively for retail sales.
    (2) Non-utility associate company means any associate company in a 
holding company system other than a public utility or electric utility 
company that has wholesale or retail customers served under cost-based 
regulation.
    (3) Value when applied to:
    (i) Transmission facilities, generation facilities, transmitting 
utilities, electric utility companies, and holding companies, means the 
market value of the facilities or companies for transactions between 
non-affiliated companies; the Commission will rebuttably presume that 
the market value is the transaction price. For transactions between 
affiliated companies, value means original cost undepreciated, as 
defined in the Commission's Uniform System of Accounts prescribed for 
public utilities and licensees in part 101 of this chapter, or original 
book cost, as applicable;
    (ii) Wholesale contracts, means the market value for transactions 
between non-affiliated companies; the Commission will rebuttably presume 
that the market value is the transaction price. For transactions between 
affiliated companies, value means total expected nominal contract 
revenues over the remaining life of the contract; and
    (iii) Securities, means market value for transactions between non-
affiliated companies; the Commission will rebuttably presume that the 
market value is the agreed-upon transaction price. For transactions 
between affiliated companies, value means market value if the securities 
are widely traded, in which case the Commission will rebuttably presume 
that market value is the market price at which the securities are being 
traded at the time the transaction occurs; if the securities are not 
widely traded, market value is determined by:

[[Page 228]]

    (A) Determining the value of the company that is the issuer of the 
equity securities based on the total undepreciated book value of the 
company's assets;
    (B) Determining the fraction of the securities at issue by dividing 
the number of equity securities involved in the transaction by the total 
number of outstanding equity securities for the company; and
    (C) Multiplying the value determined in paragraph (b)(3)(iii)(A) of 
this section by the value determined in paragraph (b)(3)(iii)(B) of this 
section (i.e., the value of the company multiplied by the fraction of 
the equity securities at issue).
    (4) The terms associate company, electric utility company, foreign 
utility company, holding company, and holding company system have the 
meaning given those terms in the Public Utility Holding Company Act of 
2005. The term holding company does not include: A State, any political 
subdivision of a State, or any agency, authority or instrumentality of a 
State or political subdivision of a State; or an electric power 
cooperative.
    (5) For purposes of this part, the term captive customers means any 
wholesale or retail electric energy customers served by a franchised 
public utility under cost-based regulation.
    (c) Blanket Authorizations. (1) Any holding company in a holding 
company system that includes a transmitting utility or an electric 
utility is granted a blanket authorization under section 203(a)(2) of 
the Federal Power Act to purchase, acquire, or take any security of:
    (i) A transmitting utility or company that owns, operates, or 
controls only facilities used solely for transmission in intrastate 
commerce and/or sales of electric energy in intrastate commerce, 
provided that if any public utility within the holding company system 
has captive customers, or owns or provides transmission service over 
jurisdictional transmission facilities, the holding company must report 
the acquisition to the Commission, including any state actions or 
conditions related to the transaction, and shall provide an explanation 
of why the transaction does not result in cross-subsidization;
    (ii) A transmitting utility or company that owns, operates, or 
controls only facilities used solely for local distribution and/or sales 
of electric energy at retail regulated by a state commission, provided 
that if any public utility within the holding company system has captive 
customers, or owns or provides transmission service over jurisdictional 
transmission facilities, the holding company must report the acquisition 
to the Commission, including any state actions or conditions related to 
the transaction, and shall provide an explanation of why the transaction 
does not result in cross-subsidization; or
    (iii) An electric utility company that owns generating facilities 
that total 100 MW or less and are fundamentally used for its own 
individual load or for sales to affiliated end-users.
    (2) Any holding company in a holding company system that includes a 
transmitting utility or an electric utility is granted a blanket 
authorization under section 203(a)(2) of the Federal Power Act to 
purchase, acquire, or take:
    (i) Any non-voting security (that does not convey sufficient veto 
rights over management actions so as to convey control) in a 
transmitting utility, an electric utility company, or a holding company 
in a holding company system that includes a transmitting utility or an 
electric utility company; or
    (ii) Any voting security in a transmitting utility, an electric 
utility company, or a holding company in a holding company system that 
includes a transmitting utility or an electric utility company if, after 
the acquisition, the holding company will own less than 10 percent of 
the outstanding voting securities; or
    (iii) Any security of a subsidiary company within the holding 
company system.
    (3) The blanket authorizations granted under paragraph (c)(2) of 
this section are subject to the conditions that the holding company 
shall not:
    (i) Borrow from any electric utility company subsidiary in 
connection with such acquisition; or
    (ii) Pledge or encumber the assets of any electric utility company 
subsidiary in connection with such acquisition.

[[Page 229]]

    (4) A holding company granted blanket authorizations in paragraph 
(c)(2) of this section shall provide the Commission copies of any 
Schedule 13D, Schedule 13G and Form 13F, at the same time and on the 
same basis, as filed with the Securities and Exchange Commission in 
connection with any securities purchased, acquired or taken pursuant to 
this section.
    (5) Any holding company in a holding company system that includes a 
transmitting utility or an electric utility is granted a blanket 
authorization under section 203(a)(2) of the Federal Power Act to 
acquire a foreign utility company. However, if such holding company or 
any of its affiliates, its subsidiaries, or associate companies within 
the holding company system has captive customers in the United States, 
or owns or provides transmission service over jurisdictional 
transmission facilities in the United States, the authorization is 
conditioned on the holding company, consistent with 18 CFR 385.2005(b), 
verifying by a duly authorized corporate official of the holding company 
that the proposed transaction:
    (i) Will not have any adverse effect on competition, rates, or 
regulation; and
    (ii) Will not result in, at the time of the transaction or in the 
future:
    (A) Any transfer of facilities between a traditional public utility 
associate company that has captive customers or that owns or provides 
transmission service over jurisdictional transmission facilities, and an 
associate company;
    (B) Any new issuance of securities by a traditional public utility 
associate company that has captive customers or that owns or provides 
transmission service over jurisdictional transmission facilities, for 
the benefit of an associate company;
    (C) Any new pledge or encumbrance of assets of a traditional public 
utility associate company that has captive customers or that owns or 
provides transmission service over jurisdictional transmission 
facilities, for the benefit of an associate company; or
    (D) Any new affiliate contracts between a non-utility associate 
company and a traditional public utility associate company that has 
captive customers or that owns or provides transmission service over 
jurisdictional transmission facilities, other than non-power goods and 
services agreements subject to review under sections 205 and 206 of the 
Federal Power Act.
    (iii) A transaction by a holding company subject to the conditions 
in paragraphs (c)(5)(i) and (ii) of this section will be deemed approved 
only upon filing the information required in paragraphs (c)(5)(i) and 
(ii) of this section.
    (6) Any public utility or any holding company in a holding company 
system that includes a transmitting utility or an electric utility is 
granted a blanket authorization under sections 203(a)(1) or 203(a)(2) of 
the Federal Power Act, as relevant, for internal corporate 
reorganizations that do not result in the reorganization of a 
traditional public utility that has captive customers or that owns or 
provides transmission service over jurisdictional transmission 
facilities, and that do not present cross-subsidization issues.
    (7) Any public utility in a holding company system that includes a 
transmitting utility or an electric utility is granted a blanket 
authorization under section 203(a)(1) of the Federal Power Act to 
purchase, acquire, or take any security of a public utility in 
connection with an intra-system cash management program, subject to 
safeguards to prevent cross-subsidization or pledges or encumbrances of 
utility assets.
    (8) A person that is a holding company solely with respect to one or 
more exempt wholesale generators (EWGs), foreign utility companies 
(FUCOs), or qualifying facilities (QFs) is granted a blanket 
authorization under section 203(a)(2) of the Federal Power Act to 
acquire the securities of additional EWGs, FUCOs, or QFs.
    (9) A holding company, or a subsidiary of that company, that is 
regulated by the Board of Governors of the Federal Reserve Bank or by 
the Office of the Comptroller of the Currency, under the Bank Holding 
Company Act of 1956 as amended by the Gramm-Leach-Bliley Act of 1999, is 
granted a blanket authorization under section 203(a)(2) of the Federal 
Power Act to acquire and hold an unlimited amount

[[Page 230]]

of the securities of holding companies that include a transmitting 
utility or an electric utility company if such acquisitions and holdings 
are in the normal course of its business and the securities are held:
    (i) As a fiduciary;
    (ii) As principal for derivatives hedging purposes incidental to the 
business of banking and it commits not to vote such securities to the 
extent they exceed 10 percent of the outstanding shares;
    (iii) As collateral for a loan; or
    (iv) Solely for purposes of liquidation and in connection with a 
loan previously contracted for and owned beneficially for a period of 
not more than two years, with the following conditions and reporting 
requirement: The holding does not confer a right to control, positively 
or negatively, through debt covenants or any other means, the operation 
or management of the public utility or public utility holding company, 
except as to customary creditors' rights or as provided under the United 
States Bankruptcy Code; and the parent holding company files with the 
Commission on a public basis and within 45 days of the close of each 
calendar quarter, both its total holdings and its holdings as principal, 
each by class, unless the holdings within a class are less than one 
percent of outstanding shares, irrespective of the capacity in which 
they were held.
    (10) Any holding company, or a subsidiary of that company, is 
granted a blanket authorization under section 203(a)(2) of the Federal 
Power Act to acquire any security of a public utility or a holding 
company that includes a public utility:
    (i) For purposes of conducting underwriting activities, subject to 
the condition that holdings that the holding company or its subsidiary 
are unable to sell or otherwise dispose of within 45 days are to be 
treated as holdings as principal and thus subject to a limitation of 10 
percent of the stock of any class unless the holding company or its 
subsidiary has within that period filed an application under section 203 
of the Federal Power Act to retain the securities and has undertaken not 
to vote the securities during the pendency of such application; and the 
parent holding company files with the Commission on a public basis and 
within 45 days of the close of each calendar quarter, both its total 
holdings and its holdings as principal, each by class, unless the 
holdings within a class are less than one percent of outstanding shares, 
irrespective of the capacity in which they were held;
    (ii) For purposes of engaging in hedging transactions, subject to 
the condition that if such holdings are 10 percent or more of the voting 
securities of a given class, the holding company or its subsidiary shall 
not vote such holdings to the extent that they are 10 percent or more.
    (11) Any public utility is granted a blanket authorization under 
section 203(a)(1) of the Federal Power Act to transfer a wholesale 
market-based rate contract to any other public utility affiliate that 
has the same ultimate upstream ownership, provided that neither 
affiliate is affiliated with a traditional public utility with captive 
customers.
    (12) A public utility is granted a blanket authorization under 
section 203(a)(1) of the Federal Power Act to transfer its outstanding 
voting securities to:
    (i) Any holding company granted blanket authorizations in paragraph 
(c)(2)(ii) of this section if, after the transfer, the holding company 
and any of its associate or affiliate companies in aggregate will own 
less than 10 percent of the outstanding voting interests of such public 
utility; or
    (ii) Any person other than a holding company if, after the transfer, 
such person and any of its associate or affiliate companies in aggregate 
will own less than 10 percent of the outstanding voting interests of 
such public utility, and within 30 days after the end of the calendar 
quarter in which such transfer has occurred the public utility notifies 
the Commission in accordance with paragraph (c)(17) of this section.
    (13) A public utility is granted a blanket authorization under 
section 203(a)(1) of the Federal Power Act to transfer its outstanding 
voting securities to any holding company granted blanket authorization 
in paragraph (c)(8) of this section if, after the transfer, the holding 
company and any of its

[[Page 231]]

associate or affiliate companies in aggregate will own less than 10 
percent of the outstanding voting interests of such public utility.
    (14) A public utility is granted a blanket authorization under 
section 203(a)(1) of the Federal Power Act to transfer its outstanding 
voting securities to any holding company granted blanket authorization 
in paragraph (c)(9) of this section.
    (15) A public utility is granted a blanket authorization under 
section 203(a)(1) of the Federal Power Act to transfer its outstanding 
voting securities to any holding company granted blanket authorization 
in paragraph (c)(10) of this section.
    (16) A public utility is granted a blanket authorization under 
section 203(a)(1) of the Federal Power Act for the acquisition or 
disposition of a jurisdictional contract where neither the acquirer nor 
transferor has captive customers or owns or provides transmission 
service over jurisdictional transmission facilities, the contract does 
not convey control over the operation of a generation or transmission 
facility, and the acquirer is a public utility.
    (17) A public utility granted blanket authorization under paragraph 
(c)(12)(ii) of this section to transfer its outstanding voting 
securities shall, within 30 days after the end of the calendar quarter 
in which such transfer has occurred, file with the Commission a report 
containing the following information:
    (i) The names of all parties to the transaction;
    (ii) Identification of the pre- and post-transaction voting security 
holdings (and percentage ownership) in the public utility held by the 
acquirer and its associate or affilate companies;
    (iii) The date the transaction was consummated;
    (iv) Identification of any public utility or holding company 
affiliates of the parties to the transaction; and
    (v) A statement indicating that the proposed transaction will not 
result in, at the time of the transaction or in the future, cross-
subsidization of a non-utility associate company or pledge or 
encumbrance of utility assets for the benefit of an associate company as 
required in Sec. 33.2(j)(1).

[Order 669-A, 71 FR 28443, May 16, 2006, as amended by Order 708, 73 FR 
11013, Feb. 29, 2008; Order 708-A, 73 FR 43072, July 24, 2008; Order 
708-B, 74 FR 25413, May 28, 2009]



Sec. 33.2  Contents of application--general information requirements.

    Each applicant must include in its application, in the manner and 
form and in the order indicated, the following general information with 
respect to the applicant and each entity whose jurisdictional facilities 
or securities are involved:
    (a) The exact name of the applicant and its principal business 
address.
    (b) The name and address of the person authorized to receive notices 
and communications regarding the application, including phone and fax 
numbers, and E-mail addresses.
    (c) A description of the applicant, including:
    (1) All business activities of the applicant, including 
authorizations by charter or regulatory approval (to be identified as 
Exhibit A to the application);
    (2) A list of all energy subsidiaries and energy affiliates, 
percentage ownership interest in such subsidiaries and affiliates, and a 
description of the primary business in which each energy subsidiary and 
affiliate is engaged (to be identified as Exhibit B to the application);
    (3) Organizational charts depicting the applicant's current and 
proposed post-transaction corporate structures (including any pending 
authorized but not implemented changes) indicating all parent companies, 
energy subsidiaries and energy affiliates unless the applicant 
demonstrates that the proposed transaction does not affect the corporate 
structure of any party to the transaction (to be identified as Exhibit C 
to the application);
    (4) A description of all joint ventures, strategic alliances, 
tolling arrangements or other business arrangements, including transfers 
of operational control of transmission facilities to Commission approved 
Regional Transmission Organizations, both current, and planned to occur 
within a year

[[Page 232]]

from the date of filing, to which the applicant or its parent companies, 
energy subsidiaries, and energy affiliates is a party, unless the 
applicant demonstrates that the proposed transaction does not affect any 
of its business interests (to be identified as Exhibit D to the 
application);
    (5) The identity of common officers or directors of parties to the 
proposed transaction (to be identified as Exhibit E to the application); 
and
    (6) A description and location of wholesale power sales customers 
and unbundled transmission services customers served by the applicant or 
its parent companies, subsidiaries, affiliates and associate companies 
(to be identified as Exhibit F to the application).
    (d) A description of jurisdictional facilities owned, operated, or 
controlled by the applicant or its parent companies, subsidiaries, 
affiliates, and associate companies (to be identified as Exhibit G to 
the application).
    (e) A narrative description of the proposed transaction for which 
Commission authorization is requested, including:
    (1) The identity of all parties involved in the transaction;
    (2) All jurisdictional facilities and securities associated with or 
affected by the transaction (to be identified as Exhibit H to the 
application);
    (3) The consideration for the transaction; and
    (4) The effect of the transaction on such jurisdictional facilities 
and securities.
    (f) All contracts related to the proposed transaction together with 
copies of all other written instruments entered into or proposed to be 
entered into by the parties to the transaction (to be identified as 
Exhibit I to the application).
    (g) A statement explaining the facts relied upon to demonstrate that 
the proposed transaction is consistent with the public interest. The 
applicant must include a general explanation of the effect of the 
transaction on competition, rates and regulation of the applicant by the 
Commission and state commissions with jurisdiction over any party to the 
transaction. The applicant should also file any other information it 
believes relevant to the Commission's consideration of the transaction. 
The applicant must supplement its application promptly to reflect in its 
analysis material changes that occur after the date a filing is made 
with the Commission, but before final Commission action. Such changes 
must be described and their effect on the analysis explained (to be 
identified as Exhibit J to the application).
    (h) If the proposed transaction involves physical property of any 
party, the applicant must provide a general or key map showing in 
different colors the properties of each party to the transaction (to be 
identified as Exhibit K to the application).
    (i) If the applicant is required to obtain licenses, orders, or 
other approvals from other regulatory bodies in connection with the 
proposed transaction, the applicant must identify the regulatory bodies 
and indicate the status of other regulatory actions, and provide a copy 
of each order of those regulatory bodies that relates to the proposed 
transaction (to be identified as Exhibit L to the application). If the 
regulatory bodies issue orders pertaining to the proposed transaction 
after the date of filing with the Commission, and before the date of 
final Commission action, the applicant must supplement its Commission 
application promptly with a copy of these orders.
    (j) An explanation, with appropriate evidentiary support for such 
explanation (to be identified as Exhibit M to this application):
    (1) Of how applicants are providing assurance, based on facts and 
circumstances known to them or that are reasonably foreseeable, that the 
proposed transaction will not result in, at the time of the transaction 
or in the future, cross-subsidization of a non-utility associate company 
or pledge or encumbrance of utility assets for the benefit of an 
associate company, including:
    (i) Disclosure of existing pledges and/or encumbrances of utility 
assets; and
    (ii) A detailed showing that the transaction will not result in:
    (A) Any transfer of facilities between a traditional public utility 
associate company that has captive customers or that owns or provides 
transmission

[[Page 233]]

service over jurisdictional transmission facilities, and an associate 
company;
    (B) Any new issuance of securities by a traditional public utility 
associate company that has captive customers or that owns or provides 
transmission service over jurisdictional transmission facilities, for 
the benefit of an associate company;
    (C) Any new pledge or encumbrance of assets of a traditional public 
utility associate company that has captive customers or that owns or 
provides transmission service over jurisdictional transmission 
facilities, for the benefit of an associate company; or
    (D) Any new affiliate contract between a non-utility associate 
company and a traditional public utility associate company that has 
captive customers or that owns or provides transmission service over 
jurisdictional transmission facilities, other than non-power goods and 
services agreements subject to review under sections 205 and 206 of the 
Federal Power Act; or
    (2) If no such assurance can be provided, an explanation of how such 
cross-subsidization, pledge, or encumbrance will be consistent with the 
public interest.

[Order 642, 65 FR 71014, Nov. 28, 2000, as amended by Order 669-A, 71 FR 
28446, May 16, 2006; Order 669-B, 71 FR 42586, July 27, 2006; Order 659-
B, 71 FR 45736, Aug. 10, 2006]



Sec. 33.3  Additional information requirements for applications involving 

horizontal competitive impacts.

    (a)(1) The applicant must file the horizontal Competitive Analysis 
Screen described in paragraphs (b) through (f) of this section if, as a 
result of the proposed transaction, a single corporate entity obtains 
ownership or control over the generating facilities of previously 
unaffiliated merging entities (for purposes of this section, merging 
entities means any party to the proposed transaction or its parent 
companies, energy subsidiaries or energy affiliates).
    (2) A horizontal Competitive Analysis Screen need not be filed if 
the applicant:
    (i) Affirmatively demonstrates that the merging entities do not 
currently conduct business in the same geographic markets or that the 
extent of the business transactions in the same geographic markets is de 
minimis; and
    (ii) No intervenor has alleged that one of the merging entities is a 
perceived potential competitor in the same geographic market as the 
other.
    (b) All data, assumptions, techniques and conclusions in the 
horizontal Competitive Analysis Screen must be accompanied by 
appropriate documentation and support.
    (1) If the applicant is unable to provide any specific data required 
in this section, it must identify and explain how the data requirement 
was satisfied and the suitability of the substitute data.
    (2) The applicant may provide other analyses for defining relevant 
markets (e.g. the Hypothetical Monopolist Test with or without the 
assumption of price discrimination) in addition to the delivered price 
test under the horizontal Competitive Analysis Screen.
    (3) The applicant may use a computer model to complete one or more 
steps in the horizontal Competitive Analysis Screen. The applicant must 
fully explain, justify and document any model used and provide 
descriptions of model formulation, mathematical specifications, solution 
algorithms, as well as the annotated model code in executable form, and 
specify the software needed to execute the model. The applicant must 
explain and document how inputs were developed, the assumptions 
underlying such inputs and any adjustments made to published data that 
are used as inputs. The applicant must also explain how it tested the 
predictive value of the model, for example, using historical data.
    (c) The horizontal Competitive Analysis Screen must be completed 
using the following steps:
    (1) Define relevant products. Identify and define all wholesale 
electricity products sold by the merging entities during the two years 
prior to the date of the application, including, but not limited to, 
non-firm energy, short-term capacity (or firm energy), long-term 
capacity (a contractual commitment of more than one year), and ancillary 
services (specifically spinning reserves, non-spinning reserves, and 
imbalance

[[Page 234]]

energy, identified and defined separately). Because demand and supply 
conditions for a product can vary substantially over the year, periods 
corresponding to those distinct conditions must be identified by load 
level, and analyzed as separate products.
    (2) Identify destination markets. Identify each wholesale power 
sales customer or set of customers (destination market) affected by the 
proposed transaction. Affected customers are, at a minimum, those 
entities directly interconnected to any of the merging entities and 
entities that have purchased electricity at wholesale from any of the 
merging entities during the two years prior to the date of the 
application. If the applicant does not identify an entity to whom the 
merging entities have sold electricity during the last two years as an 
affected customer, the applicant must provide a full explanation for 
each exclusion.
    (3) Identify potential suppliers. The applicant must identify 
potential suppliers to each destination market using the delivered price 
test described in paragraph (c)(4) of this section. A seller may be 
included in a geographic market to the extent that it can economically 
and physically deliver generation services to the destination market.
    (4) Perform delivered price test. For each destination market, the 
applicant must calculate the amount of relevant product a potential 
supplier could deliver to the destination market from owned or 
controlled capacity at a price, including applicable transmission 
prices, loss factors and ancillary services costs, that is no more than 
five (5) percent above the pre-transaction market clearing price in the 
destination market.
    (i) Supplier's presence. The applicant must measure each potential 
supplier's presence in the destination market in terms of generating 
capacity, using economic capacity and available economic capacity 
measures. Additional adjustments to supplier presence may be presented; 
applicants must support any such adjustment.
    (A) Economic capacity means the amount of generating capacity owned 
or controlled by a potential supplier with variable costs low enough 
that energy from such capacity could be economically delivered to the 
destination market. Prior to applying the delivered price test, the 
generating capacity meeting this definition must be adjusted by 
subtracting capacity committed under long-term firm sales contracts and 
adding capacity acquired under long-term firm purchase contracts (i.e., 
contracts with a remaining commitment of more than one year). The 
capacity associated with any such adjustments must be attributed to the 
party that has authority to decide when generating resources are 
available for operation. Other generating capacity may also be 
attributed to another supplier based on operational control criteria as 
deemed necessary, but the applicant must explain the reasons for doing 
so.
    (B) Available economic capacity means the amount of generating 
capacity meeting the definition of economic capacity less the amount of 
generating capacity needed to serve the potential supplier's native load 
commitments, as described in paragraph (d)(4)(i) of this section.
    (C) Available transmission capacity. Each potential supplier's 
economic capacity and available economic capacity (and any other measure 
used to determine the amount of relevant product that could be delivered 
to a destination market) must be adjusted to reflect available 
transmission capability to deliver each relevant product. The allocation 
to a potential supplier of limited capability of constrained 
transmission paths internal to the merging entities' systems or 
interconnecting the systems with other control areas must recognize both 
the transmission capability not subject to firm reservations by others 
and any firm transmission rights held by the potential supplier that are 
not committed to long-term transactions. For each such instance where 
limited transmission capability must be allocated among potential 
suppliers, the applicant must explain the method used and show the 
results of such allocation.
    (D) Internal interface. If the proposed transaction would cause an 
interface that interconnects the transmission systems of the merging 
entities to become transmission facilities for which the merging 
entities would have a

[[Page 235]]

``native load'' priority under their open access transmission tariff 
(i.e., where the merging entities may reserve existing transmission 
capacity needed for native load growth and network transmission customer 
load growth reasonable forecasted within the utility's current planning 
horizon), all of the unreserved capability of the interface must be 
allocated to the merging entities for purposes of the horizontal 
Competitive Analysis Screen, unless the applicant demonstrates one of 
the following:
    (1) The merging entities would not have adequate economic capacity 
to fully use such unreserved transmission capability;
    (2) The merging entities have committed a portion of the interface 
capability to third parties; or
    (3) Suppliers other than the merging entities have purchased a 
portion of the interface capability.
    (ii) [Reserved]
    (5) Calculate market concentration. The applicant must calculate the 
market share, both pre- and post-merger, for each potential supplier, 
the Herfindahl-Hirschman Index (HHI) statistic for the market, and the 
change in the HHI statistic. (The HHI statistic is a measure of market 
concentration and is a function of the number of firms in a market and 
their respective market shares. The HHI statistic is calculated by 
summing the squares of the individual market shares, expressed as 
percentages, of all potential suppliers to the destination market.) To 
make these calculations, the applicant must use the amounts of 
generating capacity (i.e., economic capacity and available economic 
capacity, and any other relevant measure) determined in paragraph 
(c)(4)(i) of this section, for each product in each destination market.
    (6) Provide historical transaction data. The applicant must provide 
historical trade data and historical transmission data to corroborate 
the results of the horizontal Competitive Analysis Screen. The data must 
cover the two-year period preceding the filing of the application. The 
applicant may adjust the results of the horizontal Competitive Analysis 
Screen, if supported by historical trade data or historical transmission 
service data. Any adjusted results must be shown separately, along with 
an explanation of all adjustments to the results of the horizontal 
Competitive Analysis Screen. The applicant must also provide an 
explanation of any significant differences between results obtained by 
the horizontal Competitive Analysis Screen and trade patterns in the 
last two years.
    (d) In support of the delivered price test required by paragraph 
(c)(4) of this section, the applicant must provide the following data 
and information used in calculating the economic capacity and available 
economic capacity that a potential supplier could deliver to a 
destination market. The transmission data required by paragraphs (d)(7) 
through (d)(9) of this section must be supplied for the merging 
entities' systems. The transmission data must also be supplied for other 
relevant systems, to the extent data are publicly available.
    (1) Generation capacity. For each generating plant or unit owned or 
controlled by each potential supplier, the applicant must provide:
    (i) Supplier name;
    (ii) Name of the plant or unit;
    (iii) Primary and secondary fuel-types;
    (iv) Nameplate capacity;
    (v) Summer and winter total capacity; and
    (vi) Summer and winter capacity adjusted to reflect planned and 
forced outages and other factors, such as fuel supply and environmental 
restrictions.
    (2) Variable cost. For each generating plant or unit owned or 
controlled by each potential supplier, the applicant must also provide 
variable cost components.
    (i) These cost components must include at a minimum:
    (A) Variable operation and maintenance, including both fuel and non-
fuel operation and maintenance; and
    (B) Environmental compliance.
    (ii) To the extent costs described in paragraph (d)(2)(i) of this 
section are allocated among units at the same plant, allocation methods 
must be fully described.
    (3) Long-term purchase and sales data. For each sale and purchase of 
capacity, the applicant must provide the following information:

[[Page 236]]

    (i) Purchasing entity name;
    (ii) Selling entity name;
    (iii) Duration of the contract;
    (iv) Remaining contract term and any evergreen provisions;
    (v) Provisions regarding renewal of the contract;
    (vi) Priority or degree of interruptibility;
    (vii) FERC rate schedule number, if applicable;
    (viii) Quantity and price of capacity and/or energy purchased or 
sold under the contract; and
    (ix) Information on provisions of contracts which confer operational 
control over generation resources to the purchaser.
    (4) Native load commitments. (i) Native load commitments are 
commitments to serve wholesale and retail power customers on whose 
behalf the potential supplier, by statute, franchise, regulatory 
requirement, or contract, has undertaken an obligation to construct and 
operate its system to meet their reliable electricity needs.
    (ii) The applicant must provide supplier name and hourly native load 
commitments for the most recent two years. In addition, the applicant 
must provide this information for each load level, if load-
differentiated relevant products are analyzed.
    (iii) If data on native load commitments are not available, the 
applicant must fully explain and justify any estimates of these 
commitments.
    (5) Transmission and ancillary service prices, and loss factors. (i) 
The applicant must use in the horizontal Competitive Analysis Screen the 
maximum rates stated in the transmission providers' tariffs. If 
necessary, those rates should be converted to a dollars-per-megawatt 
hour basis and the conversion method explained.
    (ii) If a regional transmission pricing regime is in effect that 
departs from system-specific transmission rates, the horizontal 
Competitive Analysis Screen must reflect the regional pricing regime.
    (iii) The following data must be provided for each transmission 
system that would be used to deliver energy from each potential supplier 
to a destination market:
    (A) Supplier name;
    (B) Name of transmission system;
    (C) Firm point-to-point rate;
    (D) Non-firm point-to-point rate;
    (E) Scheduling, system control and dispatch rate;
    (F) Reactive power/voltage control rate;
    (G) Transmission loss factor; and
    (H) Estimated cost of supplying energy losses.
    (iv) The applicant may present additional alternative analysis using 
discount prices if the applicant can support it with evidence that 
discounting is and will be available.
    (6) Destination market price. The applicant must provide, for each 
relevant product and destination market, market prices for the most 
recent two years. The applicant may provide suitable proxies for market 
prices if actual market prices are unavailable. Estimated prices or 
price ranges must be supported and the data and approach used to 
estimate the prices must be included with the application. If the 
applicant relies on price ranges in the analysis, such ranges must be 
reconciled with any actual market prices that are supplied in the 
application. Applicants must demonstrate that the results of the 
analysis do not vary significantly in response to small variations in 
actual and/or estimated prices.
    (7) Transmission capability. (i) The applicant must provide 
simultaneous transfer capability data, if available, for each of the 
transmission paths, interfaces, or other facilities used by suppliers to 
deliver to the destination markets on an hourly basis for the most 
recent two years.
    (ii) Transmission capability data must include the following 
information:
    (A) Transmission path, interface, or facility name;
    (B) Total transfer capability (TTC); and
    (C) Firm available transmission capability (ATC).
    (iii) Any estimated transmission capability must be supported and 
the data and approach used to make the estimates must be included with 
the application.
    (8) Transmission constraints. (i) For each existing transmission 
facility

[[Page 237]]

that affects supplies to the destination markets and that has been 
constrained during the most recent two years or is expected to be 
constrained within the planning horizon, the applicant must provide the 
following information:
    (A) Name of all paths, interfaces, or facilities affected by the 
constraint;
    (B) Locations of the constraint and all paths, interfaces, or 
facilities affected by the constraint;
    (C) Hours of the year when the transmission constraint is binding; 
and
    (D) The system conditions under which the constraint is binding.
    (ii) The applicant must include information regarding expected 
changes in loadings on transmission facilities due to the proposed 
transaction and the consequent effect on transfer capability.
    (iii) To the extent possible, the applicant must provide system maps 
showing the location of transmission facilities where binding 
constraints have been known or are expected to occur.
    (9) Firm transmission rights (Physical and Financial). For each 
potential supplier to a destination market that holds firm transmission 
rights necessary to directly or indirectly deliver energy to that 
market, or that holds transmission congestion contracts, the applicant 
must provide the following information:
    (i) Supplier name;
    (ii) Name of transmission path interface, or facility;
    (iii) The FERC rate schedule number, if applicable, under which 
transmission service is provided; and
    (iv) A description of the firm transmission rights held (including, 
at a minimum, quantity and remaining time the rights will be held, and 
any relevant time restrictions on transmission use, such as peak or off-
peak rights).
    (10) Summary table of potential suppliers' presence. (i) The 
applicant must provide a summary table with the following information 
for each potential supplier for each destination market:
    (A) Potential supplier name;
    (B) The potential supplier's total amount of economic capacity (not 
subject to transmission constraints); and
    (C) The potential supplier's amount of economic capacity from which 
energy can be delivered to the destination market (after adjusting for 
transmission availability).
    (ii) A similar table must be provided for available economic 
capacity, and for any other generating capacity measure used by the 
applicant.
    (11) Historical trade data. (i) The applicant must provide data 
identifying all of the merging entities' wholesale sales and purchases 
of electric energy for the most recent two years.
    (ii) The applicant must include the following information for each 
transition:
    (A) Type of transaction (such as non-firm, short-term firm, long-
term firm, peak, off-peak, etc.);
    (B) Name of purchaser;
    (C) Name of seller;
    (D) Date, duration and time period of the transaction;
    (E) Quantity of energy purchased or sold;
    (F) Energy charge per unit;
    (G) Megawatt hours purchased or sold;
    (H) Price; and
    (I) The delivery points used to effect the sale or purchase.
    (12) Historical transmission data. The applicant must provide 
information concerning any transmission service denials, interruptions 
and curtailments on the merging entities' systems, for the most recent 
two years, to the extent the information is available from OASIS data, 
including the following information:
    (i) Name of the customer denied, interrupted or curtailed;
    (ii) Type, quantity and duration of service at issue;
    (iii) The date and period of time involved;
    (iv) Reason given for the denial, interruption or curtailment;
    (v) The transmission path; and
    (vi) The reservations or other use anticipated on the affected 
transmission path at the time of the service denial, curtailment or 
interruption.
    (e) Mitigation. Any mitigation measures proposed by the applicant 
(including, for example, divestiture or participation in a regional 
transmission organization) which are intended to mitigate the adverse 
effect of the proposed

[[Page 238]]

transaction must, to the extent possible, be factored into the 
horizontal Competitive Analysis Screen as an additional post-transaction 
analysis. Any mitigation commitments that involve facilities (e.g., in 
connection with divestiture of generation) must identify the facilities 
affected by the commitment, along with a timetable for implementing the 
commitments.
    (f) Additional factors. If the applicant does not propose 
mitigation, the applicant must address:
    (1) The potential adverse competitive effects of the transaction.
    (2) The potential for entry in the market and the role that entry 
could play in mitigating adverse competitive effects of the transaction;
    (3) The efficiency gains that reasonably could not be achieved by 
other means; and
    (4) Whether, but for the transaction, one or more of the merging 
entities would be likely to fail, causing its assets to exit the market.

[65 FR 71014, Nov. 28, 2000; 65 FR 76005, Dec. 5, 2000]



Sec. 33.4  Additional information requirements for applications involving 

vertical competitive impacts.

    (a)(1) The applicant must file the vertical Competitive Analysis 
described in paragraphs (b) through (e) of this section if, as a result 
of the proposed transaction, a single corporate entity has ownership or 
control over one or more merging entities that provides inputs to 
electricity products and one or more merging entities that provides 
electric generation products (for purposes of this section, merging 
entities means any party to the proposed transaction or its parent 
companies, energy subsidiaries or energy affiliates).
    (2) A vertical Competitive Analysis need not be filed if the 
applicant can affirmatively demonstrate that:
    (i) The merging entities currently do not provide inputs to 
electricity products (i.e., upstream relevant products) and electricity 
products (i.e., downstream relevant products) in the same geographic 
markets or that the extent of the business transactions in the same 
geographic market is de minimis; and no intervenor has alleged that one 
of the merging entities is a perceived potential competitor in the same 
geographic market as the other.
    (ii) The extent of the upstream relevant products currently provided 
by the merging entities is used to produce a de minimis amount of the 
relevant downstream products in the relevant destination markets, as 
defined in paragraph (c)(2) of Sec. 33.3.
    (b) All data, assumptions, techniques and conclusions in the 
vertical Competitive Analysis must be accompanied by appropriate 
documentation and support.
    (c) The vertical Competitive Analysis must be completed using the 
following steps:
    (1) Define relevant products--(i) Downstream relevant products. The 
applicant must identify and define as downstream relevant products all 
products sold by merging entities in relevant downstream geographic 
markets, as outlined in paragraph (c)(1) of Sec. 33.3.
    (ii) Upstream relevant products. The applicant must identify and 
define as upstream relevant products all inputs to electricity products 
provided by upstream merging entities in the most recent two years.
    (2) Define geographic markets--(i) Downstream geographic markets. 
The applicant must identify all geographic markets in which it or any 
merging entities sell the downstream relevant products, as outlined in 
paragraphs (c)(2) and (c)(3) of Sec. 33.3.
    (ii) Upstream geographic markets The applicant must identify all 
geographic markets in which it or any merging entities provide the 
upstream relevant products.
    (3) Analyze competitive conditions--(i) Downstream geographic 
market. (A) The applicant must compute market share for each supplier in 
each relevant downstream geographic market and the HHI statistic for the 
downstream market. The applicant must provide a summary table with the 
following information for each relevant downstream geographic market:
    (1) The economic capacity of each downstream supplier (specify the 
amount of such capacity served by each upstream supplier);

[[Page 239]]

    (2) The total amount of economic capacity in the downstream market 
served by each upstream supplier;
    (3) The market share of economic capacity served by each upstream 
supplier; and
    (4) The HHI statistic for the downstream market.
    (B) A similar table must be provided for available economic capacity 
and for any other measure used by the applicant.
    (ii) Upstream geographic market. The applicant must provide a 
summary table with the following information for each upstream relevant 
product in each relevant upstream geographic market:
    (A) The amount of relevant product provided by each upstream 
supplier;
    (B) The total amount of relevant product in the market;
    (C) The market share of each upstream supplier; and
    (D) The HHI statistic for the upstream market.
    (d) Mitigation. Any mitigation measures proposed by the applicant 
(including, for example, divestiture or participation in an Regional 
Transmission Organization) which are intended to mitigate the adverse 
effect of the proposed transaction must, to the extent possible, be 
factored into the vertical competitive analysis as an additional post-
transaction analysis. Any mitigation measures that involve facilities 
must identify the facilities affected by the commitment.
    (e) Additional factors. (1) If the applicant does not propose 
mitigation measures, the applicant must address:
    (i) The potential adverse competitive effects of the transaction.
    (ii) The potential for entry in the market and the role that entry 
could play in mitigating adverse competitive effects of the transaction;
    (iii) The efficiency gains that reasonably could not be achieved by 
other means; and
    (iv) Whether, but for the proposed transaction, one or more of the 
parties to the transaction would be likely to fail, causing its assets 
to exit the market.
    (2) The applicant must address each of the additional factors in the 
context of whether the proposed transaction is likely to present 
concerns about raising rivals' costs or anticompetitive coordination.



Sec. 33.5  Proposed accounting entries.

    If the applicant is required to maintain its books of account in 
accordance with the Commission's Uniform System of Accounts in part 101 
of this chapter, the applicant must present proposed accounting entries 
showing the effect of the transaction with sufficient detail to indicate 
the effects on all account balances (including amounts transferred on an 
interim basis), the effect on the income statement, and the effects on 
other relevant financial statements. The applicant must also explain how 
the amount of each entry was determined.



Sec. 33.7  Verification.

    The original application must be signed by a person or persons 
having authority with respect thereto and having knowledge of the 
matters therein set forth, and must be verified under oath.



Sec. 33.8  Number of copies.

    The applicant must submit the application or petition to the 
Secretary of the Commission in accordance with filing procedures posted 
on the Commission's Web site at http://www.ferc.gov. If the applicant 
submits a public and a non-public version (containing information filed 
under a request for privileged treatment), the original and at least 
three of the eight copies must be of the non-public version of the 
filing, pursuant to Sec. 388.112(b)(ii). If the applicant must submit 
information specified in paragraphs (b), (c), (d), (e) and (f) of Sec. 
33.3 or paragraphs (b), (c), (d) and (e) of Sec. 33.4, the applicant 
must submit all such information in electronic format (e.g., on computer 
diskette or on CD) along with a printed description and summary. The 
electronic version must be submitted in accordance with Sec. 385.2011 
of the Commission's regulations. The printed portion of the applicant's 
submission must include documentation for the electronic submission, 
including all file names and a summary of the data contained in each 
file. Each column (or data item) in each separate data table or chart 
must

[[Page 240]]

be clearly labeled in accordance with the requirements of Sec. 33.3 and 
Sec. 33.4. Any units of measurement associated with numeric entries 
must also be included.

[Order 642, 65 FR 71014, Nov. 28, 2000, as amended by Order 737, 75 FR 
43403, July 26, 2010]



Sec. 33.9  Protective order.

    If the applicant seeks to protect any portion of the application, or 
any attachment thereto, from public disclosure pursuant to Sec. 388.112 
of this chapter, the applicant must include with its request for 
privileged treatment a proposed protective order under which the parties 
to the proceeding will be able to review any of the data, information, 
analysis or other documentation relied upon by the applicant for which 
privileged treatment is sought.



Sec. 33.10  Additional information.

    The Director of the Office of Energy Market Regulation, or his 
designee, may, by letter, require the applicant to submit additional 
information as is needed for analysis of an application filed under this 
part.

[Order 642, 65 FR 71014, Nov. 28, 2000, as amended by Order 699, 72 FR 
45324, Aug. 14, 2007; Order 701, 72 FR 61053, Oct. 29, 2007]



Sec. 33.11  Commission procedures for the consideration of applications under 

section 203 of the FPA.

    (a) The Commission will act on a completed application for approval 
of a transaction (i.e., one that is consistent with the requirements of 
this part) not later than 180 days after the completed application is 
filed. If the Commission does not act within 180 days, such application 
shall be deemed granted unless the Commission finds, based on good 
cause, that further consideration is required to determine whether the 
proposed transaction meets the standards of section 203(a)(4) of the FPA 
and issues, by the 180th day, an order tolling the time for acting on 
the application for not more than 180 days, at the end of which 
additional period the Commission shall grant or deny the application.
    (b) The Commission will provide for the expeditious consideration of 
completed applications for the approval of transactions that are not 
contested, do not involve mergers, and are consistent with Commission 
precedent.
    (c) Transactions, provided that they are not contested, do not 
involve mergers and are consistent with Commission precedent, that will 
generally be subject to expedited review include:
    (1) A disposition of only transmission facilities, including, but 
not limited to, those that both before and after the transaction remain 
under the functional control of a Commission-approved regional 
transmission organization or independent system operator; and
    (2) Transactions that do not require an Appendix A analysis; \1\ and
---------------------------------------------------------------------------

    \1\ Inquiry Concerning the Commission's Merger Policy Under the 
Federal Power Act; Policy Statement, Order No. 592, 61 FR 68,595 (Dec. 
30, 1996), FERC Stats. & Regs. ] 31,044 (1996), reconsideration denied, 
Order No. 592-A, 62 FR 33,340 (June 19, 1977), 79 FERC ] 61,321 (1997) 
(Merger Policy Statement).
---------------------------------------------------------------------------

    (3) Internal corporate reorganizations that result in the 
reorganization of a traditional public utility that has captive 
customers or owns or provides transmission service over jurisdictional 
transmission facilities, but do not present cross-subsidization issues.

[Order 669-A, 71 FR 28446, May 16, 2006]



PART 34_APPLICATION FOR AUTHORIZATION OF THE ISSUANCE OF SECURITIES OR THE 

ASSUMPTION OF LIABILITIES--Table of Contents



Sec.
34.1 Applicability; definitions; exemptions in case of certain State 
          regulation, certain short-term issuances and certain 
          qualifying facilities.
34.2 Placement of securities.
34.3 Contents of application for issuance of securities.
34.4 Required exhibits.
34.5 Additional information.
34.6 Form and style.
34.7 Filing requirements.
34.8 Verification.
34.9 Reports.

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352.

    Source: Order 182, 46 FR 50514, Oct. 14, 1981, unless otherwise 
noted.

    Cross References: For rules of practice and procedure, see part 385 
of this chapter.

[[Page 241]]

For Approved Forms, Federal Power Act, see part 131 of this chapter.

    OMB Reference: ``FERC Filing No. 523'' is the identification number 
used by the Commission and the Office of Management and Budget to 
reference the filing requirements in part 34.



Sec. 34.1  Applicability; definitions; exemptions in case of certain State 

regulation, certain short-term issuances and certain qualifying facilities.

    (a) Applicability. This part applies to applications for 
authorization from the Commission to issue securities or assume an 
obligation or liability which are filed by:
    (1) Licensees and other entities pursuant to sections 19 and 20 of 
the Federal Power Act (41 Stat. 1073, 16 U.S.C. 812, 813) and part 20 of 
the Commission's regulations; and
    (2) Public utilities pursuant to section 204 of the Federal Power 
Act (49 Stat. 850, 16 U.S.C. 824c).
    (b) Definitions. For the purpose of this part:
    (1) The term utility means a licensee, public utility or other 
entity seeking authorization under sections 19, 20 or 204 of the Federal 
Power Act;
    (2) The term securities includes any note, stock, treasury stock, 
bond, or debenture or other evidence of interest in or indebtedness of a 
utility;
    (3) The term issuance or placement of securities means issuance or 
placement of securities, or assumption of obligation or liability; and
    (4) The term State means a State admitted to the Union, the District 
of Columbia, and any organized Territory of the United States.
    (c) Exemptions. (1) If an agency of the State in which the utility 
is organized and operating approves or authorizes, in writing, the 
issuance of securities prior to their issuance, the utility is exempt 
from the provisions of sections 19, 20 and 204 of the Federal Power Act 
and the regulations under this part, with respect to such securities.
    (2) This part does not apply to the issue or renewal of, or 
assumption of liability on, a note or draft maturing one year or less 
after the date of such issue, renewal, or assumption of liability, if 
the aggregate of such note or draft and all other then-outstanding notes 
and drafts of a maturity of one year or less on which the utility is 
primarily or secondarily liable, is not more than 5 percent of the par 
value of the other then-outstanding securities of the utility as of the 
date of issue or renewal of, or assumption of liability on, the note or 
draft. In the case of securities having no par value, the par value for 
the purpose of this part is the fair market value, as of the date of 
issue or renewal of, or assumption of liability on, the note or draft.
    (3) For certain qualifying facilities. Any cogeneration or small 
power production facility which is exempt from sections 19, 20 and 204 
of the Federal Power Act pursuant to Sec. 292.601 of this chapter shall 
be exempt from the provisions of this part.

[Order 182, 46 FR 50514, Oct. 14, 1981, as amended at 48 FR 9851, Mar. 
9, 1983; Order 575, 60 FR 4852, Jan. 25, 1995]



Sec. 34.2  Placement of securities.

    (a) Method of issuance. Upon obtaining authorization from the 
Commission, utilities may issue securities by either a competitive bid 
or negotiated placement, provided that:
    (1) Competitive bids are obtained from at least two prospective 
dealers, purchasers or underwriters; or
    (2) Negotiated offers are obtained from at least three prospective 
dealers, purchasers or underwriters; and
    (3) The utility:
    (i) Accepts the bid or offer that provides the utility with the 
lowest cost of money for securities with fixed or variable interest or 
dividend rates, or
    (ii) Accepts the bid or offer that provides the utility with the 
greatest net proceeds for securities with no specified interest or 
dividend rates, or
    (iii) The utility has filed for and obtained authorization from the 
Commission to accept bids or offers other than those specified in 
paragraphs (a)(3)(i) or (a)(3)(ii) of this section.
    (b) Exemptions. The provisions of paragraph (a) of this section do 
not apply where:
    (1) The securities are to be issued to existing holders of 
securities on a pro rata basis;
    (2) The utility receives an unsolicited offer to purchase the 
securities;

[[Page 242]]

    (3) The securities have a maturity of one year or less; or
    (4) The securities are to be issued in support of or to guarantee 
securities issued by governmental or quasi-governmental bodies for the 
benefit of the utility.
    (c) Prohibitions. No securities will be placed with any person who:
    (1) Has performed any service or accepted any fee or compensation 
with respect to the proposed issuance of securities prior to submission 
of bids or entry into negotiations for placement of such securities; or
    (2) Would be in violation of section 305(a) of the Federal Power Act 
with respect to the issuance.

[Order 575, 60 FR 4853, Jan. 25, 1995]



Sec. 34.3  Contents of application for issuance of securities.

    Each application to the Commission for authority to issue securities 
shall contain the information specified in this section. In lieu of 
filing the information required in paragraphs (e), (i) and (j) of this 
section, a specific reference may be made to the portion of the 
registration statement filed under Sec. 34.4(f), which includes the 
information required in these paragraphs.
    (a) The official name of the applicant and address of its principal 
business office.
    (b) The State in which the utility is incorporated, the date of 
incorporation, and each State in which it operates.
    (c) The name, address and telephone number of a person within the 
utility authorized to receive notices and communications with respect to 
the application.
    (d) The date by which Commission action is requested.
    (e) A full description of the securities proposed to be issued, 
including:
    (1) Type and nature of securities;
    (2) Amount of securities (par or stated value and number of units);
    (3) Interest or dividend rate, if any;
    (4) Dates of issuance and maturity;
    (5) Institutional rating of the securities--or if the securities are 
not rated, an explanation as to why they are not rated, and if the 
securities will be rated, an estimate of the rating; and
    (6) Any stock exchange on which the securities will be listed.
    (f) The purpose for which the securities for which application is 
made are to be issued:
    (1) If the purpose of such issuance is the construction, completion, 
extension, or improvement of facilities, describe in reasonable detail 
the construction program for which the funds were or are to be used.
    (2) If the purpose for such issuance is for the refunding of 
obligations, describe in detail the obligations to be refunded, 
including the character, principal amounts, applicable discount or 
premium, dates of issuance and maturity, and all other material facts 
concerning such obligations.
    (3) If the purpose for such issuance is for other than construction 
or refunding, explain such other purpose(s) in detail.
    (g) A statement as to whether or not any application with respect to 
the transaction or any part thereof is required to be filed with any 
State regulatory body.
    (h) A detailed statement of the facts relied upon by the applicant 
to show that the issuance:
    (1) Is for some lawful object, within the corporate purposes of the 
applicant and compatible with the public interest, is necessary or 
appropriate for or consistent with the proper performances by the 
applicant of service as a public utility and will not impair its ability 
to perform that service, and
    (2) Is reasonably necessary or appropriate for such purposes.
    (i) A detailed statement of the bond indenture(s) or other 
limitations on interest and dividend coverage, and the effects of such 
limitations on the issuance of additional debt or equity securities.
    (j) A brief summary of any rate changes which were made effective 
during the period for which financial statements are submitted or which 
became or will become effective after the

[[Page 243]]

period for which statements are submitted.

[Order 182, 46 FR 50514, Oct. 14, 1981, as amended by Order 390, 49 FR 
32505, Aug. 14, 1984; Order 575, 60 FR 4853, Jan. 25, 1995; Order 593, 
62 FR 1283, Jan. 9, 1997; Order 647, 69 FR 32438, June 10, 2004; Order 
737, 75 FR 43403, July 26, 2010]



Sec. 34.4  Required exhibits.

    (a) Exhibit A. The applicant must file the statement of corporate 
purposes from its articles of incorporation.
    (b) Exhibit B. A copy of all resolutions of the applicant's 
directors authorizing the issuance of securities for which the 
application is made; and copies of the resolution of the stockholders 
approving such issuance if approval of the stockholders has been 
obtained.
    (c) Exhibit C. The Balance Sheet and attached notes for the most 
recent 12-month period for which financial statements have been 
published, provided that the 12-month period ended no more than 4 months 
prior to the date of the filing of the application, on both an actual 
basis and a pro forma basis in the form prescribed for the ``Comparative 
Balance Sheet'' of FERC Form No. 1, ``Annual Report for major electric 
utilities, licensees and others.'' Each adjustment made in determining 
the pro forma basis must be clearly identified.
    (d) Exhibit D. The Income Statement and attached notes for the most 
recent 12-month period for which financial statements have been 
published, provided that the 12-month period ended no more than 4 months 
prior to the date of the filing of the application, on both an actual 
basis and a pro forma basis in the form prescribed for the ``Statement 
of Income for the Year'' of FERC Form No. 1, ``Annual Report for major 
electric utilities, licensees and others.'' Each adjustment made in 
determining the pro forma basis must be clearly identified.
    (e) Exhibit E. A Statement of Cash Flows and Computation of Interest 
Coverage on an actual basis and a pro forma basis for the most recent 
12-month period for which financial statements have been published, 
provided that the 12-month period ended no more than 4 months prior to 
the date of the filing of the application. The Statement of Cash Flows 
must be in the form prescribed for the ``Statement of Cash Flows'' of 
the FERC Form No. 1, Annual Report for major electric utilities, 
licensees and others,'' followed by a computation of interest coverage, 
in the form of the following worksheet:

------------------------------------------------------------------------
                                                                  OMB
                                                                control
                                                     Actual    No. 1902-
  Federal Energy Regulatory Commission worksheet    for the    0043, pro
       for computation of interest coverage           year     forma for
                                                   ended mm-   the year
                                                     dd-yy     ended mm-
                                                                 dd-yy
------------------------------------------------------------------------
Net income
Add: Interest on Long-Term Debt, Interest on
 Short-Term Debt, Other Interest Expense, Total
 Interest Expense
  Federal and State Income Taxes
Income Before Interest and Income Taxes
 
         Computation of Interest Coverage
 
Income Before Interest and Income Taxes / Total
 Interest Expense = Interest Coverage
------------------------------------------------------------------------


    (f) Exhibit F. A copy of registration statement and exhibits which 
are filed with the Securities and Exchange Commission for the proposed 
security issuance.

[Order 182, 46 FR 50514, Oct. 14, 1981, as amended by Order 390, 49 FR 
32505, Aug. 14, 1984; Order 575, 60 FR 4853, Jan. 25, 1995; 60 FR 27882, 
May 26, 1995]



Sec. 34.5  Additional information.

    The Commission may, in its discretion, require the filing of 
additional information which appears necessary to reach a determination 
on any particular application.



Sec. 34.6  Form and style.

    Each application pursuant to this part 34 shall conform to the 
requirements of subpart T of part 385 of this chapter.

[Order 182, 46 FR 50514, Oct. 14, 1981, as amended by Order 225, 47 FR 
19056, May 3, 1982]



Sec. 34.7  Filing requirements.

    Applications must be filed with the Secretary of the Commission in 
accordance with filing procedures posted on

[[Page 244]]

the Commission's Web site at http://www.ferc.gov.

[Order 737, 75 FR 43403, July 26, 2010]



Sec. 34.8  Verification.

    The original application shall be signed by an authorized 
representative of the applicant, who has knowledge of the matters set 
forth therein, and it shall be verified under oath.

    Effective Date Note: At 70 FR 35375, June 20, 2005, Sec. 34.8 was 
revised, effective at the time of the next e-filing release during the 
Commission's next fiscal year. For the convenience of the user, the 
revised text follows:



Sec. 34.8  Verification.

    An application verification shall be signed under oath by an 
authorized representative of the applicant, who has knowledge of the 
matters set forth therein and as provided in Sec. 385.2005 of this 
chapter, and retained at the applicant's business location until the 
relevant proceeding has been concluded.



Sec. 34.9  Reports.

    The applicant must file reports under Sec. 131.43 and Sec. 131.50 
of this chapter no later than 30 days after the sale or placement of 
long-term debt or equity securities or the entry into guarantees or 
assumptions of liabilities pursuant to authority granted under this 
part.

[Order 575, 60 FR 4853, Jan. 25, 1995. Redesignated by Order 737, 75 FR 
43403, July 26, 2010]



PART 35_FILING OF RATE SCHEDULES AND TARIFFS--Table of Contents



                          Subpart A_Application

Sec.
35.1 Application; obligation to file rate schedules, tariffs and certain 
          service agreements.
35.2 Definitions.
35.3 Notice requirements.
35.4 Permission to become effective is not approval.
35.5 Rejection of material submitted for filing.
35.6 Submission for staff suggestions.
35.7 Electronic filing requirements.
35.8 Protests and interventions by interested parties.
35.9 Requirements for filing rate schedules, tariffs or service 
          agreements.
35.10 Form and style of rate schedules, tariffs and service agreements.
35.10a Forms of service agreements.
35.10b Electric Quarterly Reports.
35.11 Waiver of notice requirement.

            Subpart B_Documents To Be Submitted With a Filing

35.12 Filing of initial rate schedules and tariffs.
35.13 Filing of changes in rate schedules, tariffs or service 
          agreements.

                   Subpart C_Other Filing Requirements

35.14 Fuel cost and purchased economic power adjustment clauses.
35.15 Notices of cancellation or termination.
35.16 Notice of succession.
35.17 Withdrawals and amendments of rate schedule, tariff or service 
          agreement filings.
35.18 Asset retirement obligations.
35.19 Submission of information by reference.
35.19a Refund requirements under suspension orders.
35.21 Applicability to licensees and others subject to section 19 or 20 
          of the Federal Power Act.
35.22 Limits for percentage adders in rates for transmission services; 
          revision of rate schedules, tariffs or service agreements.
35.23 General provisions.
35.24 Tax normalization for public utilities.
35.25 Construction work in progress.
35.26 Recovery of stranded costs by public utilities and transmitting 
          utilities.
35.27 Authority of State commissions.
35.28 Non-discriminatory open access transmission tariff.
35.29 Treatment of special assessments levied under the Atomic Energy 
          Act of 1954, as amended by Title XI of the Energy Policy Act 
          of 1992.

Subpart D_Procedures and Requirements for Public Utility Sales of Power 
      to Bonneville Power Administration Under Northwest Power Act

35.30 General provisions.
35.31 Commission review.

  Subpart E_Regulations Governing Nuclear Plant Decommissioning Trust 
                                  Funds

35.32 General provisions.
35.33 Specific provisions.

 Subpart F_Procedures and Requirements Regarding Regional Transmission 
                              Organizations

35.34 Regional Transmission Organizations.

[[Page 245]]

       Subpart G_Transmission Infrastructure Investment Procedures

35.35 Transmission infrasturcture investment.

  Subpart H_Wholesale Sales of Electric Energy, Capacity and Ancillary 
                     Services at Market-Based Rates

35.36 Generally.
35.37 Market power analysis required.
35.38 Mitigation.
35.39 Affiliate restrictions.
35.40 Ancillary services.
35.41 Market behavior rules.
35.42 Change in status reporting requirement.

Appendix A to Subpart H Standard Screen Format
Appendix B to Subpart H Corporate Entities and Assets

  Subpart I_Cross-Subsidization Restrictions on Affiliate Transactions

35.43 Generally.
35.44 Protections against affiliate cross-subsidization.

   Subpart J_Credit Practices In Organized Wholesale Electric Markets

35.45 Applicability.
35.46 Definitions.
35.47 Tariff provisions governing credit practices in organized 
          wholesale electric markets.

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352.

    Source: Order 271, 28 FR 10573, Oct. 2, 1963, unless otherwise 
noted.



                          Subpart A_Application



Sec. 35.1  Application; obligation to file rate schedules, tariffs and certain 

service agreements.

    (a) Every public utility shall file with the Commission and post, in 
conformity with the requirements of this part, full and complete rate 
schedules and tariffs and those service agreements not meeting the 
requirements of Sec. 35.1(g), clearly and specifically setting forth 
all rates and charges for any transmission or sale of electric energy 
subject to the jurisdiction of this Commission, the classifications, 
practices, rules and regulations affecting such rates, charges, 
classifications, services, rules, regulations or practices, as required 
by section 205(c) of the Federal Power Act (49 Stat. 851; 16 U.S.C. 
824d(c)). Where two or more public utilities are parties to the same 
rate schedule or tariff, each public utility transmitting or selling 
electric energy subject to the jurisdiction of this Commission shall 
post and file such rate schedule, or the rate schedule may be filed by 
one such public utility and all other parties having an obligation to 
file may post and file a certificate of concurrence on the form 
indicated in Sec. 131.52 of this chapter: Provided, however, In cases 
where two or more public utilities are required to file rate schedules 
or certificates of concurrence such public utilities may authorize a 
designated representative to file upon behalf of all parties if upon 
written request such parties have been granted Commission authorization 
therefor.
    (b) A rate schedule, tariff, or service agreement applicable to a 
transmission or sale of electric energy, other than that which proposes 
to supersede, cancel or otherwise change the provisions of a rate 
schedule, tariff, or service agreement required to be on file with this 
Commission, shall be filed as an initial rate in accordance with Sec. 
35.12.
    (c) A rate schedule, tariff, or service agreement applicable to a 
transmission or sale of electric energy which proposes to supersede, 
cancel or otherwise change any of the provisions of a rate schedule, 
tariff, or service agreement required to be on file with this Commission 
(such as providing for other or additional rates, charges, 
classifications or services, or rules, regulations, practices or 
contracts for a particular customer or customers) shall be filed as a 
change in rate in accordance with Sec. 35.13, except cancellation or 
termination which shall be filed as a change in accordance with Sec. 
35.15.
    (d)(1) The provisions of this paragraph (d) shall apply to rate 
schedules, tariffs or service agreements tendered for filing on or after 
August 1, 1976, which are applicable to the transmission or sale of firm 
power for resale to an all-requirements customer, whether tendered 
pursuant to Sec. 35.12 as an initial rate schedule or tendered pursuant 
to Sec. 35.13 as a change in an existing rate schedule whose term has 
expired or whose term is to be extended.

[[Page 246]]

    (2) Rate schedules covered by the terms of paragraph (d)(1) of this 
section shall contain the following provision when it is the intent of 
the contracting parties to give the party furnishing service the 
unrestricted right to file unilateral rate changes under section 205 of 
the Federal Power Act:

    Nothing contained herein shall be construed as affecting in any way 
the right of the party furnishing service under this rate schedule to 
unilaterally make application to the Federal Energy Regulatory 
Commission for a change in rates under section 205 of the Federal Power 
Act and pursuant to the Commission's Rules and Regulations promulgated 
thereunder.

    (3) Rate schedules covered by the terms of paragraph (d)(1) of this 
section shall contain the following provision when it is the intent of 
the contracting parties to withhold from the party furnishing service 
the right to file any unilateral rate changes under section 205 of the 
Federal Power Act:

    The rates for service specified herein shall remain in effect for 
the term of ---------- or until ----------, and shall not be subject to 
change through application to the Federal Energy Regulatory Commission 
pursuant to the provisions of Section 205 of the Federal Power Act 
absent the agreement of all parties thereto.

    (4) Rate schedules covered by the terms of paragraph (d)(1) of this 
section, but which are not covered by paragraphs (d)(2) or (d)(3) of 
this section, are not required to contain either of the boilerplate 
provisions set forth in paragraph (d)(2) or (d)(3) of this section.
    (e) No public utility shall, directly or indirectly, demand, charge, 
collect or receive any rate, charge or compensation for or in connection 
with electric service subject to the jurisdiction of the Commission, or 
impose any classification, practice, rule, regulation or contract with 
respect thereto, which is different from that provided in a rate 
schedule required to be on file with this Commission unless otherwise 
specifically provided by order of the Commission for good cause shown.
    (f) A rate schedule applicable to the sale of electric power by a 
public utility to the Bonneville Power Administration under section 5(c) 
of the Pacific Northwest Electric Power Planning and Conservation Act 
(Pub. L. No. 96-501 (1980)) shall be filed in accordance with subpart D 
of this part.
    (g) For the purposes of paragraph (a) of this section, any service 
agreement that conforms to the form of service agreement that is part of 
the public utility's approved tariff pursuant to Sec. 35.10a of this 
chapter and any market-based rate agreement pursuant to a tariff shall 
not be filed with the Commission. All agreements must, however, be 
retained and be made available for public inspection and copying at the 
public utility's business office during regular business hours and 
provided to the Commission or members of the public upon request. Any 
individually executed service agreement for transmission, cost-based 
power sales, or other generally applicable services that deviates in any 
material respect from the applicable form of service agreement contained 
in the public utility's tariff and all unexecuted agreements under which 
service will commence at the request of the customer, are subject to the 
filing requirements of this part.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 541, 40 FR 
56425, Dec. 3, 1975; Order 541-A, 41 FR 27831, July 7, 1976; 46 FR 
50520, Oct. 14, 1981; Order 337, 48 FR 46976, Oct. 17, 1983; Order 541, 
57 FR 21734, May 22, 1992; Order 2001, 67 FR 31069, May 8, 2002; Order 
714, 73 FR 57530, 57533, Oct. 3, 2008; 74 FR 55770, Oct. 29, 2009]



Sec. 35.2  Definitions.

    (a) Electric service. The term electric service as used herein shall 
mean the transmission of electric energy in interstate commerce or the 
sale of electric energy at wholesale for resale in interstate commerce, 
and may be comprised of various classes of capacity and energy sales 
and/or transmission services. Electric service shall include the 
utilization of facilities owned or operated by any public utility to 
effect any of the foregoing sales or services whether by leasing or 
other arrangements. As defined herein, electric service is without 
regard to the form of payment or compensation for the sales or services 
rendered whether by purchase and sale, interchange, exchange, wheeling 
charge, facilities charge, rental or otherwise.

[[Page 247]]

    (b) Rate schedule. The term rate schedule as used herein shall mean 
a statement of (1) electric service as defined in paragraph (a) of this 
section, (2) rates and charges for or in connection with that service, 
and (3) all classifications, practices, rules, or regulations which in 
any manner affect or relate to the aforementioned service, rates, and 
charges. This statement shall be in writing and may take the physical 
form of a contract, purchase or sale or other agreement, lease of 
facilities, or other writing. Any oral agreement or understanding 
forming a part of such statement shall be reduced to writing and made a 
part thereof. A rate schedule is designated with a Rate Schedule number.
    (c)(1) Tariff. The term tariff as used herein shall mean a statement 
of (1) electric service as defined in paragraph (a) of this section 
offered on a generally applicable basis, (2) rates and charges for or in 
connection with that service, and (3) all classifications, practices, 
rules, or regulations which in any manner affect or relate to the 
aforementioned service, rates, and charges. This statement shall be in 
writing. Any oral agreement or understanding forming a part of such 
statement shall be reduced to writing and made a part thereof. A tariff 
is designated with a Tariff Volume number.
    (2) Service agreement. The term service agreement as used herein 
shall mean an agreement that authorizes a customer to take electric 
service under the terms of a tariff. A service agreement shall be in 
writing. Any oral agreement or understanding forming a part of such 
statement shall be reduced to writing and made a part thereof. A service 
agreement is designated with a Service Agreement number.
    (d) Filing date. The term filing date as used herein shall mean the 
date on which a rate schedule, tariff or service agreement filing is 
completed by the receipt in the office of the Secretary of all 
supporting cost and other data required to be filed in compliance with 
the requirements of this part, unless such rate schedule is rejected as 
provided in Sec. 35.5. If the material submitted is found to be 
incomplete, the Director of the Office of Energy Market Regulation will 
so notify the filing utility within 60 days of the receipt of the 
submittal.
    (e) Posting (1) The term posting as used in this part shall mean:
    (i) Keeping a copy of every rate schedule, service agreement, or 
tariff of a public utility as currently on file, or as tendered for 
filing, with the Commission open and available during regular business 
hours for public inspection in a convenient form and place at the public 
utility's principal and district or division offices in the territory 
served, and/or accessible in electronic format, and
    (ii) Serving each purchaser under a rate schedule, service 
agreement, or tariff either electronically or by mail in accordance with 
the service regulations in Part 385 of this chapter with a copy of the 
rate schedule, service agreement, or tariff. Posting shall include, in 
the event of the filing of increased rates or charges, serving either 
electronically or by mail in accordance with the service regulations in 
Part 385 of this chapter each purchaser under a rate schedule, service 
agreement or tariff proposed to be changed and to each State Commission 
within whose jurisdiction such purchaser or purchasers distribute and 
sell electric energy at retail, a copy of the rate schedule, service 
agreement or tariff showing such increased rates or charges, comparative 
billing data as required under this part, and, if requested by a 
purchaser or State Commission, a copy of the supporting data required to 
be submitted to this Commission under this part. Upon direction of the 
Secretary, the public utility shall serve copies of rate schedules, 
service agreements, or tariffs, and supplementary data, upon designated 
parties other than those specified herein.
    (2) Unless it seeks a waiver of electronic service, each customer, 
State Commission, or other party entitled to service under this 
paragraph (e) must notify the public utility of the e-mail address to 
which service should be directed. A customer, State Commission, or other 
party may seek a waiver of electronic service by filing a waiver request 
under Part 390 of this chapter providing good cause for its inability to 
accept electronic service.

[[Page 248]]

    (f) Effective date. As used herein the effective date of a rate 
schedule, tariff or service agreement shall mean the date on which a 
rate schedule filed and posted pursuant to the requirements of this part 
is permitted by the Commission to become effective as a filed rate 
schedule. The effective date shall be 60 days after the filing date, or 
such other date as may be specified by the Commission.
    (g) Frequency regulation. The term frequency regulation as used in 
this part will mean the capability to inject or withdraw real power by 
resources capable of responding appropriately to a system operator's 
automatic generation control signal in order to correct for actual or 
expected Area Control Error needs.

(16 U.S.C. 284(d), 792 et seq.; Pub. L. 95-617; Pub. L. 95-91; E.O. 
12009, 42 FR 46267)

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended at 28 FR 11404, Oct. 
24, 1963; 43 FR 36437, Aug. 17, 1978; 44 FR 16372, Mar. 19, 1979; 44 FR 
20077, Apr. 4, 1979; Order 39, 44 FR 46454, Aug. 8, 1979; Order 699, 72 
FR 45325, Aug. 14, 2007; Order 701, 72 FR 61054, Oct. 29, 2007; Order 
714, 73 FR 57530, Oct. 3, 2008; Order 755, 76 FR 67285, Oct. 31, 2011]



Sec. 35.3  Notice requirements.

    (a)(1) Rate schedules or tariffs. All rate schedules or tariffs or 
any part thereof shall be tendered for filing with the Commission and 
posted not less than sixty days nor more than one hundred-twenty days 
prior to the date on which the electric service is to commence and 
become effective under an initial rate schedule or tariff or the date on 
which the filing party proposes to make any change in electric service 
and/or rate, charge, classification, practice, rule, regulation, or 
contract effective as a change in rate schedule or tariff, except as 
provided in paragraph (b) of this section, or unless a different period 
of time is permitted by the Commission. Nothing herein shall be 
construed as in any way precluding a public utility from entering into 
agreements which, under this section, may not be filed at the time of 
execution thereof by reason of the aforementioned sixty to one hundred-
twenty day prior filing requirements. The proposed effective date of any 
rate schedule or tariff filing having a filing date in accordance with 
Sec. 35.2(d) may be deferred by the public utility making a filing 
requesting deferral prior to the rate schedule or tariff's acceptance by 
the Commission.
    (2) Service agreements. Service agreements that are required to be 
filed and posted authorizing a customer to take electric service under 
the terms of a tariff, or any part thereof, shall be tendered for filing 
with the Commission and posted not more than 30 days after electric 
service has commenced or such other date as may be specified by the 
Commission.
    (b) Construction of facilities. Rate schedules, tariffs or service 
agreements predicated on the construction of facilities may be tendered 
for filing and posted no more than one hundred-twenty days prior to the 
date set by the parties for the contract to go into effect. The 
Commission, upon request, may permit a rate schedule or service 
agreement or part thereof to be tendered for filing and posted more than 
one hundred-twenty days before it is to become effective.

(16 U.S.C. 284(d); Pub. L. 95-617; Pub. L. 95-91; E.O. 12009, 42 FR 
46267)

[44 FR 16372, Mar. 19, 1979; 44 FR 20077, Apr. 4, 1979; as amended by 
Order 714, 73 FR 57531, Oct. 3, 2008]



Sec. 35.4  Permission to become effective is not approval.

    The fact that the Commission permits a rate schedule, tariff or 
service agreement or any part thereof or any notice of cancellation to 
become effective shall not constitute approval by the Commission of such 
rate schedule or tariff or part thereof or notice of cancellation.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 714, 73 FR 
57531, 57533, Oct. 3, 2008]



Sec. 35.5  Rejection of material submitted for filing.

    (a) The Secretary, pursuant to the Commission's rules of practice 
and procedure and delegation of Commission authority, shall reject any 
material submitted for filing with the Commission which patently fails 
to substantially comply with the applicable requirements set forth in 
this part, or

[[Page 249]]

the Commission's rules of practice and procedure.
    (b) A rate filing that fails to comply with this Part may be 
rejected by the Director of the Office of Energy Market Regulation 
pursuant to the authority delegated to the Director in Sec. 
375.307(a)(1)(ii) of this chapter.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 614, 65 FR 
18227, Apr. 7, 2000; Order 699, 72 FR 45325, Aug. 14, 2007; Order 701, 
72 FR 61054, Oct. 29, 2007]



Sec. 35.6  Submission for staff suggestions.

    Any public utility may submit a rate schedule, tariff or service 
agreement or any part thereof or any material relating thereto for the 
purpose of receiving staff suggestions and comments thereon prior to 
filing with the Commission.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 714, 73 FR 
57531, Oct. 3, 2008]



Sec. 35.7  Electronic filing requirements.

    (a) General rule. All filings made in proceedings initiated under 
this part must be made electronically, including tariffs, rate schedules 
and service agreements, or parts thereof, and material that relates to 
or bears upon such documents, such as cancellations, amendments, 
withdrawals, termination, or adoption of tariffs.
    (b) Requirement for signature. All filings must be signed in 
compliance with the following:
    (1) The signature on a filing constitutes a certification that: the 
contents are true and correct to the best knowledge and belief of the 
signer; and that the signer possesses full power and authority to sign 
the filing.
    (2) A filing must be signed by one of the following:
    (i) The person on behalf of whom the filing is made;
    (ii) An officer, agent, or employee of the company, governmental 
authority, agency, or instrumentality on behalf of which the filing is 
made; or,
    (iii) A representative qualified to practice before the Commission 
under Sec. 385.2101 of this chapter who possesses authority to sign.
    (3) All signatures on the filing or any document included in the 
filing must comply, where applicable, with the requirements in Part 385 
of this chapter with respect to sworn declarations or statements and 
electronic signatures.
    (c) Format requirements for electronic filing. The requirements and 
formats for electronic filing are listed in instructions for electronic 
filing and for each form. These formats are available on the Internet at 
http://www.ferc.gov and can be obtained at the Federal Energy Regulatory 
Commission, Public Reference Room, 888 First Street, NE., Washington, DC 
20426.

[Order 714, 73 FR 57531, Oct. 3, 2008]



Sec. 35.8  Protests and interventions by interested parties.

    Unless the notice issued by the Commission provides otherwise, any 
protest or intervention to a rate filing made pursuant to this part must 
be filed in accordance with Sec. Sec. 385.211 and 385.214 of this 
chapter, on or before 21 days after the subject rate filing. A protest 
must state the basis for the objection. A protest will be considered by 
the Commission in determining the appropriate action to be taken, but 
will not serve to make the protestant a party to the proceeding. A 
person wishing to become a party to the proceeding must file a motion to 
intervene.

[Order 612, 64 FR 72537, Dec. 28, 1999; 65 FR 18229, Apr. 7, 2000, as 
amended by Order 647, 69 FR 32438, June 10, 2004; Order 714, 73 FR 
57531, Oct. 3, 2008]



Sec. 35.9  Requirements for filing rate schedules, tariffs or service 

agreements.

    (a) Rate schedules, tariffs, and service agreements may be filed 
either by dividing the rate schedule, tariff, or service agreements into 
individual sheets or sections, or as an entire document except as 
provided in paragraphs (b) and (c) of this section.
    (b) Open Access Transmission Tariffs (OATT) filed by utilities that 
are not Independent System Operators or Regional Transmission 
Organizations must be filed either as individual sheets or sections. If 
filed as sections, the sections must be no larger than the 1.0 level, 
although each schedule or attachment may be a single section. Individual 
service agreements that are entered into pursuant to the OATT may be 
filed as entire documents.

[[Page 250]]

    (c) OATT and other open access documents filed by Independent System 
Operators or Regional Transmission Organizations must be filed either as 
individual sheets or sections. If filed as sections, the sections must 
be no larger than the 1.1 level, including schedules or attachments. 
Individual service agreements that are part entered into pursuant to the 
OATT may be filed as entire documents.

[Order 714, 73 FR 57531, Oct. 3, 2008]



Sec. 35.10  Form and style of rate schedules, tariffs and service agreements.

    (a) Every rate schedule, tariff or service agreement offered for 
filing with the Commission under this part, shall show on a title page, 
which shall be otherwise blank, (1) the name of the filing public 
utility, (2) the names of other utilities rendering or receiving service 
under the rate schedule, tariff or service agreement ; and (3) a brief 
description of the service to be provided under the rate schedule, 
tariff or service agreement .
    (b) At the time a public utility files with the Commission and posts 
under this part to supersede or change the provisions of a rate 
schedule, tariff, or service agreement previously filed with the 
Commission under this part, in addition to the other requirements of 
this part, it must list in the transmittal letter the sheets or sections 
revised, and file a marked version of the rate schedule, tariff or 
service agreement sheets or sections showing additions and deletions. 
New language must be marked by either highlighting, background shading, 
bold text, or underlined text. Deleted language must be marked by 
strike-through.
    (c) In any filing to supersede or change the provisions of a rate 
schedule, tariff, or service agreement previously filed with the 
Commission under this part, only those revisions appropriately 
designated and marked under paragraph (b) of this section constitute the 
filing. Revisions to unmarked portions of the rate schedule, tariff or 
service agreement are not considered part of the filing nor will any 
acceptance of the filing by the Commission constitute acceptance of such 
unmarked changes.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 568, 59 FR 
40240, Aug. 8, 1994; Order 714, 73 FR 57532, Oct. 3, 2008]



Sec. 35.10a  Forms of service agreements.

    (a) To the extent a public utility adopts a standard form of service 
agreement for a service other than market-based power sales, the public 
utility shall include as part of its applicable tariff(s) an unexecuted 
standard service agreement approved by the Commission for each category 
of generally applicable service offered by the public utility under its 
tariff(s). The standard format for each generally applicable service 
must reference the service to be rendered and where it is located in its 
tariff(s). The standard format must provide spaces for insertion of the 
name of the customer, effective date, expiration date, and term. Spaces 
may be provided for the insertion of receipt and delivery points, 
contract quantity, and other specifics of each transaction, as 
appropriate.
    (b) Forms of service agreement submitted under this section shall be 
filed electronically as prescribed in Sec. 35.7 for the filing of rate 
schedules.

[Order 2001, 67 FR 31069, May 8, 2002; as amended by Order 714, 73 FR 
57532, Oct. 3, 2008]



Sec. 35.10b  Electric Quarterly Reports.

    Each public utility shall file an updated Electric Quarterly Report 
with the Commission covering all services it provides pursuant to this 
part, for each of the four calendar quarters of each year, in accordance 
with the following schedule: for the period from January 1 through March 
31, file by April 30; for the period from April 1 through June 30, file 
by July 31; for the period July 1 through September 30, file by October 
31; and for the period October 1 through December 31, file by January 
31. Electric Quarterly Reports must be prepared in conformance with the 
Commission's software and guidance posted and available for downloading 
from the FERC Web site (http://www.ferc.gov).

[Order 2001, 67 FR 31069, May 8, 2002]

[[Page 251]]



Sec. 35.11  Waiver of notice requirement.

    Upon application and for good cause shown, the Commission may, by 
order, provide that a rate schedule, tariff, or service agreement, or 
part thereof, shall be effective as of a date prior to the date of 
filing or prior to the date the rate schedule or tariff would become 
effective in accordance with these rules. Application for waiver of the 
prior notice requirement shall show (a) how and the extent to which the 
filing public utility and purchaser(s) under such rate schedule or 
tariff, or part thereof, would be affected if the notice requirement is 
not waived, and (b) the effects of the waiver, if granted, upon 
purchasers under other rate schedules. The filing public utility 
requesting such waiver of notice shall serve copies of its request 
therefor upon all purchasers.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 714, 73 FR 
57532, 57533, Oct. 3, 2008]



            Subpart B_Documents To Be Submitted With a Filing



Sec. 35.12  Filing of initial rate schedules and tariffs.

    (a) The letter of a public utility transmitting to the Commission 
for filing an initial rate schedule or tariff shall list the documents 
submitted with the filing; give the date on which the service under that 
rate schedule or tariff is expected to commence; state the names and 
addresses of those to whom the rate schedule or tariff has been mailed; 
contain a brief description of the kinds of services to be furnished at 
the rates specified therein; and summarize the circumstances which show 
that all requisite agreement to the rate schedule or tariff or the 
filing thereof, including any contract embodied therein, has in fact 
been obtained. In the case of coordination and interchange arrangements 
in the nature of power pooling transactions, all supporting data 
required to be submitted in support of a rate schedule or tariff filing 
shall also be submitted by parties filing certificates of concurrence, 
or a representative to file supporting data on behalf of all parties may 
be designated as provided in Sec. 35.1.
    (b) In addition, the following material shall be submitted:
    (1) Estimates of the transactions and revenues under an initial rate 
schedule. This shall include estimates, by months and for the year, of 
the quantities of services to be rendered and of the revenues to be 
derived therefrom during the 12 months immediately following the month 
in which those services will commence. Such estimates should be 
subdivided by classes of service, customers, and delivery points and 
shall show all billing determinants, e.g., kw, kwh, fuel adjustment, 
power factor adjustment. These estimates will not be required where they 
cannot be made with relative accuracy as, for example, in cases of 
interconnection arrangements containing schedules of rates for emergency 
energy, spinning reserve or economy energy or in cases of coordination 
and integration of hydroelectric generating resources whose output 
cannot be predicted quantitatively due to water conditions.
    (2)(i) Basis of the rate or charge proposed in an initial rate 
schedule or tariff and an explanation of how the proposed rate or charge 
was derived. For example, is it a standard rate of the filing public 
utility; is it a special rate arrived at through negotiations and, if 
so, were unusual customer requirements or competitive factors involved; 
and is it designed to produce a return substantially equal to the filing 
public utility's overall rate of return or is it essentially an 
increment cost plus a share of the savings rate? Were special cost of 
service studies prepared in connection with the derivation of the rate?
    (ii) A summary statement of all cost (whether fully distributed, 
incremental or other) computations involved in arriving at the 
derivation of the level of the rate, in sufficient detail to justify the 
rate, shall be submitted with the filing, except that if the filing 
includes nothing more than service to one or more added customers under 
an established rate of the utility for a particular class of service, 
such summary statement of cost computations is not required. In all 
cases, the Secretary is authorized to require the submission of the 
complete cost studies as part of the

[[Page 252]]

filing and each filing public utility shall submit the same upon request 
by the Secretary in such form as he or she shall direct.
    (3) A comparison of the proposed initial rate with other rates of 
the filing public utility for similar wholesale for resale and 
transmission services.
    (4) If any facilities are installed or modified in order to supply 
the service to be furnished under the proposed rate schedule or tariff, 
the filing public utility shall show on an appropriate available map (or 
sketch) and single line diagram the additions or changes to be made.
    (5) In support of the design of the proposed rate, the filing public 
utility shall submit the same material required to be furnished pursuant 
to Sec. 35.13(h)(37) Statement BL. In addition to the summary cost 
analysis required by Statement BL, the public utility shall also submit 
a complete explanation as to the method used in arriving at the cost of 
service allocated to the sales and service for which the rate or charge 
is proposed, and showing the principal determinants used for allocation 
purposes. In connection therewith, the following data should be 
submitted:
    (i) In the event the filing public utility considers certain special 
facilities as being devoted entirely to the service involved, it shall 
show the cost of service related to such special facilities.
    (ii) Computations showing the energy responsibility of the service, 
based upon considerations of energy sales under the proposed rate 
schedule or tariff and the kWh delivered from the filing public 
utility's supply system.
    (iii) Computations showing the demand responsibility of the service, 
and explaining the considerations upon which such responsibility was 
determined (e.g., coincident or non-coincident peak demands, etc.).

(Federal Power Act, 16 U.S.C. 792-828c; Department of Energy 
Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 42 FR 46267; Pub. L. 
96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended at 28 FR 11404, Oct. 
24, 1963; Order 537, 40 FR 48674, Oct. 17, 1975; Order 91, 45 FR 46363, 
July 10, 1980; Order 714, 73 FR 57532, Oct. 3, 2008]



Sec. 35.13  Filing of changes in rate schedules, tariffs or service 

agreements.

                                Contents

(a) General rule.
    (1) Filing for any rate schedule change not otherwise excepted.
    (2) Abbreviated filing requirements.
    (3) Cost of service data required by letter.
(b) General information.
(c) Information relating to the effect of the rate schedule change.
(d) Cost of service information.
    (1) Filing of Period I data.
    (2) Filing of Period II data.
    (3) Definitions.
    (4) Test period.
    (5) Work papers.
    (6) Additional information.
    (7) Attestation.
(e) Testimony and exhibits.
    (1) Filing requirements.
    (2) Case in chief.
    (3) Burden of proof.
(f) Filing by parties concurring in coordination and interchange 
          arrangements.
(g) Commission precedents and policy.
(h) Cost of service statements.
    (1) AA--Balance sheets.
    (2) AB--Income statements.
    (3) AC--Retained earnings statements.
    (4) AD--Cost of plant.
    (5) AE--Accumulated depreciation and amortization.
    (6) AF--Specified deferred credits.
    (7) AG--Specified plant accounts (other than plant in service) and 
deferred debits.
    (8) AH--Operation and maintenance expenses.
    (9) AI--Wages and salaries.
    (10) AJ--Depreciation and amortization expenses.
    (11) AK--Taxes other than income taxes.
    (12) AL--Working capital.
    (13) AM--Construction work in progress.
    (14) AN--Notes payable.
    (15) AO--Rate for allowance for funds used during construction.
    (16) AP--Federal income tax deductions--interest.
    (17) AQ--Federal income tax deductions--other than interest.
    (18) AR--Federal tax adjustments.
    (19) AS--Additional state income tax deductions.
    (20) AT--State tax adjustments.
    (21) AU--Revenue credits.
    (22) AV--Rate of return.
    (23) AW--Cost of short-term debt.
    (24) AX--Other recent and pending rate changes.
    (25) AY--Income and revenue tax rate data.
    (26) BA--Wholesale customer rate groups.
    (27) BB--Allocation demand and capability data.

[[Page 253]]

    (28) BC--Reliability data.
    (29) BD--Allocation energy and supporting data.
    (30) BE--Specific assignment data.
    (31) BF--Exclusive-use commitments of major power supply facilities.
    (32) BG--Revenue data to reflect changed rates.
    (33) BH--Revenue data to reflect present rates.
    (34) BI--Fuel cost adjustment factors.
    (35) BJ--Summary data tables.
    (36) BK--Electric utility department cost of service, total and as 
allocated.
    (37) BL--Rate design information.
    (38) Statement BM--Construction program statement.

    (a) General rule. Every public utility shall file the information 
required by this section, as applicable, at the time it files with the 
Commission under Sec. 35.1 all or part of a rate schedule, tariff or 
service agreement to supersede or otherwise change the provisions of a 
rate schedule, tariff or service agreement filed with the Commission 
under Sec. 35.1. Any petition filed under Sec. 385.207 of this chapter 
for waiver of any provision of this section shall specifically identify 
the requirement that the applicant wishes the Commission to waive.
    (1) Filing for any rate schedule change or tariff not otherwise 
excepted. Except as provided in paragraph (a)(2) of this section, any 
utility that files a rate schedule, tariff, or service agreement change 
shall submit with its filing the information specified in paragraphs 
(b), (c), (d), (e), and (h) of this section, in accordance with 
paragraph (g) of this section.
    (2) Abbreviated filing requirements--(i) For certain small rate 
increases. Any utility that files a rate increase for power or 
transmission services not covered by paragraph (a)(2)(ii) of this 
section may elect to file under this paragraph instead of paragraph 
(a)(1) of this section, if the proposed increase for the Test Period, as 
defined in paragraph (a)(2)(i)(A) of this section, is equal to or less 
than $200,000, regardless of customer consent, or equal to or less than 
$1 million if all wholesale customers that belong to the affected rate 
class consent.
    (A) Definition: The Test Period, for purposes of paragraph (a)(2)(i) 
of this section, means the most recent calendar year for which actual 
data are available, the last day of which is no more than fifteen months 
before the date of tender for filing under Sec. 35.1 of the notice of 
rate schedule.
    (B) Any utility that elects to file under this subparagraph must 
file the following information, conforming its submission to any rule of 
general applicability and to any Commission order specifically 
applicable to such utility:
    (1) A complete cost of service analysis for the Test Period, 
consistent with the requirements of paragraph (h)(36), Statement BK, of 
this section.
    (2) A complete derivation and explanation of all allocation factors 
and special assignments, consistent with the information required in 
Sec. 35.12(b)(5).
    (3) A complete calculation of revenues for the Test Period and for 
the first 12 months after the proposed effective date, consistent with 
the requirements of paragraph (c)(1) of this section.
    (4) If the proposed rates contain a fuel cost or purchased economic 
power adjustment clause, as defined in Sec. 35.14, the company must 
provide the derivation of its base cost of fuel (Fb) and its monthly 
fuel factors (Fm) for the Test Period and the resulting fuel adjustment 
clause revenues. If any pro forma adjustments affect the fuel clause in 
any way, the company must show the impact on Fm, kWh sales in the base 
period (Sm), Fb and kWh sales in the current period (Sb), as well as on 
fuel adjustment clause revenues.
    (5) Rate design calculations and narrative consistent with the 
information required in paragraph (h)(37) of this section and in Sec. 
35.12(b)(5).
    (6) The information required in paragraphs (b), (c)(2) and (c)(3) of 
this section and in Sec. 35.12(b)(2).
    (C) Data shall be reconciled with the utility's most recent FERC 
Form 1. If the utility has not yet submitted Form 1 for the Test Period, 
the utility shall submit the relevant Form 1 pages in draft form.
    (D) The utility may make pro forma adjustments for post-Test Period 
changes that occur before the proposed effective date and that are known 
and measurable at the time of filing. The utility shall provide a 
narrative statement explaining all pro forma adjustments.

[[Page 254]]

    (E) If the utility models its filing in whole or in part on retail 
rate decisions or settlements, the utility must provide detailed 
calculations and a narrative statement showing how all retail rate 
treatments are factored into the cost of service.
    (F) If the Commission sets the filing for hearing, the Commission 
will allow the company a specific time period in which to file 
testimony, exhibits, and supplemental workpapers to complete its case-
in-chief. While not required under this subpart, a utility may elect to 
submit Statements AA through BM for the Test Period in accord with the 
requirements of paragraphs (d), (g) and (h) of this section.
    (ii) Rate increases for service of short duration or for interchange 
or coordination service. Any utility that files a rate increase for any 
service of short duration and of a type for which the need and usage 
cannot be reasonably forecasted (such as emergency or short-term power), 
or for service that is an integral part of a coordination and 
interchange arrangement, may submit with its filing only the information 
required in paragraphs (b), (c) and (h)(37) of this section and in Sec. 
35.12(b)(2) and (b)(5), conforming its submission to any rule of general 
applicability and to any Commission order specifically applicable to 
such utility.
    (iii) For rate schedule, tariff, or service agreement changes other 
than rate increases. Any utility that files a rate change that does not 
provide for a rate increase or that provides for a rate increase that is 
based solely on a change in delivery points, a change in delivery 
voltage, or a similar change in service, must submit with its filing 
only the information required in paragraphs (b) and (c) of this section.
    (iv) Computing rate increases. For purposes of this subparagraph and 
paragraph (d)(2)(ii) of this section, the amount of any rate increase 
shall be the difference between the total revenues to be recovered under 
the rate change and the total revenues recovered or recoverable under 
the rate to be superseded or supplemented and shall be determined by:
    (A) applying the components of the rate to be superseded or 
supplemented to the billing determinants for the twelve months of Period 
I;
    (B) Applying the components of the rate change to the billing 
determinants for the twelve months of Period I; and
    (C) Subtracting the total revenues under subclause (A) from the 
total revenues under subclause (B).
    (3) Cost of service data required by letter. The Director of the 
Office of Energy Market Regulation may, by letter, require a utility 
that is not required under paragraph (a)(1) of this section to submit 
cost of service data to submit such specified cost of service data as 
are needed for Commission analysis of the rate schedule change.
    (b) General information. Any utility subject to paragraph (a) of 
this section shall file the following general information:
    (1) A list of documents submitted with the rate change;
    (2) The date on which the utility proposes to make the rate change 
effective;
    (3) The names and addresses of persons to whom a copy of the rate 
change has been posted;
    (4) A brief description of the rate change;
    (5) A statement of the reasons for the rate change;
    (6) A showing that all requisite agreement to the rate change, or to 
the filing of the rate change, including any agreement required by 
contract, has in fact been obtained;
    (7) A statement showing any expenses or costs included in the cost 
of service statements for Period I or Period II, as defined in paragraph 
(d)(3) of this section, that have been alleged or judged in any 
administrative or judicial proceeding to be illegal, duplicative, or 
unnecessary costs that are demonstrably the product of discriminatory 
employment practices; and
    (c) Information relating to the effect of the rate change. Any 
utility subject to paragraph (a) of this section shall also file the 
following information or materials:
    (1) A table or statement comparing sales and services and revenues 
from sales and services under the rate schedule, tariff, or service 
agreement to be superseded and under the rate change, by applying the 
components of each

[[Page 255]]

such rate schedule or tariff to the billing determinants for each class 
of service, for each customer, and for each delivery point or set of 
delivery points that constitutes a billing unit:
    (i) Except as provided in clause (ii), for each of the twelve months 
immediately before and each of the twelve months immediately after the 
proposed effective date of the rate change, and the total for each of 
the two twelve month periods; or
    (ii) At the election of the utility:
    (A) If the utility files Statements BG and BH under paragraph (h) 
for Period I, for each of the twelve months of Period I instead of for 
the twelve months immediately before the proposed effective date of the 
rate change; and
    (B) If Period II is the test period, for each of the twelve months 
of Period II instead of for the twelve months immediately after the 
proposed effective date of the rate change;
    (2) A comparison of the rate change and the utility's other rates 
for similar wholesale for resale and transmission services; and
    (3) If any specifically assignable facilities have been or will be 
installed or modified in order to supply service under the rate change, 
an appropriate map or sketch and single line diagram showing the 
additions or changes to be made.
    (d) Cost of service information--(1) Filing of Period I data. Any 
utility that is required under paragraph (a)(1) of this section to 
submit cost of service information, or that is subject to the exceptions 
in paragraphs (a)(2)(i) and (a)(2)(ii) of this section but elects to 
file such information, shall submit Statements AA through BM under 
paragraph (h) of this section using:
    (i) Unadjusted Period I data; or
    (ii) Period I data adjusted to reflect changes that affect revenues 
and costs prior to the proposed effective date of the rate change and 
that are known and measurable with reasonable accuracy at the time the 
rate schedule change is filed, if such utility:
    (A) Is not required to and does not file Period II data;
    (B) Adjusts all Period I data to reflect such changes; and
    (C) Fully supports the adjustments in the appropriate cost of 
service statements.
    (2) Filing of Period II data. (i) Except as provided in clause (ii) 
of this subparagraph, any utility that is required under paragraph 
(a)(1) of this section to submit cost of service information shall 
submit Statements AA through BM described in paragraph (h) using 
estimated costs and revenues for Period II;
    (ii) A utility may elect not to file Period II data if:
    (A) The utility files a rate increase that is less than one million 
dollars for Period I; or
    (B) All wholesale customers that belong to the affected rate class 
have consented to the rate increase.
    (3) Definitions. For purposes of this section:
    (i) Period I means the most recent twelve consecutive months, or the 
most recent calendar year, for which actual data are available, the last 
day of which is no more than fifteen months before the date of tender 
for filing under Sec. 35.1 of the notice of rate change;
    (ii) Period II means any period of twelve consecutive months after 
the end of Period I that begins:
    (A) No earlier than nine months before the date on which the rate 
change is proposed to become effective; and
    (B) No later than three months after the date on which the rate 
change is proposed to become effective.
    (4) Test period. If Period II data are not submitted for Statements 
AA through BM, Period I shall be the test period. If Period II data are 
submitted for Statements AA through BM, Period II shall be the test 
period.
    (5) Work papers. A utility that files adjusted Period I data or that 
files Period II data shall submit all work papers relating to such data. 
The utility shall provide a comprehensive explanation of the bases for 
the adjustments or estimates and, if such adjustments or estimates are 
based on a regularly prepared corporate budget, shall include relevant 
excerpts from such budget. Work papers and documents containing 
additional explanatory material shall be provided in electronic

[[Page 256]]

format, shall be legible, shall be assigned page numbers, and shall be 
marked, organized and indexed according to:
    (A) Subject matter;
    (B) The cost of service statements to which they apply; and
    (C) Witness.
    (6) Attestation. A utility shall include in its filing an 
attestation by its chief accounting officer or another of its officers 
that, to the best of that officer's knowledge, information, and belief, 
the cost of service statements and supporting data submitted under this 
paragraph are true, accurate, and current representations of the 
utility's books, budgets, or other corporate documents.
    (e) Testimony and exhibits--(1) Filing requirements. (i) A utility 
subject to paragraph (a)(1) of this section shall file Statements AA 
through BM under paragraph (h) as exhibits with its rate change and may 
file any other exhibits in support of its rate schedule change.
    (ii) A utility subject to paragraph (a)(1) of this section shall 
file prepared testimony. Such testimony shall include an explanation of 
all exhibits, including Statements AA through BM, and shall include 
support for all adjustments to book or budgeted data relied on in 
preparing the exhibits.
    (iii) To the extent that testimony and exhibits other than 
Statements AA through BM duplicate information required to be submitted 
in such statements, the testimony and exhibits may incorporate such 
information by referencing the specific statement containing such 
material.
    (2) Case in chief. In order to avoid delay in processing rate 
filings, such cost of service statements, testimony, and other exhibits 
described in paragraph (e)(1) of this section shall be the utility's 
case in chief in the event the matter is set for hearing.
    (3) Burden of proof. Any utility that files a rate increase shall be 
prepared to go forward at a hearing on reasonable notice on the data 
submitted under this section, to sustain the burden of proof under the 
Federal Power Act of establishing that the rate increase is just and 
reasonable and not unduly discriminatory or preferential or otherwise 
unlawful within the meaning of the Act.
    (f) Filing by parties concurring in coordination and interchange 
arrangements. For coordination and interchange arrangements in the 
nature of power pooling transactions, all information required to be 
submitted in support of a rate change under paragraphs (a)(1), (2), and 
(3) of this section shall be submitted by each party filing a 
certificate of concurrence under Sec. 35.1. If a representative is 
designated and authorized in accordance with Sec. 35.1 to file 
supporting information on behalf of all parties to a rate change, such 
filing shall fulfill the requirement in this paragraph for individual 
submittals by each party.
    (g) Commission precedents and policy. If a utility submits cost of 
service data under paragraph (d) of this section, it shall conform all 
such submissions to any rule of general applicability and to any 
Commission order specifically applicable to such utility.
    (h) Cost of service statements. Any utility subject to paragraph 
(a)(1) of this section shall submit the following Statements AA through 
BM in accordance with the requirements of paragraphs (d) and (g) of this 
section.
    (1) Statement AA--Balance sheets. Statement AA consists of balance 
sheets as of the beginning and the end of both Period I and Period II, 
and the most recently available balance sheet, including any applicable 
notes, and an explanation of any significant accounting changes since 
the most recent filing by the utility under this section that involves 
the same wholesale customer rate class. Balance sheets shall be 
constructed in accordance with the annual report form for electric 
utilities specified in part 141.
    (2) Statement AB--Income statements. Statement AB consists of income 
statements for both Period I and Period II, and the most recently 
available income statement, including any applicable notes, and an 
explanation of any significant accounting changes since the most recent 
filing by the utility under this section that involves the same 
wholesale customer rate class. Income statements shall be prepared in 
accordance with the annual report

[[Page 257]]

form for electric utilities specified in part 141.
    (3) Statement AC--Retained earnings statements. Statement AC 
consists of retained earnings statements for both Period I and Period 
II, and the most recently available retained earnings statement, 
including any notes applicable thereto. Retained earnings statements 
shall be prepared in accordance with the annual report form for electric 
utilities specified in part 141.
    (4) Statement AD--Cost of plant. Statement AD is a statement of the 
original cost of total electric plant in service according to functional 
classification for Period I and Period II. If the plant functions and 
subfunctions for Period I and Period II are different, the utility shall 
explain and justify the differences.
    (i) For each separately identified function and subfunction of 
production plant or transmission plant, the utility shall state the 
original cost as of the beginning of the first month and the end of each 
month of both Period I and Period II, with an average of the thirteen 
balances for each period. If any of the Period I or Period II thirteen 
monthly balances is not available or is unrepresentative of the current 
plan of the utility for plant in service, the utility shall provide an 
explanation of the relevant circumstances.
    (ii) For each separately identified function and subfunction of 
plant other than production or transmission, the utility shall state the 
original cost as of the beginning and the end of both Period I and 
Period II, with an average of the beginning and end balances for each 
period. If any of the Period I or Period II balances is not available or 
is unrepresentative of the current plan of the utility for plant in 
service, the utility shall provide an explanation of the relevant 
circumstances.
    (iii) The utility shall show the electric plant in service in 
accordance with each of the following five major functional 
classifications:
    (A) Production;
    (B) Transmission;
    (C) Distribution;
    (D) General and Intangible; and
    (E) Common and Other.
    (iv) To the extent feasible, the utility shall show completed 
construction not classified in accordance with clause (iii) in 
accordance with tentative classification to major functional accounts. 
If this is not feasible, the utility shall describe such facilities as 
other plant under clause (iii)(E).
    (v) If a utility designs its rate change so that subdivision of the 
major functional classifications is necessary to support the changed 
rate, the utility shall supply the original cost information for any of 
the five major functional plant classifications in clause (iii) that are 
divided into subfunctional categories. If subfunctional original cost 
information is provided, the utility shall explain the importance of 
providing such information to support the changed rate. The utility 
shall describe each subfunctional category in substantive terms, such as 
steam electric production or high voltage transmission.
    (vi) The utility shall select any subfunctional categories, as 
appropriate, under the following criteria:
    (A) Production plant categories shall be established as necessary to 
segregate costs for production services with special characteristics, 
such as base, intermediate or peaking load. The utility shall provide a 
description of each such service and shall list a brief descriptive 
title for each corresponding subfunctional category.
    (B) Transmission plant categories shall be chosen to reflect the 
extent to which the facilities are proposed to be allocated on a common 
basis among all or specific segments of utility services. For 
descriptive purposes, plant may also be categorized according to 
accounting or engineering terminology, such as high voltage overhead 
lines. The utility shall provide brief descriptive transmission category 
titles and explain the basis for the titles. If a utility allocates all 
transmission plant among utility services on the basis of a single set 
of allocation data, the utility may show original cost in total without 
subfunctionalization.
    (C) Distribution plant categories shall be selected according to 
engineering or use characteristics meaningful for allocations or 
assignments to wholesale services such as substations, overhead lines, 
meters, or non-wholesale. The utility shall provide brief descriptive 
distribution category titles

[[Page 258]]

and shall explain the basis for the titles.
    (D) If the utility divides any general, intangible, common, and 
other plant functional classifications into subfunctional categories, 
the subfunctional categories shall be chosen to group together 
facilities that share a common basis for allocation between wholesale 
and other electric services. The utility shall provide a brief 
descriptive title for each general and intangible subfunctional 
category, and for each common and other subfunctional category, with an 
explanation of the basis of each category selection. A utility need not 
divide the functional classifications of plant into subfunctional 
categories if these functions of plant are allocated in Statement BK on 
the basis of utility labor expenses.
    (E) A separate category shall be provided for each specific 
assignment of plant reported in Statement BE. Such assignments are 
applicable principally but not necessarily exclusively to distribution 
facilities. The utility shall provide brief descriptive titles 
consistent with Statement BE.
    (F) A separate category shall be provided for each exclusive-use 
commitment of major power supply facilities as required to be reported 
at Statement BF. The utility shall provide brief descriptive titles 
consistent with Statement BF.
    (5) Statement AE--Accumulated depreciation and amortization. 
Statement AE is a statement of the accumulated provision for 
depreciation and amortization of electric plant for Period I and Period 
II, provided according to major functional classifications selected by 
the utility in Statement AD under paragraph (h)(4) and divided into the 
subfunctional categories selected by the utility in Statement AD, to the 
extent that subfunctionalized data are available.
    (i) For each function and subfunction of electric production and 
transmission plant in service identified in Statement AD, the utility 
shall set forth the accumulated depreciation and amortization as of the 
beginning of the first month and the end of each month of both Period I 
and Period II. The utility shall state an average for each period 
computed as the average of the thirteen balances.
    (ii) For each function and subfunction of electric plant in service 
other than production or transmission, identified in Statement AD, the 
utility shall state the accumulated depreciation and amortization as of 
the beginning and the end of Period I and Period II, with an average of 
the beginning and end balances for each period.
    (iii) If any of the Period I or Period II balances is not available 
or is unrepresentative of the current plan of the utility for 
depreciation reserves, the utility shall provide an explanation of the 
relevant circumstances.
    (iv) If accumulated depreciation and amortization data are not 
available for any subfunction selected in Statement AD, the utility 
shall:
    (A) Provide a comparison of the current depreciation rate of the 
major functional classification and the depreciation rate estimated to 
be appropriate to the subfunctional category; and
    (B) State and explain the estimation techniques which the utility 
proposes to utilize in the absence of subfunctional data, such as the 
proration of accumulated depreciation and amortization data among the 
subfunctional categories according to the data for electric plant in 
service in Statement AD. If any of the proposed estimation techniques 
require data that are not provided elsewhere in the cost of service 
statements in paragraph (h) of this section, the utility shall supply 
the necessary data in Statement AE.
    (6) Statement AF--Specified deferred credits. Statement AF consists 
of balances of specified accounts and items which are to be considered 
in the determination of the net original cost rate base. All required 
balances are to be stated as of the beginning and end of both Period I 
and Period II, with an average of the beginning and end balances for 
each period. If any of the Period I and Period II balances is not 
available or is unrepresentative of the current operating plan of the 
utility, the utility shall include an explanation of the relevant 
circumstances. If subaccounts are maintained to reflect differences in 
ratemaking treatment among regulatory authorities that

[[Page 259]]

have jurisdiction, balances shall be provided in accordance with such 
subaccounts, with detailed explanations of the bases upon which the 
subaccounts were established and are maintained. The balances of 
deferred credits required to be filed in this statement are described in 
paragraph (h)(6) (i) through (v) of this section. All references to 
numbered accounts refer to the Commission's Uniform System of Accounts, 
18 CFR part 101.
    (i) The utility shall state total electric balances for accumulated 
deferred investment tax credits Account 255, and shall separate the 
credits into balances applicable to pre-1971 and post-1970 qualifying 
property additions. If the utility maintains records to show Account 255 
component balances according to the major functional classifications 
identified in Statement AD under paragraph (h)(4), the utility shall 
provide the component balances by function. If the data are not 
available by function, the utility shall describe the procedure by which 
the utility believes it can reasonably estimate the portion of the total 
electric balances for each major functional classification. The utility 
may show by function the component balances obtained by applying the 
procedure. If such estimation requires data that are not provided 
elsewhere in the cost of service statements in this paragraph, the 
utility shall supply in Statement AF the necessary data, such as 
historical functional patterns of plant additions eligible for the tax 
credits. The utility shall state whether the Internal Revenue Code 
General Rule, Sec. 46(f)(1), is applicable with respect to restrictions 
on credit treatment for ratemaking purposes. If the General Rule is not 
applicable, the utility shall state which election it has made with 
respect to special rules for ratable or immediate flow-through for 
ratemaking purposes.
    (ii) The utility shall state the total electric component balances 
for accumulated deferred income tax Account 281 pertaining to 
accelerated amortization property. The utility shall show separate 
components for defense, pollution control, and other facilities. The 
utility shall show balances for each component and totaled for the 
electric utility department. If the utility maintains records to show 
Account 281 component balances according to the major functional 
classifications identified in Statement AD under paragraph (h)(4), the 
utility shall provide such component balances. If data are not available 
by function, the utility shall describe the procedure by which the 
utility believes it can reasonably estimate the portion of the total 
electric balances for each major functional classification. The utility 
may show by function the component balances obtained by applying the 
procedure. If such estimation requires data that are not provided 
elsewhere in the cost of service statements in this paragraph, the 
utility shall supply in Statement AF the necessary data.
    (iii) The utility shall state the total electric component balances 
for accumulated deferred income tax Account 282 pertaining to electric 
utility property other than accelerated amortization property. The 
utility shall itemize the balances in Account 282, to the extent data 
are available, in detail sufficient to identify the specific major 
properties involved and shall list the balances according to the 
accounting entries, such as liberalized depreciation, for which 
interperiod tax allocation was used and included in this account. 
Component balances shall be shown individually and in total for the 
electric utility department. If the utility maintains records to show 
account 282 component balances according to the major functional 
classifications identified in Statement AD under paragraph (h)(4), the 
utility shall provide such component balances by function. If the data 
are not available by function, the utility shall describe the procedure 
by which the utility believes it can reasonably estimate the portion of 
the total electric balances for each major functional classification. 
The utility may show by function the component balances obtained by 
applying the procedure. If such estimation requires data that are not 
provided elsewhere in the cost of service statements in this paragraph, 
the utility shall supply in Statement AF the necessary data, such as 
historical functional patterns of plant additions.

[[Page 260]]

    (iv) The utility shall state the total electric component balances 
for accumulated deferred income tax Account 283 pertaining to 
interperiod income tax allocations not related to property. The utility 
shall itemize in detail balances in Account 283, to the extent data are 
available, and shall list the balances according to the accounting 
entries for which interperiod tax allocation was used and included in 
this account. Component balances shall be shown individually and in 
total for the electric utility department. If the utility maintains 
records to show Account 283 component balances according to the major 
functional classifications identified in Statement AD under paragraph 
(h)(4), the utility shall provide such component balances by function. 
If the data are not available by function, the utility shall describe 
the procedure by which the utility believes it can reasonably estimate 
the portion of the total electric balances for each major functional 
classification. The utility may show by function the component balances 
obtained by applying the procedure. If such estimation requires data 
that are not provided elsewhere in the cost of service statements in 
this paragraph, the filing shall supply in Statement AF the necessary 
data.
    (v) The utility shall show electric utility balances for every other 
item that the utility believes should be included in Statement AF. The 
utility shall explain the reasons for inclusion of each item.
    (7) Statement AG--Specified plant accounts (other than plant in 
service) and deferred debits. Statement AG is a statement of balances of 
specified accounts and items that are to be considered in the 
determination of the net original cost rate base. Except as prescribed 
in clause (ii), the utility shall state all required balances as of the 
beginning and the end of Period I and Period II, with an average of the 
beginning and end balances for each period. If any of the Period I or 
Period II balances is not available or is unrepresentative of the 
current operating plan of the utility, the utility shall provide a full 
explanation of the relevant circumstances. If subaccounts are maintained 
to reflect differences in ratemaking treatment among regulatory 
authorities having jurisdiction, the utility shall provide balances in 
accordance with such subaccounts, with detailed explanations of the 
bases upon which the subaccounts were established and are maintained. 
The balances required to be submitted under Statement AG are described 
in clauses (7)(i) through (vi).
    (i) For each separately identified major functional classification 
selected by the utility in Statement AD, the utility shall state the 
electric utility land and land rights balances for electric plant held 
for future use in account 105. If itemized in detail, balances shall be 
totaled for each major functional classification.
    (ii) The utility shall state the electric utility component balances 
in Accounts 107 and 120.1, individually and in total, for each item of 
construction work in progress for pollution control facilities, fuel 
conversion facilities, or any other facilities that qualify for 
inclusion in rate base under Sec. 35.26. The utility shall state such 
balances for each major functional and subfunctional classification 
under Statement AD as of the beginning of the first month and the end of 
each month of Period I and Period II with an average of the 13 balances 
for each period.
    (iii) For each major functional classification under Statement AD 
and with respect to property otherwise includable in plant in service, 
the utility shall state the balances for extraordinary property losses 
Account 182. If itemized in detail, balances shall be totaled for each 
major functional classification. The utility shall provide information 
about Commission authorization for any loss included in Account 182 and 
shall state when the loss was claimed for tax purposes.
    (iv) The utility shall state the total electric component balances 
for accumulated deferred income taxes Account 190. The component 
balances in Account 190 shall be itemized in detail and listed according 
to the accounting entries for which interperiod tax allocation was used. 
Component balances shall be shown individually and in total for the 
electric utility department. If the utility maintains records

[[Page 261]]

to show Account 190 component balances according to the major functional 
classifications identified in Statement AD under paragraph (h)(4), the 
utility shall provide such component balances by function. If the data 
are not available by function, the filing utility shall describe the 
procedure by which the utility believes it can reasonably estimate the 
portion of the total electric balances for each major functional 
classification. The utility may show by function the component balances 
obtained by applying the procedure. If such estimation requires data 
that are not provided elsewhere in the cost of service statements in 
this paragraph, the utility shall supply in Statement AG the necessary 
data.
    (v) Balances shall be shown for every other item that the utility 
believes should be included in Statement AG. The utility shall provide 
support for inclusion of each item, and a brief descriptive title for 
each such item.
    (8) Statement AH--Operation and maintenance expenses. Statement AH 
is a statement of electric utility operation and maintenance expenses 
for Period I and Period II provided according to the accounts prescribed 
by the Commission's Uniform System of Accounts, 18 CFR part 101.
    (i) For Period I and Period II, the utility shall itemize and 
subtotal all operation and maintenance expenses according to the major 
functional classifications of Statement AD in paragraph (h)(4) and the 
subfunctional categories of those classifications. The utility shall 
further divide the operation and maintenance expenses itemized under the 
production classification and each of its subfunctional categories to 
reflect expenses relating to the energy component (list each item by 
account number and compute fuel costs on an as-burned basis), the demand 
component, and any other production expenses.
    (ii) For Period I and Period II, the utility shall report production 
operation and maintenance expenses according to appropriate account 
numbers. The utility shall apply the following principles in developing 
Period I and Period II production operation and maintenance data for 
this statement:
    (A) Total production operation and maintenance expenses shall be 
segregated into energy, demand, and other components. The utility shall 
specifically state and support its criteria for classifications between 
energy and demand, and for use of the production other classification, 
such as specific assignments related to sales from particular generating 
units.
    (B) Fuel expense for cost of service purposes shall be the total as-
burned expense incurred. If the utility defers a portion of such expense 
for accounting purposes, the deferral amount shall be separately stated 
and accompanied by material that shows computational detail in support 
of such amount. If claimed nuclear fuel expense reflects a change in the 
estimated net salvage value of nuclear fuel, the utility shall show the 
amounts involved and explain the relevant circumstances.
    (C) If the amount of production fuel expense is significantly 
affected by abnormal Period I water availability for hydroelectric 
generation, the utility shall explain how water availability was taken 
into account in developing projected Period II production fuel expenses.
    (iii) For Period I and Period II, the utility shall report operation 
and maintenance expenses attributable to the transmission and 
distribution functions according to appropriate account numbers. If 
Period II transmission and distribution plant data are not provided by 
subfunctional category in Statement AD, the utility need only provide 
for Period II total operation and maintenance expenses for each 
function.
    (iv) For Period I and Period II, the utility shall report in total 
for each period, operation and maintenance expenses incurred under each 
of the categories of customer accounting, customer service and 
information, and sales.
    (v) For Period I and Period II, the utility shall itemize 
administrative and general expenses by groups that are directly 
assignable, such as regulatory Commission expenses, or that are related 
to selected plant or expense items for which an allocation to wholesale 
services is independently determinable, such as items related to labor

[[Page 262]]

expense or to a category of production plant in service. Administrative 
and general expenses shall include a detailed itemization of the general 
advertising Account 930.1 and the miscellaneous general expenses Account 
930.2. If Account 930 data are not projected on a detailed basis for 
Period II, the utility shall provide its best estimate of the Account 
930.1 expense items and a descriptive list of expense items anticipated 
as miscellaneous general expenses in Account 930.2. Where applicable, 
separate items shall be shown for general plant maintenance, and for 
common and other plant maintenance.
    (vi) In addition to annual production data for Period I and Period 
II, the utility shall provide monthly expense data by accounts for fuel 
in Accounts 501, 518, and 547 and purchased power in Account 555. For 
each type of transaction, such as firm power or economy interchange 
power, monthly purchased power expense data shall be subtotaled 
separately for interchange receipts and deliveries. For monthly fuel 
Accounts 501, 518, and 547, and for each type of purchased power 
transaction, the monthly data shall identify components to be claimed 
under the fuel adjustment clause of the utility.
    (9) Statement AI--Wages and salaries. Statement AI consists of 
statements of the electric utility wages and salaries, for Period I and 
Period II, that are included in operation and maintenance expenses 
reported in Statement AH.
    (i) For Period I and Period II, the utility shall show the 
distribution of wages and salaries by function according to the form 
prescribed for operation and maintenance expenses by the Commission's 
Uniform System of Accounts, 18 CFR part 101. The statement shall also 
include by function additional wages and salaries attributable to common 
and other plant classifications identified in Statement AD in paragraph 
(h)(4).
    (ii) For Period I and Period II, the utility shall show total 
production wages and salaries, itemized and subtotaled into energy and 
demand related components in accordance with classifications of 
Statement AH operation and maintenance production expenses of which 
production wages and salaries are a part.
    (10) Statement AJ--Depreciation and amortization expenses. Statement 
AJ consists of statements of depreciation and amortization expenses for 
Period I and Period II.
    (i) For Period I and Period II, the utility shall show the 
depreciation and amortization expenses and the depreciable plant 
balances of the filing utility, in accordance with major functional 
classifications selected by the utility in Statement AD under paragraph 
(h)(4).
    (ii) The utility shall divide the major functional classifications 
of depreciation and amortization expenses shown in clause (i) into the 
subfunctional categories selected by the utility for electric plant in 
service in Statement AD, to the extent such data are available.
    (iii) If depreciation and amortization expense data are not 
available for any subfunctional category selected in Statement AD, the 
utility shall:
    (A) Provide a comparison of the current depreciation rate of the 
major functional classification and the depreciation rate estimated to 
be appropriate to the subfunctional category; and
    (B) State and explain the estimation techniques that the utility 
utilized in developing each estimated subfunctional depreciation rate. 
If utilization of such estimation techniques requires data that are not 
provided elsewhere in the cost of service statements in this paragraph, 
the utility shall supply such data in Statement AJ.
    (iv) For Period I and Period II, the utility shall show the annual 
depreciation rate applicable to each function and subfunction for which 
depreciation expense is reported. The utility shall indicate the bases 
upon which the depreciation rates were established. If the depreciation 
rates used for Period I or Period II data differ from those employed to 
support the utility's prior approved jurisdictional electric rate, the 
utility shall include in or append to Statement AJ detailed studies in 
support of such changes. These detailed studies shall include:
    (A) Copies of any reports or analyses prepared by any independent 
consultant or utility personnel to support the proposed depreciation 
rates; and

[[Page 263]]

    (B) A detailed capital recovery study showing by primary account the 
depreciation base, accumulated provision for depreciation, cost of 
removal, net salvage, estimated service life, attained age of survivors, 
accrual rate, and annual depreciation expense.
    (11) Statement AK--Taxes other than income taxes. Statement AK 
consists of statements of taxes other than income taxes for Period I and 
Period II.
    (i) For Period I and Period II, the utility shall itemize and total 
any taxes other than income taxes according to clauses (i) (A) through 
(D).
    (A) Revenue taxes. The utility shall show total revenue taxes levied 
by each taxing authority and identify the revenue taxes, under both the 
present and changed rate, applicable to wholesale services for which a 
rate change is filed. The utility shall identify revenue taxes 
associated with each revenue credit item reported in Statement AU under 
paragraph (h)(21).
    (B) Real estate and property taxes. The utility shall itemize and 
total all real estate and property taxes. If the utility maintains 
records to show tax component balances according to the major functional 
classifications identified in Statement AD under paragraph (h)(4), the 
utility shall supply the component balances by function. If the data are 
not available by function, the utility shall describe the procedure by 
which the utility believes it can reasonably estimate the portion of the 
total electric balances for each major functional classification. The 
utility may show by function the component balances obtained by applying 
the procedure. If such estimation requires data that are not provided 
elsewhere in the cost of service statements in this paragraph, the 
utility shall supply the necessary data in Statement AK.
    (C) Payroll taxes. The utility shall itemize and total all payroll 
taxes. If the utility maintains records to show tax component balances 
according to the major functional classifications identified in 
Statement AD in paragraph (h)(4), the utility shall provide the 
component balances by function. If the data are not available by 
function, the utility shall describe the procedure by which the utility 
believes it can reasonably estimate the portion of the total electric 
balances for each major functional classification. The utility may show 
by function the component balances obtained by applying the procedure. 
If such estimation requires data that are not provided elsewhere in the 
cost of service statements in this paragraph, the utility shall provide 
the necessary data in Statement AK.
    (D) Miscellaneous taxes. The utility shall itemize and total all 
miscellaneous taxes which are directly assignable or which are related 
to any selected plant or expense item for which an allocation to 
wholesale services is independently determinable, such as items related 
to transmission plant in service or to net distribution plant.
    (ii) If any of the taxes itemized under clause (11)(i) are levied by 
a taxing authority that is a customer, or is related to a customer, 
whose services would be affected by the changed rate schedule, the 
utility shall show amounts of such taxes according to the taxing 
authority, identify the related customer, and provide an explanation of 
the relevant circumstances.
    (12) Statement AL--Working capital. Statement AL consists of 
statements for Period I and Period II designed to establish the need for 
working capital to maintain adequate levels of operating supplies, to 
meet required prepayments, and to meet ongoing cash disbursements that 
must be made at a time different than related revenue receipts for 
utility services rendered.
    (i) Supplies and prepayments. The utility shall supply statements to 
show monthly balances of operating supplies and prepayments itemized 
under clauses (i) (A) through (C). The utility shall state all required 
balances as of the beginning of the first month and the end of each 
month of both Period I and Period II, with an average of the thirteen 
balances for each period. If any of the Period I or Period II balances 
is not available or is unrepresentative of the current operating plan of 
the utility for supplies or prepayments, the utility shall include an 
explanation of the relevant circumstances. Operating supply and 
prepayment balances shall be itemized under the following categories:
    (A) Fuel supplies. The utility shall state the fuel supply balances 
for each

[[Page 264]]

type of electric utility production plant, except hydraulic. The utility 
shall describe its overall fossil fuel supply objectives for Period I 
and Period II, in terms of projected average days of burn for major 
fossil fuel generating stations, if feasible. The utility shall explain 
substantial differences, if any, between actual Period I inventories and 
the target objectives, or between Period II objectives and Period I 
objectives. Nuclear fuel balances shall include fuel in stock, fuel in 
the reactor and spent fuel in the process of cooling in Accounts 120.2, 
120.3, 120.4, less accumulated provisions for amortization of nuclear 
fuel assemblies in Account 120.5.
    (B) Plant materials and operating supplies. The utility shall state 
materials and operating supply balances for each of the major electric 
utility operating functions of production, transmission, and 
distribution, and for each significant type of miscellaneous operating 
supplies. Miscellaneous supplies shall be grouped to facilitate suitable 
allocations or assignments among utility services.
    (C) Prepayments. The utility shall indicate prepayment balances for 
each major prepayment item, with a brief description of the item. 
Balances shall be grouped and subtotaled to facilitate suitable 
allocations or assignments among utility services.
    (ii) Cash working capital. The utility shall indicate average 
monthly working cash requirements that reflect the extent to which day-
to-day operational utility service revenues are received later or 
earlier than cash disbursements necessary to provide the services, with 
an explanation of how such requirements are derived.
    (13) Statement AM--Construction work in progress. Statement AM is a 
statement of the amount of construction work in progress described 
according to functional classification for Period I and Period II. For 
production plant and transmission plant, the utility shall state the 
balances as of the beginning of the first month and the end of each 
month of both Period I and Period II, with an average of the 13 balances 
for each period. For each function of plant identified in Statement AD 
other than production or transmission, the utility shall state the 
balances as of the beginning and the end of both Period I and Period II, 
with an average of the beginning and end balances for each period. If 
any Period I or Period II balance is not available, the utility shall 
include monthly estimates and an explanation of the relevant 
circumstances. Pollution control facilities, fuel conversion facilities, 
or other construction amounts reported in Statement AG shall be excluded 
from amounts reported in this Statement.
    (14) Statement AN--Notes payable. Statement AN is a statement of the 
electric utility portion of average notes payable for Period I and 
Period II. The utility shall indicate balances as of the beginning of 
the first month and the end of each month of both Period I and Period 
II, with an average of the thirteen balances for each period. If any of 
the Period I or Period II balances is not available or is 
unrepresentative of the current financing plan of the utility, the 
utility shall provide an explanation of the relevant circumstances. If a 
utility has operations other than electric, the utility shall also show 
allocations between electric and other utility departments on an 
appropriate basis, such as the average amount of construction work in 
progress and net plant.
    (15) Statement AO--Rate for allowance for funds used during 
construction. Statement AO is a statement of the basis of the rate for 
computing the allowance for funds used during construction (AFUDC) for 
Period I and Period II.
    (i) The utility shall show the computations of the maximum rates for 
the construction allowances computed in accordance with plant 
instructions of the Commission's Uniform System of Accounts, 18 CFR part 
101. The utility shall show the rates computed annually, and shall 
provide the rates for each annual period that includes any part of 
Period I or Period II. If the utility proposes to use a net-of-tax rate, 
the utility shall show the derivation for both the gross-of-tax and net-
of-tax rates.
    (ii) If the book allowance amounts of AFUDC do not reflect the 
maximum rates for allowances for funds computed in accordance with 
clause (i), the

[[Page 265]]

utility shall show the derivation for the actual rates utilized in 
computing AFUDC, including derivation of any net-of-tax rate utilized by 
the utility.
    (16) Statement AP--Federal income tax deductions--interest. 
Statement AP is a statement of electric utility interest charges for 
Period I and Period II. For each period, the utility shall state the 
total electric utility interest in terms of three or more component 
items described in clauses (i) through (iv).
    (i) The utility shall state the allowance for borrowed funds used 
for electric utility construction Account 432 as a separate component. 
The utility shall show supporting detail, including computation of the 
amounts on the basis of AFUDC rates claimed in Statement AO.
    (ii) The utility shall state interest for borrowed funds used for 
electric utility construction Account 431 as a separate component. If 
applicable, the utility shall also show all elements of Account 431 
related to purposes other than electric utility construction, with 
detailed supporting material, such as a computation of allocations 
between electric and other utility departments with explanatory material 
to support the bases of such allocations.
    (iii) The utility shall state the interest on long-term debt 
required for electric rate base investment as a separate component. The 
interest amount shall be consistent with that shown and utilized in 
Statement BK under paragraph (h)(36) of this section.
    (iv) The utility shall show other interest items appropriate in the 
determination of net taxable income allocable to the wholesale services 
at issue. The utility shall describe and support each item and shall 
accompany each item with a statement of the basis on which the item is 
allocable to the wholesale services. The utility shall also list a short 
descriptive title for each item.
    (17) Statement AQ--Federal income tax deductions--other than 
interest. Statement AQ is a statement of other deductions from net 
operating income before Federal income taxes, for Period I and Period 
II, which deductions are appropriate in determining the net taxable 
income allocable to the wholesale services subject to the changed rate. 
The utility shall show unallowable deductions as negative entries in 
this statement. The utility shall itemize deductions in accordance with 
clause (i) through (iii) and individually identify each by a brief 
descriptive title.
    (i) The utility shall report, as a separate component of this 
statement, the difference between tax and book depreciation, in total, 
or in individual amounts based on the Internal Revenue Code provisions 
that permit the utility to use various methods of computing depreciation 
for tax purposes, such as liberalized depreciation or the asset 
depreciation range. If the utility reports the differences in total 
only, it shall list the specific Internal Revenue Code provisions that 
result in the difference.
    (ii) The utility shall state taxes and pensions capitalized as a 
separate component.
    (iii) The utility shall describe and support other deduction items 
appropriate in the determination of net taxable income allocable to the 
wholesale services. Each item shall be accompanied by a brief 
explanation of the basis on which the item is allocable to the wholesale 
services.
    (18) Statement AR--Federal tax adjustments. Statement AR is a 
statement of adjustments to Federal income taxes for Period I and Period 
II. If subaccounts are maintained to reflect differences in ratemaking 
treatment among regulatory authorities having jurisdiction, the utility 
shall provide adjustment amounts in accordance with such subaccounts. 
The utility shall report detailed explanations of the bases upon which 
the subaccounts were established and are maintained.
    (i) For each major function of plant identified in Statement AD 
under paragraph (h)(4), the utility shall state the electric utility 
component adjustment for the Federal portions of the provision for 
deferred income tax Account 410.1. If the data are not available by 
function, the utility shall state the amounts for the total electric 
utility and shall describe the procedure by which the utility believes 
it can reasonably estimate the portion of the total electric balances 
for each major functional classification. The utility may show by 
function the component

[[Page 266]]

balances obtained by applying the procedure. If such estimation requires 
data that are not provided elsewhere in the cost of service statements 
in this paragraph, the utility shall supply in Statement AR the 
necessary data. The utility shall provide the adjustment amounts for 
total electric and, to the extent available for each such major 
functional component, accompanied by summary totals segregated in 
accordance with related balance sheet Accounts 281, 282, 283, and 190 
[see Statements AF and AG]. Account 190 items require a negative sign 
for entries in Statement AR. The utility shall identify the summarized 
items by account number.
    (ii) The utility shall provide for the Federal portions of the 
provision for deferred income tax-credit Account 411.1 the data required 
by clause (i) for Account 410.1.
    (iii) For each major functional classification of plant identified 
in Statement AD under paragraph (h)(4), the utility shall provide the 
electric utility component for investment tax credits generated for 
Period I and Period II, credits utilized for each period, and the 
allocations to current income for each period. If the data are not 
available by function, the utility shall state the amounts for total 
electric utility and shall describe the procedure by which the utility 
believes it can reasonably estimate the portion of the total electric 
balances for each major functional classification. The utility may show 
by function the component balance obtained by applying the procedure. If 
such estimation requires data that are not provided elsewhere in the 
cost of service statements in this paragraph, the utility shall supply 
in Statement AR the necessary data. If itemized in detail, balances 
shall be subtotaled for each major function, and totaled for the 
electric utility department. Detailed data shall be consistent with that 
provided in Statement AF under paragraph (h)(6) of this section.
    (iv) The utility shall list and designate as other adjustment items 
any additional Federal income tax adjustments and shall provide a brief 
descriptive title for each item. The utility shall explain the reasons 
for inclusion of each item, and shall indicate the basis on which each 
will be assigned or allocated to the wholesale services subject to the 
changed rate and to the other electric utility services.
    (19) Statement AS--Additional state income tax deductions. Statement 
AS is a listing of state income tax deductions for Period I and Period 
II, in addition to those listed at Statements AP and AQ for Federal tax 
purposes. The utility shall explain the reasons for inclusion of each 
item. The utility shall indicate the basis on which each item is to be 
assigned or allocated to the wholesale services at issue and to the 
other electric utility services. If applicable, the utility shall show 
unallowable deductions as negative entries in this statement. The 
utility shall provide the percentage of Federal income tax payable which 
is deductible for state income tax purposes, if applicable. [See also 
Statement AY, dealing with tax rate data.]
    (20) Statement AT--State tax adjustments. Statement AT is a 
statement of adjustments to state income taxes for Period I and Period 
II. The utility shall prepare and present the data in statement AT as 
prescribed for Federal tax adjustments in Statement AR. The utility 
shall annotate Statement At data as necessary to identify state tax 
adjustments that are not properly deductible for Federal tax purposes.
    (21) Statement AU--Revenue credits. Statement AU is, for Period I 
and Period II, a statement of the operating revenue balances in Accounts 
450 through 456, and other revenue items, such as short-term sales in 
Account 447, that are appropriately credited to the cost of service for 
determinations of costs allocable to the wholesale services subject to 
the changed rate. The utility shall include revenue credits proposed for 
exclusive-use commitment of major power supply facilities according to 
instructions for preparation of Statement BF under paragraph (h)(31) of 
this section. When applicable, the utility shall state revenue taxes for 
each revenue credit item. The utility shall explain the reasons for 
inclusion of each item, and shall indicate the basis for assigning or 
allocating each item to the wholesale services subject to the changed 
rate and to the other electric utility services.

[[Page 267]]

    (22) Statement AV--Rate of return. Statement AV is a statement and 
explanation of the percentage rate of return requested by the utility. 
The utility shall provide the complete capital structure, including 
ratios, component costs and weighted component costs claimed by the 
utility. The utility shall submit additional data where any component of 
the capital of the utility is not primarily obtained through its own 
financing, but is primarily obtained from a company by which the utility 
is controlled, as defined in the Commission's Uniform System of 
Accounts, 18 CFR part 101. The utility shall submit the additional data, 
if required with respect to the debt capital, preferred stock capital 
and common stock capital of such controlling company or any intermediate 
company through which such funds have been secured.
    (i) General. The utility shall show, based on the capitalization of 
the utility, the cost of debt capital and preferred stock capital, the 
claimed rate of return on the common equity of the utility and the 
resulting overall rate of return requested.
    (A) For Period I and, if applicable, Period II, the utility shall 
show in tabular form the following:
    (1) Cost of each capital element, including claimed rate of return 
on equity capital;
    (2) Capitalization amounts and ratios;
    (3) Weighted cost of each capital element; and
    (4) Overall claimed rate of return.
    (B) When a Period II filing is submitted the utility shall provide:
    (1) A full explanation of, and supporting work papers for, the pro 
forma adjustments to the actual capitalization data to arrive at the 
Period II capitalization; and
    (2) The pro forma adjustment to Period I data to arrive at the 
Period II amount for unappropriated undistributed subsidiary earnings in 
Account 216.1.
    (C) If not included elsewhere in the filing, the utility shall 
submit the amount for Account 216.1 for Period I as part of this 
statement.
    (ii) Debt capital. (A) The utility shall show the weighted cost for 
all issues of long-term debt capital as of the end of Period I, as 
expected on the date the changed rate is filed, and, if applicable, as 
estimated for the end of Period II. The weighted cost is calculated by: 
(1) Multiplying the cost of money for each issue under clause (B)(6) 
below by the principal amount outstanding for each issue, which yields 
the annualized cost for each issue; and (2) adding the annual cost of 
each issue to obtain the total for all issues, which is divided by the 
total principal amount outstanding for all issues to obtain the weighted 
cost for all issues.
    (B) The utility shall show the following for each class and series 
of long-term debt outstanding as of the end of Period I, as expected on 
the date the changed rate is filed, and, if applicable, as estimated to 
be outstanding as of the end of Period II.
    (1) Title;
    (2) Date of offering and date of maturity;
    (3) Interest rate;
    (4) Principal amount of issue;
    (5) Net proceeds to the utility;
    (6) Cost of money, which is the yield to maturity at issuance based 
on the interest rate and net proceeds to the utility determined by 
reference to any generally accepted table of bond yields;
    (7) Principal amount outstanding;
    (8) Name and relationship of issuer and if the debt issue was issued 
by an affiliate; and
    (9) If the utility has acquired at a discount or premium some part 
of the outstanding debt which could be used in meeting sinking fund 
requirements, or for some other reason, the annual amortization of the 
discount or premium for each issue of debt from the date of the 
reacquisition over the remaining life of the debt being retired. The 
utility shall show separately the total discount and premium to be 
amortized, and the amortized amount applicable to Period I and, if 
applicable, Period II.
    (C) The utility shall show the before-tax interest coverage, for the 
twelve months of Period I based on the indenture requirements. The 
utility shall provide a copy of the work papers used to make the 
calculations, with explanations appropriate to understand the 
calculations.

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    (iii) Preferred stock and preference stock capital. (A) This 
statement shall show the weighted cost for all issues of preferred and 
preference stock capital as of the end of Period I, as expected on the 
date the changed rate is filed, and, if applicable, as estimated for the 
end of Period II. The weighted cost is calculated by: (1) Multiplying 
the cost of money for each issue under clause (B)(9) by the par amount 
outstanding for each issue, which yields the annualized cost for each 
issue; and (2) adding the annual cost of each issue to obtain the total 
for all issues, which is divided by the total par amount outstanding for 
all issues to obtain the weighted cost for all issues.
    (B) The statement shall show for each class and issue of preferred 
and preference stock outstanding as of the end of Period I, as expected 
on the date the changed rate is filed, and, if applicable, as estimated 
to be outstanding as of the end of Period II:
    (1) Title;
    (2) Date of offering;
    (3) If callable, call price;
    (4) If convertible, terms of conversion;
    (5) Dividend rate;
    (6) Par or stated amount of issue;
    (7) Net proceeds to the filing utility;
    (8) Ratio of net proceeds to gross proceeds received by the filing 
utility;
    (9) Cost of money (dividend rate divided by the ratio of net 
proceeds to gross proceeds for each issue);
    (10) Par or stated amount outstanding; and
    (11) If issue is owned by an affiliate, name and relationship of 
owner.
    (iv) Common stock capital. This statement shall show the following 
information for each sale of common stock during the five-year period 
preceding the date of the balance sheet for the end of Period I and for 
each sale of common stock between the end of Period I and the date that 
the changed rate is filed:
    (A) Number of shares offered;
    (B) Date of offering;
    (C) Gross proceeds at offering price;
    (D) Underwriters' commissions;
    (E) Dividends per share;
    (F) Net proceeds to company;
    (G) Issuance expenses; and
    (H) Whether issue was offered to stockholders through subscription 
rights or to the public and whether common stock was issued for property 
or for capital stock of others.
    (v) Supplementary financial data. The utility shall submit a 
statement indicating the sources and uses of funds for Period I and as 
estimated for Period II and a copy of the utility's most recent annual 
report to the stockholders. The utility shall also supply a prospectus 
for its most recent issue of securities and a copy of the latest 
prospectus issued by any subsidiary of the filing utility or by any 
holding company of which the filing utility is a subsidiary.
    (23) Statement AW--Cost of short-term debt. In Statement AW, the 
utility shall provide a statement of the cost of capital rate for short-
term debt of the utility as of the end of Period I, as expected on the 
date the proposed rate is filed, and, if applicable, as estimated for 
the end of Period II, with details supporting each stated cost. The 
short-term debt rate shown in Statement AW shall include only the short-
term debt that appears on the income statement as interest expense and 
shall not include nominal forms of financing, such as trust agreements.
    (24) Statement AX--Other recent and pending rate changes. Statement 
AX is a statement describing the extent to which operating revenues are 
subject to refund for Period I and, if applicable, Period II, for each 
rate change filed with any Federal, state, or other regulatory body that 
has jurisdiction. The utility shall list and submit any orders in which 
applications for a rate increase have been acted on by any regulatory 
body during Period I, Period II, or the interval between Period I and 
Period II, and a copy of each transmittal letter or equivalent written 
document by which a utility summarized and submitted any pending 
applications that have not been acted on. Statement AX shall reflect 
information available at the time of submittal under this paragraph. 
Notwithstanding any other provision of this section, Statement AX is 
required to be filed only if the proposed rate design tracks retail 
rates.
    (25) Statement AY--Income and revenue tax rate data. (i) Statement 
AY is a

[[Page 269]]

statement of tax rate data for Period I and Period II arranged as 
follows:
    (A) Nominal Federal income tax rate;
    (B) Nominal state income tax rate;
    (C) Proportion of Federal income taxes payable which is deductible 
for state income tax purposes. If an allowable deduction is stated in 
other terms, the utility shall provide an estimate of the effective 
deduction as a percentage of Federal tax payable; and
    (D) Revenue tax rate. If the revenue tax rate is scaled, the utility 
shall show approximate weighted average rates for relevant revenue 
levels and full supporting data.
    (ii) If the utility serves in more than one jurisdiction for revenue 
or state income tax purposes, the utility shall state the appropriate 
tax rates for each wholesale customer group at issue and for all other 
customers as a composite group. [See, Statement BA under paragraph 
(h)(26) for wholesale customer grouping criteria.] If there are any 
changes in tax rates that occur in Period I or that may occur in Period 
II, the utility shall describe such changes and the effective date of 
the changes.
    (26) Statement BA--Wholesale customer rate groups. (i) Statement BA 
is a list of wholesale customers by group for the purpose of:
    (A) Allocating the allowable costs of the utility to such customer 
groups on the basis of electric utility services rendered; and
    (B) Comparing proposed revenues from each customer group with the 
cost of service as allocated to that group.
    (ii) The utility shall limit the number of wholesale customer groups 
listed to the minimum required under the following criteria:
    (A) At least one customer group shall be specified for each separate 
wholesale rate subject to the changed rate filing.
    (B) In general, all customers proposed to be served on the same rate 
shall be included in a common group. If the utility believes that there 
are significant differences in services provided under the same rate, 
the utility shall subdivide the common group served by the same rate 
into separate customer groups characterized by the type of service 
provided each group and shall demonstrate whether the common rate is 
cost-based by means of cost-justification for each service group. 
Certain customer groupings, such as cooperatives or municipals, may also 
be utilized to facilitate purchaser evaluations of the changed rate.
    (C) In all cases, the utility shall select customer groupings on a 
basis consistent with rate design information provided in Statement BL 
under paragraph (h)(37) of this section.
    (iii) The utility shall enumerate all wholesale customer rate 
groups, together with a brief descriptive title for each group. For 
example:
    Group 1. Full Requirements Tariff

FR-1.
    Group 2. Partial Requirements Tariff PR-1.
    (27) Statement BB--Allocation demand and capability data. Statement 
BB is a statement of electric utility demand and capability data for 
Period I and Period II to be considered as a basis for allocating 
related costs to the wholesale services subject to the changed rate.
    (i) For each month of Period I and Period II, with an average for 
each period, the utility shall show the maximum peak firm kilowatt 
demand on the power supply system of the utility, and the kilowatt 
demands of the wholesale services that coincide with the system monthly 
maximum power supply demand, including for Period I the date and hour 
for such coincidental peak demands. The utility shall state these 
kilowatt demands in terms of 60-minute intervals or other intervals 
adjusted to the equivalent of 60 minutes. The utility shall not include 
in the data the demands associated with interruptible power supply 
services, firm or nonfirm transmission wheeling services, or demands 
associated with other services the revenues from which are shown as 
revenue credits in Statement AU under paragraph (h)(21). The utility 
shall provide wholesale service demand data as follows:
    (A) The wholesale service data for each individual customer delivery 
point or set of delivery points that constitutes an individual wholesale 
customer billing unit shall include demands at delivery. The individual 
customer wholesale service data shall be

[[Page 270]]

summarized and subtotaled in accordance with Statement BA customer 
groupings.
    (B) The data supplied for each wholesale customer group under clause 
(A) shall be adjusted for losses to reflect demand at the power supply 
level. The data shall be totaled to show total customer group demand at 
power supply level for each month of Period I and Period II.
    (ii) To the extent such data are available, the utility shall state 
Period I and Period II monthly maximum demand data for interruptible 
power supply services, firm wheeling services, and nonfirm wheeling 
services. The utility shall also provide, to the extent data are 
available, firm wheeling demand data for any of the 60-minute periods 
that coincide with the times of power supply peak demands shown under 
clause (i). The utility shall indicate the basis of all demands, such as 
metered demands or contract demands, reported under this clause. For 
interruptible services, the utility shall provide a description of the 
conditions under which service may be interrupted or curtailed. The 
utility shall include available information on actual interruptions or 
curtailments during a three-year period that includes Period I. If any 
of the wholesale rates at issue are for interruptible or curtailable 
service, the utility shall provide any demand data specifically relevant 
to such service.
    (iii) If a utility establishes plant categories in Statement AD 
under paragraph (h)(4) of this section for the purpose of supporting 
wholesale rates for firm power supply services with special 
characteristics, such as base load, intermediate, or peaking, the 
utility shall provide in Statement BB the demand data required by clause 
(i) in total and in separate corresponding demand values consistent with 
the service characteristics. Corresponding values shall be stated for 
the system demand of the utility, and for each applicable wholesale 
service group.
    (iv) If a utility establishes plant categories in Statement AD under 
paragraph (h)(4) of this section for the purpose of supporting wholesale 
rates for nonfirm power supply services, such as capacity sales, the 
utility shall include in Statement BB for each month of Period I and 
Period II the monthly capability data relied on by the utility in 
developing costs allocable to such rates, with an explanation of the 
underlying cost allocation rationale.
    (v) If a utility establishes production plant categories in 
Statement AD under paragraph (h)(4) of this section for the purpose of 
supporting wholesale rates based on specialized ratemaking theories such 
as marginal cost pricing, time-of-day pricing, or base, intermediate, 
and peaking characteristics, the utility shall include in Statement BB 
all demand and capability data relied on by the utility in developing 
support on a cost of service basis, with appropriate explanatory 
material.
    (vi) For each month of Period I and Period II, the utility shall 
provide any additional demand data that the utility believes to be 
relevant to the allocation of electric utility costs to the wholesale 
services at issue. The utility shall fully support all such data and 
shall explain the rationale and the specific application proposed.
    (vii) Based upon information reported in Statements BB and BC, the 
utility shall list selected months that are normally the months of 
greatest significance in determining the need of the utility for power 
supply capability throughout the year. All twelve months may be 
selected, if appropriate. In its selection, the utility shall take into 
account any effects of local weather seasons and, particularly, the 
extent to which peak demands may tend to be similar in magnitude in two 
or more months of a weather season. The utility shall explain the 
reasons for the selections and describe the significance for the 
selections of seasonal variations in the weather.
    (28) Statement BC--Reliability data. Statement BC is a statement 
relating to reference standards of the filing utility for electric power 
supply reliability, and to information designed to reflect monthly 
availability of generating capacity reserves.
    (i) For Period II, Period I, and each of the three calendar years 
preceding Period I, the utility shall state and briefly explain its 
objective reference standard of production power supply reliability and 
the rationale underlying its

[[Page 271]]

choice of a reliability standard, including whether it participates with 
other electric utilities in the selection of a common standard on an 
area or pool basis. The utility shall identify any such participating 
utilities, and provide a general explanation of the basis upon which the 
reliability standard was jointly developed.
    (ii) The utility shall describe how its objective standard for 
production power supply reliability affects its electric generating 
facility construction planning and purchased power planning.
    (iii) For the peak day of each month of Period II, Period I, and, to 
the extent data are available, for the peak day of each month of the 
three calendar years preceding Period I, the utility shall include 
tabular schedules designed to show the following:
    (A) Net peak load in megawatts, itemized to show:
    (1) Gross peak firm load, including all firm sales assured available 
by the reserve capacity of the utility;
    (2) All firm purchases assured available by the reserve capacity of 
the supplier; and
    (3) Net peak load, computed as gross peak load under clause (1) 
minus all firm purchases under clause (2).
    (B) Net available dependable capacity, that is, the load-carrying 
ability of the electric production facilities determined for the purpose 
of scheduling capacity in day-to-day operations, provided in megawatts 
and itemized to show:
    (1) The owned dependable capacity of the utility for each production 
plant category selected in Statement AD under paragraph (h)(4);
    (2) Scheduled maintenance of owned dependable capacity of the 
utility;
    (3) Purchased dependable capacity of the utility;
    (4) Scheduled maintenance of purchased dependable capacity of the 
utility; and
    (5) Net available dependable capacity, computed as the owned 
dependable capacity under clause (1), minus scheduled maintenance of 
owned capacity under clause (2), plus purchased dependable capacity 
under clause (3), minus scheduled maintenance of purchased capacity 
under clause (4).
    (C) Available reserves in megawatts, which is the net available 
dependable capacity under clause (iii)(B) minus net peak load under 
clause (iii)(A).
    (D) Available reserves as a percent of peak load, which is the 
available reserves under clause (iii)(C) divided by net peak load under 
clause (iii)(A).
    (29) Statement BD--Allocation energy and supporting data. Statement 
BD is a statement of electric utility energy data for Period I and 
Period II to be considered as bases for allocating related costs to the 
wholesale services subject to the changed rate.
    (i) For each month of Period I and Period II, and as totaled for the 
twelve months of each period, the utility shall show the megawatt-hours 
of firm power supply energy required by the system of the utility and 
the megawatt-hour energy requirements of the wholesale customer groups 
whose services will be subject to the changed rate. The wholesale 
service data for each individual customer delivery point or set of 
delivery points that constitutes an individual wholesale customer 
billing unit shall include megawatt-hours at delivery. The utility shall 
summarize and subtotal these individual customer data in accordance with 
Statement BA customer groupings under paragraph (h)(26). The utility 
shall show a loss adjustment for each wholesale customer group to 
reflect energy at the power supply level. The utility shall total the 
data to show total customer group energy requirements at power supply 
level for each month of Period I and Period II.
    (ii) Data provided under clause (i) shall not include energy 
associated with interruptible or curtailable services, or energy 
associated with other services, the revenues from which are shown as 
revenue credits in Statement AU under paragraph (h)(21) of this section. 
The utility shall separately state Period I and Period II monthly and 
total energy data for any such services provided by the utility. If any 
of the proposed wholesale rates at issue are for interruptible or 
curtailable service, the utility shall provide descriptive material and 
energy data specifically relevant to such services.
    (iii) If a utility selects subfunctional categories in Statement AD 
under

[[Page 272]]

paragraph (h)(4) of this section for the purpose of supporting any 
changed wholesale rate for firm power supply services with special 
characteristics, such as base load, intermediate, and peaking services, 
the utility shall separate the energy data required by clause (i) into 
corresponding energy values consistent with the service characteristics 
and consistent with energy-related expense categories utilized in 
Statement AH under paragraph (h)(8) of this section. The utility shall 
state the corresponding values for the utility's system energy and for 
each applicable wholesale service group.
    (iv) If a utility establishes plant categories in Statement AD under 
paragraph (h)(4) of this section for the purpose of supporting any 
changed wholesale rate for nonfirm production services, or the changed 
wholesale rate based on specialized ratemaking theories [see paragraph 
(h)(27)(v) of this section], the utility shall include in Statement BD 
all energy data relied on by the utility in developing the support on a 
cost of service basis and relevant explanatory material. Energy data 
provided under this clause shall be consistent with related expense 
categories utilized in Statement AH under paragraph (h)(8) of this 
section.
    (v) For each month of Period I and Period II, and as totaled for the 
twelve months of each period, the utility shall show the megawatt-hours 
generated, itemized in accordance with Statement AD production 
subfunctional categories, and the megawatt-hours purchased or 
interchanged, itemized to show each type of transaction, such as firm 
energy or economy interchanged energy. The utility shall quantitatively 
reconcile such data with the system allocation energy reported in this 
statement, and with energy data underlying the fuel and purchased power 
expense reported in Statement AH.
    (30) Statement BE--Specific assignment data. (i) Statement BE is a 
statement of specific components of the electric costs of service of the 
utility for Period I and Period II. Statement BE costs of service are 
those apportioned among wholesale services subject to the rate change 
and other utility services, on a basis other than:
    (A) Demand, capability, or energy data provided in Statements BB and 
BD;
    (B) A proportional relationship based on a selected plant category 
or expense item for which an allocation to wholesale services is to be 
independently determined; or
    (C) Exclusive-use commitment in Statement BF under paragraph (h)(31) 
of this section.
    (ii) The utility shall include specific assignments considered 
appropriate by the utility. Typical cost of service components that 
could be specifically assigned are distribution plant [see examples 
listed in Statement AD under paragraph (h)(4) of this section], certain 
total electric wages and salaries provided in Statement AI under 
paragraph (h)(9) of this section, such as wages and salaries for 
customer accounting and for customer service and information, and 
certain administrative and general expense items. [See examples listed 
in Statement AH under paragraph (h)(8) of this section.]
    (iii) The utility shall limit specific assignments to the minimum 
required to adequately provide for costs not otherwise appropriately 
allocable.
    (iv) For each specific assignment, the utility shall include at 
least the following information:
    (A) Brief descriptive component title, such as distribution 
substations or rate case expenses;
    (B) Total electric amount in dollars;
    (C) Wholesale customer group dollar amounts stated individually for 
each wholesale customer rate group identified in Statement BA under 
paragraph (h)(26), and stated in total for all such groups; and
    (D) Explanation of the basis on which assignments were made, 
accompanied by supporting detailed computations.
    (31) Statement BF--Exclusive-use commitments of major power supply 
facilities. Statement BF is a statement describing and justifying the 
commitment to exclusive-use for particular services of all or a stated 
portion of electric utility generation units or plants, or major 
transmission facilities.
    (i) For Period I and Period II, the utility shall list each 
transaction in which all or a stated portion of the output of a 
specified filing utility-

[[Page 273]]

owned generating unit or group of units was committed exclusively to a 
particular customer or group of customers, or to a power pool or similar 
power supply entity. For each such transaction, the utility shall 
provide the following information:
    (A) Brief descriptive title for each commitment;
    (B) Name of plant and unit designation;
    (C) Name of the purchaser or power pool or other similar power 
supply entity;
    (D) Duration of the transaction;
    (E) Basis of rates or charges, stated in terms of whether a 
transaction reflects marginal, incremental, or fully distributed costs, 
the specific overall and common equity rates of return included in 
costs, provided on both a claimed and earned basis to the extent such 
information is available, the approximate date of the cost analysis on 
which the rates and charges were based, and any other considerations 
significant to the transaction;
    (F) Revenue received for each month of Period I and Period II or, if 
applicable, monthly quantities of power and energy received or available 
from power pools as consideration for commitment to a pool; and
    (G) Proposed treatment in the cost of service determinations for the 
wholesale services at issue. For example, a credit of revenue to the 
total electric cost of service, in Statement AU under paragraph (h)(21), 
could be proposed to account for unit capacity sales based upon 
incremental capital costs. The utility shall include explanatory 
material and support for the proposed procedures.
    (ii) For Period I and Period II, the utility shall list each 
transaction in which all, or a portion, of a major transmission facility 
owned by the filing utility was committed exclusively to a particular 
customer or group of customers. For each such transaction, the utility 
shall provide information similar to that required by clause (i).
    (32) Statement BG--Revenue data to reflect changed rates. Statement 
BG is a statement of revenues for Period I and Period II, including 
those under the changed rate for the wholesale services at issue.
    (i) For each month of Period I and Period II, and in total for each 
of the two periods, the utility shall show all billing determinants and 
metered quantities for each delivery point or set of delivery points 
that constitutes an individual wholesale customer billing unit, and the 
result of applying each specific rate component to the billing 
determinants for each billing unit stated with the total of the computed 
monthly bill for the customer. If the rates include a fuel clause, the 
utility shall compute and total the revenues under the fuel clause to 
reflect fuel costs incurred during each month of Period I and Period II. 
That is, the fuel clause revenues for the first month of Period I shall 
reflect fuel costs incurred for that month, and so on for each month of 
Period I and Period II. In computing fuel clause revenues, the utility 
shall determine fuel cost according to Sec. 35.14 of this chapter.
    (ii) If the form of the proposed fuel clause would produce revenues 
different from those computed in accordance with clause (i), the utility 
shall separately compute and state such fuel clause revenues for each 
customer for each month of Period I and Period II.
    (iii) The utility shall summarize separately revenue data computed 
in accordance with clauses (i) and (ii) above for each month and in 
total for Period I and Period II, in accordance with wholesale rate 
groups specified in Statement BA under paragraph (h)(26) of this 
section. The utility shall show total electric department revenues for 
each period to include revenues under the changed rate for all such 
wholesale customer rate groups.
    (iv) For Period I and as estimated for Period II, the utility shall 
summarize all billing determinants and revenues received from 
interruptible or curtailable services. Billing determinants and revenue 
data shall be consistent with interruptible demand and energy data in 
Statements BB and BD. The utility shall include an explanation of the 
extent to which interruptible or curtailable service revenues are or are 
not included in revenue credits in Statement AU under paragraph (h)(21) 
of this section.
    (33) Statement BH--Revenue data to reflect present rates. Statement 
BH is a

[[Page 274]]

statement of revenues for Period I and Period II, including those under 
present rates for wholesale services at issue, and for total electric 
service to reflect such revenues for wholesale services. The utility 
shall prepare this statement to include data consistent with criteria 
specified for presentation of revenue under the changed rate in 
Statement BG under paragraph (h)(32) of this section.
    (34) Statement BI--Fuel cost adjustment factors. Statement BI is a 
statement of monthly fuel cost adjustment factors under the changed rate 
and under the present rates, for Period I and Period II.
    (i) If the changed rate schedule embodies a fuel cost adjustment 
clause, the utility shall show detailed derivations of fuel cost 
adjustment factors computed to reflect fuel cost incurred during each 
month of Period I and Period II. Fuel cost adjustment factors are those 
required for revenue determinations in accordance with paragraph 
(h)(32)(i) of Statement BG.
    (ii) If additional proposed fuel clause revenue data are reported in 
accordance with paragraph (h)(32)(ii) of Statement BG, the utility shall 
show detailed derivation of applicable monthly fuel adjustment factors.
    (iii) If the present rate includes a fuel cost adjustment change, 
the utility shall show detailed derivations of fuel cost adjustment 
factors for each month of Period I and Period II. The utility shall 
include in Statement BI derivations for all monthly factors required in 
the computation of present fuel clause revenues reported in Statement 
BH. The utility shall provide an explanation of the differences between 
the present and proposed fuel clauses.
    (iv) All fuel cost adjustment factors shall be cost-based. The 
utility shall make a computational showing that shall develop adjustment 
factors in a manner consistent with the requirements of Sec. 35.14 of 
this chapter. The utility shall provide supporting detail on cost by 
type of fuel, and shall show separately the allowable fuel clause cost 
component of purchased or interchanged energy. All fuel cost data shall 
be consistent with that included in operation and maintenance expenses 
in Statement AH under paragraph (h)(8) of this section.
    (35) Statement BJ--Summary data tables. Statement BJ is a tabular 
summary of portions of Period I and Period II data from specific cost of 
service statements in this paragraph. The utility shall summarize under 
descriptive titles the Period I and Period II data from the cost of 
service provisions listed in this subparagraph. The utility shall supply 
the data in the manner described for each cost of service statement and 
in this subparagraph.
    (i) If a utility provides in Statement BK information that is 
substantially equivalent to the information required in this statement, 
the utility may fulfill the requirements of this statement by 
specifically referring to the location in Statement BK of the 
information required in this subparagraph.
    (ii) The utility shall provide the information in the following 
statements as average total electric department monthly balances for 
each function and subfunction of plant:
    (A) Statement AD--(h)(4)(i) and (ii);
    (B) Statement AE--(h)(5)(i) and (ii);
    (C) Statement AF--(h)(6)(i) through (v);
    (D) Statement AG--(h)(7)(i) through (vi);
    (E) Statement AL--(h)(12)(i) and (ii);
    (F) Statement AM--(h)(13); and
    (G) Statement AN--(h)(14).
    (iii) The utility shall provide the information in the following 
statements as total electric department annual revenue and expense 
amounts:
    (A) Statement AH--(h)(8)(i), (iv) and (v);
    (B) Statement AI--(h)(9)(i) and (ii);
    (C) Statement AJ--(h)(10)(i);
    (D) Statement AK--(h)(11)(i);
    (E) Statement AP--(h)(16)(i) through (iv);
    (F) Statement AQ--(h)(17)(i) through (iii);
    (G) Statement AR--(h)(18)(i) through (iv);
    (H) Statement AS--(h)(19);
    (I) Statement AT--(h)(20); and
    (J) Statement AU--(h)(21).
    (iv) The utility shall provide all cost of capital amounts in the 
following statements.
    (A) Statement AV--(h)(22)(i)(A); and
    (B) Statement AW--(h)(23);

[[Page 275]]

    (v) The utility shall provide all tax rate data in Statement AY, 
paragraph (h)(25)(i) of this section.
    (vi) The utility shall provide the information in the following 
statements as appropriate, for total electric department values and 
individual customer group values:
    (A) Statement BB--(h)(27)(i) through (vi);
    (B) Statement BD--(h)(29)(i) through (iv);
    (C) Statement BE--(h)(30)(iv) (A), (B), and (C);
    (D) Statement BG--(h)(32)(iii); and
    (E) Statement BH--(h)(33).
    (36) Statement BK--Electric utility department cost of service, 
total and as allocated. Statement BK is a statement of the claimed fully 
allocated cost of service of the utility developed and shown for Period 
I and Period II. The utility shall include analytical support for each 
rate proposed to be differentiated on a time-of-use basis. The utility 
shall also provide any marginal or incremental cost information that is 
required to support the changed rate developed on a marginal or 
incremental cost basis. The utility shall show allocations of fully 
distributed costs to the wholesale services subject to the changed rate 
accompanied by a comparison of allocated costs with revenues under the 
changed rate. Nothing in this subparagraph shall preclude use by any 
utility of any cost of service technique it believes reasonable and that 
is consistent with the requirements of paragraph (g) of this section.
    (i) The utility shall base the fully distributed cost of service and 
the allocations thereof upon data provided in the accompanying detailed 
statements required under this section and additional data which the 
utility may submit and support in connection with this statement. The 
cost of service data of the utility shall conform to the following 
requirements:
    (A) The total electric rate base and cost of service shall be 
itemized and summarized by major functions and in a format designed to 
facilitate review and analysis.
    (B) Based on the total electric rate base and cost of service, and 
on allocated or assigned component elements, the cost of service for 
each Statement BA wholesale customer rate group under paragraph (h)(26) 
shall be itemized and summarized by major functions in a format 
consistent with that shown for total electric.
    (C) The costs of service data for total electric and for each of the 
wholesale customer groups shall include data that show the return and 
the income taxes by components and in total, based upon the rate of 
return claimed by the utility in Statement AV under paragraph (h)(22). 
Individual components of income taxes shall include income taxes 
payable, provision for deferred income tax--debits and deferred income 
tax--credits, investment tax credits, or other adjustments.
    (D) The fully distributed cost of service study of the utility shall 
disclose the principal determinants for allocation of total electric 
costs among the wholesale customer groups, including but not limited to 
the following:
    (1) Computations showing the energy responsibilities of the 
wholesale services, with supporting detail;
    (2) Computations showing the demand responsibilities of the 
wholesale services, with supporting detail; and
    (3) Computations showing the specific assignment responsibilities of 
the wholesale services, with supporting detail.
    (ii) For the total electric service and for each wholesale customer 
rate group, the utility shall compare the fully distributed cost of 
service with the revenues under the changed rate. Based on the 
comparison, the utility shall show the revenue excess or deficiency and 
the earned rate of return computed for the total electric service and 
for each wholesale customer rate group.
    (iii) For any filing that contains Period II data, the utility shall 
supply any work papers and additional explanatory material necessary to 
support Statement BK, indexed, referenced and paginated as provided in 
paragraph (d)(5) of this section.
    (iv) The utility shall provide a tabular comparison of Period II 
total electric fully distributed cost items with those of Period I. The 
comparisons shall show item amounts for each of the two periods, and 
also shall show Period II item amounts as percentages

[[Page 276]]

of equivalent items for Period I. Comparisons shall include at least the 
following items, accompanied by explanatory notes with respect to 
significant variations among the comparative percentages:
    (A) Rate base;
    (B) Production expenses;
    (C) Transmission expenses;
    (D) Customer accounting, customer service and information, and sales 
expenses;
    (E) Depreciation expenses;
    (F) Taxes except income and revenue;
    (G) Income taxes;
    (H) Revenue taxes; and
    (I) Return claimed.
    (37) Statement BL--Rate design information. In support of the design 
of the changed rate, the utility shall submit the following material:
    (i) A narrative statement describing and justifying the objectives 
of the design of the changed rate. If the purpose of the rate design is 
to reflect costs, the utility shall state how that objective is 
achieved, and shall accompany it with a summary cost analysis that would 
justify the rate design, including any discounts or surcharges based on 
delivery voltage level or other specific considerations. Such summary 
cost analysis shall be consistent with, derived from, and cross-
referenced to the data in cost of service Statement BK. If the rate 
design is not intended to reflect costs, whether fully distributed, 
marginal, incremental, or other, the utility shall provide a statement 
to justify the departure from cost-based rates.
    (ii) If the billing determinants, such as quantities of demand, 
energy, or delivery points, are on different bases than the cost 
allocation determinants supporting such charges, the utility shall 
submit an explanation setting forth the economic or other considerations 
that warrant such departure. The information shall include at least the 
following:
    (A) If the individual rate for the demand, energy and customer 
charges do not correspond to the comparable cost classifications 
supporting such charges, a detailed explanation stating the reasons for 
the differences.
    (B) If the changed rate contains more than one demand or energy 
block, a detailed explanation indicating the rationale for the blocking 
and the considerations upon which such blocking is based, including 
adequate cost support for the specified blocking.
    (38) Statement BM--Construction program statement. Statement BM is a 
summary of data and supporting assumptions relating to the economics of 
any construction program to replace or expand the utility's power supply 
that shall be filed if the utility is filing for construction work in 
progress in rate base under Sec. 35.26(c)(3) of this chapter. The 
filing utility shall describe generally its program for providing 
reliable and economic power for the period beginning with the date of 
the filing and ending with the tenth year after the test period. The 
statement shall include an assessment of the relative costs of adopting 
alternative strategies including an analysis of alternative production 
plant, e.g., cogeneration, small power production, heightened load 
management and conservation efforts, additions to transmission plant or 
increased purchases of power, and an explanation of why the program 
adopted is prudent and consistent with a least-cost energy supply 
program.

(Federal Power Act, 16 U.S.C. 791-828c; Dept. of Energy Organization 
Act, 42 U.S.C. 7101-7352; E.O. 12009, 42 FR 46267, 3 CFR 142 (1978); 
Pub. L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))

[Order 91, 45 FR 46363, July 10, 1980]

    Editorial Note: For Federal Register citations affecting Sec. 
35.13, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



                   Subpart C_Other Filing Requirements



Sec. 35.14  Fuel cost and purchased economic power adjustment clauses.

    (a) Fuel adjustment clauses (fuel clause) which are not in 
conformity with the principles set out below are not in the public 
interest. These regulations contemplate that the filing of proposed rate 
schedules, tariffs or service agreements which embody fuel clauses 
failing to conform to the following principles may result in suspension 
of those parts of such rate schedules, tariffs, or service agreements:

[[Page 277]]

    (1) The fuel clause shall be of the form that provides for periodic 
adjustments per kWh of sales equal to the difference between the fuel 
and purchased economic power costs per kWh of sales in the base period 
and in the current period:

Adjustment Factor =Fm/Sm-Fb/Sb

Where: F is the expense of fossil and nuclear fuel and purchased 
    economic power in the base (b) and current (m) periods; and S is the 
    kWh sales in the base and current periods, all as defined below.

    (2) Fuel and purchased economic power costs (F) shall be the cost 
of:
    (i) Fossil and nuclear fuel consumed in the utility's own plants, 
and the utility's share of fossil and nuclear fuel consumed in jointly 
owned or leased plants.
    (ii) The actual identifiable fossil and nuclear fuel costs 
associated with energy purchased for reasons other than identified in 
paragraph (a)(2)(iii) of this section.
    (iii) The total cost of the purchase of economic power, as defined 
in paragraph (a)(11) of this section, if the reserve capacity of the 
buyer is adequate independent of all other purchases where non-fuel 
charges are included in either Fb or Fm;
    (iv) Energy charges for any purchase if the total amount of energy 
charges incurred for the purchase is less than the buyer's total avoided 
variable cost;
    (v) And less the cost of fossil and nuclear fuel recovered through 
all inter-system sales.
    (3) Sales (S) must be all kWh's sold, excluding inter-system sales. 
Where for any reason, billed system sales cannot be coordinated with 
fuel costs for the billing period, sales may be equated to the sum of: 
(i) Generation, (ii) purchases, (iii) exchange received, less (iv) 
energy associated with pumped storage operations, less (v) inter-system 
sales referred to in paragraph (a)(2)(iv) of this section, less (vi) 
total system losses.
    (4) The adjustment factor developed according to this procedure 
shall be modified to properly allow for losses (estimated if necessary) 
associated only with wholesale sales for resale.
    (5) The adjustment factor developed according to this procedure may 
be further modified to allow the recovery of gross receipts and other 
similar revenue based tax charges occasioned by the fuel adjustment 
revenues.
    (6) The cost of fossil fuel shall include no items other than those 
listed in Account 151 of the Commission's Uniform System of Accounts for 
Public Utilities and Licensees. The cost of nuclear fuel shall be that 
as shown in Account 518, except that if Account 518 also contains any 
expense for fossil fuel which has already been included in the cost of 
fossil fuel, it shall be deducted from this account. (Paragraph C of 
Account 518 includes the cost of other fuels used for ancillary steam 
facilities.)
    (7) Where the cost of fuel includes fuel from company-owned or 
controlled \1\ sources, that fact shall be noted and described as part 
of any filing. Where the utility purchases fuel from a company-owned or 
controlled source, the price of which is subject to the jurisdiction of 
a regulatory body, and where the price of such fuel has been approved by 
that regulatory body, such costs shall be presumed, subject to rebuttal, 
to be reasonable and includable in the adjustment clause. If the current 
price, however, is in litigation and is being collected subject to 
refund, the utility shall so advise the Commission and shall keep a 
separate account of such amounts paid which are subject to refund, and 
shall advise the Commission of the final disposition of such matter by 
the regulatory body having jurisdiction. With respect to the price of 
fuel purchases from company-owned or controlled sources pursuant to 
contracts which are not subject to regulatory authority, the utility 
company shall file such contracts and amendments thereto with the 
Commission for its acceptance at the time it files its fuel clause or 
modification thereof. Any subsequent amendment to such contracts shall 
likewise be filed with the Commission as a rate schedule change and may 
be subject to suspension under section 205 of the Federal

[[Page 278]]

Power Act. Fuel charges by affiliated companies which do not appear to 
be reasonable may result in the suspension of the fuel adjustment clause 
or cause an investigation thereof to be made by the Commission on its 
own motion under section 206 of the Federal Power Act.
---------------------------------------------------------------------------

    \1\ As defined in the Commission's Uniform System of Accounts 18 CFR 
part 101, Definitions 5B.
---------------------------------------------------------------------------

    (8) All rate filings which contain a proposed new fuel clause or a 
change in an existing fuel clause shall conform such clauses with the 
regulations. Within one year of the effectiveness of this rulemaking, 
all public utilities with rate schedules that contain a fuel clause 
should conform such clauses with the regulations. Recognizing that 
individual public utilities may have special operating characteristics 
that may warrant granting temporary delays in the implementation of the 
regulations, the Commission may, upon showing of good cause, waive the 
requirements of this section of the regulations for an additional one-
year period so as to permit the public utilities sufficient time to 
adjust to the requirements.
    (9) All rate filings containing a proposed new fuel clause or change 
in an existing fuel clause shall include:
    (i) A description of the fuel clause with detailed cost support for 
the base cost of fuel and purchased economic power or energy.
    (ii) Full cost of service data unless the utility has had the rate 
approved by the Commission within a year, provided that such cost of 
service may not be required when an existing fuel cost adjustment clause 
is being modified to conform to the Commission's regulations.
    (10) Whenever particular circumstances prevent the use of the 
standards provided for herein, or the use thereof would result in an 
undue burden, the Commission may, upon application under Sec. 385.207 
of this chapter and for good cause shown, permit deviation from these 
regulations.
    (11) For the purpose of paragraph (a)(2)(iii) of this section, the 
following definitions apply:
    (i) Economic power is power or energy purchased over a period of 
twelve months or less where the total cost of the purchase is less than 
the buyer's total avoided variable cost.
    (ii) Total cost of the purchase is all charges incurred in buying 
economic power and having such power delivered to the buyer's system. 
The total cost includes, but is not limited to, capacity or reservation 
charges, energy charges, adders, and any transmission or wheeling 
charges associated with the purchase.
    (iii) Total avoided variable cost is all identified and documented 
variable costs that would have been incurred by the buyer had a 
particular purchase not been made. Such costs include, but are not 
limited to, those associated with fuel, start-up, shut-down or any 
purchases that would have been made in lieu of the purchase made.
    (12) For the purpose of paragraph (a)(2)(iii) of this section, the 
following procedures and instructions apply:
    (i) A utility proposing to include purchase charges other than those 
for fuel or energy in fuel and purchased economic power costs (F) under 
paragraph (a)(2)(iii) of this section shall amend its fuel cost 
adjustment clause so that it is consistent with paragraphs (a)(1) and 
(a)(2)(iii) of this section. Such amendment shall state the system 
reserve capacity criteria by which the system operator decides whether a 
reliability purchase is required. Where the utility filing the statement 
is required by a State or local regulatory body (including a plant site 
licensing board) to file a capacity criteria statement with that body, 
the system reserve capacity criteria in the statement filed with the 
Commission shall be identical to those contained in the statement filed 
with the State or local regulatory body. Any utility that changes its 
reserve capacity criteria shall, within 45 days of such change, file an 
amended fuel cost and purchased economic power adjustment clause to 
incorporate the new criteria.
    (ii) Reserve capacity shall be deemed adequate if, at the time a 
purchase was initiated, the buyer's system reserve capacity criteria 
were projected to be satisfied for the duration of the purchase without 
the purchase at issue.
    (iii) The total cost of the purchase must be projected to be less 
than total avoided variable cost, at the time a purchase was initiated, 
before any non-

[[Page 279]]

fuel purchase charge may be included in Fm.
    (iv) The purchasing utility shall make a credit to Fm after a 
purchase terminates if the total cost of the purchase exceeds the total 
avoided variable cost. The amount of the credit shall be the difference 
between the total cost of the purchase and the total avoided variable 
cost. This credit shall be made in the first adjustment period after the 
end of the purchase. If a utility fails to make the credit in the first 
adjustment period after the end of the purchase, it shall, when making 
the credit, also include in Fm interest on the amount of the credit. 
Interest shall be calculated at the rate required by Sec. 
35.19a(a)(2)(iii) of this chapter, and shall accrue from the date the 
credit should have been made under this paragraph until the date the 
credit is made.
    (v) If a purchase is made of more capacity than is needed to satisfy 
the buyer's system reserve capacity criteria because the total costs of 
the extra capacity and associated energy are less than the buyer's total 
avoided variable costs for the duration of the purchase, the charges 
associated with the non-reliability portion of the purchase may be 
included in F.

(Approved by the Office of Management and Budget under control number 
1902-0096)

(Federal Power Act, 16 U.S.C. 824d, 824e and 825h (1976 & Supp. IV 
1980); Department of Energy Organization Act, 42 U.S.C. 7171, 7172 and 
7173(c) (Supp. IV 1980); E.O. 12009, 3 CFR part 142 (1978); 5 U.S.C. 553 
(1976))

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 421, 36 FR 
3047, Feb. 17, 1971; 39 FR 40583, Nov. 19, 1974; Order 225, 47 FR 19056, 
May 3, 1982; Order 352, 48 FR 55436, Dec. 13, 1983; 49 FR 5073, Feb. 10, 
1984; Order 529, 55 FR 47321, Nov. 13, 1990; Order 600, 63 FR 53809, 
Oct. 7, 1998; Order 714, 73 FR 57532, Oct. 3, 2008; 73 FR 63886, Oct. 
28, 2008]



Sec. 35.15  Notices of cancellation or termination.

    (a) General rule. When a rate schedule, tariff or service agreement 
or part thereof required to be on file with the Commission is proposed 
to be cancelled or is to terminate by its own terms and no new rate 
schedule, tariff or service agreement or part thereof is to be filed in 
its place, a filing must be made to cancel such rate schedule, tariff or 
service agreement or part thereof at least sixty days but not more than 
one hundred-twenty days prior to the date such cancellation or 
termination is proposed to take effect. A copy of such notice to the 
Commission shall be duly posted. With such notice, each filing party 
shall submit a statement giving the reasons for the proposed 
cancellation or termination, and a list of the affected purchasers to 
whom the notice has been provided. For good cause shown, the Commission 
may by order provide that the notice of cancellation or termination 
shall be effective as of a date prior to the date of filing or prior to 
the date the filing would become effective in accordance with these 
rules.
    (b) Applicability. (1) The provisions of paragraph (a) of this 
section shall apply to all contracts for unbundled transmission service 
and all power sale contracts:
    (i) Executed prior to July 9, 1996; or
    (ii) If unexecuted, filed with the Commission prior to July 9, 1996.
    (2) Any power sales contract executed on or after July 9, 1996 that 
is to terminate by its own terms shall not be subject to the provisions 
of paragraph (a) of this section.
    (c) Notice. Any public utility providing jurisdictional services 
under a power sales contract that is not subject to the provisions of 
paragraph (a) of this section shall notify the Commission of the date of 
the termination of such contract within 30 days after such termination 
takes place.

[Order 888, 61 FR 21692, May 10, 1996, as amended by Order 714, 73 FR 
57532, Oct. 3, 2008]



Sec. 35.16  Notice of succession.

    Whenever the name of a public utility is changed, or its operating 
control is transferred to another public utility in whole or in part, or 
a receiver or trustee is appointed to operate any public utility, the 
exact name of the public utility, receiver, or trustee which will 
operate the property thereafter shall be filed within 30 days thereafter 
with the Commission with a tariff consistent with the electronic filing 
requirements in Sec. 35.7 of this part.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 714, 73 FR 
57533, Oct. 3, 2008]

[[Page 280]]



Sec. 35.17  Withdrawals and amendments of rate schedule, tariff or service 

agreement filings.

    (a) Withdrawals of rate schedule, tariff or service agreement 
filings prior to Commission action. (1) A public utility may withdraw in 
its entirety a rate schedule, tariff or service agreement filing that 
has not become effective and upon which no Commission or delegated order 
has been issued by filing a withdrawal motion with the Commission. Upon 
the filing of such motion, the proposed rate schedule, tariff or service 
agreement sections will not become effective under section 205(d) of the 
Federal Power Act in the absence of Commission action making the rate 
schedule, tariff or service agreement filing effective.
    (2) The withdrawal motion will become effective, and the rate 
schedule, tariff or service agreement filing will be deemed withdrawn, 
at the end of 15 days from the date of filing of the withdrawal motion, 
if no answer in opposition to the withdrawal motion is filed within that 
period and if no order disallowing the withdrawal is issued within that 
period. If an answer in opposition is filed within the 15 day period, 
the withdrawal is not effective until an order accepting the withdrawal 
is issued.
    (b) Amendments or modifications to rate schedule, tariff or service 
agreement sections prior to Commission action on the filing. A public 
utility may file to amend or modify, and may file a settlement that 
would amend or modify, a rate schedule, tariff or service agreement 
section contained in a rate schedule, tariff or service agreement filing 
that has not become effective and upon which no Commission or delegated 
order has yet been issued. Such filing will toll the notice period in 
section 205(d) of the Federal Power Act for the original filing, and 
establish a new date on which the entire filing will become effective, 
in the absence of Commission action, no earlier than 61 days from the 
date of the filing of the amendment or modification.
    (c) Withdrawal of suspended rate schedules, tariffs, or service 
agreements, or parts thereof. Where a rate schedule, tariff, or service 
agreement, or part thereof has been suspended by the Commission, it may 
be withdrawn during the period of suspension only by special permission 
of the Commission granted upon application therefor and for good cause 
shown. If permitted to be withdrawn, any such rate schedule, tariff, or 
service agreement may be refiled with the Commission within a one-year 
period thereafter only with special permission of the Commission for 
good cause shown.
    (d) Changes in suspended rate schedules, tariffs, or service 
agreements, or parts thereof. A public utility may not, within the 
period of suspension, file any change in a rate schedule, tariff, or 
service agreement, or part thereof, which has been suspended by order of 
the Commission except by special permission of the Commission granted 
upon application therefor and for good cause shown.
    (e) Changes in rate schedules or tariffs or parts thereof continued 
in effect and which were proposed to be changed by the suspended filing. 
A public utility may not, within the period of suspension, file any 
change in a rate schedule or tariff or part thereof continued in effect 
by operation of an order of suspension and which was proposed to be 
changed by the suspended filing, except by special permission of the 
Commission granted upon application therefor and for good cause shown.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 714, 73 FR 
57533, Oct. 3, 2008; 74 FR 55770, Oct. 29, 2009]



Sec. 35.18  Asset retirement obligations.

    (a) A public utility that files a rate schedule, tariff or service 
agreement under Sec. 35.12 or Sec. 35.13 and has recorded an asset 
retirement obligation on its books must provide a schedule, as part of 
the supporting work papers, identifying all cost components related to 
the asset retirement obligations that are included in the book balances 
of all accounts reflected in the cost of service computation supporting 
the proposed rates. However, all cost components related to asset 
retirement obligations that would impact the calculation of rate base, 
such as electric plant and related accumulated depreciation and 
accumulated deferred income taxes, may not be reflected in rates and 
must be removed from the rate base

[[Page 281]]

calculation through a single adjustment.
    (b) A public utility seeking to recover nonrate base costs related 
to asset retirement costs in rates must provide, with its filing under 
Sec. 35.12 or Sec. 35.13, a detailed study supporting the amounts 
proposed to be collected in rates.
    (c) A public utility that has recorded asset retirement obligations 
on its books, but is not seeking recovery of the asset retirement costs 
in rates, must remove all asset-retirement-obligations-related cost 
components from the cost of service supporting its proposed rates.

[Order 631, 68 FR 19619, Apr. 21, 2003, as amended by Order 714, 73 FR 
57533, Oct. 3, 2008]



Sec. 35.19  Submission of information by reference.

    If all or any portion of the information called for in this part has 
already been submitted to the Commission, substantially in the form 
prescribed above, specific reference thereto may be made in lieu of re-
submission in response to the requirements of this part.



Sec. 35.19a  Refund requirements under suspension orders.

    (a) Refunds. (1) The public utility whose proposed increased rates 
or charges were suspended shall refund at such time in such amounts and 
in such manner as required by final order of the Commission the portion 
of any increased rates or charges found by the Commission in that 
suspension proceeding not to be justified, together with interest as 
required in paragraph (a)(2) of this section.
    (2) Interest shall be computed from the date of collection until the 
date refunds are made as follows:
    (i) At a rate of seven percent simple interest per annum on all 
excessive rates or charges held prior to October 10, 1974;
    (ii) At a rate of nine percent simple interest per annum on all 
excessive rates or charges held between October 10, 1974, and September 
30, 1979; and
    (iii)(A) At an average prime rate for each calendar quarter on all 
excessive rates or charges held (including all interest applicable to 
such rates or charges) on or after October 1, 1979. The applicable 
average prime rate for each calendar quarter shall be the arithmetic 
mean, to the nearest one-hundredth of one percent, of the prime rate 
values published in the Federal Reserve Bulletin, or in the Federal 
Reserve's ``Selected Interest Rates'' (Statistical Release H. 15), for 
the fourth, third, and second months preceding the first month of the 
calendar quarter.
    (B) The interest required to be paid under clause (iii)(A) shall be 
compounded quarterly.
    (3) Any public utility required to make refunds pursuant to this 
section shall bear all costs of such refunding.
    (b) Reports. Any public utility whose proposed increased rates or 
charges were suspended and have gone into effect pending final order of 
the Commission pursuant to section 205(e) of the Federal Power Act shall 
keep accurate account of all amounts received under the increased rates 
or charges which became effective after the suspension period, for each 
billing period, specifying by whom and in whose behalf such amounts are 
paid.

[44 FR 53503, Sept. 14, 1979, as amended at 45 FR 3889, Jan. 21, 1980; 
Order 545, 57 FR 53990, Nov. 16, 1992; 74 FR 54463, Oct. 22, 2009]



Sec. 35.21  Applicability to licensees and others subject to section 19 or 20 

of the Federal Power Act.

    Upon further order of this Commission issued upon its own motion or 
upon complaint or request by any person or State within the meaning of 
sections 19 or 20 of the Federal Power Act, the provisions of Sec. Sec. 
35.1 through 35.19 shall be operative as to any licensee or others who 
are subject to this Commission's jurisdiction in respect to services and 
the rates and charges of payment therefor by reason of the requirements 
of sections 19 or 20 of the Federal Power Act. The requirement of this 
section for compliance with the provisions of Sec. Sec. 35.1 through 
35.19 shall be in addition to and independent of any obligation for 
compliance with those regulations by reason of the provisions of 
sections 205 and 206 of the Federal Power Act. For purposes of applying 
this section Electric Service as otherwise defined in Sec. 35.2(a) 
shall

[[Page 282]]

mean: Services to customers or consumers of power within the meaning of 
sections 19 or 20 of the Federal Power Act which may be comprised of 
various classes of capacity and energy and/or transmission services 
subject to the jurisdiction of this Commission. Electric Service shall 
include the utilization of facilities owned or operated by any licensee 
or others to effect any of the foregoing sales or services whether by 
leasing or other arrangements. As defined herein Electric Service is 
without regard to the form of payment or compensation for the sales or 
services rendered, whether by purchase and sale, interchange, exchange, 
wheeling charge, facilities charge, rental or otherwise. For purposes of 
applying this section, Rate Schedule as otherwise defined in Sec. 
35.2(b) shall mean: A statement of
    (1) Electric service as defined in this Sec. 35.21,
    (2) Rates and charges for or in connection with that service, and
    (3) All classifications, practices, rules, regulations, or contracts 
which in any manner affect or relate to the aforementioned service, 
rates and charges. This statement shall be in writing and may take the 
physical form of a contractual document, purchase or sale agreement, 
lease of facilities, tariff \5\ or other writing. Any oral agreement or 
understanding forming a part of such statement shall be reduced to 
writing and made a part thereof.
---------------------------------------------------------------------------

    \5\ See Sec. 35.2.

[Order 271, 28 FR 10573, Oct. 2, 1963, as amended by Order 714, 73 FR 
57533, Oct. 3, 2008]



Sec. 35.22  Limits for percentage adders in rates for transmission services; 

revision of rate schedules, tariffs or service agreements.

    (a) Applicability. This section applies to all electric rate 
schedules, tariffs or service agreements required to be filed under this 
part that are used for transactions in which the utility or system 
performs a transmission or purchase and resale function.
    (b) Definition. For purposes of this section, purchased power price 
means the amount paid by a utility or system that performs a 
transmission or purchase and resale function for electric power 
generated by another utility or system.
    (c) General rule. (1) If a utility or system uses a rate component 
that recovers revenues computed wholly or in part as a percentage of the 
purchased power price, the utility or system shall establish a limit on 
the revenues recovered by such rate component in any transaction, in 
accordance with paragraph (d) of this section.
    (2) The limit established under this paragraph shall be stated in 
mills per kilowatt-hour.
    (d) Cost support information. (1) A utility or system shall submit 
cost support information to justify any revenue limit established under 
paragraph (c) of this section, except as provided in paragraph (e) of 
this section.
    (2) The information submitted under this section shall consist of 
those costs, other than the purchased power price, incurred by a utility 
or system as a result of a transmission or purchase and resale 
transaction, which costs are not recovered under any other rate 
component.
    (e) Exception. A utility or system need not submit the cost support 
information required under paragraph (d) of this section if the limit 
established under paragraph (c) of this section is not more than one 
mill per kilowatt-hour.
    (f) Revision of rate schedules, tariffs or service agreements. Every 
utility or system shall:
    (1) Amend any rate schedule, tariffs or service agreements to 
indicate any limit established pursuant to this section, not later than 
60 days after the effective date of this rule; and
    (2) Hereafter conform any rate or rate change filed under this part 
to the requirements of this section.

(Federal Power Act, as amended, 16 U.S.C. 792-828c; Department of Energy 
Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 3 CFR 142 (1978))

[Order 84, 45 FR 31300, May 13, 1980. Redesignated by Order 545, 57 FR 
53990, Nov. 16, 1992, as amended by Order 714, 73 FR 57533, Oct. 3, 
2008]



Sec. 35.23  General provisions.

    (a) Applicability. This subpart applies to any wholesale sale of 
electric energy

[[Page 283]]

in a coordination transaction by a public utility if that sale requires 
the use of an emissions allowance.
    (b) Implementation Procedures. (1) If a public utility has a 
coordination rate schedule on file that expressly provides for the 
recovery of all incremental or out-of-pocket costs, such utility may 
make an abbreviated rate filing detailing how it will recover emissions 
allowance costs. Such filing must include the following: the index or 
combination of indices to be used; the method by which the emission 
allowance amounts will be calculated; timing procedures; how 
inconsistencies, if any, with dispatch criteria will be reconciled; and 
how any other rate impacts will be addressed. In addition, a utility 
making an abbreviated filing must:
    (i) Clearly identify the filing as being limited to an amendment to 
a coordination rate to reflect the cost of emissions allowances, in the 
first paragraph of the letter of transmittal accompanying the filing;
    (ii) Submit the revisions in accordance with Sec. 35.7; and
    (iii) Identify each rate schedule to which the amendment applies.
    (2) The abbreviated filing must apply consistent treatment to all 
coordination rate schedules. If the filing does not apply consistent 
rate treatment, the public utility must explain why it does not do so.
    (3) If a public utility wants to charge incremental costs for 
emissions allowances, but its rate schedule on file with the Commission 
does not provide for the recovery of all incremental costs, the selling 
public utility may submit an abbreviated filing if all customers agree 
to the rate change. If customers do not agree, the selling public 
utility must tender its emissions allowance proposal in a separate 
section 205 rate filing, fully justifying its proposal.

[59 FR 65938, Dec. 22, 1994, as amended by Order 714, 73 FR 57533, Oct. 
3, 2008]



Sec. 35.24  Tax normalization for public utilities.

    (a) Applicability. (1) Except as provided in subparagraph (2) of 
this paragraph, this section applies, with respect to rate schedules 
filed under Sec. Sec. 35.12 and 35.13 of this part, to the ratemaking 
treatment of the tax effects of all transactions for which there are 
timing differences.
    (2) This section does not apply to the following timing differences:
    (i) Differences that result from the use of accelerated 
depreciation;
    (ii) Differences that result from the use of Class Life Asset 
Depreciation Range (ADR) provisions of the Internal Revenue Code;
    (iii) Differences that result from the use of accelerated 
amortization provisions on certified defense and pollution control 
facilities;
    (iv) Differences that arise from recognition of extraordinary 
property losses as a current expense for tax purposes but as a deferred 
and amortized expense for book purposes;
    (v) Differences that arise from recognition of research, 
development, and demonstration expenditures as a current expense for tax 
purposes but as a deferred and amortized expense for book purposes;
    (vi) Differences that result from different tax and book reporting 
of deferred gains or losses from disposition of utility plant;
    (vii) Differences that result from the use of the Asset Guideline 
Class ``Repair Allowance'' provision of the Internal Revenue Code;
    (viii) Differences that result from recognition of purchased gas 
costs as a current expense for tax purposes but as a deferred expense 
for book purposes.

(See Order 13, issued October 18, 1978; Order 203, issued May 29, 1958; 
Order 204, issued May 29, 1958; Order 404, issued May 15, 1970; Order 
408, issued August 26, 1970; Order 432, issued April 23, 1971; Order 
504, issued February 11, 1974; Order 505, issued February 11, 1974; 
Order 566, issued June 3, 1977; Opinion 578, issued June 3, 1970; and 
Opinion 801, issued May 31, 1977.)

    (b) General rules--1) Tax normalization required. (i) A public 
utility must compute the income tax component of its cost of service by 
using tax normalization for all transactions to which this section 
applies.
    (ii) Except as provided in paragraph (c) of this section, 
application of tax normalization by a public utility under this section 
to compute the income tax component will not be subject to case-by-case 
adjudication.

[[Page 284]]

    (2) Reduction of, and addition to, rate base. (i) The rate base of a 
public utility using tax normalization under this section must be 
reduced by the balances that are properly recordable in Account 281, 
``Accumulated deferred income taxes-accelerated amortization property;'' 
Account 282, ``Accumulated deferred income taxes--other property;'' and 
Account 283, ``Accumulated deferred income taxes--other.'' Balances that 
are properly recordable in Account 190, ``Accumulated deferred income 
taxes,'' must be treated as an addition to rate base.
    (ii) Such rate base reductions or additions must be limited to 
deferred taxes related to rate base, construction or other 
jurisdictional activities.
    (iii) If a public utility uses an approved purchased gas adjustment 
clause or a research, development and demonstration tracking clause, the 
rate base reductions or additions required under this subparagraph must 
apply only to the extent that the balances in Account 190 and Accounts 
281 through 283 are not used, for purposes of calculating carrying 
charges, as an offset to balances properly recordable in Account 188, 
``Research development and demonstration expenditures,'' or Account 191, 
``Unrecovered purchased gas costs.''
    (c) Special rules. (1) This paragraph applies:
    (i) If the public utility has not provided deferred taxes in the 
same amount that would have accrued had tax normalization been applied 
for the tax effects of timing difference transactions originating at any 
time prior to the test period; or
    (ii) If, as a result of changes in tax rates, the accumulated 
provision for deferred taxes becomes deficient in or in excess of 
amounts necessary to meet future tax liabilities as determined by 
application of the current tax rate to all timing difference 
transactions originating in the test period and prior to the test 
period.
    (2) The public utility must compute the income tax component in its 
cost of service by making provision for any excess or deficiency in 
deferred taxes described in subparagraphs (1)(i) or (1)(ii) of this 
paragraph.
    (3) The public utility must apply a Commission-approved ratemaking 
method made specifically applicable to the public utility for 
determining the cost of service provision described in subparagraph (2) 
of this paragraph. If no Commission-approved ratemaking method has been 
made specifically applicable to the public utility, then the public 
utility must use some ratemaking method for making such provision, and 
the appropriateness of this method will be subject to case-by-case 
determination.
    (d) Definitions. For purposes of this section, the term:
    (1) Tax normalization means computing the income tax component as if 
the amounts of timing difference transactions recognized in each period 
for ratemaking purposes were also recognized in the same amount in each 
such period for income tax purposes.
    (2) Timing differences means differences between amounts of expenses 
or revenues recognized for income tax purposes and amounts of expenses 
or revenues recognized for ratemaking purposes, which differences arise 
in one time period and reverse in one or more other time periods so that 
the total amounts of expenses or revenues recognized for income tax 
purposes and for ratemaking purposes are equal.
    (3) Commission-approved ratemaking method means a ratemaking method 
approved by the Commission in a final decision including approval of a 
settlement agreement containing a ratemaking method only if such 
settlement agreement applies that method beyond the effective term of 
the settlement agreement.
    (4) Income tax purposes means for the purpose of computing income 
tax under the provisions of the Internal Revenue Code or the income tax 
provisions of the laws of a State or political subdivision of a State 
(including franchise taxes).
    (5) Income tax component means that part of the cost of service that 
covers income tax expenses allowable by the Commission.
    (6) Ratemaking purposes means for the purpose of fixing, modifying, 
approving, disapproving or rejecting rates under the Federal Power Act 
or the Natural Gas Act.

[[Page 285]]

    (7) Tax effect means the tax reduction or addition associated with a 
specific expense or revenue transaction.
    (8) Transaction means an activity or event that gives rise to an 
accounting entry that is used in determining revenues or expenses.

[46 FR 26636, May 14, 1981. Redesignated and amended by Order 144-A, 47 
FR 8342, Feb. 26, 1982; Redesignated by Order 545, 57 FR 53990, Nov. 16, 
1992]



Sec. 35.25  Construction work in progress.

    (a) Applicability. This section applies to any rate schedule filed 
under this part by any public utility as defined in subsection 201(e) of 
the Federal Power Act.
    (b) Definitions. For purposes of this section:
    (1) Constuction work in progress or CWIP means any expenditure for 
public utility plant in process of construction that is properly 
included in Accounts 107 (construction work in progress) and 120.1 
(nuclear fuel in process of refinement, conversion, enrichment, and 
fabrication) of part 101 of this chapter, the Uniform System of Accounts 
Prescribed for Public Utilities and Licensees Subject to the Provisions 
of the Federal Power Act (Major and Nonmajor), that would otherwise be 
eligible for allowance for funds used during construction (AFUDC) 
treatment.
    (2) Double whammy means a situation which may arise when a wholesale 
electric rate customer embarks upon its own or participates in a 
construction program to supply itself with all or a portion of its 
future power needs, thereby reducing its future dependence on the CWIP 
of the rate applicant, but is simultaneously forced to pay to the CWIP 
public utility rate applicant the CWIP portion of the wholesale rates 
that reflects existing levels of service or a different anticipated 
service level.
    (3) Fuel conversion facility means any addition to public utility 
plant that enables a natural gas-burning plant to convert to the use of 
other fuels, or that enables an oil-burning plant to convert to the use 
of other fuels, other than natural gas. Such facilities include those 
that alter internal plant workings, such as oil or coal burners, soot 
blowers, bottom ash removal systems and concomitant air pollution 
control facilities, and any facility needed for receiving and storing 
the fuel to which the plant is being converted, which facility would not 
be necessary if the plant continued to burn gas or oil.
    (4) Pollution control facility means an identifiable structure or 
portions of a structure that is designed to reduce the amount of 
pollution produced by the power plant, but does not include any facility 
that reduces pollution by substituting a different method of generation 
or that generates the additional power necessitated by the operation of 
a pollution control facility.
    (c) General rule. For purposes of any initial rate schedule or any 
rate schedule change filed under Sec. 35.12 or Sec. 35.13 of this 
part, a public utility may include in its rate base any costs of 
construction work in progress (CWIP), including allowance for funds used 
during construction (AFUDC), as provided in this section.
    (1) Pollution control facilities--(i) General rule. Any CWIP for 
pollution control facilities allocable to electric power sales for 
resale may be included in the rate base of the public utility.
    (ii) Qualification as a pollution control facility. In determining 
whether a facility is a pollution control facility for purposes of this 
section, the Commission will consider:
    (A) Whether such facility is the type facility described in the 
Internal Revenue Service laws, 26 U.S.C. 169(d)(1), as follows:

    ``A new identifiable treatment facility which is used * * * to abate 
or control water or atmospheric pollution or contamination by removing, 
altering, disposing, storing, or preventing the creation or emission of 
pollutants, contaminants, wastes or heat'';

    (B) Whether such facility has been certified by a local, state, or 
federal agency as being in conformity with, or required by, a program of 
pollution control;
    (C) Other evidence showing that such facilities are for pollution 
control.
    (2) Fuel conversion facilities. Any CWIP for fuel conversion 
facilities allocable to electric power sales for resale may be included 
in the rate base of the public utility.
    (3) Non-pollution control of fuel conversion (non-PC/FC) CWIP. No 
more than

[[Page 286]]

50 percent of any CWIP allocable to electric power sales for resale not 
otherwise included in rate base under paragraphs (c) (1) and (2) of this 
section, may be included in the rate base of the public utility.
    (4) Forward looking allocation ratios. Every test period CWIP 
project requested for wholesale rate base treatment pursuant to Sec. 
35.26(c)(1), (2), and (3) of this part will be allocated to the customer 
classes on the basis of forward looking allocation ratios reflecting the 
anticipated average annual use the wholesale customers will make of the 
system over the estimated service life of the project. Supporting 
documentation, as required by Sec. Sec. 35.12 and 35.13 of this part, 
must be in sufficient detail to permit examination and verification of 
the forward looking allocation ratio's recognition of each wholesale 
customer's plans, if any, for future alternative or supplementary power 
supplies. For the purpose of preventing anticompetitive effects, 
including CWIP-induced price squeeze and double whammy, sufficient 
recognition of such plans may require the public utility applicant to 
provide for separate customer groups or provide for a rate design 
incorporating selected CWIP project credits.
    (d) Effective date. If a public utility proposes in its filed rates 
to include CWIP in rate base under this section, that portion of the 
rate related to CWIP is collectible at the time the general rates become 
effective pursuant to Commission order, whether or not subject to 
refund, except as provided in paragraph (g) of this section.
    (e) Discontinuance of AFUDC. On the date that any proposed rate that 
includes CWIP in rate base becomes effective, a public utility that has 
included CWIP in rate base must discontinue the capitalization of any 
AFUDC related to those amounts of CWIP is rate base.
    (f) Accounting procedures. When a public utility files to include 
CWIP in its rate base pursuant to this section, it must propose 
accounting procedures in that rate schedule filing that:
    (1) Ensure that wholesale customers will not be charged for both 
capitalized AFUDC and corresponding amounts of CWIP proposed to be 
included in rate base; and
    (2) Ensure that wholesale customers will not be charged for any 
corresponding AFUDC capitalized as a result of different accounting or 
ratemaking treatments accorded CWIP by state or local regulatory 
authorities.
    (g) Anticompetitive procedures--(1) Filing requirements. In order to 
facilitate Commission review of the anticompetitive effects of 
applications for CWIP pursuant to Sec. 35.26(c)(3), a public utility 
applying for rates based upon inclusion of such CWIP in rate base must 
include the following information in its filing:
    (i) The percentage of the proposed increase in the jurisdictional 
rate level attributable to non-pollution control/fuel conversion CWIP 
and the percentage of non-pollution control/fuel conversion CWIP 
supporting the proposed rate level;
    (ii) The percentage of non-pollution control/fuel conversion CWIP 
permitted by the state or local commission supporting the current retail 
rates of the public utility against which the relevant wholesale 
customers compete; and
    (iii) Individual earned rate of return analyses of each of the 
competing retail rates developed on a basis fully consistent with the 
wholesale cost of service for the same test period if the requested 
percentage of wholesale non-pollution control/fuel conversion CWIP 
exceeds that permitted by the relevant state or local authority to 
support the currently competing retail rates.
    (2) Preliminary relief. (i) If an intervenor in its initial pleading 
alleges that a price squeeze will occur as a direct result of the public 
utility's request for CWIP pursuant to Sec. 35.26(c)(3), makes a 
showing that it is likely to incur harm if such CWIP is allowed subject 
to refund, and makes a showing of how the harm to the intervenor would 
be mitigated or eliminated by the types of preliminary relief requested, 
the Commission will consider preliminary relief at the suspension stage 
of the case pursuant to paragraph (g)(4) of this section. In determining 
whether to grant preliminary relief, the Commission will balance the 
following public interest considerations:

[[Page 287]]

    (A) The harm to the intervenor if it is not granted preliminary 
relief from the requested CWIP;
    (B) The harm to the public utility if, during the interim period of 
preliminary relief, the public utility is required to recover its 
financing charges later through AFUDC rather than immediately through 
CWIP; and
    (C) Mitigating bias against investment in new plants, ensuring 
accurate price signals, and fostering rate stability.
    (ii) Whether or not preliminary relief is granted at the suspension 
stage will not preclude consideration of further interim or final 
remedies later in the proceedings, if warranted.
    (3) If the Commission makes a final determination that a price 
squeeze due solely to allowance of a lower percentage of non-pollution 
control/fuel conversion CWIP in the public utility's retail rate base 
than allowed by this Commission, the Commission will consider an 
adjustment to non-pollution control/fuel conversion CWIP in order to 
eliminate or mitigate the price squeeze.
    (4) If an intervenor meets the requirements of paragraph (g)(2) of 
this section, the Commission, depending on the type of showing made 
including the likelihood, immediacy, and severity of any anticompetitive 
harm, may:
    (i) Suspend the entire rate increase or all or a portion of the non-
pollution control/fuel conversion CWIP component for up to five months;
    (ii) Allow all or a portion of the non-pollution control/fuel 
conversion CWIP only prospectively from the issuance of the Commission's 
final order on rehearing on the matter; or
    (iii) Take such other action as is proper under the circumstances.

[Order 474, 52 FR 23965, June 26, 1987, as amended by Order 474-A, 52 FR 
35702, Sept. 23, 1987; Order 474-B, 54 FR 32804, Aug. 10, 1989. 
Redesignated by Order 545, 57 FR 53990, Nov. 16, 1992, as amended by 
Order 626, 67 FR 36096, May 23, 2002]



Sec. 35.26  Recovery of stranded costs by public utilities and transmitting 

utilities.

    (a) Purpose. This section establishes the standards that a public 
utility or transmitting utility must satisfy in order to recover 
stranded costs.
    (b) Definitions--1) Wholesale stranded cost means any legitimate, 
prudent and verifiable cost incurred by a public utility or a 
transmitting utility to provide service to:
    (i) A wholesale requirements customer that subsequently becomes, in 
whole or in part, an unbundled wholesale transmission services customer 
of such public utility or transmitting utility; or
    (ii) A retail customer that subsequently becomes, either directly or 
through another wholesale transmission purchaser, an unbundled wholesale 
transmission services customer of such public utility or transmitting 
utility.
    (2) Wholesale requirements customer means a customer for whom a 
public utility or transmitting utility provides by contract any portion 
of its bundled wholesale power requirements.
    (3) Wholesale transmission services means the transmission of 
electric energy sold, or to be sold, at wholesale in interstate commerce 
or ordered pursuant to section 211 of the Federal Power Act (FPA).
    (4) Wholesale requirements contract means a contract under which a 
public utility or transmitting utility provides any portion of a 
customer's bundled wholesale power requirements.
    (5) Retail stranded cost means any legitimate, prudent and 
verifiable cost incurred by a public utility to provide service to a 
retail customer that subsequently becomes, in whole or in part, an 
unbundled retail transmission services customer of that public utility.
    (6) Retail transmission services means the transmission of electric 
energy sold, or to be sold, in interstate commerce directly to a retail 
customer.
    (7) New wholesale requirements contract means any wholesale 
requirements contract executed after July 11, 1994, or extended or 
renegotiated to be effective after July 11, 1994.
    (8) Existing wholesale requirements contract means any wholesale 
requirements contract executed on or before July 11, 1994.
    (c) Recovery of wholesale stranded costs--1) General requirement. A 
public utility or transmitting utility will be

[[Page 288]]

allowed to seek recovery of wholesale stranded costs only as follows:
    (i) No public utility or transmitting utility may seek recovery of 
wholesale stranded costs if such recovery is explicitly prohibited by a 
contract or settlement agreement, or by any power sales or transmission 
rate schedule or tariff.
    (ii) No public utility or transmitting utility may seek recovery of 
stranded costs associated with a new wholesale requirements contract if 
such contract does not contain an exit fee or other explicit stranded 
cost provision.
    (iii) If wholesale stranded costs are associated with a new 
wholesale requirements contract containing an exit fee or other explicit 
stranded cost provision, and the seller under the contract is a public 
utility, the public utility may seek recovery of such costs, in 
accordance with the contract, through rates for electric energy under 
sections 205-206 of the FPA. The public utility may not seek recovery of 
such costs through any transmission rate for FPA section 205 or 211 
transmission services.
    (iv) If wholesale stranded costs are associated with a new wholesale 
requirements contract, and the seller under the contract is a 
transmitting utility but not also a public utility, the transmitting 
utility may not seek an order from the Commission allowing recovery of 
such costs.
    (v) If wholesale stranded costs are associated with an existing 
wholesale requirements contract, if the seller under such contract is a 
public utility, and if the contract does not contain an exit fee or 
other explicit stranded cost provision, the public utility may seek 
recovery of stranded costs only as follows:
    (A) If either party to the contract seeks a stranded cost amendment 
pursuant to a section 205 or section 206 filing under the FPA made prior 
to the expiration of the contract, and the Commission accepts or 
approves an amendment permitting recovery of stranded costs, the public 
utility may seek recovery of such costs through FPA section 205-206 
rates for electric energy.
    (B) If the contract is not amended to permit recovery of stranded 
costs as described in paragraph (c)(1)(v)(A) of this section, the public 
utility may file a proposal, prior to the expiration of the contract, to 
recover stranded costs through FPA section 205-206 or section 211-212 
rates for wholesale transmission services to the customer.
    (vi) If wholesale stranded costs are associated with an existing 
wholesale requirements contract, if the seller under such contract is a 
transmitting utility but not also a public utility, and if the contract 
does not contain an exit fee or other explicit stranded cost provision, 
the transmitting utility may seek recovery of stranded costs through FPA 
section 211-212 transmission rates.
    (vii) If a retail customer becomes a legitimate wholesale 
transmission customer of a public utility or transmitting utility, e.g., 
through municipalization, and costs are stranded as a result of the 
retail-turned-wholesale customer's access to wholesale transmission, the 
utility may seek recovery of such costs through FPA section 205-206 or 
section 211-212 rates for wholesale transmission services to that 
customer.
    (2) Evidentiary demonstration for wholesale stranded cost recovery. 
A public utility or transmitting utility seeking to recover wholesale 
stranded costs in accordance with paragraphs (c)(1) (v) through (vii) of 
this section must demonstrate that:
    (i) It incurred costs to provide service to a wholesale requirements 
customer or retail customer based on a reasonable expectation that the 
utility would continue to serve the customer;
    (ii) The stranded costs are not more than the customer would have 
contributed to the utility had the customer remained a wholesale 
requirements customer of the utility, or, in the case of a retail-
turned-wholesale customer, had the customer remained a retail customer 
of the utility; and
    (iii) The stranded costs are derived using the following formula: 
Stranded Cost Obligation = (Revenue Stream Estimate--Competitive Market 
Value Estimate) x Length of Obligation (reasonable expectation period).

[[Page 289]]

    (3) Rebuttable presumption. If a public utility or transmitting 
utility seeks recovery of wholesale stranded costs associated with an 
existing wholesale requirements contract, as permitted in paragraph 
(c)(1) of this section, and the existing wholesale requirements contract 
contains a notice provision, there will be a rebuttable presumption that 
the utility had no reasonable expectation of continuing to serve the 
customer beyond the term of the notice provision.
    (4) Procedure for customer to obtain stranded cost estimate. A 
customer under an existing wholesale requirements contract with a public 
utility seller may obtain from the seller an estimate of the customer's 
stranded cost obligation if it were to leave the public utility's 
generation supply system by filing with the public utility a request for 
an estimate at any time prior to the termination date specified in its 
contract.
    (i) The public utility must provide a response within 30 days of 
receiving the request. The response must include:
    (A) An estimate of the customer's stranded cost obligation based on 
the formula in paragraph (c)(2)(iii) of this section;
    (B) Supporting detail indicating how each element in the formula was 
derived;
    (C) A detailed rationale justifying the basis for the utility's 
reasonable expectation of continuing to serve the customer beyond the 
termination date in the contract;
    (D) An estimate of the amount of released capacity and associated 
energy that would result from the customer's departure; and
    (E) The utility's proposal for any contract amendment needed to 
implement the customer's payment of stranded costs.
    (ii) If the customer disagrees with the utility's response, it must 
respond to the utility within 30 days explaining why it disagrees. If 
the parties cannot work out a mutually agreeable resolution, they may 
exercise their rights to Commission resolution under the FPA.
    (5) A customer must be given the option to market or broker a 
portion or all of the capacity and energy associated with any stranded 
costs claimed by the public utility.
    (i) To exercise the option, the customer must so notify the utility 
in writing no later than 30 days after the public utility files its 
estimate of stranded costs for the customer with the Commission.
    (A) Before marketing or brokering can begin, the utility and 
customer must execute an agreement identifying, at a minimum, the amount 
and the price of capacity and associated energy the customer is entitled 
to schedule, and the duration of the customer's marketing or brokering 
of such capacity and energy.
    (ii) If agreement over marketing or brokering cannot be reached, and 
the parties seek Commission resolution of disputed issues, upon issuance 
of a Commission order resolving the disputed issues, the customer may 
reevaluate its decision in paragraph (c)(5)(i) of this section to 
exercise the marketing or brokering option. The customer must notify the 
utility in writing within 30 days of issuance of the Commission's order 
resolving the disputed issues whether the customer will market or broker 
a portion or all of the capacity and energy associated with stranded 
costs allowed by the Commission.
    (iii) If a customer undertakes the brokering option, and the 
customer's brokering efforts fail to produce a buyer within 60 days of 
the date of the brokering agreement entered into between the customer 
and the utility, the customer shall relinquish all rights to broker the 
released capacity and associated energy and will pay stranded costs as 
determined by the formula in paragraph (c)(2)(iii) of this section.
    (d) Recovery of retail stranded costs--1) General requirement. A 
public utility may seek to recover retail stranded costs through rates 
for retail transmission services only if the state regulatory authority 
does not have authority under state law to address stranded costs at the 
time the retail wheeling is required.
    (2) Evidentiary demonstration necessary for retail stranded cost 
recovery. A public utility seeking to recover retail stranded costs in 
accordance with paragraph

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(d)(1) of this section must demonstrate that:
    (i) It incurred costs to provide service to a retail customer that 
obtains retail wheeling based on a reasonable expectation that the 
utility would continue to serve the customer; and
    (ii) The stranded costs are not more than the customer would have 
contributed to the utility had the customer remained a retail customer 
of the utility.

[Order 888-A, 62 FR 12460, Mar. 14, 1997]



Sec. 35.27  Authority of State commissions.

    Nothing in this part--
    (a) Shall be construed as preempting or affecting any jurisdiction a 
State commission or other State authority may have under applicable 
State and Federal law, or
    (b) Limits the authority of a State commission in accordance with 
State and Federal law to establish
    (1) Competitive procedures for the acquisition of electric energy, 
including demand-side management, purchased at wholesale, or
    (2) Non-discriminatory fees for the distribution of such electric 
energy to retail consumers for purposes established in accordance with 
State law.

[Order 697, 72 FR 40038, July 20, 2007]



Sec. 35.28  Non-discriminatory open access transmission tariff.

    (a) Applicability. This section applies to any public utility that 
owns, controls or operates facilities used for the transmission of 
electric energy in interstate commerce and to any non-public utility 
that seeks voluntary compliance with jurisdictional transmission tariff 
reciprocity conditions.
    (b) Definitions--(1) Requirements service agreement means a contract 
or rate schedule under which a public utility provides any portion of a 
customer's bundled wholesale power requirements.
    (2) Economy energy coordination agreement means a contract, or 
service schedule thereunder, that provides for trading of electric 
energy on an ``if, as and when available'' basis, but does not require 
either the seller or the buyer to engage in a particular transaction.
    (3) Non-economy energy coordination agreement means any non-
requirements service agreement, except an economy energy coordination 
agreement as defined in paragraph (b)(2) of this section.
    (4) Demand response means a reduction in the consumption of electric 
energy by customers from their expected consumption in response to an 
increase in the price of electric energy or to incentive payments 
designed to induce lower consumption of electric energy.
    (5) Demand response resource means a resource capable of providing 
demand response.
    (6) An operating reserve shortage means a period when the amount of 
available supply falls short of demand plus the operating reserve 
requirement.
    (7) Market Monitoring Unit means the person or entity responsible 
for carrying out the market monitoring functions that the Commission has 
ordered Commission-approved independent system operators and regional 
transmission organizations to perform.
    (8) Market Violation means a tariff violation, violation of a 
Commission-approved order, rule or regulation, market manipulation, or 
inappropriate dispatch that creates substantial concerns regarding 
unnecessary market inefficiencies.
    (c) Non-discriminatory open access transmission tariffs.
    (1) Every public utility that owns, controls, or operates facilities 
used for the transmission of electric energy in interstate commerce must 
have on file with the Commission a tariff of general applicability for 
transmission services, including ancillary services, over such 
facilities. Such tariff must be the open access pro forma tariff 
contained in Order No. 888, FERC Stats. & Regs. ] 31,036 (Final Rule on 
Open Access and Stranded Costs), as revised by the open access pro forma 
tariff contained in Order No. 890, FERC Stats. & Regs. ] 31,241 (Final 
Rule on Open Access Reforms) and further revised in Order No. 1000, FERC 
Stats. & Regs. ] 31,323 (Final Rule on Transmission Planning and Cost 
Allocation by Transmission Owning and Operating Public Utilities), or 
such other open access tariff as may be approved by the Commission 
consistent with Order No. 888, FERC Stats. & Regs ] 31,306, Order No. 
890, FERC Stats. & Regs. ] 32,241, and Order No. 1000, FERC Stats. & 
Regs. ] 31,323.

[[Page 291]]

    (i) Subject to the exceptions in paragraphs (c)(1)(ii), (c)(1)(iii), 
(c)(1)(iv) and (c)(1)(v) of this section, the pro forma tariff contained 
in Order No. 888, FERC Stats. & Regs. ] 31,036, as revised by the open 
access pro forma tariff contained in Order No. 890, FERC Stats. & Regs. 
] 31,241 and further revised in Order No. 1000, FERC Stats. & Regs. ] 
31,323, and accompanying rates, must be filed no later than 60 days 
prior to the date on which a public utility would engage in a sale of 
electric energy at wholesale in interstate commerce or in the 
transmission of electric energy in interstate commerce.
    (ii) If a public utility owns, controls, or operates facilities used 
for the transmission of electric energy in interstate commerce as of 
October 11, 2011, it must file the revisions to the pro forma tariff 
contained in Order No. 890, FERC Stats. & Regs. ] 31,241, as amended by 
Order No. 1000, FERC Stats. & Regs. ] 31,323, pursuant to section 206 of 
the FPA and accompanying rates pursuant to section 205 of the FPA in 
accordance with the procedures set forth in Order No. 890, FERC Stats. & 
Regs. ] 31,241 and Order No. 1000, FERC Stats. & Regs ] 31,323.
    (iii) If a public utility owns, controls, or operates transmission 
facilities used for the transmission of electric energy in interstate 
commerce as of October 11, 2011, such facilities are jointly owned with 
a non-public utility, and the joint ownership contract prohibits 
transmission service over the facilities to third parties, the public 
utility with respect to access over the public utility's share of the 
jointly owned facilities must file the revisions to the pro forma tariff 
contained in Order No. 890, FERC Stats. & Regs. ] 31,241 as amended by 
Order No. 1000, FERC Stats. & Regs. ] 31,323, pursuant to section 206 of 
the FPA and accompanying rates pursuant to section 205 of the FPA.
    (iv) Any public utility whose transmission facilities are under the 
independent control of a Commission-approved ISO or RTO may satisfy its 
obligation under paragraph (c)(1) of this section, with respect to such 
facilities, through the open access transmission tariff filed by the ISO 
or RTO.
    (v) If a public utility obtains a waiver of the tariff requirement 
pursuant to paragraph (d) of this section, it does not need to file the 
pro forma tariff required by this section.
    (vi) Any public utility that seeks a deviation from the pro forma 
tariff contained in Order No. 888, FERC Stats. & Regs. ] 31,036, as 
revised in Order No. 890, FERC Stats. & Regs. ] 31,241 and Order No. 
1000, FERC Stats. & Regs. ] 31,323, must demonstrate that the deviation 
is consistent with the principles of Order No. 888, FERC Stats. & Regs ] 
31,036, Order No. 890, FERC Stats. & Regs. ] 31,241, and Order No. 1000, 
FERC Stats. & Regs. ] 31,323.
    (vii) Each public utility's open access transmission tariff must 
include the standards incorporated by reference in part 38 of this 
chapter.
    (2) Subject to the exceptions in paragraphs (c)(2)(i) and 
(c)(3)(iii) of this section, every public utility that owns, controls, 
or operates facilities used for the transmission of electric energy in 
interstate commerce, and that uses those facilities to engage in 
wholesale sales and/or purchases of electric energy, or unbundled retail 
sales of electric energy, must take transmission service for such sales 
and/or purchases under the open access transmission tariff filed 
pursuant to this section.
    (i) For sales of electric energy pursuant to a requirements service 
agreement executed on or before July 9, 1996, this requirement will not 
apply unless separately ordered by the Commission. For sales of electric 
energy pursuant to a bilateral economy energy coordination agreement 
executed on or before July 9, 1996, this requirement is effective on 
December 31, 1996. For sales of electric energy pursuant to a bilateral 
non-economy energy coordination agreement executed on or before July 9, 
1996, this requirement will not apply unless separately ordered by the 
Commission.
    (ii) [Reserved]
    (3) Every public utility that owns, controls, or operates facilities 
used for the transmission of electric energy in interstate commerce, and 
that is a member of a power pool, public utility holding company, or 
other multi-lateral trading arrangement or agreement that contains 
transmission rates, terms or conditions, must have on file a joint pool-
wide or system-wide open

[[Page 292]]

access transmission tariff, which tariff must be the pro forma tariff 
contained in Order No. 888, FERC Stats. & Regs. ] 31,036, as revised by 
the pro forma tariff contained in Order No. 890, FERC Stats. & Regs. ] 
31,241 and further revised in Order No. 1000, FERC Stats. & Regs. ] 
31,323, or such other open access tariff as may be approved by the 
Commission consistent with Order No. 888, FERC Stats. & Regs. ] 31,036, 
Order No. 890, FERC Stats. & Regs. ] 31,241, and Order No. 1000, FERC 
Stats. & Regs. ] 31,323.
    (i) For any power pool, public utility holding company or other 
multi-lateral arrangement or agreement that contains transmission rates, 
terms or conditions and that is executed after October 11, 2011, this 
requirement is effective on the date that transactions begin under the 
arrangement or agreement.
    (ii) For any power pool, public utility holding company or other 
multi-lateral arrangement or agreement that contains transmission rates, 
terms or conditions and that is executed on or before October 11, 2011, 
a public utility member of such power pool, public utility holding 
company or other multi-lateral arrangement or agreement that owns, 
controls, or operates facilities used for the transmission of electric 
energy in interstate commerce must file the revisions to its joint pool-
wide or system-wide open access transmission tariff consistent with 
Order No. 890, FERC Stats. & Regs. ] 31,241 as amended by Order No. 
1000, FERC Stats. & Regs. ] 31,323, pursuant to section 206 of the FPA 
and accompanying rates pursuant to section 205 of the FPA in accordance 
with the procedures set forth in Order No. 890, FERC Stats. & Regs. ] 
31,241 and Order No. 1000, FERC Stats. & Regs ] 31,323.
    (iii) A public utility member of a power pool, public utility 
holding company or other multi-lateral arrangement or agreement that 
contains transmission rates, terms or conditions and that is executed on 
or before July 9, 1996 must take transmission service under a joint 
pool-wide or system-wide open access transmission tariff filed pursuant 
to this section for wholesale trades among the pool or system members.
    (4) Consistent with paragraph (c)(1) of this section, every 
Commission-approved ISO or RTO must have on file with the Commission a 
tariff of general applicability for transmission services, including 
ancillary services, over such facilities. Such tariff must be the pro 
forma tariff contained in Order No. 888, FERC Stats. & Regs. ] 31,036, 
as revised by the pro forma tariff contained in Order No. 890, FERC 
Stats. & Regs. ] 31,241 and further revised in Order No. 1000, FERC 
Stats. & Regs. ] 31,323, or such other open access tariff as may be 
approved by the Commission consistent with Order No. 888, FERC Stats. & 
Reg. ] 31,036, Order No. 890, FERC Stats. & Regs. ] 31,241, and Order 
No. 1000, FERC Stats. & Regs. ] 31,323.
    (i) Subject to paragraph (c)(4)(ii) of this section, a Commission-
approved ISO or RTO must file the revisions to the pro forma tariff 
contained in Order No. 890, FERC Stats. & Regs. ] 31,241 as amended by 
Order No. 1000, FERC Stats. & Regs. ] 31,323, pursuant to section 206 of 
the FPA and accompanying rates pursuant to section 205 of the FPA in 
accordance with the procedures set forth in Order No. 890, FERC Stats. & 
Regs. ] 31,241 and Order No. 1000, FERC Stats. & Regs ] 31,323.
    (ii) If a Commission-approved ISO or RTO can demonstrate that its 
existing open access tariff is consistent with or superior to the 
revisions to the pro forma tariff contained in Order No. 888, FERC 
Stats. & Regs. ] 31,036, as revised by the pro forma tariff in Order No. 
890, FERC Stats. & Regs. ] 31,241 and further revised in Order No. 1000, 
FERC Stats. & Regs. ] 31,323, or any portions thereof, the Commission-
approved ISO or RTO may instead set forth such demonstration in its 
filing pursuant to section 206 in accordance with the procedures set 
forth in Order No. 1000, FERC Stats. & Regs ] 31,323.
    (d) Waivers. A public utility subject to the requirements of this 
section and Order No. 889, FERC Stats. & Regs. ] 31,037 (Final Rule on 
Open Access Same-Time Information System and Standards of Conduct) may 
file a request for waiver of all or part of the requirements of this 
section, or Part 37 (Open Access Same-Time Information System and 
Standards of Conduct for Public Utilities), for good cause shown.

[[Page 293]]

Except as provided in paragraph (f) of this section, an application for 
waiver must be filed either:
    (1) No later than October 11, 2011, or
    (2) No later than 60 days prior to the time the public utility would 
otherwise have to comply with the requirement.
    (e) Non-public utility procedures for tariff reciprocity compliance. 
(1) A non-public utility may submit a transmission tariff and a request 
for declaratory order that its voluntary transmission tariff meets the 
requirements of Order No. 888, FERC Stats. & Regs. ] 31,036, Order No. 
890, FERC Stats. & Regs. ] 31,241, and Order No. 1000, FERC Stats. & 
Regs. ] 31,323.
    (i) Any submittal and request for declaratory order submitted by a 
non-public utility will be provided an NJ (non-jurisdictional) docket 
designation.
    (ii) If the submittal is found to be an acceptable transmission 
tariff, an applicant in a Federal Power Act (FPA) section 211 or 211A 
proceeding against the non-public utility shall have the burden of proof 
to show why service under the open access tariff is not sufficient and 
why a section 211 or 211A order should be granted.
    (2) A non-public utility may file a request for waiver of all or 
part of the reciprocity conditions contained in a public utility open 
access tariff, for good cause shown. An application for waiver may be 
filed at any time.
    (f) Standard generator interconnection procedures and agreements. 
(1) Every public utility that is required to have on file a non-
discriminatory open access transmission tariff under this section must 
amend such tariff by adding the standard interconnection procedures and 
agreement contained in Order No. 2003, FERC Stats. & Regs. & 31,146 
(Final Rule on Generator Interconnection), as amended by the Commission 
in Order No. 661, FERC Stats. & Regs. ] 31,186 (Final Rule on 
Interconnection for Wind Energy), and the standard small generator 
interconnection procedures and agreement contained in Order No. 2006, 
FERC Stats. & Regs. ] 31,180 (Final Rule on Small Generator 
Interconnection), or such other interconnection procedures and 
agreements as may be approved by the Commission consistent with Order 
No. 2003, FERC Stats. & Regs. & 31,146 (Final Rule on Generator 
Interconnection) and Order No. 2006, FERC Stats. & Regs. ] 31,180 (Final 
Rule on Small Generator Interconnection).
    (i) The amendment to implement the Final Rule on Generator 
Interconnection required by the preceding subsection must be filed no 
later than January 20, 2004.
    (ii) The amendment to implement the Final Rule on Small Generator 
Interconnection required by the preceding subsection must be filed no 
later than August 12, 2005.
    (iii) The amendment to implement the Final Rule on Interconnection 
for Wind Energy required by the preceding subsection must be filed no 
later than December 30, 2005.
    (iv) Any public utility that seeks a deviation from the standard 
interconnection procedures and agreement contained in Order No. 2003, 
FERC Stats. & Regs. & 31,146 (Final Rule on Generator Interconnection), 
as amended by the Commission in Order No. 661, FERC Stats. & Regs. ] 
31,186 (Final Rule on Interconnection for Wind Energy), or the standard 
small generator interconnection procedures and agreement contained in 
Order No. 2006, FERC Stats. & Regs. ] 31,180 (Final Rule on Small 
Generator Interconnection), must demonstrate that the deviation is 
consistent with the principles of either Order No. 2003, FERC Stats. & 
Regs. & 31,146 (Final Rule on Generator Interconnection) or Order No. 
2006, FERC Stats. & Regs. ] 31,180 (Final Rule on Small Generator 
Interconnection).
    (2) The non-public utility procedures for tariff reciprocity 
compliance described in paragraph (e) of this section are applicable to 
the standard interconnection procedures and agreements.
    (3) A public utility subject to the requirements of this paragraph 
pertaining to the Final Rule on Generator Interconnection may file a 
request for waiver of all or part of the requirements of this paragraph, 
for good cause shown. An application for waiver must be filed either:
    (i) No later than January 20, 2004, or
    (ii) No later than 60 days prior to the time the public utility 
would otherwise

[[Page 294]]

have to comply with the requirements of this paragraph.
    (4) A public utility subject to the requirements of this paragraph 
pertaining to the Final Rule on Small Generator Interconnection may file 
a request for waiver of all or part of the requirements of this 
paragraph, for good cause shown. An application for waiver must be filed 
either:
    (i) No later than August 12, 2005, or
    (ii) No later than 60 days prior to the time the public utility 
would otherwise have to comply with the requirements of this paragraph.
    (g) Tariffs and operations of Commission-approved independent system 
operators and regional transmission organizations.
    (1) Demand response and pricing.
    (i) Ancillary services provided by demand response resources.
    (A) Every Commission-approved independent system operator or 
regional transmission organization that operates organized markets based 
on competitive bidding for energy imbalance, spinning re serves 
,supplemental reserves, reactive power and voltage control, or 
regulation and frequency response ancillary services (or its functional 
equivalent in the Commission-approved independent system operator's or 
regional transmission organization's tariff) must accept bids from 
demand response resources in these markets for that product on a basis 
comparable to any other resources, if the demand response resource meets 
the necessary technical requirements under the tariff, and submits a bid 
under the Commission-approved independent system operator's or regional 
transmission organization's bidding rules at or below the market-
clearing price, unless not permitted by the laws or regulations of the 
relevant electric retail regulatory authority.
    (B) Each Commission-approved independent system operator or regional 
transmission organization must allow providers of a demand response 
resource to specify the following in their bids:
    (1) A maximum duration in hours that the demand response resource 
may be dispatched;
    (2) A maximum number of times that the demand response resource may 
be dispatched during a day; and
    (3) A maximum amount of electric energy reduction that the demand 
response resource may be required to provide either daily or weekly.
    (ii) Removal of deviation charges. A Commission-approved independent 
system operator or regional transmission organization with a tariff that 
contains a day-ahead and a real-time market may not assess charge to a 
purchaser of electric energy in its day-ahead market for purchasing less 
power in the real-time market during a real-time market period for which 
the Commission-approved independent system operator or regional 
transmission organization declares an operating reserve shortage or 
makes a generic request to reduce load to avoid an operating reserve 
shortage.
    (iii) Aggregation of retail customers. Each Commission-approved 
independent system operator and regional transmission organization must 
accept bids from an aggregator of retail customers that aggregates the 
demand response of the customers of utilities that distributed more than 
4 million megawatt-hours in the previous fiscal year, and the customers 
of utilities that distributed 4 million megawatt-hours or less in the 
previous fiscal year, where the relevant electric retail regulatory 
authority permits such customers' demand response to be bid into 
organized markets by an aggregator of retail customers. An independent 
system operator or regional transmission organization must not accept 
bids from an aggregator of retail customers that aggregates the demand 
response of the customers of utilities that distributed more than 4 
million megawatt-hours in the previous fiscal year, where the relevant 
electric retail regulatory authority prohibits such customers' demand 
response to be bid into organized markets by an aggregator of retail 
customers, or the customers of utilities that distributed 4 million 
megawatt-hours or less in the previous fiscal year, unless the relevant 
electric retail regulatory authority permits such customers' demand 
response to be bid into organized markets by an aggregator of retail 
customers.

[[Page 295]]

    (iv) Price formation during periods of operating reserve shortage.
    (A) Each Commission-approved independent system operator or regional 
transmission organization must modify its market rules to allow the 
market-clearing price during periods of operating reserve shortage to 
reach a level that rebalances supply and demand so as to maintain 
reliability while providing sufficient provisions for mitigating market 
power.
    (B) A Commission-approved independent system operator or regional 
transmission organization may phase in this modification of its market 
rules.
    (v) Demand response compensation in energy markets. Each Commission-
approved independent system operator or regional transmission 
organization that has a tariff provision permitting demand response 
resources to participate as a resource in the energy market by reducing 
consumption of electric energy from their expected levels in response to 
price signals must:
    (A) Pay to those demand response resources the market price for 
energy for these reductions when these demand response resources have 
the capability to balance supply and demand and when payment of the 
market price for energy to these resources is cost-effective as 
determined by a net benefits test accepted by the Commission;
    (B) Allocate the costs associated with demand response compensation 
proportionally to all entities that purchase from the relevant energy 
market in the area(s) where the demand response reduces the market price 
for energy at the time when the demand response resource is committed or 
dispatched.
    (2) Long-term power contracting in organized markets. Each 
Commission-approved independent system operator or regional transmission 
organization must provide a portion of its Web site for market 
participants to post offers to buy or sell power on a long-term basis.
    (3) Market monitoring policies.
    (i) Each Commission-approved independent system operator or regional 
transmission organization must modify its tariff provisions governing 
its Market Monitoring Unit to reflect the directives provided in 
OrderNo. 719, including the following:
    (A) Each Commission-approved independent system operator or regional 
transmission organization must include in its tariff a provision to 
provide its Market Monitoring Unit access to Commission-approved 
independent system operator and regional transmission organization 
market data, resources and personnel to enable the MarketMonitoring Unit 
to carry out its functions.
    (B) The tariff provision must provide the Market Monitoring Unit 
complete access to the Commission-approved independent system operator's 
and regional transmission organization's databases of market 
information.
    (C) The tariff provision must provide that any data created by the 
Market Monitoring Unit, including, but not limited to, reconfiguring of 
the Commission-approved independent system operator's and regional 
transmission organization's data, will be kept within the exclusive 
control of the Market Monitoring Unit.
    (D) The Market Monitoring Unit must report to the Commission-
approved independent system operator's or regional transmission 
organization's board of directors, with its management members removed, 
or to an independent committee of the Commission-approved independent 
system operator's or regional transmission organization's board of 
directors. A Commission-approved independent system operator or regional 
transmission organization that has both an internal Market Monitoring 
Unit and an external Market Monitoring Unit may permit the internal 
Market Monitoring Unit to report to management and the external Market 
Monitoring Unit to report to the Commission-approved independent system 
operator's or regional transmission organization's board of directors 
with its management members removed, or to an independent committee of 
the Commission-approved independent system operator or regional 
transmission organization board of directors. If the internal market 
monitor is responsible for carrying out any or all of the core Market 
Monitoring Unit functions identified in paragraph (g)(3)(ii) of this 
section, the

[[Page 296]]

internal market monitor must report to the independent system operator's 
or regional transmission organization's board of directors.
    (E) A Commission-approved independent system operator or regional 
transmission organization may not alter the reports generated by the 
Market Monitoring Unit, or dictate the conclusions reached by the Market 
Monitoring Unit.
    (F) Each Commission-approved independent system operator or regional 
transmission organization must consolidate the core Market Monitoring 
Unit provisions into one section of its tariff. Each independent system 
operator or regional transmission organization must include a mission 
statement in the introduction to the Market Monitoring Unit provisions 
that identifies the Market Monitoring Unit's goals, including the 
protection of consumers and market participants by the identification 
and reporting of market design flaws and market power abuses.
    (ii) Core Functions of Market Monitoring Unit. The Market Monitoring 
Unit must perform the following core functions:
    (A) Evaluate existing and proposed market rules, tariff provisions 
and market design elements and recommend proposed rule and tariff 
changes to the Commission-approved independent system operator or 
regional transmission organization, to the Commission's Office of Energy 
Market Regulation staff and to other interested entities such as state 
commissions and market participants, provided that:
    (1) The Market Monitoring Unit is not to effectuate its proposed 
market design itself, and
    (2) The Market Monitoring Unit must limit distribution of its 
identifications and recommendations to the independent system operator 
or regional transmission organization and to Commission staff in the 
event it believes broader dissemination could lead to exploitation, with 
an explanation of why further dissemination should be avoided at that 
time.
    (B) Review and report on the performance of the wholesale markets to 
the Commission-approved independent system operator or regional 
transmission organization, the Commission, and other interested entities 
such as state commissions and market participants, on at least a 
quarterly basis and submit a more comprehensive annual state of the 
market report. The Market Monitoring Unit may issue additional reports 
as necessary.
    (C) Identify and notify the Commission's Office of Enforcement staff 
of instances in which a market participant's or the Commission-approved 
independent system operator's or regional transmission organization's 
behavior may require investigation, including, but not limited to, 
suspected Market Violations.
    (iii) Tariff administration and mitigation
    (A) A Commission-approved independent system operator or regional 
transmission organization may not permit its Market Monitoring Unit, 
whether internal or external, to participate in the administration of 
the Commission-approved independent system operator's or regional 
transmission organization's tariff or, except as provided in paragraph 
(g)(3)(iii)(D) of this section, to conduct prospective mitigation.
    (B) A Commission-approved independent system operator or regional 
transmission organization may permit its Market Monitoring Unit to 
provide the inputs required for the Commission-approved independent 
system operator or regional transmission organization to conduct 
prospective mitigation, including, but not limited to, reference levels, 
identification of system constraints, and cost calculations.
    (C) A Commission-approved independent system operator or regional 
transmission organization may allow its Market Monitoring Unit to 
conduct retrospective mitigation.
    (D) A Commission-approved independent system operator or regional 
transmission organization with a hybrid Market Monitoring Unit structure 
may permit its internal market monitor to conduct prospective and/or 
retrospective mitigation, in which case it must assign to its external 
market monitor the responsibility and the tools to monitor the quality 
and appropriateness of the mitigation.

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    (E) Each Commission-approved independent system operator or regional 
transmission organization must identify in its tariff the functions the 
Market Monitoring Unit will perform and the functions the Commission-
approved independent system operator or regional transmission 
organization will perform.
    (iv) Protocols on Market Monitoring Unit referrals to the Commission 
of suspected violations.
    (A) A Market Monitoring Unit is to make a non-public referral to the 
Commission in all instances where the Market Monitoring Unit has reason 
to believe that a Market Violation has occurred. While the Market 
Monitoring Unit need not be able to prove that a Market Violation has 
occurred, the Market Monitoring Unit is to provide sufficient credible 
information to warrant further investigation by the Commission. Once the 
Market Monitoring Unit has obtained sufficient credible information to 
warrant referral to the Commission, the Market Monitoring Unit is to 
immediately refer the matter to the Commission and desist from 
independent action related to the alleged Market Violation. This does 
not preclude the Market Monitoring Unit from continuing to monitor for 
any repeated instances of the activity by the same or other entities, 
which would constitute new Market Violations. The Market Monitoring Unit 
is to respond to requests from the Commission for any additional 
information in connection with the alleged Market Violation it has 
referred.
    (B) All referrals to the Commission of alleged Market Violations are 
to be in writing, whether transmitted electronically, by fax, mail, or 
courier. The Market Monitoring Unit may alert the Commission orally in 
advance of the written referral.
    (C) The referral is to be addressed to the Commission's Director of 
the Office of Enforcement, with a copy also directed to both the 
Director of the Office of Energy Market Regulation and the General 
Counsel.
    (D) The referral is to include, but need not be limited to, the 
following information.
    (1) The name[s] of and, if possible, the contact information for, 
the entity[ies] that allegedly took the action[s] that constituted the 
alleged Market Violation[s];
    (2) The date[s] or time period during which the alleged Market 
Violation[s] occurred and whether the alleged wrongful conduct is 
ongoing;
    (3) The specific rule or regulation, and/or tariff provision, that 
was allegedly violated, or the nature of any inappropriate dispatch that 
may have occurred;
    (4) The specific act[s] or conduct that allegedly constituted the 
Market Violation;
    (5) The consequences to the market resulting from the acts or 
conduct, including, if known, an estimate of economic impact on the 
market;
    (6) If the Market Monitoring Unit believes that the act[s] or 
conduct constituted a violation of the anti-manipulation rule of Part 
1c, a description of the alleged manipulative effect on market prices, 
market conditions, or market rules;
    (7) Any other information the Market Monitoring Unit believes is 
relevant and may be helpful to the Commission.
    (E) Following a referral to the Commission, the Market Monitoring 
Unit is to continue to notify and inform the Commission of any 
information that the Market Monitoring Unit learns of that may be 
related to the referral, but the Market Monitoring Unit is not to 
undertake any investigative steps regarding the referral except at the 
express direction of the Commission or Commission Staff.
    (v) Protocols on Market Monitoring Unit Referrals to the Commission 
of Perceived Market Design Flaws and Recommended Tariff Changes.
    (A) A Market Monitoring Unit is to make a referral to the Commission 
in all instances where the Market Monitoring Unit has reason to believe 
market design flaws exist that it believes could effectively be remedied 
by rule or tariff changes. The Market Monitoring Unit must limit 
distribution of its identifications and recommendations to the 
independent system operator or regional transmission organization and to 
the Commission in the event it believes broader dissemination could lead 
to exploitation, with an explanation of

[[Page 298]]

why further dissemination should be avoided at that time.
    (B) All referrals to the Commission relating to perceived market 
design flaws and recommended tariff changes are to be in writing, 
whether transmitted electronically, by fax, mail, or courier. The Market 
Monitoring Unit may alert the Commission orally in advance of the 
written referral.
    (C) The referral should be addressed to the Commission's Director of 
the Office of Energy Market Regulation, with copies directed to both the 
Director of the Office of Enforcement and the General Counsel.
    (D) The referral is to include, but need not be limited to, the 
following information.
    (1) A detailed narrative describing the perceived market design 
flaw[s];
    (2) The consequences of the perceived market design flaw[s], 
including, if known, an estimate of economic impact on the market;
    (3) The rule or tariff change(s) that the Market Monitoring Unit 
believes could remedy the perceived market design flaw;
    (4) Any other information the Market Monitoring Unit believes is 
relevant and may be helpful to the Commission.
    (E) Following a referral to the Commission, the Market Monitoring 
Unit is to continue to notify and inform the Commission of any 
additional information regarding the perceived market design flaw, its 
effects on the market, any additional or modified observations 
concerning the rule or tariff changes that could remedy the perceived 
design flaw, any recommendations made by the Market Monitoring Unit to 
the regional transmission organization or independent system operator, 
stakeholders, market participants or state commissions regarding the 
perceived design flaw, and any actions taken by the regional 
transmission organization or independent system operator regarding the 
perceived design flaw.
    (vi) Market Monitoring Unit ethics standards. Each Commission-
approved independent system operator or regional transmission 
organization must include in its tariff ethical standards for its Market 
Monitoring Unit and the employees of its Market Monitoring Unit. At a 
minimum, the ethics standards must include the following requirements:
    (A) The Market Monitoring Unit and its employees must have no 
material affiliation with any market participant or affiliate.
    (B) The Market Monitoring Unit and its employees must not serve as 
an officer, employee, or partner of a market participant.
    (C) The Market Monitoring Unit and its employees must have no 
material financial interest in any market participant or affiliate with 
potential exceptions for mutual funds and non-directed investments.
    (D) The Market Monitoring Unit and its employees must not engage in 
any market transactions other than the performance of their duties under 
the tariff.
    (E) The Market Monitoring Unit and its employees must not be 
compensated, other than by the Commission-approved independent system 
operator or regional transmission organization that retains or employs 
it, for any expert witness testimony or other commercial services, 
either to the Commission-approved independent system operator or 
regional transmission organization or to any other party, in connection 
with any legal or regulatory proceeding or commercial transaction 
relating to the Commission-approved independent system operator or 
regional transmission organization or to the Commission-approved 
independent system operator's or regional transmission organization's 
markets.
    (F) The Market Monitoring Unit and its employees may not accept 
anything of value from a market participant in excess of a de minimis 
amount.
    (G) The Market Monitoring Unit and its employees must advise a 
supervisor in the event they seek employment with a market participant, 
and must disqualify themselves from participating in any matter that 
would have an effect on the financial interest of the market 
participant.
    (4) Offer and bid data. (i) Unless a Commission-approved independent 
system operator or regional transmission organization obtains Commission 
approval for a different period, each Commission-approved independent 
system

[[Page 299]]

operator and regional transmission organization must release its offer 
and bid data within three months.
    (ii) A Commission-approved independent system operator or regional 
transmission organization must mask the identity of market participants 
when releasing offer and bid data. The Commission-approved independent 
system operators and regional transmission organization may propose a 
time period for eventual unmasking.
    (5) Responsiveness of Commission-approved independent system 
operators and regional transmission organizations. Each Commission-
approved independent system operator or regional transmission 
organization must adopt business practices and procedures that achieve 
Commission-approved independent system operator and regional 
transmission organization board of directors' responsiveness to 
customers and other stakeholders and satisfy the following criteria:
    (i) Inclusiveness. The business practices and procedures must ensure 
that any customer or other stakeholder affected by the operation of the 
Commission-approved independent system operator or regional transmission 
organization, or its representative, is permitted to communicate the 
customer's or other stakeholder's views to the independent system 
operator's or regional transmission organization's board of directors;
    (ii) Fairness in balancing diverse interests. The business practices 
and procedures must ensure that the interests of customers or other 
stakeholders are equitably considered, and that deliberation and 
consideration of Commission-approved independent system operator's and 
regional transmission organization's issues are not dominated by any 
single stakeholder category;
    (iii) Representation of minority positions. The business practices 
and procedures must ensure that, in instances where stakeholders are not 
in total agreement on a particular issue, minority positions are 
communicated to the Commission-approved independent system operator's 
and regional transmission organization's board of directors at the same 
time as majority positions; and
    (iv) Ongoing responsiveness. The business practices and procedures 
must provide for stakeholder input into the Commission-approved 
independent system operator's or regional transmission organization's 
decisions as well as mechanisms to provide feedback to stakeholders to 
ensure that information exchange and communication continue over time.
    (6) Compliance filings. All Commission-approved independent system 
operators and regional transmission organizations must make a compliance 
filing with the Commission as described in Order No. 719 under the 
following schedule:
    (i) The compliance filing addressing the accepting of bids from 
demand response resources in markets for ancillary services on a basis 
comparable to other resources, removal of deviation charges, aggregation 
of retail customers, shortage pricing during periods of operating 
reserve shortage, long-term power contracting in organized markets, 
Market Monitoring Units, Commission-approved independent system 
operators' and regional transmission organizations' board of directors' 
responsiveness, and reporting on the study of the need for further 
reforms to remove barriers to comparable treatment of demand response 
resources must be submitted on or before April 28, 2009.
    (ii) A public utility that is approved as a regional transmission 
organization under Sec. 35.34, or that is not approved but begins to 
operate regional markets for electric energy or ancillary services after 
December 29, 2008, must comply with Order No. 719 and the provisions of 
paragraphs (g)(1) through (g)(5) of this section before beginning 
operations.
    (7) Frequency regulation compensation in ancillary services markets. 
Each Commission-approved independent system operator or regional 
transmission organization that has a tariff that provides for the 
compensation for frequency regulation service must provide such 
compensation based on the actual service provided, including a capacity 
payment that includes the marginal unit's opportunity costs and a 
payment for performance that reflects the quantity of frequency 
regulation service provided

[[Page 300]]

by a resource when the resource is accurately following the dispatch 
signal.

[Order 888, 61 FR 21693, May 10, 1996, as amended by Order 2003, 68 FR 
49929, Aug. 19, 2003; Order 2006, 70 FR 34240, June 13, 2005; Order 661, 
70 FR 75014, Dec. 19, 2005; Order 676, 71 FR 26212, May 4, 2006; Order 
890, 72 FR 12492, Mar. 15, 2007; 73 FR 64167, Oct. 28, 2008; Order 719-
A, 74 FR 37801, July 29, 2009; Order 745, 76 FR 16678, Mar. 24, 2011; 
Order 1000, 76 FR 49963, Aug. 11, 2011; Order 755, 76 FR 67285, Oct. 31, 
2011]



Sec. 35.29  Treatment of special assessments levied under the Atomic Energy 

Act of 1954, as amended by Title XI of the Energy Policy Act of 1992.

    The costs that public utilities incur relating to special 
assessments under the Atomic Energy Act of 1954, as amended by the 
Energy Policy Act of 1992, are costs that may be reflected in 
jurisdictional rates. Public utilities seeking to recover the costs 
incurred relating to special assessments shall comply with the following 
procedures.
    (a) Fuel adjustment clauses. In computing the Account 518 cost of 
nuclear fuel pursuant to Sec. 35.14(a)(6), utilities seeking to recover 
the costs of special assessments through their fuel adjustment clauses 
shall:
    (1) Deduct any expenses associated with special assessments included 
in Account 518;
    (2) Add to Account 518 one-twelfth of any payments made for special 
assessments within the 12-month period ending with the current month; 
and
    (3) Deduct from Account 518 one-twelfth of any refunds of payments 
made for special assessments received within the 12-month period ending 
with the current month that is received from the Federal government 
because the public utility has contested a special assessment or 
overpaid a special assessment.
    (b) Cost of service data requirements. Public utilities filing rate 
applications under Sec. Sec. 35.12 or 35.13 (regardless of whether the 
utility elects the abbreviated, unadjusted Period I, adjusted Period I, 
or Period II cost support requirements) must submit cost data that is 
computed in accordance with the requirements specified in paragraphs (a) 
(1), (2) and (3) of this section.
    (c) Formula rates. Public utilities with formula rates on file that 
provide for the automatic recovery of nuclear fuel costs must reflect 
the costs of special assessments in accordance with the requirements 
specified in paragraphs (a) (1), (2) and (3) of this section.

[Order 557, 58 FR 51221, Oct. 1, 1993. Redesignated by Order 888, 61 FR 
21692, May 10, 1996]



Subpart D_Procedures and Requirements for Public Utility Sales of Power 

      to Bonneville Power Administration Under Northwest Power Act

    Authority: Federal Power Act, 16 U.S.C. 792-828c (1976 and Supp. IV 
1980) and Pacific Northwest Electric Power Planning and Conservation 
Act, 16 U.S.C. 830-839h (Supp. IV (1980)).



Sec. 35.30  General provisions.

    (a) Applicability. This subpart applies to any sales of electric 
power subject to the Commission's jurisdiction under Part II of the 
Federal Power Act from public utilities to the Administrator of the 
Bonneville Power Administration (BPA) at the average system cost (ASC) 
of that utility's resources (electric power generation by the utility) 
pursuant to section 5(c) of the Pacific Northwest Electric Power 
Planning and Conservation Act, 16 U.S.C. 830-839h. The ASC is determined 
by BPA in accordance with 18 CFR part 301.
    (b) Effectiveness of rates. (1) During the period between the date 
of BPA's determination of ASC and the date of the final order issued by 
the Commission, the utility may charge the rate based on the ASC 
determined by BPA, subject to Sec. 35.31(c) of this part.
    (2) Except as otherwise provided under this section, the ASC ordered 
by the Commission will be deemed in effect from the beginning of the 
relevant exchange period, as defined in Sec. 301.1(b)(95) of this 
chapter. For any initial exchange period after the Commission approves a 
new ASC methodology, the ASC will be effective retroactively under this 
paragraph only if the utility files its new ASC within the time allowed 
under BPA procedures. Any utility that files a revised ASC

[[Page 301]]

with BPA in accordance with this paragraph must promptly file with the 
Commission a notice of timely filing of the new ASC.
    (c) Filing requirements. Within 15 business days of the date of 
issuance of the BPA report on a utility's ASC, the utility must file 
with the Commission the ASC determined by BPA, the BPA written report, 
the utility's ASC schedules, material necessary to comply with 18 CFR 
35.13(c), and any other material requested by the Commission or its 
staff.

[Order 337, 48 FR 46976, Oct. 17, 1983, as amended by Order 400, 49 FR 
39300, Oct. 5, 1984]



Sec. 35.31  Commission review.

    (a) Procedures. Filings under this subpart are subject to the 
procedures applicable to other filings under section 205 of the Federal 
Power Act, as the Commission deems appropriate.
    (b) Commission standard. With respect to any filing under this 
subpart, the Commission will determine whether the ASC set by BPA for 
the applicable exchange period was determined in accordance with the ASC 
methodology set forth at 18 CFR 301.1. If the ASC is not in accord with 
the methodology, the Commission will order that BPA amend the ASC to 
conform with the methodology. If the ASC is in accord with the 
methodology, the rate is deemed just and reasonable.
    (c) Refunds and adjustments. (1) Any ASC-based rate charged by a 
public utility under this subpart pending Commission order is subject to 
refund or to adjustment that increases the ASC-based rate.
    (2) Any interest on refunds ordered by the Commission under this 
subpart is computed in accordance with 18 CFR 35.19a. Interest on any 
increase ordered by the Commission will be at the rate charged to BPA by 
the U.S. Treasury during that period, unless the Commission orders 
another interest rate.

(Approved by the Office of Management and Budget under control number 
1902-0096)

[Order 337, 48 FR 46976, Oct. 17, 1983, as amended at 49 FR 1177, Jan. 
10, 1984]



  Subpart E_Regulations Governing Nuclear Plant Decommissioning Trust 

                                  Funds



Sec. 35.32  General provisions.

    (a) If a public utility has elected to provide for the 
decommissioning of a nuclear power plant through a nuclear plant 
decommissioning trust fund (Fund), the Fund must meet the following 
criteria:
    (1) The Fund must be an external trust fund in the United States, 
established pursuant to a written trust agreement, that is independent 
of the utility, its subsidiaries, affiliates or associates. If the trust 
fund includes monies collected both in Commission-jurisdictional rates 
and in non-Commission-jurisdictional rates, then a separate account of 
the Commission-jurisdictional monies shall be maintained.
    (2) The utility may provide overall investment policy to the Trustee 
or Investment Manager, but it may do so only in writing, and neither the 
utility nor its subsidiaries, affiliates or associates may serve as 
Investment Manager or otherwise engage in day-to-day management of the 
Fund or mandate individual investment decisions.
    (3) The Fund's Investment Manager must exercise the standard of 
care, whether in investing or otherwise, that a prudent investor would 
use in the same circumstances. The term ``prudent investor'' means a 
prudent investor as described in Restatement of the Law (Third), Trusts 
Sec. 227, including general comments and reporter's notes, pages 8-101. 
St. Paul, MN: American Law Institute Publishers, (1992). ISBN 0-314-
84246-2. This incorporation by reference was approved by the Director of 
the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 
51. Copies may be obtained from the American Law Institute, 4025 
Chestnut Street, Philadelphia, PA 19104, and are also available in local 
law libraries. Copies may be inspected at the Federal Energy Regulatory 
Commission's Library, Room 95-01, 888 First Street, NE. Washington, DC 
or at the National Archives and Records Administration (NARA). For 
information on the availability of this material at NARA, call 202-741-
6030, or go to: http://

[[Page 302]]

www.archives.gov/federal--register/code--of--federal--regulations/ibr--
locations.html.
    (4) The Trustee shall have a net worth of at least $100 million. In 
calculating the $100 million net worth requirement, the net worth of the 
Trustee's parent corporation and/or affiliates may be taken into account 
only if such entities guarantee the Trustee's responsibilities to the 
Fund.
    (5) The Trustee or Investment Manager shall keep accurate and 
detailed accounts of all investments, receipts, disbursements and 
transactions of the Fund. All accounts, books and records relating to 
the Fund shall be open to inspection and audit at reasonable times by 
the utility or its designee or by the Commission or its designee. The 
utility or its designee must notify the Commission prior to performing 
any such inspection or audit. The Commission may direct the utility to 
conduct an audit or inspection.
    (6) Absent the express authorization of the Commission, no part of 
the assets of the Fund may be used for, or diverted to, any purpose 
other than to fund the costs of decommissioning the nuclear power plant 
to which the Fund relates, and to pay administrative costs and other 
incidental expenses, including taxes, of the Fund.
    (7) If the Fund balances exceed the amount actually expended for 
decommissioning after decommissioning has been completed, the utility 
shall return the excess jurisdictional amount to ratepayers, in a manner 
the Commission determines.
    (8) Except for investments tied to market indexes or other mutual 
funds, the Investment Manager shall not invest in any securities of the 
utility for which it manages the funds or in that utility's 
subsidiaries, affiliates, or associates or their successors or assigns.
    (9) The utility and the Fiduciary shall seek to obtain the best 
possible tax treatment of amounts collected for nuclear plant 
decommissioning. In this regard, the utility and the Fiduciary shall 
take maximum advantage of tax deductions and credits, when it is 
consistent with sound business practices to do so.
    (10) Each utility shall deposit in the Fund at least quarterly all 
amounts included in Commission-jurisdictional rates to fund nuclear 
power plant decommissioning.
    (b) The establishment, organization, and maintenance of the Fund 
shall not relieve the utility or its subsidiaries, affiliates or 
associates of any obligations it may have as to the decommissioning of 
the nuclear power plant. It is not the responsibility of the Fiduciary 
to ensure that the amount of monies that a Fund contains are adequate to 
pay for a nuclear unit's decommissioning.
    (c) A utility may establish both qualified and non-qualified Funds 
with respect to a utility's interest in a specific nuclear plant. This 
section applies to both ``qualified'' (under the Internal Revenue Code, 
26 U.S.C. 468A, or any successor section) and non-qualified Funds.
    (d) A utility must regularly supply to the Fund's Investment 
Manager, and regularly update, essential information about the nuclear 
unit covered by the Trust Fund Agreement, including its description, 
location, expected remaining useful life, the decommissioning plan the 
utility proposes to follow, the utility's liquidity needs once 
decommissioning begins, and any other information that the Fund's 
Investment Manager would need to construct and maintain, over time, a 
sound investment plan.
    (e) A utility should monitor the performance of all Fiduciaries of 
the Fund and, if necessary, replace them if they are not properly 
performing assigned responsibilities.

[Order 580-A, 62 FR 33348, June 19, 1997, as amended at 69 FR 18803, 
Apr. 9, 2004]



Sec. 35.33  Specific provisions.

    (a) In addition to the general provisions of Sec. 35.32, the 
Trustee must observe the provisions of this section.
    (b) The Trustee may use Fund assets only to:
    (1) Satisfy the liability of a utility for decommissioning costs of 
the nuclear power plant to which the Fund relates as provided by Sec. 
35.32; and
    (2) Pay administrative costs and other incidental expenses, 
including taxes, of the Fund as provided by Sec. 35.32.

[[Page 303]]

    (c) To the extent that the Trustee does not currently require the 
assets of the Fund for the purposes described in paragraphs (b)(1) and 
(b)(2) of this section, the Investment Manager, when investing Fund 
assets, must exercise the same standard of care that a reasonable person 
would exercise in the same circumstances. In this context, a 
``reasonable person'' means a prudent investor as described in 
Restatement of the Law (Third), Trusts Sec. 227, including general 
comments and reporter's notes, pages 8-101. St. Paul, MN: American Law 
Institute Publishers, 1992. ISBN 0-314-84246-2. This incorporation by 
reference was approved by the Director of the Federal Register in 
accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be 
obtained from the American Law Institute, 4025 Chestnut Street, 
Philadelphia, PA 19104, and are also available in local law libraries. 
Copies may be inspected at the Federal Energy Regulatory Commission, 888 
First Street, NE. Washington, DC or at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, call 202-741-6030, or go to: http://www.archives.gov/
federal-register/cfr/ibr-locations.html.
    (d) The utility must submit to the Commission by March 31 of each 
year, one original and three conformed copies of the financial report 
furnished to the utility by the Fund's Trustee that shows for the 
previous calendar year:
    (1) Fund assets and liabilities at the beginning of the period;
    (2) Activity of the Fund during the period, including amounts 
received from the utility, a summary amount for purchases of fund 
investments and a summary amount for sales of fund investments, gains 
and losses from investment activity, disbursements from the Fund for 
decommissioning activity and payment of Fund expenses, including taxes; 
and
    (3) Fund assets and liabilities at the end of the period. The report 
should not include the liability for decommissioning.
    (4) Public utilities owning nuclear plants must maintain records of 
individual purchase and sales transactions until after decommissioning 
has been completed and any excess jurisdictional amounts have been 
returned to ratepayers in a manner that the Commission determines. The 
public utility need not include these records in the financial report 
that it furnishes to the Commission by March 31 of each year.
    (e) The utility must also mail a copy of the financial report 
provided to the Commission pursuant to paragraph (d) of this section to 
anyone who requests it.
    (f) If an independent public accountant has expressed an opinion on 
the report or on any portion of the report, then that opinion must 
accompany the report.

[Order 580-A, 62 FR 33348, June 19, 1997, as amended at 69 FR 18803, 
Apr. 9, 2004; Order 658, 70 FR 34343, June 14, 2005; Order 737, 75 FR 
43404, July 26, 2010]



 Subpart F_Procedures and Requirements Regarding Regional Transmission 

                              Organizations



Sec. 35.34  Regional Transmission Organizations.

    (a) Purpose. This section establishes required characteristics and 
functions for Regional Transmission Organizations for the purpose of 
promoting efficiency and reliability in the operation and planning of 
the electric transmission grid and ensuring non-discrimination in the 
provision of electric transmission services. This section further 
directs each public utility that owns, operates, or controls facilities 
used for the transmission of electric energy in interstate commerce to 
make certain filings with respect to forming and participating in a 
Regional Transmission Organization.
    (b) Definitions. (1) Regional Transmission Organization means an 
entity that satisfies the minimum characteristics set forth in paragraph 
(j) of this section, performs the functions set forth in paragraph (k) 
of this section, and accommodates the open architecture condition set 
forth in paragraph (l) of this section.
    (2) Market participant means:
    (i) Any entity that, either directly or through an affiliate, sells 
or brokers electric energy, or provides ancillary services to the 
Regional Transmission Organization, unless the Commission

[[Page 304]]

finds that the entity does not have economic or commercial interests 
that would be significantly affected by the Regional Transmission 
Organization's actions or decisions; and
    (ii) Any other entity that the Commission finds has economic or 
commercial interests that would be significantly affected by the 
Regional Transmission Organization's actions or decisions.
    (3) Affiliate means the definition given in section 2(a)(11) of the 
Public Utility Holding Company Act (15 U.S.C. 79b(a)(11)).
    (4) Class of market participants means two or more market 
participants with common economic or commercial interests.
    (c) General rule. Except for those public utilities subject to the 
requirements of paragraph (h) of this section, every public utility that 
owns, operates or controls facilities used for the transmission of 
electric energy in interstate commerce as of March 6, 2000 must file 
with the Commission, no later than October 15, 2000, one of the 
following:
    (1) A proposal to participate in a Regional Transmission 
Organization consisting of one of the types of submittals set forth in 
paragraph (d) of this section; or
    (2) An alternative filing consistent with paragraph (g) of this 
section.
    (d) Proposal to participate in a Regional Transmission Organization. 
For purposes of this section, a proposal to participate in a Regional 
Transmission Organization means:
    (1) Such filings, made individually or jointly with other entities, 
pursuant to sections 203, 205 and 206 of the Federal Power Act (16 
U.S.C. 824b, 824d, and 824e), as are necessary to create a new Regional 
Transmission Organization;
    (2) Such filings, made individually or jointly with other entities, 
pursuant to sections 203, 205 and 206 of the Federal Power Act (16 
U.S.C. 824b, 824d, and 824e), as are necessary to join a Regional 
Transmission Organization approved by the Commission on or before the 
date of the filing; or
    (3) A petition for declaratory order, filed individually or jointly 
with other entities, asking whether a proposed transmission entity would 
qualify as a Regional Transmission Organization and containing at least 
the following:
    (i) A detailed description of the proposed transmission entity, 
including a description of the organizational and operational structure 
and the intended participants;
    (ii) A discussion of how the transmission entity would satisfy each 
of the characteristics and functions of a Regional Transmission 
Organization specified in paragraphs (j), (k) and (l) of this section;
    (iii) A detailed description of the Federal Power Act section 205 
rates that will be filed for the Regional Transmission Organization; and
    (iv) A commitment to make filings pursuant to sections 203, 205 and 
206 of the Federal Power Act (16 U.S.C. 824b, 824d, and 824e), as 
necessary, promptly after the Commission issues an order in response to 
the petition.
    (4) Any proposal filed under this paragraph (d) must include an 
explanation of efforts made to include public power entities and 
electric power cooperatives in the proposed Regional Transmission 
Organization.
    (e) [Reserved]
    (f) Transfer of operational control. Any public utility's proposal 
to participate in a Regional Transmission Organization filed pursuant to 
paragraph (c)(1) of this section must propose that operational control 
of that public utility's transmission facilities will be transferred to 
the Regional Transmission Organization on a schedule that will allow the 
Regional Transmission Organization to commence operating the facilities 
no later than December 15, 2001.

    Note to paragraph (f): The requirement in paragraph (f) of this 
section may be satisfied by proposing to transfer to the Regional 
Transmission Organization ownership of the facilities in addition to 
operational control.

    (g) Alternative filing. Any filing made pursuant to paragraph (c)(2) 
of this section must contain:
    (1) A description of any efforts made by that public utility to 
participate in a Regional Transmission Organization;
    (2) A detailed explanation of the economic, operational, commercial, 
regulatory, or other reasons the public utility has not made a filing to 
participate

[[Page 305]]

in a Regional Transmission Organization, including identification of any 
existing obstacles to participation in a Regional Transmission 
Organization; and
    (3) The specific plans, if any, the public utility has for further 
work toward participation in a Regional Transmission Organization, a 
proposed timetable for such activity, an explanation of efforts made to 
include public power entities in the proposed Regional Transmission 
Organization, and any factors (including any law, rule or regulation) 
that may affect the public utility's ability or decision to participate 
in a Regional Transmission Organization.
    (h) Public utilities participating in approved transmission 
entities. Every public utility that owns, operates or controls 
facilities used for the transmission of electric energy in interstate 
commerce as of March 6, 2000, and that has filed with the Commission on 
or before March 6, 2000 to transfer operational control of its 
facilities to a transmission entity that has been approved or 
conditionally approved by the Commission on or before March 6, 2000 as 
being in conformance with the eleven ISO principles set forth in Order 
No. 888, FERC Statutes and Regulations, Regulations Preamble January 
1991-June 1996 ] 31,036 (Final Rule on Open Access and Stranded Costs; 
see 61 FR 21540, May 10, 1996), must, individually or jointly with other 
entities, file with the Commission, no later than January 15, 2001:
    (1) A statement that it is participating in a transmission entity 
that has been so approved;
    (2) A detailed explanation of the extent to which the transmission 
entity in which it participates has the characteristics and performs the 
functions of a Regional Transmission Organization specified in 
paragraphs (j) and (k) of this section and accommodates the open 
architecture conditions in paragraph (l) of this section; and
    (3) To the extent the transmission entity in which the public 
utility participates does not meet all the requirements of a Regional 
Transmission Organization specified in paragraphs (j), (k), and (l) of 
this section,
    (i) A proposal to participate in a Regional Transmission 
Organization that meets such requirements in accordance with paragraph 
(d) of this section,
    (ii) A proposal to modify the existing transmission entity so that 
it conforms to the requirements of a Regional Transmission Organization, 
or
    (iii) A filing containing the information specified in paragraph (g) 
of this section addressing any efforts, obstacles, and plans with 
respect to conformance with those requirements.
    (i) Entities that become public utilities with transmission 
facilities. An entity that is not a public utility that owns, operates 
or controls facilities used for the transmission of electric energy in 
interstate commerce as of March 6, 2000, but later becomes such a public 
utility, must file a proposal to participate in a Regional Transmission 
Organization in accordance with paragraph (d) of this section, or an 
alternative filing in accordance with paragraph (g) of this section, by 
October 15, 2000 or 60 days prior to the date on which the public 
utility engages in any transmission of electric energy in interstate 
commerce, whichever comes later. If a proposal to participate in 
accordance with paragraph (d) of this section is filed, it must propose 
that operational control of the applicant's transmission system will be 
transferred to the Regional Transmission Organization within six months 
of filing the proposal.
    (j) Required characteristics for a Regional Transmission 
Organization. A Regional Transmission Organization must satisfy the 
following characteristics when it commences operation:
    (1) Independence. The Regional Transmission Organization must be 
independent of any market participant. The Regional Transmission 
Organization must include, as part of its demonstration of independence, 
a demonstration that it meets the following:
    (i) The Regional Transmission Organization, its employees, and any 
non-stakeholder directors must not have financial interests in any 
market participant.
    (ii) The Regional Transmission Organization must have a decision 
making process that is independent of control

[[Page 306]]

by any market participant or class of participants.
    (iii) The Regional Transmission Organization must have exclusive and 
independent authority under section 205 of the Federal Power Act (16 
U.S.C. 824d), to propose rates, terms and conditions of transmission 
service provided over the facilities it operates.

    Note to paragraph (j)(1)(iii): Transmission owners retain authority 
under section 205 of the Federal Power Act (16 U.S.C. 824d) to seek 
recovery from the Regional Transmission Organization of the revenue 
requirements associated with the transmission facilities that they own.

    (iv)(A) The Regional Transmission Organization must provide:
    (1) With respect to any Regional Transmission Organization in which 
market participants have an ownership interest, a compliance audit of 
the independence of the Regional Transmission Organization's decision 
making process under paragraph (j)(1)(ii) of this section, to be 
performed two years after approval of the Regional Transmission 
Organization, and every three years thereafter, unless otherwise 
provided by the Commission.
    (2) With respect to any Regional Transmission Organization in which 
market participants have a role in the Regional Transmission 
Organization's decision making process but do not have an ownership 
interest, a compliance audit of the independence of the Regional 
Transmission Organization's decision making process under paragraph 
(j)(1)(ii) of this section, to be performed two years after its approval 
as a Regional Transmission Organization.
    (B) The compliance audits under paragraph (j)(1)(iv)(A) of this 
section must be performed by auditors who are not affiliated with the 
Regional Transmission Organization or transmission facility owners that 
are members of the Regional Transmission Organization.
    (2) Scope and regional configuration. The Regional Transmission 
Organization must serve an appropriate region. The region must be of 
sufficient scope and configuration to permit the Regional Transmission 
Organization to maintain reliability, effectively perform its required 
functions, and support efficient and non-discriminatory power markets.
    (3) Operational authority. The Regional Transmission Organization 
must have operational authority for all transmission facilities under 
its control. The Regional Transmission Organization must include, as 
part of its demonstration of operational authority, a demonstration that 
it meets the following:
    (i) If any operational functions are delegated to, or shared with, 
entities other than the Regional Transmission Organization, the Regional 
Transmission Organization must ensure that this sharing of operational 
authority will not adversely affect reliability or provide any market 
participant with an unfair competitive advantage. Within two years after 
initial operation as a Regional Transmission Organization, the Regional 
Transmission Organization must prepare a public report that assesses 
whether any division of operational authority hinders the Regional 
Transmission Organization in providing reliable, non-discriminatory and 
efficiently priced transmission service.
    (ii) The Regional Transmission Organization must be the security 
coordinator for the facilities that it controls.
    (4) Short-term reliability. The Regional Transmission Organization 
must have exclusive authority for maintaining the short-term reliability 
of the grid that it operates. The Regional Transmission Organization 
must include, as part of its demonstration with respect to reliability, 
a demonstration that it meets the following:
    (i) The Regional Transmission Organization must have exclusive 
authority for receiving, confirming and implementing all interchange 
schedules.
    (ii) The Regional Transmission Organization must have the right to 
order redispatch of any generator connected to transmission facilities 
it operates if necessary for the reliable operation of these facilities.
    (iii) When the Regional Transmission Organization operates 
transmission facilities owned by other entities, the Regional 
Transmission Organization

[[Page 307]]

must have authority to approve or disapprove all requests for scheduled 
outages of transmission facilities to ensure that the outages can be 
accommodated within established reliability standards.
    (iv) If the Regional Transmission Organization operates under 
reliability standards established by another entity (e.g., a regional 
reliability council), the Regional Transmission Organization must report 
to the Commission if these standards hinder it from providing reliable, 
non-discriminatory and efficiently priced transmission service.
    (k) Required functions of a Regional Transmission Organization. The 
Regional Transmission Organization must perform the following functions. 
Unless otherwise noted, the Regional Transmission Organization must 
satisfy these obligations when it commences operations.
    (1) Tariff administration and design. The Regional Transmission 
Organization must administer its own transmission tariff and employ a 
transmission pricing system that will promote efficient use and 
expansion of transmission and generation facilities. As part of its 
demonstration with respect to tariff administration and design, the 
Regional Transmission Organization must satisfy the standards listed in 
paragraphs (k)(1)(i) and (ii) of this section, or demonstrate that an 
alternative proposal is consistent with or superior to satisfying such 
standards.
    (i) The Regional Transmission Organization must be the only provider 
of transmission service over the facilities under its control, and must 
be the sole administrator of its own Commission-approved open access 
transmission tariff. The Regional Transmission Organization must have 
the sole authority to receive, evaluate, and approve or deny all 
requests for transmission service. The Regional Transmission 
Organization must have the authority to review and approve requests for 
new interconnections.
    (ii) Customers under the Regional Transmission Organization tariff 
must not be charged multiple access fees for the recovery of capital 
costs for transmission service over facilities that the Regional 
Transmission Organization controls.
    (2) Congestion management. The Regional Transmission Organization 
must ensure the development and operation of market mechanisms to manage 
transmission congestion. As part of its demonstration with respect to 
congestion management, the Regional Transmission Organization must 
satisfy the standards listed in paragraph (k)(2)(i) of this section, or 
demonstrate that an alternative proposal is consistent with or superior 
to satisfying such standards.
    (i) The market mechanisms must accommodate broad participation by 
all market participants, and must provide all transmission customers 
with efficient price signals that show the consequences of their 
transmission usage decisions. The Regional Transmission Organization 
must either operate such markets itself or ensure that the task is 
performed by another entity that is not affiliated with any market 
participant.
    (ii) The Regional Transmission Organization must satisfy the market 
mechanism requirement no later than one year after it commences initial 
operation. However, it must have in place at the time of initial 
operation an effective protocol for managing congestion.
    (3) Parallel path flow. The Regional Transmission Organization must 
develop and implement procedures to address parallel path flow issues 
within its region and with other regions. The Regional Transmission 
Organization must satisfy this requirement with respect to coordination 
with other regions no later than three years after it commences initial 
operation.
    (4) Ancillary services. The Regional Transmission Organization must 
serve as a provider of last resort of all ancillary services required by 
Order No. 888, FERC Statutes and Regulations, Regulations Preamble 
January 1991-June 1996 ] 31,036 (Final Rule on Open Access and Stranded 
Costs; see 61 FR 21540, May 10, 1996), and subsequent orders. As part of 
its demonstration with respect to ancillary services, the Regional 
Transmission Organization must

[[Page 308]]

satisfy the standards listed in paragraphs (k)(4)(i) through (iii) of 
this section, or demonstrate that an alternative proposal is consistent 
with or superior to satisfying such standards.
    (i) All market participants must have the option of self-supplying 
or acquiring ancillary services from third parties subject to any 
restrictions imposed by the Commission in Order No. 888, FERC Statutes 
and Regulations, Regulations Preamble January 1991-June 1996 ] 31,036 
(Final Rule on Open Access and Stranded Costs), and subsequent orders.
    (ii) The Regional Transmission Organization must have the authority 
to decide the minimum required amounts of each ancillary service and, if 
necessary, the locations at which these services must be provided. All 
ancillary service providers must be subject to direct or indirect 
operational control by the Regional Transmission Organization. The 
Regional Transmission Organization must promote the development of 
competitive markets for ancillary services whenever feasible.
    (iii) The Regional Transmission Organization must ensure that its 
transmission customers have access to a real-time balancing market. The 
Regional Transmission Organization must either develop and operate this 
market itself or ensure that this task is performed by another entity 
that is not affiliated with any market participant.
    (5) OASIS and Total Transmission Capability (TTC) and Available 
Transmission Capability (ATC). The Regional Transmission Organization 
must be the single OASIS site administrator for all transmission 
facilities under its control and independently calculate TTC and ATC.
    (6) Market monitoring. To ensure that the Regional Transmission 
Organization provides reliable, efficient and not unduly discriminatory 
transmission service, the Regional Transmission Organization must 
provide for objective monitoring of markets it operates or administers 
to identify market design flaws, market power abuses and opportunities 
for efficiency improvements, and propose appropriate actions. As part of 
its demonstration with respect to market monitoring, the Regional 
Transmission Organization must satisfy the standards listed in 
paragraphs (k)(6)(i) through (k)(6)(iii) of this section, or demonstrate 
that an alternative proposal is consistent with or superior to 
satisfying such standards.
    (i) Market monitoring must include monitoring the behavior of market 
participants in the region, including transmission owners other than the 
Regional Transmission Organization, if any, to determine if their 
actions hinder the Regional Transmission Organization in providing 
reliable, efficient and not unduly discriminatory transmission service.
    (ii) With respect to markets the Regional Transmission Organization 
operates or administers, there must be a periodic assessment of how 
behavior in markets operated by others (e.g., bilateral power sales 
markets and power markets operated by unaffiliated power exchanges) 
affects Regional Transmission Organization operations and how Regional 
Transmission Organization operations affect the efficiency of power 
markets operated by others.
    (iii) Reports on opportunities for efficiency improvement, market 
power abuses and market design flaws must be filed with the Commission 
and affected regulatory authorities.
    (7) Planning and expansion. The Regional Transmission Organization 
must be responsible for planning, and for directing or arranging, 
necessary transmission expansions, additions, and upgrades that will 
enable it to provide efficient, reliable and non-discriminatory 
transmission service and coordinate such efforts with the appropriate 
state authorities. As part of its demonstration with respect to planning 
and expansion, the Regional Transmission Organization must satisfy the 
standards listed in paragraphs (k)(7)(i) and (ii) of this section, or 
demonstrate that an alternative proposal is consistent with or superior 
to satisfying such standards.
    (i) The Regional Transmission Organization planning and expansion 
process must encourage market-driven operating and investment actions 
for preventing and relieving congestion.
    (ii) The Regional Transmission Organization's planning and expansion 
process must accommodate efforts by state regulatory commissions to 
create

[[Page 309]]

multi-state agreements to review and approve new transmission 
facilities. The Regional Transmission Organization's planning and 
expansion process must be coordinated with programs of existing Regional 
Transmission Groups (See Sec. 2.21 of this chapter) where appropriate.
    (iii) If the Regional Transmission Organization is unable to satisfy 
this requirement when it commences operation, it must file with the 
Commission a plan with specified milestones that will ensure that it 
meets this requirement no later than three years after initial 
operation.
    (8) Interregional coordination. The Regional Transmission 
Organization must ensure the integration of reliability practices within 
an interconnection and market interface practices among regions.
    (l) Open architecture. (1) Any proposal to participate in a Regional 
Transmission Organization must not contain any provision that would 
limit the capability of the Regional Transmission Organization to evolve 
in ways that would improve its efficiency, consistent with the 
requirements in paragraphs (j) and (k) of this section.
    (2) Nothing in this regulation precludes an approved Regional 
Transmission Organization from seeking to evolve with respect to its 
organizational design, market design, geographic scope, ownership 
arrangements, or methods of operational control, or in other appropriate 
ways if the change is consistent with the requirements of this section. 
Any future filing seeking approval of such changes must demonstrate that 
the proposed changes will meet the requirements of paragraphs (j), (k) 
and (l) of this section.

[Order 2000-A, 65 FR 12110, Mar. 8, 2000, as amended by Order 679, 71 FR 
43338, July 31, 2006]



       Subpart G_Transmission Infrastructure Investment Provisions



Sec. 35.35  Transmission infrastructure investment.

    (a) Purpose. This section establishes rules for incentive-based 
(including performance-based) rate treatments for transmission of 
electric energy in interstate commerce by public utilities for the 
purpose of benefiting consumers by ensuring reliability and reducing the 
cost of delivered power by reducing transmission congestion.
    (b) Definitions. (1) Transco means a stand-alone transmission 
company that has been approved by the Commission and that sells 
transmission services at wholesale and/or on an unbundled retail basis, 
regardless of whether it is affiliated with another public utility.
    (2) Transmission Organization means a Regional Transmission 
Organization, Independent System Operator, independent transmission 
provider, or other transmission organization finally approved by the 
Commission for the operation of transmission facilities.
    (c) General rule. All rates approved under the rules of this 
section, including any revisions to the rules, are subject to the filing 
requirements of sections 205 and 206 of the Federal Power Act and to the 
substantive requirements of sections 205 and 206 of the Federal Power 
Act that all rates, charges, terms and conditions be just and reasonable 
and not unduly discriminatory or preferential.
    (d) Incentive-based rate treatments for transmission infrastructure 
investment. The Commission will authorize any incentive-based rate 
treatment, as discussed in this paragraph (d), for transmission 
infrastructure investment, provided that the proposed incentive-based 
rate treatment is just and reasonable and not unduly discriminatory or 
preferential. A public utility's request for one or more incentive-based 
rate treatments, to be made in a filing pursuant to section 205 of the 
Federal Power Act, or in a petition for a declaratory order that 
precedes a filing pursuant to section 205, must include a detailed 
explanation of how the proposed rate treatment complies with the 
requirements of section 219 of the Federal Power Act and a demonstration 
that the proposed rate treatment is just, reasonable, and not unduly 
discriminatory or preferential. The applicant must demonstrate that the 
facilities for which it seeks incentives either ensure reliability or 
reduce the cost of delivered power by reducing transmission congestion 
consistent with the

[[Page 310]]

requirements of section 219, that the total package of incentives is 
tailored to address the demonstrable risks or challenges faced by the 
applicant in undertaking the project, and that resulting rates are just 
and reasonable. For purposes of this paragraph (d), incentive-based rate 
treatment means any of the following:
    (1) For purposes of this paragraph (d), incentive-based rate 
treatment means any of the following:
    (i) A rate of return on equity sufficient to attract new investment 
in transmission facilities;
    (ii) 100 percent of prudently incurred Construction Work in Progress 
(CWIP) in rate base;
    (iii) Recovery of prudently incurred pre-commercial operations 
costs;
    (iv) Hypothetical capital structure;
    (v) Accelerated depreciation used for rate recovery;
    (vi) Recovery of 100 percent of prudently incurred costs of 
transmission facilities that are cancelled or abandoned due to factors 
beyond the control of the public utility;
    (vii) Deferred cost recovery; and
    (viii) Any other incentives approved by the Commission, pursuant to 
the requirements of this paragraph, that are determined to be just and 
reasonable and not unduly discriminatory or preferential.
    (2) In addition to the incentives in Sec. 35.35(d)(1), the 
Commission will authorize the following incentive-based rate treatments 
for Transcos, provided that the proposed incentive-based rate treatment 
is just and reasonable and not unduly discriminatory or preferential:
    (i) A return on equity that both encourages Transco formation and is 
sufficient to attract investment; and
    (ii) An adjustment to the book value of transmission assets being 
sold to a Transco to remove the disincentive associated with the impact 
of accelerated depreciation on federal capital gains tax liabilities.
    (e) Incentives for joining a Transmission Organization. The 
Commission will authorize an incentive-based rate treatment, as 
discussed in this paragraph (e), for public utilities that join a 
Transmission Organization, if the applicant demonstrates that the 
proposed incentive-based rate treatment is just and reasonable and not 
unduly discriminatory or preferential. Applicants for the incentive-
based rate treatment must make a filing with the Commission under 
section 205 of the Federal Power Act. For purposes of this paragraph 
(e), an incentive-based rate treatment means a return on equity that is 
higher than the return on equity the Commission might otherwise allow if 
the public utility did not join a Transmission Organization. The 
Commission will also permit transmitting utilities or electric utilities 
that join a Transmission Organization the ability to recover prudently 
incurred costs associated with joining the Transmission Organization, 
either through transmission rates charged by transmitting utilities or 
electric utilities or through transmission rates charged by the 
Transmission Organization that provides services to such utilities.
    (f) Approval of prudently-incurred costs. The Commission will 
approve recovery of prudently-incurred costs necessary to comply with 
the mandatory reliability standards pursuant to section 215 of the 
Federal Power Act, provided that the proposed rates are just and 
reasonable and not unduly discriminatory or preferential.
    (g) Approval of prudently incurred costs related to transmission 
infrastructure development. The Commission will approve recovery of 
prudently-incurred costs related to transmission infrastructure 
development pursuant to section 216 of the Federal Power Act, provided 
that the proposed rates are just and reasonable and not unduly 
discriminatory or preferential.
    (h) FERC-730, Report of transmission investment activity. Public 
utilities that have been granted incentive rate treatment for specific 
transmission projects must file FERC-730 on an annual basis beginning 
with the calendar year incentive rate treatment is granted by the 
Commission. Such filings are due by April 18 of the following calendar 
year and are due April 18 each year thereafter. The following 
information must be filed:
    (1) In dollar terms, actual transmission investment for the most 
recent

[[Page 311]]

calendar year, and projected, incremental investments for the next five 
calendar years;
    (2) For all current and projected investments over the next five 
calendar years, a project by project listing that specifies for each 
project the most up-to-date, expected completion date, percentage 
completion as of the date of filing, and reasons for delays. Exclude 
from this listing projects with projected costs less than $20 million; 
and
    (3) For good cause shown, the Commission may extend the time within 
which any FERC-730 filing is to be filed or waive the requirements 
applicable to any such filing.
    (i) Rebuttable presumption. (1) The Commission will apply a 
rebuttable presumption that an applicant has demonstrated that its 
project is needed to ensure reliability or reduces the cost of delivered 
power by reducing congestion for:
    (i) A transmission project that results from a fair and open 
regional planning process that considers and evaluates projects for 
reliability and/or congestion and is found to be acceptable to the 
Commission; or
    (ii) A project that has received construction approval from an 
appropriate state commission or state siting authority.
    (2) To the extent these approval processes do not require that a 
project ensures reliability or reduce the cost of delivered power by 
reducing congestion, the applicant bears the burden of demonstrating 
that its project satisfies these criteria.
    (j) Commission authorization to site electric transmission 
facilities in interstate commerce. If the Commission pursuant to its 
authority under section 216 of the Federal Power Act and its regulations 
thereunder has issued one or more permits for the construction or 
modification of transmission facilities in a national interest electric 
transmission corridor designated by the Secretary, such facilities shall 
be deemed to either ensure reliability or reduce the cost of delivered 
power by reducing congestion for purposes of section 219(a).

[Order 679, 71 FR 43338, July 31, 2006, as amended by Order 679-A, 72 FR 
1172, Jan. 10, 2007, Order 691, 72 FR 5174, Feb. 5, 2007]



  Subpart H_Wholesale Sales of Electric Energy, Capacity and Ancillary 

                     Services at Market-Based Rates

    Source: Order 697, 72 FR 40038, July 20, 2007, unless otherwise 
noted.



Sec. 35.36  Generally.

    (a) For purposes of this subpart:
    (1) Seller means any person that has authorization to or seeks 
authorization to engage in sales for resale of electric energy, capacity 
or ancillary services at market-based rates under section 205 of the 
Federal Power Act.
    (2) Category 1 Sellers means wholesale power marketers and wholesale 
power producers that own or control 500 MW or less of generation in 
aggregate per region; that do not own, operate or control transmission 
facilities other than limited equipment necessary to connect individual 
generating facilities to the transmission grid (or have been granted 
waiver of the requirements of Order No. 888, FERC Stats. & Regs. ] 
31,036); that are not affiliated with anyone that owns, operates or 
controls transmission facilities in the same region as the seller's 
generation assets; that are not affiliated with a franchised public 
utility in the same region as the seller's generation assets; and that 
do not raise other vertical market power issues.
    (3) Category 2 Sellers means any Sellers not in Category 1.
    (4) Inputs to electric power production means intrastate natural gas 
transportation, intrastate natural gas storage or distribution 
facilities; sites for generation capacity development; physical coal 
supply sources and ownership of or control over who may access 
transportation of coal supplies.
    (5) Franchised public utility means a public utility with a 
franchised service obligation under State law.
    (6) Captive customers means any wholesale or retail electric energy 
customers served by a franchised public utility under cost-based 
regulation.
    (7) Market-regulated power sales affiliate means any power seller 
affiliate other than a franchised public utility, including a power 
marketer, exempt wholesale generator, qualifying facility

[[Page 312]]

or other power seller affiliate, whose power sales are regulated in 
whole or in part on a market-rate basis.
    (8) Market information means non-public information related to the 
electric energy and power business including, but not limited to, 
information regarding sales, cost of production, generator outages, 
generator heat rates, unconsummated transactions, or historical 
generator volumes. Market information includes information from either 
affiliates or non-affiliates.
    (9) Affiliate of a specified company means:
    (i) Any person that directly or indirectly owns, controls, or holds 
with power to vote, 10 percent or more of the outstanding voting 
securities of the specified company;
    (ii) Any company 10 percent or more of whose outstanding voting 
securities are owned, controlled, or held with power to vote, directly 
or indirectly, by the specified company;
    (iii) Any person or class of persons that the Commission determines, 
after appropriate notice and opportunity for hearing, to stand in such 
relation to the specified company that there is liable to be an absence 
of arm's-length bargaining in transactions between them as to make it 
necessary or appropriate in the public interest or for the protection of 
investors or consumers that the person be treated as an affiliate; and
    (iv) Any person that is under common control with the specified 
company.
    (v) For purposes of paragraph (a)(9), owning, controlling or holding 
with power to vote, less than 10 percent of the outstanding voting 
securities of a specified company creates a rebuttable presumption of 
lack of control.
    (b) The provisions of this subpart apply to all Sellers authorized, 
or seeking authorization, to make sales for resale of electric energy, 
capacity or ancillary services at market-based rates unless otherwise 
ordered by the Commission.

[Order 697, 72 FR 40038, July 20, 2007, as amended by Order 697-A, 73 FR 
25912, May 7, 2008; Order 697-B, 73 FR 79627, Dec. 30, 2008]



Sec. 35.37  Market power analysis required.

    (a) (1) In addition to other requirements in subparts A and B, a 
Seller must submit a market power analysis in the following 
circumstances: when seeking market-based rate authority; for Category 2 
Sellers, every three years, according to the schedule contained in Order 
No. 697, FERC Stats. & Regs. ] 31,252; or any other time the Commission 
directs a Seller to submit one. Failure to timely file an updated market 
power analysis will constitute a violation of Seller's market-based rate 
tariff.
    (2) When submitting a market power analysis, whether as part of an 
initial application or an update, a Seller must include an appendix of 
assets in the form provided in Appendix B of this subpart.
    (b) A market power analysis must address whether a Seller has 
horizontal and vertical market power.
    (c) (1) There will be a rebuttable presumption that a Seller lacks 
horizontal market power if it passes two indicative market power 
screens: a pivotal supplier analysis based on the annual peak demand of 
the relevant market, and a market share analysis applied on a seasonal 
basis. There will be a rebuttable presumption that a Seller possesses 
horizontal market power if it fails either screen.
    (2) Sellers and intervenors may also file alternative evidence to 
support or rebut the results of the indicative screens. Sellers may file 
such evidence at the time they file their indicative screens. 
Intervenors may file such evidence in response to a Seller's 
submissions.
    (3) If a Seller does not pass one or both screens, the Seller may 
rebut a presumption of horizontal market power by submitting a Delivered 
Price Test analysis. A Seller that does not rebut a presumption of 
horizontal market power or that concedes market power, is subject to 
mitigation, as described in Sec. 35.38.
    (4) When submitting a horizontal market power analysis, a Seller 
must use the form provided in Appendix A of this subpart and include all 
supporting materials referenced in the form.

[[Page 313]]

    (d) To demonstrate a lack of vertical market power, a Seller that 
owns, operates or controls transmission facilities, or whose affiliates 
own, operate or control transmission facilities, must have on file with 
the Commission an Open Access Transmission Tariff, as described in Sec. 
35.28; provided, however, that a Seller whose foreign affiliate(s) own, 
operate or control transmission facilities outside of the United States 
that can be used by competitors of the Seller to reach United States 
markets must demonstrate that such affiliate either has adopted and is 
implementing an Open Access Transmission Tariff as described in Sec. 
35.28, or otherwise offers comparable, non-discriminatory access to such 
transmission facilities.
    (e) To demonstrate a lack of vertical market power in wholesale 
energy markets through the affiliation, ownership or control of inputs 
to electric power production, such as the transportation or distribution 
of the inputs to electric power production, a Seller must provide the 
following information:
    (1) A description of its ownership or control of, or affiliation 
with an entity that owns or controls, intrastate natural gas 
transportation, intrastate natural gas storage or distribution 
facilities;
    (2) Sites for generation capacity development; and
    (3) Physical coal supply sources and ownership or control over who 
may access transportation of coal supplies.
    (4) A Seller must ensure that this information is included in the 
record of each new application for market-based rates and each updated 
market power analysis. In addition, a Seller is required to make an 
affirmative statement that it has not erected barriers to entry into the 
relevant market and will not erect barriers to entry into the relevant 
market.
    (f) If the seller seeks to protect any portion of the application, 
or any attachment thereto, from public disclosure pursuant to Sec. 
388.112 of this chapter, the seller must include with its request for 
privileged treatment a proposed protective order under which the parties 
to the proceeding will be able to review any of the data, information, 
analysis or other documentation relied upon by the seller for which 
privileged treatment is sought. A seller must grant access to privileged 
data to any party that signs a protective order within 5 days from the 
date that the party executes the protective order.

[Order 697, 72 FR 40038, July 20, 2007, as amended by Order 697-B, 73 FR 
79627, Dec. 30, 2008]



Sec. 35.38  Mitigation.

    (a) A Seller that has been found to have market power in generation 
or that is presumed to have horizontal market power by virtue of failing 
or foregoing the horizontal market power screens, as described in Sec. 
35.37(c), may adopt the default mitigation detailed in paragraph (b) of 
this section or may propose mitigation tailored to its own particular 
circumstances to eliminate its ability to exercise market power. 
Mitigation will apply only to the market(s) in which the Seller is 
found, or presumed, to have market power.
    (b) Default mitigation consists of three distinct products:
    (1) Sales of power of one week or less priced at the Seller's 
incremental cost plus a 10 percent adder;
    (2) Sales of power of more than one week but less than one year 
priced at no higher than a cost-based ceiling reflecting the costs of 
the unit(s) expected to provide the service; and
    (3) New contracts filed for review under section 205 of the Federal 
Power Act for sales of power for one year or more priced at a rate not 
to exceed embedded cost of service.



Sec. 35.39  Affiliate restrictions.

    (a) General affiliate provisions. As a condition of obtaining and 
retaining market-based rate authority, the conditions provided in this 
section, including the restriction on affiliate sales of electric energy 
and all other affiliate provisions, must be satisfied on an ongoing 
basis, unless otherwise authorized by Commission rule or order. Failure 
to satisfy these conditions will constitute a violation of the Seller's 
market-based rate tariff.
    (b) Restriction on affiliate sales of electric energy or capacity. 
As a condition of obtaining and retaining market-based rate authority, 
no wholesale sale of electric energy or capacity may be

[[Page 314]]

made between a franchised public utility with captive customers and a 
market-regulated power sales affiliate without first receiving 
Commission authorization for the transaction under section 205 of the 
Federal Power Act. All authorizations to engage in affiliate wholesale 
sales of electric energy or capacity must be listed in a Seller's 
market-based rate tariff.
    (c) Separation of functions. (1) For the purpose of this paragraph, 
entities acting on behalf of and for the benefit of a franchised public 
utility with captive customers (such as entities controlling or 
marketing power from the electrical generation assets of the franchised 
public utility) are considered part of the franchised public utility. 
Entities acting on behalf of and for the benefit of the market-regulated 
power sales affiliates of a franchised public utility with captive 
customers are considered part of the market-regulated power sales 
affiliates.
    (2) (i) To the maximum extent practical, the employees of a market-
regulated power sales affiliate must operate separately from the 
employees of any affiliated franchised public utility with captive 
customers.
    (ii) Franchised public utilities with captive customers are 
permitted to share support employees, and field and maintenance 
employees with their market-regulated power sales affiliates. Franchised 
public utilities with captive customers are also permitted to share 
senior officers and boards of directors with their market-regulated 
power sales affiliates; provided, however, that the shared officers and 
boards of directors must not participate in directing, organizing or 
executing generation or market functions.
    (iii) Notwithstanding any other restrictions in this section, in 
emergency circumstances affecting system reliability, a market-regulated 
power sales affiliate and a franchised public utility with captive 
customers may take steps necessary to keep the bulk power system in 
operation. A franchised public utility with captive customers or the 
market-regulated power sales affiliate must report to the Commission and 
disclose to the public on its Web site, each emergency that resulted in 
any deviation from the restrictions of section 35.39, within 24 hours of 
such deviation.
    (d) Information sharing. (1) A franchised public utility with 
captive customers may not share market information with a market-
regulated power sales affiliate if the sharing could be used to the 
detriment of captive customers, unless simultaneously disclosed to the 
public.
    (2) Permissibly shared support employees, field and maintenance 
employees and senior officers and board of directors under Sec. Sec. 
35.39(c)(2)(ii) may have access to information covered by the 
prohibition of Sec. 35.39(d)(1), subject to the no-conduit provision in 
Sec. 35.39(g).
    (e) Non-power goods or services. (1) Unless otherwise permitted by 
Commission rule or order, sales of any non-power goods or services by a 
franchised public utility with captive customers, to a market-regulated 
power sales affiliate must be at the higher of cost or market price.
    (2) Unless otherwise permitted by Commission rule or order, sales of 
any non-power goods or services by a market-regulated power sales 
affiliate to an affiliated franchised public utility with captive 
customers may not be at a price above market.
    (f) Brokering of power. (1) Unless otherwise permitted by Commission 
rule or order, to the extent a market-regulated power sales affiliate 
seeks to broker power for an affiliated franchised public utility with 
captive customers:
    (i) The market-regulated power sales affiliate must offer the 
franchised public utility's power first;
    (ii) The arrangement between the market-regulated power sales 
affiliate and the franchised public utility must be non-exclusive; and
    (iii) The market-regulated power sales affiliate may not accept any 
fees in conjunction with any brokering services it performs for an 
affiliated franchised public utility.
    (2) Unless otherwise permitted by Commission rule or order, to the 
extent a franchised public utility with captive customers seeks to 
broker power for a market-regulated power sales affiliate:
    (i) The franchised public utility must charge the higher of its 
costs for the

[[Page 315]]

service or the market price for such services;
    (ii) The franchised public utility must market its own power first, 
and simultaneously make public (on the Internet) any market information 
shared with its affiliate during the brokering; and
    (iii) The franchised public utility must post on the Internet the 
actual brokering charges imposed.
    (g) No conduit provision. A franchised public utility with captive 
customers and a market-regulated power sales affiliate are prohibited 
from using anyone, including asset managers, as a conduit to circumvent 
the affiliate restrictions in Sec. Sec. 35.39(a) through (g).
    (h) Franchised utilities without captive customers. If necessary, 
any affiliate restrictions regarding separation of functions, power 
sales or non-power goods and services transactions, or brokering 
involving two or more franchised public utilities, one or more of whom 
has captive customers and one or more of whom does not have captive 
customers, will be imposed on a case-by-case basis.

[Order 697, 72 FR 40038, July 20, 2007, as amended by Order 697-A, 73 FR 
25912, May 7, 2008]



Sec. 35.40  Ancillary services.

    A Seller may make sales of ancillary services at market-based rates 
only if it has been authorized by the Commission and only in specific 
geographic markets as the Commission has authorized.



Sec. 35.41  Market behavior rules.

    (a) Unit operation. Where a Seller participates in a Commission-
approved organized market, Seller must operate and schedule generating 
facilities, undertake maintenance, declare outages, and commit or 
otherwise bid supply in a manner that complies with the Commission-
approved rules and regulations of the applicable market. A Seller is not 
required to bid or supply electric energy or other electricity products 
unless such requirement is a part of a separate Commission-approved 
tariff or is a requirement applicable to Seller through Seller's 
participation in a Commission-approved organized market.
    (b) Communications. A Seller must provide accurate and factual 
information and not submit false or misleading information, or omit 
material information, in any communication with the Commission, 
Commission-approved market monitors, Commission-approved regional 
transmission organizations, Commission-approved independent system 
operators, or jurisdictional transmission providers, unless Seller 
exercises due diligence to prevent such occurrences.
    (c) Price reporting. To the extent a Seller engages in reporting of 
transactions to publishers of electric or natural gas price indices, 
Seller must provide accurate and factual information, and not knowingly 
submit false or misleading information or omit material information to 
any such publisher, by reporting its transactions in a manner consistent 
with the procedures set forth in the Policy Statement issued by the 
Commission in Docket No. PL03-3-000 and any clarifications thereto. 
Unless Seller has previously provided the Commission with a notification 
of its price reporting status, Seller must notify the Commission within 
15 days of the effective date of this regulation or within 15 days of 
the date it begins making wholesale sales, whichever is earlier, whether 
it engages in such reporting of its transactions. Seller must update the 
notification within 15 days of any subsequent change in its transaction 
reporting status. In addition, Seller must adhere to such other 
standards and requirements for price reporting as the Commission may 
order.
    (d) Records retention. A Seller must retain, for a period of five 
years, all data and information upon which it billed the prices it 
charged for the electric energy or electric energy products it sold 
pursuant to Seller's market-based rate tariff, and the prices it 
reported for use in price indices.



Sec. 35.42  Change in status reporting requirement.

    (a) As a condition of obtaining and retaining market-based rate 
authority, a Seller must timely report to the Commission any change in 
status that would reflect a departure from the characteristics the 
Commission relied

[[Page 316]]

upon in granting market-based rate authority. A change in status 
includes, but is not limited to, the following:
    (1) Ownership or control of generation capacity that results in net 
increases of 100 MW or more, or of inputs to electric power production, 
or ownership, operation or control of transmission facilities, or
    (2) Affiliation with any entity not disclosed in the application for 
market-based rate authority that owns or controls generation facilities 
or inputs to electric power production, affiliation with any entity not 
disclosed in the application for market-based rate authority that owns, 
operates or controls transmission facilities, or affiliation with any 
entity that has a franchised service area.
    (b) Any change in status subject to paragraph (a) of this section, 
other than a change in status submitted to report the acquisition of 
control of a site or sites for new generation capacity development, must 
be filed no later than 30 days after the change in status occurs. Power 
sales contracts with future delivery are reportable 30 days after the 
physical delivery has begun. Failure to timely file a change in status 
report constitutes a tariff violation.
    (c) When submitting a change in status notification regarding a 
change that impacts the pertinent assets held by a Seller or its 
affiliates with market-based rate authorization, a Seller must include 
an appendix of assets in the form provided in Appendix B of this 
subpart.
    (d) A Seller must report on a quarterly basis the acquisition of 
control of a site or sites for new generation capacity development for 
which site control has been demonstrated in the interconnection process 
and for which the potential number of megawatts that are reasonably 
commercially feasible on the site or sites for new generation capacity 
development is equal to 100 megawatts or more. If a Seller elects to 
make a monetary deposit so that it may demonstrate site control at a 
later time in the interconnection process, the monetary deposit will 
trigger the quarterly reporting requirement instead of the demonstration 
of site control. A notification of change in status that is submitted to 
report the acquisition of control of a site or sites for new generation 
capacity development must include:
    (1) The number of sites acquired;
    (2) The relevant geographic market in which the sites are located; 
and
    (3) The maximum potential number of megawatts (MW) that are 
reasonably commercially feasible on the sites reported.
    (e) For the purposes of paragraph (d) of this section, ``control'' 
shall mean ``site control'' as it is defined in the Standard Large 
Generator Interconnection Procedures (LGIP).

[Order 697-D, 75 FR 14351, Mar. 25, 2010]



                 Sec. Appendix A to Subpart H of Part 35

                               Appendix A

                         Standard Screen Format

             (Data provided for Illustrative Purposes only)

                    Part I--Pivotal Supplier Analysis
------------------------------------------------------------------------
     Row              Generation              MW           Reference
------------------------------------------------------------------------
Seller and Affiliate Capacity
------------------------------------------------------------------------
A...........  Installed Capacity.......       19,500  Workpaper.
B...........  Long-Term Firm Purchases.          500  Workpaper.
C...........  Long-Term Firm Sales.....       -1,000  Workpaper.
D...........  Imported Power...........            0  Workpaper.
------------------------------------------------------------------------
Non-Affiliate Capacity
------------------------------------------------------------------------
E...........  Installed Capacity.......        8,000  Workpaper.
F...........  Long-Term Firm Purchases.          500  Workpaper.

[[Page 317]]

 
G...........  Long-Term Firm Sales.....       -2,500  Workpaper.
H...........  Imported Power...........        3,500  Workpaper.
I...........  Balancing Authority Area        -2,160  Workpaper.
               Reserve Requirement.
J...........  Amount of Line I                -2,160  Workpaper.
               Attributable to Seller,
               if any.
K...........  Total Uncommitted Supply         9,840
               (SUM
               A,B,C,D,E,F,G,H,I,M).
------------------------------------------------------------------------
Load
------------------------------------------------------------------------
L...........  Balancing Authority Area        18,000  Workpaper.
               Annual Peak Load.
M...........  Average Daily Peak Native      -16,500  Workpaper.
               Load in Peak Month.
N...........  Amount of Line M               -16,500  Workpaper.
               Attributable to Seller,
               if any.
O...........  Wholesale Load (SUM L,M).        1,500
P...........  Net Uncommitted Supply (K-       8,340
               O).
Q...........  Seller's Uncommitted               340
               Capacity (SUM
               A,B,C,D,J,N).
              Result of Pivotal          ...........  PASS.
               Supplier Screen (Pass if
               Line Q < Line P), (Fail
               if Line Q 
               Line P).
------------------------------------------------------------------------


[Order 697, 72 FR 40038, July 20, 2007, as amended by Order 697-A, 73 FR 
25913, May 7, 2008]



                 Sec. Appendix B to Subpart H of Part 35

    This is an example of the required appendix listing the filing 
entity and all its energy affiliates and their associated assets which 
should be submitted with all market-based rate filings.

                                                                        Market-Based Rate Authority and Generation Assets
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                       Location
                                Docket No. where                                                                         ------------------------------------
 Filing entity and its energy     MBR authority    Generation name      Owned by        Controlled by     Date control                         Geographic      In-service date  Nameplate and/or
          affiliates               was granted                                                             transferred        Balancing        region (per                       seasonal rating
                                                                                                                           authority area      Appendix D)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ABC Corp......................  ER05-23X-000....  ABC falls plant   ABC Corp........  ABC Corp........  NA*.............  ABC balancing     Central.........  8/12/1981.......  153.5 MW
                                                   1.                                                             authority area.                                       (seasonal).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
xyz Inc.......................  ER94-79XX-000...  NA..............  NA..............  NA..............  NA..............  NA..............  NA..............  NA..............  NA.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
RST LLC.......................  ER01-2XX5-000...  Green CoGen.....  WWW Corp........  RST LLC.........  5/23/2005.......  New York ISO....  Northeast.......  12/20/2003......  2000 MW
                                                                                                                                                                                 (nameplate).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sample Co.....................  ER03-XX45-000...  Sample Co. 3....  Sample Co.......  YYY Corp........  2/1/1982........  Sample Co.        Southwest.......  5/13/1973.......  10 MW
                                                                                                                           balancing                                             (seasonal).
                                                                                                                           authority.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
*If an entity has no assets or the field is not applicable please indicate so by inputting (NA).


                           Electric Transmission Assets and/or Natural Gas Intrastate Pipelines and/or Gas Storage Facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   Location
                                                                                                      ----------------------------------
 Filing entity and its energy   Asset name and       Owned by        Controlled by     Date control                        Geographic          Size
          affiliates                  use                                               transferred       Balancing       region (per
                                                                                                        authority area    Appendix D)
--------------------------------------------------------------------------------------------------------------------------------------------------------
ABC Corp.....................  CBA Line, used    ABC Corp........  ABC Corp........  NA*.............  New York ISO...  Northeast......  approximately
                                to interconnect                                                                                           five-mile, 500
                                Green Cogen to                                                                                            kV line.
                                New York ISO
                                transmission
                                system.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 318]]

 
Etc. LP......................  Nowhere           Etc. LP.........  Etc. LP.........  NA..............  ABC balancing    Central........  approximately
                                Pipeline, used                                                          authority area.                   14 miles of
                                to connect                                                                                                natural gas
                                Storage LLC's--                                                                                           pipeline and
                                Longway                                                                                                   related
                                Pipeline to ABC                                                                                           equipment with
                                falls plant                                                                                               50 MMcf/d
                                1.                                                                                               capacity.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*If the field is not applicable please indicate so by inputting (NA).



  Subpart I_Cross-Subsidization Restrictions on Affiliate Transactions

    Source: 73 FR 11025, Feb. 29, 2008, unless otherwise noted.



Sec. 35.43  Generally.

    (a) For purposes of this subpart:
    (1) Affiliate of a specified company means:
    (i) For any person other than an exempt wholesale generator:
    (A) Any person that directly or indirectly owns, controls, or holds 
with power to vote, 10 percent or more of the outstanding voting 
securities of the specified company;
    (B) Any company 10 percent or more of whose outstanding voting 
securities are owned, controlled, or held with power to vote, directly 
or indirectly, by the specified company;
    (C) Any person or class of persons that the Commission determines, 
after appropriate notice and opportunity for hearing, to stand in such 
relation to the specified company that there is liable to be an absence 
of arm's-length bargaining in transactions between them as to make it 
necessary or appropriate in the public interest or for the protection of 
investors or consumers that the person be treated as an affiliate; and
    (D) Any person that is under common control with the specified 
company.
    (E) For purposes of paragraph (a)(1)(i) of this section, owning, 
controlling or holding with power to vote, less than 10 percent of the 
outstanding voting securities of a specified company creates a 
rebuttable presumption of lack of control.
    (ii) For any exempt wholesale generator (as defined under Sec. 
366.1 of this chapter), consistent with section 214 of the Federal Power 
Act (16 U.S.C. 824m), which provides that ``affiliate'' will have the 
same meaning as provided in section 2(a) of the Public Utility Holding 
Company Act of 1935 (15 U.S.C. 79b(a)(11)):
    (A) Any person that directly or indirectly owns, controls, or holds 
with power to vote, 5 percent or more of the outstanding voting 
securities of the specified company;
    (B) Any company 5 percent or more of whose outstanding voting 
securities are owned, controlled, or held with power to vote, directly 
or indirectly, by the specified company;
    (C) Any individual who is an officer or director of the specified 
company, or of any company which is an affiliate thereof under paragraph 
(a)(1)(ii)(A) of this section; and
    (D) Any person or class of persons that the Commission determines, 
after appropriate notice and opportunity for hearing, to stand in such 
relation to the specified company that there is liable to be an absence 
of arm's-length bargaining in transactions between them as to make it 
necessary or appropriate in the public interest or for the protection of 
investors or consumers that the person be treated as an affiliate.
    (2) Captive customers means any wholesale or retail electric energy 
customers served by a franchised public utility under cost-based 
regulation.

[[Page 319]]

    (3) Franchised public utility means a public utility with a 
franchised service obligation under state law.
    (4) Market-regulated power sales affiliate means any power seller 
affiliate other than a franchised public utility, including a power 
marketer, exempt wholesale generator, qualifying facility or other power 
seller affiliate, whose power sales are regulated in whole or in part on 
a market-rate basis.
    (5) Non-utility affiliate means any affiliate that is not in the 
power sales or transmission business, other than a local gas 
distribution company or an interstate natural gas pipeline.
    (b) The provisions of this subpart apply to all franchised public 
utilities that have captive customers or that own or provide 
transmission service over jurisdictional transmission facilities.



Sec. 35.44  Protections against affiliate cross-subsidization.

    (a) Restriction on affiliate sales of electric energy. No wholesale 
sale of electric energy may be made between a franchised public utility 
with captive customers and a market-regulated power sales affiliate 
without first receiving Commission authorization for the transaction 
under section 205 of the Federal Power Act. This requirement does not 
apply to energy sales from a qualifying facility, as defined by 18 CFR 
292.101, made under market-based rate authority granted by the 
Commission.
    (b) Non-power goods or services.
    (1) Unless otherwise permitted by Commission rule or order, and 
except as permitted by paragraph (b)(4) of this section, sales of any 
non-power goods or services by a franchised public utility that has 
captive customers or that owns or provides transmission service over 
jurisdictional transmission facilities, including sales made to or 
through its affiliated exempt wholesale generators or qualifying 
facilities, to a market-regulated power sales affiliate or non-utility 
affiliate must be at the higher of cost or market price.
    (2) Unless otherwise permitted by Commission rule or order, and 
except as permitted by paragraphs (b)(3) and (b)(4) of this section, a 
franchised public utility that has captive customers or that owns or 
provides transmission service over jurisdictional transmission 
facilities, may not purchase or receive non-power goods and services 
from a market-regulated power sales affiliate or a non-utility affiliate 
at a price above market.
    (3) A franchised public utility that has captive customers or that 
owns or provides transmission service over jurisdictional transmission 
facilities, may only purchase or receive non-power goods and services 
from a centralized service company at cost.
    (4) A company in a single-state holding company system, as defined 
in Sec. 366.3(c)(1) of this chapter, may provide general administrative 
and management non-power goods and services to, or receive such goods 
and services from, other companies in the same holding company system, 
at cost, provided that the only parties to transactions involving these 
non-power goods and services are affiliates or associate companies, as 
defined in Sec. 366.1 of this chapter, of a holding company in the 
holding company system.
    (c) Exemption for price under fuel adjustment clause regulations. 
Where the price of fuel from a company-owned or controlled source is 
found or presumed under Sec. 35.14 to be reasonable and includable in 
the adjustment clause, transactions involving that fuel shall be exempt 
from the affiliate price restrictions in Sec. 35.44(b).

[73 FR 11025, Feb. 29, 2008, as amended by Order 707-A, 73 FR 43083, 
July 24, 2008]



   Subpart J_Credit Practices In Organized Wholesale Electric Markets

    Source: Order 741, 75 FR 65962, Oct. 27, 2010, unless otherwise 
noted.



Sec. 35.45  Applicability.

    This subpart establishes credit practices for organized wholesale 
electric markets for the purpose of minimizing risk to market 
participants.



Sec. 35.46  Definitions.

    As used in this subpart:
    (a) Market Participant means an entity that qualifies as a Market 
Participant under Sec. 35.34.

[[Page 320]]

    (b) Organized Wholesale Electric Market includes an independent 
system operator and a regional transmission organization.
    (c) Regional Transmission Organization means an entity that 
qualifies as a Regional Transmission Organization under 18 CFR 35.34.
    (d) Independent System Operator means an entity operating a 
transmission system and found by the Commission to be an Independent 
System Operator.



Sec. 35.47  Tariff provisions regarding credit practices in organized 

wholesale electric markets.

    Each organized wholesale electric market must have tariff provisions 
that:
    (a) Limit the amount of unsecured credit extended by an organized 
wholesale electric market to no more than $50 million for each market 
participant; where a corporate family includes more than one market 
participant participating in the same organized wholesale electric 
market, the limit on the amount of unsecured credit extended by that 
organized wholesale electric market shall be no more than $50 million 
for the corporate family.
    (b) Adopt a billing period of no more than seven days and allow a 
settlement period of no more than seven days.
    (c) Eliminate unsecured credit in financial transmission rights 
markets and equivalent markets.
    (d) Establish a single counterparty to all market participant 
transactions, or require each market participant in an organized 
wholesale electric market to grant a security interest to the organized 
wholesale electric market in the receivables of its transactions, or 
provide another method of supporting netting that provides a similar 
level of protection to the market and is approved by the Commission. In 
the alternative, the organized wholesale electric market shall not net 
market participants' transactions and must establish credit based on 
market participants' gross obligations.
    (e) Limit to no more than two days the time period provided to post 
additional collateral when additional collateral is requested by the 
organized wholesale electric market.
    (f) Require minimum participation criteria for market participants 
to be eligible to participate in the organized wholesale electric 
market.
    (g) Provide a list of examples of circumstances when a market 
administrator may invoke a ``material adverse change'' as a 
justification for requiring additional collateral; this list does not 
limit a market administrator's right to invoke such a clause in other 
circumstances.

[Order 741, 75 FR 65962, Oct. 27, 2010, as amended by Order 741-A, 76 FR 
10498, Feb. 25, 2011]



PART 36_RULES CONCERNING APPLICATIONS FOR TRANSMISSION SERVICES UNDER SECTION 

211 OF THE FEDERAL POWER ACT--Table of Contents



    Authority: 5 U.S.C. 551-557; 16 U.S.C. 791a-825r; 31 U.S.C. 9701; 42 
U.S.C. 7107-7352.



Sec. 36.1  Notice provisions applicable to applications for transmission 

services under section 211 of the Federal Power Act.

    (a) Definitions. (1) Affected party means each affected electric 
utility, each affected State regulatory authority, and each affected 
Federal power marketing agency.
    (2) Affected electric utility means each electric utility that has 
made arrangements for the sale or purchase of electric energy to be 
transmitted pursuant to the particular application for transmission 
services, and each transmitting utility, as defined in section 3(23) of 
the Federal Power Act, 16 U.S.C. 796(23), being requested to transmit 
such electric energy.
    (3) Affected State regulatory authority means a State regulatory 
authority, as defined in section 3(21) of the Federal Power Act, 16 
U.S.C. 796(21), regulating the rates and charges of each affected 
electric utility.
    (4) Affected Federal power marketing agency means a Federal power 
marketing agency that operates in the service area of each affected 
electric utility.

[[Page 321]]

    (b) Additional filing requirements. Any person filing an application 
for transmission services pursuant to section 211 of the Federal Power 
Act, 16 U.S.C. 824j, shall include the following:
    (1) The applicant must include a form of notice of the application 
suitable for publication in the Federal Register in accordance with the 
specifications in Sec. 385.203(d) of this chapter. The form of notice 
shall be on electronic media as specified by the Secretary.
    (2) A sworn statement that actual notice, including the applicant's 
name, the date of the application, the names of the affected parties, 
and a brief description of the transmission services sought (including 
the proposed dates for initiating and terminating the requested 
transmission services, the total amount of transmission capacity 
requested, a brief description of the character and nature of the 
transmission services being requested, and whether the transmission 
services requested are firm or non-firm) has been served, pursuant to 
Rule 2010 of the Commission's Rules of Practice and Procedure, Sec. 
385.2010 of this chapter, on each affected party. Such statement shall 
enumerate each person so served.
    (c) Other filing requirements. All other filing requirements of the 
Commission's Rules of Practice and Procedure remain in effect for 
applications under this section.

[Order 560, 58 FR 57737, Oct. 27, 1993, as amended by Order 593, 62 FR 
1283, Jan. 9, 1997; Order 647, 69 FR 32438, June 10, 2004]

    Effective Date Note: By Order 560, 58 FR 57737, Oct. 27, 1993, Sec. 
36.1 was added. The section contains information collection and 
recordkeeping requirements and will not become effective until approval 
has been given by the Office of Management and Budget.



PART 37_OPEN ACCESS SAME-TIME INFORMATION SYSTEMS--Table of Contents



Sec.
37.1 Applicability.
37.2 Purpose.
37.3 Definitions.
37.4 [Reserved]
37.5 Obligations of Transmission Providers and Responsible Parties.
37.6 Information to be posted on the OASIS.
37.7 Auditing Transmission Service Information.
37.8 Obligations of OASIS users.

    Authority: 16 U.S.C. 791-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352.

    Source: Order 889, 61 FR 21764, May 10, 1996, unless otherwise 
noted.



Sec. 37.1  Applicability.

    This part applies to any public utility that owns, operates, or 
controls facilities used for the transmission of electric energy in 
interstate commerce and to transactions performed under the pro forma 
tariff required in part 35 of this chapter.



Sec. 37.2  Purpose.

    (a) The purpose of this part is to ensure that potential customers 
of open access transmission service receive access to information that 
will enable them to obtain transmission service on a non-discriminatory 
basis from any Transmission Provider. These rules provide standards of 
conduct and require the Transmission Provider (or its agent) to create 
and operate an Open Access Same-time Information System (OASIS) that 
gives all users of the open access transmission system access to the 
same information.
    (b) The OASIS will provide information by electronic means about 
available transmission capability for point-to-point service and will 
provide a process for requesting transmission service. OASIS will enable 
Transmission Providers and Transmission Customers to communicate 
promptly requests and responses to buy and sell available transmission 
capacity offered under the Transmission Provider's tariff.



Sec. 37.3  Definitions.

    (a) Transmission Provider means any public utility that owns, 
operates, or controls facilities used for the transmission of electric 
energy in interstate commerce.
    (b) Transmission Customer means any eligible customer (or its 
designated agent) that can or does execute a transmission service 
agreement or can or does receive transmission service.
    (c) Responsible party means the Transmission Provider or an agent to 
whom the Transmission Provider has delegated the responsibility of 
meeting any of the requirements of this part.

[[Page 322]]

    (d) Reseller means any Transmission Customer who offers to sell 
transmission capacity it has purchased.
    (e) Wholesale merchant function means the sale for resale of 
electric energy in interstate commerce.
    (f) Affiliate means:
    (1) For any exempt wholesale generator, as defined under section 
32(a) of the Public Utility Holding Company Act of 1935, as amended, the 
same as provided in section 214 of the Federal Power Act; and
    (2) For any other entity, the term affiliate has the same meaning as 
given in Sec. 161.2(a) of this chapter.

[Order 889, 61 FR 21764, May 10, 1996, as amended by Order 889-A, 62 FR 
12503, Mar. 14, 1997]



Sec. 37.4  [Reserved]



Sec. 37.5  Obligations of Transmission Providers and Responsible Parties.

    (a) Each Transmission Provider is required to provide for the 
operation of an OASIS, either individually or jointly with other 
Transmission Providers, in accordance with the requirements of this 
Part. The Transmission Provider may delegate this responsibility to a 
Responsible Party such as another Transmission Provider, an Independent 
System Operator, a Regional Transmission Group, or a Regional 
Reliability Council.
    (b) A Responsible Party must provide access to an OASIS providing 
standardized information relevant to the availability of transmission 
capacity, prices, and other information (as described in this part) 
pertaining to the transmission system for which it is responsible.
    (c) A Responsible Party may not deny or restrict access to an OASIS 
user merely because that user makes automated computer-to-computer file 
transfers or queries, or extensive requests for data.
    (d) In the event that an OASIS user's grossly inefficient method of 
accessing an OASIS node or obtaining information from the node seriously 
degrades the performance of the node, a Responsible Party may limit a 
user's access to the OASIS node without prior Commission approval. The 
Responsible Party must immediately contact the OASIS user to resolve the 
problem. Notification of the restriction must be made to the Commission 
within two business days of the incident and include a description of 
the problem. A closure report describing how the problem was resolved 
must be filed with the Commission within one week of the incident.
    (e) In the event that an OASIS user makes an error in a query, the 
Responsible Party can block the affected query and notify the user of 
the nature of the error. The OASIS user must correct the error before 
making any additional queries. If there is a dispute over whether an 
error has occurred, the procedures in paragraph (d) of this section 
apply.
    (f) Transmission Providers must provide ``read only'' access to the 
OASIS to Commission staff and the staffs of State regulatory 
authorities, at no cost, after such staff members have complied with the 
requisite registration procedures.

[Order 889, 61 FR 21764, May 10, 1996, as amended by Order 605, 64 FR 
34124, June 25, 1999; Order 638, 65 FR 17400, Mar. 31, 2000; Order 676, 
71 FR 26212, May 4, 2006]



Sec. 37.6  Information to be posted on the OASIS.

    (a) The information posted on the OASIS must be in such detail and 
the OASIS must have such capabilities as to allow Transmission Customers 
to:
    (1) Make requests for transmission services offered by Transmission 
Providers, Resellers and other providers of ancillary services, request 
the designation of a network resource, and request the termination of 
the designation of a network resource;
    (2) View and download in standard formats, using standard protocols, 
information regarding the transmission system necessary to enable 
prudent business decision making;
    (3) Post, view, upload and download information regarding available 
products and desired services;
    (4) Clearly identify the degree to which transmission service 
requests or schedules were denied or interrupted;

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    (5) Obtain access, in electronic format, to information to support 
available transmission capability calculations and historical 
transmission service requests and schedules for various audit purposes; 
and
    (6) Make file transfers and automated computer-to-computer file 
transfers and queries as defined by the Standards and Communications 
Protocols Document.
    (b) Posting transfer capability. The available transfer capability 
on the Transmission Provider's system (ATC) and the total transfer 
capability (TTC) of that system shall be calculated and posted for each 
Posted Path as set out in this section.
    (1) Definitions. For purposes of this section the terms listed below 
have the following meanings:
    (i) Posted path means any control area to control area 
interconnection; any path for which service is denied, curtailed or 
interrupted for more than 24 hours in the past 12 months; and any path 
for which a customer requests to have ATC or TTC posted. For this last 
category, the posting must continue for 180 days and thereafter until 
180 days have elapsed from the most recent request for service over the 
requested path. For purposes of this definition, an hour includes any 
part of an hour during which service was denied, curtailed or 
interrupted.
    (ii) Constrained posted path means any posted path having an ATC 
less than or equal to 25 percent of TTC at any time during the preceding 
168 hours or for which ATC has been calculated to be less than or equal 
to 25 percent of TTC for any period during the current hour or the next 
168 hours.
    (iii) Unconstrained posted path means any posted path not determined 
to be a constrained posted path.
    (iv) The word interconnection, as used in the definition of ``posted 
path'', means all facilities connecting two adjacent systems or control 
areas.
    (v) Available transfer capability or ATC means the transfer 
capability remaining in the physical transmission network for further 
commercial activity over and above already committed uses, or such 
definition as contained in Commission-approved Reliability Standards.
    (vi) Total transfer capability or TTC means the amount of electric 
power that can be moved or transferred reliably from one area to another 
area of the interconnected transmission systems by way of all 
transmission lines (or paths) between those areas under specified system 
conditions, or such definition as contained in Commission-approved 
Reliability Standards.
    (vii) Capacity Benefit Margin or CBM means the amount of TTC 
preserved by the Transmission Provider for load-serving entities, whose 
loads are located on that Transmission Provider's system, to enable 
access by the load-serving entities to generation from interconnected 
systems to meet generation reliability requirements, or such definition 
as contained in Commission-approved Reliability Standards.
    (viii) Transmission Reliability Margin or TRM means the amount of 
TTC necessary to provide reasonable assurance that the interconnected 
transmission network will be secure, or such definition as contained in 
Commission-approved Reliability Standards.
    (2) Calculation methods, availability of information, and requests. 
(i) Information used to calculate any posting of ATC and TTC must be 
dated and time-stamped and all calculations shall be performed according 
to consistently applied methodologies referenced in the Transmission 
Provider's transmission tariff and shall be based on Commission-approved 
Reliability Standards as well as current industry practices, standards 
and criteria.
    (ii) On request, the Responsible Party must make all data used to 
calculate ATC, TTC, CBM, and TRM for any constrained posted paths 
publicly available (including the limiting element(s) and the cause of 
the limit (e.g., thermal, voltage, stability), as well as load forecast 
assumptions) in electronic form within one week of the posting. The 
information is required to be provided only in the electronic format in 
which it was created, along with any necessary decoding instructions, at 
a cost limited to the cost of reproducing the material. This information 
is to be retained for six months after the applicable posting period.

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    (iii) System planning studies, facilities studies, and specific 
network impact studies performed for customers or the Transmission 
Provider's own network resources are to be made publicly available in 
electronic form on request and a list of such studies shall be posted on 
the OASIS. A study is required to be provided only in the electronic 
format in which it was created, along with any necessary decoding 
instructions, at a cost limited to the cost of reproducing the material. 
These studies are to be retained for five years.
    (3) Posting. The ATC, TTC, CBM, and TRM for all Posted Paths must be 
posted in megawatts by specific direction and in the manner prescribed 
in this subsection.
    (i) Constrained posted paths--(A) For firm ATC and TTC.
    (1) The posting shall show ATC, TTC, CBM, and TRM for a 30-day 
period. For this period postings shall be: by the hour, for the current 
hour and the 168 hours next following; and thereafter, by the day. If 
the Transmission Provider charges separately for on-peak and off-peak 
periods in its tariff, ATC, TTC, CBM, and TRM will be posted daily for 
each period.
    (2) Postings shall also be made by the month, showing for the 
current month and the 12 months next following.
    (3) If planning and specific requested transmission studies have 
been done, seasonal capability shall be posted for the year following 
the current year and for each year following to the end of the planning 
horizon but not to exceed 10 years.
    (B) For non-firm ATC and TTC. The posting shall show ATC, TTC, CBM 
and TRM for a 30-day period by the hour and days prescribed under 
paragraph (b)(3)(i)(A)(1) of this section and, if so requested, by the 
month and year as prescribed under paragraph (b)(3)(i)(A) (2) and (3) of 
this section. The posting of non-firm ATC and TTC shall show CBM as 
zero.
    (C) Updating posted information for constrained paths.
    (1) The capability posted under paragraphs (b)(3)(i)(A) and (B) of 
this section must be updated when transactions are reserved or service 
ends or whenever the estimate for the path changes by more than 10 
percent.
    (2) All updating of hourly information shall be made on the hour.
    (3) When the monthly and yearly capability posted under paragraphs 
(b)(3)(i)(A) and (B) of this section are updated because of a change in 
TTC by more than 10 percent, the Transmission Provider shall post a 
brief, but specific, narrative explanation of the reason for the update. 
This narrative should include, the specific events which gave rise to 
the update (e.g., scheduling of planned outages and occurrence of forced 
transmission outages, de-ratings of transmission facilities, scheduling 
of planned generation outages and occurrence of forced generation 
outages, changes in load forecast, changes in new facilities' in-service 
dates, or other events or assumption changes) and new values for ATC on 
the path (as opposed to all points on the network).
    (4) When the monthly and yearly capability posted under paragraphs 
(b)(3)(i)(A) and (B) of this section remain unchanged at a value of zero 
for a period of six months, the Transmission Provider shall post a 
brief, but specific, narrative explanation of the reason for the 
unavailability of ATC.
    (ii) Unconstrained posted paths.
    (A) Postings of firm and nonfirm ATC, TTC, CBM, and TRM shall be 
posted separately by the day, showing for the current day and the next 
six days following and thereafter, by the month for the 12 months next 
following. If the Transmission Provider charges separately for on-peak 
and off-peak periods in its tariff, ATC, TTC, CBM, and TRM will be 
posted separately for the current day and the next six days following 
for each period. These postings are to be updated whenever the ATC 
changes by more than 20 percent of the Path's TTC.
    (B) If planning and specific requested transmission studies have 
been done, seasonal capability shall be posted for the year following 
the current year and for each year following until the end of the 
planning horizon but not to exceed 10 years.
    (iii) Calculation of CBM.
    (A) The Transmission Provider must reevaluate its CBM needs at least 
every year.

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    (B) The Transmission Provider must post its practices for 
reevaluating its CBM needs.
    (iv) Daily load. The Transmission Provider must post on a daily 
basis, its load forecast, including underlying assumptions, and actual 
daily peak load for the prior day.
    (c) Posting Transmission Service Products and Prices. (1) 
Transmission Providers must post prices and a summary of the terms and 
conditions associated with all transmission products offered to 
Transmission Customers.
    (2) Transmission Providers must provide a downloadable file of their 
complete tariffs in the same electronic format as the tariff that is 
filed with the Commission. Transmission Providers also must provide a 
link to all of the rules, standards and practices that relate to 
transmission services posted on the Transmission Providers' public Web 
sites.
    (3) Any offer of a discount for any transmission service made by the 
Transmission Provider must be announced to all potential customers 
solely by posting on the OASIS.
    (4) For any transaction for transmission service agreed to by the 
Transmission Provider and a customer, the Transmission Provider (at the 
time when ATC must be adjusted in response to the transaction), must 
post on the OASIS (and make available for download) information 
describing the transaction (including: price; quantity; points of 
receipt and delivery; length and type of service; identification of 
whether the transaction involves the Transmission Provider's wholesale 
merchant function or any affiliate; identification of what, if any, 
ancillary service transactions are associated with this transmission 
service transaction; and any other relevant terms and conditions) and 
shall keep such information posted on the OASIS for at least 30 days. A 
record of the transaction must be retained and kept available as part of 
the audit log required in Sec. 37.7.
    (5) Customers choosing to use the OASIS to offer for resale 
transmission capacity they have purchased must post relevant information 
to the same OASIS as used by the Transmission Provider from whom the 
Reseller purchased the transmission capacity. This information must be 
posted on the same display page, using the same tables, as similar 
capability being sold by the Transmission Provider, and the information 
must be contained in the same downloadable files as the Transmission 
Provider's own available capability.
    (d) Posting Ancillary Service Offerings and Prices. (1) Any 
ancillary service required to be provided or offered under the pro forma 
tariff prescribed by part 35 of this chapter must be posted with the 
price of that service.
    (2) Any offer of a discount for any ancillary service made by the 
Transmission Provider must be announced to all potential customers 
solely by posting on the OASIS.
    (3) For any transaction for ancillary service agreed to by the 
Transmission Provider and a customer, the Transmission Provider (at the 
time when ATC must be adjusted in response to an associated transmission 
service transaction, if any), must post on the OASIS (and make available 
for download) information describing the transaction (including: date 
and time when the agreement was entered into; price; quantity; length 
and type of service; identification of whether the transaction involves 
the Transmission Provider's wholesale merchant function or any 
affiliate; identification of what, if any, transmission service 
transactions are associated with this ancillary service transaction; and 
any other relevant terms and conditions) and shall keep such information 
posted on the OASIS for at least 30 days. A record of the transaction 
must be retained and kept available as part of the audit log required in 
Sec. 37.7.
    (4) Any other interconnected operations service offered by the 
Transmission Provider may be posted, with the price for that service.
    (5) Any entity offering an ancillary service shall have the right to 
post the offering of that service on the OASIS if the service is one 
required to be offered by the Transmission Provider under the pro forma 
tariff prescribed by part 35 of this chapter. Any entity may also post 
any other interconnected operations service voluntarily offered by the 
Transmission Provider. Postings by

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customers and third parties must be on the same page, and in the same 
format, as postings of the Transmission Provider.
    (e) Posting specific transmission and ancillary service requests and 
responses--(1) General rules.(i) All requests for transmission and 
ancillary service offered by Transmission Providers under the pro forma 
tariff, including requests for discounts, and all requests to designate 
or terminate a network resource, must be made on the OASIS and posted 
prior to the Transmission Provider responding to the request, except as 
discussed in paragraphs (e)(1)(ii) and (iii) of this section. The 
Transmission Provider must post all requests for transmission service, 
for ancillary service, and for the designation or termination of a 
network resource comparably. Requests for transmission service, 
ancillary service, and to designate and terminate a network resource, as 
well as the responses to such requests, must be conducted in accordance 
with the Transmission Provider's tariff, the Federal Power Act, and 
Commission regulations.
    (ii) The requirement in paragraph (e)(1)(i) of this section, to post 
requests for transmission and ancillary service offered by Transmission 
Providers under the pro forma tariff, including requests for discounts, 
prior to the Transmission Provider responding to the request, does not 
apply to requests for next-hour service made during Phase I.
    (iii) In the event that a discount is being requested for ancillary 
services that are not in support of basic transmission service provided 
by the Transmission Provider, such request need not be posted on the 
OASIS.
    (iv) In processing a request for transmission or ancillary service, 
the Responsible Party shall post the same information as required in 
paragraphs (c)(4) and (d)(3) of this section, and the following 
information: the date and time when the request is made, its place in 
any queue, the status of that request, and the result (accepted, denied, 
withdrawn). In processing a request to designate or terminate the 
designation of a network resource, the Responsible Party shall post the 
date and time when the request is made.
    (v) For any request to designate or terminate a network resource, 
the Transmission Provider (at the time when the request is received), 
must post on the OASIS (and make available for download) information 
describing the request (including: name of requestor, identification of 
the resource, effective time for the designation or termination, 
identification of whether the transaction involves the Transmission 
Provider's wholesale merchant function or any affiliate; and any other 
relevant terms and conditions) and shall keep such information posted on 
the OASIS for at least 30 days. A record of the transaction must be 
retained and kept available as part of the audit log required in Sec. 
37.7.
    (vi) The Transmission Provider shall post a list of its current 
designated network resources and all network customers' current 
designated network resources on OASIS. The list of network resources 
should include the name of the resource, its geographic and electrical 
location, its total installed capacity, and the amount of capacity to be 
designated as a network resource.
    (2) Posting when a request for transmission service is denied. (i) 
When a request for service is denied, the Responsible Party must provide 
the reason for that denial as part of any response to the request.
    (ii) Information to support the reason for the denial, including the 
operating status of relevant facilities, must be maintained for five 
years and provided, upon request, to the potential Transmission Customer 
and the Commission's Staff.
    (iii) Any offer to adjust operation of the Transmission Provider's 
System to accommodate the denied request must be posted and made 
available to all Transmission Customers at the same time.
    (3) Posting when a transaction is curtailed or interrupted. (i) When 
any transaction is curtailed or interrupted, the Transmission Provider 
must post notice of the curtailment or interruption on the OASIS, and 
the Transmission Provider must state on the OASIS the reason why the 
transaction could not be continued or completed.
    (ii) Information to support any such curtailment or interruption, 
including

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the operating status of the facilities involved in the constraint or 
interruption, must be maintained and made available upon request, to the 
curtailed or interrupted customer, the Commission's Staff, and any other 
person who requests it, for five years.
    (iii) Any offer to adjust the operation of the Transmission 
Provider's system to restore a curtailed or interrupted transaction must 
be posted and made available to all curtailed and interrupted 
Transmission Customers at the same time.
    (f) Posting Transmission Service Schedules Information. Information 
on transmission service schedules must be recorded by the entity 
scheduling the transmission service and must be available on the OASIS 
for download. Transmission service schedules must be posted no later 
than seven calendar days from the start of the transmission service.
    (g) Posting Other Transmission-Related Communications. (1) The 
posting of other communications related to transmission services must be 
provided for by the Responsible Party. These communications may include 
``want ads'' and ``other communications'' (such as using the OASIS as a 
Transmission-related conference space or to provide transmission-related 
messaging services between OASIS users). Such postings carry no 
obligation to respond on the part of any market participant.
    (2) The Responsible Party is responsible for posting other 
transmission-related communications in conformance with the instructions 
provided by the third party on whose behalf the communication is posted. 
It is the responsibility of the third party requesting such a posting to 
ensure the accuracy of the information to be posted.
    (3) Notices of transfers of personnel shall be posted as described 
in Sec. 358.4(c). The posting requirements are the same as those 
provided in Sec. 37.7 for audit data postings.
    (4) Logs detailing the circumstances and manner in which a 
Transmission Provider or Responsible Party exercised its discretion 
under any terms of the tariff shall be posted as described in Sec. 
358.5(c)(4). The posting requirements are the same as those provided in 
Sec. 37.7 for audit data postings.
    (h) Posting information summarizing the time to complete 
transmission service request studies. (1) For each calendar quarter, the 
Responsible Party must post the set of measures detailed in paragraph 
(h)(1)(i) through paragraph (h)(1)(vi) of this section related to the 
Responsible Party's processing of transmission service request system 
impact studies and facilities studies. The Responsible Party must 
calculate and post the measures in paragraph (h)(1)(i) through paragraph 
(h)(1)(vi) of this section for requests for short-term firm point-to-
point transmission service, requests for long-term firm point-to-point 
transmission service, and requests to designate a new network resource 
or network load. When calculating the measures in paragraph (h)(1)(i) 
through paragraph (h)(1)(iv) of this section, the Responsible Party may 
aggregate requests for short-term firm point-to-point service and 
requests for long-term firm point-to-point service, but must calculate 
and post measures separately for transmission service requests from 
Affiliates and transmission service requests from Transmission Customers 
who are not Affiliates. The Responsible Party is required to include in 
the calculations of the measures in paragraph (h)(1)(i) through 
paragraph (h)(1)(vi) of this section all studies the Responsible Party 
conducts of transmission service requests on another Transmission 
Provider's OASIS.
    (i) Process time from initial service request to offer of system 
impact study agreement.
    (A) Number of new system impact study agreements delivered during 
the reporting quarter to entities that request transmission service,
    (B) Number of new system impact study agreements delivered during 
the reporting quarter to entities that request transmission service more 
than thirty (30) days after the Responsible Party received the request 
for transmission service,
    (C) Mean time (in days), for all requests acted on by the 
Responsible Party during the reporting quarter, from the date when the 
Responsible Party received the request for transmission service to when 
the Responsible Party changed the transmission

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service request status to indicate that the Responsible Party could 
offer transmission service or needed to perform a system impact study,
    (D) Mean time (in days), for all system impact study agreements 
delivered by the Responsible Party during the reporting quarter, from 
the date when the Responsible Party received the request for 
transmission service to the date when the Responsible Party delivered a 
system impact study agreement, and
    (E) Number of new system impact study agreements executed during the 
reporting quarter.
    (ii) System impact study processing time.
    (A) Number of system impact studies completed by the Responsible 
Party during the reporting quarter,
    (B) Number of system impact studies completed by the Responsible 
Party during the reporting quarter more than 60 days after the 
Responsible Party received an executed system impact study agreement,
    (C) For all system impact studies completed more than 60 days after 
receipt of an executed system impact study agreement, average number of 
days study was delayed due to transmission customer's actions (e.g., 
delays in providing needed data),
    (D) Mean time (in days), for all system impact studies completed by 
the Responsible Party during the reporting quarter, from the date when 
the Responsible Party received the executed system impact study 
agreement to the date when the Responsible Party provided the system 
impact study to the entity who executed the system impact study 
agreement, and
    (E) Mean cost of system impact studies completed by the Responsible 
Party during the reporting quarter.
    (iii) Transmission service requests withdrawn from the system impact 
study queue.
    (A) Number of transmission service requests withdrawn from the 
Responsible Party's system impact study queue during the reporting 
quarter,
    (B) Number of transmission service requests withdrawn from the 
Responsible Party's system impact study queue during the reporting 
quarter more than 60 days after the Responsible Party received the 
executed system impact study agreement, and
    (C) Mean time (in days), for all transmission service requests 
withdrawn from the Responsible Party's system impact study queue during 
the reporting quarter, from the date the Responsible Party received the 
executed system impact study agreement to date when request was 
withdrawn from the Responsible Party's system impact study queue.
    (iv) Process time from completed system impact study to offer of 
facilities study.
    (A) Number of new facilities study agreements delivered during the 
reporting quarter to entities that request transmission service,
    (B) Number of new facilities study agreements delivered during the 
reporting quarter to entities that request transmission service more 
than thirty (30) days after the Responsible Party completed the system 
impact study,
    (C) Mean time (in days), for all facilities study agreements 
delivered by the Responsible Party during the reporting quarter, from 
the date when the Responsible Party completed the system impact study to 
the date when the Responsible Party delivered a facilities study 
agreement, and
    (D) Number of new facilities study agreements executed during the 
reporting quarter.
    (v) Facilities study processing time.
    (A) Number of facilities studies completed by the Responsible Party 
during the reporting quarter,
    (B) Number of facilities studies completed by the Responsible Party 
during the reporting quarter more than 60 days after the Responsible 
Party received an executed facilities study agreement,
    (C) For all facilities studies completed more than 60 days after 
receipt of an executed facilities study agreement, average number of 
days study was delayed due to transmission customer's actions (e.g., 
delays in providing needed data),
    (D) Mean time (in days), for all facilities studies completed by the 
Responsible Party during the reporting quarter, from the date when the 
Responsible Party received the executed facilities study agreement to 
the date when the Responsible Party provided

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the facilities study to the entity who executed the facilities study 
agreement,
    (E) Mean cost of facilities studies completed by the Responsible 
Party during the reporting quarter, and
    (F) Mean cost of upgrades recommended in facilities studies 
completed during the reporting quarter.
    (vi) Service requests withdrawn from facilities study queue.
    (A) Number of transmission service requests withdrawn from the 
Responsible Party's facilities study queue during the reporting quarter,
    (B) Number of transmission service requests withdrawn from the 
Responsible Party's facilities study queue during the reporting quarter 
more than 60 days after the Responsible Party received the executed 
facilities study agreement, and
    (C) Mean time (in days), for all transmission service requests 
withdrawn from the Responsible Party's facilities study queue during the 
reporting quarter, from the date the Responsible Party received the 
executed facilities study agreement to date when request was withdrawn 
from the Responsible Party's facilities study queue.
    (2) The Responsible Party is required to post the measures in 
paragraph (h)(1)(i) through paragraph (h)(1)(vi) of this section for 
each calendar quarter within 15 days of the end of the calendar quarter. 
The Responsible Party will keep the quarterly measures posted on OASIS 
for three calendar years.
    (3) The Responsible Party will be required to post on OASIS the 
measures in paragraph (h)(3)(i) through paragraph (h)(3)(iv) of this 
section in the event the Responsible Party, for two consecutive calendar 
quarters, completes more than twenty (20) percent of the studies 
associated with requests for transmission service from entities that are 
not Affiliates of the Responsible Party more than sixty (60) days after 
the Responsible Party delivers the appropriate study agreement. The 
Responsible Party will have to post the measures in paragraph (h)(3)(i) 
through paragraph (h)(3)(iv) of this section until it processes at least 
ninety (90) percent of all studies within 60 days after it has received 
the appropriate executed study agreement. For the purposes of 
calculating the percent of studies completed more than sixty (60) days 
after the Responsible Party delivers the appropriate study agreement, 
the Responsible Party should aggregate all system impact studies and 
facilities studies that it completes during the reporting quarter.
    (i) Mean, across all system impact studies the Responsible Party 
completes during the reporting quarter, of the employee-hours expended 
per system impact study the Responsible Party completes during reporting 
period;
    (ii) Mean, across all facilities studies the Responsible Party 
completes during the reporting quarter, of the employee-hours expended 
per facilities study the Responsible Party completes during reporting 
period;
    (iii) The number of employees the Responsible Party has assigned to 
process system impact studies;
    (iv) The number of employees the Responsible Party has assigned to 
process facilities studies.
    (4) The Responsible Party is required to post the measures in 
paragraph (h)(3)(i) through paragraph (h)(3)(iv) of this section for 
each calendar quarter within 15 days of the end of the calendar quarter. 
The Responsible Party will keep the quarterly measures posted on OASIS 
for five calendar years.
    (i) Posting data related to grants and denials of service. The 
Responsible Party is required to post data each month listing, by path 
or flowgate, the number of transmission service requests that have been 
accepted and the number of transmission service requests that have been 
denied during the prior month. This posting must distinguish between the 
length of the service request (e.g., short-term or long-term requests) 
and between the type of service requested (e.g., firm point-to-point, 
non-firm point-to-point or network service). The posted data must show:
    (1) The number of non-Affiliate requests for transmission service 
that have been rejected,
    (2) The total number of non-Affiliate requests for transmission 
service that have been made,

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    (3) The number of Affiliate requests for transmission service, 
including requests by the transmission provider's merchant function to 
designate a network resource or to procure secondary network service, 
that have been rejected, and
    (4) The total number of Affiliate requests for transmission service, 
including requests by the transmission provider's merchant function to 
designate, or terminate the designation of, a network resource or to 
procure secondary network service, that have been made.
    (j) Posting redispatch data.
    (1) The Transmission Provider must allow the posting on OASIS of any 
third party offer to relieve a specified congested transmission 
facility.
    (2) The Transmission Provider must post on OASIS (i) its monthly 
average cost of planning and reliability redispatch, for which it 
invoices customers, at each internal transmission facility or interface 
over which it provides redispatch service and (ii) a high and low 
redispatch cost for the month for each of these same transmission 
facilities. The transmission provider must post this data on OASIS as 
soon as practical after the end of each month, but no later than when it 
sends invoices to transmission customers for redispatch-related 
services.

[Order 889, 61 FR 21764, May 10, 1996, as amended by Order 889-A, 62 FR 
12503, Mar. 14, 1997; Order 605, 64 FR 34124, June 25, 1999; Order 2004, 
68 FR 69157, Dec. 11, 2003; Order 890, 72 FR 12493, Mar. 15, 2007; Order 
890-A, 73 FR 3111, Jan. 16, 2008]



Sec. 37.7  Auditing Transmission Service Information.

    (a) All OASIS database transactions, except other transmission-
related communications provided for under Sec. 37.6(g)(2), must be 
stored, dated, and time stamped.
    (b) Audit data must remain available for download on the OASIS for 
90 days, except ATC/TTC postings that must remain available for download 
on the OASIS for 20 days. The audit data are to be retained and made 
available upon request for download for five years from the date when 
they are first posted in the same electronic form as used when they 
originally were posted on the OASIS.

[Order 889, 61 FR 21764, May 10, 1996, as amended by Order 889-A, 62 FR 
12504, Mar. 14, 1997; Order 890, 72 FR 12496, Mar. 15, 2007]



Sec. 37.8  Obligations of OASIS users.

    Each OASIS user must notify the Responsible Party one month in 
advance of initiating a significant amount of automated queries. The 
OASIS user must also notify the Responsible Party one month in advance 
of expected significant increases in the volume of automated queries.

[Order 605, 64 FR 34124, June 25, 1999]



PART 38_BUSINESS PRACTICE STANDARDS AND COMMUNICATION PROTOCOLS FOR PUBLIC 

UTILITIES--Table of Contents



Sec.
38.1 Applicability.
38.2 Incorporation by reference of North American Energy Standards Board 
          Wholesale Electric Quadrant standards.

    Authority: 16 U.S.C. 791-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352.

    Source: Order 676, 71 FR 26212, May 4, 2006, unless otherwise noted.



Sec. 38.1  Applicability.

    This part applies to any public utility that owns, operates, or 
controls facilities used for the transmission of electric energy in 
interstate commerce or for the sale of electric energy at wholesale in 
interstate commerce and to any non-public utility that seeks voluntary 
compliance with jurisdictional transmission tariff reciprocity 
conditions.

[Order 698, 72 FR 38767, July 16, 2007]



Sec. 38.2  Incorporation by reference of North American Energy Standards Board 

Wholesale Electric Quadrant standards.

    (a) All entities to which Sec. 38.1 is applicable must comply with 
the following business practice and electronic communication standards 
promulgated by the North American Energy Standards Board Wholesale 
Electric Quadrant, which are incorporated herein by reference:

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    (1) Open Access Same-Time Information Systems (OASIS), Version 1.5 
(WEQ-001, Version 002.1, March 11, 2009, with minor corrections applied 
May 29, 2009 and September 8, 2009, with the exception of Standards 001-
0.1, 001-0.9 through 001-0.13, 001-1.0, 001-9.7, 001-14.1.3, and 001-
15.1.2);
    (2) Open Access Same-Time Information Systems (OASIS) Standards & 
Communication Protocols, Version 1.5 (WEQ-002, Version 002.1, March 11, 
2009, with minor corrections applied May 29, 2009 and September 8, 
2009);
    (3) Open Access Same-Time Information Systems (OASIS) Data 
Dictionary, Version 1.5 (WEQ-003, Version 002.1, March 11, 2009, with 
minor corrections applied May 29, 2009 and September 8, 2009);
    (4) Coordinate Interchange (WEQ-004, Version 002.1, March 11, 2009, 
with minor corrections applied May 29, 2009 and September 8, 2009);
    (5) Area Control Error (ACE) Equation Special Cases (WEQ-005, 
Version 002.1, March 11, 2009, with minor corrections applied May 29, 
2009 and September 8, 2009);
    (6) Manual Time Error Correction (WEQ-006, Version 001, Oct. 31, 
2007, with minor corrections applied on Nov. 16, 2007);
    (7) Inadvertent Interchange Payback (WEQ-007, Version 002.1, March 
11, 2009, with minor corrections applied May 29, 2009 and September 8, 
2009);
    (8) Transmission Loading Relief--Eastern Interconnection (WEQ-008, 
Version 002.1, March 11, 2009, with minor corrections applied May 29, 
2009 and September 8, 2009);
    (9) Gas/Electric Coordination (WEQ-011, Version 002.1, March 11, 
2009, with minor corrections applied May 29, 2009 and September 8, 
2009);
    (10) Public Key Infrastructure (PKI) (WEQ-012, Version 002.1, March 
11, 2009, with minor corrections applied on May 29, 2009 and September 
8, 2009);
    (11) Open Access Same-Time Information Systems (OASIS) 
Implementation Guide, Version 1.5 (WEQ-013, Version 002.1, March 11, 
2009, with minor corrections applied on May 29, 2009 and September 8, 
2009); and
    (12) Business Practices for Measurement and Verification of 
Wholesale Electricity Demand Response (WEQ-015, 2008 Annual Plan Item 
5(a), March 16, 2009).
    (b) This incorporation by reference was approved by the Director of 
the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 
51. Copies of these standards may be obtained from the North American 
Energy Standards Board, 801 Travis Street, Suite 1675, Houston, TX 
77002, Tel: (713) 356-0060. NAESB's Web site is at http://
www.naesb.org/. Copies may be inspected at the Federal Energy Regulatory 
Commission, Public Reference and Files Maintenance Branch, 888 First 
Street, NE., Washington, DC 20426, Tel: (202) 502-8371, http://
www.ferc.gov, or at the National Archives and Records Administration 
(NARA). For information on the availability of this material at NARA, 
call 202-741-6030, or go to: http://www.archives.gov/federal--register/
code--of--federal--regulations/ibr--locations.html.

[Order 676, 71 FR 26212, May 4, 2006 as amended by Order 676-B, 72 FR 
21099, Apr. 30, 2007; Order 698, 72 FR 38767, July 16, 2007; Order 676-
C, 73 FR 43860, July 29, 2008; Order 676-E, 74 FR 63306, Dec. 3, 2009; 
Order 676-F, 75 FR 20908, Apr. 22, 2010]



PART 39_RULES CONCERNING CERTIFICATION OF THE ELECTRIC RELIABILITY 

ORGANIZATION; AND PROCEDURES FOR THE ESTABLISHMENT, APPROVAL, AND ENFORCEMENT 

OF ELECTRIC RELIABILITY STANDARDS--Table of Contents



Sec.
39.1 Definitions.
39.2 Jurisdiction and applicability.
39.3 Electric Reliability Organization certification.
39.4 Funding of the Electric Reliability Organization.
39.5 Reliability Standards.
39.6 Conflict of a Reliability Standard with a Commission order.
39.7 Enforcement of Reliability Standards.
39.8 Delegation to a Regional Entity.
39.9 Enforcement of Commission rules and orders.
39.10 Changes to an Electric Reliability Organization Rule or Regional 
          Entity Rule.
39.11 Reliability reports.
39.12 Review of state action.
39.13 Regional Advisory Bodies.

    Authority: 16 U.S.C. 824o.

[[Page 332]]


    Source: Order 672, 71 FR 8736, Feb. 17, 2006, unless otherwise 
noted.



Sec. 39.1  Definitions.

    As used in this part:
    Bulk-Power System means facilities and control systems necessary for 
operating an interconnected electric energy transmission network (or any 
portion thereof), and electric energy from generating facilities needed 
to maintain transmission system reliability. The term does not include 
facilities used in the local distribution of electric energy.
    Cross-Border Regional Entity means a Regional Entity that 
encompasses a part of the United States and a part of Canada or Mexico.
    Cybersecurity Incident means a malicious act or suspicious event 
that disrupts, or was an attempt to disrupt, the operation of those 
programmable electronic devices and communications networks including 
hardware, software and data that are essential to the Reliable Operation 
of the Bulk-Power System.
    Electric Reliability Organization or ``ERO'' means the organization 
certified by the Commission under Sec. 39.3 the purpose of which is to 
establish and enforce Reliability Standards for the Bulk-Power System, 
subject to Commission review.
    Electric Reliability Organization Rule means, for purposes of this 
part, the bylaws, a rule of procedure or other organizational rule or 
protocol of the Electric Reliability Organization.
    Interconnection means a geographic area in which the operation of 
Bulk-Power System components is synchronized such that the failure of 
one or more of such components may adversely affect the ability of the 
operators of other components within the system to maintain Reliable 
Operation of the facilities within their control.
    Regional Advisory Body means an entity established upon petition to 
the Commission pursuant to section 215(j) of the Federal Power Act that 
is organized to advise the Electric Reliability Organization, a Regional 
Entity, or the Commission regarding certain matters in accordance with 
Sec. 39.13.
    Regional Entity means an entity having enforcement authority 
pursuant to Sec. 39.8.
    Regional Entity Rule means, for purposes of this part, the bylaws, a 
rule of procedure or other organizational rule or protocol of a Regional 
Entity.
    Reliability Standard means a requirement approved by the Commission 
under section 215 of the Federal Power Act, to provide for Reliable 
Operation of the Bulk-Power System. The term includes requirements for 
the operation of existing Bulk-Power System facilities, including 
cybersecurity protection, and the design of planned additions or 
modifications to such facilities to the extent necessary to provide for 
Reliable Operation of the Bulk-Power System, but the term does not 
include any requirement to enlarge such facilities or to construct new 
transmission capacity or generation capacity.
    Reliable Operation means operating the elements of the Bulk-Power 
System within equipment and electric system thermal, voltage, and 
stability limits so that instability, uncontrolled separation, or 
cascading failures of such system will not occur as a result of a sudden 
disturbance, including a Cybersecurity Incident, or unanticipated 
failure of system elements.
    Transmission Organization means a regional transmission 
organization, independent system operator, independent transmission 
provider, or other transmission organization finally approved by the 
Commission for the operation of transmission facilities.



Sec. 39.2  Jurisdiction and applicability.

    (a) Within the United States (other than Alaska and Hawaii), the 
Electric Reliability Organization, any Regional Entities, and all users, 
owners and operators of the Bulk-Power System, including but not limited 
to entities described in section 201(f) of the Federal Power Act, shall 
be subject to the jurisdiction of the Commission for the purposes of 
approving Reliability Standards established under section 215 of the 
Federal Power Act and enforcing compliance with section 215 of the 
Federal Power Act.
    (b) All entities subject to the Commission's reliability 
jurisdiction under

[[Page 333]]

paragraph (a) of this section shall comply with applicable Reliability 
Standards, the Commission's regulations, and applicable Electric 
Reliability Organization and Regional Entity Rules made effective under 
this part.
    (c) Each user, owner and operator of the Bulk-Power System within 
the United States (other than Alaska and Hawaii) shall register with the 
Electric Reliability Organization and the Regional Entity for each 
region within which it uses, owns or operates Bulk-Power System 
facilities, in such manner as prescribed in the Rules of the Electric 
Reliability Organization and each applicable Regional Entity.
    (d) Each user, owner or operator of the Bulk-Power System within the 
United States (other than Alaska and Hawaii) shall provide the 
Commission, the Electric Reliability Organization and the applicable 
Regional Entity such information as is necessary to implement section 
215 of the Federal Power Act as determined by the Commission and set out 
in the Rules of the Electric Reliability Organization and each 
applicable Regional Entity. The Electric Reliability Organization and 
each Regional Entity shall provide the Commission such information as is 
necessary to implement section 215 of the Federal Power Act.



Sec. 39.3  Electric Reliability Organization certification.

    (a) Any person may submit an application to the Commission for 
certification as the Electric Reliability Organization no later than 
April 4, 2006. Such application shall comply with the requirements for 
filings in proceedings before the Commission in part 385 of this 
chapter.
    (b) After notice and an opportunity for public comment, the 
Commission may certify one such applicant as an Electric Reliability 
Organization, if the Commission determines such applicant:
    (1) Has the ability to develop and enforce, subject to Sec. 39.7, 
Reliability Standards that provide for an adequate level of reliability 
of the Bulk-Power System, and
    (2) Has established rules that:
    (i) Assure its independence of users, owners and operators of the 
Bulk-Power System while assuring fair stakeholder representation in the 
selection of its directors and balanced decisionmaking in any Electric 
Reliability Organization committee or subordinate organizational 
structure;
    (ii) Allocate equitably reasonable dues, fees and charges among end 
users for all activities under this part;
    (iii) Provide fair and impartial procedures for enforcement of 
Reliability Standards through the imposition of penalties in accordance 
with Sec. 39.7, including limitations on activities, functions, 
operations, or other appropriate sanctions or penalties;
    (iv) Provide reasonable notice and opportunity for public comment, 
due process, openness, and balance of interests in developing 
Reliability Standards, and otherwise exercising its duties; and
    (v) Provide appropriate steps, after certification by the Commission 
as the Electric Reliability Organization, to gain recognition in Canada 
and Mexico.
    (c) The Electric Reliability Organization shall submit an assessment 
of its performance three years from the date of certification by the 
Commission, and every five years thereafter. After receipt of the 
assessment, the Commission will establish a proceeding with opportunity 
for public comment in which it will review the performance of the 
Electric Reliability Organization.
    (1) The Electric Reliability Organization's assessment of its 
performance shall include:
    (i) An explanation of how the Electric Reliability Organization 
satisfies the requirements of Sec. 39.3(b);
    (ii) Recommendations by Regional Entities, users, owners, and 
operators of the Bulk-Power System, and other interested parties for 
improvement of the Electric Reliability Organization's operations, 
activities, oversight and procedures, and the Electric Reliability 
Organization's response to such recommendations; and
    (iii) The Electric Reliability Organization's evaluation of the 
effectiveness of each Regional Entity, recommendations by the Electric 
Reliability Organization, users, owners, and operators of the Bulk-Power 
System, and other interested parties for improvement of the Regional 
Entity's performance of

[[Page 334]]

delegated functions, and the Regional Entity's response to such 
evaluation and recommendations.
    (2) The Commission will issue an order finding that the Electric 
Reliability Organization meets the statutory and regulatory criteria or 
directing the Electric Reliability Organization or a Regional Entity to 
come into compliance with or improve its compliance with the 
requirements of this part. If the ERO fails to comply adequately with 
the Commission order, the Commission may institute a proceeding to 
enforce its order, including, if necessary and appropriate, a proceeding 
to consider decertification of the ERO consistent with Sec. 39.9. The 
Commission will issue an order finding that each Regional Entity meets 
the statutory and regulatory criteria or directing the Regional Entity 
to come into compliance with or improve its compliance with the 
requirements of this part. If a Regional Entity fails to comply 
adequately with the Commission order, the Commission may institute a 
proceeding to enforce its order, including, if necessary and 
appropriate, a proceeding to consider rescission of its approval of the 
Regional Entity's delegation agreement.



Sec. 39.4  Funding of the Electric Reliability Organization.

    (a) Any person who submits an application for certification as the 
Electric Reliability Organization shall include in its application a 
formula or method for the allocation and assessment of Electric 
Reliability Organization dues, fees and charges. The certified Electric 
Reliability Organization may subsequently file with the Commission a 
request to modify the formula or method.
    (b) The Electric Reliability Organization shall file with the 
Commission its proposed entire annual budget for statutory and any non-
statutory activities, including the entire annual budget for statutory 
and any non-statutory activities of each Regional Entity, with 
supporting materials, including the ERO's and each Regional Entity's 
complete business plan and organization chart, explaining the proposed 
collection of all dues, fees and charges and the proposed expenditure of 
funds collected in sufficient detail to justify the requested funding 
collection and budget expenditures 130 days in advance of the beginning 
of each Electric Reliability Organization fiscal year. The annual 
Electric Reliability Organization budget shall include line item budgets 
for the activities of each Regional Entity that are delegated or 
assigned to each Regional Entity pursuant to Sec. 39.8.
    (c) The Commission, after public notice and opportunity for hearing, 
will issue an order either accepting, rejecting, remanding or modifying 
the proposed Electric Reliability Organization budget and business plan 
no later than sixty (60) days in advance of the beginning of the 
Electric Reliability Organization's fiscal year.
    (d) On a demonstration of unforeseen and extraordinary circumstances 
requiring additional funds prior to the next Electric Reliability 
Organization fiscal year, the Electric Reliability Organization may file 
with the Commission for authorization to collect a special assessment. 
Such filing shall include supporting materials explaining the proposed 
collection in sufficient detail to justify the requested funding, 
including any departure from the approved funding formula or method. 
After notice and an opportunity for hearing, the Commission will 
approve, disapprove, remand or modify such request.
    (e) All entities within the Commission's jurisdiction as set forth 
in section 215(b) of the Federal Power Act shall pay any Electric 
Reliability Organization assessment of dues, fees and charges as 
approved by the Commission, in a timely manner reasonably as designated 
by the Electric Reliability Organization.
    (f) Any person who submits an application for certification as the 
Electric Reliability Organization may include in the application a plan 
for a transitional funding mechanism that would allow such person, if 
certified as the Electric Reliability Organization, to continue existing 
operations without interruption as it transitions from one method of 
funding to another. Any proposed transitional funding plan should 
terminate no later than eighteen (18) months from the date of Electric 
Reliability Organization certification.

[[Page 335]]

    (g) The Electric Reliability Organization or a Regional Entity may 
not engage in any activity or receive revenues from any person that, in 
the judgment of the Commission represents a significant distraction 
from, or a conflict of interest with, its responsibilities under this 
part.



Sec. 39.5  Reliability Standards.

    (a) The Electric Reliability Organization shall file each 
Reliability Standard or modification to a Reliability Standard that it 
proposes to be made effective under this part with the Commission. The 
filing shall include a concise statement of the basis and purpose of the 
proposed Reliability Standard, either a summary of the Reliability 
Standard development proceedings conducted by the Electric Reliability 
Organization or a summary of the Reliability Standard development 
proceedings conducted by a Regional Entity together with a summary of 
the Reliability Standard review proceedings of the Electric Reliability 
Organization, and a demonstration that the proposed Reliability Standard 
is just, reasonable, not unduly discriminatory or preferential, and in 
the public interest.
    (b) The Electric Reliability Organization shall rebuttably presume 
that a proposal for a Reliability Standard or a modification to a 
Reliability Standard to be applicable on an Interconnection-wide basis 
is just, reasonable, not unduly discriminatory or preferential, and in 
the public interest, if such proposal is from a Regional Entity 
organized on an Interconnection-wide basis.
    (c) The Commission may approve by rule or order a proposed 
Reliability Standard or a proposed modification to a Reliability 
Standard if, after notice and opportunity for public hearing, it 
determines that the proposed Reliability Standard is just, reasonable, 
not unduly discriminatory or preferential, and in the public interest.
    (1) The Commission will give due weight to the technical expertise 
of the Electric Reliability Organization with respect to the content of 
a proposed Reliability Standard or a proposed modification to a 
Reliability Standard,
    (2) The Commission will give due weight to the technical expertise 
of a Regional Entity organized on an Interconnection-wide basis with 
respect to a proposed Reliability Standard or a proposed modification to 
a Reliability Standard to be applicable within that Interconnection, and
    (3) The Commission will not defer to the Electric Reliability 
Organization or a Regional Entity with respect to the effect of a 
proposed Reliability Standard or a proposed modification to a 
Reliability Standard on competition.
    (d) An approved Reliability Standard or modification to a 
Reliability Standard shall take effect as approved by the Commission.
    (e) The Commission will remand to the Electric Reliability 
Organization for further consideration a proposed Reliability Standard 
or modification to a Reliability Standard that the Commission 
disapproves in whole or in part.
    (f) The Commission may, upon its own motion or a complaint, order 
the Electric Reliability Organization to submit a proposed Reliability 
Standard or modification to a Reliability Standard that addresses a 
specific matter if the Commission considers such a new or modified 
Reliability Standard appropriate to carry out section 215 of the Federal 
Power Act.
    (g) The Commission, when remanding a Reliability Standard to the 
Electric Reliability Organization or ordering the Electric Reliability 
Organization to submit to the Commission a proposed Reliability Standard 
or proposed modification to a Reliability Standard that addresses a 
specific matter may order a deadline by which the Electric Reliability 
Organization must submit a proposed or modified Reliability Standard.



Sec. 39.6  Conflict of a Reliability Standard with a Commission Order.

    (a) If a user, owner or operator of the transmission facilities of a 
Transmission Organization determines that a Reliability Standard may 
conflict with a function, rule, order, tariff, rate schedule, or 
agreement accepted, approved, or ordered by the Commission with respect 
to such Transmission Organization, the Transmission Organization shall 
expeditiously notify the Commission, the Electric Reliability

[[Page 336]]

Organization and the relevant Regional Entity of the possible conflict.
    (b) After notice and opportunity for hearing, within sixty (60) days 
of the date that a notice was filed under paragraph (a) of this section, 
unless the Commission orders otherwise, the Commission will issue an 
order determining whether a conflict exists and, if so, resolve the 
conflict by directing:
    (1) The Transmission Organization to file a modification of the 
conflicting function, rule, order, tariff, rate schedule, or agreement 
pursuant to section 206 of the Federal Power Act, as appropriate, or
    (2) The Electric Reliability Organization to propose a modification 
to the conflicting Reliability Standard pursuant to Sec. 39.5 of the 
Commission's regulations.
    (c) The Transmission Organization shall continue to comply with the 
function, rule, order, tariff, rate schedule, or agreement accepted, 
approved, or ordered by the Commission until the Commission finds that a 
conflict exists, the Commission orders a change to such provision 
pursuant to section 206 of the Federal Power Act, and the ordered change 
becomes effective.

[Order 672, 71 FR 8736, Feb. 17, 2006, as amended at 71 FR 11505, Mar. 
8, 2006; Order 672-A, 71 FR 19823, Apr. 18, 2006]



Sec. 39.7  Enforcement of Reliability Standards.

    (a) The Electric Reliability Organization and each Regional Entity 
shall have an audit program that provides for rigorous audits of 
compliance with Reliability Standards by users, owners and operators of 
the Bulk-Power System.
    (b) The Electric Reliability Organization and each Regional Entity 
shall have procedures to report promptly to the Commission any self-
reported violation or investigation of a violation or an alleged 
violation of a Reliability Standard and its eventual disposition.
    (1) Any person that submits an application to the Commission for 
certification as an Electric Reliability Organization shall include in 
such application a proposal for the prompt reporting to the Commission 
of any self-reported violation or investigation of a violation or an 
alleged violation of a Reliability Standard and its eventual 
disposition.
    (2) Any agreement for the delegation of enforcement authority to a 
Regional Entity shall include a provision for the prompt reporting 
through the Electric Reliability Organization to the Commission of any 
self-reported violation or investigation of a violation or an alleged 
violation of a Reliability Standard and its eventual disposition.
    (3) Each report of a violation or alleged violation by a user, owner 
or operator of the Bulk-Power System shall include the user's, owner's 
or operator's name, which Reliability Standard or Reliability Standards 
were violated or allegedly violated, when the violation or alleged 
violation occurred, and the name of a person knowledgeable about the 
violation or alleged violation to serve as a point of contact with the 
Commission.
    (4) Each violation or alleged violation shall be treated as 
nonpublic until the matter is filed with the Commission as a notice of 
penalty or resolved by an admission that the user, owner or operator of 
the Bulk-Power System violated a Reliability Standard or by a settlement 
or other negotiated disposition. The disposition of each violation or 
alleged violation that relates to a Cybersecurity Incident or that would 
jeopardize the security of the Bulk-Power System if publicly disclosed 
shall be nonpublic unless the Commission directs otherwise.
    (5) The Electric Reliability Organization, and each Regional Entity 
through the ERO, shall file such periodic summary reports as the 
Commission shall from time to time direct on violations of Reliability 
Standards and summary analyses of such violations.
    (c) The Electric Reliability Organization, or a Regional Entity, may 
impose, subject to section 215(e) of the Federal Power Act, a penalty on 
a user, owner or operator of the Bulk-Power System for a violation of a 
Reliability Standard approved by the Commission if, after notice and 
opportunity for hearing:
    (1) The Electric Reliability Organization or the Regional Entity 
finds that the user, owner or operator has violated a Reliability 
Standard approved by the Commission; and

[[Page 337]]

    (2) The Electric Reliability Organization files a notice of penalty 
and the record of its or a Regional Entity's proceeding with the 
Commission. Simultaneously with the filing of a notice of penalty with 
the Commission, the Electric Reliability Organization shall serve a copy 
of the notice of penalty on the entity that is the subject of the 
penalty.
    (d) A notice of penalty by the Electric Reliability Organization 
shall consist of:
    (1) The name of the entity on whom the penalty is imposed;
    (2) Identification of each Reliability Standard violated;
    (3) A statement setting forth findings of fact with respect to the 
act or practice resulting in the violation of each Reliability Standard;
    (4) A statement describing any penalty imposed;
    (5) The record of the proceeding;
    (6) Other matters the Electric Reliability Organization or the 
Regional Entity, as appropriate, may find relevant.
    (e) A penalty imposed under this section may take effect not earlier 
than the thirty-first (31st) day after the Electric Reliability 
Organization files with the Commission the notice of penalty and the 
record of the proceedings.
    (1) Such penalty will be subject to review by the Commission, on its 
own motion or upon application by the user, owner or operator of the 
Bulk-Power System that is the subject of the penalty filed within thirty 
(30) days after the date such notice is filed with Commission. In the 
absence of the filing of an application for review or motion or other 
action by the Commission, the penalty shall be affirmed by operation of 
law upon the expiration of the thirty (30)-day period for filing of an 
application for review.
    (2) An applicant filing an application for review shall comply with 
the requirements for filings in proceedings before the Commission. An 
application shall contain a complete and detailed explanation of why the 
applicant believes that the Electric Reliability Organization or 
Regional Entity erred in determining that the applicant violated a 
Reliability Standard, or in determining the appropriate form or amount 
of the penalty. The applicant may support its explanation by providing 
information that is not included in the record submitted by the Electric 
Reliability Organization.
    (3) Application to the Commission for review, or the initiation of 
review by the Commission on its own motion, shall not operate as a stay 
of such penalty unless the Commission otherwise orders upon its own 
motion or upon application by the user, owner or operator that is the 
subject of such penalty.
    (4) Any answer, intervention or comment to an application for review 
of a penalty imposed under this part must be filed within twenty (20) 
days after the application is filed, unless otherwise ordered by the 
Commission.
    (5) In any proceeding to review a penalty imposed under this part, 
the Commission, after public notice and opportunity for hearing (which 
hearing may consist solely of the record before the Electric Reliability 
Organization or Regional Entity and the opportunity for the presentation 
of supporting reasons to affirm, modify, or set aside the penalty), will 
by order affirm, set aside, or modify the penalty or may remand the 
determination of a violation or the form or amount of the penalty to the 
Electric Reliability Organization for further consideration. The 
Commission may establish a hearing before an administrative law judge or 
initiate such further procedures as it determines to be appropriate, 
before issuing such an order. In the case of a remand to the Electric 
Reliability Organization, the Electric Reliability Organization may 
remand the matter to a Regional Entity for further consideration and 
resubmittal through the Electric Reliability Organization to the 
Commission.
    (6) The Commission will take action on an application for review of 
a penalty within sixty (60) days of the date the application is filed 
unless the Commission determines on a case-by-case basis that an 
alternative expedited procedure is appropriate.
    (7) A proceeding for Commission review of a penalty for violation of 
a Reliability Standard will be public unless

[[Page 338]]

the Commission determines that a nonpublic proceeding is necessary and 
lawful, including a proceeding involving a Cybersecurity Incident. For a 
nonpublic proceeding, the user, owner or operator of the Bulk-Power 
System that is the subject of the penalty will be given timely notice 
and an opportunity for hearing and the public will not be notified and 
the public will not be allowed to participate.
    (f) On its own motion or upon complaint, the Commission may order 
compliance with a Reliability Standard and may impose a penalty against 
a user, owner or operator of the Bulk-Power System, if the Commission 
finds, after public notice and opportunity for hearing, that the user, 
owner or operator of the Bulk-Power System has engaged or is about to 
engage in any acts or practices that constitute or will constitute a 
violation of a Reliability Standard.
    (g) Any penalty imposed for the violation of a Reliability Standard 
shall bear a reasonable relation to the seriousness of the violation and 
shall take into consideration efforts of such user, owner or operator of 
the Bulk-Power System to remedy the violation in a timely manner.
    (1) The penalty imposed may be a monetary or a non-monetary penalty 
and may include, but is not limited to, a limitation on an activity, 
function, operation, or other appropriate sanction, including being 
added to a reliability watch list composed of major violators that is 
established by the Electric Reliability Organization, a Regional Entity 
or the Commission.
    (2) The Electric Reliability Organization shall submit for 
Commission approval penalty guidelines that set forth a range of 
penalties for the violation of Reliability Standards. A penalty imposed 
by the Electric Reliability Organization or a Regional Entity must be 
within be within the range set forth in the penalty guidelines.

[Order 672, 71 FR 8736, Feb. 17, 2006, as amended by Order 737, 75 FR 
43404, July 26, 2010]



Sec. 39.8  Delegation to a Regional Entity.

    (a) The Electric Reliability Organization may enter into an 
agreement to delegate authority to a Regional Entity for the purpose of 
proposing Reliability Standards to the Electric Reliability Organization 
and enforcing Reliability Standards under Sec. 39.7.
    (b) After notice and opportunity for comment, the Commission may 
approve a delegation agreement. A delegation agreement shall not be 
effective until it is approved by the Commission.
    (c) The Electric Reliability Organization shall file a delegation 
agreement. Such filing shall include a statement demonstrating that:
    (1) The Regional Entity is governed by an independent board, a 
balanced stakeholder board, or a combination independent and balanced 
stakeholder board;
    (2) The Regional Entity otherwise satisfies the provisions of 
section 215(c) of the Federal Power Act; and
    (3) The agreement promotes effective and efficient administration of 
Bulk-Power System reliability.
    (d) The Commission may modify such delegation.
    (e) The Electric Reliability Organization shall and the Commission 
will rebuttably presume that a proposal for delegation to a Regional 
Entity organized on an Interconnection-wide basis promotes effective and 
efficient administration of Bulk-Power System reliability and should be 
approved.
    (f) An entity seeking to enter into a delegation agreement that is 
unable to reach an agreement with the Electric Reliability Organization 
within 180 days after proposing a delegation agreement to the Electric 
Reliability Organization may apply to the Commission to assign to it the 
Electric Reliability Organization's authority to enforce Reliability 
Standards within its region. The entity must demonstrate in its 
application that it meets the requirements of paragraph (c) of this 
section and that continued negotiations with the Electric Reliability 
Organization would not likely result in an appropriate delegation 
agreement within a reasonable period of time. After notice and 
opportunity for hearing, the Commission may designate the entity as a 
Regional Entity and assign enforcement authority to it.
    (g) An application pursuant to paragraph (f) of this section must 
state:

[[Page 339]]

    (1) Whether the Commission's Dispute Resolution Service, or other 
alternative dispute resolution procedures were used, or why these 
procedures were not used; and
    (2) Whether the Regional Entity believes that alternative dispute 
resolution under the Commission's supervision could successfully resolve 
the disputes regarding the terms of the delegation agreement.



Sec. 39.9  Enforcement of Commission Rules and Orders.

    (a) The Commission may take such action as is necessary and 
appropriate against the Electric Reliability Organization or a Regional 
Entity to ensure compliance with a Reliability Standard or any 
Commission order affecting the Electric Reliability Organization or a 
Regional Entity, including, but not limited to:
    (1) After notice and opportunity for hearing, imposition of civil 
penalties under the Federal Power Act.
    (2) After notice and opportunity for hearing, suspension or 
decertification of the Commission's certification to be the Electric 
Reliability Organization.
    (3) After notice and opportunity for hearing, suspension or 
rescission of the Commission's approval of an agreement to delegate 
certain Electric Reliability Organization authorities to a Regional 
Entity.
    (b) The Commission may periodically audit the Electric Reliability 
Organization's performance under this part.



Sec. 39.10  Changes to an Electric Reliability Organization Rule or Regional 

Entity Rule.

    (a) The Electric Reliability Organization shall file with the 
Commission for approval any proposed Electric Reliability Organization 
Rule or Rule change. A Regional Entity shall submit a Regional Entity 
Rule or Rule change to the Electric Reliability Organization and, if 
approved by the Electric Reliability Organization, the Electric 
Reliability Organization shall file the proposed Regional Entity Rule or 
Rule change with the Commission for approval. Any filing by the Electric 
Reliability Organization shall be accompanied by an explanation of the 
basis and purpose for the Rule or Rule change, together with a 
description of the proceedings conducted by the Electric Reliability 
Organization or Regional Entity to develop the proposal.
    (b) The Commission, upon its own motion or upon complaint, may 
propose a change to an Electric Reliability Organization Rule or 
Regional Entity Rule.
    (c) A proposed Electric Reliability Organization Rule or Rule change 
or Regional Entity Rule or Rule change shall take effect upon a finding 
by the Commission, after notice and opportunity for public comment, that 
the change is just, reasonable, not unduly discriminatory or 
preferential, is in the public interest, and satisfies the requirements 
of Sec. 39.3.



Sec. 39.11  Reliability reports.

    (a) The Electric Reliability Organization shall conduct assessments 
as determined by the Commission of the reliability of the Bulk-Power 
System in North America and provide a report to the Commission and 
provide subsequent reports of the same to the Commission.
    (b) The Electric Reliability Organization shall conduct assessments 
of the adequacy of the Bulk-Power System in North America and report its 
findings to the Commission, the Secretary of Energy, each Regional 
Entity, and each Regional Advisory Body annually or more frequently if 
so ordered by the Commission.



Sec. 39.12  Review of state action.

    (a) Nothing in this section shall be construed to preempt any 
authority of any state to take action to ensure the safety, adequacy, 
and reliability of electric service within that state, as long as such 
action is not inconsistent with any Reliability Standard, except that 
the State of New York may establish rules that result in greater 
reliability within that state, as long as such action does not result in 
lesser reliability outside the state than that provided by the 
Reliability Standards.
    (b) Where a state takes action to ensure the safety, adequacy, or 
reliability of electric service, the Electric Reliability Organization, 
a Regional Entity or other affected person may apply to the Commission 
for a determination of

[[Page 340]]

consistency of the state action with a Reliability Standard.
    (1) The application shall:
    (i) Identify the state action;
    (ii) Identify the Reliability Standard with which the state action 
is alleged to be inconsistent;
    (iii) State the basis for the allegation that the state action is 
inconsistent with the Reliability Standard; and
    (iv) Be served on the relevant state agency and the Electric 
Reliability Organization, concurrent with its filing with the 
Commission.
    (2) Within ninety (90) days of the application of the Electric 
Reliability Organization, the Regional Entity, or other affected person, 
and after notice and opportunity for public comment, the Commission will 
issue a final order determining whether the state action is inconsistent 
with a Reliability Standard, taking into consideration any 
recommendation of the Electric Reliability Organization and the state.
    (c) The Commission, after consultation with the Electric Reliability 
Organization and the state taking action, may stay the effectiveness of 
the state action, pending the Commission's issuance of a final order.



Sec. 39.13  Regional Advisory Bodies.

    (a) The Commission will establish a Regional Advisory Body on the 
petition of at least two-thirds of the states within a region that have 
more than one-half of their electric load served within the region.
    (b) A petition to establish a Regional Advisory Body shall include a 
statement that the Regional Advisory Body is composed of one member from 
each participating state in the region, appointed by the governor of 
each state, and may include representatives of agencies, states and 
provinces outside the United States.
    (c) A Regional Advisory Body established by the Commission may 
provide advice to the Electric Reliability Organization or a Regional 
Entity or the Commission regarding:
    (1) The governance of an existing or proposed Regional Entity within 
the same region;
    (2) Whether a Reliability Standard proposed to apply within the 
region is just, reasonable, not unduly discriminatory or preferential, 
and in the public interest;
    (3) Whether fees for all activities under this part proposed to be 
assessed within the region are just, reasonable, not unduly 
discriminatory or preferential, and in the public interest; and
    (4) Any other responsibilities requested by the Commission.
    (d) The Commission may give deference to the advice of a Regional 
Advisory Body established by the Commission that is organized on an 
Interconnection-wide basis.



PART 40_MANDATORY RELIABILITY STANDARDS FOR THE BULK-POWER SYSTEM--Table of 

Contents



Sec.
40.1 Applicability.
40.2 Mandatory Reliability Standards.
40.3 Availability of Reliability Standards.

    Authority: 16 U.S.C. 824o.

    Source: Order 693, 72 FR 16598, Apr. 4, 2007, unless otherwise 
noted.



Sec. 40.1  Applicability.

    (a) This part applies to all users, owners and operators of the 
Bulk-Power System within the United States (other than Alaska or 
Hawaii), including, but not limited to, entities described in section 
201(f) of the Federal Power Act.
    (b) Each Reliability Standard made effective by Sec. 40.2 must 
identify the subset of users, owners and operators of the Bulk-Power 
System to which a particular Reliability Standard applies.



Sec. 40.2  Mandatory Reliability Standards.

    (a) Each applicable user, owner or operator of the Bulk-Power System 
must comply with Commission-approved Reliability Standards developed by 
the Electric Reliability Organization.
    (b) A proposed modification to a Reliability Standard proposed to 
become effective pursuant to Sec. 39.5 of this Chapter will not be 
effective until approved by the Commission.



Sec. 40.3  Availability of Reliability Standards.

    The Electric Reliability Organization must post on its Web site the 
currently

[[Page 341]]

effective Reliability Standards as approved and enforceable by the 
Commission. The effective date of the Reliability Standards must be 
included in the posting.



PART 41_ACCOUNTS, RECORDS, MEMORANDA AND DISPOSITION OF CONTESTED AUDIT 

FINDINGS AND PROPOSED REMEDIES--Table of Contents



      Disposition of Contested Audit Findings and Proposed Remedies

Sec.
41.1 Notice to audited person.
41.2 Response to notification.
41.3 Shortened procedure.
41.4 Form and style.
41.5 Verification.
41.6 Determination.
41.7 Assignment for oral hearing.
41.8 Burden of proof.

         Certification of Compliance With Accounting Regulations

41.10 Examination of accounts.
41.11 Report of certification.
41.12 Qualifications of accountants.

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 42 U.S.C. 7101-7352.

    Source: Order 141, 12 FR 8500, Dec. 19, 1947, unless otherwise 
noted.

    Cross Reference: For rules of practice and procedure, see part 385 
of this chapter.

      Disposition of Contested Audit Findings and Proposed Remedies



Sec. 41.1  Notice to audited person.

    (a) Applicability. This part applies to all audits conducted by the 
Commission or its staff under authority of the Federal Power Act except 
for Electric Reliability Organization audits conducted pursuant to the 
authority of part 39 of the Commission's regulations.
    (b) Notice. An audit conducted by the Commission's staff under 
authority of the Federal Power Act may result in a notice of deficiency 
or audit report or similar document containing a finding or findings 
that the audited person has not complied with a requirement of the 
Commission with respect to, but not limited to, the following: A filed 
tariff or tariffs, contracts, data, records, accounts, books, 
communications or papers relevant to the audit of the audited person; 
matters under the Standards of Conduct or the Code of Conduct; and the 
activities or operations of the audited person. The notice of 
deficiency, audit report or similar document may also contain one or 
more proposed remedies that address findings of noncompliance. Where 
such findings, with or without proposed remedies, appear in a notice of 
deficiency, audit report or similar document, such document shall be 
provided to the audited person, and the finding or findings, and any 
proposed remedies, shall be noted and explained. The audited person 
shall timely indicate in a written response any and all findings or 
proposed remedies, or both, in any combination, with which the audited 
person disagrees. The audited person shall have 15 days from the date it 
is sent the notice of deficiency, audit report or similar document to 
provide a written response to the audit staff indicating any and all 
findings or proposed remedies, or both, in any combination, with which 
the audited person disagrees, and such further time as the audit staff 
may provide in writing to the audited person at the time the document is 
sent to the audited person. The audited person may move the Commission 
for additional time to provide a written response to the audit staff and 
such motion shall be granted for good cause shown. Any initial order 
that the Commission subsequently may issue with respect to the notice of 
deficiency, audit report or similar document shall note, but not address 
on the merits, the finding or findings, or the proposed remedy or 
remedies, or both, in any combination, with which the audited person 
disagreed. The Commission shall provide the audited person 30 days to 
respond to the initial Commission order concerning a notice of 
deficiency, audit report or similar document with respect to the finding 
or findings or any proposed remedy or remedies, or both, in any 
combination, with which it disagreed.

[Order 675-A, 71 FR 29784, May 24, 2006]



Sec. 41.2  Response to notification.

    Upon issuance of a Commission order that notes a finding or 
findings, or proposed remedy or remedies, or both, in

[[Page 342]]

any combination, with which the audited person has disagreed, the 
audited person may: Acquiesce in the findings and/or proposed remedies 
by not timely responding to the Commission order, in which case the 
Commission may issue an order approving them or taking other action; or 
challenge the finding or findings and/or any proposed remedies, with 
which it disagreed by timely notifying the Commission in writing that it 
requests Commission review by means of a shortened procedure or, if 
there are material facts in dispute which require cross-examination, a 
trial-type hearing.

[Order 675, 71 FR 9706, Feb. 27, 2006]



Sec. 41.3  Shortened procedure.

    If the audited person subject to a Commission order described in 
Sec. 41.1 notifies the Commission that it seeks to challenge one or 
more audit findings, or proposed remedies, or both, in any combination, 
by the shortened procedure, the Commission shall thereupon issue a 
notice setting a schedule for the filing of memoranda. The person 
electing the use of the shortened procedure, and any other interested 
entities, including the Commission staff, shall file, within 45 days of 
the notice, an initial memorandum that addresses the relevant facts and 
applicable law that support the position or positions taken regarding 
the matters at issue. Reply memoranda shall be filed within 20 days of 
the date by which the initial memoranda are due to be filed. Only 
participants who filed initial memoranda may file reply memoranda. 
Subpart T of part 385 of this chapter shall apply to all filings. Within 
20 days after the last date that reply memoranda under the shortened 
procedure may be timely filed, the audited person who elected the 
shortened procedure may file a motion with the Commission requesting a 
trial-type hearing if new issues are raised by a party. To prevail in 
such a motion, the audited person must show that a party to the 
shortened procedure raised one or more new issues of material fact 
relevant to resolution of a matter in the shortened procedure such that 
fundamental fairness requires a trial-type hearing to resolve the new 
issue or issues so raised. Parties to the shortened procedure and the 
Commission staff may file responses to the motion. In ruling upon the 
motion, the Commission may determine that some or all of the issues be 
litigated in a trial-type hearing.

[Order 675, 71 FR 9706, Feb. 27, 2006]



Sec. 41.4  Form and style.

    Each copy of such memorandum must be complete in itself. All 
pertinent data should be set forth fully, and each memorandum should set 
out the facts and argument as prescribed for briefs in Sec. 385.706 of 
this chapter.

[Order 141, 12 FR 8500, Dec. 19, 1947, as amended by Order 225, 47 FR 
19056, May 3, 1982]



Sec. 41.5  Verification.

    The facts stated in the memorandum must be sworn to by persons 
having knowledge thereof, which latter fact must affirmatively appear in 
the affidavit. Except under unusual circumstances, such persons should 
be those who would appear as witnesses if hearing were had to testify as 
to the facts stated in the memorandum.



Sec. 41.6  Determination.

    If no formal hearing is had the matter in issue will be determined 
by the Commission on the basis of the facts and arguments submitted.



Sec. 41.7  Assignment for oral hearing.

    Except when there are no material facts in dispute, when a person 
does not consent to the shortened procedure, the Commission will assign 
the proceeding for hearing as provided by subpart E of part 385 of this 
chapter. Notwithstanding a person's not giving consent to the shortened 
procedure, and instead seeking assignment for hearing as provided for by 
subpart E of part 385 of this chapter, the Commission will not assign 
the proceeding for a hearing when no material facts are in dispute. The 
Commission may also, in its discretion, at any stage in the proceeding, 
set the proceeding for hearing.

[Order 575, 60 FR 4854, Jan. 25, 1995]



Sec. 41.8  Burden of proof.

    The burden of proof to justify every accounting entry shall be on 
the person

[[Page 343]]

making, authorizing, or requiring such entry.

         Certification of Compliance With Accounting Regulations



Sec. 41.10  Examination of accounts.

    (a) All Major and Nonmajor public utilities and licensees not 
classified as Class C or Class D prior to January 1, 1984 shall secure, 
for the year 1968 and each year thereafter until December 31, 1975, the 
services of an independent certified public accountant, or independent 
licensed public accountant, certified or licensed by a regulatory 
authority of a State or other political subdivision of the United 
States, to test compliance in all material respects of those schedules 
as are indicated in the General Instructions set out in the Annual 
Report, Form No. 1, with the Commission's applicable Uniform System of 
Accounts and published accounting releases. The Commission expects that 
identification of questionable matters by the independent accountant 
will facilitate their early resolution and that the independent 
accountant will seek advisory rulings by the Commission on such items. 
This examination shall be deemed supplementary to periodic Commission 
examinations of compliance.
    (b) Beginning January 1, 1976, and each year thereafter, only 
independent certified public accountants, or independent licensed public 
accountants who were licensed on or before December 31, 1970, will be 
authorized to conduct annual audits and to certify to compliance in all 
material respects, of those schedules as are indicated in the General 
Instructions set out in the Annual Report, Form No. 1, with the 
Commission's applicable Uniform System of Accounts, published accounting 
releases and all other regulatory matters.

[Order 462, 37 FR 26005, Dec. 7, 1972, as amended by Order 390, 49 FR 
32505, Aug. 14, 1984]



Sec. 41.11  Report of certification.

    Each Major and Nonmajor (including those companies classified as 
nonoperating under Part 101, General Instruction 1(A)(3) of this 
chapter) public utility or licensee operating on a calendar year and not 
classified as Class C or Class D prior to January 1, 1984 must file with 
the Commission a letter or report of the independent accountant 
certifying approval, together with or within 30 days after the filing of 
the Annual Report, Form No. 1, covering the subjects and in the form 
prescribed in the General Instructions of the Annual Report. For such 
utility or licensee operating on a non-calendar fiscal year, the letter 
or report of the independent accountant certifying approval must be 
filed within 150 days of the close of the company's fiscal year; the 
letter or report must also identify which, if any, of the examined 
schedules do not conform to the Commission's requirements and shall 
describe the discrepancies that exist. The Commission will not be bound 
by a certification of compliance made by an independent accountant 
pursuant to this paragraph.

[73 FR 58736, Oct. 7, 2008]



Sec. 41.12  Qualifications of accountants.

    The Commission will not recognize any certified public accountant or 
public accountant through December 31, 1975, who is not in fact 
independent. Beginning January 1, 1976, and each year thereafter, the 
Commission will recognize only independent certified public accountants, 
or independent licensed public accountants who were licensed on or 
before December 31, 1970, who are in fact independent. For example, an 
accountant will not be considered independent with respect to any person 
or any of its parents or subsidiaries in whom he has, or had during the 
period of report, any direct financial interest. The Commission will 
determine the fact of independence by considering all the relevant 
circumstances including evidence bearing on the relationships between 
the accountant and that person or any affiliate thereof.

[Order 462, 37 FR 26006, Dec. 7, 1972]



PART 42_LONG-TERM FIRM TRANSMISSION RIGHTS IN ORGANIZED ELECTRICITY MARKETS--

Table of Contents



Sec.
42.1 Requirement that Transmission Organizations with Organized 
          Electricity

[[Page 344]]

          Markets Offer Long-Term Firm Transmission Rights.

    Authority: 16 U.S.C. 791a-825r and section 217 of the Federal Power 
Act, 16 U.S.C. 824q.

    Source: Order 681, 71 FR 43619, Aug. 1, 2006, unless otherwise 
noted.



Sec. 42.1  Requirement that Transmission Organizations with Organized 

Electricity Markets Offer Long-Term Firm Transmission Rights.

    (a) Purpose. This section requires a transmission organization with 
one or more organized electricity markets (administered either by it or 
by another entity) to make available long-term firm transmission rights, 
pursuant to section 217(b)(4) of the Federal Power Act, that satisfy 
each of the guidelines set forth in paragraph (d) of this section. This 
section does not require that a specific type of long-term firm 
transmission right be made available, and is intended to permit 
transmission organizations flexibility in satisfying the guidelines set 
forth in paragraph (d) of this section.
    (b) Definitions. As used in this section:
    (1) Transmission Organization means a Regional Transmission 
Organization, Independent System Operator, independent transmission 
provider, or other independent transmission organization finally 
approved by the Commission for the operation of transmission facilities.
    (2) Load serving entity means a distribution utility or an electric 
utility that has a service obligation.
    (3) Service obligation means a requirement applicable to, or the 
exercise of authority granted to, an electric utility under Federal, 
State, or local law or under long-term contracts to provide electric 
service to end-users or to a distribution utility.
    (4) Organized Electricity Market means an auction-based day ahead 
and real time wholesale market where a single entity receives offers to 
sell and bids to buy electric energy and/or ancillary services from 
multiple sellers and buyers and determines which sales and purchases are 
completed and at what prices, based on formal rules contained in 
Commission-approved tariffs, and where the prices are used by a 
transmission organization for establishing transmission usage charges.
    (c) General rule. (1) Every public utility that is a transmission 
organization and that owns, operates or controls facilities used for the 
transmission of electric energy in interstate commerce and has one or 
more organized electricity markets (administered either by it or by 
another entity) must file with the Commission, no later than January 29, 
2007, one of the following:
    (i) Tariff sheets and rate schedules that make available long-term 
firm transmission rights that satisfy each of the guidelines set forth 
in paragraph (d) of this section; or
    (ii) An explanation of how its current tariff and rate schedules 
already provide for long-term firm transmission rights that satisfy each 
of the guidelines set forth in paragraph (d) of this section.
    (2) Any transmission organization approved by the Commission for 
operation after January 29, 2007 that has one or more organized 
electricity markets (administered either by it or by another entity) 
will be required to satisfy this general rule.
    (3) Filings made in compliance with this paragraph (c) must explain 
how the transmission organization's transmission planning and expansion 
procedures will accommodate long-term firm transmission rights, 
including but not limited to how the transmission organization will 
ensure that allocated long-term firm transmission rights remain feasible 
over their entire term.
    (4) Each transmission organization subject to this general rule must 
also make its transmission planning and expansion procedures and plans 
publicly available, including (but not limited to) both the actual plans 
and any underlying information used to develop the plans.
    (d) Guidelines for Design and Administration of Long-term Firm 
Transmission Rights. Transmission organizations subject to paragraph (c) 
of this section must make available long-term firm transmission rights 
that satisfy the following guidelines:
    (1) The long-term firm transmission right should specify a source 
(injection node or nodes) and sink (withdrawal node or nodes), and a 
quantity (MW).

[[Page 345]]

    (2) The long-term firm transmission right must provide a hedge 
against day-ahead locational marginal pricing congestion charges or 
other direct assignment of congestion costs for the period covered and 
quantity specified. Once allocated, the financial coverage provided by a 
financial long-term right should not be modified during its term (the 
``full funding'' requirement) except in the case of extraordinary 
circumstances or through voluntary agreement of both the holder of the 
right and the transmission organization.
    (3) Long-term firm transmission rights made feasible by transmission 
upgrades or expansions must be available upon request to any party that 
pays for such upgrades or expansions in accordance with the transmission 
organization's prevailing cost allocation methods for upgrades or 
expansions.
    (4) Long-term firm transmission rights must be made available with 
term lengths (and/or rights to renewal) that are sufficient to meet the 
needs of load serving entities to hedge long-term power supply 
arrangements made or planned to satisfy a service obligation. The length 
of term of renewals may be different from the original term. 
Transmission organizations may propose rules specifying the length of 
terms and use of renewal rights to provide long-term coverage, but must 
be able to offer firm coverage for at least a 10 year period.
    (5) Load serving entities must have priority over non-load serving 
entities in the allocation of long-term firm transmission rights that 
are supported by existing capacity. The transmission organization may 
propose reasonable limits on the amount of existing capacity used to 
support long-term firm transmission rights.
    (6) A long-term transmission right held by a load serving entity to 
support a service obligation should be re-assignable to another entity 
that acquires that service obligation.
    (7) The initial allocation of the long-term firm transmission rights 
shall not require recipients to participate in an auction.



PART 45_APPLICATION FOR AUTHORITY TO HOLD INTERLOCKING POSITIONS--Table of 

Contents



Sec.
45.1 Applicability; who must file.
45.2 Positions requiring authorization.
45.3 Time of filing application.
45.4 Supplemental applications.
45.5 Supplemental information.
45.6 Termination of authorization.
45.7 Form of application; filing procedure.
45.8 Contents of application.
45.9 Automatic authorization of certain interlocking positions.

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352; 3 CFR 142.

    Source: Order 141, 12 FR 8501, Dec. 19, 1947, unless otherwise 
noted.

    Cross References: For rules of practice and procedure, see part 385 
of this chapter. For forms under rules of practice and regulations under 
the Federal Power Act, see part 131 of this chapter.



Sec. 45.1  Applicability; who must file.

    (a) This part applies to any person seeking to hold the following 
interlocking positions:
    (1) Officer or director of more than one public utility;
    (2) Officer or director of a public utility and of any bank, trust 
company, banking association, or firm that is authorized by law to 
underwrite or participate in the marketing of securities of a public 
utility; or
    (3) Officer or director of a public utility and of any company 
supplying electrical equipment to a public utility.
    (b) Any person seeking to hold any interlocking position described 
in Sec. 45.2 of this chapter must do the following:
    (1) Apply for Commission authorization under Sec. 45.8 of this 
chapter; or
    (2) If qualified, comply with the requirements for automatic 
authorization under Sec. 45.9 of this chapter.

[Order 446, 51 FR 4904, Feb. 10, 1986]



Sec. 45.2  Positions requiring authorization.

    (a) The positions subject to this part shall include those of any 
person elected or appointed to perform the duties or functions 
ordinarily performed by a president, vice president, secretary,

[[Page 346]]

treasurer, general manager, comptroller, chief purchasing agent, 
director or partner, or to perform any other similar executive duties or 
functions, in any corporation \1\ within the purview of section 305(b) 
of the Act. With respect to positions not herein specifically mentioned 
which applicant holds and which are invested with executive authority, 
applicant shall state in the application the source of such executive 
authority, whether by bylaws, action of the board of directors, or 
otherwise.
---------------------------------------------------------------------------

    \1\ Corporation means any corporation, joint-stock company, 
partnership, association, business trust, organized group of persons, 
whether incorporated or not, or a receiver or receivers, trustee or 
trustees of any of the foregoing. It shall not include municipalities as 
defined in the Federal Power Act (sec. 3, 49 Stat. 838; 16 U.S.C. 796).
---------------------------------------------------------------------------

    (b) Corporations \1\ within the purview of section 305(b) of the Act 
include:
    (1) Any public utility under the Act, which means any person who 
owns or operates facilities for the transmission of electric energy in 
interstate commerce, or any person who owns or operates facilities for 
the sale at wholesale of electric energy in interstate commerce.
    (2) Any bank, trust company, banking association, or firm that is 
authorized by law to underwrite or participate in the marketing of 
public utility securities; this includes any corporation when so 
authorized whether or not same may also be a public utility and/or a 
holding company. (See 12 U.S.C. 378)
    (3) Any company that supplies electrical equipment to a public 
utility in which applicant seeks authorization to hold a position, 
whether the supplying company be a manufacturer, or dealer, or one 
supplying electrical equipment pursuant to a construction, service, 
agency, or other contract.
    (c) Regardless of any action which may have been taken by the 
Commission upon a previous application under section 305(b) of the Act, 
an application for approval under such section is required with 
reference to any position or positions not previously authorized which 
are within the purview of said section.



Sec. 45.3  Timing of filing application.

    (a) The holding of positions within the purview of section 305(b) of 
the Act shall be unlawful unless the holding shall have been authorized 
by order of the Commission. Nothing in this part shall be construed as 
authorizing the holding of positions within the purview of section 
305(b) of the Act prior to order of the Commission on application 
therefor. Applications must be filed and authorization must be granted 
prior to holding any interlocking positions within the purview of 
section 305(b) of the Act; late-filed applications will be denied. The 
term ``holding'', as used in this part, shall mean acting as, serving 
as, voting as, or otherwise performing or assuming the duties and 
responsibilities of officer or director within the purview of section 
305(b) of the Act.
    (b) Absent Commission action within 60 days of a completed 
application to hold interlocking positions, an application will be 
deemed granted. Such authorization is subject to revocation by the 
Commission after due notice to applicant and opportunity for hearing. In 
any such proceeding, the burden of proof shall be upon the applicant to 
show that neither public nor private interests will be adversely 
affected by the holding of such positions.

[Order 664, 70 FR 55723, Sept. 23, 2005]



Sec. 45.4  Supplemental applications.

    (a) New positions. In the event of a change or changes in the 
information set forth in an application, by the applicant's election or 
appointment to another position or other positions in corporations 
within the purview of section 305(b) of the Act, the application shall 
be supplemented by the applicant's setting forth all the data with 
respect to the new position or positions in accordance with the 
requirements of this part.
    (b) Old positions. After applicant has been authorized to hold a 
particular position, further application in connection with each 
successive term so long as he continues in uninterrupted tenure of such 
position will not be required except as ordered by the Commission. If 
the term of office or the

[[Page 347]]

holding of any position for which authorization has been given shall be 
interrupted and the applicant shall subsequently be reelected or 
reappointed thereto, further authorization will be required.



Sec. 45.5  Supplemental information.

    (a) Required by Commission. Applicants under this part shall upon 
request of the Commission and within such time as may be allowed, 
supplement any application or any supplemental application with any 
information required by the Commission.
    (b) Notice of changes. In the event of the applicant's resignation, 
withdrawal, or failure of reelection or appointment in respect to any of 
the positions for which authorization has been granted by the 
Commission, or in the event of any other material or substantial change 
therein, the applicant shall within 30 days after any such change 
occurs, give notice thereof to the Commission setting forth the position 
corporation, and date of termination therewith, or other material or 
substantial change.
    (c) Reports. All persons holding positions by authorization of the 
Commission under section 305(b) of the Act may be required to file such 
periodic or special reports as the Commission may deem necessary.



Sec. 45.6  Termination of authorization.

    (a) By the Commission. Orders of authorization under section 305(b) 
of the Act are subject to revocation by the Commission after due notice 
to applicant and opportunity for hearing. In any such proceeding the 
burden of proof shall be upon the applicant to show that neither public 
nor private interests will be adversely affected by the holding of such 
positions.
    (b) Without action of the Commission. Whenever a person shall cease 
to hold a position theretofore authorized to be held by the Commission 
or such position shall cease to be within the purview of section 305(b) 
of the Federal Power Act, the Commission's authorization to hold such 
position shall terminate without further action by the Commission. If 
upon such termination of authorization as aforesaid, such person does 
not continue to hold at least two positions authorized and then 
requiring authorization pursuant to said section 305(b) of the Act, all 
authorization theretofore given by the Commission shall thereupon 
terminate.



Sec. 45.7  Form of application; filing procedure.

    Applications, supplemental applications, statements of supplemental 
information, notices of change, and reports should be filed with the 
Secretary of the Commission in accordance with filing procedures posted 
on the Commission's Web site at http://www.ferc.gov. Each filing must be 
dated, signed by the applicant, and verified under oath in accordance 
with Sec. 385.2005(b) and (c).

[Order 737, 75 FR 43404, July 26, 2010]



Sec. 45.8  Contents of application.

    Each application shall state the following:
    (a) Identification of applicant. (1) Full name, business address and 
state of residence.
    (2) Major business or professional activity.
    (3) If former application or applications under section 305(b) of 
the Act have been made by the applicant, give date and docket number of 
the last application filed.
    (b) List of positions within the purview of section 305(b) of the 
Act for which authorization is sought. (Indicate by asterisk positions 
which were the subjects of previous authorizations.)

------------------------------------------------------------------------
                                              Classification: (1) Public
                                              utility, (2) authorized by
      Position         Name of corporation      law to underwrite, (3)
                                                 supplying electrical
                                                      equipment
------------------------------------------------------------------------
 
 
 
------------------------------------------------------------------------

    (c) Data as to positions with each public utility mentioned in 
paragraph (b) of this section. (The format should be adapted to the 
information submitted, in keeping with completeness and conciseness. In 
the case of public utilities of the same holding company system, brevity 
will generally be promoted by submitting the information for all of the 
utilities involved under each subsection progressively in the order of 
the subsections, utilizing tables when feasible.)

[[Page 348]]

    (1) Name of utility.
    (2) Date elected or appointed, or anticipated date of election or 
appointment, to each position not previously authorized.
    (3) Names of officers and directors; number of vacancies, if any, on 
Board of Directors.
    (4) Description of applicant's duties: Approximate amount of time 
devoted thereto; and, if applicant seeks authorization as a director, 
the percentage of directors meetings held during the past 12 months that 
were attended by the applicant.
    (5) All other professional, contractual, or business relationships 
of applicant with the public utility, either directly or through other 
corporations or firms.
    (6) Extent of applicant's direct or indirect ownership, control of, 
or beneficial interest in the public utility or the securities thereof. 
If ownership or interest is held in a name other than that of applicant, 
state name and address of the holder.
    (7) Extent of applicant's indebtedness to the public utility, how 
and when incurred, and consideration therefor.
    (8) All money or property received by applicant from the public 
utility or any affiliate (i) during the past 12 months, and expected 
during the ensuing 12 months, or (ii) during the public utility's most 
recently ended fiscal year, and expected during the public utility's 
current fiscal year, or (iii) during the past and current calendar 
years, whether for services, reimbursement for expenses, or otherwise. 
Specify in detail the amount thereof and the basis therefor. If 
applicant's compensation for services to the public utility is not paid 
directly by the public utility, give name of the corporation that does 
pay same, the amount allocated or allocable to the public utility or any 
affiliate, and the basis or reason for such allocation.
    (9) Whether during the past 5 years the public utility or any 
affiliate thereof or any security holders of either have commenced any 
suit against the officers or directors thereof for alleged waste, 
mismanagement or violation of duty, to which suit applicant was a party 
defendant. If so, give date of commencement of suit, court in which 
commenced, and present status.
    (d) Data as to positions with each bank, trust company, banking 
association or firm, mentioned in paragraph (b) of this section, that is 
authorized by law to underwrite or participate in the marketing of 
securities of a public utility. (The applicant shall use a separate 
sheet for each corporation.)
    (1) Name of corporation and address of principal place of business.
    (2) Positions which applicant holds or seeks authorization to hold 
therein and when and by whom elected or appointed to each position.
    (3) Description of applicant's duties in each position and the 
approximate amount of time devoted thereto, and, if applicant seeks 
authorization as director, the percentage of directors meetings held 
during the past 12 months that were attended by the applicant.
    (4) Extent of applicant's direct or indirect ownership, or control 
of, or beneficial interest in, the company or in the securities thereof, 
including common stock, preferred stock, bonds, or other securities. If 
such ownership or interest is held in a name other than that of 
applicant, state name and address of such holder.
    (5) All money or property received by applicant from the company (i) 
during the past 12 months, and expected during the ensuing 12 months, or 
(ii) during the company's most recently ended fiscal year, and expected 
during the company's current fiscal year, or (iii) during the past and 
current calendar years, whether for services, reimbursement for 
expenses, or otherwise. Specify in detail the amount thereof and the 
basis therefor.
    (6) Names and titles of directors, officers, or partners.
    (7) Whether the corporation is now engaged in underwriting or 
participating in the marketing of the securities of a public utility; if 
so, to what extent.
    (8) Whether the corporation, during applicant's connection 
therewith, has underwritten or participated in the marketing of the 
security issue of any public utility with which applicant was also 
connected; if so, the details with respect to every such transaction 
that occurred during the past 36 months.

[[Page 349]]

    (9) (If the answer to paragraph (d)(7) of this section is in the 
negative.) Give excerpts from the charter, declaration of trust, or 
articles of partnership that authorize the underwriting or participating 
in the marketing of securities of a public utility.
    (10) (If the answer to paragraph (d)(7) of this section is in the 
negative.) Give general requirements of and appropriate reference to, 
the laws of the State of organization and of States in which corporation 
is doing business or has qualified to do business, with which it must 
comply in order to engage in the business of underwriting or 
participating in the marketing of the securities of a public utility.
    (11) What steps, if any, have been taken to comply with laws 
mentioned in paragraph (d)(10) of this section.
    (12) In lieu of paragraphs (d)(9), (10), and (11) of this section, 
an opinion by counsel to the same effect and including the information 
in respect thereto may be filed with the application.
    (13) Whether the corporation has registered with the Securities and 
Exchange Commission; if so, when and under what section of what act.
    (e) Data as to positions with each company, mentioned in paragraph 
(b) of this section, supplying electrical equipment to a public utility 
in which applicant holds a position. (Applicant shall use a separate 
sheet for each company.)
    (1) Name of company and address of principal place of business.
    (2) Positions which applicant holds or seeks authorization to hold 
therein and when and by whom elected or appointed to each position.
    (3) Description of applicant's duties in each position and 
approximate amounts of time devoted thereto, and, if applicant seeks 
authorization as director, the percentage of directors meetings held 
during the past 12 months that were attended by the applicant.
    (4) Names and titles of directors or partners.
    (5) Name of each public utility, with which applicant holds or seeks 
authorization to hold a position, to which the company supplies 
electrical equipment; the frequency of such transactions; the 
approximate annual dollar volume of such business; and the type of 
equipment supplied.
    (6) Nature of relationship between the company supplying electrical 
equipment and the public utility:
    (i) Whether company manufactures such electrical equipment or is a 
dealer therein.
    (ii) Whether company supplies electrical equipment to the public 
utility pursuant to construction, service, agency, or other contract 
with the public utility or an affiliate thereof, and, if so, furnish 
brief summary of the terms of such contract.
    (7) Extent of applicant's direct or indirect ownership, or control 
of, or beneficial interest in, the company or in the securities thereof, 
including common stock, preferred stock, bonds, or other securities. If 
such ownership or interest is held in a name other than that of 
applicant, state name and address of such holder.
    (8) All money or property received by applicant from the company (i) 
during the past 12 months, and expected during the ensuing 12 months, or 
(ii) during the company's most recently ended fiscal year, and expected 
during the company's current fiscal year, or (iii) during the past and 
current calendar years, whether for services, reimbursement for 
expenses, or otherwise. Specify in detail the amount thereof and the 
basis therefor.
    (f) Data as to positions with public utility holding companies. (Do 
not include here data as to corporations listed in paragraph (b) of this 
section which are also holding companies. A holding company as herein 
used means any corporation which directly or indirectly owns, controls, 
or holds with power to vote, 10 per centum or more, of the outstanding 
voting securities of a public utility.)
    (1) Name of holding company and address of principal place of 
business.
    (2) Positions which applicant holds therein, when and by whom 
elected or appointed to each position.
    (3) Extent of applicant's direct or indirect ownership, or control 
of, or beneficial interest in, the holding company or in the securities 
thereof, including common stock, preferred stock, bonds, or other 
securities. If such ownership or interest is held in a

[[Page 350]]

name other than that of applicant, state name and address of such 
holder.
    (4) All money or property received by applicant from the holding 
company (i) during the past 12 months, and expected during the ensuing 
12 months, or (ii) during the holding company's most recently ended 
fiscal year, and expected during the holding company's current fiscal 
year, or (iii) during the past and current calendar years, whether for 
services, reimbursement for expenses, or otherwise. Specify in detail 
the amount thereof and the basis therefor.
    (g) Positions with all other corporations. (Do not include here data 
that have been filed within the past 12 months in FERC-561, pursuant to 
part 46 of this chapter, or data as to any corporations listed in 
paragraph (b) or (f) of this section.)
    (1) All other corporations and positions therein, including briefly 
the information required in parallel columns as below:

------------------------------------------------------------------------
                           Address: Kind of
  Name of corporation          business          Position held therein
------------------------------------------------------------------------
 
 
 
------------------------------------------------------------------------

    (2) Any corporate, contractual, financial, or business relationships 
between any of the corporations listed in paragraph (g)(1) of this 
section and any of the public utilities listed in paragraph (b) of this 
section.
    (h) Data as to the public utility holding company system. The names 
of the public utility holding company systems of which each public 
utility listed in paragraph (b) of this section is a part, with a chart 
showing the corporate relationships existing between and among the 
corporations within the holding company systems.

[Order 246, 27 FR 4912, May 25, 1962, as amended by Order 427, 36 FR 
5598, Mar. 25, 1971; Order 374, 49 FR 20479-20480, May 15, 1984; Order 
435, 50 FR 40358, Oct. 3, 1985; Order 737, 75 FR 43404, July 26, 2010]

    Cross Reference: For rules and regulations of the Securities and 
Exchange Commission, see 17 CFR, chap. II.



Sec. 45.9  Automatic authorization of certain interlocking positions.

    (a) Applicability. Subject to paragraphs (b) and (c) of this 
section, the Commission authorizes any officer or director of a public 
utility to hold the following interlocking positions:
    (1) Officer or director of one or more other public utilities if the 
same holding company owns, directly or indirectly, that percentage of 
each utility's stock (of whatever class or classes) which is required by 
each utility's by-laws to elect directors;
    (2) Officer or director of two public utilities, if one utility is 
owned, wholly or in part, by the other and, as its primary business, 
owns or operates transmission or generating facilities to provide 
transmission service or electric power for sale to its owners; and
    (3) Officer or director of more than one public utility, if such 
officer or director is already authorized under this part to hold 
different positions as officer or director of those utilities where the 
interlock involves affiliated public utilities.
    (b) Conditions of authorization. As a condition of authorization, 
any person authorized to hold interlocking positions under this section 
must submit, prior to performing or assuming the duties and 
responsibilities of the position, an informational report in accordance 
with paragraph (c) of this section, unless that person is already 
authorized to hold interlocking positions of the type governed by this 
section. Failure to timely file the informational report will constitute 
a failure to satisfy this condition, and will constitute automatic 
denial.
    (c) Informational report. An informational report required under 
paragraph (b) of this section must state:
    (1) The full name and business address of the person required to 
submit this report;
    (2) The names of all public utilities with which the person holds or 
will hold the positions of officer or director and a description of 
those positions;
    (3) The names of any entity, other than those listed in paragraph 
(c)(2) of this section, of which the person is an officer or director 
and a description of those positions; and

[[Page 351]]

    (4) An explanation of the corporate relationship between or among 
the public utilities listed in paragraph (c)(2) of this section which 
qualifies the person for automatic authorization under this section.
    (5) A statement or an affirmation that the applicant has not yet 
performed or assumed the duties or responsibilities of the position 
which necessitated the filing of this informational report.

[Order 446, 51 FR 4905, Feb. 10, 1986, as amended by Order 664, 70 FR 
55723, Sept. 23, 2005]



PART 46_PUBLIC UTILITY FILING REQUIREMENTS AND FILING REQUIREMENTS FOR PERSONS 

HOLDING INTERLOCKING POSITIONS--Table of Contents



Sec.
46.1 Purpose.
46.2 Definitions.
46.3 Purchaser list.
46.4 General rule.
46.5 Covered entities.
46.6 Contents of the statement and procedures for filing.

    Authority: 16 U.S.C. 792-828c; 16 U.S.C. 2601-2645; 42 U.S.C. 7101-
7352; E.O. 12009, 3 CFR 142.

    Source: 45 FR 23418, Apr. 7, 1980, unless otherwise noted.



Sec. 46.1  Purpose.

    The purpose of this part is to implement section 305(c) of the 
Federal Power Act, as amended by section 211 of the Public Utility 
Regulatory Policies Act of 1978.

[Order 67, 45 FR 3569, Jan. 18, 1980]



Sec. 46.2  Definitions.

    For the purpose of this part:
    (a) Public utility has the same meaning as in section 201(e) of the 
Federal Power Act and further includes any company which is part of a 
holding company system which includes a registered holding company 
unless no company in such system is an electric utility within the 
meaning of section 3 of the Federal Power Act. Such term does not 
include any rural electric cooperative which is regulated by the Rural 
Electrification Administration of the Department of Agriculture or any 
other entities covered in section 201(f) of the Federal Power Act.
    (b) The following terms have the same meaning as in the Public 
Utility Holding Company Act of 1935:
    (1) Holding company system; and
    (2) Registered holding company.
    (c) Purchaser means any individual or corporation within the meaning 
of section 3 of the Federal Power Act who purchases electric energy from 
a public utility. Such term does not include the United States or any 
agency or instrumentality of the United States or any rural electric 
cooperative which is regulated by the Rural Electrification 
Administration of the Department of Agriculture.
    (d) Control and controlled mean the possession, directly or 
indirectly, of the power to direct the management or policies of an 
entity whether such power is exercised through one or more intermediary 
companies or pursuant to an agreement, written or oral, and whether such 
power is established through ownership or voting of securities, or 
common directors, officers, or stockholders, or voting trusts, holding 
trusts, or debt holdings, or contract, or any other direct or indirect 
means. A rebuttable presumption that control exists arises from the 
ownership or the power to vote, directly or indirectly, ten percent 
(10%) or more of the voting securities of such entity.
    (e) Entity means any firm, company, or organization including any 
corporation, joint-stock company, partnership, association, business 
trust, organized group of persons, whether incorporated or not, or a 
receiver or receivers, trustee or trustees of any of the foregoing. Such 
term does not include municipality as defined in section 3 of the 
Federal Power Act and does not include any Federal, State, or local 
government agencies or any rural electric cooperative which is regulated 
by the Rural Electrification Administration of the Department of 
Agriculture.
    (f) Electrical equipment means any apparatus, device, integral 
component, or integral part used in an activity which is electrically, 
electronically, mechanically, or by legal prescription necessary to the 
process of generation,

[[Page 352]]

transmission, or distribution of electric energy. \1\
---------------------------------------------------------------------------

    \1\ Guidance in applying the definition of electrical equipment may 
be obtained by examining the items within the following accounts 
described in part 101, title 18 of the Code of Federal Regulations: 
Boiler/Reactor plant equipment (Accounts 312 and 322); Engines and 
engine driven generators (313); Turbogenerator units (314 and 323); 
Accessory electrical equipment (315, 324, 334 and 345); Miscellaneous 
power plant equipment (316, 325, 335 and 346); Water wheels, turbines 
and generators (333); Fuel holders, producers, and accessories (342); 
Prime movers (343); Generators (344); Station equipment (353 and 362); 
Poles, towers and fixtures (354, 355 and 364); Overhead conductors and 
devices (356 and 365); Underground conduit (357 and 366); Underground 
conductors and devices (358 and 367); Storage battery equipment (363); 
Line transformers (368); Services (369); Meters (370); Installation on 
customers' premises (371); Street lighting and signal systems (373); 
Leased property on customers' premises (372); and Communication 
equipment (397). Excepted from these accounts, are vehicles, structures, 
foundations, settings, and services.
---------------------------------------------------------------------------

    (g) Produces or supplies means any transaction including a sale, 
lease, sale-leaseback, consignment, or any other transaction in which an 
entity provides electrical equipment, coal, natural gas, oil, nuclear 
fuel, or other fuel to any public utility either directly or through an 
entity controlled by such entity.
    (h) Appointee means any person appointed on a temporary or permanent 
basis to perform any duties or functions described in Sec. 46.4(a).
    (i) Representative means any person empowered, through oral or 
written agreement, to transact business on behalf of an entity and any 
person who serves as an advisor regarding policy or management decisions 
of the entity. The term does not include attorneys, accountants, 
architects, or any other persons who render a professional service on a 
fee basis.



Sec. 46.3  Purchaser list.

    (a) Compilation and filing list. On or before January 31 of each 
year, each public utility shall compile a list of the purchasers 
described in paragraph (b) of this section and shall identify each 
purchaser by name and principal business address. The public utility 
must submit the list to the Secretary of the Commission in accordance 
with filing procedures posted on the Commission's Web site at http://
www.ferc.gov and make the list publicly available through its principal 
business office.
    (b) Largest purchasers. The list required under paragraph (a) of 
this section shall include each purchaser who, during any of the three 
(3) preceding calendar years, purchased (for purposes other than resale) 
from a public utility one of the twenty (20) largest amounts of electric 
energy measured in kilowatt hours sold (for purposes other than resale) 
by such utility during such year.
    (c) Special rules. If data for actual annual sales (for purposes 
other than resale) are not available in the records of the public 
utility, the utility may use estimates based on actual data available to 
it. If one purchaser maintains several billing accounts with the public 
utility, the kilowatt hours purchased in each account of that purchaser 
shall be aggregated to arrive at the total for that purchaser.
    (d) Notification of largest purchasers. Each public utility shall 
notify by January 31 of each year each purchaser which has been 
identified on the list of largest purchasers under paragraph (b) of this 
section.
    (e) Revision of the list. Each public utility relying upon any 
estimates for its January 31st filing, shall revise the list compiled 
under paragraph (b) of this section no later than March 1 of the year in 
which the list was originally filed to reflect actual data not available 
to the utility prior to that time. Any revised list shall be filed with 
the Commission and made publicly available through the utility's 
principal business office no later than March 1. A utility filing a 
revised list shall indicate thereon the changes made to the list 
previously filed under paragraph (b) of this section. On or before the 
filing and publication of the revised list, the public utility shall 
notify the newly-listed purchasers and any purchasers whose names were 
removed from the list.

[Order 67, 45 FR 3569, Jan. 18, 1980; 45 FR 6377, Jan. 28, 1980, as 
amended by Order 737, 75 FR 43404, July 26, 2010]

[[Page 353]]



Sec. 46.4  General rule.

    A person must file with the Secretary of the Commission a statement 
in accordance with Sec. 46.6, and in the form specified in Sec. 131.31 
of this chapter (except that with respect to calendar year 1980, no 
filings in the form specified in Sec. 131.31 is required if such person 
has previously filed the statement required for calendar year 1980 in a 
different form than specified in Sec. 131.31), if such person:
    (a) Serves for a public utility in any of the following positions: A 
director or a chief executive officer, president, vice president, 
secretary, treasurer, general manager, comptroller, chief purchasing 
agent, or any other position in which such person performs similar 
executive duties or functions for such public utility; and
    (b) Serves for any entity described in Sec. 46.5 in any of the 
positions described in paragraph (a) of this section or is a partner, 
appointee, or representative of such entity.

[45 FR 23418, Apr. 7, 1980, as amended by Order 140, 46 FR 22181, Apr. 
16, 1981; Order 737, 75 FR 43404, July 26, 2010]



Sec. 46.5  Covered entities.

    Entities to which the general rule in Sec. 46.4(b) applies are the 
following:
    (a) Any investment bank, bank holding company, foreign bank or 
subsidiary thereof doing business in the United States, insurance 
company, or any other organization primarily engaged in the business of 
providing financial services or credit, a mutual savings bank, or a 
savings and loan association;
    (b) Any entity which is authorized by law to underwrite or 
participate in the marketing of securities of a public utility;
    (c) Any entity which produces or supplies electrical equipment or 
coal, natural gas, oil, nuclear fuel, or other fuel, for the use of any 
public utility;
    (d) Any entity specified in Sec. 46.3;
    (e) Any entity referred to in section 305(b) of the Federal Power 
Act; and
    (f) Any entity which is controlled by any entity referred to in this 
section.



Sec. 46.6  Contents of the statement and procedures for filing.

    Each person required to file a written statement under the general 
rule in Sec. 46.4 shall comply with the following requirements:
    (a) Each person shall provide the following information: full name 
and business address; identification of the public utilities and the 
covered entities in which such person holds executive positions 
described in Sec. 46.4; and identification of the interlock described 
in Sec. 46.4;
    (b) If the interlock is between a public utility and an entity 
described in Sec. 46.5(c), which produces or supplies electrical 
equipment for use of such public utility, such person shall provide the 
following information:
    (1) The aggregate amount of revenues received by such entity from 
producing or supplying electrical equipment to such public utility in 
the calendar year specified in paragraph (d) of this section, rounded up 
to the nearest $100,000; and
    (2) The nature of the business relationship between such public 
utility and such entity.
    (c) If the person is authorized by the Commission to hold the 
positions of officer or director in accordance with part 45, such person 
shall identify the authorization by docket number and shall give the 
date of authorization.
    (d)(1) Each person shall file an original and one copy of such 
written statement with the Office of Secretary of the Commission on or 
before April 30 of each year immediately following the calendar year 
during any portion of which such person held a position described in 
Sec. 46.4. The original of such statement shall be dated and signed by 
such person. The copy shall bear the date that appeared on the original; 
the signature on the copy may be stamped or typed on the copy.
    (2) Instead of submitting changes to the Commission on the pre-
printed Form No. 561 sent annually by the Commission, a person may 
choose to make changes to the pre-filled electronic version provided by 
the Commission. This electronic version, along with the signed original 
and one copy (as required by Paragraph (d)(c)) shall also be filed with 
the Commission.

[[Page 354]]

    (3) Such statement shall be available to the public through the 
Commission's eLibrary system on http://www.ferc.gov and shall be made 
publicly available through the principal business offices of the public 
utility and any entity to which it applies on or before April 30 of the 
year the statement was filed with the Commission.

(Pub. L. 96-511, 94 Stat. 2812 (44 U.S.C. 3501 et seq.))

[45 FR 23418, Apr. 7, 1980, as amended by Order 601, 63 FR 72169, Dec. 
31, 1998; Order 737, 75 FR 43404, July 26, 2010]



PART 50_APPLICATIONS FOR PERMITS TO SITE INTERSTATE ELECTRIC TRANSMISSION 

FACILITIES--Table of Contents



Sec.
50.1 Definitions.
50.2 Purpose and intent of rules.
50.3 Applications/pre-filing; rules and format.
50.4 Stakeholder participation.
50.5 Pre-filing procedures.
50.6 Applications: general content.
50.7 Applications: exhibits.
50.8 Acceptance/rejection of applications.
50.9 Notice of application.
50.10 Interventions.
50.11 General conditions applicable to permits.

    Authority: 16 U.S.C. 824p, DOE Delegation Order No. 00-004.00A.

    Source: 71 FR 69465, Dec. 1, 2006, unless otherwise noted.



Sec. 50.1  Definitions.

    As used in this part:
    Affected landowners include owners of property interests, as noted 
in the most recent county/city tax records as receiving the tax notice, 
whose property:
    (1) Is directly affected (i.e., crossed or used) by the proposed 
activity, including all facility sites, rights-of-way, access roads, 
staging areas, and temporary workspace; or
    (2) Abuts either side of an existing right-of-way or facility site 
owned in fee by any utility company, or abuts the edge of a proposed 
facility site or right-of-way which runs along a property line in the 
area in which the facilities would be constructed, or contains a 
residence within 50 feet of a proposed construction work area.
    Director means the Director of the Office of Energy Projects or his 
designees.
    Federal authorization means permits, special use authorization, 
certifications, opinions, or other approvals that may be required under 
Federal law in order to site a transmission facility.
    National interest electric transmission corridor means any 
geographic area experiencing electric energy transmission capacity 
constraints or congestion that adversely affects consumers, as 
designated by the Secretary of Energy.
    Permitting entity means any Federal or State agency, Indian tribe, 
multistate, or local agency that is responsible for issuing separate 
authorizations pursuant to Federal law that are required to construct 
electric transmission facilities in a national interest electric 
transmission corridor.
    Stakeholder means any Federal, State, interstate, Tribal, or local 
agency, any affected non-governmental organization, affected landowner, 
or interested person.
    Transmitting utility means an entity that owns, operates, or 
controls facilities used for the transmission of electric energy in 
interstate commerce for the sale of electric energy at wholesale.



Sec. 50.2  Purpose and intent of rules.

    (a) The purpose of the regulations in this part is to provide for 
efficient and timely review of requests for permits for the siting of 
electric transmission facilities under section 216 of the Federal Power 
Act. The regulations ensure that each stakeholder is afforded an 
opportunity to present views and recommendations with respect to the 
need for and impact of a facility covered by the permit. They also 
coordinate, to the maximum extent practicable, the Federal authorization 
and review processes of other Federal and State agencies, Indian tribes, 
multistate, and local entities that are responsible for conducting any 
separate permitting and environmental reviews of the proposed 
facilities.
    (b) Every applicant shall file all pertinent data and information 
necessary

[[Page 355]]

for a full and complete understanding of the proposed project.
    (c) Every requirement of this part will be considered as an 
obligation of the applicant which can only be avoided by a definite and 
positive showing that the information or data called for by the 
applicable rules is not necessary for the consideration and ultimate 
determination of the application.
    (d) The burden of assuring that all applications and information 
submitted under this part is in an intelligible form and any omission of 
data is justified rests with the applicant.



Sec. 50.3  Applications/pre-filing; rules and format.

    (a) Filings are subject to the formal paper and electronic filing 
requirements for proceedings before the Commission as provided in part 
385 of this chapter.
    (b) Applications, amendments, and all exhibits and other submissions 
required to be furnished by an applicant to the Commission under this 
part must be submitted in an original and 7 conformed copies.
    (c) When an application considered alone is incomplete and depends 
vitally upon information in another application, it will not be accepted 
for filing until the supporting application has been filed. When 
applications are interdependent, they must be filed concurrently.
    (d) All filings must be signed in compliance with Sec. 385.2005 of 
this chapter.
    (e) The Commission will conduct a paper hearing on applications for 
permits for electric transmission facilities.
    (f) Permitting entities will be subject to the filing requirements 
of this section and the prompt and binding intermediate milestones and 
ultimate deadlines established in the notice issued under Sec. 50.9.
    (g) Any person submitting documents containing critical energy 
infrastructure information must follow the procedures specified in Sec. 
388.113 of this chapter.



Sec. 50.4  Stakeholder participation.

    A Project Participation Plan is required to ensure stakeholders have 
access to accurate and timely information on the proposed project and 
permit application process.
    (a) Project Participation Plan. An applicant must develop a Project 
Participation Plan and file it with the pre-filing materials under Sec. 
50.5(c)(7) that:
    (1) Identifies specific tools and actions to facilitate stakeholder 
communications and public information, including an up-to-date project 
Web site and a readily accessible, single point of contact within the 
company;
    (2) Lists all central locations in each county throughout the 
project area where the applicant will provide copies of all their 
filings related to the proposed project; and
    (3) Includes a description and schedule explaining how the applicant 
intends to respond to requests for information from the public as well 
as Federal, State, and Tribal permitting agencies, and other legal 
entities with local authorization requirements.
    (b) Document Availability. (1) Within three business days of the 
date the pre-filing materials are filed or application is issued a 
docket number, an applicant must ensure that:
    (i) Complete copies of the pre-filing or application materials are 
available in accessible central locations in each county throughout the 
project area, either in paper or electronic format; and
    (ii) Complete copies of all filed materials are available on the 
project Web site.
    (2) An applicant is not required to serve voluminous or difficult to 
reproduce material, such as copies of certain environmental information, 
on all parties, as long as such material is publicly available in an 
accessible central location in each county throughout the project area 
and on the applicant's project website.
    (c) Project notification. (1) The applicant must make a good faith 
effort to notify: all affected landowners; landowners with a residence 
within a quarter mile from the edge of the construction right-of-way of 
the proposed project; towns and communities; permitting agencies; other 
local, State, Tribal, and Federal governments and agencies involved in 
the project; electric utilities and transmission owners and operators 
that are or may be connected to the application's proposed

[[Page 356]]

transmission facilities; and any known individuals that have expressed 
an interest in the State permitting proceeding. Notification must be 
made:
    (i) By certified or first class mail, sent:
    (A) Within 14 days after the Director notifies the applicant of the 
commencement of the pre-filing process under Sec. 50.5(d);
    (B) Within 3 business days after the Commission notices the 
application under Sec. 50.9; and
    (ii) By twice publishing a notice of the pre-filing request and 
application filings, in a daily, weekly, and/or tribal newspaper of 
general circulation in each county in which the project is located, no 
later than 14 days after the date that a docket number is assigned for 
the pre-filing process or to the application.
    (2) Contents of participation notice
    (i) The pre-filing request notification must, at a minimum, include:
    (A) The docket number assigned to the proceeding;
    (B) The most recent edition of the Commission's pamphlet Electric 
Transmission Facilities Permit Process. The newspaper notice need only 
refer to the pamphlet and indicate that it is available on the 
Commission's website;
    (C) A description of the applicant and a description of the proposed 
project, its location (including a general location map), its purpose, 
and the timing of the project;
    (D) A general description of the property the applicant will need 
from an affected landowner if the project is approved, how to contact 
the applicant, including a local or toll-free phone number, the name of 
a specific person to contact who is knowledgeable about the project, and 
a reference to the project website. The newspaper notice need not 
include a description of the property, but should indicate that a 
separate notice is being mailed to affected landowners and governmental 
entities;
    (E) A brief summary of what rights the affected landowner has at the 
Commission and in proceedings under the eminent domain rules of the 
relevant State. The newspaper notice does not need to include this 
summary;
    (F) Information on how to get a copy of the pre-filing information 
from the company and the location(s) where copies of the pre-filing 
information may be found as specified in paragraph (b) of this section;
    (G) A copy of the Director's notification of commencement of the 
pre-filing process, the Commission's Internet address, and the telephone 
number for the Commission's Office of External Affairs; and
    (H) Information explaining the pre-filing and application process 
and when and how to intervene in the application proceedings.
    (ii) The application notification must include the Commission's 
notice issued under Sec. 50.9.
    (3) If, for any reason, a stakeholder has not yet been identified 
when the notices under this paragraph are sent or published, the 
applicant must supply the information required under paragraphs 
(c)(2)(i) and (ii) of this section when the stakeholder is identified.
    (4) If the notification is returned as undeliverable, the applicant 
must make a reasonable attempt to find the correct address and notify 
the stakeholder.
    (5) Access to critical energy infrastructure information is subject 
to the requirements of Sec. 388.113 of this chapter.



Sec. 50.5  Pre-filing procedures.

    (a) Introduction. Any applicant seeking a permit to site new 
electric transmission facilities or modify existing facilities must 
comply with the following pre-filing procedures prior to filing an 
application for Commission review.
    (b) Initial consultation. An applicant must meet and consult with 
the Director concerning the proposed project.
    (1) At the initial consultation meeting, the applicant must be 
prepared to discuss the nature of the project, the contents of the pre-
filing request, and the status of the applicant's progress toward 
obtaining the information required for the pre-filing request described 
in paragraph (c) of this section.
    (2) The initial consultation meeting will also include a discussion 
of whether a third-party contractor is likely to be needed to prepare 
the environmental documentation for the project and the

[[Page 357]]

specifications for the applicant's solicitation for prospective third-
party contractors.
    (3) The applicant also must discuss how its proposed project will be 
subject to the Commission's jurisdiction under section 216(b)(1) of the 
Federal Power Act. If the application is seeking Commission jurisdiction 
under section 216(b)(1)(C) of the Federal Power Act, the applicant must 
be prepared to discuss when it filed its application with the State and 
the status of that application.
    (c) Contents of the initial filing. An applicant's pre-filing 
request will be filed after the initial consultation and must include 
the following information:
    (1) A description of the schedule desired for the project, including 
the expected application filing date, desired date for Commission 
approval, and proposed project operation date, as well as the status of 
any State siting proceedings.
    (2) A detailed description of the project, including location maps 
and plot plans to scale showing all major components, including a 
description of zoning and site availability for any permanent 
facilities.
    (3) A list of the permitting entities responsible for conducting 
separate Federal permitting and environmental reviews and authorizations 
for the project, including contact names and telephone numbers, and a 
list of local entities with local authorization requirements. The filing 
must include information concerning:
    (i) How the applicant intends to account for each of the relevant 
entity's permitting and environmental review schedules, including its 
progress in DOE's pre-application process; and
    (ii) When the applicant proposes to file with these permitting and 
local entities for the respective permits or other authorizations.
    (4) A list of all affected landowners and other stakeholders 
(include contact names and telephone numbers) that have been contacted, 
or have contacted the applicant, about the project.
    (5) A description of what other work already has been done, 
including, contacting stakeholders, agency and Indian tribe 
consultations, project engineering, route planning, environmental and 
engineering contractor engagement, environmental surveys/studies, open 
houses, and any work done or actions taken in conjunction with a State 
proceeding. This description also must include the identification of the 
environmental and engineering firms and sub-contractors under contract 
to develop the project.
    (6) Proposals for at least three prospective third-party contractors 
from which Commission staff may make a selection to assist in the 
preparation of the requisite NEPA document, if the Director determined a 
third-party contractor would be necessary in the Initial Consultation 
meeting.
    (7) A proposed Project Participation Plan, as set forth in Sec. 
50.4(a).
    (d) Director's notice. (1) When the Director finds that an applicant 
seeking authority to site and construct an electric transmission 
facility has adequately addressed the requirements of paragraphs (a), 
(b), and (c) of this section, and any other requirements determined at 
the Initial Consultation meeting, the Director will so notify the 
applicant.
    (i) The notification will designate the third-party contractor, and
    (ii) The pre-filing process will be deemed to have commenced on the 
date of the Director's notification.
    (2) If the Director determines that the contents of the initial pre-
filing request are insufficient, the applicant will be notified and 
given a reasonable time to correct the deficiencies.
    (e) Subsequent filing requirements. Upon the Director's issuance of 
a notice commencing an applicant's pre-filing process, the applicant 
must:
    (1) Within 7 days, finalize and file the Project Participation Plan, 
as defined in Sec. 50.4(a), and establish the dates and locations at 
which the applicant will conduct meetings with stakeholders and 
Commission staff.
    (2) Within 14 days, finalize the contract with the selected third-
party contractor, if applicable.
    (3) Within 14 days:
    (i) Provide all identified stakeholders with a copy of the 
Director's notification commencing the pre-filing process;

[[Page 358]]

    (ii) Notify affected landowners in compliance with the requirements 
of Sec. 50.4(c); and
    (iii) Notify permitting entities and request information detailing 
any specific information not required by the Commission in the resource 
reports required under Sec. 380.16 of this chapter that the permitting 
entities may require to reach a decision concerning the proposed 
project. The responses of the permitting entities must be filed with the 
Commission, as well as being provided to the applicant.
    (4) Within 30 days, submit a mailing list of all stakeholders 
contacted under paragraph (e)(3) of this section, including the names of 
the Federal, State, Tribal, and local jurisdictions' representatives. 
The list must include information concerning affected landowner 
notifications that were returned as undeliverable.
    (5) Within 30 days, file a summary of the project alternatives 
considered or under consideration.
    (6) Within 30 days, file an updated list of all Federal, State, 
Tribal, and local agencies permits and authorizations that are necessary 
to construct the proposed facilities. The list must include:
    (i) A schedule detailing when the applications for the permits and 
authorizations will be submitted (or were submitted);
    (ii) Copies of all filed applications; and
    (iii) The status of all pending permit or authorization requests and 
of the Secretary of Energy's pre-application process being conducted 
under section 216(h)(4)(C) of the Federal Power Act.
    (7) Within 60 days, file the draft resource reports required in 
Sec. 380.16 of this chapter.
    (8) On a monthly basis, file status reports detailing the 
applicant's project activities including surveys, stakeholder 
communications, and agency and tribe meetings, including updates on the 
status of other required permits or authorizations. If the applicant 
fails to respond to any request for additional information, fails to 
provide sufficient information, or is not making sufficient progress 
towards completing the pre-filing process, the Director may issue a 
notice terminating the process.
    (f) Concluding the pre-filing process. The Director will determine 
when the information gathered during the pre-filing process is complete, 
after which the applicant may file an application. An application must 
contain all the information specified by the Commission staff during the 
pre-filing process, including the environmental material required in 
part 380 of this chapter and the exhibits required in Sec. 50.7.



Sec. 50.6  Applications: general content.

    Each application filed under this part must provide the following 
information:
    (a) The exact legal name of applicant; its principal place of 
business; whether the applicant is an individual, partnership, 
corporation, or otherwise; the State laws under which the applicant is 
organized or authorized; and the name, title, and mailing address of the 
person or persons to whom communications concerning the application are 
to be addressed.
    (b) A concise description of applicant's existing operations.
    (c) A concise general description of the proposed project sufficient 
to explain its scope and purpose. The description must, at a minimum: 
Describe the proposed geographic location of the principal project 
features and the planned routing of the transmission line; contain the 
general characteristics of the transmission line including voltage, 
types of towers, origin and termination points of the transmission line, 
and the geographic character of area traversed by the line; and be 
accompanied by an overview map of sufficient scale to show the entire 
transmission route on one or a few 8.5 by 11-inch sheets.
    (d) Verification that the proposed route lies within a national 
interest electric transmission corridor designated by the Secretary of 
the Department of Energy under section 216 of the Federal Power Act.
    (e) Evidence that:
    (1) A State in which the transmission facilities are to be 
constructed or modified does not have the authority to approve the 
siting of the facilities or consider the interstate benefits expected to 
be achieved by the proposed

[[Page 359]]

construction or modification of transmission facilities in the State;
    (2) The applicant is a transmitting utility but does not qualify to 
apply for a permit or siting approval of the proposed project in a State 
because the applicant does not serve end-use customers in the State; or
    (3) A State commission or other entity that has the authority to 
approve the siting of the facilities has:
    (i) Withheld approval for more than one year after the filing of an 
application seeking approval under applicable law or one year after the 
designation of the relevant national interest electric transmission 
corridor, whichever is later; or
    (ii) Conditioned its approval in such a manner that the proposed 
construction or modification will not significantly reduce transmission 
congestion in interstate commerce or is not economically feasible.
    (f) A demonstration that the facilities to be authorized by the 
permit will be used for the transmission of electric energy in 
interstate commerce, and that the proposed construction or modification:
    (1) Is consistent with the public interest;
    (2) Will significantly reduce transmission congestion in interstate 
commerce and protects or benefits consumers;
    (3) Is consistent with sound national energy policy and will enhance 
energy interdependence; and
    (4) Will maximize, to the extent reasonable and economical, the 
transmission capabilities of existing towers or structures.
    (g) A description of the proposed construction and operation of the 
facilities, including the proposed dates for the beginning and 
completion of construction and the commencement of service.
    (h) A general description of project financing.
    (i) A full statement as to whether any other application to 
supplement or effectuate the applicant's proposals must be or is to be 
filed by the applicant, any of the applicant's customers, or any other 
person, with any other Federal, State, Tribal, or other regulatory body; 
and if so, the nature and status of each such application.
    (j) A table of contents that must list all exhibits and documents 
filed in compliance with this part, as well as all other documents and 
exhibits otherwise filed, identifying them by their appropriate titles 
and alphabetical letter designations. The alphabetical letter 
designations specified in Sec. 50.7 must be strictly adhered to and 
extra exhibits submitted at the volition of applicant must be designated 
in sequence under the letter Z (Z1, Z2, Z3, etc.).
    (k) A form of notice suitable for publication in the Federal 
Register, as provided by Sec. 50.9(a), which will briefly summarize the 
facts contained in the application in such a way as to acquaint the 
public with its scope and purpose. The form of notice also must include 
the name, address, and telephone number of an authorized contact person.



Sec. 50.7  Applications: exhibits.

    Each exhibit must contain a title page showing the applicant's name, 
title of the exhibit, the proper letter designation of the exhibit, and, 
if 10 or more pages, a table of contents, citing by page, section number 
or subdivision, the component elements or matters contained in the 
exhibit.
    (a) Exhibit A--Articles of incorporation and bylaws. If the 
applicant is not an individual, a conformed copy of its articles of 
incorporation and bylaws, or other similar documents.
    (b) Exhibit B--State authorization. For each State where the 
applicant is authorized to do business, a statement showing the date of 
authorization, the scope of the business the applicant is authorized to 
carry on and all limitations, if any, including expiration dates and 
renewal obligations. A conformed copy of applicant's authorization to do 
business in each State affected must be supplied upon request.
    (c) Exhibit C--Company officials. A list of the names and business 
addresses of the applicant's officers and directors, or similar 
officials if the applicant is not a corporation.
    (d) Exhibit D--Other pending applications and filings. A list of 
other applications and filings submitted by the applicant that are 
pending before the

[[Page 360]]

Commission at the time of the filing of an application and that directly 
and significantly affect the proposed project, including an explanation 
of any material effect the grant or denial of those other applications 
and filings will have on the application and of any material effect the 
grant or denial of the application will have on those other applications 
and filings.
    (e) Exhibit E--Maps of general location of facilities. The general 
location map required under Sec. 50.5(c) must be provided as Exhibit E. 
Detailed maps required by other exhibits must be filed in those 
exhibits, in a format determined during the pre-filing process in Sec. 
50.5.
    (f) Exhibit F--Environmental report. An environmental report as 
specified in Sec. Sec. 380.3 and 380.16 of this chapter. The applicant 
must submit all appropriate revisions to Exhibit F whenever route or 
site changes are filed. These revisions must identify the locations by 
mile post and describe all other specific differences resulting from the 
route or site changes, and should not simply provide revised totals for 
the resources affected. The format of the environmental report filing 
will be determined during the pre-filing process required under Sec. 
50.5.
    (g) Exhibit G--Engineering data.
    (1) A detailed project description including:
    (i) Name and destination of the project;
    (ii) Design voltage rating (kV);
    (iii) Operating voltage rating (kV);
    (iv) Normal peak operating current rating;
    (v) Line design features for minimizing television and/or radio 
interference cause by operation of the proposed facilities; and
    (vi) Line design features that minimize audible noise during fog/
rain caused by operation of the proposed facilities, including comparing 
expected audible noise levels to the applicable Federal, State, and 
local requirements.
    (2) A conductor, structures, and substations description including:
    (i) Conductor size and type;
    (ii) Type of structures;
    (iii) Height of typical structures;
    (iv) An explanation why these structures were selected;
    (v) Dimensional drawings of the typical structures to be used in the 
project; and
    (vi) A list of the names of all new (and existing if applicable) 
substations or switching stations that will be associated with the 
proposed new transmission line.
    (3) The location of the site and right-of-way including:
    (i) Miles of right-of-way;
    (ii) Miles of circuit;
    (iii) Width of the right-of-way;
    (iv) A brief description of the area traversed by the proposed 
transmission line, including a description of the general land uses in 
the area and the type of terrain crossed by the proposed line;
    (4) Assumptions, bases, formulae, and methods used in the 
development and preparation of the diagrams and accompanying data, and a 
technical description providing the following information:
    (i) Number of circuits, with identification as to whether the 
circuit is overhead or underground;
    (ii) The operating voltage and frequency; and
    (iii) Conductor size, type and number of conductors per phase.
    (5) If the proposed interconnection is an overhead line, the 
following additional information also must be provided:
    (i) The wind and ice loading design parameters;
    (ii) A full description and drawing of a typical supporting 
structure including strength specifications;
    (iii) Structure spacing with typical ruling and maximum spans;
    (iv) Conductor (phase) spacing; and
    (v) The designed line-to-ground and conductor-side clearances.
    (6) If an underground or underwater interconnection is proposed, the 
following additional information also must be provided:
    (i) Burial depth;
    (ii) Type of cable and a description of any required supporting 
equipment, such as insulation medium pressurizing or forced cooling;
    (iii) Cathodic protection scheme; and
    (iv) Type of dielectric fluid and safeguards used to limit potential 
spills in waterways.

[[Page 361]]

    (7) Technical diagrams that provide clarification of any of the 
above items should be included.
    (8) Any other data or information not previously identified that has 
been identified as a minimum requirement for the siting of a 
transmission line in the State in which the facility will be located.
    (h) Exhibit H--System analysis data. An analysis evaluating the 
impact the proposed facilities will have on the existing electric 
transmission system performance, including:
    (1) An analysis of the existing and expected congestion on the 
electric transmission system.
    (2) Power flow cases used to analyze the proposed and future 
transmission system under anticipated load growth, operating conditions, 
variations in power import and export levels, and additional 
transmission facilities required for system reliability. The cases must:
    (i) Provide all files to model normal, single contingency, multiple 
contingency, and special protective systems, including the special 
protective systems' automatic switching or load shedding system; and
    (ii) State the assumptions, criteria, and guidelines upon which they 
are based and take into consideration transmission facility loading; 
first contingency incremental transfer capability (FCITC); normal 
incremental transfer capability (NITC); system protection; and system 
stability.
    (3) A stability analysis including study assumptions, criteria, and 
guidelines used in the analysis, including load shedding allowables.
    (4) A short circuit analysis for all power flow cases.
    (5) A concise analysis to include:
    (i) An explanation of how the proposed project will improve system 
reliability over the long and short term;
    (ii) An analysis of how the proposed project will impact long term 
regional transmission expansion plans;
    (iii) An analysis of how the proposed project will impact congestion 
on the applicant's entire system; and
    (iv) A description of proposed high technology design features.
    (6) Detailed single-line diagrams, including existing system 
facilities identified by name and circuit number, that show system 
transmission elements, in relation to the project and other principal 
interconnected system elements, as well as power flow and loss data that 
represent system operating conditions.
    (i) Exhibit I--Project Cost and Financing. (1) A statement of 
estimated costs of any new construction or modification.
    (2) The estimated capital cost and estimated annual operations and 
maintenance expense of each proposed environmental measure.
    (3) A statement and evaluation of the consequences of denial of the 
transmission line permit application.
    (j) Exhibit J--Construction, operation, and management. A concise 
statement providing arrangements for supervision, management, 
engineering, accounting, legal, or other similar service to be rendered 
in connection with the construction or operation of the project, if not 
to be performed by employees of the applicant, including reference to 
any existing or contemplated agreements, together with a statement 
showing any affiliation between the applicant and any parties to the 
agreements or arrangements.



Sec. 50.8  Acceptance/rejection of applications.

    (a) Applications will be docketed when received and the applicant so 
advised.
    (b) If an application patently fails to comply with applicable 
statutory requirements or with applicable Commission rules, regulations, 
and orders for which a waiver has not been granted, the Director may 
reject the application as provided by Sec. 385.2001(b) of this chapter. 
This rejection is without prejudice to an applicant's refiling a 
complete application. However, an application will not be rejected 
solely on the basis that the environmental reports are incomplete 
because the company has not been granted access by affected landowners 
to perform required surveys.
    (c) An application that relates to a proposed project or 
modification for which a prior application has been filed and rejected, 
will be docketed as a new application.

[[Page 362]]



Sec. 50.9  Notice of application.

    (a) Notice of each application filed, except when rejected in 
accordance with Sec. 50.8, will be issued and subsequently published in 
the Federal Register.
    (b) The notice will establish prompt and binding intermediate 
milestones and ultimate deadlines for the coordination, and review of, 
and action on Federal authorization decisions relating to, the proposed 
facilities.



Sec. 50.10  Interventions.

    Notices of applications, as provided by Sec. 50.9, will fix the 
time within which any person desiring to participate in the proceeding 
may file a petition to intervene, and within which any interested 
regulatory agency, as provided by Sec. 385.214 of this chapter, 
desiring to intervene may file its notice of intervention.



Sec. 50.11  General conditions applicable to permits.

    (a) The following terms and conditions, among others as the 
Commission will find are required by the public interest, will attach to 
the issuance of each permit and to the exercise of the rights granted 
under the permit.
    (b) The permit will be void and without force or effect unless 
accepted in writing by the permittee within 30 days from the date of the 
order issuing the permit. Provided that, when an applicant files for 
rehearing of the order in accordance with FPA section 313(a), the 
acceptance must be filed within 30 days from the issue date of the order 
of the Commission upon the application for rehearing or within 30 days 
from the date on which the application may be deemed to have been denied 
when the Commission has not acted on such application within 30 days 
after it has been filed. Provided further, that when a petition for 
review is filed in accordance with the provisions of FPA section 313(b), 
the acceptance shall be filed within 30 days after final disposition of 
the judicial review proceedings thus initiated.
    (c) Standards of construction and operation. In determining standard 
practice, the Commission will be guided by the provisions of the 
American National Standards Institute, Incorporated, the National 
Electrical Safety Code, and any other codes and standards that are 
generally accepted by the industry, except as modified by this 
Commission or by municipal regulators within their jurisdiction. Each 
electric utility will construct, install, operate, and maintain its 
plant, structures, equipment, and lines in accordance with these 
standards, and in a manner to best accommodate the public, and to 
prevent interference with service furnished by other public or non-
public utilities insofar as practical.
    (d) Written authorization must be obtained from the Director prior 
to commencing construction of the facilities or initiating operations. 
Requests for these authorizations must demonstrate compliance with all 
terms and conditions of the construction permit.
    (e) Any authorized construction or modification must be completed 
and made available for service by the permitee within a period of time 
to be specified by the Commission in each order issuing the transmission 
line construction permit. If facilities are not completed within the 
specified timeframe, the permittee must file for an extension of time 
under Sec. 385.2008 of this chapter.
    (f) A permittee must file with the Commission, in writing and under 
oath, an original and four conformed copies, as provided in Sec. 
385.2011 of this chapter, of the following:
    (1) Within ten days after the bona fide beginning of construction, 
notice of the date of the beginning; and
    (2) Within ten days after authorized facilities have been 
constructed and placed in service, notice of the date of the completion 
of construction and commencement of service.
    (g) The permit issued to the applicant may be transferred, subject 
to the approval of the Commission, to a person who agrees to comply with 
the terms, limitations or conditions contained in the filing and in 
every subsequent Order issued thereunder. A permit holder seeking to 
transfer a permit must file with the Secretary a petition for approval 
of the transfer. The petition must:
    (1) State the reasons supporting the transfer;

[[Page 363]]

    (2) Show that the transferee is qualified to carry out the 
provisions of the permit and any Orders issued under the permit;
    (3) Be verified by all parties to the proposed transfer;
    (4) Be accompanied by a copy of the proposed transfer agreement;
    (5) Be accompanied by an affidavit of service of a copy on the 
parties to the permit proceeding; and
    (6) Be accompanied by an affidavit of publication of a notice 
concerning the petition and service of such notice on all affected 
landowners that have executed agreements to convey property rights to 
the transferee and all other persons, municipalities or agencies 
entitled by law to be given notice of, or be served with a copy of, any 
application to construct a major electric generation facility.

[[Page 364]]



                SUBCHAPTER C_ACCOUNTS, FEDERAL POWER ACT



PART 101_UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR PUBLIC UTILITIES AND 

LICENSEES SUBJECT TO THE PROVISIONS OF THE FEDERAL POWER ACT--Table of 

Contents



    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352, 7651-7651o.

    Source: Order 218, 25 FR 5014, June 7, 1960.

    Editorial Note: For Federal Register citations affecting part 101, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and at www.fdsys.gov.

    Effective Date Note: At 58 FR 18004-18006, Apr. 7, 1993, part 101 
was amended by redesignating Definitions 30 through 38 as 31 through 39 
and adding new Definition 30; adding paragraph 21 under the General 
Instructions; adding Accounts 158.1, 158.2, 182.3, and 254 under Balance 
Sheet Accounts; adding Accounts 407.3, 407.4, 411.8, and 411.9 under 
Income Accounts; and adding Account 509 under Operation and Maintenance 
Expense Accounts. The added text contains information collection and 
recordkeeping requirements and will not become effective until approval 
has been given by the Office of Management and Budget.

    Note: Order 141, 12 FR 8503, Dec. 19, 1947, provides in part as 
follows:
    Prescribing a system of accounts for public utilities and licensees 
under the Federal Power Act. The Federal Power Commission acting 
pursuant to authority granted by the Federal Power Act, particularly 
sections 301(a), 304(a), and 309, and paragraph (13) of section 3, 
section 4(b) thereof, and finding such action necessary and appropriate 
for carrying out the provisions of said act, hereby adopts the 
accompanying system of accounts entitled ``Uniform System of Accounts 
Prescribed for Public Utilities and Licensees Subject to the Provisions 
of the Federal Power Act,'' and the rules and regulations contained 
therein; and It is hereby ordered:
    (a) That said system of accounts and said rules and regulations 
contained therein be and the same are hereby prescribed and promulgated 
as the system of accounts and rules and regulations of the Commission to 
be kept and observed by public utilities subject to the jurisdiction of 
the Commission and by licensees holding licenses issued by the 
Commission, to the extent and in the manner set forth therein;
    (b) That said system of accounts and rules and regulations therein 
contained shall, as to all public utilities now subject to the 
jurisdiction of the Commission and as to all present licensees, become 
effective on January 1, 1937, and as to public utilities and licensees 
which may hereafter become subject to the jurisdiction of the 
Commission, they shall become effective as of the date when such public 
utility becomes subject to the jurisdiction of the Commission or on the 
effective date of the license;
    (c) That a copy of said system of accounts and rules and regulation 
contained therein be forthwith served upon each public utility subject 
to the jurisdiction of the Commission, and each licensee or permittee 
holding a license or permit from the Commission.
    This system of accounts supersedes the system of accounts prescribed 
for licensees under the Federal Water Power Act; and Order No. 13, 
entered November 20, 1922, prescribing said system of accounts, was 
rescinded effective January 1, 1937.
    Applicability of system of accounts. This system of accounts is 
applicable in principle to all licensees subject to the Commission's 
accounting requirements under the Federal Power Act, and to all public 
utilities subject to the provisions of the Federal Power Act. The 
Commission reserves the right, however, under the provisions of section 
301(a) of the Federal Power Act to classify such licensees and public 
utilities and to prescribe a system of classification of accounts to be 
kept by and which will be convenient for and meet the requirements of 
each class.
    This system of accounts is applicable to public utilities, as 
defined in this part, and to licensees engaged in the generation and 
sale of electric energy for ultimate distribution to the public.
    This system of accounts shall also apply to agencies of the United 
States engaged in the generation and sale of electric energy for 
ultimate distribution to the public, so far as may be practicable, in 
accordance with applicable statutes.
    In accordance with the requirements of section 3 of the Act (49 
Stat. 839; 16 U.S.C. 796(13)), the ``classification of investment in 
road and equipment of steam roads, issue of 1914, Interstate Commerce 
Commission'', is published and promulgated as a part of the accounting 
rules and regulations of the Commission, and a copy thereof appears as 
part 103 of this chapter. Irrespective of any rules and regulations 
contained in this system of accounts, the cost of original projects 
licensed under the Act, and also the cost of additions thereto and 
betterments thereof, shall be determined under the rules and principles 
as defined and interpreted in said classification of the Interstate 
Commerce Commission so far as applicable.


[[Page 365]]



    Cross References: For application of uniform system of accounts to 
Class C and D public utilities and licensees, see part 104 of this 
chapter. For statements and reports, see part 141 of this chapter.



Uniform System of Accounts Prescribed for Public Utilities and Licensees 

Subject to the Provisions of the Federal Power Act--Table of Contents





Definitions--Table of Contents



    When used in this system of accounts:
    1. Accounts means the accounts prescribed in this system of 
accounts.
    2. Actually issued, as applied to securities issued or assumed by 
the utility, means those which have been sold to bona fide purchasers 
for a valuable consideration, those issued as dividends on stock, and 
those which have been issued in accordance with contractual requirements 
direct to trustees of sinking funds.
    3. Actually outstanding, as applied to securities issued or assumed 
by the utility, means those which have been actually issued and are 
neither retired nor held by or for the utility; provided, however, that 
securities held by trustees shall be considered as actually outstanding.
    4. Amortization means the gradual extinguishment of an amount in an 
account by distributing such amount over a fixed period, over the life 
of the asset or liability to which it applies, or over the period during 
which it is anticipated the benefit will be realized.
    5. A. Associated (affiliated) companies means companies or persons 
that directly, or indirectly through one or more intermediaries, 
control, or are controlled by, or are under common control with, the 
accounting company.
    B. Control (including the terms controlling, controlled by, and 
under common control with) means the possession, directly or indirectly, 
of the power to direct or cause the direction of the management and 
policies of a company, whether such power is exercised through one or 
more intermediary companies, or alone, or in conjunction with, or 
pursuant to an agreement, and whether such power is established through 
a majority or minority ownership or voting of securities, common 
directors, officers, or stockholders, voting trusts, holding trusts, 
associated companies, contract or any other direct or indirect means.
    6. Book cost means the amount at which property is recorded in these 
accounts without deduction of related provisions for accrued 
depreciation, amortization, or for other purposes.
    7. Commission, means the Federal Energy Regulatory Commission.
    8. Continuing Plant Inventory Record means company plant records for 
retirement units and mass property that provide, as either a single 
record, or in separate records readily obtainable by references made in 
a single record, the following information:
    A. For each retirement unit:
    (1) The name or description of the unit, or both;
    (2) The location of the unit;
    (3) The date the unit was placed in service;
    (4) The cost of the unit as set forth in Plant Instructions 2 and 3 
of this part; and
    (5) The plant control account to which the cost of the unit is 
charged; and
    B. For each category of mass property:
    (1) A general description of the property and quantity;
    (2) The quantity placed in service by vintage year;
    (3) The average cost as set forth in Plant Instructions 2 and 3 of 
this part; and
    (4) The plant control account to which the costs are charged.
    9. Cost means the amount of money actually paid for property or 
services. When the consideration given is other than cash in a purchase 
and sale transaction, as distinguished from a transaction involving the 
issuance of common stock in a merger or a pooling of interest, the value 
of such consideration shall be determined on a cash basis.
    10. Cost of removal means the cost of demolishing, dismantling, 
tearing down or otherwise removing electric plant, including the cost of 
transportation and handling incidental thereto. It does not include the 
cost of removal

[[Page 366]]

activities associated with asset retirement obligations that are 
capitalized as part of the tangible long-lived assets that give rise to 
the obligation. (See General Instruction 25).
    11. Debt expense means all expenses in connection with the issuance 
and initial sale of evidences of debt, such as fees for drafting 
mortgages and trust deeds; fees and taxes for issuing or recording 
evidences of debt; cost of engraving and printing bonds and certificates 
of indebtedness; fees paid trustees; specific costs of obtaining 
governmental authority; fees for legal services; fees and commissions 
paid underwriters, brokers, and salesmen for marketing such evidences of 
debt; fees and expenses of listing on exchanges; and other like costs.
    12. Depreciation, as applied to depreciable electric plant, means 
the loss in service value not restored by current maintenance, incurred 
in connection with the consumption or prospective retirement of electric 
plant in the course of service from causes which are known to be in 
current operation and against which the utility is not protected by 
insurance. Among the causes to be given consideration are wear and tear, 
decay, action of the elements, inadequacy, obsolescence, changes in the 
art, changes in demand and requirements of public authorities.
    13. Discount, as applied to the securities issued or assumed by the 
utility, means the excess of the par (stated value of no-par stocks) or 
face value of the securities plus interest or dividends accrued at the 
date of the sale over the cash value of the consideration received from 
their sale.
    14. Investment advances means advances, represented by notes or by 
book accounts only, with respect to which it is mutually agreed or 
intended between the creditor and debtor that they shall be settled by 
the issuance of securities or shall not be subject to current 
settlement.
    15. Lease, capital means a lease of property used in utility or 
nonutility operations, which meets one or more of the criteria stated in 
General Instruction 19.
    16. Lease, operating means a lease of property used in utility or 
nonutility operations, which does not meet any of the criteria stated in 
General Instruction 19.
    17. Licensee means any person, or State, licensed under the 
provisions of the Federal Power Act and subject to the Commission's 
accounting requirements under the terms of the license.
    18. Minor items of property means the associated parts or items of 
which retirement units are composed.
    19. Net salvage value means the salvage value of property retired 
less the cost of removal.
    20. Nominally issued, as applied to securities issued or assumed by 
the utility, means those which have been signed, certified, or otherwise 
executed, and placed with the proper officer for sale and delivery, or 
pledged, or otherwise placed in some special fund of the utility, but 
which have not been sold, or issued direct to trustees of sinking funds 
in accordance with contractual requirements.
    21. Nominally outstanding, as applied to securities issued or 
assumed by the utility, means those which, after being actually issued, 
have been reacquired by or for the utility under circumstances which 
require them to be considered as held alive and not retired, provided, 
however, that securities held by trustees shall be considered as 
actually outstanding.
    22. Nonproject property means the electric plant of a licensee which 
is not a part of the project property subject to a license issued by the 
Commission.
    23. Original cost, as applied to electric plant, means the cost of 
such property to the person first devoting it to public service.
    24. Person means an individual, a corporation, a partnership, an 
association, a joint stock company, a business trust, or any organized 
group of persons, whether incorporated or not, or any receiver or 
trustee.
    25. Premium, as applied to securities issued or assumed by the 
utility, means the excess of the cash value of the consideration 
received from their sale over the sum of their par (stated value of no-
par stocks) or face value and interest or dividends accrued at the date 
of sale.
    26. Project means complete unit of improvement or development, 
consisting of a power house, all water conduits,

[[Page 367]]

all dams and appurtenant works and structures (including navigation 
structures) which are a part of said unit, and all storage, diverting, 
or forebay reservoirs directly connected therewith, the primary line or 
lines transmitting power therefrom to the point of junction with the 
distribution system or with the interconnected primary transmission 
system, all miscellaneous structures used and useful in connection with 
said unit or any part thereof, and all water rights, rights of way, 
ditches, dams, reservoirs, lands, or interest in lands the use and 
occupancy of which are necessary or appropriate in the maintenance and 
operation of such unit.
    27. Project property means the property described in and subject to 
a license issued by the Commission.
    28. Property retired, as applied to electric plant, means property 
which has been removed, sold, abandoned, destroyed, or which for any 
cause has been withdrawn from service.
    29. Public utility means any person who owns or operates facilities 
subject to the jurisdiction of the Commission under the Federal Power 
Act. (See section 201(e) of said act.)
    30. Regional market means an organized energy market operated by a 
public utility, whether directly or through a contractual relationship 
with another entity.
    31. Regulatory Assets and Liabilities are assets and liabilities 
that result from rate actions of regulatory agencies. Regulatory assets 
and liabilities arise from specific revenues, expenses, gains, or losses 
that would have been included in net income determination in one period 
under the general requirements of the Uniform System of Accounts but for 
it being probable:
    A. that such items will be included in a different period(s) for 
purposes of developing the rates the utility is authorized to charge for 
its utility services; or
    B. in the case of regulatory liabilities, that refunds to customers, 
not provided for in other accounts, will be required.
    32. A. Replacing or replacement, when not otherwise indicated in the 
context, means the construction or installation of electric plant in 
place of property retired, together with the removal of the property 
retired.
    B. Research, Development, and Demonstration (RD&D) in the case of 
Major utilities means expenditures incurred by public utilities and 
licensees either directly or through another person or organization 
(such as research institute, industry association, foundation, 
university, engineering company or similar contractor) in pursuing 
research, development, and demonstration activities including 
experiment, design, installation, construction, or operation. This 
definition includes expenditures for the implementation or development 
of new and/or existing concepts until technically feasible and 
commercially feasible operations are verified. Such research, 
development, and demonstration costs should be reasonably related to the 
existing or future utility business, broadly defined, of the public 
utility or licensee or in the environment in which it operates or 
expects to operate. The term includes, but is not limited to: All such 
costs incidental to the design, development or implementation of an 
experimental facility, a plant process, a product, a formula, an 
invention, a system or similar items, and the improvement of already 
existing items of a like nature; amounts expended in connection with the 
proposed development and/or proposed delivery of alternate sources of 
electricity; and the costs of obtaining its own patent, such as 
attorney's fees expended in making and perfecting a patent application. 
The term includes preliminary investigations and detailed planning of 
specific projects for securing for customers non-conventional electric 
power supplies that rely on technology that has not been verified 
previously to be feasible. The term does not include expenditures for 
efficiency surveys; studies of management, management techniques and 
organization; consumer surveys, advertising, promotions, or items of a 
like nature.
    33. Retained Earnings (formerly earned surplus) means the 
accumulated net income of the utility less distribution to stockholders 
and transfers to other capital accounts.

[[Page 368]]

    34. Retirement units means those items of electric plant which, when 
retired, with or without replacement, are accounted for by crediting the 
book cost thereof to the electric plant account in which included.
    35. Salvage value means the amount received for property retired, 
less any expenses incurred in connection with the sale or in preparing 
the property for sale; or, if retained, the amount at which the material 
recoverable is chargeable to materials and supplies, or other 
appropriate account.
    36. Service life means the time between the date electric plant is 
includible in electric plant in service, or electric plant leased to 
others, and the date of its retirement. If depreciation is accounted for 
on a production basis rather than on a time basis, then service life 
should be measured in terms of the appropriate unit of production.
    37. Service value means the difference between original cost and net 
salvage value of electric plant.
    38. State means a State admitted to the Union, the District of 
Columbia, and any organized Territory of the United States.
    39. Subsidiary Company in the case of Major utilities means a 
company which is controlled by the utility through ownership of voting 
stock. (See Definitions item 5B, Control). A corporate joint venture in 
which a corporation is owned by a small group of businesses as a 
separate and specific business or project for the mutual benefit of the 
members of the group is a subsidiary company for the purposes of this 
system of accounts.
    40. Utility, as used herein and when not otherwise indicated in the 
context, means any public utility or licensee to which this system of 
accounts is applicable.



General Instructions--Table of Contents



    1. Classification of utilities.
    A. For purpose of applying the system of accounts prescribed by the 
Commission, electric utilities and licensees are divided into classes, 
as follows:
    (1) Major. Utilities and licensees that had, in each of the last 
three consecutive years, sales or transmission service that exceeded any 
one or more of the following:
    (a) One million megawatt-hours of total sales;
    (b) 100 megawatt-hours of sales for resale;
    (c) 500 megawatt-hours of power exchanges delivered; or
    (d) 500 megawatt-hours of wheeling for others (deliveries plus 
losses).
    (2) Nonmajor. Utilities and licensees that are not classified as 
Major (as defined above), and had total sales in each of the last three 
consecutive years of 10,000 megawatt-hours or more.
    (3) Nonoperating. Utilities and licensees formerly designated as 
Major or Nonmajor that have ceased operation but continue to collect 
amounts pursuant to a Commission-accepted tariff or rate schedule, or a 
Commission order.
    B. This system applies to Major, Nonmajor, and Nonoperating 
utilities and licensees. Provisions have been incorporated into this 
system for those entities which, prior to January 1, 1984, were applying 
the Commission's Uniform System of Accounts Prescribed for Public 
Utilities and Licensees subject to the Provisions of the Federal Power 
Act (Class C and Class D) [part 104 of this chapter, now revoked]. The 
notations (Nonmajor) and (Major) have been used to indicate those 
instructions and accounts from previous systems and classifications, 
which by definition, are not interchangeable without causing a loss of 
detail for the Major (previously Class A and Class B) or an increase in 
detail burden on the Nonmajor (previously Class C and Class D).
    C. The class to which any utility or licensee belongs will 
originally be determined by its annual megawatt hours in each of the 
last three consecutive years, or in the case of a newly established 
entity, the projected data shall be the basis. Subsequent changes in 
classification shall be made as necessary when the megawatt-hours for 
each of the three immediately preceding years shall exceed the upper 
limit, or be less than the lower limit of the classification previously 
applicable to the utility.

[[Page 369]]

    D. Any utility may, at its option, adopt the system of accounts 
prescribed by the Commission for any larger class of utilities.
    2. Records.
    A. Each utility shall keep its books of account, and all other 
books, records, and memoranda 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.
    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.
    C. No utility shall destroy any such books or records unless the 
destruction thereof is permitted by rules and regulations of the 
Commission.
    D. In addition to prescribed accounts, clearing accounts, temporary 
or experimental accounts, and subdivisions of any accounts, may be kept, 
provided the integrity of the prescribed accounts is not impaired.
    E. All amounts included in the accounts prescribed herein for 
electric plant and operating expenses shall be just and reasonable and 
any payments or accruals by the utility in excess of just and reasonable 
charges shall be included in account 426.5, Other Deductions.
    F. The arrangement or sequence of the accounts prescribed herein 
shall not be controlling as to the arrangement or sequence in report 
forms which may be prescribed by the Commission.
    3. Numbering System.
    A. The account numbering plan used herein consists of a system of 
three-digit whole numbers as follows:

100-199 Assets and other debits.
200-299 Liabilities and other credits.
300-399 Plant accounts.
400-432, 434-435 Income accounts.
433, 436-439 Retained earnings accounts.
440-459 Revenue accounts.
500-599 Production, transmission and distribution expenses.
900-949 Customer accounts, customer service and informational, sales, 
and general and administrative expenses.

    B. In certain instances, numbers have been skipped in order to allow 
for possible later expansion or to permit better coordination with the 
numbering system for other utility departments.
    C. The numbers prefixed to account titles are to be considered as 
parts of the titles. Each utility, however, may adopt for its own 
purposes a different system of account numbers (see also general 
instruction 2D) provided that the numbers herein prescribed shall appear 
in the descriptive headings of the ledger accounts and in the various 
sources of original entry; however, if a utility uses a different group 
of account numbers and it is not practicable to show the prescribed 
account numbers in the various sources of original entry, such reference 
to the prescribed account numbers may be omitted from the various 
sources of original entry. Moreover, each utility using different 
account numbers for its own purposes shall keep readily available a list 
of such account numbers which it uses and a reconciliation of such 
account numbers with the account numbers provided herein. It is intended 
that the utility's records shall be so kept as to permit ready analysis 
by prescribed accounts (by direct reference to sources of original entry 
to the extent practicable) and to permit preparation of financial and 
operating statements directly from such records at the end of each 
accounting period according to the prescribed accounts.
    4. Accounting Period.
    Each utility shall keep its books on a monthly basis so that for 
each month all transactions applicable thereto, as nearly as may be 
ascertained, shall be entered in the books of the utility. Amounts 
applicable or assignable to specific utility departments shall be so 
segregated monthly. Each utility shall close its books at the end of 
each calendar year unless otherwise authorized by the Commission.
    5. Submittal of Questions.
    To maintain uniformity of accounting, utilities shall submit 
questions of doubtful interpretation to the Commission for consideration 
and decision.
    6. Item Lists.

[[Page 370]]

    Lists of items appearing in the texts of the accounts or elsewhere 
herein are for the purpose of more clearly indicating the application of 
the prescribed accounting. The lists are intended to be representative, 
but not exhaustive. The appearance of an item in a list warrants the 
inclusion of the item in the account mentioned only when the text of the 
account also indicates inclusion inasmuch as the same item frequently 
appears in more than one list. The proper entry in each instance must be 
determined by the texts of the accounts.
    7. Extraordinary Items.
    It is the intent that net income shall reflect all items of profit 
and loss during the period with the exception of prior period 
adjustments as described in paragraph 7.1 and long-term debt as 
described in paragraph 17 below. Those items related to the effects of 
events and transactions which have occurred during the current period 
and which are of unusual nature and infrequent occurrence shall be 
considered extraordinary items. Accordingly, they will be events and 
transactions of significant effect which are abnormal and significantly 
different from the ordinary and typical activities of the company, and 
which would not reasonably be expected to recur in the forseeable 
future. (In determining significance, items should be considered 
individually and not in the aggregate. However, the effects of a series 
of related transactions arising from a single specific and identifiable 
event or plan of action should be considered in the aggregate. To be 
considered as extraordinary under the above guidelines, an item should 
be more than approximately 5 percent of income, computed before 
extraordinary items. Commission approval must be obtained to treat an 
item of less than 5 percent, as extraordinary. (See accounts 434 and 
435.)
    7.1 Prior period items.
    A. Items of profit and loss related to the following shall be 
accounted for as prior period adjustments and excluded from the 
determination of net income for the current year:
    (1) Correction of an error in the financial statements of a prior 
year.
    (2) Adjustments that result from realization of income tax benefits 
of pre-acquisition operating loss carryforwards of purchased 
subsidiaries.
    B. All other items of profit and loss recognized during the year 
shall be included in the determination of net income for that year.
    8. Unaudited Items (Major Utility).
    Whenever a financial statement is required by the Commission, if it 
is known that a transaction has occurred which affects the accounts but 
the amount involved in the transaction and its effect upon the accounts 
cannot be determined with absolute accuracy, the amount shall be 
estimated and such estimated amount included in the proper accounts. The 
utility is not required to anticipate minor items which would not 
appreciably affect the accounts.
    9. Distribution of Pay and Expenses of Employees.
    The charges to electric plant, operating expense and other accounts 
for services and expenses of employees engaged in activities chargeable 
to various accounts, such as construction, maintenance, and operations, 
shall be based upon the actual time engaged in the respective classes of 
work, or in case that method is impracticable, upon the basis of a study 
of the time actually engaged during a representative period.
    10. Payroll Distribution.
    Underlying accounting data shall be maintained so that the 
distribution of the cost of labor charged direct to the various accounts 
will be readily available. Such underlying data shall permit a 
reasonably accurate distribution to be made of the cost of labor charged 
initially to clearing accounts so that the total labor cost may be 
classified among construction, cost of removal, electric operating 
functions (steam generation, nuclear generation, hydraulic generation, 
transmission, distribution, etc.) and nonutility operations.
    11. Accounting to be on Accrual Basis.
    A. The utility is required to keep its accounts on the accrual 
basis. This requires the inclusion in its accounts of all known 
transactions of appreciable amount which affect the accounts. If bills 
covering such transactions have not been received or rendered, the

[[Page 371]]

amounts shall be estimated and appropriate adjustments made when the 
bills are received.
    B. When payments are made in advance for items such as insurance, 
rents, taxes or interest the amount applicable to future periods shall 
be charged to account 165, Prepayments, and spread over the periods to 
which applicable by credits to account 165, and charges to the accounts 
appropriate for the expenditure.
    12. Records for Each Plant (Major Utility).
    Separate records shall be maintained by electric plant accounts of 
the book cost of each plant owned, including additions by the utility to 
plant leased from others, and of the cost of operating and maintaining 
each plant owned or operated. The term plant as here used means each 
generating station and each transmission line or appropriate group of 
transmission lines.
    13. Accounting for Other Departments.
    If the utility also operates other utility departments, such as gas, 
water, etc., it shall keep such accounts for the other departments as 
may be prescribed by proper authority and in the absence of prescribed 
accounts, it shall keep such accounts as are proper or necessary to 
reflect the results of operating each such department. It is not 
intended that proprietary and similar accounts which apply to the 
utility as a whole shall be departmentalized.
    14. Transactions With Associated Companies (Major Utility).
    Each utility shall keep its accounts and records so as to be able to 
furnish accurately and expeditiously statements of all transactions with 
associated companies. The statements may be required to show the general 
nature of the transactions, the amounts involved therein and the amounts 
included in each account prescribed herein with respect to such 
transactions. Transactions with associated companies shall be recorded 
in the appropriate accounts for transactions of the same nature. Nothing 
herein contained, however, shall be construed as restraining the utility 
from subdividing accounts for the purpose of recording separately 
transactions with associated companies.
    15. Contingent Assets and Liabilities (Major Utility).
    Contingent assets represent a possible source of value to the 
utility contingent upon the fulfillment of conditions regarded as 
uncertain. Contingent liabilities include items which may under certain 
conditions become obligations of the utility but which are neither 
direct nor assumed liabilities at the date of the balance sheet. The 
utility shall be prepared to give a complete statement of significant 
contingent assets and liabilities (including cumulative dividends on 
preference stock) in its annual report and at such other times as may be 
requested by the Commission.
    16. Separate Accounts or Records for Each Licensed Project.
    The accounts or records of each licensee shall be so kept as to show 
for each project (including pumped storage) under license;
    (a) The actual legitimate original cost of the project, including 
the original cost (or fair value, as determined under section 23 of the 
Federal Power Act) of the original project, the original cost of 
additions thereto and betterments thereof and credits for property 
retired from service, as determined under the Commission's regulations;
    (b) The charges for operation and maintenance of the project 
property directly assignable to the project;
    (c) The credits and debits to the depreciation and amortization 
accounts, and the balances in such accounts;
    (d) The credits and debits to operating revenue, income, and 
retained earnings accounts that can be identified with and directly 
assigned to the project.

    Note: The purpose of this instruction is to insure that accounts or 
records are currently maintained by each licensee from which reports may 
be made to the Commission for use in determining the net investment in 
each licensed project. The instruction covers only the debit and credit 
items appearing in the licensee's accounts which may be identified with 
and assigned directly to any licensed project. In the determination of 
the net investment as defined in section 3 of the Federal Power Act, 
allocations of items affecting the net investment may be required where 
direct assignment is not practicable.


[[Page 372]]


    17. Long-Term Debt: Premium, Discount and Expense, and Gain or Loss 
on Reacquisition.
    A. Premium, discount and expense. A separate premium, discount and 
expense account shall be maintained for each class and series of long-
term debt (including receivers' certificates) is- sued or assumed by the 
utility. The premium will be recorded in account 225, Unamortized 
Premium on Long-Term Debt, the discount will be recorded in account 226, 
Unamortized Discount on Long-Term Debt--Debit, and the expense of 
issuance shall be recorded in account 181, Unamortized Debt Expense.
    The premium, discount and expense shall be amortized over the life 
of the respective issues under a plan which will distribute the amounts 
equitably over the life of the securities. The amortization shall be on 
a monthly basis, and amounts thereof relating to discount and expense 
shall be charged to account 428, Amortization of Debt Discount and 
Expense. The amounts relating to premium shall be credited to account 
429, Amortization of Premium on Debt--Credit.
    B. Reacquisition, without refunding. When long-term debt is 
reacquired or redeemed without being converted into another form of 
long-term debt and when the transaction is not in connection with a 
refunding operation (primarily redemptions for sinking fund purposes), 
the difference between the amount paid upon reacquisition and the face 
value; plus any un- amortized premium less any related unamortized debt 
expense and reacquisition costs; or less any unamortized discount, 
related debt expense and reacquisition costs applicable to the debt 
redeemed, retired and canceled, shall be included in account 189, 
Unamortized Loss on Reacquired Debt, or account 257, Unamortized Gain on 
Reacquired Debt, as appropriate. The utility shall amortize the recorded 
amounts equally on a monthly basis over the remaining life of the 
respective security issues (old original debt). The amounts so amortized 
shall be charged to account 428.1, Amortization of Loss on Reacquired 
Debt, or credited to account 429.1, Amortization of Gain on Reacquired 
Debt--Credit, as appropriate.
    C. Reacquisition, with refunding. When the redemption of one issue 
or series of bonds or other long-term obligations is financed by another 
issue or series before the maturity date of the first issue, the 
difference between the amount paid upon refunding and the face value; 
plus any unamortized premium less related debt expense or less any 
unamortized discount and related debt expense, applicable to the debt 
refunded, shall be included in account 189, Unamortized Loss on 
Reacquired Debt, or account 257, Unamortized Gain on Reacquired Debt, as 
appropriate. The utility may elect to account for such amounts as 
follows:
    (1) Write them off immediately when the amounts are insignificant.
    (2) Amortize them by equal monthly amounts over the remainder of the 
original life of the issue retired, or
    (3) Amortize them by equal monthly amounts over the life of the new 
issue.
    Once an election is made, it shall be applied on a consistent basis. 
The amounts in (1), (2) or (3) above shall be charged to account 428.1. 
Amortization of Loss on Reacquired Debt, or credited to account 429.1, 
Amortization of Gain on Reacquired Debt--Credit, as appropriate.
    D. Under methods (2) and (3) above, the increase or reduction in 
current income taxes resulting from the reacquisition should be 
apportioned over the remainder of the original life of the issue retired 
or over the life of the new issue, as appropriate, as directed more 
specifically in paragraphs E and F below.
    E. When the utility recognizes the loss in the year of reacquisition 
as a tax deduction, account 410.1, Provision for Deferred Income Taxes, 
Utility Operating Income, shall be debited and account 283, Accumulated 
Deferred Income Taxes--Other, shall be credited with the amount of the 
related tax effect, such amount to be allocated to the periods affected 
in accordance with the provisions of account 283.
    F. When the utility chooses to recognize the gain in the year of 
reacquisition as a taxable gain, account 411.1, Provision for Deferred 
Income Taxes--Credit, Utility Operating Income, shall be credited and 
account 190, Accumulated Deferred Income Taxes, shall be

[[Page 373]]

debited with the amount of the related tax effect, such amount to be 
allocated to the periods affected in accordance with the provisions of 
account 190.
    G. When the utility chooses to use the optional privilege of 
deferring the tax on the gain attributable to the reacquisition of debt 
by reducing the depreciable basis of utility property for tax purposes, 
pursuant to section 108 of the Internal Revenue Code, the related tax 
effects shall be deferred as the income is recognized for accounting 
purposes, and the deferred amounts shall be amortized over the life of 
the associated property on a vintage year basis. Account 410.1, 
Provision for Deferred Income Taxes, Utility Operating Income, shall be 
debited, and account 282, Accumulated Deferred Income Taxes--Other 
Property shall be credited with an amount equal to the estimated income 
tax effect applicable to the portion of the income, attributable to 
reacquired debt, recognized for accounting purposes during the period. 
Account 282 shall be debited and account 411.1, Provision for Deferred 
Income Taxes--Credit, Utility Operating Income, shall be credited with 
an amount equal to the estimated income tax effects, during the life of 
the property, attributable to the reduction in the depreciable basis for 
tax purposes.
    H. The tax effects relating to gain or loss shall be allocated as 
above to utility operations except in cases where a portion of the debt 
reacquired is directly applicable to nonutility operations. In that 
event, the related portion of the tax effects shall be allocated to 
nonutility operations. Where it can be established that reacquired debt 
is generally applicable to both utility and nonutility operations, the 
tax effects shall be allocated between utility and nonutility operations 
based on the ratio of net investment in utility plant to net investment 
in nonutility plant.
    I. Premium, discount, or expense on debt shall not be included as an 
element in the cost of construction or acquisition of property (tangible 
or intangible), except under the provisions of account 432, Allowance 
for Borrowed Funds Used During Construction--Credit.
    J. Alternate method. Where a regulatory authority or a group of 
regulatory authorities having prime rate jurisdiction over the utility 
specifically disallows the rate principle of amortizing gains or losses 
on reacquisition of long-term debt without refunding, and does not apply 
the gain or loss to reduce interest charges in computing the allowed 
rate of return for rate purposes, then the following alternate method 
may be used to account for gains or losses relating to reacquisition of 
long-term debt, with or without refunding.
    (1) The difference between the amount paid upon reacquisition of any 
long-term debt and the face value, adjusted for unamortized discount, 
expenses or premium, as the case may be, applicable to the debt redeemed 
shall be recognized currently in income and recorded in account 421, 
Miscellaneous Nonoperating Income, or account 426.5, Other Deductions.
    (2) When this alternate method of accounting is used, the utility 
shall include a footnote to each financial statement, prepared for 
public use, explaining why this method is being used along with the 
treatment given for ratemaking purposes.
    18. Comprehensive Interperiod In- come Tax Allocation.
    A. Where there are timing differences between the periods in which 
transactions affect taxable income and the periods in which they enter 
into the determination of pretax accounting income, the income tax 
effects of such transactions are to be recognized in the periods in 
which the differences between book accounting income and taxable income 
arise and in the periods in which the differences reverse using the 
deferred tax method. In general, comprehensive interperiod tax 
allocation should be followed whenever transactions enter into the 
determination of pretax accounting income for the period even though 
some transactions may affect the determination of taxes payable in a 
different period, as further qualified below.
    B. Utilities are not required to utilize comprehensive interperiod 
income tax allocation until the deferred income taxes are included as an 
expense in the rate level by the regulatory authority

[[Page 374]]

having rate jurisdiction over the utility. Where comprehensive 
interperiod tax allocation accounting is not practiced the utility shall 
include as a note to each financial statement, prepared for public use, 
a footnote explanation setting forth the utility's accounting policies 
with respect to interperiod tax allocation and describing the treatment 
for ratemaking purposes of the tax timing differences by regulatory 
authorities having rate jurisdiction.
    C. Should the utility be subject to more than one agency having rate 
jurisdiction, its accounts shall appropriately reflect the ratemaking 
treatment (deferral or flow through) of each jurisdiction.
    D. Once comprehensive interperiod tax allocation has been initiated 
either in whole or in part it shall be practiced on a consistent basis 
and shall not be changed or discontinued without prior Commission 
approval.
    E. Tax effects deferred currently will be recorded as deferred 
debits or deferred credits in accounts 190, Accumulated Deferred Income 
Taxes, 281, Accumulated Deferred Income Tax- es--Accelerated 
Amortization Property, 282, Accumulated Deferred Income Taxes--Other 
Property, and 283, Accumulated Deferred Income Taxes--Other, as 
appropriate. The resulting amounts recorded in these accounts shall be 
disposed of as prescribed in this system of accounts or as otherwise 
authorized by the Commission.
    19. Criteria for classifying leases.
    A. If at its inception a lease meets one or more of the following 
criteria, the lease shall be classified as a capital lease. Otherwise, 
it shall be classified as an operating lease.
    (1) The lease transfers ownership of the property to the lessee by 
the end of the lease term
    (2) The lease contains a bargain purchase option.
    (3) The lease term is equal to 75 percent or more of the estimated 
economic life of the leased property. However, if the beginning of the 
lease term falls within the last 25 percent of the total estimated 
economic life of the leased property, including earlier years of use, 
this criterion shall not be used for purposes of classifying the lease.
    (4) The present value at the beginning of the lease term of the 
minimum lease payments, excluding that portion of the payments 
representing executory costs such as insurance, maintenance, and taxes 
to be paid by the lessor, including any profit thereon, equals or 
exceeds 90 percent of the excess of the fair value of the leased 
property to the lessor at the inception of the lease over any related 
investment tax credit retained by the lessor and expected to be realized 
by the lessor. However, if the beginning of the lease term falls within 
the last 25 percent of the total estimated economic life of the leased 
property, including earlier years of use, this criterion shall not be 
used for purposes of classifying the lease. The lessee utility shall 
compute the present value of the minimum lease payments using its 
incremental borrowing rate, unless (A) it is practicable for the utility 
to learn the implicit rate computed by the lessor, and (B) the implicit 
rate computed by the lessor is less than the lessee's incremental 
borrowing rate. If both of those conditions are met, the lessee shall 
use the implicit rate.
    B. If at any time the lessee and lessor agree to change the 
provisions of the lease, other than by renewing the lease or extending 
its term, in a manner that would have resulted in a different 
classification of the lease under the criteria in paragraph A had the 
changed terms been in effect at the inception of the lease, the revised 
agreement shall be considered as a new agreement over its term, and the 
criteria in paragraph A shall be applied for purposes of classifying the 
new lease. Likewise, any action that extends the lease beyond the 
expiration of the existing lease term, such as the exercise of a lease 
renewal option other than those already included in the lease term, 
shall be considered as a new agreement and shall be classified according 
to the above provisions. Changes in estimates (for example, changes in 
estimates of the economic life or of the residual value of the leased 
property) or changes in circumstances (for example, default by the 
lessee) shall not give rise to a new classification of a lease for 
accounting purposes.
    20. Accounting for leases.

[[Page 375]]

    A. All leases shall be classified as either capital or operating 
leases. The accounting for capitalized leases is effective January 1, 
1984, except for the retroactive classification of certain leases which, 
in accordance with FASB No. 71, will not be required to be capitalized 
until after a three year transition period. For the purpose of reporting 
to the FERC, the transition period shall be deemed to end December 31, 
1986.
    B. The utility shall record a capital lease as an asset in account 
101.1, Property under Capital Leases, Account 120.6, Nuclear Fuel under 
Capital Leases, or account 121, Nonutility Property, as appropriate, and 
an obligation in account 227, Obligations under Capital Leases--
Noncurrent, or account 243, Obligations under Capital Leases--Current, 
at an amount equal to the present value at the beginning of the lease 
term of minimum lease payments during the lease term, excluding that 
portion of the payments representing executory costs such as insurance, 
maintenance, and taxes to be paid by the lessor, together with any 
profit thereon. However, if the amount so determined exceeds the fair 
value of the leased property at the inception of the lease, the amount 
recorded as the asset and obligation shall be the fair value.
    C. The utility, as a lessee, shall recognize an asset retirement 
obligation (See General Instruction 25) arising from the plant under a 
capital lease unless the obligation is recorded as an asset and 
liability under a capital lease. The utility shall record the asset 
retirement cost by debiting account 101.1, Property under capital 
leases, or account 120.6, Nuclear fuel under capital leases, or account 
121, Nonutility property, as appropriate, and crediting the liability 
for the asset retirement obligation in account 230, Asset retirement 
obligations. Asset retirement costs recorded in account 101.1, account 
120.6, or account 121 shall be amortized by charging rent expense (See 
Operating Expense Instruction 3), or account 518, Nuclear fuel expense 
(Major only), or account 421, Miscellaneous nonoperating income, as 
appropriate, and crediting a separate subaccount of the account in which 
the asset retirement costs are recorded. Charges for the periodic 
accretion of the liability in account 230, Asset retirement obligations, 
shall be recorded by a charge to account 411.10, Accretion expense, for 
electric utility plant, and account 421, Miscellaneous nonoperating 
income, for nonutility plant and a credit to account 230, Asset 
retirement obligations.
    D. Rental payments on all leases shall be charged to rent expense, 
fuel expense, construction work in progress, or other appropriate 
accounts as they become payable.
    E. For a capital lease, for each period during the lease term, the 
amounts recorded for the asset and obligation shall be reduced by an 
amount equal to the portion of each lease payment that would have been 
allocated to the reduction of the obligation, if the payment had been 
treated as a payment on an installment obligation (liability) and 
allocated between interest expense and a reduction of the obligation so 
as to produce a constant periodic rate of interest on the remaining 
balance.
    21. Allowances.
    A. Title IV of the Clean Air Act Amendments of 1990, Public Law No. 
101-549, 104 Stat. 2399, 2584, provides for the issuance of allowances 
as a means to limit the emissions of certain airborne pollutants by 
various entities, including public utilities. Public utilities owning 
allowances, other than those acquired for speculative purposes, shall 
account for such allowances at cost in Account 158.1, Allowance 
Inventory, or Account 158.2, Allowances Withheld, as appropriate. 
Allowances acquired for speculative purposes and identified as such in 
contemporaneous records at the time of purchase shall be accounted for 
in Account 124, Other Investments.
    B. When purchased allowances become eligible for use in different 
years, and the allocation of the purchase cost cannot be determined by 
fair value, the purchase cost allocated to allowances of each vintage 
shall be determined through use of a present-value based measurement. 
The interest rate used in the present-value measurement shall be the 
utility's incremental borrowing rate, in the month in which the 
allowances are acquired, for a loan with a

[[Page 376]]

term similar to the period that it will hold the allowances and in an 
amount equal to the purchase price.
    C. The underlying records supporting Account 158.1 and Account 158.2 
shall be maintained in sufficient detail so as to provide the number of 
allowances and the related cost by vintage year.
    D. Issuances from inventory from inventory included in Account 158.1 
and Account 158.2 shall be accounted for on a vintage basis using a 
monthly weighted-average method of cost determination. The cost of 
eligible allowances not used in the current year shall be transferred to 
the vintage for the immediately following year.
    E. Account 158.1 shall be credited and Account 509, Allowances, 
debited so that the cost of the allowances to be remitted for the year 
is charged to expense monthly based on each month's emissions. This may, 
in certain circumstances, require allocation of the cost of an allowance 
between months on a fractional basis.
    F. In any period in which actual emissions exceed the amount 
allowable based on eligible allowances owned, the utility shall estimate 
the cost to acquire the additional allowances needed and charge Account 
158.1 with the estimated cost. This estimated cost of future allowance 
acquisitions shall be credited to Account 158.1 and charged to Account 
509 in the same accounting period as the related charge to Account 
158.1. Should the actual cost of these allowances differ from the 
estimated cost, the differences shall be recognized in the then-current 
period's inventory issuance cost.
    G. Any penalties assessed by the Environmental Protection Agency for 
the emission of excess pollutants shall be charged to Account 426.3, 
Penalties.
    H. Gains on dispositions of allowances, other than allowances held 
for speculative purposes, shall be accounted for as follows. First, if 
there is uncertainty as to the regulatory treatment, the gain shall be 
deferred in Account 254, Other Regulatory Liabilities, pending 
resolution of the uncertainty. Second, if there is certainty as to the 
existence of a regulatory liability, the gain will be credited to 
Account 254, with subsequent recognition in income when reductions in 
charges to customers occur or the liability is otherwise satisfied. 
Third, all other gains will be credited to Account 411.8, Gains from 
Disposition of Allowances. Losses on disposition of allowances, other 
than allowances held for speculative purposes, shall be accounted for as 
follows. Losses that qualify as regulatory assets shall be charged 
directly to Account 182.3, Other Regulatory Assets. All other losses 
shall be charged to Account 411.9, Losses from Disposition of 
Allowances. (See Definition No. 30.) Gains or losses on disposition of 
allowances held for speculative purposes shall be recognized in Account 
421, Miscellaneous Nonoperating Income, or Account 426.5, Other 
Deductions, as appropriate.
    22. Depreciation Accounting.
    A. Method. Utilities must use a method of depreciation that 
allocates in a systematic and rational manner the service value of 
depreciable property over the service life of the property.
    B. Service lives. Estimated useful service lives of depreciable 
property must be supported by engineering, economic, or other 
depreciation studies.
    C. Rate. Utilities must use percentage rates of depreciation that 
are based on a method of depreciation that allocates in a systematic and 
rational manner the service value of depreciable property to the service 
life of the property. Where composite depreciation rates are used, they 
should be based on the weighted average estimated useful service lives 
of the depreciable property comprising the composite group.
    23. Accounting for other comprehensive income.
    A. Utilities shall record items of other comprehensive income in 
account 219, Accumulated other comprehensive income. Amounts included in 
this account shall be maintained by each category of other comprehensive 
income. Examples of categories of other comprehensive income include, 
foreign currency items, minimum pension liability adjustments, 
unrealized gains and losses on available-for-sale type securities and 
cash flow hedge amounts. Supporting records shall be maintained for 
account 219 so that the

[[Page 377]]

company can readily identify the cumulative amount of other 
comprehensive income for each item included in this account.
    B. When an item of other comprehensive income enters into the 
determination of net income in the current or subsequent periods, a 
reclassification adjustment shall be recorded in account 219 to avoid 
double counting of that amount.
    C. When it is probable that an item of other comprehensive income 
will be included in the development of cost-of-service rates in 
subsequent periods, that amount of unrealized losses or gains will be 
recorded in Accounts 182.3 or 254 as appropriate.
    24. Accounting for derivative instruments and hedging activities.
    A. Utilities shall recognize derivative instruments as either assets 
or liabilities in the financial statements and measure those instruments 
at fair value, except those falling within recognized exceptions. Normal 
purchases or sales are contracts that provide for the purchase or sale 
of goods that will be delivered in quantities expected to be used or 
sold by the utility over a reasonable period in the normal course of 
business. A derivative instrument is a financial instrument or other 
contract with all of the following characteristics:
    (1) It has one or more underlyings and a notional amount or payment 
provision. Those terms determine the amount of the settlement or 
settlements, and, in some cases, whether or not a settlement is 
required.
    (2) It requires no initial net investment or an initial net 
investment that is smaller than would be required for other types of 
contracts that would be expected to have a similar response to changes 
in market factors.
    (3) Its terms require or permit net settlement, can readily be 
settled net by a means outside the contract, or provides for delivery of 
an asset that puts the recipient in a position not substantially 
different from net settlement.
    B. The accounting for the changes in the fair value of derivative 
instruments depends upon its intended use and designation. Changes in 
the fair value of derivative instruments not designated as fair value or 
cash flow hedges shall be recorded in account 175, derivative instrument 
assets, or account 244, derivative instrument liabilities, as 
appropriate, with the gains recorded in account 421, miscellaneous 
nonoperating income, and losses recorded in account 426.5, other 
deductions.
    C. A derivative instrument may be specifically designated as a fair 
value or cash flow hedge. A hedge is used to manage risk to price, 
interest rates, or foreign currency transactions. A company shall 
maintain documentation of the hedge relationship at the inception of the 
hedge that details the risk management objective and strategy for 
undertaking the hedge, the nature of the risk being hedged, and how 
hedge effectiveness will be determined.
    D. If the utility designates the derivative instrument as a fair 
value hedge against exposure to changes in the fair value of a 
recognized asset, liability, or a firm commitment, it shall record the 
change in fair value of the derivative instrument to account 176, 
derivative instrument assets-hedges, or account 245, derivative 
instrument liabilities-hedges, as appropriate, with a corresponding 
adjustment to the subaccount of the item being hedged. The ineffective 
portion of the hedge transaction shall be reflected in the same income 
or expense account that will be used when the hedged item enters into 
the determination of net income. In the case of a fair value hedge of a 
firm commitment a new asset or liability is created. As a result of the 
hedge relationship, the new asset or liability will become part of the 
carrying amount of the item being hedged.
    E. If the utility designates the derivative instrument as a cash 
flow hedge against exposure to variable cash flows of a probable 
forecasted transaction, it shall record changes in the fair value of the 
derivative instrument in account 176, derivative instrument assets-
hedges, or account 245, derivative instrument liabilities-hedges, as 
appropriate, with a corresponding amount in account 219, accumulated 
other comprehensive income, for the effective portion of the hedge. The 
ineffective portion of the hedge transaction shall be reflected in the 
same income or expense account that will be used when

[[Page 378]]

the hedged item enters into the determination of net income. Amounts 
recorded in other comprehensive income shall be reclassified into 
earnings in the same period or periods that the hedged forecasted item 
enters into the determination of net income.
    25. Accounting for asset retirement obligations.
    A. An asset retirement obligation represents a liability for the 
legal obligation associated with the retirement of a tangible long-lived 
asset that a company is required to settle as a result of an existing or 
enacted law, statute, ordinance, or written or oral contract or by legal 
construction of a contract under the doctrine of promissory estoppel. An 
asset retirement cost represents the amount capitalized when the 
liability is recognized for the long-lived asset that gives rise to the 
legal obligation. The amount recognized for the liability and an 
associated asset retirement cost shall be stated at the fair value of 
the asset retirement obligation in the period in which the obligation is 
incurred.
    B. The utility shall initially record a liability for an asset 
retirement obligation in account 230, Asset retirement obligations, and 
charge the associated asset retirement costs to electric utility plant 
(including accounts 101.1 and 120.6), and nonutility plant, as 
appropriate, related to the plant that gives rise to the legal 
obligation. The asset retirement cost shall be depreciated over the 
useful life of the related asset that gives rise to the obligations. For 
periods subsequent to the initial recording of the asset retirement 
obligation, a utility shall recognize the period to period changes of 
the asset retirement obligation that result from the passage of time due 
to the accretion of the liability and any subsequent measurement changes 
to the initial liability for the legal obligation recorded in account 
230, Asset retirement obligations, as follows:
    (1) The utility shall record the accretion of the liability by 
debiting account 411.10, Accretion expense, for electric utility plant, 
account 413, Expenses of electric plant leased to others, for electric 
plant leased to others, and account 421, Miscellaneous nonoperating 
income, for nonutility plant and crediting account 230, Asset retirement 
obligations; and
    (2) The utility shall recognize any subsequent measurement changes 
of the liability initially recorded in account 230, Asset retirement 
obligations, for each specific asset retirement obligation as an 
adjustment of that liability in account 230 with the corresponding 
adjustment to electric utility plant, electric plant leased to others, 
and nonutility plant, as appropriate. The utility shall on a timely 
basis monitor any measurement changes of the asset retirement 
obligations.
    C. Gains or losses resulting from the settlement of asset retirement 
obligations associated with utility plant resulting from the difference 
between the amount of the liability for the asset retirement obligation 
included in account 230, Asset retirement obligations, and the actual 
amount paid to settle the obligation shall be accounted for as follows:
    (1) Gains shall be credited to account 411.6, Gains from disposition 
of utility plant, and;
    (2) Losses shall be charged to account 411.7, Losses from 
disposition of utility plant.
    D. Gains or losses on the settlement of asset retirement obligations 
associated with nonutility plant resulting from the difference between 
the amount of the liability for the asset retirement obligation in 
account 230, Asset retirement obligations, and the amount paid to settle 
the obligation, shall be accounted for as follows:
    (1) Gains shall be credited to account 421, Miscellaneous 
nonoperating income, and;
    (2) Losses shall be charged to account 426.5, Other deductions.
    E. Separate subsidiary records shall be maintained for each asset 
retirement obligation showing the initial liability and associated asset 
retirement cost, any incremental amounts of the liability incurred in 
subsequent reporting periods for additional layers of the original 
liability and related asset retirement cost, the accretion of the 
liability, the subsequent measurement changes to the asset retirement 
obligation, the depreciation and amortization

[[Page 379]]

of the asset retirement costs and related accumulated depreciation, and 
the settlement date and actual amount paid to settle the obligation. For 
purposes of analyses a utility shall maintain supporting documentation 
so as to be able to furnish accurately and expeditiously with respect to 
each asset retirement obligation the full details of the identity and 
nature of the legal obligation, the year incurred, the identity of the 
plant giving rise to the obligation, the full particulars relating to 
each component and supporting computations related to the measurement of 
the asset retirement obligation.



Electric Plant Instructions--Table of Contents



    1. Classification of electric plant at effective date of system of 
accounts (Major utilities).
    A. The electric plant accounts provided herein are the same as those 
contained in the prior system of accounts except for inclusion of 
accounts for nuclear production plant and some changes in classification 
in the general equipment accounts. Except for these changes, the 
balances in the various plant accounts, as determined under the prior 
system of accounts, should be carried forward. Any remaining balance of 
plant which has not yet been classified, pursuant to the requirements of 
the prior system, shall be classified in accordance with the following 
instructions.
    B. The cost to the utility of its unclassified plant shall be 
ascertained by analysis of the utility's records. Adjustments shall not 
be made to record in utility plant accounts amounts previously charged 
to operating expenses or to income deductions in accordance with the 
uniform system of accounts in effect at the time or in accordance with 
the discretion of management as exercised under a uniform system of 
accounts, or under accounting practices previously followed.
    C. The detailed electric plant accounts (301 to 399, inclusive) 
shall be stated on the basis of cost to the utility of plant constructed 
by it and the original cost, estimated if not known, of plant acquired 
as an operating unit or system. The difference between the original 
cost, as above, and the cost to the utility of electric plant after 
giving effect to any accumulated provision for depreciation or 
amortization shall be recorded in account 114, Electric Plant 
Acquisition Adjustments. The original cost of electric plant shall be 
determined by analysis of the utility's records or those of the 
predecessor or vendor companies with respect to electric plant 
previously acquired as operating units or systems and the difference 
between the original cost so determined, less accumulated provisions for 
depreciation and amortization and the cost to the utility with necessary 
adjustments for retirements from the date of acquisition, shall be 
entered in account 114, Electric Plant Acquisition Adjustments. Any 
difference between the cost of electric plant and its book cost, when 
not properly includible in other accounts, shall be recorded in account 
116, Other Electric Plant Adjustments.
    D. Plant acquired by lease which qualifies as capital lease property 
under General Instruction 19. Criteria for Classifying Leases, shall be 
recorded in Account 101.1, Property under Capital Leases, or Account 
120.6, Nuclear Fuel under Capital Leases, as appropriate.
    2. Electric Plant To Be Recorded at Cost.
    A. All amounts included in the accounts for electric plant acquired 
as an operating unit or system, except as otherwise provided in the 
texts of the intangible plant accounts, shall be stated at the cost 
incurred by the person who first devoted the property to utility 
service. All other electric plant shall be included in the accounts at 
the cost incurred by the utility, except for property acquired by lease 
which qualifies as capital lease property under General Instruction 19. 
Criteria for Classifying Leases, and is recorded in Account 101.1, 
Property under Capital Leases, or Account 120.6, Nuclear Fuel under 
Capital Leases. Where the term cost is used in the detailed plant 
accounts, it shall have the meaning stated in this paragraph.
    B. When the consideration given for property is other than cash, the 
value of such consideration shall be determined on a cash basis (see, 
however, definition 9). In the entry recording

[[Page 380]]

such transition, the actual consideration shall be described with 
sufficient particularity to identify it. The utility shall be prepared 
to furnish the Commission the particulars of its determination of the 
cash value of the consideration if other than cash.
    C. When property is purchased under a plan involving deferred 
payments, no charge shall be made to the electric plant accounts for 
interest, insurance, or other expenditures occasioned solely by such 
form of payment.
    D. The electric plant accounts shall not include the cost or other 
value of electric plant contributed to the company. Contributions in the 
form of money or its equivalent toward the construction of electric 
plant shall be credited to accounts charged with the cost of such 
construction. Plant constructed from contributions of cash or its 
equivalent shall be shown as a reduction to gross plant constructed when 
assembling cost data in work orders for posting to plant ledgers of 
accounts. The accumulated gross costs of plant accumulated in the work 
order shall be recorded as a debit in the plant ledger of accounts along 
with the related amount of contributions concurrently be recorded as a 
credit.
    3. Components of construction cost.
    A. For Major utilities, the cost of construction properly includible 
in the electric plant accounts shall include, where applicable, the 
direct and overhead cost as listed and defined hereunder:
    (1) Contract work includes amounts paid for work performed under 
contract by other companies, firms, or individuals, costs incident to 
the award of such contracts, and the inspection of such work.
    (2) Labor includes the pay and expenses of employees of the utility 
engaged on construction work, and related workmen's compensation 
insurance, payroll taxes and similar items of expense. It does not 
include the pay and expenses of employees which are distributed to 
construction through clearing accounts nor the pay and expenses included 
in other items hereunder.
    (3) Materials and supplies includes the purchase price at the point 
of free delivery plus customs duties, excise taxes, the cost of 
inspection, loading and transportation, the related stores expenses, and 
the cost of fabricated materials from the utility's shop. In determining 
the cost of materials and supplies used for construction, proper 
allowance shall be made for unused materials and supplies, for materials 
recovered from temporary structures used in performing the work 
involved, and for discounts allowed and realized in the purchase of 
materials and supplies.

    Note: The cost of individual items of equipment of small value (for 
example, $500 or less) or of short life, including small portable tools 
and implements, shall not be charged to utility plant accounts unless 
the correctness of the accounting therefor is verified by current 
inventories. The cost shall be charged to the appropriate operating 
expense or clearing accounts, according to the use of such items, or, if 
such items are consumed directly in construction work, the cost shall be 
included as part of the cost of the construction

    (4) Transportation includes the cost of transporting employees, 
materials and supplies, tools, purchased equipment, and other work 
equipment (when not under own power) to and from points of construction. 
It includes amounts paid to others as well as the cost of operating the 
utility's own transportation equipment. (See item 5 following.)
    (5) Special machine service includes the cost of labor (optional), 
materials and supplies, depreciation, and other expenses incurred in the 
maintenance, operation and use of special machines, such as steam 
shovels, pile drivers, derricks, ditchers, scrapers, material unloaders, 
and other labor saving machines; also expenditures for rental, 
maintenance and operation of machines of others. It does not include the 
cost of small tools and other individual items of small value or short 
life which are included in the cost of materials and supplies. (See item 
3, above.) When a particular construction job requires the use for an 
extended period of time of special machines, transportation or other 
equipment, the net book cost thereof, less the appraised or salvage 
value at time of release from the job, shall be included in the cost of 
construction.
    (6) Shop service includes the proportion of the expense of the 
utility's shop

[[Page 381]]

department assignable to construction work except that the cost of 
fabricated materials from the utility's shop shall be included in 
materials and supplies.
    (7) Protection includes the cost of protecting the utility's 
property from fire or other casualties and the cost of preventing 
damages to others, or to the property of others, including payments for 
discovery or extinguishment of fires, cost of apprehending and 
prosecuting incendiaries, witness fees in relation thereto, amounts paid 
to municipalities and others for fire protection, and other analogous 
items of expenditures in connection with construction work.
    (8) Injuries and damages includes expenditures or losses in 
connection with construction work on account of injuries to persons and 
damages to the property of others; also the cost of investigation of and 
defense against actions for such injuries and damages. Insurance 
recovered or recoverable on account of compensation paid for injuries to 
persons incident to construction shall be credited to the account or 
accounts to which such compensation is charged Insurance recovered or 
recoverable on account of property damages incident to construction 
shall be credited to the account or accounts charged with the cost of 
the damages.
    (9) Privileges and permits includes payments for and expenses 
incurred in securing temporary privileges, permits or rights in 
connection with construction work, such as for the use of private or 
public property, streets, or highways, but it does not include rents, or 
amounts chargeable as franchises and consents for which see account 302, 
Franchises and Consents.
    (10) Rents includes amounts paid for the use of construction 
quarters and office space occupied by construction forces and amounts 
properly includible in construction costs for such facilities jointly 
used.
    (11) Engineering and supervision includes the portion of the pay and 
expenses of engineers, surveyors, draftsmen, inspectors, superintendents 
and their assistants applicable to construction work.
    (12) General administration capitalized includes the portion of the 
pay and expenses of the general officers and administrative and general 
expenses applicable to construction work.
    (13) Engineering services includes amounts paid to other companies, 
firms, or individuals engaged by the utility to plan, design, prepare 
estimates, supervise, inspect, or give general advice and assistance in 
connection with construction work.
    (14) Insurance includes premiums paid or amounts provided or 
reserved as self-insurance for the protection against loss and damages 
in connection with construction, by fire or other casualty injuries to 
or death of persons other than employees, damages to property of others, 
defalcation of employees and agents, and the nonperformance of 
contractual obligations of others. It does not include workmen's 
compensation or similar insurance on employees included as labor in item 
2, above.
    (15) Law expenditures includes the general law expenditures incurred 
in connection with construction and the court and legal costs directly 
related thereto, other than law expenses included in protection, item 7, 
and in injuries and damages, item 8.
    (16) Taxes includes taxes on physical property (including land) 
during the period of construction and other taxes properly includible in 
construction costs before the facilities become available for service.
    (17) Allowance for funds used during construction (Major and 
Nonmajor Utilities) includes the net cost for the period of construction 
of borrowed funds used for construction purposes and a reasonable rate 
on other funds when so used, not to exceed, without prior approval of 
the Commission, allowances computed in accordance with the formula 
prescribed in paragraph (a) of this subparagraph. No allowance for funds 
used during construction charges shall be included in these accounts 
upon expenditures for construction projects which have been abandoned.
    (a) The formula and elements for the computation of the allowance 
for funds used during construction shall be:

Ai=s(S/W)+d(D/D+P+C)(1-S/W)
Ae=[1-S/W][p(P/D+P+C)+c(C/D+P+C)]

Ai=Gross allowance for borrowed funds used during construction rate.

[[Page 382]]

Ae=Allowance for other funds used during construction rate.
S=Average short-term debt.
s=Short-term debt interest rate.
D=Long-term debt.
d=Long-term debt interest rate.
P=Preferred stock.
p=Preferred stock cost rate.
C=Common equity.
c=Common equity cost rate.
W= Average balance in construction work in progress plus nuclear fuel in 
process of refinement, conversion, enrichment and fabrication, less 
asset retirement costs (See General Instruction 25) related to plant 
under construction.

    (b) The rates shall be determined annually. The balances for long-
term debt, preferred stock and common equity shall be the actual book 
balances as of the end of the prior year. The cost rates for long-term 
debt and preferred stock shall be the weighted average cost determined 
in the manner indicated in Sec. 35.13 of the Commission's Regulations 
Under the Federal Power Act. The cost rate for common equity shall be 
the rate granted common equity in the last rate proceeding before the 
ratemaking body having primary rate jurisdictions. If such cost rate is 
not available, the average rate actually earned during the preceding 
three years shall be used. The short-term debt balances and related cost 
and the average balance for construction work in progress plus nuclear 
fuel in process of refinement, conversion, enrichment, and fabrication 
shall be estimated for the current year with appropriate adjustments as 
actual data becomes available.

    Note: When a part only of a plant or project is placed in operation 
or is completed and ready for service but the construction work as a 
whole is incomplete, that part of the cost of the property placed in 
operation or ready for service, shall be treated as Electric Plant in 
Service and allowance for funds used during construction thereon as a 
charge to construction shall cease. Allowance for funds used during 
construction on that part of the cost of the plant which is incomplete 
may be continued as a charge to construction until such time as it is 
placed in operation or is ready for service, except as limited in item 
17, above.

    (18) Earnings and expenses during construction. The earnings and 
expenses during construction shall constitute a component of 
construction costs.
    (a) The earnings shall include revenues received or earned for power 
produced by generating plants during the construction period and sold or 
used by the utility. Where such power is sold to an independent 
purchaser before intermingling with power generated by other plants, the 
credit shall consist of the selling price of the energy. Where the power 
generated by a plant under construction is delivered to the utility's 
electric system for distribution and sale, or is delivered to an 
associated company, or is delivered to and used by the utility for 
purposes other than distribution and sale (for manufacturing or 
industrial use, for example), the credit shall be the fair value of the 
energy so delivered. The revenues shall also include rentals for lands, 
buildings etc., and miscellaneous receipts not properly includible in 
other accounts.
    (b) The expenses shall consist of the cost of operating the power 
plant, and other costs incident to the production and delivery of the 
power for which construction is credited under paragraph (a), above, 
including the cost of repairs and other expenses of operating and 
maintaining lands, buildings, and other property, and other 
miscellaneous and like expenses not properly includible in other 
accounts.
    (19) Training costs (Major and Nonmajor Utilities). When it is 
necessary that employees be trained to operate or maintain plant 
facilities that are being constructed and such facilities are not 
conventional in nature, or are new to the company's operations, these 
costs may be capitalized as a component of construction cost. Once plant 
is placed in service, the capitalization of training costs shall cease 
and subsequent training costs shall be expensed. (See Operating Expense 
Instruction 4.)
    (20) Studies includes the costs of studies such as nuclear 
operational, safety, or seismic studies or environmental studies 
mandated by regulatory bodies relative to plant under construction. 
Studies relative to facilities in service shall be charged to account 
183, Preliminary Survey and Investigation Charges.

[[Page 383]]

    (21) Asset retirement costs. The costs recognized as a result of 
asset retirement obligations incurred during the construction and 
testing of utility plant shall constitute a component of construction 
costs.
    B. For Nonmajor utilities, the cost of construction of property 
chargeable to the electric plant accounts shall include, where 
applicable, the cost of labor; materials and supplies; transportation; 
work done by others for the utility; injuries and damages incurred in 
construction work; privileges and permits; special machine service; 
allowance for funds used during construction, not to exceed without 
prior approval of the Commission, amounts computed in accordance with 
the formula prescribed in paragraph (a) of paragraph (17) of this 
Instruction; training costs; and such portion of general engineering, 
administrative salaries and expenses, insurance, taxes, and other 
analogous items as may be properly includable in construction costs. 
(See Operating Expense Instruction 4.) The rates and balances of short 
and long-term debt, preferred stock, common equity and construction work 
in progress shall be determined as prescribed in paragraph (b) of 
paragraph (17) of this Instruction.
    4. Overhead Construction Costs.
    A. All overhead construction costs, such as engineering, 
supervision, general office salaries and expenses, construction 
engineering and supervision by others than the accounting utility, law 
expenses, insurance, injuries and damages, relief and pensions, taxes 
and interest, shall be charged to particular jobs or units on the basis 
of the amounts of such overheads reasonably applicable thereto, to the 
end that each job or unit shall bear its equitable proportion of such 
costs and that the entire cost of the unit, both direct and overhead, 
shall be deducted from the plant accounts at the time the property is 
retired.
    B. As far as practicable, the determination of pay roll charges 
includible in construction overheads shall be based on time card 
distributions thereof. Where this procedure is impractical, special 
studies shall be made periodically of the time of supervisory employees 
devoted to construction activities to the end that only such overhead 
costs as have a definite relation to construction shall be capitalized. 
The addition to direct construction costs of arbitrary percentages or 
amounts to cover assumed overhead costs is not permitted.
    C. For Major utilities, the records supporting the entries for 
overhead construction costs shall be so kept as to show the total amount 
of each overhead for each year, the nature and amount of each overhead 
expenditure charged to each construction work order and to each electric 
plant account, and the bases of distribution of such costs.
    5. Electric Plant Purchased or Sold.
    A. When electric plant constituting an operating unit or system is 
acquired by purchase, merger, consolidation, liquidation, or otherwise, 
after the effective date of this system of accounts, the costs of 
acquisition, including expenses incidental thereto properly includible 
in electric plant, shall be charged to account 102, Electric Plant 
Purchased or Sold.
    B. The accounting for the acquisition shall then be completed as 
follows:
    (1) The original cost of plant, estimated if not known, shall be 
credited to account 102, Electric Plant Purchased or Sold, and 
concurrently charged to the appropriate electric plant in service 
accounts and to account 104, Electric Plant Leased to Others, account 
105, Electric Plant Held for Future Use, and account 107, Construction 
Work in Progress--Electric, as appropriate.
    (2) The depreciation and amortization applicable to the original 
cost of the properties purchased shall be charged to account 102, 
Electric Plant Purchased or Sold, and concurrently credited to the 
appropriate account for accumulated provision for depreciation or 
amortization.
    (3) The cost to the utility of any property includible in account 
121, Nonutility Property, shall be transferred thereto.
    (4) The amount remaining in account 102, Electric Plant Purchased or 
Sold, shall then be closed to account 114, Electric Plant Acquisition 
Adjustments.

[[Page 384]]

    C. If property acquired in the purchase of an operating unit or 
system is in such physical condition when acquired that it is necessary 
substantially to rehabilitate it in order to bring the property up to 
the standards of the utility, the cost of such work, except 
replacements, shall be accounted for as a part of the purchase price of 
the property.
    D. When any property acquired as an operating unit or system 
includes duplicate or other plant which will be retired by the 
accounting utility in the reconstruction of the acquired property or its 
consolidation with previously owned property, the proposed accounting 
for such property shall be presented to the Commission.
    E. In connection with the acquisition of electric plant constituting 
an operating unit or system, the utility shall procure, if possible, all 
existing records relating to the property acquired, or certified copies 
thereof, and shall preserve such records in conformity with regulations 
or practices governing the preservation of records of its own 
construction.
    F. When electric plant constituting an operating unit or system is 
sold, conveyed, or transferred to another by sale, merger, 
consolidation, or otherwise, the book cost of the property sold or 
transferred to another shall be credited to the appropriate utility 
plant accounts, including amounts carried in account 114, Electric Plant 
Acquisition Adjustments. The amounts (estimated if not known) carried 
with respect thereto in the accounts for accumulated provision for 
depreciation and amortization and in account 252, Customer Advances for 
Construction, shall be charged to such accounts and contra entries made 
to account 102, Electric Plant Purchased or Sold. Unless otherwise 
ordered by the Commission, the difference, if any, between (1) the net 
amount of debits and credits and (2) the consideration received for the 
property (less commissions and other expenses of making the sale) shall 
be included in account 421.1. Gain on Disposition of Property, or 
account 421.2, Loss on Disposition of Property. (See account 102, 
Electric Plant Purchased or Sold.)

    Note: In cases where existing utilities merge or consolidate because 
of financial or operating reasons or statutory requirements rather than 
as a means of transferring title of purchased properties to a new owner, 
the accounts of the constituent utilities, with the approval of the 
Commission, may be combined. In the event original cost has not been 
determined, the resulting utility shall proceed to determine such cost 
as outlined herein.

    6. Expenditures on Leased Property.
    A. The cost of substantial initial improvements (including repairs, 
rear-rangements, additions, and betterments) made in the course of 
preparing for utility service property leased for a period of more than 
one year, and the cost of subsequent substantial additions, 
replacements, or betterments to such property, shall be charged to the 
electric plant account appropriate for the class of property leased. If 
the service life of the improvements is terminable by action of the 
lease, the cost, less net salvage, of the improvements shall be spread 
over the life of the lease by charges to account 404, Amortization of 
Limited-Term Electric Plant. However, if the service life is not 
terminated by action of the lease but by depreciation proper, the cost 
of the improvements, less net salvage, shall be accounted for as 
depreciable plant. The provisions of this paragraph are applicable to 
property leased under either capital leases or operating leases.
    B. If improvements made to property leased for a period of more than 
one year are of relatively minor cost, or if the lease is for a period 
of not more than one year, the cost of the improvements shall be charged 
to the account in which the rent is included, either directly or by 
amortization thereof.
    7. Land and Land Rights.
    A. The accounts for land and land rights shall include the cost of 
land owned in fee by the utility and rights. Interests, and privileges 
held by the utility in land owned by others, such as leaseholds, 
easements, water and water power rights, diversion rights, submersion 
rights, rights-of-way, and other like interests in land. Do not include 
in the accounts for land and land rights and rights-of-way costs 
incurred in connection with first clearing and grading of land and 
rights-of-way and

[[Page 385]]

the damage costs associated with the construction and installation of 
plant. Such costs shall be included in the appropriate plant accounts 
directly benefited.
    B. Where special assessments for public improvements provide for 
deferred payments, the full amount of the assessments shall be charged 
to the appropriate land account and the unpaid balance shall be carried 
in an appropriate liability account. Interest on unpaid balances shall 
be charged to the appropriate interest account. If any part of the cost 
of public improvements is included in the general tax levy, the amount 
thereof shall be charged to the appropriate tax account.
    C. The net profit from the sale of timber, cord wood, sand, gravel, 
other resources or other property acquired with the rights-of-way or 
other lands shall be credited to the appropriate plant account to which 
related. Where land is held for a considerable period of time and timber 
and other natural resources on the land at the time of purchase 
increases in value, the net profit (after giving effect to the cost of 
the natural resources) from the sales of timber or its products or other 
natural resources shall be credited to the appropriate utility operating 
income account when such land has been recorded in account 105, Electric 
Plant Held for Future Use or classified as plant in service, otherwise 
to account 421, Miscellaneous Nonoperating Income.
    D. Separate entries shall be made for the acquisition, transfer, or 
retirement of each parcel of land, and each land right (except rights of 
way for distribution lines), or water right, having a life of more than 
one year. A record shall be maintained showing the nature of ownership, 
full legal description, area, map reference, purpose for which used, 
city, county, and tax district on which situated, from whom purchased or 
to whom sold, payment given or received, other costs, contract date and 
number, date of recording of deed, and book and page of record. Entries 
transferring or retiring land or land rights shall refer to the original 
entry recording its acquisition.
    E. Any difference between the amount received from the sale of land 
or land rights, less agents' commissions and other costs incident to the 
sale, and the book cost of such land or rights, shall be included in 
account 411.6, Gains from Disposition of Utility Plant, or 411.7, Losses 
from Disposition of Utility Plant when such property has been recorded 
in account 105, Electric Plant Held for Future Use, otherwise to account 
421.1, Gain on Disposition of Property or 421.2, Loss on Disposition of 
Property, as appropriate, unless a reserve therefor has been authorized 
and provided. Appropriate adjustments of the accounts shall be made with 
respect to any structures or improvements located on land sold.
    F. The cost of buildings and other improvements (other than public 
improvements) shall not be included in the land accounts. If at the time 
of acquisition of an interest in land such interest extends to buildings 
or other improvements (other than public improvements) which are then 
devoted to utility operations, the land and improvements shall be 
separately appraised and the cost allocated to land and buildings or 
improvements on the basis of the appraisals. If the improvements are 
removed or wrecked without being used in operations, the cost of 
removing or wrecking shall be charged and the salvage credited to the 
account in which the cost of the land is recorded.
    G. When the purchase of land for electric operations requires the 
purchase of more land than needed for such purposes, the charge to the 
specific land account shall be based upon the cost of the land 
purchased, less the fair market value of that portion of the land which 
is not to be used in utility operations. The portion of the cost 
measured by the fair market value of the land not to be used shall be 
included in account 105, Electric Plant Held for Future Use, or account 
121, Nonutility Property, as appropriate.
    H. Provisions shall be made for amortizing amounts carried in the 
accounts for limited-term interests in land so as to apportion equitably 
the cost of each interest over the life thereof. (For Major utilities, 
see account 111, Accumulated Provision for Amortization of Electric 
Plant Utility, and account 404, Amortization of Limited-Term Electric

[[Page 386]]

Plant. For Nonmajor utilities, see account 404.)
    I. The items of cost to be included in the accounts for land and 
land rights are as follows:

    1. Bulkheads, buried, not requiring maintenance or replacement.
    2. Cost, first, of acquisition including mortgages and other liens 
assumed (but not subsequent interest thereon).
    3. [Reserved]
    4. Condemnation proceedings, including court and counsel costs.
    5. Consents and abutting damages, payment for.
    6. Conveyancers' and notaries' fees.
    7. Fees, commissions, and salaries to brokers, agents and others in 
connection with the acquisition of the land or land rights.
    8. [Reserved]
    9. Leases, cost of voiding upon purchase to secure possession of 
land.
    10. Removing, relocating, or reconstructing, property of others, 
such as buildings, highways, railroads, bridges, cemeteries, churches, 
telephone and power lines, etc., in order to acquire quiet possession.
    11. Retaining walls unless identified with structures.
    12. Special assessments levied by public authorities for public 
improvements on the basis of benefits for new roads, new bridges, new 
sewers, new curbing, new pavements, and other public improvements, but 
not taxes levied to provide for the maintenance of such improvements.
    13. Surveys in connection with the acquisition, but not amounts paid 
for topographical surveys and maps where such costs are attributable to 
structures or plant equipment erected or to be erected or installed on 
such land.
    14. Taxes assumed, accrued to date of transfer of title.
    15. Title, examining, clearing, insuring and registering in 
connection with the acquisition and defending against claims relating to 
the period prior to the acquisition.
    16. Appraisals prior to closing title.
    17. Cost of dealing with distributees or legatees residing outside 
of the state or county, such as recording power of attorney, recording 
will or exemplification of will, recording satisfaction of state tax.
    18. Filing satisfaction of mortgage.
    19. Documentary stamps.
    20. Photographs of property at acquisition.
    21. Fees and expenses incurred in the acquisition of water rights 
and grants.
    22. Cost of fill to extend bulkhead line over land under water, 
where riparian rights are held, which is not occasioned by the erection 
of a structure.
    23. Sidewalks and curbs constructed by the utility on public 
property.
    24. Labor and expenses in connection with securing rights of way, 
where performed by company employees and company agents.

    8. Structures and Improvements.
    A. The accounts for structures and improvements shall include the 
cost of all buildings and facilities to house, support, or safeguard 
property or persons, including all fixtures permanently attached to and 
made a part of buildings and which cannot be removed therefrom without 
cutting into the walls, ceilings, or floors, or without in some way 
impairing the buildings, and improvements of a permanent character on or 
to land. Also include those costs incurred in connection with the first 
clearing and grading of land and rights-of-way and the damage costs 
associated with construction and installation of plant.
    B. The cost of specially provided foundations not intended to 
outlast the machinery or apparatus for which provided, and the cost of 
angle irons, castings, etc., installed at the base of an item of 
equipment, shall be charged to the same account as the cost of the 
machinery, apparatus, or equipment.
    C. Minor buildings and structures, such as valve towers, patrolmen's 
towers, telephone stations, fish and wildlife, and recreation 
facilities, etc., which are used directly in connection with or form a 
part of a reservoir, dam, waterway, etc., shall be considered a part of 
the facility in connection with which constructed or operated and the 
cost thereof accounted for accordingly.
    D. Where furnaces and boilers are used primarily for furnishing 
steam for some particular department and only incidentally for 
furnishing steam for heating a building and operating the equipment 
therein, the entire cost of such furnaces and boilers shall be charged 
to the appropriate plant account, and no part to the building account.
    E. Where the structure of a dam forms also the foundation of the 
power plant building, such foundation shall be considered a part of the 
dam.
    F. The cost of disposing of materials excavated in connection with 
construction of structures shall be considered as a part of the cost of 
such work, except as follows: (a) When such material is used for 
filling, the cost of loading,

[[Page 387]]

hauling, and dumping shall be equitably apportioned between the work in 
connection with which the removal occurs and the work in connection with 
which the material is used; (b) when such material is sold, the net 
amount realized from such sales shall be credited to the work in 
connection with which the removal occurs. If the amount realized from 
the sale of excavated materials exceeds the removal costs and the costs 
in connection with the sale, the excess shall be credited to the land 
account in which the site is carried.
    G. Lighting or other fixtures temporarily attached to buildings for 
purposes of display or demonstration shall not be included in the cost 
of the building but in the appropriate equipment account.
    H. The items of cost to be included in the accounts for structures 
and improvements are as follows:

    1. Architects' plans and specifications including supervision.
    2. Ash pits (when located within the building). (Major Utilities)
    3. Athletic field structures and improvements.
    4. Boilers, furnaces, piping, wiring, fixtures, and machinery for 
heating, lighting, signaling, ventilating, and air-conditioning systems, 
plumbing, vacuum cleaning systems, incinerator and smoke pipe, flues, 
etc.
    5. Bulkheads, including dredging, riprap fill, piling, decking, 
concrete, fenders, etc., when exposed and subject to maintenance and 
replacement.
    6. Chimneys (Major Utilities).
    7. Coal bins and bunkers.
    8. Commissions and fees to brokers, agents, architects, and others.
    9. Conduit (not to be removed) with its contents.
    10. Damages to abutting property during construction.
    11. Docks (Major Utilities).
    12. Door checks and door stops (Major Utilities).
    13. Drainage and sewerage systems.
    14. Elevators, cranes, hoists, etc., and the machinery for operating 
them.
    15. Excavation, including shoring, bracing, bridging, refill and 
disposal of excess excavated material, cofferdams around foundation, 
pumping water from cofferdams during construction, and test borings.
    16. Fences and fence curbs (not including protective fences 
isolating items of equipment, which shall be charged to the appropriate 
equipment account).
    17. Fire protection systems when forming a part of a structure.
    18. Flagpole (Major Utilities).
    19. Floor covering (permanently attached) (Major Utilities).
    20. Foundations and piers for machinery, constructed as a permanent 
part of a building or other item listed herein.
    21. Grading and clearing when directly occasioned by the building of 
a structure.
    22. Intrasite communication system, poles, pole fixtures, wires, and 
cables.
    23. Landscaping, lawns, shrubbery, etc.
    24. Leases, voiding upon purchase to secure possession of 
structures.
    25. Leased property, expenditures on.
    26. Lighting fixtures and outside lighting system.
    27. Mailchutes when part of a building (Major Utilities).
    28. Marquee, permanently attached to building (Major Utilities).
    29. Painting, first cost.
    30. Permanent paving, concrete, brick, flagstone, asphalt, etc., 
within the property lines.
    31. Partitions, including movable (Major Utilities).
    32. Permits and privileges.
    33. Platforms, railings, and gratings when constructed as a part of 
a structure.
    34. Power boards for services to a building (Major Utilities).
    35. Refrigerating systems for general use (Major Utilities).
    36. Retaining walls except when identified with land.
    37. Roadways, railroads, bridges, and trestles intrasite except 
railroads provided for in equipment accounts.
    38. Roofs (Major Utilities).
    39. Scales, connected to and forming a part of a structure (Major 
Utilities).
    40. Screens (Major Utilities).
    41. Sewer systems, for general use (Major Utilities).
    42. Sidewalks, culverts, curbs and streets constructed by the 
utility on its property (Major Utilities).
    43. Sprinkling systems (Major Utilities).
    44. Sump pumps and pits (Major Utilities).
    45. Stacks--brick, steel, or concrete, when set on foundation 
forming part of general foundation and steelwork of a building.
    46. Steel inspection during construction (Major Utilities).
    47. Storage facilities constituting a part of a building.
    48. Storm doors and windows (Major Utilities).
    49. Subways, areaways, and tunnels, directly connected to and 
forming part of a structure.
    50. Tanks, constructed as part of a building or as a distinct 
structural unit.
    51. Temporary heating during construction (net cost) (Major 
Utilities).

[[Page 388]]

    52. Temporary water connection during construction (net cost) (Major 
Utilities).
    53. Temporary shanties and other facilities used during construction 
(net cost)
    54. Topographical maps (Major Utilities).
    55. Tunnels, intake and discharge, when constructed as part of a 
structure, including sluice gates, and those constructed to house mains.
    56. Vaults constructed as part of a building.
    57. Watchmen's sheds and clock systems (net cost when used during 
construction only) (Major Utilities).
    58. Water basins or reservoirs.
    59. Water front improvements (Major Utilities).
    60. Water meters and supply system for a building or for general 
company purposes (Major Utilities).
    61. Water supply piping, hydrants and wells (Major Utilities).
    62. Wharves.
    63. Window shades and ventilators (Major Utilities).
    64. Yard drainage system (Major Utilities).
    65. Yard lighting system (Major Utilities).
    66. Yard surfacing, gravel, concrete, or oil. (First cost only.) 
(Major Utilities)

    Note: Structures and Improvements accounts shall be credited with 
the cost of coal bunkers, stacks, foundations, subways, tunnels, etc., 
the use of which has terminated with the removal of the equipment with 
which they are associated even though they have not been physically 
removed.

    9. Equipment.
    A. The cost of equipment chargeable to the electric plant accounts, 
unless otherwise indicated in the text of an equipment account, includes 
the net purchase price thereof, sales taxes, investigation and 
inspection expenses necessary to such purchase, expenses of 
transportation when borne by the utility, labor employed, materials and 
supplies consumed, and expenses incurred by the utility in unloading and 
placing the equipment in readiness to operate. Also include those costs 
incurred in connection with the first clearing and grading of land and 
rights-of-way and the damage costs associated with construction and 
installation of plant.
    B. Exclude from equipment accounts hand and other portable tools, 
which are likely to be lost or stolen or which have relatively small 
value (for example, $500 or less) or short life, unless the correctness 
of the accounting therefor as electric plant is verified by current 
inventories. Special tools acquired and included in the purchase price 
of equipment shall be included in the appropriate plant account. 
Portable drills and similar tool equipment when used in connection with 
the operation and maintenance of a particular plant or department, such 
as production, transmission, distribution, etc., or in stores, shall be 
charged to the plant account appropriate for their use.
    C. The equipment accounts shall include angle irons and similar 
items which are installed at the base of an item of equipment, but piers 
and foundations which are designed to be as permanent as the buildings 
which house the equipment, or which are constructed as a part of the 
building and which cannot be removed without cutting into the walls, 
ceilings or floors or without in some way impairing the building, shall 
be included in the building accounts.
    D. The equipment accounts shall include the necessary costs of 
testing or running a plant or parts thereof during an experimental or 
test period prior to such plant becoming ready for or placed in service. 
In the case of Nonmajor utilities, the utility shall pay the fee 
prescribed in part 381 of this chapter and shall furnish the Commission 
with full particulars of and justification for any test or experimental 
run extending beyond a period of 30 days. In the case of Major 
utilities, the utility shall furnish the Commission with full 
particulars of and justification for any test or experimental run 
extending beyond a period of 120 days for nuclear plant, and a period of 
90 days for all other plant. Such particulars shall include a detailed 
operational and downtime log showing days of production, gross kilowatts 
generated by hourly increments, types, and periods of outages by hours 
with explanation thereof, beginning with the first date the equipment 
was either tested or synchronized on the line to the end of the test 
period.
    E. The cost of efficiency or other tests made subsequent to the date 
equipment becomes available for service shall be charged to the 
appropriate expense accounts, except that tests to determine whether 
equipment meets the specifications and requirements as to efficiency, 
performance, etc., guaranteed by manufacturers, made after

[[Page 389]]

operations have commenced and within the period specified in the 
agreement or contract of purchase may be charged to the appropriate 
electric plant account.
    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.
    B. The addition and retirement of retirement units shall be 
accounted for as follows:
    (1) When a retirement unit is added to electric plant, the cost 
thereof shall be added to the appropriate electric plant account, except 
that when units are acquired in the acquisition of any electric plant 
constituting an operating system, they shall be accounted for as 
provided in electric plant instruction 5.
    (2) When a retirement unit is retired from electric plant, with or 
without replacement, the book cost thereof shall be credited to the 
electric plant account in which it is included, determined in the manner 
set forth in paragraph D, below. If the retirement unit is of a 
depreciable class, the book cost of the unit retired and credited to 
electric plant shall be charged to the accumulated provision for 
depreciation applicable to such property. The cost of removal and the 
salvage shall be charged or credited, as appropriate, to such 
depreciation account.
    C. The addition and retirement of minor items of property shall be 
accounted for as follows:
    (1) When a minor item of property which did not previously exist is 
added to plant, the cost thereof shall be accounted for in the same 
manner as for the addition of a retirement unit, as set forth in 
paragraph B(1), above, if a substantial addition results, otherwise the 
charge shall be to the appropriate maintenance expense account.
    (2) When a minor item of property is retired and not replaced, the 
book cost thereof shall be credited to the electric plant account in 
which it is included; and, in the event the minor item is a part of 
depreciable plant, the account for accumulated provision for 
depreciation shall be charged with the book cost and cost of removal and 
credited with the salvage. If, however, the book cost of the minor item 
retired and not replaced has been or will be accounted for by its 
inclusion in the retirement unit of which it is a part when such unit is 
retired, no separate credit to the property account is required when 
such minor item is retired.
    (3) When a minor item of depreciable property is replaced 
independently of the retirement unit of which it is a part, the cost of 
replacement shall be charged to the maintenance account appropriate for 
the item, except that if the replacement effects a substantial 
betterment (the primary aim of which is to make the property affected 
more useful, more efficient, of greater durability, or of greater 
capacity), the excess cost of the replacement over the estimated cost at 
current prices of replacing without betterment shall be charged to the 
appropriate electric plant account.
    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.
    E. The book cost of land retired shall be credited to the 
appropriate land account. If the land is sold, the difference between 
the book cost (less any accumulated provision for depreciation or 
amortization therefore which has been authorized and provided) and the 
sale price of the land (less commissions and other expenses of making 
the sale) shall be recorded in account 411.6,

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Gains from Disposition of Utility Plant, or 411.7, Losses from 
Disposition of Utility Plant when the property has been recorded in 
account 105, Electric Plant Held for Future Use, otherwise to accounts 
421.1, Gain on Disposition of Property or 421.2, Loss on Disposition of 
Property, as appropriate. If the land is not used in utility service but 
is retained by the utility, the book cost shall be charged to account 
105, Electric Plant Held for Future Use, or account 121, Nonutility 
Property, as appropriate.
    F. The book cost less net salvage of depreciable electric plant 
retired shall be charged in its entirety to account 108. Accumulated 
Provision for Depreciation of Electric Plant in Service (Account 110, 
Accumulated Provision for Depreciation and Amortization of Electric 
Utility Plant, in the case of Nonmajor utilities). Any amounts which, by 
approval or order of the Commission, are charged to account 182.1, 
Extraordinary Property Losses, shall be credited to account 108 (Account 
110 for Nonmajor utilities).
    G. In the case of Major utilities, the accounting for the retirement 
of amounts included in account 302, Franchises and Consents, and account 
303, Miscellaneous Intangible Plant, and the items of limited-term 
interest in land included in the accounts for land and land rights, 
shall be as provided for in the text of account 111. Accumulated 
Provision for Amortization of Electric Plant in Service, account 404, 
Amortization of Limited-Term Electric Plant, and account 405, 
Amortization of Other Electric Plant.
    11. Work Order and Property Record System Required.
    A. Each utility shall record all construction and retirements of 
electric plant by means of work orders or job orders. Separate work 
orders may be opened for additions to and retirements of electric plant 
or the retirements may be included with the construction work order, 
provided, however, that all items relating to the retirements shall be 
kept separate from those relating to construction and provided, further, 
that any maintenance costs involved in the work shall likewise be 
segregated.
    B. Each utility shall keep its work order system so as to show the 
nature of each addition to or retirement of electric plant, the total 
cost thereof, the source or sources of costs, and the electric plant 
account or accounts to which charged or credited. Work orders covering 
jobs of short duration may be cleared monthly.
    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.
    12. Transfers of Property.
    When property is transferred from one electric plant account to 
another, from one utility department to another, such as from electric 
to gas, from one operating division or area to another, to or from 
accounts 101, Electric Plant in Service, 104. Electric Plant Leased to 
Others, 105. Electric Plant Held for Future Use, and 121, Nonutility 
Property, the transfer shall be recorded by transferring the original 
cost thereof from the one account, department, or location to the other. 
Any related amounts carried in the accounts for accumulated provision 
for depreciation or amortization shall be transferred in accordance with 
the segregation of such accounts.
    13. Common Utility Plant.
    A. If the utility is engaged in more than one utility service, such 
as electric, gas, and water, and any of its utility plant is used in 
common for several utility services or for other purposes to such an 
extent and in such manner that it is impracticable to segregate it by 
utility services currently in the accounts, such property, with the 
approval of the Commission, may be designated and classified as common 
utility plant.
    B. The book amount of utility plant designated as common plant shall 
be included in account 118, Other Utility Plant, and if applicable in 
part to the electric department, shall be segregated and accounted for 
in subaccounts as electric plant is accounted for in accounts 101 to 
107, inclusive, and electric plant adjustments in account 116; any 
amounts classifiable as common plant acquisition adjustments or common 
plant adjustments shall be subject to disposition as provided in

[[Page 391]]

paragraphs C and B of accounts 114 and 116, respectively, for amounts 
classified in those accounts. The original cost of common utility plant 
in service shall be classified according to detailed utility plant 
accounts appropriate for the property.
    C. The utility shall be prepared to show at any time and to report 
to the Commission annually, or more frequently, if required, and by 
utility plant accounts (301 to 399) the following: (1) The book cost of 
common utility plant, (2) The allocation of such cost to the respective 
departments using the common utility plant, and (3) The basis of the 
allocation.
    D. The accumulated provision for depreciation and amortization of 
the utility shall be segregated so as to show the amount applicable to 
the property classified as common utility plant.
    E. The expenses of operation, maintenance, rents, depreciation and 
amortization of common utility plant shall be recorded in the accounts 
prescribed herein, but designated as common expenses, and the allocation 
of such expenses to the departments using the common utility plant shall 
be supported in such manner as to reflect readily the basis of 
allocation used.
    14. Transmission and Distribution Plant.
    For the purpose of this system of accounts:
    A. Transmission system means:
    (1) All land, conversion structures, and equipment employed at a 
primary source of supply (i.e., generating station, or point of receipt 
in the case of purchased power) to change the voltage or frequency of 
electricity for the purpose of its more efficient or convenient 
transmission;
    (2) All land, structures, lines, switching and conversion stations, 
high tension apparatus, and their control and protective equipment 
between a generating or receiving point and the entrance to a 
distribution center or wholesale point; and
    (3) All lines and equipment whose primary purpose is to augment, 
integrate or tie together the sources of power supply
    B. Distribution system means all land, structures, conversion 
equipment, lines, line transformers, and other facilities employed 
between the primary source of supply (i.e., generating station, or point 
of receipt in the case of purchased power) and of delivery to customers, 
which are not includible in transmission system, as defined in paragraph 
A, whether or not such land, structures, and facilities are operated as 
part of a transmission system or as part of a distribution system.

    Note: Stations which change electricity from transmission to 
distribution voltage shall be classified as distribution stations.

    C. Where poles or towers support both transmission and distribution 
conductors, the poles, towers, anchors, guys, and rights of way shall be 
classified as transmission system. The conductors, crossarms, braces, 
grounds, tiewire, insulators, etc., shall be classified as transmission 
or distribution facilities, according to the purpose for which used.
    D. Where underground conduit contains both transmission and 
distribution conductors, the underground conduit and right of way shall 
be classified as distribution system. The conductors shall be classified 
as transmission or distribution facilities according to the purpose for 
which used.
    E. Land (other than rights of way) and structures used jointly for 
transmission and distribution purposes shall be classified as 
transmission or distribution according to the major use thereof.
    15. Hydraulic production plant (Major Utilities).
    For the purpose of this system of accounts hydraulic production 
plant means all land and land rights, structures and improvements used 
in connection with hydraulic power generation, reservoirs dams and 
waterways, water wheels, turbines, generators, accessory electric 
equipment, miscellaneous powerplant equipment, roads, railroads, and 
bridges, and structures and improvements used in connection with fish 
and wildlife, and recreation.
    16. Nuclear Fuel Records Required (Major Utilities).
    Each utility shall keep all the necessary records to support the 
entries to the various nuclear fuel plant accounts classified under 
``Assets and Other Debits,'' Utility Plant 120.1 through 120.6, 
inclusive, account 518, Nuclear Fuel

[[Page 392]]

Expense and account 157, Nuclear Materials Held for Sale. These records 
shall be so kept as to readily furnish the basis of the computation of 
the net nuclear fuel costs.



Operating Expense Instructions--Table of Contents



    1. Supervision and Engineering (Major Utilities).
    The supervision and engineering includible in the operating expense 
accounts shall consist of the pay and expenses of superintendents, 
engineers, clerks, other employees and consultants engaged in 
supervising and directing the operation and maintenance of each utility 
function. Wherever allocations are necessary in order to arrive at the 
amount to be included in any account, the method and basis of allocation 
shall be reflected by underlying records.

                                  Items

                                  Labor

    1. Special tests to determine efficiency of equipment operation.
    2. Preparing or reviewing budgets, estimates, and drawings relating 
to operation or maintenance for departmental approval.
    3. Preparing instructions for operations and maintenance activities.
    4. Reviewing and analyzing operating results.
    5. Establishing organizational setup of departments and executing 
changes therein.
    6. Formulating and reviewing routines of departments and executing 
changes therein.
    7. General training and instruction of employees by supervisors 
whose pay is chargeable hereto. Specific instruction and training in a 
particular type of work is chargeable to the appropriate functional 
account (See Electric Plant Instruction 3(19)).
    8. Secretarial work for supervisory personnel, but not general 
clerical and stenographic work chargeable to other accounts.

                                Expenses

    9. Consultants' fees and expenses.
    10. Meals, traveling and incidental expenses.

    2. Maintenance.
    A. The cost of maintenance chargeable to the various operating 
expense and clearing accounts includes labor, materials, overheads and 
other expenses incurred in maintenance work. A list of work operations 
applicable generally to utility plant is included hereunder. Other work 
operations applicable to specific classes of plant are listed in 
functional maintenance expense accounts.
    B. Materials recovered in connection with the maintenance of 
property shall be credited to the same account to which the maintenance 
cost was charged.
    C. If the book cost of any property is carried in account 102, 
Electric Plant Purchased or Sold, the cost of maintaining such property 
shall be charged to the accounts for maintenance of property of the same 
class and use, the book cost of which is carried in other electric plant 
in service accounts. Maintenance of property leased from others shall be 
treated as provided in operating expense instruction 3.

                                  Items

    1. Direct field supervision of maintenance.
    2. Inspecting, testing, and reporting on condition of plant 
specifically to determine the need for repairs, replacements, 
rearrangements and changes and inspecting and testing the adequacy of 
repairs which have been made.
    3. Work performed specifically for the purpose of preventing 
failure, restoring serviceability or maintaining life of plant.
    4. Rearranging and changing the location of plant not retired.
    5. Repairing for reuse materials recovered from plant.
    6. Testing for locating and clearing trouble.
    7. Net cost of installing, maintaining, and removing temporary 
facilities to prevent interruptions in service.
    8. Replacing or adding minor items of plant which do not constitute 
a retirement unit. (See electric plant instruction 10.)

    3. Rents.
    A. The rent expense accounts provided under the several functional 
groups of expense accounts shall include all rents, including taxes paid 
by the lessee on leased property, for property used in utility 
operations, except (1) minor amounts paid for occasional or infrequent 
use of any property or equipment and all amounts paid for use of 
equipment that, if owned, would be includible in plant accounts 391 to 
398, inclusive, which shall be treated as an expense item and included 
in the appropriate functional account and (2) rents which are chargeable 
to clearing

[[Page 393]]

accounts, and distributed therefrom to the appropriate account. If rents 
cover property used for more than one function, such as production and 
transmission, or by more than one department, the rents shall be 
apportioned to the appropriate rent expense or clearing accounts of each 
department on an actual, or, if necessary, an estimated basis.
    B. When a portion of property or equipment rented from others for 
use in connection with utility operations is subleased, the revenue 
derived from such subleasing shall be credited to the rent revenue 
account in operating revenues; provided, however, that in case the rent 
was charged to a clearing account, amounts received from subleasing the 
property shall be credited to such clearing account.
    C. The cost, when incurred by the lessee, of operating and 
maintaining leased property, shall be charged to the accounts 
appropriate for the expense if the property were owned.
    D. The cost incurred by the lessee of additions and replacements to 
electric plant leased from others shall be accounted for as provided in 
electric plant instruction 6.
    4. Training Costs.
    When it is necessary that employees be trained to specifically 
operate or maintain plant facilities that are being constructed, the 
related costs shall be accounted for as a current operating and 
maintenance expense. These expenses shall be charged to the appropriate 
functional accounts currently as they are incurred. However, when the 
training costs involved relate to facilities which are not conventional 
in nature, or are new to the company's operations, then see Electric 
Plant Instruction 3(19), for accounting.

                     Balance Sheet Chart of Accounts

                         ASSETS AND OTHER DEBITS

                            1. Utility Plant

101 Electric plant in service (Major only).
101.1 Property under capital leases.
102 Electric plant purchased or sold.
103 Experimental electric plant unclassified (Major only).
103.1 Electric plant in process of reclassification (Nonmajor only).
104 Electric plant leased to others.
105 Electric plant held for future use.
106 Completed construction not classified--Electric (Major only).
107 Construction work in progress--Electric.
108 Accumulated provision for depreciation of electric utility plant 
          (Major only).
109 [Reserved]
110 Accumulated provision for depreciation and amortization of electric 
          utility plant (Nonmajor only).
111 Accumulated provision for amortization of electric utility plant 
          (Major only).
112-113 [Reserved]
114 Electric plant acquisition adjustments.
115 Accumulated provision for amortization of electric plant acquisition 
          adjustments (Major only).
116 Other electric plant adjustments.
118 Other utility plant.
119 Accumulated provision for depreciation and amortization of other 
          utility plant.
120.1 Nuclear fuel in process of refinement, conversion, enrichment and 
          fabrication (Major only).
120.2 Nuclear fuel materials and assemblies--Stock account (Major only).
120.3 Nuclear fuel assemblies in reactor (Major only).
120.4 Spent nuclear fuel (Major only).
120.5 Accumulated provision for amortization of nuclear fuel assemblies 
          (Major only).
120.6 Nuclear fuel under capital leases (Major only).

                    2. Other Property and Investments

121 Nonutility property.
122 Accumulated provision for depreciation and amortization of 
          nonutility property.
123 Investment in associated companies (Major only).
123.1 Investment in subsidiary companies (Major only).
124 Other investments.
125 Sinking funds (Major only).
126 Depreciation fund (Major only).
127 Amortization fund--Federal (Major only).
128 Other special funds (Major only).
129 Special funds (Nonmajor only).

                      3. Current and Accrued Assets

130 Cash and working funds (Nonmajor only).
131 Cash (Major only).
132 Interest special deposits (Major only).
133 Dividend special deposits (Major only).
134 Other special deposits (Major only).
135 Working funds (Major only).
136 Temporary cash investments.
141 Notes receivable.
142 Customer accounts receivable.
143 Other accounts receivable.
144 Accumulated provision for uncollectible accounts--credit.
145 Notes receivable from associated companies.
146 Accounts receivable from associated companies.
151 Fuel stock (Major only).

[[Page 394]]

152 Fuel stock expenses undistributed (Major only).
153 Residuals (Major only).
154 Plant materials and operating supplies.
155 Merchandise (Major only).
156 Other materials and supplies (Major only).
157 Nuclear materials held for sale (Major only).
158.1 Allowance inventory.
158.2 Allowances withheld.
163 Stores expense undistributed (Major only).
165 Prepayments.
171 Interest and dividends receivable (Major only).
172 Rents receivable (Major only).
173 Accrued utility revenues (Major only).
174 Miscellaneous current and accrued assets.
175 Derivative instrument assets.
176 Derivative instrument assets-Hedges.

                           4. Deferred Debits

181 Unamortized debt expense.
182.1 Extraordinary property losses.
182.2 Unrecovered plant and regulatory study costs.
182.3 Other regulatory assets.
183 Preliminary survey and investigation charges (Major only).
184 Clearing accounts (Major only).
185 Temporary facilities (Major only).
186 Miscellaneous deferred debits.
187 Deferred losses from disposition of utility plant.
188 Research, development, and demonstration expenditures (Major only).
189 Unamortized loss on reacquired debt.
190 Accumulated deferred income taxes.

                      LIABILITIES AND OTHER CREDITS

                         5. Proprietary Capital

201 Common stock issued.
202 Common stock subscribed (Major only).
203 Common stock liability for conversion (Major only).
204 Preferred stock issued.
205 Preferred stock subscribed (Major only).
206 Preferred stock liability for conversion (Major only).
207 Premium on capital stock (Major only).
208 Donations received from stockholders (Major only).
209 Reduction in par or stated value of capital stock (Major only).
210 Gain on resale or cancellation of reacquired capital stock (Major 
          only).
211 Miscellaneous paid-in capital.
212 Installments received on capital stock.
213 Discount on capital stock.
214 Capital stock expense.
215 Appropriated retained earnings.
215.1 Appropriated retained earnings--Amortization reserve, Federal.
216 Unappropriated retained earnings.
216.1 Unappropriated undistributed subsidiary earnings (Major only).
217 Reacquired capital stock.
218 Noncorporate proprietorship (Nonmajor only).
219 Accumulated other comprehensive income.

                            6. Long-Term Debt

221 Bonds.
222 Reacquired bonds (Major only).
223 Advances from associated companies.
224 Other long-term debt.
225 Unamortized premium on long-term debt.
226 Unamortized discount on long-term debt--Debit.

                     7. Other Noncurrent Liabilities

227 Obligations under capital lease--noncurrent.
228.1 Accumulated provision for property insurance.
228.2 Accumulated provision for injuries and damages.
228.3 Accumulated provision for pensions and benefits.
228.4 Accumulated miscellaneous operating provisions.
229 Accumulated provision for rate refunds.
230 Asset retirement obligations.

                   8. Current and Accrued Liabilities

231 Notes payable.
232 Accounts payable.
233 Notes payable to associated companies.
234 Accounts payable to associated companies.
235 Customer deposits.
236 Taxes accrued.
237 Interest accrued.
238 Dividends declared (Major only).
239 Matured long-term debt (Major only).
240 Matured interest (Major only).
241 Tax collections payable (Major only).
242 Miscellaneous current and accrued liabilities.
243 Obligations under capital leases--current.
244 Derivatives instrument liabilities.
245 Derivative instrument liabilities-Hedges.

                           9. Deferred Credits

251 [Reserved]
252 Customer advances for construction.
253 Other deferred credits.
254 Other regulatory liabilities.
255 Accumulated deferred investment tax credits.
256 Deferred gains from disposition of utility plant.
257 Unamortized gain on reacquired debt.
281 Accumulated deferred income taxes--Accelerated amortization 
          property.
282 Accumulated deferred income taxes--Other property.

[[Page 395]]

283 Accumulated deferred income taxes--Other.



Balance Sheet Accounts--Table of Contents



101 Electric plant in service (Major only).
    A. This account shall include the original cost of electric plant, 
included in accounts 301 to 399, prescribed herein, owned and used by 
the utility in its electric utility operations, and having an 
expectation of life in service of more than one year from date of 
installation, including such property owned by the utility but held by 
nominees. (See also account 106 for unclassified construction costs of 
completed plant actually in service.)
    B. The cost of additions to and betterments of property leased from 
others, which are includible in this account, shall be recorded in 
subdivisions separate and distinct from those relating to owned 
property. (See electric plant instruction 6.)
101.1 Property under capital leases.
    A. This account shall include the amount recorded under capital 
leases for plant leased from others and used by the utility in its 
utility operations.
    B. The electric property included in this account shall be 
classified separately according to the detailed accounts (301 to 399) 
prescribed for electric plant in service.
    C. Records shall be maintained with respect to each capital lease 
reflecting: (1) name of lessor, (2) basic details of lease, (3) terminal 
date, (4) original cost or fair market value of property leased, (5) 
future minimum lease payments, (6) executory costs, (7) present value of 
minimum lease payments, (8) the amount representing interest and the 
interest rate used, and (9) expenses paid. Records shall also be 
maintained for plant under a lease, to identify the asset retirement 
obligation and cost originally recognized for each lease and the 
periodic charges and credits made to the asset retirement obligations 
and asset retirement costs.
102 Electric plant purchased or sold.
    A. This account shall be charged with the cost of electric plant 
acquired as an operating unit or system by purchase, merger, 
consolidation liquidation, or otherwise, and shall be credited with the 
selling price of like property transferred to others pending the 
distribution to appropriate accounts in accordance with electric plant 
instruction 5.
    B. Within six months from the date of acquisition or sale of 
property recorded herein, the utility shall file with the Commission the 
proposed journal entries to clear from this account the amounts recorded 
herein.
103 Experimental electric plant unclassified (Major only).
    A. This account shall include the cost of electric plant which was 
constructed as a research, development, and demonstration plant under 
the provisions of paragraph C, Account 107, Construction Work in 
Progress--Electric, and due to the nature of the plant it is desirous to 
operate it for a period of time in an experimental status.
    B. Amounts in this account shall be transferred to Account 101, 
Electric Plant in Service, or Account 121, Nonutility Property as 
appropriate when the project is no longer considered as experimental.
    C. The depreciation on plant in this account shall be charged to 
account 403, Depreciation expense, and account 403.1, Depreciation 
expense for asset retirement costs, as appropriate, and credited to 
account 108, Accumulated provision for depreciation of electric utility 
plant (Major only). The amounts herein shall be depreciated over a 
period which corresponds to the estimated useful life of the relevant 
project considering the characteristics involved. However, when projects 
are transferred to account 101, Electric plant in service, a new 
depreciation rate based on the remaining service life and undepreciated 
amounts, will be established.
    D. Records shall be maintained with respect to each unit of 
experiment so that full details may be obtained as to the cost, 
depreciation and the experimental status.
    E. Should it be determined that experimental plant recorded in this 
account will fail to satisfactorily perform its function, the costs 
thereof shall be accounted for as directed or authorized by the 
Commission.

[[Page 396]]

103.1 Electric plant in process of reclassification (Nonmajor only).
    A. This account shall include temporarily the balance of electric 
plant as of the effective date of the prior system of accounts, which 
has not yet been reclassified as of the effective date of this system of 
accounts. The detail or primary accounts in support of this account 
employed prior to such date shall be continued pending reclassification 
into the electric plant accounts herein prescribed (301-399), but shall 
not be used for additions, betterments, or new construction.
    B. No charges other than as provided in paragraph A, above, shall be 
made to this account, but retirements of such unclassified electric 
plant shall be credited hereto and to the supporting (old) fixed capital 
accounts until the reclassification shall have been accomplished.
104 Electric plant leased to others.
    A. This account shall include the original cost of electric plant 
owned by the utility, but leased to others as operating units or 
systems, where the lessee has exclusive possession.
    B. The property included in this account shall be classified 
according to the detailed accounts (301 to 399) prescribed for electric 
plant in service and this account shall be maintained in such detail as 
though the property were used by the owner in its utility operations.
105 Electric plant held for future use.
    A. This account shall include the original cost of electric plant 
(except land and land rights) owned and held for future use in electric 
service under a definite plan for such use, to include: (1) Property 
acquired (except land and land rights) but never used by the utility in 
electric service, but held for such service in the future under a 
definite plan, and (2) property (except land and land rights) previously 
used by the utility in service, but retired from such service and held 
pending its reuse in the future, under a definite plan, in electric 
service.
    B. This account shall also include the original cost of land and 
land rights owned and held for future use in electric service under a 
plan for such use, to include land and land rights: (1) Acquired but 
never used by the utility in electric service, but held for such service 
in the future under a plan, and (2) previously held by the utility in 
service, but retired from such service and held pending its reuse in the 
future under a plan, in electric service. (See Electric Plant 
Instruction 7.)
    C. In the event that property recorded in this account shall no 
longer be needed or appropriate for future utility operations, the 
company shall request Commission approval of journal entries to remove 
such property from this account when the gain realized from the sale or 
other disposition of the property is $100,000 or more, prior to their 
being recorded. Such filings shall include the description and original 
cost of individual properties removed from this account, the accounts 
charged upon removal, and any associated gains realized upon disposition 
of such property.
    D. Gains or losses from the sale of land and land rights or other 
disposition of such property previously recorded in this account and not 
placed in utility service shall be recorded directly in accounts 411.6 
or 411.7, as appropriate, except when determined to be significant by 
the Commission. Upon such a determination, the amounts shall be 
transferred to account 256, Deferred Gains from Disposition of Utility 
Plant, or account 187, Deferred Losses from Disposition of Utility 
Plant, and amortized to accounts 411.6, Gains from Disposition of 
Utility Plant, or 411.7, Losses from Disposition of Utility Plant, as 
appropriate.
    E. The property included in this account shall be classified 
according to the detail accounts (301 to 399) prescribed for electric 
plant in service and the account shall be maintained in such detail as 
though the property were in service.

    Note: Materials and supplies, meters and transformers held in 
reserve, and normal spare capacity of plant in service shall not be 
included in this account.

[[Page 397]]

106 Completed construction not classified--Electric (Major only).
    At the end of the year or such other date as a balance sheet may be 
required by the Commission, this account shall include the total of the 
balances of work orders for electric plant which has been completed and 
placed in service but which work orders have not been classified for 
transfer to the detailed electric plant accounts.

    Note: For the purpose of reporting to the Commission the 
classification of electric plant in service by accounts is required, the 
utility shall also report the balance in this account tentatively 
classified as accurately as practicable according to prescribed account 
classifications. The purpose of this provision is to avoid any 
significant omissions in reported amounts of electric plant in service.
107 Construction work in progress--Electric.
    A. This account shall include the total of the balances of work 
orders for electric plant in process of construction.
    B. Work orders shall be cleared from this account as soon as 
practicable after completion of the job. Further, if a project, such as 
a hydroelectric project, a steam station or a transmission line, is 
designed to consist of two or more units or circuits which may be placed 
in service at different dates, any expenditures which are common to and 
which will be used in the operation of the project as a whole shall be 
included in electric plant in service upon the completion and the 
readiness for service of the first unit. Any expenditures which are 
identified exclusively with units of property not yet in service shall 
be included in this account.
    C. Expenditures on research, development, and demonstration projects 
for construction of utility facilities are to be included in a separate 
subdivision in this account. Records must be maintained to show 
separately each project along with complete detail of the nature and 
purpose of the research, development, and demonstration project together 
with the related costs.
108 Accumulated provision for depreciation of electric utility plant 
(Major only).
    A. This account shall be credited with the following:
    (1) Amounts charged to account 403, Depreciation Expense, or to 
clearing accounts for current depreciation expense for electric plant in 
service.
    (2) Amounts charged to account 403.1, Depreciation expense for asset 
retirement costs, for current depreciation expense related to asset 
retirement costs in electric plant in service in a separate subaccount.
    (3) Amounts charged to account 421, Miscellaneous Nonoperating 
Income, for depreciation expense on property included in account 105, 
Electric Plant Held for Future Use. Include, also, the balance of 
accumulated provision for depreciation on property when transferred to 
account 105, Electric Plant Held for Future Use, from other property 
accounts. Normally account 108 will not be used for current depreciation 
provisions because, as provided herein, the service life during which 
depreciation is computed commences with the date property is includible 
in electric plant in service; however, if special circumstances indicate 
the propriety of current accruals for depreciation, such charges shall 
be made to account 421, Miscellaneous Nonoperating Income.
    (4) Amounts charged to account 413, Expenses of Electric Plant 
Leased to Others, for electric plant included in account 104, Electric 
Plant Leased to Others.
    (5) Amounts charged to account 416, Costs and Expenses of 
Merchandising, Jobbing, and Contract Work, or to clearing accounts for 
current depreciation expense.
    (6) Amounts of depreciation applicable to electric properties 
acquired as operating units or systems. (See electric plant instruction 
5.)
    (7) Amounts charged to account 182, Extraordinary Property Losses, 
when authorized by the Commission.
    (8) Amounts of depreciation applicable to electric plant donated to 
the utility.
    (The utility shall maintain separate subaccounts for depreciation 
applicable to electric plant in service, electric

[[Page 398]]

plant leased to others and electric plant held for future use.)
    B. At the time of retirement of depreciable electric utility plant, 
this account shall be charged with the book cost of the property retired 
and the cost of removal and shall be credited with the salvage value and 
any other amounts recovered, such as insurance. When retirement, costs 
of removal and salvage are entered originally in retirement work orders, 
the net total of such work orders may be included in a separate 
subaccount hereunder. Upon completion of the work order, the proper 
distribution to subdivisions of this account shall be made as provided 
in the following paragraph.
    C. For general ledger and balance sheet purposes, this account shall 
be regarded and treated as a single composite provision for 
depreciation. For purposes of analysis, however, each utility shall 
maintain subsidiary records in which this account is segregated 
according to the following functional classification for electric plant:
    (1) Steam production,
    (2) Nuclear production,
    (3) Hydraulic production,
    (4) Other production,
    (5) Transmission,
    (6) Distribution,
    (7) Regional Transmission and Market Operation, and
    (8) General.
    These subsidiary records shall reflect the current credits and 
debits to this account in sufficient detail to show separately for each 
such functional classification:
    (a) The amount of accrual for depreciation,
    (b) The book cost of property retired,
    (c) Cost of removal,
    (d) Salvage, and
    (e) Other items, including recoveries from insurance.
    Separate subsidiary records shall be maintained for the amount of 
accrued cost of removal other than legal obligations for the retirement 
of plant recorded in Account 108, Accumulated provision for depreciation 
of electric utility plant (Major only).
    D. When transfers of plant are made from one electric plant account 
to another, or from or to another utility department, or from or to 
nonutility property accounts, the accounting for the related accumulated 
provision for depreciation shall be as provided in electric plant 
instruction 12.
    E. The utility is restricted in its use of the accumulated provision 
for depreciation to the purposes set forth above. It shall not transfer 
any portion of this account to retained earnings or make any other use 
thereof without authorization by the Commission.
109 [Reserved]
110 Accumulated provision for depreciation and amortization of electric 
utility plant (Nonmajor only).
    A. This account shall be credited with the following:
    (1) Amounts charged to account 403 Depreciation Expense, to account 
404 Amortization of Limited-Term Electric Plant, to account 405, 
Amortization of Other Electric Plant, to account 413, Expenses of 
Electric Plant Leased to Others, to account 416. Costs and Expenses of 
Merchandising, Jobbing and Contract Work, or to clearing accounts for 
currently accruing depreciation and amortization.
    (2) Amounts charged to account 403.1, Depreciation expense for asset 
retirement costs, in electric utility plant in service in a separate 
subaccount.
    (3) Amounts of depreciation applicable to electric properties 
acquired as operating units or systems. (See electric plant instruction 
4.)
    (4) Amounts chargeable to account 182, Extraordinary Property 
Losses, when authorized by the Commission.
    (5) Amounts of depreciation applicable to electric plant donated to 
the utility.
    B. At the time of retirement of electric plant, this account shall 
be charged with the book cost of the property retired and the cost of 
removal, and shall be credited with the salvage value and any other 
amounts recovered, such as insurance. When retirements, cost of removal 
and salvage are entered originally in retirement work orders, the net 
total of such work orders may be included in a separate subaccount 
hereunder. Upon completion of the work order, the proper distribution to 
subdivisions of this account shall be

[[Page 399]]

made as provided in the following paragraph.
    C. For general ledger and balance sheet purposes, this account shall 
be regarded and treated as a single composite provision for 
depreciation. This account shall be subdivided to show the amount 
applicable to Electric Plant in Service, Electric Plant Leased to 
Others, and Electric Plant Held for Future Use. These subsidiary records 
shall show the current credits and debits to this account in sufficient 
detail to show separately for each subdivision, (1) the amount of 
accrual for depreciation or amortization, (2) the book cost of property 
retired, (3) cost of removal, (4) salvage and (5) other items, including 
recoveries from insurance. Separate subsidiary records shall be 
maintained for the amount of accrued cost of removal other than legal 
obligations for the retirement of plant recorded in account 110, 
Accumulated provision for depreciation of electric utility plant 
(Nonmajor only).
    D. When transfers of plant are made from one electric plant account 
to another, or form or to nonutility property, the accounting shall be 
as provided in electric plant instruction 10.
    E. The utility is restricted in its use of the accumulated provision 
for depreciation to the purposes set forth above. It shall not transfer 
any portion of this account to retained earnings or make any other use 
thereof without authorization by the Commission.
111 Accumulated provision for amortization of electric utility plant 
(Major only).
    A. This account shall be credited with the following:
    (1) Amounts charged to account 404, Amortization of Limited-Term 
Electric Plant, for the current amortization of limited-term electric 
plant investments.
    (2) Amounts charged to account 421, Miscellaneous Nonoperating 
Income, for amortization expense on property included in account 105, 
Electric Plant Held for Future Use. Include also the balance of 
accumulated provision for amortization on property when transferred to 
account 105, Electric Plant Held for Future Use, from other property 
accounts. See also paragraph A(2), account 108, Accumulated Provision 
for Depreciation of Electric Utility Plant.
    (3) Amounts charged to account 405, Amortization of Other Electric 
Plant.
    (4) Amounts charged to account 413, Expenses of Electric Plant 
Leased to Others, for the current amortization of limited-term or other 
investments subject to amortization included in account 104, Electric 
Plant Leased to Others.
    (5) Amounts charged to account 425, Miscellaneous Amortization, for 
the amortization of intangible or other electric plant which does not 
have a definite or terminable life and is not subject to charges for 
depreciation expense, with Commission approval.
    (The utility shall maintain subaccounts of this account for the 
amortization applicable to electric plant in service, electric plant 
leased to others and electric plant held for future use.)
    B. When any property to which this account applies is sold, 
relinquished, or otherwise retired from service, this account shall be 
charged with the amount previously credited in respect to such property. 
The book cost of the property so retired less the amount chargeable to 
this account and less the net proceeds realized at retirement shall be 
included in account 421.1, Gain on Disposition of Property, or account 
421.2, Loss on Disposition of Property, as appropriate.
    C. For general ledger and balance sheet purposes, this account shall 
be regarded and treated as a single composite provision for 
amortization. For purposes of analysis, however, each utility shall 
maintain subsidiary records in which this account is segregated 
according to the following functional classification for electric plant: 
(1) Steam production, (2) nuclear production, (3) hydraulic production, 
(4) other production, (5) transmission, (6) distribution, and (7) 
general. These subsidiary records shall reflect the current credits and 
debits to this account in sufficient detail to show separately for each 
such functional classification (a) the amount of accrual for 
amortization, (b) the book cost of property retired, (c) cost of 
removal, (d) salvage, and (e) other items, including recoveries from 
insurance.

[[Page 400]]

    D. The utility is restricted in its use of the accumulated provision 
for amortization to the purposes set forth above. It shall not transfer 
any portion of this account to retained earnings or make any other use 
thereof without authorization by the Commission.
112-113 [Reserved]
114 Electric plant acquisition adjustments.
    A. This account shall include the difference between (1) the cost to 
the accounting utility of electric plant acquired as an operating unit 
or system by purchase, merger, consolidation, liquidation, or otherwise, 
and (2) the original cost, estimated, if not known, of such property, 
less the amount or amounts credited by the accounting utility at the 
time of acquisition to accumulated provisions for depreciation and 
amortization and contributions in aid of construction with respect to 
such property.
    B. With respect to acquisitions after the effective date of this 
system of accounts, this account shall be subdivided so as to show the 
amounts included herein for each property acquisition and to electric 
plant in service, electric plant held for future use, and electric plant 
leased to others. (See electric plant instruction 5.)
    C. Debit amounts recorded in this account related to plant and land 
acquisition may be amortized to account 425, Miscellaneous Amortization, 
over a period not longer than the estimated remaining life of the 
properties to which such amounts relate. Amounts related to the 
acquisition of land only may be amortized to account 425 over a period 
of not more than 15 years. Should a utility wish to account for debit 
amounts in this account in any other manner, it shall petition the 
Commission for authority to do so. Credit amounts recorded in this 
account shall be accounted for as directed by the Commission.
115 Accumulated provision for amortization of electric plant acquisition 
adjustments (Major only).
    This account shall be credited or debited with amounts which are 
includible in account 406. Amortization of Electric Plant Acquisition 
Adjustments or account 425, Miscellaneous Amortization, for the purpose 
of providing for the extinguishment of amounts in account 114, Electric 
Plant Acquisition Adjustments, in instances where the amortization of 
account 114 is not being made by direct write-off of the account.
116 Other electric plant adjustments.
    A. This account shall include the difference between the original 
cost, estimated if not known, and the book cost of electric plant to the 
extent that such difference is not properly includible in account 114, 
Electric Plant Acquisition Adjustments. (See electric plant instruction 
1C).
    B. Amounts included in this account shall be classified in such 
manner as to show the origin of each amount and shall be disposed of as 
the Commission may approve or direct.

    Note: The provisions of this account shall not be construed as 
approving or authorizing the recording of appreciation of electric 
plant.
118 Other utility plant.
    This account shall include the balances in accounts for utility 
plant, other than electric plant, such as gas, railway, etc.
119 Accumulated provision for depreciation and amortization of other 
utility plant.
    This account shall include the accumulated provision for 
depreciation and amortization applicable to utility property other than 
electric plant.
120.1 Nuclear fuel in process of refinement, conversion, enrichment and 
fabrication (Major only).
    A. This account shall include the original cost to the utility of 
nuclear fuel materials while in process of refinement, conversion, 
enrichment, and fabrication into nuclear fuel assemblies and components, 
including processing, fabrication, and necessary shipping costs. This 
account shall also include the salvage value of nuclear materials which 
are actually being reprocessed for use and were transferred from account 
120.5, Accumulated Provision

[[Page 401]]

for Amortization of Nuclear Fuel Assemblies. (See definition 20.)
    B. This account shall be credited and account 120.2, Nuclear Fuel 
Materials and Assemblies--Stock Account, shall be debited for the cost 
of completed fuel assemblies delivered for use in refueling or to be 
held as spares. In the case of the initial core loading, the transfer 
shall be made directly to account 120.3, Nuclear Fuel Assemblies in 
Reactor, upon the conclusion of the experimental or test period of the 
plant prior to its becoming available for service.

                                  items

    1. Cost of natural uranium, uranium ores concentrates or other 
nuclear fuel sources, such as thorium, plutonium, and U-233.
    2. Value of recovered nuclear materials being reprocessed for use.
    3. Milling process costs.
    4. Sampling and weighing, and assaying costs.
    5. Purification and conversion process costs.
    6. Costs of enrichment by gaseous diffusion or other methods.
    7. Costs of fabrication into fuel forms suitable for insertion in 
the reactor.
    8. All shipping costs of materials and components, including 
shipping of fabricated fuel assemblies to the reactor site.
    9. Use charges on leased nuclear materials while in process of 
refinement, conversion, enrichment, and fabrication.
120.2 Nuclear fuel materials and assemblies--Stock account (Major only).
    A. This account shall be debited and account 120.1, Nuclear Fuel in 
Process of Refinement, Conversion, Enrichment, and Fabrication, shall be 
credited with the cost of fabricated fuel assemblies delivered for use 
in refueling or to be carried in stock as spares. It shall also include 
the original cost of fabricated fuel assemblies purchased in completed 
form. This account shall also include the original cost of partially 
irradiated fuel assemblies being held in stock for reinsertion in a 
reactor which had been transferred from account 120.3, Nuclear Fuel 
Assemblies in Reactor.
    B. When fuel assemblies included in this account are inserted in a 
reactor, this account shall be credited and account 120.3, Nuclear Fuel 
Assemblies in Reactor, debited for the cost of such assemblies.
    C. This account shall also include the cost of nuclear materials and 
byproduct materials being held for future use and not actually in 
process in account 120.1, Nuclear Fuel in Process of Refinement, 
Conversion, Enrichment, and Fabrication.
120.3 Nuclear fuel assemblies in reactor (Major only).
    A. This account shall include the cost of nuclear fuel assemblies 
when inserted in a reactor for the production of electricity. The 
amounts included herein shall be transferred from account 120.2, Nuclear 
Fuel Materials and Assemblies--Stock Account, except for the initial 
core loading which will be transferred directly from account 120.1.
    B. Upon removal of fuel assemblies from a reactor, the original cost 
of the assemblies removed shall be transferred to account 120.4, Spent 
Nuclear Fuel or account 120.2, Nuclear Fuel Materials and Assemblies--
Stock Account, as appropriate.
120.4 Spent nuclear fuel (Major only).
    A. This account shall include the original cost of nuclear fuel 
assemblies, in the process of cooling, transferred from account 120.3, 
Nuclear Fuel Assemblies in Reactor, upon removal from a reactor pending 
reprocessing.
    B. This account shall be credited and account 120.5, Accumulated 
Provision for Amortization of Nuclear Fuel Assemblies, debited for fuel 
assemblies, after the cooling period is over, at the cost recorded in 
this account.
120.5 Accumulated provision for amortization of nuclear fuel assemblies 
(Major only).
    A. This account shall be credited and account 518, Nuclear fuel 
expense shall be debited for the amortization of the net cost of nuclear 
fuel assemblies used in the production of energy. The net cost of 
nuclear fuel assemblies subject to amortization shall be the original 
cost of nuclear fuel assemblies, plus or less the expected net salvage 
value of uranium, plutonium, and other by-products.
    B. This account shall be credited with the net salvage value of 
uranium,

[[Page 402]]

plutonium, and other nuclear by-products when such items are sold, 
transferred or otherwise disposed of. Account 120.1, Nuclear Fuel in 
Process of Refinement, Conversion, Enrichment, and Fabrication, shall be 
debited with the net salvage value of nuclear materials to be 
reprocessed. Account 157, Nuclear Materials Held for Sale shall be 
debited for the net salvage value of nuclear materials not to be 
reprocessed but to be sold or otherwise disposed of and account 120.2, 
will be debited with the net salvage value of nuclear materials that 
will be held for future use and not actually in process, in account 
120.1, Nuclear Fuel in Process of Refinement, Conversion, Enrichment, 
and Fabrication.
    C. This account shall be debited and account 120.4, Spent Nuclear 
Fuel, shall be credited with the cost of fuel assemblies at the end of 
the cooling period.
120.6 Nuclear fuel under capital leases (Major only).
    A. This account shall include the amount recorded under capital 
leases for nuclear fuel leased from others for use by the utility in its 
utility operations.
    B. Records shall be maintained with respect to each capital lease 
reflecting: (1) Name of lessor, (2) basic details of lease, (3) terminal 
date, (4) original cost or fair market value of nuclear fuel leased, (5) 
future minimum lease payments, (6) executory costs, (7) present value of 
minimum lease payments, (8) the amount representing interest and the 
interest rate used, and (9) expenses paid.
121 Nonutility property.
    A. This account shall include the book cost of land, structures, 
equipment, or other tangible or intangible property owned by the 
utility, but not used in utility service and not properly includible in 
account 105, Electric Plant Held for Future Use. This account shall also 
include, where applicable, amounts recorded for asset retirement costs 
associated with nonutility plant.
    B. This account shall also include the amount recorded under capital 
leases for property leased from others and used by the utility in its 
nonutility operations. Records shall be maintained with respect to each 
lease reflecting: (1) name of lessor, (2) basic details of lease, (3) 
terminal date, (4) original cost or fair market value of property 
leased, (5) future minimum lease payments, (6) executory costs, (7) 
present value of minimum lessee payments, (8) the amount representing 
interest and the interest rate used, and (9) expenses paid.
    C. This account shall be subdivided so as to show the amount of 
property used in operations which are nonutility in character but 
nevertheless constitute a distinct operating activity of the company 
(such as operation of an ice department where such activity is not 
classed as a utility) and the amount of miscellaneous property not used 
in operations. The records in support of each subaccount shall be 
maintained so as to show an appropriate classification of the property.

    Note: The gain from the sale or other disposition of property 
included in this account which had been previously recorded in account 
105, Electric Plant Held for Future Use, shall be accounted for in 
accordance with paragraph C of account 105.
122 Accumulated provision for depreciation and amortization of 
nonutility property.
    This account shall include the accumulated provision for 
depreciation and amortization applicable to nonutility property.
123 Investment in associated companies (Major only).
    A. This account shall include the book cost of investments in 
securities issued or assumed by associated companies and investment 
advances to such companies, including interest accrued thereon when such 
interest is not subject to current settlement, provided that the 
investment does not relate to a subsidiary company. (If the investment 
relates to a subsidiary company it shall be included in account 123.1, 
Investment in Subsidiary Companies.) Include herein the offsetting entry 
to the recording of amortization of discount or premium on interest 
bearing investments. (See account 419, Interest and Dividend Income.)

[[Page 403]]

    B. This account shall be maintained in such manner as to show the 
investment in securities of, and advances to, each associated company 
together with full particulars regarding any of such investments that 
are pledged.

    Note A: Securities and advances of associated companies owned and 
pledged shall be included in this account, but such securities, if held 
in special deposits or in special funds, shall be included in the 
appropriate deposit or fund account. A complete record of securities 
pledged shall be maintained.
    Note B: Securities of associated companies held as temporary cash 
investments are includible in account 136, Temporary Cash Investments.
    Note C: Balances in open accounts with associated companies, which 
are subject to current settlement, are includible in account 146, 
Accounts Receivable from Associated Companies.
    Note D: The utility may write down the cost of any security in 
recognition of a decline in the value thereof. Securities shall be 
written off or written down to a nominal value if there is no reasonable 
prospect of substantial value. Fluctuations in market value shall not be 
recorded but a permanent impairment in the value of securities shall be 
recognized in the accounts. When securities are written off or written 
down, the amount of the adjustment shall be charged to account 426.5, 
Other Deductions, or to an appropriate account for accumulated 
provisions for loss in value established as a separate subdivision of 
this account.
123.1 Investment in subsidiary companies (Major only).
    A. This account shall include the cost of investments in securities 
issued or assumed by subsidiary companies and investment advances to 
such companies, including interest accrued thereon when such interest is 
not subject to current settlement plus the equity in undistributed 
earnings or losses of such subsidiary companies since acquisition. This 
account shall be credited with any dividends declared by such 
subsidiaries.
    B. This account shall be maintained in such a manner as to show 
separately for each subsidiary: the cost of such investments in the 
securities of the subsidiary at the time of acquisition; the amount of 
equity in the subsidiary's undistributed net earnings or net losses 
since acquisition; advances or loans to such subsidiary; and full 
particulars regarding any such investments that are pledged.
124 Other investments.
    A. This account shall include the book cost of investments in 
securities issued or assumed by nonassociated companies, investment 
advances to such companies, and any investments not accounted for 
elsewhere. This account shall also include unrealized holding gains and 
losses on trading and available-for-sale types of security investments. 
Include also the offsetting entry to the recording of amortization of 
discount or premium on interest bearing investments. (See account 419, 
interest and dividend income.)
    B. The cost of capital stock of the utility reacquired by it under a 
definite plan for resale pursuant to authorization by the Board of 
Directors may, if permitted by statutes, be included in a separate 
subdivision of this account. (See also account 210, Gain on Resale or 
Cancellation of Reacquired Capital Stock, and account 217, Reacquired 
Capital Stock.)
    C. The records shall be maintained in such manner as to show the 
amount of each investment and the investment advances to each person.

    Note A: Securities owned and pledged shall be included in this 
account, but securities held in special deposits or in special funds 
shall be included in appropriate deposit or fund accounts. A complete 
record of securities pledged shall be maintained.
    Note B: Securities held as temporary cash investments shall not be 
included in this account.
    Note C: Special funds. See Note D of account 123.
125 Sinking funds (Major only).
    This account shall include the amount of cash and book cost of 
investments held in sinking funds. This account shall also include 
unrealized holding gains and losses on trading and available-for-sale 
types of security investments. A separate account, with appropriate 
title, shall be kept for each sinking fund. Transfers from this account 
to special deposit accounts may be made as necessary for the purpose of 
paying matured sinking-fund obligations, or obligations called for 
redemption but not presented, or the interest thereon.

[[Page 404]]

126 Depreciation fund (Major only).
    This account shall include the amount of cash and book cost of 
investments which have been segregated in a special fund for the purpose 
of identifying such assets with the accumulated provisions for 
depreciation. This account shall also include unrealized holding gains 
and losses on trading and available-for-sale types of security 
investments.
127 Amortization fund--Federal (Major only).
    This account shall include the amount of cash and book cost of 
investments of any investments of any fund maintained pursuant to the 
requirements of a federal regulatory body, as the cash and investments 
segregated for the purpose of identifying the specific assets associated 
with account 215.1, appropriated retained earnings--amortization 
reserve, federal. This account shall also include unrealized holding 
gains and losses on trading and available-for-sale types of security 
investments.
128 Other special funds (Major only).
    This account shall include the amount of cash and book cost of 
investments which have been segregated in special funds for insurance, 
employee pensions, savings, relief, hospital, and other purposes not 
provided for elsewhere. This account shall also include unrealized 
holding gains and losses on trading and available-for-sale types of 
security investments. A separate account with appropriate title, shall 
be kept for each fund.

    Note: Amounts deposited with a trustee under the terms of an 
irrevocable trust agreement for pensions or other employee benefits 
shall not be included in this account.

    Special Instructions for Current and Accrued Assets. Current and 
accrued assets are cash, those assets which are readily convertible into 
cash or are held for current use in operations or construction, current 
claims against others, payment of which is reasonably assured, and 
amounts accruing to the utility which are subject to current settlement, 
except such items for which accounts other than those designated as 
current and accrued assets are provided. There shall not be included in 
the group of accounts designated as current and accrued assets any item, 
the amount or collectibility of which is not reasonably assured, unless 
an adequate provision for possible loss has been made therefor. Items of 
current character but of doubtful value may be written down and for 
record purposes carried in these accounts at nominal value.
129 Special funds (Nonmajor only).
    This account shall include the amount of cash and book cost of 
investments which have been segregated in special funds for bond 
retirements, property additions and replacements, insurance, employees' 
pensions, savings, relief, hospital, and other purposes not provided for 
elsewhere. This account shall also include unrealized holding gains and 
losses on trading and available-for-sale types of security investments. 
A separate account, with appropriate title, shall be kept for each fund.

    Note A: Amounts deposited with a trustee under the terms of an 
irrevocable trust agreement for pensions or other employees benefits 
shall not be included in this account.
    Note B: Licensees under the Federal Power Act which are required to 
establish an amortization fund under terms of the license shall provide 
a special subdivision of this account for the purpose of accounting for 
and identifying the cash, investments or other specific assets 
associated with account 215.1, Appropriated Retained Earnings--
Amortization Reserve, Federal.

    Special Instructions for Current and Accrued Assets. Current and 
accrued assets are cash, those assets which are readily convertible into 
cash or are held for current use in operations or construction, current 
claims against others, payment of which is reasonably assured, and 
amounts accruing to the utility which are subject to current settlement, 
except such items for which accounts other than those designated as 
current and accrued assets are provided. There shall not be included in 
the group of accounts designated as current and accrued assets any item, 
the amount or collectibility of which is not reasonably assured, unless 
an adequate provision for possible

[[Page 405]]

loss has been made therefor. Items of current character but of doubtful 
value may be written down and for record purposes carried in these 
accounts at nominal value.
130 Cash and working funds (Nonmajor only).
    This account shall include the amount of cash on hand and in banks 
and cash advanced to officers, agents, employees, and others as petty 
cash or working funds. Special cash deposits for payment of interest, 
dividends or other special purposes shall be included in this account in 
separate subdivisions which shall specify the purpose for which each 
such special deposit is made.

    Note: Special Deposits for more than one year which are not offset 
by current liabilities, shall not be charged to this account but to 
account 125, Special Funds.
131 Cash (Major only).
    This account shall include the amount of current cash funds except 
working funds.
132 Interest special deposits (Major only).
    This account shall include special deposits with fiscal agents or 
others for the payment of interest.
133 Dividend special deposits (Major only).
    This account shall include special deposits with fiscal agents or 
others for the payment of dividends.
134 Other special deposits (Major only).
    This account shall include deposits with fiscal agents or others for 
special purposes other than the payment of interest and dividends. Such 
special deposits may include cash deposited with federal, state, or 
municipal authorities as a guaranty for the fulfillment of obligations; 
cash deposited with trustees to be held until mortgaged property sold, 
destroyed, or otherwise disposed of is replaced; cash realized from the 
sale of the accounting utility's securities and deposited with trustees 
to be held until invested in property of the utility, etc. Entries to 
this account shall specify the purpose for which the deposit is made.

    Note: Assets available for general corporate purposes shall not be 
included in this account. Further, deposits for more than one year, 
which are not offset by current liabilities, shall not be charged to 
this account but to account 128, Other Special Funds.
135 Working funds (Major only).
    This account shall include cash advanced to officers, agents, 
employees, and others as petty cash or working funds.
136 Temporary cash investments.
    A. This account shall include the book cost of investments, such as 
demand and time loans, bankers' acceptances, United States Treasury 
certificates, marketable securities, and other similar investments, 
acquired for the purpose of temporarily investing cash.
    B. This account shall be so maintained as to show separately 
temporary cash investments in securities of associated companies and of 
others. Records shall be kept of any pledged investments.
141 Notes receivable.
    This account shall include the book cost, not includible elsewhere, 
of all collectible obligations in the form of notes receivable and 
similar evidences (except interest coupons) of money due on demand or 
within one year from the date of issue, except, however, notes 
receivable from associated companies. (See account 136, Temporary Cash 
Investments, and account 145, Notes Receivable from Associated 
Companies.)

    Note: The face amount of notes receivable discounted, sold, or 
transferred without releasing the utility from liability as endorser 
thereon, shall be credited to a separate subdivision of this account and 
appropriate disclosure shall be made in financial statements of any 
contingent liability arising from such transactions.
142 Customer accounts receivable.
    A. This account shall include amounts due from customers for utility 
service, and for merchandising, jobbing and contract work. This account 
shall not include amounts due from associated companies.
    B. This account shall be maintained so as to permit ready 
segregation of the amounts due for merchandising, jobbing and contract 
work.

[[Page 406]]

143 Other accounts receivable.
    A. This account shall include amounts due the utility upon open 
accounts, other than amounts due from associated companies and from 
customers for utility services and merchandising, jobbing and contract 
work.
    B. This account shall be maintained so as to show separately amounts 
due on subscriptions to capital stock and from officers and employees, 
but the account shall not include amounts advanced to officers or others 
as working funds. (See account 135, Working Funds.)
144 Accumulated provision for uncollectible accounts--credit.
    A. This account shall be credited with amounts provided for losses 
on accounts receivable which may become uncollectible, and also with 
collections on accounts previously charged hereto. Concurrent charges 
shall be made to account 904, Uncollectible Accounts, for amounts 
applicable to utility operations, and to corresponding accounts for 
other operations. Records shall be maintained so as to show the write-
offs of account receivable for each utility department.
    B. This account shall be subdivided to show the provision applicable 
to the following classes of accounts receivable:

Utility customers.
Merchandising, jobbing and contract work.
Officers and employees.
Others.

    Note A: Accretions to this account shall not be made in excess of a 
reasonable provision against losses of the character provided for.
    Note B: If provisions for uncollectible notes receivable or for 
uncollectible receivables from associated companies are necessary, 
separate subaccounts therefor shall be established under the account in 
which the receivable is carried.
145 Notes receivable from associated companies.
146 Accounts receivable from associated companies.
    A. These accounts shall include notes and drafts upon which 
associated companies are liable, and which mature and are expected to be 
paid in full not later than one year from the date of issue, together 
with any interest thereon, and debit balances subject to current 
settlement in open accounts with associated companies. Items which do 
not bear a specified due date but which have been carried for more than 
twelve months and items which are not paid within twelve months from due 
date shall be transferred to account 123, Investment in Associated 
Companies.
    B. A public utility or licensee participating in a cash management 
program must maintain supporting documentation for all deposits into, 
borrowings from, interest income from, and interest expense to such 
program. Cash management programs include all agreements in which funds 
in excess of the daily needs of the public utility or licensee along 
with the excess funds of the public utility's or licensee's parent, 
affiliated and subsidiary companies are concentrated, consolidated, or 
otherwise made available for use by other entities within the corporate 
group. The written documentation must include the following information:
    (1) For deposits with and withdrawals from the cash management 
program: the date of the deposit or withdrawal, the amount of the 
deposit or withdrawal, and the maturity date, if any, of the deposit;
    (2) For borrowings from a cash management program: the date of the 
borrowing, the amount of the borrowing, and the maturity date, if any, 
of the borrowing;
    (3) The security, if any, provided by the cash management program 
for repayment of deposits into the cash management program and the 
security required, if any, by the cash management program in support of 
borrowings from the program; and
    (4) The monthly balance of the cash management program.
    C. The public utility or licensee must maintain current and up-to-
date copies of the documents authorizing the establishment of the cash 
management program including the following:
    (1) The duties and responsibilities of the administrator and the 
public utilities or licensees in the cash management program;
    (2) The restrictions on deposits or borrowings by public utilities 
or licensees in the cash management program;

[[Page 407]]

    (3) The interest rate, including the method used to determine the 
interest earning rates and interest borrowing rates for deposits into 
and borrowings from the program; and
    (4) The method used to allocate interest income and expenses among 
public utilities or licensees in the program.

    Note A: On the balance sheet, accounts receivable from an associated 
company may be set off against accounts payable to the same company.
    Note B: The face amount of notes receivable discounted, sold or 
transferred without releasing the utility from liability as endorser 
thereon, shall be credited to a separate subdivision of this account and 
appropriate disclosure shall be made in financial statements of any 
contingent liability arising from such transactions.
151 Fuel stock (Major only).
    This account shall include the book cost of fuel on hand.

                                  Items

    1. Invoice price of fuel less any cash or other discounts.
    2. Freight, switching, demurrage and other transportation charges, 
not including, however, any charges for unloading from the shipping 
medium.
    3. Excise taxes, purchasing agents' commissions, insurance and other 
expenses directly assignable to cost of fuel.
    4. Operating, maintenance and depreciation expenses and ad valorem 
taxes on utility-owned transportation equipment used to transport fuel 
from the point of acquisition to the unloading point.
    5. Lease or rental costs of transportation equipment used to 
transport fuel from the point of acquisition to the unloading point.
152 Fuel stock expenses undistributed (Major only).
    A. This account may include the cost of labor and of supplies used 
and expenses incurred in unloading fuel from the shipping medium and in 
the handling thereof prior to its use, if such expenses are sufficiently 
significant in amount to warrant being treated as a part of the cost of 
fuel inventory rather than being charged direct to expense as incurred.
    B. Amounts included herein shall be charged to expense as the fuel 
is used to the end that the balance herein shall not exceed the expenses 
attributable to the inventory of fuel on hand.

                                  Items

Labor:
    1. Procuring and handling of fuel.
    2. All routine fuel analyses.
    3. Unloading from shipping facility and putting in storage.
    4. Moving of fuel in storage and transferring from one station to 
another.
    5. Handling from storage or shipping facility to first bunker, 
hopper, bucket, tank or holder of boiler house structure.
    6. Operation of mechanical equipment, such as locomotives, trucks, 
cars, boats, barges, cranes, etc.
Supplies and Expenses:
    7. Tools, lubricants and other supplies.
    8. Operating supplies for mechanical equipment.
    9. Transportation and other expenses in moving fuel.
    10. Stores expenses applicable to fuel.
153 Residuals (Major only).
    This account shall include the book cost of any residuals produced 
in production or manufacturing processes.
154 Plant materials and operating supplies.
    A. This account shall include the cost of materials purchased 
primarily for use in the utility business for construction, operation 
and maintenance purposes. For Nonmajor utilities, this account shall 
include the cost of fuel on hand and unapplied materials and supplies 
(except meters and house regulators). For both Major and Nonmajor 
utilities, it shall include also the book cost of materials recovered in 
connection with construction, maintenance or the retirement of property, 
such materials being credited to construction, maintenance or 
accumulated depreciation provision, respectively, and included herein as 
follows:
    (1) Reusable materials consisting of large individual items shall be 
included in this account at original cost, estimated if not known. The 
cost of repairing such items shall be charged to the maintenance account 
appropriate for the previous use.
    (2) Reusable materials consisting of relatively small items, the 
identity of which (from the date of original installation to the final 
abandonment or sale thereof) cannot be ascertained without undue 
refinement in accounting, shall be included in this account at current 
prices new for such items. The cost of

[[Page 408]]

repairing such items shall be charged to the appropriate expense account 
as indicated by previous use.
    (3) Scrap and nonusable materials included in this account shall be 
carried at the estimated net amount realizable therefrom. The difference 
between the amounts realized for scrap and nonusable materials sold and 
the net amount at which the materials were carried in this account, as 
far as practicable, shall be adjusted to the accounts credited when the 
materials were charged to this account.
    B. Materials and supplies issued shall be credited hereto and 
charged to the appropriate construction, operating expense, or other 
account on the basis of a unit price determined by the use of cumulative 
average, first-in-first-out, or such other method of inventory 
accounting as conforms with accepted accounting standards consistently 
applied.
    C. For Nonmajor utilities, inventories of materials, supplies, fuel, 
etc., shall be taken at least annually and the necessary adjustments 
shall be made to bring this account into agreement with the actual 
inventories. In effecting the adjustments, large differences which can 
be assigned to important classes of materials shall be equitably 
adjusted among the accounts to which such classes of materials have been 
charged since the previous inventory. Other differences shall be 
equitably apportioned among the accounts to which materials have been 
charged.

                                  Items

    1. Invoice price of materials less cash or other discounts.
    2. Freight, switching or other transportation charges when 
practicable to include as part of the cost of particular materials to 
which they relate.
    3. Customs duties and excise taxes.
    4. Costs of inspection and special tests prior to acceptance.
    5. Insurance and other directly assignable charges.

    Note A: Where expenses applicable to materials purchased cannot be 
directly assigned to particular purchases, they may be charged to a 
stores expense clearing account (account 163, Stores Expense 
Undistributed, in the case of Major utilities), and distributed 
therefrom to the appropriate account.
    Note B: When materials and supplies are purchased for immediate use, 
they need not be carried through this account but may be charged 
directly to the appropriate utility plant or expense account.
155 Merchandise (Major only).
    This account shall include the book cost of materials and supplies 
and appliances and equipment held primarily for merchandising, jobbing 
and contract work. The principles prescribed in accounting for utility 
materials and supplies shall be observed in respect to items carried in 
this account.
156 Other materials and supplies (Major only).
    This account shall include the book cost of materials and supplies 
held primarily for nonutility purposes. The principles prescribed in 
accounting for utility materials and supplies shall be observed in 
respect to items carried in this account.
157 Nuclear materials held for sale (Major only).
    This account shall include the net salvage value of uranium, 
plutonium and other nuclear materials held by the company for sale or 
other disposition and that are not to be reused by the company in its 
electric utility operations. This account shall be debited and account 
120.5, Accumulated Provision for Amortization of Nuclear Fuel 
Assemblies, credited for such net salvage value. Any difference between 
the amount recorded in this account and the actual amount realized from 
the sale of materials shall be debited or credited, as appropriate, to 
account 518, Nuclear Fuel Expense at the time of such sale.
158.1 Allowance inventory.
    A. This account shall include the cost of allowances owned by the 
utility and not withheld by the Environmental Protection Agency. See 
General Instruction No. 21 and Account 158.2, Allowances Withheld.
    B. This account shall be credited and Account 509, Allowances, shall 
be debited concurrent with the monthly emission of sulfur dioxide.
    C. Separate subdivisions of this account shall be maintained so as 
to separately account for those allowances usable in the current year 
and in each

[[Page 409]]

subsequent year. The underlying records of these subdivisions shall be 
maintained in sufficient detail so as to identify each allowance 
included; the origin of each allowance; and the acquisition cost, if 
any, of the allowance.
158.2 Allowances withheld.
    A. This account shall include the cost of allowances owned by the 
utility but withheld by the Environmental Protection Agency. (See 
General Instruction No. 21.)
    B. The inventory cost of the allowances released by the 
Environmental Protection Agency for use by the utility shall be 
transferred to Account 158.1, Allowance Inventory.
    C. The underlying records of this account shall be maintained in 
sufficient detail so as to identify each allowance included; the origin 
of each allowance; and the acquisition cost, if any, of the allowances.
163 Stores expense undistributed (Major only).
    A. This account shall include the cost of supervision, labor and 
expenses incurred in the operation of general storerooms, including 
purchasing, storage, handling and distribution of materials and 
supplies.
    B. This account shall be cleared by adding to the cost of materials 
and supplies issued a suitable loading charge which will distribute the 
expense equitably over stores issues. The balance in the account at the 
close of the year shall not exceed the amount of stores expenses 
reasonably attributable to the inventory of materials and supplies 
exclusive of fuel, as any amount applicable to fuel costs should be 
included in account 152, Fuel Stock Expenses Undistributed.

                                  Items

Labor:
    1. Inspecting and testing materials and supplies when not assignable 
to specific items.
    2. Unloading from shipping facility and putting in storage.
    3. Supervision of purchasing and stores department to extent 
assignable to materials handled through stores.
    4. Getting materials from stock and in readiness to go out.
    5. Inventorying stock received or stock on hand by stores employees 
but not including inventories by general department employees as part of 
internal or general audits.
    6. Purchasing department activities in checking material needs, 
investigating sources of supply, analyzing prices, preparing and placing 
orders, and related activities to extent applicable to materials handled 
through stores. (Optional. Purchasing department expenses may be 
included in administrative and general expenses.)
    7. Maintaining stores equipment.
    8. Cleaning and tidying storerooms and stores offices.
    9. Keeping stock records, including recording and posting of 
material receipts and issues and maintaining inventory record of stock.
    10. Collecting and handling scrap materials in stores.

Supplies and expenses:
    11. Adjustments of inventories of materials and supplies but not 
including large differences which can readily be assigned to important 
classes of materials and equitably distributed among the accounts to 
which such classes of materials have been charged since the previous 
inventory.
    12. Cash and other discounts not practically assignable to specific 
materials.
    13. Freight, express, etc., when not assignable to specific items.
    14. Heat, light and power for storerooms and store offices.
    15. Brooms, brushes, sweeping compounds and other supplies used in 
cleaning and tidying storerooms and stores offices.
    16. Injuries and damages.
    17. Insurance on materials and supplies and on stores equipment.
    18. Losses due to breakage, leakage, evaporation, fire or other 
causes, less credits for amounts received from insurance, transportation 
companies or others in compensation of such losses.
    19. Postage, printing, stationery and office supplies.
    20. Rent of storage space and facilities.
    21. Communication service.
    22. Excise and other similar taxes not assignable to specific 
materials.
    23. Transportation expense on inward movement of stores and on 
transfer between storerooms but not including charges on materials 
recovered from retirements which shall be accounted for as part of cost 
of removal.

    Note: A physical inventory of each class of materials and supplies 
shall be made at least every two years.
165 Prepayments.
    This account shall include amounts representing prepayments of 
insurance,

[[Page 410]]

rents, taxes, interest and miscellaneous items, and shall be kept or 
supported in such manner as to disclose the amount of each class of 
prepayment.
171 Interest and dividends receivable (Major only).
    This account shall include the amount of interest on bonds, 
mortgages, notes, commercial paper, loans, open accounts, deposits, 
etc., the payment of which is reasonably assured, and the amount of 
dividends declared or guaranteed on stocks owned.

    Note A: Interest which is not subject to current settlement shall 
not be included herein but in the account in which is carried the 
principal on which the interest is accrued.
    Note B: Interest and dividends receivable from associated companies 
shall be included in account 146, Accounts receivable from associated 
companies.
172 Rents receivable (Major only).
    This account shall include rents receivable or accrued on property 
rented or leased by the utility to others.

    Note: Rents receivable from associated companies shall be included 
in account 146, Accounts Receivable from Associated Companies.
173 Accrued utility revenues (Major only).
    At the option of the utility, the estimated amount accrued for 
service rendered, but not billed at the end of any accounting period, 
may be included herein. In case accruals are made for unbilled revenues, 
they shall be made likewise for unbilled expenses, such as for the 
purchase of energy.
174 Miscellaneous current and accrued assets.
    This account shall include the book cost of all other current and 
accrued assets, appropriately designated and supported so as to show the 
nature of each asset included herein.
175 Derivative instrument assets.
    This account shall include the amounts paid for derivative 
instruments, and the change in the fair value of all derivative 
instrument assets not designated as cash flow or fair value hedges. 
Account 421, miscellaneous nonoperating income, shall be credited or 
debited, as appropriate, with the corresponding amount of the change in 
the fair value of the derivative instrument.
176 Derivative instrument assets--Hedges.
    A. This account shall include the amounts paid for derivative 
instruments, and the change in the fair value of derivative instrument 
assets designated by the utility as cash flow or fair value hedges.
    B. When a utility designates a derivative instrument asset as a cash 
flow hedge it will record the change in the fair value of the derivative 
instrument in this account with a concurrent charge to account 219, 
accumulated other comprehensive income, with the effective portion of 
the gain or loss. The ineffective portion of the cash flow hedge shall 
be charged to the same income or expense account that will be used when 
the hedged item enters into the determination of net income.
    C. When a utility designates a derivative instrument as a fair value 
hedge it shall record the change in the fair value of the derivative 
instrument in this account with a concurrent charge to a subaccount of 
the asset or liability that carries the item being hedged. The 
ineffective portion of the fair value hedge shall be charged to the same 
income or expense account that will be used when the hedged item enters 
into the determination of net income.
181 Unamortized debt expense.
    This account shall include expenses related to the issuance or 
assumption of debt securities. Amounts recorded in this account shall be 
amortized over the life of each respective issue under a plan which will 
distribute the amount equitably over the life of the security. The 
amortization shall be on a monthly basis, and the amounts thereof shall 
be charged to account 428, Amortization of Debt Discount and Expense. 
Any unamortized amounts outstanding at the time that the related debt is 
prematurely reacquired shall be accounted for as indicated in General 
Instruction 17.

[[Page 411]]

182.1 Extraordinary property losses.
    A. When authorized or directed by the Commission, this account shall 
include extraordinary losses, which could not reasonably have been 
anticipated and which are not covered by insurance or other provisions, 
such as unforeseen damages to property.
    B. Application to the Commission for permission to use this account 
shall be accompanied by a statement giving a complete explanation with 
respect to the items which it is proposed to include herein, the period 
over which, and the accounts to which it is proposed to write off the 
charges, and other pertinent information.
182.2 Unrecovered plant and regulatory study costs.
    A. This account shall include: (1) Nonrecurring costs of studies and 
analyses mandated by regulatory bodies related to plants in service, 
transferred from account 183, Preliminary Survey and Investigation 
Charges, and not resulting in construction; and (2) when authorized by 
the Commission, significant unrecovered costs of plant facilities where 
construction has been cancelled or which have been prematurely retired.
    B. This account shall be credited and account 407, Amortization of 
Property Losses, Unrecovered Plant and Regulatory Study Costs, shall be 
debited over the period specified by the Commission.
    C. Any additional costs incurred, relative to the cancellation or 
premature retirement, may be included in this account and amortized over 
the remaining period of the original amortization period. Should any 
gains or recoveries be realized relative to the cancelled or prematurely 
retired plant, such amounts shall be used to reduce the unamortized 
amount of the costs recorded herein.
    D. In the event that the recovery of costs included herein is 
disallowed in the rate proceedings, the disallowed costs shall be 
charged to account 426.5, Other Deductions, or account 435, 
Extraordinary Deductions, in the year of such disallowance.
182.3 Other regulatory assets.
    A. This account shall include the amounts of regulatory-created 
assets, not includible in other accounts, resulting from the ratemaking 
actions of regulatory agencies. (See Definition No. 30.)
    B. The amounts included in this account are to be established by 
those charges which would have been included in net income, or 
accumulated other comprehensive income, determinations in the current 
period under the general requirements of the Uniform System of Accounts 
but for it being probable that such items will be included in a 
different period(s) for purposes of developing rates that the utility is 
authorized to charge for its utility services. When specific 
identification of the particular source of a regulatory asset cannot be 
made, such as in plant phase-ins, rate moderation plans, or rate 
levelization plans, account 407.4, regulatory credits, shall be 
credited. The amounts recorded in this account are generally to be 
charged, concurrently with the recovery of the amounts in rates, to the 
same account that would have been charged if included in income when 
incurred, except all regulatory assets established through the use of 
account 407.4 shall be charged to account 407.3, regulatory debits, 
concurrent with the recovery in rates.
    C. If rate recovery of all or part of an amount included in this 
account is disallowed, the disallowed amount shall be charged to Account 
426.5, Other Deductions, or Account 435, Extraordinary Deductions, in 
the year of the disallowance.
    D. The records supporting the entries to this account shall be kept 
so that the utility can furnish full information as to the nature and 
amount of each regulatory asset included in this account, including 
justification for inclusion of such amounts in this account.
183 Preliminary survey and investigation charges (Major only).
    A. This account shall be charged with all expenditures for 
preliminary surveys, plans, investigations, etc., made for the purpose 
of determining the feasibility of utility projects under contemplation. 
If construction results,

[[Page 412]]

this account shall be credited and the appropriate utility plant account 
charged. If the work is abandoned, the charge shall be made to account 
426.5, Other Deductions, or to the appropriate operating expense 
account.
    B. This account shall also include costs of studies and analyses 
mandated by regulatory bodies related to plant in service. If 
construction results from such studies, this account shall be credited 
and the appropriate utility plant account charged with an equitable 
portion of such study costs directly attributable to new construction. 
The portion of such study costs not attributable to new construction or 
the entire cost if construction does not result shall be charged to 
account 182.2, Unrecovered Plant and Regulatory Costs, or the 
appropriate operating expense account. The costs of such studies 
relative to plant under construction shall be included directly in 
account 107, Construction Work in Progress-Electric.
    C. The records supporting the entries to this account shall be so 
kept that the utility can furnish complete information as to the nature 
and the purpose of the survey, plans, or investigations and the nature 
and amounts of the several charges.

    Note: The amount of preliminary survey and investigation charges 
transferred to utility plant shall not exceed the expenditures which may 
reasonably be determined to contribute directly and immediately and 
without duplication to utility plant.
184 Clearing accounts (Major only).
    This caption shall include undistributed balances in clearing 
accounts at the date of the balance sheet. Balances in clearing accounts 
shall be substantially cleared not later than the end of the calendar 
year unless items held therein relate to a future period.
185 Temporary facilities (Major only).
    This account shall include amounts shown by work orders for plant 
installed for temporary use in utility service for periods of less than 
one year. Such work orders shall be charged with the cost of temporary 
facilities and credited with payments received from customers and net 
salvage realized on removal of the temporary facilities. Any net credit 
or debit resulting shall be cleared to account 451, Miscellaneous 
Service Revenues.
186 Miscellaneous deferred debits.
    A. For Major utilities, this account shall include all debits not 
elsewhere provided for, such as miscellaneous work in progress, and 
unusual or extraordinary expenses, not included in other accounts, which 
are in process of amortization and items the proper final disposition of 
which is uncertain.
    B. For Nonmajor utilities, this account shall include the following 
classes of items:
    (1) Expenditures for preliminary surveys, plans, investigations, 
etc., made for the purpose of determining the feasibility of utility 
projects under contemplation. If construction results, this account 
shall be credited with the amount applicable thereto and the appropriate 
plant accounts shall be charged with an amount which does not exceed the 
expenditures which may reasonably be determined to contribute directly 
and immediately and without duplication to plant. If the work is 
abandoned, the charge shall be to account 426.5, Other Deductions, or to 
the appropriate operating expense accounts.
    (2) Undistributed balances in clearing accounts at the date of the 
balance sheet. Balances in clearing accounts shall be substantially 
cleared not later than the end of the calendar year unless items held 
therein related to a future period.
    (3) Balances representing expenditures for work in progress other 
than on utility plant. This includes jobbing and contract work in 
progress.
    (4) Other debit balances, the proper final disposition of which is 
uncertain and unusual or extraordinary expenses not included in other 
accounts, which are in process of being written off.
    C. For both Major and Nonmajor utilities, the records supporting the 
entries to this account shall be so kept that the utility can furnish 
full information as to each deferred debit included herein.

[[Page 413]]

187 Deferred losses from disposition of utility plant.
    This account shall include losses from the sale or other disposition 
of property previously recorded in account 105, Electric Plant held for 
Future Use, under the provisions of paragraphs B, C, and D thereof, 
where such losses are significant and are to be amortized over a period 
of 5 years, unless otherwise authorized by the Commission. The 
amortization of the amounts in this account shall be made by debits to 
account 411.7, Losses from Disposition of Utility Plant. (See account 
105, Electric Plant Held for Future Use.)
188 Research, development and demonstration expenditures (Major only).
    A. This account shall be charged with the cost of all expenditures 
coming within the meaning of Research, Development and Demonstration (RD 
& D) of this uniform system of accounts (see definition 27.B.), except 
those expenditures properly chargeable to account 107, Construction Work 
in Progress--Electric.
    B. Costs that are minor or of a general or recurring nature shall be 
transferred from this account to the appropriate operating expense 
function or if such costs are common to the overall operations or cannot 
be feasibly allocated to the various operating accounts, then such costs 
shall be recorded in account 930.2, Miscellaneous General Expenses.
    C. In certain instances a company may incur large and significant 
research, development, and demonstration expenditures which are 
nonrecurring and which would distort the annual research, development, 
and demonstration charges for the period. In such a case the portion of 
such amounts that cause the distortion may be amortized to the 
appropriate operating expense account over a period not to exceed 5 
years unless otherwise authorized by the Commission.
    D. The entries in this account must be so maintained as to show 
separately each project along with complete detail of the nature and 
purpose of the research, development, and demonstration project together 
with the related costs.
189 Unamortized loss on reacquired debt.
    This account shall include the losses on long-term debt reacquired 
or redeemed. The amounts in this account shall be amortized in 
accordance with General Instruction 17.
190 Accumulated deferred income taxes.
    A. This account shall be debited and account 411.1, Provision for 
Deferred Income Taxes--Credit, Utility Operating Income, or account 
411.2, Provision for Deferred Income Taxes--Credit, Other Income and 
Deductions, as appropriate, shall be credited with an amount equal to 
that by which income taxes payable for the year are higher because of 
the inclusion of certain items in income for tax purposes, which items 
for general accounting purposes will not be fully reflected in the 
utility's determination of annual net income until subsequent years.
    B. This account shall be credited and account 410.1, Provision for 
Deferred Income Taxes, Utility Operating Income, or account 410.2, 
Provision for Deferred Income Taxes, Other Income and Deductions, as 
appropriate, shall be debited with an amount equal to that by which 
income taxes payable for the year are lower because of prior payment of 
taxes as provided by paragraph A above, because of difference in timing 
for tax purposes of particular items of income or income deductions from 
that recognized by the utility for general accounting purposes. Such 
credit to this account and debit to account 410.1 or 410.2 shall, in 
general, represent the effect on taxes payable in the current year of 
the smaller amount of book income recognized for tax purposes as 
compared to the amount recognized in the utility's current accounts with 
respect to the item or class of items for which deferred tax accounting 
by the utility was authorized by the Commission.
    C. Vintage year records with respect to entries to this account, as 
described above, and the account balance, shall be so maintained as to 
show the factor of calculation with respect to each annual amount of the 
item or class of items for which deferred tax accounting by the utility 
is utilized.

[[Page 414]]

    D. The utility is restricted in its use of this account to the 
purpose set forth above. It shall not make use of the balance in this 
account or any portion thereof except as provided in the text of this 
account, without prior approval of the Commission. Any remaining 
deferred tax account balance with respect to an amount for any prior 
year's tax deferral, the amortization of which or other recognition in 
the utility's income accounts has been completed, or other disposition 
made, shall be debited to account 410.1, Provision for Deferred Income 
Taxes, Utility Operating Income, or account 410.2, Provision for 
Deferred Income Taxes, Other Income and Deductions, as appropriate, or 
otherwise disposed of as the Commission may authorize or direct. (See 
General Instruction 18.)
201 Common stock issued.
202 Common stock subscribed (Major only).
203 Common stock liability for conversion (Major only).
204 Preferred stock issued.
    A. These accounts shall include the par value or the stated value of 
stock without par value if such stock has a stated value, and, if not, 
the cash value of the consideration received for such nonpar stock, of 
each class of capital stock actually issued, including the par or stated 
value of such capital stock in account 124, Other Investments, and 
account 217, Reacquired Capital Stock.
    B. When the actual cash value of the consideration received is more 
or less than the par or stated value of any stock having a par or stated 
value, the difference shall be credited or debited, as the case may be, 
to the premium or discount account for the particular class and series.
    C. When capital stock is retired, these accounts shall be charged 
with the amount at which such stock is carried herein.
    D. A separate ledger account, with a descriptive title, shall be 
maintained for each class and series of stock. The supporting records 
shall show the shares nominally issued, actually issued, and nominally 
outstanding.

    Note: When a levy or assessment, except a call for payment on 
subscriptions, is made against holders of capital stock, the amount 
collected upon such levy or assessment shall be credited to account 207, 
Premium on Capital Stock (for Nonmajor utilities, account 211, 
Miscellaneous Paid-In Capital), provided, however, that the credit shall 
be made to account 213, Discount on Capital Stock, to the extent of any 
remaining balance of discount on the issue of stock.
205 Preferred stock subscribed (Major only).
    A. These accounts shall include the amount of legally enforceable 
subscriptions to capital stock of the utility. They shall be credited 
with the par or stated value of the stock subscribed, exclusive of 
accrued dividends, if any. Concurrently, a debit shall be made to 
subscriptions to capital stock, included as a separate subdivision of 
account 143, Other Accounts Receivable, for the agreed price, and any 
discount or premium shall be debited or credited to the appropriate 
discount or premium account. When properly executed stock certificates 
have been issued representing the shares subscribed, this account shall 
be debited, and the appropriate capital stock account credited, with the 
par or stated value of such stock.
    B. The records shall be kept in such manner as to show the amount of 
subscriptions to each class and series of stock.
206 Preferred stock liability for conversion (Major only).
    A. These accounts shall include the par value or stated value, as 
appropriate, of capital stock which the utility has agreed to exchange 
for outstanding securities of other companies in connection with the 
acquisition of properties of such companies under terms which allow the 
holders of the securities of the other companies to surrender such 
securities and receive in return therefor capital stock of the 
accounting utility.
    B. When the securities of the other companies have been surrendered 
and capital stock issued in accordance with the terms of the exchange, 
these accounts shall be charged and accounts

[[Page 415]]

201, Common Stock Issued, or 204, Preferred Stock Issued, as the case 
may be, shall be credited.
    C. The records shall be kept so as to show separately the stocks of 
each class and series for which a conversion liability exists.
207 Premium on capital stock (Major only).
    A. This account shall include, in a separate subdivision for each 
class and series of stock, the excess of the actual cash value of the 
consideration received on original issues of capital stock over the par 
or stated value and accrued dividends of such stock, together with 
assessments against stockholders representing payments required in 
excess of par or stated values.
    B. Premium on capital stock shall not be set off against expenses. 
Further, a premium received on an issue of a certain class or series of 
stock shall not be set off against expenses of another issue of the same 
class or series.
    C. When capital stock which has been actually issued is retired, the 
amount in this account applicable to the shares retired shall be 
transferred to account 210, Gain on Resale or Cancellation of Reacquired 
Capital Stock.
208 Donations received from stockholders (Major only).
    This account shall include the balance of credits for donations 
received from stockholders consisting of capital stock of the utility, 
cancellation or reduction of debt of the utility, and the cash value of 
other assets received as a donation.
209 Reduction in par or stated value of capital stock (Major only).
    This account shall include the balance of credits arising from a 
reduction in the par or stated value of capital stock.
210 Gain on resale or cancellation of reacquired capital stock (Major 
only).
    This account shall include the balance of credits arising from the 
resale or cancellation of reacquired capital stock. (See account 217. 
Reacquired Capital Stock.)
211 Miscellaneous paid-in capital.
    This account shall include the balance of all other credits for 
paid-in capital which are not properly includible in the foregoing 
accounts. This account may include all commissions and expenses incurred 
in connection with the issuance of capital stock. (In the case of 
Nonmajor companies, this account shall be kept so as to show the source 
of the credits includible herein.)

                          Items (Nonmajor only)

    1. Premium received on original issues of capital stock.
    2. Donations received from stockholders or reduction of debt of the 
utility, and the cash value of other assets received as a donation.
    3. Reduction in part or stated value of capital stock.
    4. Gain on resale or cancellation of reacquired capital stock.

    Note A: (Major utilities) Amounts included in capital surplus at the 
effective date of this system of accounts which cannot be classified as 
to the source thereof shall be included in this account.
    Note B: (Nonmajor utilities) Premium on capital stock shall not be 
set off against expenses. Further, a premium received on an issue of a 
certain class or series of stock shall not be set off against expense of 
another issue of the same class or series.
212 Installments received on capital stock.
    A. This account shall include in a separate subdivision for each 
class and series of capital stock the amount of installments received on 
capital stock on a partial or installment payment plan from subscribers 
who are not bound by legally enforceable subscription contracts.
    B. As subscriptions are paid in full and certificates issued, this 
account shall be charged and the appropriate capital stock account 
credited with the par or stated value of such stock. Any discount or 
premium on an original issue shall be included in the appropriate 
discount or premium account.
213 Discount on capital stock.
    A. This account shall include in a separate subdivision for each 
class and series of capital stock all discount on the original issuance 
and sale of capital stock, including additional capital

[[Page 416]]

stock of a particular class or series as well as first issues.
    B. When capital stock which has been actually issued is retired, the 
amount in this account applicable to the shares retired shall be written 
off to account 210, Gain on Resale or Cancellation of Reacquired Capital 
Stock, provided, however, that the amount shall be charged to account 
439, Adjustments to Retained Earnings, to the extent that it exceeds the 
balance in account 210.
214 Capital stock expense.
    A. This account shall include in a separate subdivision for each 
class and series of stock all commissions and expenses incurred in 
connection with the original issuance and sale of capital stock, 
including additional capital stock of a particular class or series as 
well as first issues. Expenses applicable to capital stock shall not be 
deducted from premium on capital stock.
    B. When capital stock which has been actually issued by the utility 
is retired the amount in this account, applicable to the shares retired 
shall be written off to account 210, Gain on Resale or Cancellation of 
Reacquired Capital Stock, provided, however, that the amount shall be 
charged to account 439, Adjustments to Retained Earnings, to the extent 
that it exceeds the balance in account 210.

    Note A: Expenses in connection with the reacquisition or resale of 
the utility's capital stock shall not be included herein.
    Note B: The utility may write off capital stock expense in whole or 
in part by charges to account 211, Miscellaneous Paid-in Capital.
215 Appropriated retained earnings.
    This account shall include the amount of retained earnings which has 
been appropriated or set aside for specific purposes. Separate 
subaccounts shall be maintained under such titles as will designate the 
purpose for which each appropriation was made.
215.1 Appropriated retained earnings--Amortization reserve, Federal.
    A. This account shall be credited with such amounts as are 
appropriated by a licensee from account 216, Unappropriated Retained 
Earnings, for amortization reserve purposes in accordance with the 
requirements of a hydroelectric project license.
    B. This account shall be debited with only such items or amounts as 
the Commission may require or approve. (See account 127, Amortization 
Fund--Federal.)
216 Unappropriated retained earnings.
    This account shall include the balances, either debit or credit, of 
unappropriated retained earnings arising from earnings of the utility. 
This account shall not include any amounts representing the 
undistributed earnings of subsidiary companies.
216.1 Unappropriated undistributed subsidiary earnings (Major only).
    This account shall include the balances, either debit or credit, of 
undistributed retained earnings of subsidiary companies since their 
acquisition. When dividends are received from subsidiary companies 
relating to amounts included in this account, this account shall be 
debited and account 216, ``Unappropriated Retained Earnings,'' credited.
217 Reacquired capital stock.
    A. This account shall include in a separate subdivision for each 
class and series of capital stock, the cost of capital stock actually 
issued by the utility and reacquired by it and not retired or canceled, 
except, however, stock which is held by trustees in sinking or other 
funds.
    B. When reacquired capital stock is retired or canceled, the 
difference between its cost, including commissions and expenses paid in 
connection with the reacquisition, and its par or stated value plus any 
premium and less any discount and expenses applicable to the shares 
retired, shall be debited or credited, as appropriate, to account 210, 
Gain on Resale or Cancellation of Reacquired Capital Stock, provided, 
however, that debits shall be charged to account 439, Adjustments to 
Retained Earnings, to the extent that they exceed the balance in account 
210.
    C. When reacquired capital stock is resold by the utility, the 
difference between the amount received on the resale of the stock, less 
expenses incurred in the resale, and the cost of the

[[Page 417]]

stock included in this account shall be accounted for as outlined in 
paragraph B.

    Note A: See account 124. Other Investments, for permissive 
accounting treatment of stock reacquired under a definite plan for 
resale.
    Note B: The accounting for reacquired stock shall be as prescribed 
herein unless otherwise specifically required by statute.
218 Noncorporate proprietorship (Nonmajor only).
    This account shall include the investment in an unincorporated 
utility by the proprietor thereof, and shall be charged with all 
withdrawals from the business by its proprietor. At the end of each 
calendar year the net income for the year, as developed in the income 
account, shall be transferred to this account. (See optional accounting 
procedure provided in Note C, hereunder.)

    Note A: Amounts payable to the proprietor as just and reasonable 
compensation for services performed shall not be charged to this account 
but to appropriate operating expense or other accounts.
    Note B: When the utility is owned by a partnership, a separate 
account shall be kept to show the net equity of each member therein and 
the transactions affecting the interest of each such partner.
    Note C: This account may be restricted to the amount considered by 
the proprietor to be the permanent investment in the business, subject 
to change only by additional investment by the proprietor or the 
withdrawal of portions thereof not representing net income. When this 
option is taken, the retained earnings accounts shall be maintained and 
entries thereto shall be made in accordance with the texts thereof.
219 Accumulated other comprehensive income.
    A. This account shall include revenues, expenses, gains, and losses 
that are properly includable in other comprehensive income during the 
period. Examples of other comprehensive income include foreign currency 
items, minimum pension liability adjustments, unrealized gains and 
losses on certain investments in debt and equity securities, and cash 
flow hedges. Records supporting the entries to this account shall be 
maintained so that the utility can furnish the amount of other 
comprehensive income for each item included in this account.
    B. This account shall also be debited or credited, as appropriate, 
with amounts of accumulated other comprehensive income that have been 
included in the determination of net income during the period and in 
accumulated other comprehensive income in prior periods. Separate 
records for each category of items shall be maintained to identify the 
amount of the reclassification adjustments from accumulated other 
comprehensive income to earnings made during the period.
221 Bonds.
    This account shall include in a separate subdivision for each class 
and series of bonds the face value of the actually issued and unmatured 
bonds which have not been retired or canceled; also the face value of 
such bonds issued by others the payment of which has been assumed by the 
utility.
222 Reacquired bonds (Major only).
    A. This account shall include the face value of bonds actually 
issued or assumed by the utility and reacquired by it and not retired or 
canceled. The account for reacquired debt shall not include securities 
which are held by trustees in sinking or other funds.
    B. When bonds are reacquired, the difference between face value, 
adjusted for unamortized discount, expenses or premium, and the amount 
paid upon reacquisition, shall be included in account 189, Unamortized 
Loss on Reacquired Debt, or account 257, Unamortized Gain on Reacquired 
Debt, as appropriate. (See General Instruction 17.)
223 Advances from associated companies.
    A. This account shall include the face value of notes payable to 
associated companies and the amount of open book accounts representing 
advances from associated companies. It does not include notes and open 
accounts representing indebtedness subject to current settlement which 
are includible in account 233. Notes Payable to Associated Companies, or 
account 234, Accounts Payable to Associated Companies.

[[Page 418]]

    B. The records supporting the entries to this account shall be so 
kept that the utility can furnish complete information concerning each 
note and open account.
224 Other long-term debt.
    A. This account shall include, until maturity all long-term debt not 
otherwise provided for. This covers such items as receivers' 
certificates, real estate mortgages executed or assumed, assessments for 
public improvements, notes and unsecured certificates of indebtedness 
not owned by associated companies, receipts outstanding for long-term 
debt, and other obligations maturing more than one year from date of 
issue or assumption.
    B. Separate accounts shall be maintained for each class of 
obligation, and records shall be maintained to show for each class all 
details as to date of obligation, date of maturity, interest dates and 
rates, security for the obligation, etc.

    Note: Miscellaneous long-term debt reacquired shall be accounted for 
in accordance with the procedure set forth in account 222. Reacquired 
Bonds.
225 Unamortized premium on long-term debt.
    A. This account shall include the excess of the cash value of 
consideration received over the face value upon the issuance or 
assumption of long-term debt securities.
    B. Amounts recorded in this account shall be amortized over the life 
of each respective issue under a plan which will distribute the amount 
equitably over the life of the security. The amortization shall be on a 
monthly basis, with the amounts thereof to be credited to account 429, 
Amortization of Premium on Debt--Credit. (See General Instruction 17.)
226 Unamortized discount on long-term debt--Debit.
    A. This account shall include the excess of the face value of long-
term debt securities over the cash value of consideration received 
therefor, related to the issue or assumption of all types and classes of 
debt.
    B. Amounts recorded in this account shall be amortized over the life 
of the respective issues under a plan which will distribute the amount 
equitably over the life of the securities. The amortization shall be on 
a monthly basis, with the amounts thereof charged to account 428, 
Amortization of Debt Discount and Expense. (See General Instruction 17.)

    Special Instructions for Current and Accrued Liabilities. Current 
and accrued liabilities are those obligations which have either matured 
or which become due within one year from the date thereof: except, 
however, bonds, receivers' certificates and similar obligations which 
shall be classified as long-term debt until date of maturity; accrued 
taxes, such as income taxes, which shall be classified as accrued 
liabilities even though payable more than one year from date; 
compensation awards, which shall be classified as current liabilities 
regardless of date due; and minor amounts payable in installments which 
may be classified as current liabilities. If a liability is due more 
than one year from date of issuance or assumption by the utility, it 
shall be credited to a long-term debt account appropriate for the 
transaction, except, however, the current liabilities previously 
mentioned.
227 Obligations under capital lease--noncurrent.
    This account shall include the portion not due within one year, of 
the obligations recorded for the amounts applicable to leased property 
recorded as assets in account 101.1, Property under Capital Leases, 
account 120.6, Nuclear Fuel under Capital Leases, or account 121, 
Nonutility Property.

          Special Instructions to Accounts 228.1 Through 228.4

    No amounts shall be credited to these accounts unless authorized by 
a regulatory authority or authorities to be collected in a utility's 
rate levels.
228.1 Accumulated provision for property insurance.
    A. This account shall include amounts reserved by the utility for 
losses through accident, fire, flood, or other hazards to its own 
property or

[[Page 419]]

property leased from others, not covered by insurance. The amounts 
charged to account 924, Property Insurance, or other appropriate 
accounts to cover such risks shall be credited to this account. A 
schedule of risks covered shall be maintained, giving a description of 
the property involved, the character of the risks covered and the rates 
used.
    B. Charges shall be made to this account for losses covered, not to 
exceed the account balance. Details of these charges shall be maintained 
according to the year the casualty occurred which gave rise to the loss.
228.2 Accumulated provision for injuries and damages.
    A. This account shall be credited with amounts charged to account 
925, Injuries and Damages, or other appropriate accounts, to meet the 
probable liability, not covered by insurance, for deaths or injuries to 
employees and others and for damages to property neither owned nor held 
under lease by the utility.
    B. When liability for any injury or damage is admitted by the 
utility either voluntarily or because of the decision of a court or 
other lawful authority, such as a workmen's compensation board, the 
admitted liability shall be charged to this account and credited to the 
appropriate current liability account. Details of these charges shall be 
maintained according to the year the casualty occurred which gave rise 
to the loss.

    Note: Recoveries or reimbursements for losses charged to this 
account shall be credited hereto; the cost of repairs to property of 
others if provided for herein shall be charged to this account.
228.3 Accumulated provision for pensions and benefits.
    A. This account shall include provisions made by the utility and 
amounts contributed by employees for pensions, accident and death 
benefits, savings, relief, hospital and other provident purposes, where 
the funds are included in the assets of the utility either in general or 
in segregated fund accounts.
    B. Amounts paid by the utility for the purposes for which this 
liability is established shall be charged hereto.
    C. A separate account shall be kept for each kind of provision 
included herein.

    Note: If employee pension or benefit plan funds are not included 
among the assets of the utility but are held by outside trustees, 
payments into such funds, or accruals therefor, shall not be included in 
this account.
228.4 Accumulated miscellaneous operating provisions.
    A. This account shall include all operating provisions which are not 
provided for elsewhere.
    B. This account shall be maintained in such manner as to show the 
amount of each separate provision and the nature and amounts of the 
debits and credits thereto.

    Note: This account includes only provisions as may be created for 
operating purposes and does not include any reservations of income the 
credits for which should be carried in account 215, Appropriated 
Retained Earnings.
229 Accumulated provision for rate refunds.
    A. This account shall be credited with amounts charged to Account 
449.1, Provisions for Rate Refunds, to provide for estimated refunds 
where the utility is collecting amounts in rates subject to refund.
    B. When refund of any amount recorded in this account is ordered by 
a regulatory authority, such amount shall be changed hereto and credited 
to account 242, Miscellaneous Current and Accrued Liabilities.
    C. Records supporting the entries to this account shall be kept so 
as to identify each amount recorded by the respective rate filing docket 
number.
230 Asset retirement obligations.
    A. This account shall include the amount of liabilities for the 
recognition of asset retirement obligations related to electric utility 
plant and nonutility plant that gives rise to the obligations. This 
account shall be credited for the amount of the liabilities for asset 
retirement obligations with amounts charged to the appropriate electric 
utility plant accounts or nonutility plant account to record the related 
asset retirement costs.

[[Page 420]]

    B. The utility shall charge the accretion expense to account 411.10, 
Accretion expense, for electric utility plant, account 413, Expenses of 
electric plant leased to others, for electric plant leased to others, or 
account 421, Miscellaneous nonoperating income, for nonutility plant, as 
appropriate, and credit account 230, Asset retirement obligations.
    C. This account shall be debited with amounts paid to settle the 
asset retirement obligations recorded herein.
    D. The utility shall clear from this account any gains or losses 
resulting from the settlement of asset retirement obligations in 
accordance with the instructions prescribed in General Instruction 25.
231 Notes payable.
    This account shall include the face value of all notes, drafts, 
acceptances, or other similar evidences of indebtedness, payable on 
demand or within a time not exceeding one year from date of issue, to 
other than associated companies.
232 Accounts payable.
    This account shall include all amounts payable by the utility within 
one year, which are not provided for in other accounts.
233 Notes payable to associated companies.
234 Accounts payable to associated companies.
    These accounts shall include amounts owing to associated companies 
on notes, drafts, acceptances, or other similar evidences of 
indebtedness, and open accounts payable on demand or not more than one 
year from date of issue or creation.

    Note: Exclude from these accounts notes and accounts which are 
includible in account 223, Advances from Associated Companies.
235 Customer deposits.
    This account shall include all amounts deposited with the utility by 
customers as security for the payment of bills.
236 Taxes accrued.
    A. This account shall be credited with the amount of taxes accrued 
during the accounting period, corresponding debits being made to the 
appropriate accounts for tax charges. Such credits may be based upon 
estimates, but from time to time during the year as the facts become 
known, the amount of the periodic credits shall be adjusted so as to 
include as nearly as can be determined in each year the taxes applicable 
thereto. Any amount representing a prepayment of taxes applicable to the 
period subsequent to the date of the balance sheet, shall be shown under 
account 165, Prepayments.
    B. If accruals for taxes are found to be insufficient or excessive, 
correction therefor shall be made through current tax accruals.
    C. Accruals for taxes shall be based upon the net amounts payable 
after credit for any discounts, and shall not include any amounts for 
interest on tax deficiencies or refunds. Interest received on refunds 
shall be credited to account 419, Interest and Dividend Income, and 
interest paid on deficiencies shall be charged to account 431, Other 
Interest Expense.
    D. The records supporting the entries to this account shall be kept 
so as to show for each class of taxes, the amount accrued, the basis for 
the accrual, the accounts to which charged, and the amount of tax paid.
237 Interest accrued.
    This account shall include the amount of interest accrued but not 
matured on all liabilities of the utility not including, however, 
interest which is added to the principal of the debt on which incurred. 
Supporting records shall be maintained so as to show the amount of 
interest accrued on each obligation.
238 Dividends declared (Major only).
    This account shall include the amount of dividends which have been 
declared but not paid. Dividends shall be credited to this account when 
they become a liability.

[[Page 421]]

239 Matured long-term debt (Major only).
    This account shall include the amount of long-term debt (including 
any obligation for premiums) matured and unpaid, without specific 
agreement for extension of the time of payment and bonds called for 
redemption but not presented.
240 Matured interest (Major only).
    This account shall include the amount of matured interest on long-
term debt or other obligations of the utility at the date of the balance 
sheet unless such interest is added to the principal of the debt on 
which incurred.
241 Tax collections payable (Major only).
    This account shall include the amount of taxes collected by the 
utility through payroll deductions or otherwise pending transmittal of 
such taxes to the proper taxing authority.

    Note: Do not include liability for taxes assessed directly against 
the utility which are accounted for as part of the utility's own tax 
expense.
242 Miscellaneous current and accrued liabilities.
    This account shall include the amount of all other current and 
accrued liabilities not provided for elsewhere appropriately designated 
and supported so as to show the nature of each liability.

                          Items (Nonmajor only)

    1. Dividends declared but not paid.
    2. Matured long-term debt.
    3. Matured interest.
    4. Taxes collected through payroll deductions or otherwise pending 
transmittal to the proper taxing authority.
243 Obligations under capital leases--current.
    This account shall include the portion, due within one year, of the 
obligations recorded for the amounts applicable to leased property 
recorded as assets in account 101.1, Property under Capital Leases, 
account 120.6, Nuclear Fuel under Capital Leases (Major only), or 
account 121, Nonutility Property.
244 Derivative instrument liabilities.
    This account shall include the change in the fair value of all 
derivative instrument liabilities not designated as cash flow or fair 
value hedges. Account 426, other deductions, shall be debited or 
credited as appropriate with the corresponding amount of the change in 
the fair value of the derivative instrument.
245 Derivative instrument liabilities-Hedges.
    A. This account shall include the change in the fair value of 
derivative instrument liabilities designated by the utility as cash flow 
or fair value hedges.
    B. A utility shall record the change in the fair value of a 
derivative instrument liability related to a cash flow hedge in this 
account, with a concurrent charge to account 219, accumulated other 
comprehensive income, with the effective portion of the derivative's 
gain or loss. The ineffective portion of the cash flow hedge shall be 
charged to the same income or expense account that will be used when the 
hedged item enters into the determination of net income.
    C. A utility shall record the change in the fair value of a 
derivative instrument liability related to a fair value hedge in this 
account, with a concurrent charge to a subaccount of the asset or 
liability that carries the item being hedged. The ineffective portion of 
the fair value hedge shall be charged to the same income or expense 
account that will be used when the hedged item enters into the 
determination of net income.
251 [Reserved]
252 Customer advances for construction.
    This account shall include advances by customers for construction 
which are to be refunded either wholly or in part. When a customer is 
refunded the entire amount to which he is entitled, according to the 
agreement or rule under which the advance was made, the balance, if any, 
remaining in this account shall be credited to the respective plant 
account.

[[Page 422]]

253 Other deferred credits.
    This account shall include advance billings and receipts and other 
deferred credit items, not provided for elsewhere, including amounts 
which cannot be entirely cleared or disposed of until additional 
information has been received.
254 Other regulatory liabilities.
    A. This account shall include the amounts of regulatory liabilities, 
not includible in other accounts, imposed on the utility by the 
ratemaking actions of regulatory agencies. (See Definition No. 30.)
    B. The amounts included in this account are to be established by 
those credits which would have been included in net income, or 
accumulated other comprehensive income, determinations in the current 
period under the general requirements of the Uniform System of Accounts 
but for it being probable that: Such items will be included in a 
different period(s) for purposes of developing the rates that the 
utility is authorized to charge for its utility services; or refunds to 
customers, not provided for in other accounts, will be required. When 
specific identification of the particular source of the regulatory 
liability cannot be made or when the liability arises from revenues 
collected pursuant to tariffs on file at a regulatory agency, account 
407.3, regulatory debits, shall be debited. The amounts recorded in this 
account generally are to be credited to the same account that would have 
been credited if included in income when earned except: All regulatory 
liabilities established through the use of account 407.3 shall be 
credited to account 407.4, regulatory credits; and in the case of 
refunds, a cash account or other appropriate account should be credited 
when the obligation is satisfied.
    C. If it is later determined that the amounts recorded in this 
account will not be returned to customers through rates or refunds, such 
amounts shall be credited to Account 421, Miscellaneous Nonoperating 
Income, or Account 434, Extraordinary Income, as appropriate, in the 
year such determination is made.
    D. The records supporting the entries to this account shall be so 
kept that the utility can furnish full information as to the nature and 
amount of each regulatory liability included in this account, including 
justification for inclusion of such amounts in this account.
255 Accumulated deferred investment tax credits.
    A. This account shall be credited with all investment tax credits 
deferred by companies which have elected to follow deferral accounting, 
partial or full, rather than recognizing in the income statement the 
total benefits of the tax credit as realized. After such election, a 
company may not transfer amounts from this account, except as authorized 
herein and in accounts 411.4, Investment Tax Credit Adjustments, Utility 
Operations, 411.5, Investment Tax Credit Adjustments, Nonutility 
Operations, and 420, Investment Tax Credits, or with approval of the 
Commission.
    B. Where the company's accounting provides that investment tax 
credits are to be passed on to customers, this account shall be debited 
and account 411.4 credited with a proportionate amount determined in 
relation to the average useful life of electric utility property to 
which the tax credits relate or such lesser period of time as allowed by 
a regulatory agency having rate jurisdiction. If, however, the deferral 
procedure provides that investment tax credits are not to be passed on 
to customers, the proportionate restorations to income shall be credited 
to account 420.
    C. Subdivisions of this account by department shall be maintained 
for deferred investment tax credits that are related to nonelectric 
utility or other operations. Contra entries affecting such account 
subdivisions shall be appropriately recorded in account 413, Expenses of 
Electric Plant Leased to Others; or account 414, Other Utility Operating 
Income. Use of deferral or nondeferral accounting procedures adopted for 
nonelectric utility or other operations are to be followed on a 
consistent basis.
    D. Separate records for electric and nonelectric utility or other 
operations shall be maintained identifying the properties giving rise to 
the investment tax credits for each year with the

[[Page 423]]

weighted-average service life of such properties and any unused balances 
of such credits. Such records are not necessary unless the tax credits 
are deferred.
256 Deferred gains from disposition of utility plant.
    This account shall include gains from the sale or other disposition 
of property previously recorded in account 105, Electric Plant Held for 
Future Use, under the provisions of paragraphs B, C, and D thereof, 
where such gains are significant and are to be amortized over a period 
of 5 years, unless otherwise authorized by the Commission. The 
amortization of the amounts in this account shall be made by credits to 
account 411.6, Gains from Disposition of Utility Plant. (See account 
105, Electric Plant Held for Future Use.)
257 Unamortized gain on reacquired debt.
    This account shall include the amounts of discount realized upon 
reacquisition or redemption of long-term debt. The amounts in this 
account shall be amortized in accordance with General Instruction 17.

                          Special Instructions

                    Accumulated Deferred Income Taxes

    Before using the deferred tax accounts provided below refer to 
General Instruction 18. Comprehensive Interperiod Income Tax Allocation.
    The text of these accounts are designed primarily to cover deferrals 
of Federal income taxes. However, they are also to be used when making 
deferrals of state and local income taxes. Public utilities and 
licensees which, in addition to an electric utility department, have 
another utility department, gas, water, etc., and nonutility property 
and which have deferred taxes on income with respect thereto shall 
separately classify such deferrals in the accounts provided below so as 
to allow ready identification of items relating to each utility 
Deductions.
281 Accumulated deferred income taxes--Accelerated amortization 
property.
    A. This account shall include tax deferrals resulting from adoption 
of the principles of comprehensive interperiod tax allocation described 
in General Instruction 18 of this system of accounts that relate to 
property for which the utility has availed itself of the use of 
accelerated (5-year) amortization of (1) certified defense facilities as 
permitted by Section 168 of the Internal Revenue Code and (2) certified 
pollution control facilities as permitted by Section 169 of the Internal 
Revenue Code.
    B. This account shall be credited and accounts 410.1, Provision for 
Deferred Income Taxes, Utility Operating Income, or 410.2, Provision for 
Deferred Income Taxes, Other Income and Deductions, as appropriate, 
shall be debited with tax effects related to property described in 
paragraph A above where taxable income is lower than pretax accounting 
income due to differences between the periods in which revenue and 
expense transactions affect taxable income and the periods in which they 
enter into the determination of pretax accounting income.
    C. This account shall be debited and accounts 411.1, Provision for 
Deferred Income Taxes--Credit, Utility Operating Income, or 411.2, 
Provision for Deferred Income Taxes--Credit, Other Income and 
Deductions, as appropriate, shall be credited with tax effects related 
to property described in paragraph A above where taxable income is 
higher than pretax accounting income due to differences between the 
periods in which revenue and expense transactions affect taxable income 
and the periods in which they enter into the determination of pretax 
accounting income.
    D. The utility is restricted in its use of this account to the 
purposes set forth above. It shall not transfer the balance in this 
account or any portion thereof to retained earnings or make any use 
thereof except as provided in the text of this account without prior 
approval of the Commission. Upon the disposition by sale exchange, 
transfer, abandonment or premature retirement of plant on which there is 
a related balance herein, this account shall be

[[Page 424]]

charged with an amount equal to the related income tax expense, if any, 
arising from such disposition and account 411.1, Provision for Deferred 
Income Taxes--Credit, Utility Operating Income, or 411.2, Provision for 
Deferred Income Taxes--Credit, Other Income and Deductions, as 
appropriate, shall be credited. When the remaining balance, after 
consideration of any related income tax expense, is less than $25,000, 
this account shall be charged and account 411.1 or 411.2, as 
appropriate, credited with such balance. If after consideration of any 
related income tax expense, there is a remaining amount of $25,000 or 
more, the Commission shall authorize or direct how such amount shall be 
accounted for at the time approval for the disposition of accounting is 
granted. When plant is disposed of by transfer to a wholly owned 
subsidiary the related balance in this account shall also be 
transferred. When the disposition relates to retirement of an item or 
items under a group method of depreciation where there is no tax effect 
in the year of retirement, no entries are required in this account if it 
can be determined that the related balances would be necessary to be 
retained to offset future group item tax deficiencies.
282 Accumulated deferred income taxes--Other property.
    A. This account shall include the tax deferrals resulting from 
adoption of the principle of comprehensive interperiod income tax 
allocation described in General Instruction 18 of this system of 
accounts which are related to all property other than accelerated 
amortization property.
    B. This account shall be credited and accounts 410.1, Provision for 
Deferred Income Taxes, Utility Operating Income, or 410.2, Provision for 
Deferred Income Taxes, Other Income and Deductions, as appropriate, 
shall be debited with tax effects related to property described in 
paragraph A above where taxable income is lower than pretax accounting 
income due to differences between the periods in which revenue and 
expense transactions affect taxable income and the periods in which they 
enter into the determination of pretax accounting income.
    C. This account shall be debited and accounts 411.1, Provision for 
Deferred Income Taxes--Credit, Utility Operating Income, or 411.2, 
Provision for Deferred Income Taxes--Credit, Other Income and 
Deductions, as appropriate, shall be credited with tax effects related 
to property described in paragraph A above where taxable income is 
higher than pretax accounting income due to differences between the 
periods in which revenue and expense transactions affect taxable income 
and the periods in which they enter into the determination of pretax 
accounting income.
    D. The utility is restricted in its use of this account to the 
purposes set forth above. It shall not transfer the balance in this 
account or any portion thereof to retained earnings or make any use 
thereof except as provided in the text of this account without prior 
approval of the Commission. Upon the disposition by sale, exchange, 
transfer, abandonment or premature retirement of plant on which there is 
a related balance herein, this account shall be charged with an amount 
equal to the related income tax expense, if any, arising from such 
disposition and account 411.1, Income Taxes Deferred in Prior Years--
Credit, Utility Operating Income, or 411.2, Income Taxes Deferred in 
Prior Years--Credit, Other Income and Deductions, shall be credited. 
When the remaining balance after consideration of any related tax 
expenses, is less than $25,000, this account shall be charged and 
account 411.1 or 411.2, as appropriate, credited with such balance. If 
after consideration of any related income tax expense, there is a 
remaining amount of $25,000 or more, the Commission shall authorize or 
direct how such amount shall be accounted for at the time approval for 
the disposition of accounting is granted. When plant disposed of by 
transfer to a wholly owned subsidiary, the related balance in this 
account shall also be transferred. When the disposition relates to 
retirement of an item or items under a group method of depreciation 
where there is no tax effect in the year of retirement, no entries are 
required in this account if it can be determined

[[Page 425]]

that the related balance would be necessary to be retained to offset 
future group item tax deficiencies.
283 Accumulated deferred income taxes--Other.
    A. This account shall include all credit tax deferrals resulting 
from the adoption of the principles of comprehensive interperiod income 
tax allocation described in General Instruction 18 of this system of 
accounts other than those deferrals which are includible in Accounts 
281, Accumulated Deferred Income Taxes--Accelerated Amortization 
Property and 282, Accumulated Deferred Income Taxes--Other Property.
    B. This account shall be credited and accounts 410.1 Provision for 
Deferred Income Taxes, Utility Operating Income, or 410.2, Provision for 
Deferred Income Taxes, Other Income and Deductions, as appropriate, 
shall be debited with tax effects related to items described in 
paragraph A above where taxable income is lower than pretax accounting 
income due to differences between the periods in which revenue and 
expense transactions affect taxable income and the periods in which they 
enter into the determination of pretax accounting income.
    C. This account shall be debited and accounts 411.1, Provision for 
Deferred Income Taxes--Credit, Utility Operating Income or 411.2, 
Provision for Deferred Income Taxes--Credit, Other Income and 
Deductions, as appropriate, shall be credited with tax effects related 
to items described in paragraph A above where taxable income is higher 
than pretax accounting income due to differences between the periods in 
which revenue and expense transactions affect taxable income and the 
periods in which they enter into the determination of pretax accounting 
income.
    D. Records with respect to entries to this account, as described 
above, and the account balance, shall be so maintained as to show the 
factors of calculation with respect to each annual amount of the item or 
class of items.
    E. The utility is restricted in its use of this account to the 
purposes set forth above. It shall not transfer the balance in the 
account or any portion thereof to retained earnings or to any other 
account or make any use thereof except as provided in the text of this 
account, without prior approval of the Commission. Upon the disposition 
by sale, exchange, transfer, abandonment or premature retirement of 
items on which there is a related balance herein, this account shall be 
charged with an amount equal to the related income tax effect, if any, 
arising from such disposition and account 411.1, Provision For Deferred 
Income Taxes--Credit, Utility Operating Income, or 411.2, Provision For 
Deferred Income Taxes--Credit, Other Income and Deductions, as 
appropriate, shall be credited. When the remaining balance, after 
consideration of any related tax expenses, is less than $25,000, this 
account shall be charged and account 411.1 or 411.2, as appropriate, 
credited with such balance. If after consideration of any related income 
tax expense, there is a remaining amount of $25,000 or more, the 
Commission shall authorize or direct how such amount shall be accounted 
for at the time approval for the disposition of accounting is granted.
    When plant is disposed of by transfer to a wholly owned subsidiary, 
the related balance in this account shall also be transferred. When the 
disposition relates to retirement of an item or items under a group 
method of depreciation where there is no tax effect in the year of 
retirement, no entries are required in this account if it can be 
determined that the related balance would be necessary to be retained to 
offset future group item tax deficiencies.
Electric Plant Chart of Accounts

                           1. Intangible Plant

301 Organization.
302 Franchises and consents.
303 Miscellaneous intangible plant.

                           2. Production Plant

                           a. steam production

310 Land and land rights.
311 Structures and improvements.
312 Boiler plant equipment.
313 Engines and engine-driven generators.
314 Turbogenerator units.
315 Accessory electric equipment.
316 Miscellaneous power plant equipment
317 Asset retirement costs for steam production plant.

[[Page 426]]

                          b. nuclear production

320 Land and land rights (Major only).
321 Structures and improvements (Major only).
322 Reactor plant equipment (Major only).
323 Turbogenerator units (Major only).
324 Accessory electric equipment (Major only).
325 Miscellaneous power plant equipment (Major only).
326 Asset retirement costs for nuclear production plant (Major only).

                         c. hydraulic production

330 Land and land rights.
331 Structures and improvements.
332 Reservoirs, dams, and waterways.
333 Water wheels, turbines and generators.
334 Accessory electric equipment.
335 Miscellaneous power plant equipment.
336 Roads, railroads and bridges.
337 Asset retirement costs for hydraulic production plant.

                           d. other production

340 Land and land rights.
341 Structures and improvements.
342 Fuel holders, producers, and accessories.
343 Prime movers.
344 Generators.
345 Accessory electric equipment.
346 Miscellaneous power plant equipment.
347 Asset retirement costs for other production plant.

                          3. Transmission Plant

350 Land and land rights.
351 [Reserved]
352 Structures and improvements.
353 Station equipment.
354 Towers and fixtures.
355 Poles and fixtures.
356 Overhead conductors and devices.
357 Underground conduit.
358 Underground conductors and devices.
359 Roads and trails.
359.1 Asset retirement costs for transmission plant.

                          4. Distribution Plant

360 Land and land rights.
361 Structures and improvements.
362 Station equipment.
363 Storage battery equipment.
364 Poles, towers and fixtures.
365 Overhead conductors and devices
366 Underground conduit.
367 Underground conductors and devices
368 Line transformers.
369 Services.
370 Meters.
371 Installations on customers' premises
372 Leased property on customers' premises.
373 Street lighting and signal systems.
374 Asset retirement costs for distribution plant.

           5. Regional Transmission and Market Operation Plant

380 Land and land rights.
381 Structures and improvements.
382 Computer hardware.
383 Computer software.
384 Communication Equipment.
385 Miscellaneous Regional Transmission and Market Operation Plant.
386 Asset Retirement Costs for Regional Transmission and Market 
          Operation Plant.
387 [Reserved]

                            6. General Plant

389 Land and land rights.
390 Structures and improvements.
391 Office furniture and equipment.
392 Transportation equipment.
393 Stores equipment.
394 Tools, shop and garage equipment.
395 Laboratory equipment.
396 Power operated equipment.
397 Communication equipment.
398 Miscellaneous equipment.
399 Other tangible property.
399.1 Asset retirement costs for general plant.



Electric Plant Accounts--Table of Contents



301 Organization.
    This account shall include all fees paid to federal or state 
governments for the privilege of incorporation and expenditures incident 
to organizing the corporation, partnership, or other enterprise and 
putting it into readiness to do business.

                                  Items

    1. Cost of obtaining certificates authorizing an enterprise to 
engage in the public-utility business.
    2. Fees and expenses for incorporation
    3. Fees and expenses for mergers or consolidations.
    4. Office expenses incident to organizing the utility.
    5. Stock and minute books and corporate seal.

    Note A: This account shall not include any discounts upon securities 
issued or assumed; nor shall it include any costs incident to 
negotiating loans, selling bonds or other evidences of debt or expenses 
in connection with the authorization, issuance or sale of capital stock.
    Note B: Exclude from this account and include in the appropriate 
expense account the cost of preparing and filing papers in connection 
with the extension of the term of incorporation unless the first 
organization costs

[[Page 427]]

have been written off. When charges are made to this account for 
expenses incurred in mergers, consolidations, or reorganizations, 
amounts previously included herein or in similar accounts in the books 
of the companies concerned shall be excluded from this account.
302 Franchises and consents.
    A. This account shall include amounts paid to the federal 
government, to a state or to a political subdivision thereof in 
consideration for franchises, consents, water power licenses, or 
certificates, running in perpetuity or for a specified term of more than 
one year, together with necessary and reasonable expenses incident to 
procuring such franchises, consents, water power licenses, or 
certificates of permission and approval, including expenses of 
organizing and merging separate corporations, where statutes require, 
solely for the purpose of acquiring franchises.
    B. If a franchise, consent, water power license or certificate is 
acquired by assignment, the charge to this account in respect thereof 
shall not exceed the amount paid therefor by the utility to the 
assignor, nor shall it exceed the amount paid by the original grantee, 
plus the expense of acquisition to such grantee. Any excess of the 
amount actually paid by the utility over the amount above specified 
shall be charged to account 426.5, Other Deductions.
    C. When any franchise has expired, the book cost thereof shall be 
credited hereto and charged to account 426.5, Other Deductions, or to 
account 111, Accumulated Provision for Amortization of Electric Utility 
Plant (for Nonmajor utilities, account 110, Accumulated Provision for 
Depreciation and Amortization of Electric Plant), as appropriate.
    D. Records supporting this account shall be kept so as to show 
separately the book cost of each franchise or consent.

    Note: Annual or other periodic payments under franchises shall not 
be included herein but in the appropriate operating expense account.
303 Miscellaneous intangible plant.
    A. This account shall include the cost of patent rights, licenses, 
privileges, and other intangible property necessary or valuable in the 
conduct of utility operations and not specifically chargeable to any 
other account.
    B. When any item included in this account is retired or expires, the 
book cost thereof shall be credited hereto and charged to account 426.5, 
Other Deductions, or account 111, Accumulated Provision for Amortization 
of Electric Utility Plant (for Nonmajor utilities, account 110, 
Accumulated Provision for Depreciation and Amortization of Electric 
Plant), as appropriate.
    C. This account shall be maintained in such a manner that the 
utility can furnish full information with respect to the amounts 
included herein.
310 Land and land rights.
    This account shall include the cost of land and land rights used in 
connection with steam-power generation. (See electric plant instruction 
7.)
311 Structures and improvements.
    This account shall include the cost in place of structures and 
improvements used in connection with steam-power generation. (See 
electric plant instruction 8.)

    Note: Include steam production roads and railroads in this account.
312 Boiler plant equipment.
    This account shall include the cost installed of furnaces, boilers, 
coal and ash handling and coal preparing equipment, steam and feed water 
piping, boiler apparatus and accessories used in the production of 
steam, mercury, or other vapor, to be used primarily for generating 
electricity.

                                  Items

    1. Ash handling equipment, including hoppers, gates, cars, 
conveyors, hoists, sluicing equipment, including pumps and motors, 
sluicing water pipe and fittings, sluicing trenches and accessories, 
etc., except sluices which are a part of a building.
    2. Boiler feed system, including feed water heaters, evaporator 
condensers, heater drain pumps, heater drainers, deaerators, and vent 
condensers, boiler feed pumps, surge tanks, feed water regulators, feed 
water measuring equipment, and all associated drives.
    3. Boiler plant cranes and hoists and associated drives.

[[Page 428]]

    4. Boilers and equipment, including boilers and baffles, 
economizers, superheaters, soot blowers, foundations and settings, water 
walls, arches, grates, insulation, blow-down system, drying out of new 
boilers, also associated motors or other power equipment.
    5. Breeching and accessories, including breeching, dampers, soot 
spouts, hoppers and gates, cinder eliminators, breeching insulation, 
soot blowers and associated motors.
    6. Coal handling and storage equipment, including coal towers, coal 
lorries, coal cars, locomotives and tracks when devoted principally to 
the transportation of coal, hoppers, downtakes, unloading and hoisting 
equipment, skip hoists and conveyors, weighing equipment, magnetic 
separators, cable ways, housings and supports for coal handling 
equipment.
    7. Draft equipment, including air preheaters and accessories, 
induced and forced draft fans, air ducts, combustion control mechanisms, 
and associated motors or other power equipment.
    8. Gas-burning equipment, including holders, burner equipment and 
piping, control equipment, etc.
    9. Instruments and devices, including all measuring, indicating, and 
recording equipment for boiler plant service together with mountings and 
supports.
    10. Lighting systems.
    11. Oil-burning equipment, including tanks, heaters, pumps with 
drive, burner equipment and piping, control equipment, etc.
    12. Pulverized fuel equipment, including pulverizers, accessory 
motors, primary air fans, cyclones and ducts, dryers, pulverized fuel 
bins, pulverized fuel conveyors and equipment, burners, burner piping, 
priming equipment, air compressors, motors, etc.
    13. Stacks, including foundations and supports, stack steel and 
ladders, stack brick work, stack concrete, stack lining, stack painting 
(first), when set on separate foundations, independent of substructure 
or superstructure of building.
    14. Station piping, including pipe, valves, fittings, separators, 
traps, desuperheaters, hangers, excavation, covering, etc., for station 
piping system, including all steam, condensate, boiler feed and water 
supply piping, etc., but not condensing water, plumbing, building 
heating, oil, gas, air piping or piping specifically provided for in 
account 313.
    15. Stoker or equivalent feeding equipment, including stokers and 
accessory motors, clinker grinders, fans and motors, etc.
    16. Ventilating equipment.
    17. Water purification equipment, including softeners and 
accessories, evaporators and accessories, heat exchangers, filters, 
tanks for filtered or softened water, pumps, motors, etc.
    18. Water-supply systems, including pumps, motors, strainers, raw-
water storage tanks, boiler wash pumps, intake and discharge pipes and 
tunnels not a part of a building.
    19. Wood fuel equipment, including hoppers, fuel hogs and 
accessories, elevators and conveyors, bins and gates, spouts, measuring 
equipment and associated drives.

    Note: When the system for supplying boiler or condenser water is 
elaborate, as when it includes a dam, reservoir, canal, pipe line, 
cooling ponds, or where gas or oil is used as a fuel for producing steam 
and is supplied through a pipe line system owned by the utility, the 
cost of such special facilities shall be charged to a subdivision of 
account 311, Structures and Improvements.
313 Engines and engine-driven generators.
    This account shall include the cost installed of steam engines, 
reciprocating or rotary, and their associated auxiliaries; and engine-
driven main generators, except turbogenerator units.

                                  Items

    1. Air cleaning and cooling apparatus, including blowers, drive 
equipment, air ducts not a part of building, louvers, pumps, hoods, etc.
    2. Belting, shafting, pulleys, reduction gearing, etc.
    3. Circulating pumps, including connections between condensers and 
intake and discharge tunnels.
    4. Cooling system, including towers, pumps, tank, and piping.
    5. Condensers, including condensate pumps, air and vacuum pumps, 
ejectors, unloading valves and vacuum breakers, expansion devices, 
screens, etc.
    6. Cranes, hoists, etc., including items wholly identified with 
items listed herein.
    7. Engines, reciprocating or rotary.
    8. Fire-extinguishing systems.
    9. Foundations and settings, especially constructed for and not 
expected to outlast the apparatus for which provided.
    10. Generators--Main, a.c. or d.c., including field rheostats and 
connections for self-excited units, and excitation systems when 
identified with the generating unit.
    11. Governors.
    12. Lighting systems.
    13. Lubricating systems including gauges, filters, tanks, pumps, 
piping, motors, etc.
    14. Mechanical meters, including gauges, recording instruments, 
sampling and testing equipment.
    15. Piping--main exhaust, including connections between generator 
and condenser and between condenser and hotwell.

[[Page 429]]

    16. Piping--main steam, including connections from main throttle 
valve to turbine inlet.
    17. Platforms, railings, steps, gratings, etc., appurtenant to 
apparatus listed herein.
    18. Pressure oil system, including accumulators, pumps, piping, 
motors, etc.
    19. Throttle and inlet valve.
    20. Tunnels, intake and discharge, for condenser system, when not a 
part of a structure.
    21. Water screens, motors, etc.
314 Turbogenerator units.
    This account shall include the cost installed of main turbine-driven 
units and accessory equipment used in generating electricity by steam.

                                  Items

    1. Air cleaning and cooling apparatus, including blowers, drive 
equipment, air ducts not a part of building, louvers, pumps, hoods, etc.
    2. Circulating pumps, including connections between condensers and 
intake and discharge tunnels.
    3. Condensers, including condensate pumps, air and vacuum pumps, 
ejectors, unloading valves and vacuum breakers, expansion devices, 
screens, etc.
    4. Generator hydrogen, gas piping and detrainment equipment.
    5. Cooling system, including towers, pumps, tanks, and piping.
    6. Cranes, hoists, etc., including items wholly identified with 
items listed herein.
    7. Excitation system, when identified with main generating units.
    8. Fire-extinguishing systems.
    9. Foundations and settings, especially constructed for and not 
expected to outlast the apparatus for which provided.
    10. Governors.
    11. Lighting systems.
    12. Lubricating systems, including gauges, filters, water 
separators, tanks, pumps, piping, motors, etc.
    13. Mechanical meters, including gauges, recording instruments, 
sampling and testing equipment.
    14. Piping--main exhaust, including connections between 
turbogenerator and condenser and between condenser and hotwell.
    15. Piping--main steam, including connections from main throttle 
valve to turbine inlet.
    16. Platforms, railings, steps, gratings, etc., appurtenant to 
apparatus listed herein.
    17. Pressure oil systems, including accumulators, pumps, piping, 
motors, etc.
    18. Steelwork, specially constructed for apparatus listed herein.
    19. Throttle and inlet valve.
    20. Tunnels, intake and discharge, for condenser system, when not a 
part of structure, water screens, etc.
    21. Turbogenerators--main, including turbine and generator, field 
rheostats and electric connections for self-excited units.
    22. Water screens, motors, etc.
    23. Moisture separator for turbine steam.
    24. Turbine lubricating oil (initial charge).
315 Accessory electric equipment.
    This account shall include the cost installed of auxiliary 
generating apparatus, conversion equipment, and equipment used primarily 
in connection with the control and switching of electric energy produced 
by steam power, and the protection of electric circuits and equipment, 
except electric motors used to drive equipment included in other 
accounts. Such motors shall be included in the account in which the 
equipment with which they are associated is included.

                                  Items

    1. Auxiliary generators, including boards, compartments, switching 
equipment, control equipment, and connections to auxiliary power bus.
    2. Excitation system, including motor, turbine and dual-drive 
exciter sets and rheostats, storage batteries and charging equipment, 
circuit breakers, panels and accessories, knife switches and 
accessories, surge arresters, instrument shunts, conductors and conduit, 
special supports for conduit, generator field and exciter switch panels, 
exciter bus tie panels, generator and exciter rheostats, etc., special 
housing, protective screens, etc.
    3. Generator main connections, including oil circuit breakers and 
accessories, disconnecting switches and accessories, operating 
mechanisms and interlocks, current transformers, potential transformers, 
protective relays, isolated panels and equipment, conductors and 
conduit, special supports for generator main leads grounding switch, 
etc., special housings, protective screens, etc.
    4. Station buses including main, auxiliary, transfer, synchronizing 
and fault ground buses, including oil circuit breakers and accessories, 
disconnecting switches and accessories, operating mechanisms and 
interlocks, reactors and accessories, voltage regulators and 
accessories, compensators, resistors, starting transformers, current 
transformers, potential transformers, protective relays, storage 
batteries and charging equipment, isolated panels and equipment, 
conductors and conduit, special supports, special housings, concrete 
pads, general station

[[Page 430]]

grounding system, special fire-extinguishing system, and test equipment.
    5. Station control system, including station switchboards with panel 
wiring, panels with instruments and control equipment only, panels with 
switching equipment mounted or mechanically connected, truck-type boards 
complete, cubicles, station supervisory control boards, generator and 
exciter signal stands, temperature recording devices, frequency-control 
equipment, master clocks, watt-hour meters and synchronoscope in the 
turbine room, station totalizing wattmeter, boiler-room load indicator 
equipment, storage batteries, panels and charging sets, instrument 
transformers for supervisory metering, conductors and conduit, special 
supports for conduit, switchboards, batteries, special housing for 
batteries, protective screens, doors, etc.

    Note A: Do not include in this account transformers and other 
equipment used for changing the voltage or frequency of electricity for 
the purposes of transmission or distribution.
    Note B: When any item of equipment listed herein is used wholly to 
furnish power to equipment included in another account, its cost shall 
be included in such other account.
316 Miscellaneous power plant equipment.
    This account shall include the cost installed of miscellaneous 
equipment in and about the steam generating plant devoted to general 
station use, and which is not properly includible in any of the 
foregoing steam-power production accounts.

                                  Items

    1. Compressed air and vacuum cleaning systems, including tanks, 
compressors, exhausters, air filters, piping, etc.
    2. Cranes and hoisting equipment, including cranes, cars, crane 
rails, monorails, hoists, etc., with electric and mechanical 
connections.
    3. Fire-extinguishing equipment for general station use.
    4. Foundations and settings specially constructed for and not 
expected to outlast the apparatus for which provided.
    5. Locomotive cranes not includible elsewhere.
    6. Locomotives not includible elsewhere.
    7. Marine equipment, including boats, barges, etc.
    8. Miscellaneous belts, pulleys, countershafts, etc.
    9. Miscellaneous equipment, including atmospheric and weather 
indicating devices, intrasite communication equipment, laboratory 
equipment, signal systems, callophones emergency whistles and sirens, 
fire alarms, insect-control equipment, and other similar equipment.
    10. Railway cars not includible elsewhere.
    11. Refrigerating systems, including compressors, pumps, cooling 
coils, etc.
    12. Station maintenance equipment, including lathes, shapers, 
planers, drill presses, hydraulic presses, grinders, etc., with motors, 
shafting, hangers, pulleys, etc.
    13. Ventilating equipment, including items wholly identified with 
apparatus listed herein.

    Note: When any item of equipment listed herein is wholly used in 
connection with equipment included in another account, its cost shall be 
included in such other account.
317 Asset retirement costs for steam production plant.
    This account shall include asset retirement costs on plant included 
in the steam production function.
320 Land and land rights (Major only).
    This account shall include the cost of land and land rights used in 
connection with nuclear power generation. (See electric plant 
instruction 7.)
321 Structures and improvements (Major only).
    This account shall include the cost in place of structures and 
improvements used and useful in connection with nuclear power 
generation. (See electric plant instruction 8.)

    Note: Include vapor containers and nuclear production roads and 
railroads in this account.
322 Reactor plant equipment (Major only).
    This account shall include the installed cost of reactors, reactor 
fuel handling and storage equipment, pressurizing equipment, coolant 
charging equipment, purification and discharging equipment, radioactive 
waste treatment and disposal equipment, boilers, steam and feed water 
piping, reactor and boiler apparatus and accessories and other reactor 
plant equipment used in the production of steam to be used primarily for 
generating electricity, including auxiliary superheat boilers and 
associated equipment in systems which change temperatures or pressure of 
steam from the reactor system.


[[Page 431]]



                                  Items

    1. Auxiliary superheat boilers and associated fuel storage handling 
preparation and burning equipment, etc. (See account 312 Boiler Plant 
Equipment, for items, but exclude water supply, water flow lines, and 
steam lines, as well as other equipment not strictly within the 
superheat function.)
    2. Boiler feed system, including feed water heaters, evaporator 
condensers, heater drain pumps, heater drainers, deaerators, and vent 
condensers, boiler feed pumps, surge tanks, feed water regulators, feed 
water measuring equipment, and all associated drivers.
    3. Boilers and heat exchangers.
    4. Instruments and devices, including all measuring, indicating, and 
recording equipment for reactor and boiler plant service together with 
mountings and supports.
    5. Lighting systems.
    6. Moderators, such as heavy water, graphite, etc., initial charge.
    7. Reactor coolant; primary and secondary systems (initial charge).
    8. Radioactive waste treatment and disposal equipment, including 
tanks, ion exchangers, incinerators, condensers, chimneys, and diluting 
fans and pumps.
    9. Foundations and settings, especially constructed for and not 
expected to outlast the apparatus for which provided.
    10. Reactor including shielding, control rods and mechanisms.
    11. Reactor fuel handling equipment, including manipulating and 
extraction tools, underwater viewing equipment, seal cutting and welding 
equipment, fuel transfer equipment and fuel disassembly machinery.
    12. Reactor fuel element failure detection system.
    13. Reactor emergency poison container and injection system.
    14. Reactor pressurizing and pressure relief equipment, including 
pressurizing tanks and immersion heaters.
    15. Reactor coolant or moderator circulation charging, purification, 
and discharging equipment, including tanks, pumps, heat exchangers, 
demineralizers, and storage.
    16. Station piping, including pipes, valves, fittings, separators, 
traps, desuperheaters, hangers, excavation, covering, etc., for station 
piping system, including all-reactor coolant, steam, condensate, boiler 
feed and water supply piping, etc., but not condensing water, plumbing, 
building heating, oil, gas, or air piping.
    17. Ventilating equipment.
    18. Water purification equipment, including softeners, 
demineralizers, and accessories, evaporators and accessories, heat 
exchangers, filters, tanks for filtered or softened water, pumps, 
motors, etc.
    19. Water supply systems, including pumps, motors, strainers, raw-
water storage tanks, boiler wash pumps, intake and discharge pipes and 
tunnels not a part of a building.
    20. Reactor plant cranes and hoists, and associated drives.

    Note: When the system for supplying boiler or condenser water is 
elaborate, as when it includes a dam, reservoir, canal, pipe lines, or 
cooling ponds, the cost of such special facilities shall be charged to a 
subdivision of account 321, Structures and Improvements.
323 Turbogenerator units (Major only).
    This account shall include the cost installed of main turbine-driven 
units and accessory equipment used in generating electricity by steam.

                                  Items

    1. Air cleaning and cooling apparatus, including blowers, drive 
equipment, air ducts not a part of building, louvers, pumps, hoods, etc.
    2. Circulating pumps, including connections between condensers, and 
intake and discharge tunnels.
    3. Condensers, including condensate pumps, air and vacuum pumps 
ejectors, unloading valves and vacuum breakers, expansion devices, 
screens, etc.
    4. Generator hydrogen gas piping system and hydrogen detrainment 
equipment, and bulk hydrogen gas storage equipment.
    5. Cooling system, including towers, pumps, tanks and piping.
    6. Cranes, hoists, etc., including items wholly identified with 
items listed herein.
    7. Excitation system, when identified with main generating units.
    8. Fire extinguishing systems.
    9. Foundations and settings, especially constructed for and not 
expected to outlast the apparatus for which provided.
    10. Governors.
    11. Lighting systems.
    12. Lubricating systems, including gauges filters, water separators, 
tanks, pumps, piping motors, etc.
    13. Mechanical meters, including gauges recording instruments, 
sampling and testing equipment.
    14. Piping--main exhaust, including connections between 
turbogenerator and condenser and between condenser and hotwell.
    15. Piping--main steam, including connections from main throttle 
valve to turbine inlet.
    16. Platforms, railings, steps, gratings, etc. appurtenant to 
apparatus listed herein.
    17. Pressure oil systems, including accumulators, pumps, piping, 
motors, etc.
    18. Steelwork, specially constructed for apparatus listed herein.
    19. Throttle and inlet valve.

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    20. Tunnels, intake and discharge, for condenser system, when not a 
part of structure water screens, etc.
    21. Turbogenerators--main, including turbine and generator, field 
rheostats and electric connections for self-excited units.
    22. Water screens, motors, etc.
    23 Moisture separators for turbine steam.
    24. Turbine lubricating oil (initial charge).
324 Accessory electric equipment (Major only).
    This account shall include the cost installed of auxiliary 
generating apparatus, conversion equipment, and equipment used primarily 
in connection with the control and switching of electric energy produced 
by nuclear power, and the protection of electric circuits and equipment, 
except electric motors used to drive equipment included in other 
accounts. Such motors shall be included in the account in which the 
equipment with which they are associated is included.

    Note: Do not include in this account transformers and other 
equipment used for changing the voltage or frequency of electric energy 
for the purpose of transmission or distribution.

                                  Items

    1. Auxiliary generators, including boards, compartments, switching 
equipment, control equipment, and connections to auxiliary power bus.
    2. Excitation system, including motor, turbine and dual-drive 
exciter sets and rheostats, storage batteries and charging equipment, 
circuit breakers, panels and accessories, knife switches and 
accessories, surge arresters, instrument shunts, conductors and conduit, 
special supports for conduit, generator field and exciter switch panels, 
exciter bus tie panels, generator and exciter rheostats, etc., special 
housing, protective screens, etc.
    3. Generator main connections, including oil circuit breakers and 
accessories, disconnecting switches and accessories, operating 
mechanisms and interlocks, current transformers, potential transformers, 
protective relays, isolated panels and equipment, conductors and 
conduit, special supports for generator main leads, grounding switch, 
etc., special housings, protective screens, etc.
    4. Station buses, including main, auxiliary, transfer, synchronizing 
and fault ground buses, including oil circuit breakers and accessories, 
disconnecting switches and accessories, operating mechanisms and 
interlocks, reactors and accessories, voltage regulators and 
accessories, compensators, resistors, starting transformers, current 
transformers, potential transformers, protective relays, storage 
batteries and charging equipment, isolated panels and equipment, 
conductors and conduit, special supports, special housings, concrete 
pads, general station grounding system, fire-extinguishing system, and 
test equipment.
    5. Station control system, including station switchboards with panel 
wiring, panels with instruments and control equipment only, panels with 
switching equipment mounted or mechanically connected, truck-type boards 
complete, cubicles, station supervisory control boards, generator and 
exciter signal stands, temperature recording devices, frequency-control 
equipment, master clocks, watt-hour meters and synchronoscope in the 
turbine room, station totalizing wattmeter, boiler-room load indicator 
equipment, storage batteries, panels and charging sets, instrument 
transformers for supervisory metering, conductors and conduit, special 
supports for conduit, switchboards, batteries, special housing for 
batteries, protective screens, doors, etc.

    Note: When any item of equipment listed herein is used wholly to 
furnish power to equipment included in another account, its cost shall 
be included in such other account
325 Miscellaneous power plant equipment (Major only).
    This account shall include the cost installed of miscellaneous 
equipment in and about the nuclear generating plant devoted to general 
station use, and which is not properly includible in any of the 
foregoing nuclear-power production accounts.

                                  Items

    1. Compressed air and vacuum cleaning systems, including tanks, 
compressors, exhausters, air filters, piping, etc.
    2. Cranes and hoisting equipment, including cranes, cars, crane 
rails, monorails, hoists, etc., with electric and mechanical 
connections.
    3. Fire-extinguishing equipment for general station and site use.
    4. Foundations and settings specially constructed for and not 
expected to outlast the apparatus for which provided.
    5. Locomotive cranes not includible elsewhere.
    6. Locomotives not included elsewhere.
    7. Marine equipment, including boats, barges, etc.
    8. Miscellaneous belts, pulleys, countershafts, etc.
    9. Miscellaneous equipment, including atmospheric and weather 
recording devices, intrasite communication equipment, laboratory 
equipment, signal systems, callophones emergency whistles and sirens, 
fire alarms,

[[Page 433]]

insect-control equipment, and other similar equipment.
    10. Railway cars or special shipping containers not includible 
elsewhere.
    11. Refrigerating systems, including compressors, pumps, cooling 
coils, etc.
    12. Station maintenance equipment, including lathes, shapers, 
planers, drill presses, hydraulic presses, grinders, etc., with motors, 
shafting, hangers, pulleys, etc.
    13. Ventilating equipment, including items wholly identified with 
apparatus listed herein.
    14. Station and area radiation monitoring equipment.

    Note: When any item of equipment listed herein is wholly used in 
connection with equipment included in another account, its cost shall be 
included in such other account.
326 Asset retirement costs for nuclear production plant (Major only).
    This account shall include asset retirement costs on plant included 
in the nuclear production function.
330 Land and land rights.
    This account shall include the cost of land and land rights used in 
connection with hydraulic power generation. (See electric plant 
instruction 7.) For Major utilities, it shall also include the cost of 
land and land rights used in connection with (1) the conservation of 
fish and wildlife, and (2) recreation. Separate subaccounts shall be 
maintained for each of the above.
331 Structures and improvements.
    This account shall include the cost in place of structures and 
improvements used in connection with hydraulic power generation. (See 
electric plant instruction 8.) For Major utilities, it shall also 
include the cost in place of structures and improvements used in 
connection with (1) the conservation of fish and wildlife, and (2) 
recreation. Separate subaccounts shall be maintained for each of the 
above.
332 Reservoirs, dams, and waterways.
    This account shall include the cost in place of facilities used for 
impounding, collecting, storage, diversion, regulation, and delivery of 
water used primarily for generating electricity. For Major utilities, it 
shall also include the cost in place of facilities used in connection 
with (a) the conservation of fish and wildlife, and (b) recreation. 
Separate subaccounts shall be maintained for each of the above. (See 
electric plant instruction 8C.)

                                  Items

    1. Bridges and culverts (when not a part of roads or railroads).
    2. Clearing and preparing land.
    3. Dams, including wasteways, spillways, flash boards, spillway 
gates with operating and control mechanisms, tunnels, gate houses, and 
fish ladders.
    4. Dikes and embankments.
    5. Electric system, including conductors control system, 
transformers, lighting fixtures, etc.
    6. Excavation, including shoring, bracing, bridging, refill, and 
disposal of excess excavated material.
    7. Foundations and settings specially constructed for and not 
expected to outlast the apparatus for which provided.
    8. Intakes, including trash racks, rack cleaners, control gates and 
valves with operating mechanisms, and intake house when not a part of 
station structure.
    9. Platforms, railings, steps, gratings, etc., appurtenant to 
structures listed herein.
    10. Power line wholly identified with items included herein.
    11. Retaining walls.
    12. Water conductors and accessories, including canals, tunnels, 
flumes, penstocks pipe conductors, forebays, tailraces, navigation locks 
and operating mechanisms, waterhammer and surge tanks, and supporting 
trestles and structures.
    13. Water storage reservoirs, including dams, flashboards, spillway 
gates and operating mechanisms, inlet and outlet tunnels, regulating 
valves and valve towers, silt and mud sluicing tunnels with valve or 
gate towers, and all other structures wholly identified with any of the 
foregoing items.
333 Water wheels, turbines and generators.
    This account shall include the cost installed of water wheels and 
hydraulic turbines (from connection with penstock or flume to tailrace) 
and generators driven thereby devoted to the production of electricity 
by water power or for the production of power for industrial or other 
purposes, if the equipment used for such purposes is a part of the 
hydraulic power plant works.

                                  Items

    1. Exciter water wheels and turbines, including runners, gates, 
governors, pressure

[[Page 434]]

regulators, oil pumps, operating mechanisms, scroll cases, draft tubes, 
and draft-tube supports.
    2. Fire-extinguishing equipment.
    3. Foundations and settings, specially constructed for and not 
expected to outlast the apparatus for which provided.
    4. Generator cooling system, including air cooling and washing 
apparatus, air fans and accessories, air ducts, etc.
    5. Generators--main, a.c. or d.c., including field rheostats and 
connections for self-excited units and excitation system when identified 
with the generating unit.
    6. Lighting systems.
    7. Lubricating systems, including gauges, filters, tanks, pumps, 
piping, etc.
    8. Main penstock valves and appurtenances, including main valves, 
control equipment, bypass valves and fittings, and other accessories.
    9. Main turbines and water wheels, including runners, gates, 
governors, pressure regulators, oil pumps, operating mechanisms, scroll 
cases, draft tubes, and draft-tube supports.
    10. Mechanical meters and recording instruments.
    11. Miscellaneous water-wheel equipment, including gauges, 
thermometers, meters, and other instruments.
    12. Platforms, railings, steps, gratings, etc., appurtenant to 
apparatus listed herein.
    13. Scroll case filling and drain system, including gates, pipe, 
valves, fittings, etc.
    14. Water-actuated pressure-regulator system, including tanks and 
housings, pipes, valves, fittings and insulations, piers and anchorage, 
and excavation and backfill.
334 Accessory electric equipment.
    This account shall include the cost installed of auxiliary 
generating apparatus, conversion equipment, and equipment used primarily 
in connection with the control and switching of electric energy produced 
by hydraulic power and the protection of electric circuits and 
equipment, except electric motors used to drive equipment included in 
other accounts, such motors being included in the account in which the 
equipment with which they are associated is included.

                                  Items

    1. Auxiliary generators, including boards, compartments, switching 
equipment, control equipment, and connections to auxiliary power bus.
    2. Excitation system, including motor, turbine, and dual-drive 
exciter sets and rheostats, storage batteries and charging equipment, 
circuit breakers, panels and accessories, knife switches and 
accessories, surge arresters, instrument shunts, conductors and conduit, 
special supports for conduit, generator field and exciter switch panels, 
exciter bus tie panels, generator and exciter rheostats, etc., special 
housings, protective screens, etc.
    3. Generator main connections, including oil circuit breakers and 
accessories, disconnecting switches and accessories, operating 
mechanisms and interlocks, current transformers, potential transformers, 
protective relays, isolated panels and equipment, conductors and 
conduit, special supports for generator main leads, grounding switch, 
etc., special housings, protective screens, etc.
    4. Station buses, including main, auxiliary, transfer, 
synchronizing, and fault ground buses, including oil circuit breakers 
and accessories, disconnecting switches and accessories, operating 
mechanisms and interlocks, reactors and accessories, voltage regulators 
and accessories, compensators, resistors starting transformers, current 
transformers, potential transformers, protective relays, storage 
batteries, and charging equipment, isolated panels and equipment, 
conductors and conduit, special supports, special fire-extinguishing 
system, and test equipment.
    5. Station control system, including station switchboards with panel 
wiring panels with instruments and control equipment only, panels with 
switching equipment mounted or mechanically connected, trucktype boards 
complete, cubicles, station supervisory control devices, frequency 
control equipment, master clocks, watt-hour meter, station totalizing 
watt-meter, storage batteries, panels and charging sets, instrument 
transformers for supervisory metering, conductors and conduit, special 
supports for conduit, switchboards, batteries, special housings for 
batteries, protective screens, doors, etc.

    Note A: Do not include in this account transformers and other 
equipment used for changing the voltage or frequency of electricity for 
the purpose of transmission or distribution.
    Note B: When any item of equipment listed herein is used wholly to 
furnish power to equipment, it shall be included in such equipment 
account.
335 Miscellaneous power plant equipment.
    This account shall include the cost installed of miscellaneous 
equipment in and about the hydroelectric generating plant which is 
devoted to general station use and is not properly includible in other 
hydraulic production accounts. For Major utilities, it shall also 
include the cost of equipment used in connection with (a) the 
conservation of fish and wildlife, and (b) recreation.

[[Page 435]]

Separate subaccounts shall be maintained for each of the above.

                                  Items

    1. Compressed air and vacuum cleaning systems, including tanks, 
compressors, exhausters, air filters, piping, etc.
    2. Cranes and hoisting equipment, including cranes, cars, crane 
rails, monorails, hoists, etc., with electric and mechanical 
connections.
    3. Fire-extinguishing equipment for general station use.
    4. Foundations and settings, specially constructed for and not 
expected to outlast the apparatus for which provided.
    5. Locomotive cranes not includible elsewhere.
    6. Locomotives not includible elsewhere.
    7. Marine equipment, including boats, barges, etc.
    8. Miscellaneous belts, pulleys, countershafts, etc.
    9. Miscellaneous equipment, including atmospheric and weather 
indicating devices, intrasite communication equipment, laboratory 
equipment, insect control equipment, signal systems, callophones, 
emergency whistles and sirens, fire alarms, and other similar equipment.
    10. Railway cars, not includible elsewhere.
    11. Refrigerating system, including compressors, pumps, cooling 
coils, etc.
    12. Station maintenance equipment, including lathes, shapers, 
planers, drill presses, hydraulic presses, grinders, etc., with motors, 
shafting, hangers, pulleys, etc.
    13. Ventilating equipment, including items wholly identified with 
apparatus listed herein.

    Note: When any item of equipment, listed herein is used wholly in 
connection with equipment included in another account, its cost shall be 
included in such other account.
336 Roads, railroads and bridges.
    This account shall include the cost of roads, railroads, trails, 
bridges, and trestles used primarily as production facilities. It 
includes also those roads, etc., necessary to connect the plant with 
highway transportation systems, except when such roads are dedicated to 
public use and maintained by public authorities.

                                  Items

    1. Bridges, including foundations, piers, girders, trusses, 
flooring, etc.
    2. Clearing land.
    3. Railroads, including grading, ballast, ties, rails, culverts, 
hoists, etc.
    4. Roads, including grading, surfacing, culverts, etc.
    5. Structures, constructed and maintained in connection with items 
listed herein.
    6. Trails, including grading, surfacing, culverts, etc.
    7. Trestles, including foundations, piers, girders, trusses, 
flooring, etc.

    Note A: Roads intended primarily for connecting employees' houses 
with the powerplant, and roads used primarily in connection with fish 
and wildlife, and recreation activities, shall not be included herein 
but in account 331, Structures and Improvements.
    Note B: The cost of temporary roads, bridges, etc. necessary during 
the period of construction but abandoned or dedicated to public use upon 
completion of the plant, shall not be included herein but shall be 
charged to the accounts appropriate for the construction.
337 Asset retirement costs for hydraulic production plant.
    This account shall include asset retirement costs on plant included 
in the hydraulic production function.
340 Land and land rights.
    This account shall include the cost of land and land rights used in 
connection with other power generation. (See electric plant instruction 
7.)
341 Structures and improvements.
    This account shall include the cost in place of structures and 
improvements used in connection with other power generation. (See 
electric plant instruction 8.)
342 Fuel holders, producers, and accessories.
    This account shall include the cost installed of fuel handling and 
storage equipment used between the point of fuel delivery to the station 
and the intake pipe through which fuel is directly drawn to the engine, 
also the cost of gas producers and accessories devoted to the production 
of gas for use in prime movers driving main electric generators.

                                  Items

    1. Blower and fans.
    2. Boilers and pumps.
    3. Economizers.
    4. Exhauster outfits.
    5. Flues and piping.
    6. Pipe system.
    7. Producers.
    8. Regenerators.
    9. Scrubbers.

[[Page 436]]

    10. Steam injectors.
    11. Tanks for storage of oil, gasoline, etc.
    12. Vaporizers.
343 Prime movers.
    This account shall include the cost installed of Diesel or other 
prime movers devoted to the generation of electric energy, together with 
their auxiliaries.

                                  Items

    1. Air-filtering system.
    2. Belting, shafting, pulleys, reduction gearing, etc.
    3. Cooling system, including towers, pumps, tanks, and piping.
    4. Cranes, hoists, etc., including items wholly identified with 
apparatus listed herein.
    5. Engines, Diesel, gasoline, gas, or other internal combustion.
    6. Foundations and settings specially constructed for and not 
expected to outlast the apparatus for which provided.
    7. Governors.
    8. Ignition system.
    9. Inlet valve.
    10. Lighting systems.
    11. Lubricating systems, including filters, tanks, pumps, and 
piping.
    12. Mechanical meters, including gauges, recording instruments, 
sampling, and testing equipment.
    13. Mufflers.
    14. Piping.
    15. Starting systems, compressed air, or other, including 
compressors and drives, tanks, piping, motors, boards and connections, 
storage tanks, etc.
    16. Steelwork, specially constructed for apparatus listed herein.
    17. Waste heat boilers, antifluctuators, etc.
344 Generators.
    This account shall include the cost installed of Diesel or other 
power driven main generators.

                                  Items

    1. Cranes, hoists, etc., including items wholly identified with such 
apparatus.
    2. Fire-extinguishing equipment.
    3. Foundations and settings, specially constructed for and not 
expected to outlast the apparatus for which provided.
    4. Generator cooling system, including air cooling and washing 
apparatus, air fans and accessories, air ducts, etc.
    5. Generators--main, a.c. or d.c., including field rheostats and 
connections for self-excited units and excitation system when identified 
with the generating unit.
    6. Lighting systems.
    7. Lubricating system, including tanks, filters, strainers, pumps, 
piping, coolers, etc.
    8. Mechanical meters, and recording instruments.
    9. Platforms, railings, steps, gratings, etc., appurtenant to 
apparatus listed herein.

    Note: If prime movers and generators are so integrated that it is 
not practical to classify them separately, the entire unit may be 
included in account 344, Generators.
345 Accessory electric equipment.
    This account shall include the cost installed of auxiliary 
generating apparatus, conversion equipment, and equipment used primarily 
in connection with the control and switching of electric energy produced 
in other power generating stations, and the protection of electric 
circuits and equipment, except electric motors used to drive equipment 
included in other accounts. Such motors shall be included in the account 
in which the equipment with which it is associated is included.

                                  Items

    1. Auxiliary generators, including boards, compartments, switching 
equipment, control equipment, and connections to auxiliary power bus.
    2. Excitation system, including motor, turbine and dual-drive 
exciter sets and rheostats, storage batteries and charging equipment, 
circuit breakers, panels and accessories, knife switches and 
accessories, surge arresters, instrument shunts, conductors and conduit, 
special supports for conduit, generator field and exciter switch panels, 
exciter bus tie panels, generator and exciter rheostats, etc., special 
housings, protective screens, etc.
    3. Generator main connections, including oil circuit breakers and 
accessories, disconnecting switches and accessories, operating 
mechanisms and interlocks, current transformers, potential transformers, 
protective relays, isolated panels and equipment, conductors and 
conduit, special supports for generator main leads, grounding switch, 
etc., special housing, protective screens, etc.
    4. Station control system, including station switchboards with panel 
wiring, panels with instruments and control equipment only, panels with 
switching equipment mounted or mechanically connected, trunktype boards 
complete, cubicles, station supervisory control boards, generator and 
exciter signal stands, temperature-recording devices, frequency control 
equipment, master clocks, watt-hour meter, station totalizing wattmeter, 
storage batteries, panels and charging sets, instrument transformers for 
supervisory metering, conductors and

[[Page 437]]

conduit, special supports for conduit, switchboards, batteries, special 
housing for batteries, protective screens, doors, etc.
    5. Station buses, including main, auxiliary transfer, synchronizing 
and fault ground buses, including oil curcuit breakers and accessories, 
disconnecting switches and accessories, operating mechanisms and 
interlocks, reactors and accessories, voltage regulators and 
accessories, compensators, resistors, starting transformers, current 
transformers, potential transformers, protective relays, storage 
batteries and charging equipment, isolated panels and equipment, 
conductors and conduit, special supports, special housings, concrete 
pads, general station ground system, special fire-extinguishing system, 
and test equipment.

    Note A: Do not include in this account transformers and other 
equipment used for changing the voltage or frequency of electric energy 
for the purpose of transmission or distribution.
    Note B: When any item of equipment listed herein is used wholly to 
furnish power to equipment included in another account, its cost shall 
be included in such other account.
346 Miscellaneous power plant equipment.
    This account shall include the cost installed of miscellaneous 
equipment in and about the other power generating plant, devoted to 
general station use, and not properly includible in any of the foregoing 
other power production accounts.

                                  Items

    1. Compressed air and vacuum cleaning systems, including tanks, 
compressors, exhausters, air filters, piping, etc.
    2. Cranes and hoisting equipment, including cranes, cars, crane 
rails, monorails, hoists, etc., with electric and mechanical 
connections.
    3. Fire-extinguishing equipment for general station use.
    4. Foundations and settings, specially constructed for and not 
expected to outlast the apparatus for which provided.
    5. Miscellaneous equipment, including atmospheric and weather 
indicating devices, intrasite communication equipment, laboratory 
equipment, signal systems, callophones, emergency whistles and sirens, 
fire alarms, and other similar equipment.
    6. Miscellaneous belts, pulleys, countershafts, etc.
    7. Refrigerating system including compressors, pumps, cooling coils, 
etc.
    8. Station maintenance equipment, including lathes, shapers, 
planers, drill presses, hydraulic presses, grinders, etc., with motors, 
shafting, hangers, pulleys, etc.
    9. Ventilating equipment, including items wholly identified with 
apparatus listed herein.

    Note: When any item of equipment, listed herein is used wholly in 
connection with equipment included in another account, its cost shall be 
included in such other account.
347 Asset retirement costs for other production plant.
    This account shall include asset retirement costs on plant included 
in the other production function.
350 Land and land rights.
    This account shall include the cost of land and land rights used in 
connection with transmission operations. (See electric plant instruction 
7.)
351 [Reserved]
352 Structures and improvements.
    This account shall include the cost in place of structures and 
improvements used in connection with transmission operations. (See 
electric plant instruction 8.)
353 Station equipment.
    This account shall include the cost installed of transforming, 
conversion, and switching equipment used for the purpose of changing the 
characteristics of electricity in connection with its transmission or 
for controlling transmission circuits.

                                  Items

    1. Bus compartments, concrete, brick, and sectional steel, including 
items permanently attached thereto.
    2. Conduit, including concrete and iron duct runs not a part of a 
building.
    3. Control equipment, including batteries battery charging 
equipment, transformers, remote relay boards, and connections.
    4. Conversion equipment, including transformers, indoor and outdoor, 
frequency changers, motor generator sets, rectifiers, synchronous 
converters, motors, cooling equipment, and associated connections.
    5. Fences.
    6. Fixed and synchronous condensers, including transformers, 
switching equipment blowers, motors and connections.
    7. Foundations and settings, specially constructed for and not 
expected to outlast the apparatus for which provided.
    8. General station equipment, including air compressors, motors, 
hoists, cranes, test equipment, ventilating equipment, etc.

[[Page 438]]

    9. Platforms, railings, steps, gratings, etc. appurtenant to 
apparatus listed herein.
    10. Primary and secondary voltage connections, including bus runs 
and supports, insulators, potheads, lightning arresters, cable and wire 
runs from and to outdoor connections or to manholes and the associated 
regulators, reactors, resistors, surge arresters, and accessory 
equipment.
    11. Switchboards, including meters, relays, control wiring, etc.
    12. Switching equipment, indoor and outdoor, including oil circuit 
breakers and operating mechanisms, truck switches, and disconnect 
switches.
    13. Tools and appliances.
354 Towers and fixtures.
    This account shall include the cost installed of towers and 
appurtenant fixtures used for supporting overhead transmission 
conductors.

                                  Items

    1. Anchors, guys, braces.
    2. Brackets.
    3. Crossarms, including braces.
    4. Excavation, backfill, and disposal of excess excavated material.
    5. Foundations.
    6. Guards.
    7. Insulator pins and suspension bolts.
    8. Ladders and steps.
    9. Railings, etc.
    10. Towers.
355 Poles and fixtures.
    This account shall include the cost installed of transmission line 
poles, wood, steel, concrete, or other material, together with 
appurtenant fixtures used for supporting overhead transmission 
conductors.

                                  Items

    1. Anchors, head arm and other guys, including guy guards, guy 
clamps, strain insulators, pole plates, etc.
    2. Brackets.
    3. Crossarms and braces.
    4. Excavation and backfill, including disposal of excess excavated 
material.
    5. Extension arms.
    6. Gaining, roofing stenciling, and tagging.
    7. Insulator pins and suspension bolts.
    8. Paving.
    9. Pole steps.
    10. Poles, wood, steel, concrete, or other material.
    11. Racks complete with insulators.
    12. Reinforcing and stubbing.
    13. Settings.
    14. Shaving and painting.
356 Overhead conductors and devices.
    This account shall include the cost installed of overhead conductors 
and devices used for transmission purposes.

                                  Items

    1. Circuit breakers.
    2. Conductors, including insulated and bare wires and cables.
    3. Ground wires and ground clamps.
    4. Insulators, including pin, suspension, and other types.
    5. Lightning arresters.
    6. Switches.
    7. Other line devices.
357 Underground conduit.
    This account shall include the cost installed of underground conduit 
and tunnels used for housing transmission cables or wires. (See electric 
plant instruction 14.)

                                  Items

    1. Conduit, concrete, brick or tile, including iron pipe, fiber 
pipe, Murray duct, and standpipe on pole or tower.
    2. Excavation, including shoring, bracing, bridging, backfill, and 
disposal of excess excavated material.
    3. Foundations and settings specially constructed for and not 
expected to outlast the apparatus for which provided.
    4. Lighting systems.
    5. Manholes, concrete or brick, including iron or steel, frames and 
covers, hatchways, gratings, ladders, cable racks and hangers, etc., 
permanently attached to manholes.
    6. Municipal inspection.
    7. Pavement disturbed, including cutting and replacing pavement, 
pavement base and sidewalks.
    8. Permits.
    9. Protection of street openings.
    10. Removal and relocation of subsurface obstructions.
    11. Sewer connections, including drains, traps, tide valves, check 
valves, etc.
    12. Sumps, including pumps.
    13. Ventilating equipment.
358 Underground conductors and devices.
    This account shall include the cost installed of underground 
conductors and devices used for transmission purposes.

                                  Items

    1. Armored conductors, buried, including insulators, insulating 
materials, splices, potheads, trenching, etc.

[[Page 439]]

    2. Armored conductors, submarine, including insulators, insulating 
materials, splices in terminal chambers, potheads, etc.
    3. Cables in standpipe, including pothead and connection from 
terminal chamber of manhole to insulators on pole.
    4. Circuit breakers.
    5. Fireproofing, in connection with any items listed herein.
    6. Hollow-core oil-filled cable, including straight or stop joints 
pressure tanks, auxiliary air tanks, feeding tanks, terminals, potheads 
and connections, ventilating equipment, etc.
    7. Lead and fabric covered conductors, including insulators, 
compound filled, oil filled, or vacuum splices, potheads, etc.
    8. Lightning arresters.
    9. Municipal inspection.
    10. Permits.
    11. Protection of street openings.
    12. Racking of cables.
    13. Switches.
    14. Other line devices.
359 Roads and trails.
    This account shall include the cost of roads, trails, and bridges 
used primarily as transmission facilities.

                                  Items

    1. Bridges, including foundation piers, girders, trusses, flooring, 
etc.
    2. Clearing land.
    3. Roads, including grading, surfacing, culverts, etc.
    4. Structures, constructed and maintained in connection with items 
included herein.
    5. Trails, including grading, surfacing, culverts, etc.

    Note: The cost of temporary roads, bridges, etc., necessary during 
the period of construction but abandoned or dedicated to public use upon 
completion of the plant, shall be charged to the accounts appropriate 
for the construction.
359.1 Asset retirement costs for transmission plant.
    This account shall include asset retirement costs on plant included 
in the transmission plant function.
360 Land and land rights.
    This account shall include the cost of land and land rights used in 
connection with distribution operations. (See electric plant instruction 
7.)

    Note: Do not include in this account the cost of permits to erect 
poles, towers, etc., or to trim trees. (See account 364, Poles, Towers 
and Fixtures, and account 365, Overhead Conductors and Devices.)
361 Structures and improvements.
    This account shall include the cost in place of structures and 
improvements used in connection with distribution operations. (See 
electric plant instruction 8.)
362 Station equipment.
    This account shall include the cost installed of station equipment, 
including transformer banks, etc., which are used for the purpose of 
changing the characteristics of electricity in connection with its 
distribution.

                                  Items

    1. Bus compartments, concrete, brick and sectional steel, including 
items permanently attached thereto.
    2. Conduit, including concrete and iron duct runs not part of 
building.
    3. Control equipment, including batteries, battery charging 
equipment, transformers, remote relay boards, and connections.
    4. Conversion equipment, indoor and outdoor, frequency changers, 
motor generator sets, rectifiers, synchronous converters, motors, 
cooling equipment, and associated connections.
    5. Fences.
    6. Fixed and synchronous condensers, including transformers, 
switching equipment, blowers, motors, and connections.
    7. Foundations and settings, specially constructed for and not 
expected to outlast the apparatus for which provided.
    8. General station equipment, including air compressors, motors, 
hoists, cranes, test equipment, ventilating equipment, etc.
    9. Platforms, railings, steps, gratings, etc., appurtenant to 
apparatus listed herein.
    10. Primary and secondary voltage connections, including bus runs 
and supports, insulators, potheads, lightning arresters, cable and wire 
runs from and to outdoor connections or to manholes and the associated 
regulators, reactors, resistors, surge arresters, and accessory 
equipment.
    11. Switchboards, including meters, relays, control wiring, etc.
    12. Switching equipment, indoor and outdoor, including oil circuit 
breakers and operating mechanisms, truck switches, disconnect switches.

    Note: The cost of rectifiers, series transformers, and other special 
station equipment devoted exclusively to street lighting service shall 
not be included in this account, but in account 373, Street Lighting and 
Signal Systems.

[[Page 440]]

363 Storage battery equipment.
    This account shall include the cost installed of storage battery 
equipment used for the purpose of supplying electricity to meet 
emergency or peak demands.

                                  Items

    1. Batteries, including elements, tanks, tank insulators, etc.
    2. Battery room connections, including cable or bus runs and 
connections.
    3. Battery room flooring, when specially laid for supporting 
batteries.
    4. Charging equipment, including motor generator sets and other 
charging equipment and connections, and cable runs from generator or 
station bus to battery room connections.
    5. Miscellaneous equipment, including instruments, water stills, 
etc.
    6. Switching equipment, including endcell switches and connections, 
boards and panels, used exclusively for battery control, not part of 
general station switchboard.
    7. Ventilating equipment, including fans and motors, louvers, and 
ducts not part of building.

    Note: Storage batteries used for control and general station 
purposes shall not be included in this account but in the account 
appropriate for their use.
364 Poles, towers and fixtures.
    This account shall include the cost installed of poles, towers, and 
appurtenant fixtures used for supporting overhead distribution 
conductors and service wires.

                                  Items

    1. Anchors, head arm, and other guys, including guy guards, guy 
clamps, strain insulators, pole plates, etc.
    2. Brackets.
    3. Crossarms and braces.
    4. Excavation and backfill, including disposal of excess excavated 
material.
    5. Extension arms.
    6. Foundations.
    7. Guards.
    8. Insulator pins and suspension bolts.
    9. Paving.
    10. Permits for construction.
    11. Pole steps and ladders.
    12. Poles, wood, steel, concrete, or other material.
    13. Racks complete with insulators.
    14. Railings.
    15. Reinforcing and stubbing.
    16. Settings.
    17. Shaving, painting, gaining, roofing, stenciling, and tagging.
    18. Towers.
    19. Transformer racks and platforms.
365 Overhead conductors and devices.
    This account shall include the cost installed of overhead conductors 
and devices used for distribution purposes.

                                  Items

    1. Circuit breakers.
    2. Conductors, including insulated and bare wires and cables.
    3. Ground wires, clamps, etc.
    4. Insulators, including pin, suspension, and other types, and tie 
wire or clamps.
    5. Lightning arresters.
    6. Railroad and highway crossing guards.
    7. Splices.
    8. Switches.
    9. Tree trimming, initial cost including the cost of permits 
therefor.
    10. Other line devices.

    Note: The cost of conductors used solely for street lighting or 
signal systems shall not be included in this account but in account 373, 
Street Lighting and Signal Systems.
366 Underground conduit.
    This account shall include the cost installed of underground conduit 
and tunnels used for housing distribution cables or wires.

                                  Items

    1. Conduit, concrete, brick and tile, including iron pipe, fiber 
pipe, Murray duct, and standpipe on pole or tower.
    2. Excavation, including shoring, bracing, bridging, backfill, and 
disposal of excess excavated material.
    3. Foundations and settings specially constructed for and not 
expected to outlast the apparatus for which constructed.
    4. Lighting systems.
    5. Manholes, concrete or brick, including iron or steel frames and 
covers, hatchways, gratings, ladders, cable racks and hangers, etc., 
permanently attached to manholes.
    6. Municipal inspection.
    7. Pavement disturbed, including cutting and replacing pavement, 
pavement base, and sidewalks.
    8. Permits.
    9. Protection of street openings.
    10. Removal and relocation of subsurface obstructions.
    11. Sewer connections, including drains, traps, tide valves, check 
valves, etc.
    12. Sumps, including pumps.
    13. Ventilating equipment.

    Note: The cost of underground conduit used solely for street 
lighting or signal systems shall be included in account 373, Street 
Lighting and Signal Systems.

[[Page 441]]

367 Underground conductors and devices.
    This account shall include the cost installed of underground 
conductors and devices used for distribution purposes.

                                  Items

    1. Armored conductors, buried, including insulators, insulating 
materials, splices, potheads, trenching, etc.
    2. Armored conductors, submarine, including insulators, insulating 
materials, splices in terminal chamber, potheads, etc.
    3. Cables in standpipe, including pothead and connection from 
terminal chamber or manhole to insulators on pole.
    4. Circuit breakers.
    5. Fireproofing, in connection with any items listed herein.
    6. Hollow-core oil-filled cable, including straight or stop joints, 
pressure tanks, auxiliary air tanks, feeding tanks, terminals, potheads 
and connections, etc.
    7. Lead and fabric covered conductors, including insulators, 
compound-filled, oil-filled or vacuum splices, potheads, etc.
    8. Lightning arresters.
    9. Municipal inspection.
    10. Permits.
    11. Protection of street openings.
    12. Racking of cables.
    13. Switches.
    14. Other line devices.

    Note: The cost of underground conductors and devices used solely for 
street lighting or signal systems shall be included in account 373, 
Street Lighting and Signal Systems.
368 Line transformers.
    A. This account shall include the cost installed of overhead and 
underground distribution line transformers and poletype and underground 
voltage regulators owned by the utility, for use in transforming 
electricity to the voltage at which it is to be used by the customer, 
whether actually in service or held in reserve.
    B. When a transformer is permanently retired from service, the 
original installed cost thereof shall be credited to this account.
    C. The records covering line transformers shall be so kept that the 
utility can furnish the number of transformers of various capacities in 
service and those in reserve, and the location and the use of each 
transformer.

                                  Items

    1. Installation, labor of (first installation only).
    2. Transformer cut-out boxes.
    3. Transformer lightning arresters.
    4. Transformers, line and network.
    5. Capacitors.
    6. Network protectors.

    Note: The cost of removing and resetting line transformers shall not 
be charged to this account but to account 583, Overhead Line Expenses, 
or account 584, Underground Line Expenses (for Nonmajor utilities, 
account 561, Line and Station Labor, or account 562, Line and Station 
Supplies and Expenses), as appropriate. The cost of line transformers 
used solely for street lighting or signal systems shall be included in 
account 373, Street Lighting and Signal Systems.
369 Services.
    This account shall include the cost installed of overhead and 
underground conductors leading from a point where wires leave the last 
pole of the overhead system or the distribution box or manhole, or the 
top of the pole of the distribution line, to the point of connection 
with the customer's outlet or wiring. Conduit used for underground 
service conductors shall be included herein.

                                  Items

    1. Brackets.
    2. Cables and wires.
    3. Conduit.
    4. Insulators.
    5. Municipal inspection.
    6. Overhead to underground, including conduit or standpipe and 
conductor from last splice on pole to connection with customer's wiring.
    7. Pavement disturbed, including cutting and replacing pavement, 
pavement base, and sidewalks.
    8. Permits.
    9. Protection of street openings.
    10. Service switch.
    11. Suspension wire.
370 Meters.
    A. This account shall include the cost installed of meters or 
devices and appurtenances thereto, for use in measuring the electricity 
delivered to its users, whether actually in service or held in reserve.
    B. When a meter is permanently retired from service, the installed 
cost

[[Page 442]]

included herein shall be credited to this account.
    C. The records covering meters shall be so kept that the utility can 
furnish information as to the number of meters of various capacities in 
service and in reserve as well as the location of each meter owned.

                                  Items

    1. Alternating current, watt-hour meters.
    2. Current limiting devices.
    3. Demand indicators.
    4. Demand meters.
    5. Direct current watt-hour meters.
    6. Graphic demand meters.
    7. Installation, labor of (first installation only).
    8. Instrument transformers.
    9. Maximum demand meters.
    10. Meter badges and their attachments.
    11. Meter boards and boxes.
    12. Meter fittings, connections, and shelves (first set).
    13. Meter switches and cut-outs.
    14. Prepayment meters.
    15. Protective devices.
    16. Testing new meters.

    Note A: This account shall not include meters for recording output 
of a generating station, substation meters, etc. It includes only those 
meters used to record energy delivered to customers.
    Note B: The cost of removing and resetting meters shall be charged 
to account 586, Meter Expenses (for Nonmajor utilities, account 556, 
Meter Expenses).
371 Installations on customers' premises.
    This account shall include the cost installed of equipment on the 
customer's side of a meter when the utility incurs such cost and when 
the utility retains title to and assumes full responsibility for 
maintenance and replacement of such property. This account shall not 
include leased equipment, for which see account 372, Leased Property on 
Customers' Premises.

                                  Items

    1. Cable vaults.
    2. Commercial lamp equipment.
    3. Foundations and settings specially provided for equipment 
included herein.
    4. Frequency changer sets.
    5. Motor generator sets.
    6. Motors.
    7. Switchboard panels, high or low tension.
    8. Wire and cable connections to incoming cables.

    Note: Do not include in this account any costs incurred in 
connection with merchandising, jobbing, or contract work activities.
372 Leased property on customers' premises.
    This account shall include the cost of electric motors, 
transformers, and other equipment on customers' premises (including 
municipal corporations), leased or loaned to customers, but not 
including property held for sale.

    Note A: The cost of setting and connecting such appliances or 
equipment on the premises of customers and the cost of resetting or 
removal shall not be charged to this account but to operating expenses, 
account 587, Customer Installations Expenses (for Nonmajor utilities, 
account 567, Customer Installations Expenses).
    Note B: Do not include in this account any costs incurred in 
connection with merchandising, jobbing, or contract work activities.
373 Street lighting and signal systems.
    This account shall include the cost installed of equipment used 
wholly for public street and highway lighting or traffic, fire alarm, 
police, and other signal systems.

                                  Items

    1. Armored conductors, buried or submarine, including insulators, 
insulating materials, splices, trenching, etc.
    2. Automatic control equipment.
    3. Conductors, overhead or underground, including lead or fabric 
covered, parkway cables, etc., including splices, insulators, etc.
    4. Lamps, are, incandescent, or other types, including glassware, 
suspension fixtures, brackets, etc.
    5. Municipal inspection.
    6. Ornamental lamp posts.
    7. Pavement disturbed, including cutting and replacing pavement, 
pavement base, and sidewalks.
    8. Permits.
    9. Posts and standards.
    10. Protection of street openings.
    11. Relays or time clocks.
    12. Series contactors.
    13. Switches.
    14. Transformers, pole or underground.
374 Asset retirement costs for distribution plant.
    This account shall include asset retirement costs on plant included 
in the distribution plant function.

[[Page 443]]

380 Land and Land Rights.
    This account shall include the cost of land and land rights used in 
connection with regional transmission and market operations.
381 Structures and Improvements.
    This account shall include the cost in place of structures and 
improvements used for regional transmission and market operations.
382 Computer Hardware.
    This account shall include the cost of computer hardware and 
miscellaneous information technology equipment to provide scheduling, 
system control and dispatching, system planning, standards development, 
market monitoring, and market administration activities. Records shall 
be maintained identifying to the maximum extent practicable computer 
hardware owned and used for: (1) Scheduling, system control and 
dispatching, (2) system planning and standards development, and (3) 
market monitoring and market administration activities.

                                  Items

    1. Personal computers
    2. Servers
    3. Workstations
    4. Energy Management System (EMS) hardware
    5. Supervisory Control and Data Acquisition (SCADA) system hardware
    6. Peripheral equipment
    7. Networking components
383 Computer Software.
    This account shall include the cost of off-the-shelf and in-house 
developed software purchased and used to provide scheduling, system 
control and dispatching, system planning, standards development, market 
monitoring, and market administration activities. Records shall be 
maintained identifying to the maximum extent practicable the cost of 
software used for:
    (1) Scheduling, system control and dispatching,
    (2) System planning and standards development, and
    (3) Market monitoring and market administration activities.

                                  Items

    1. Software licenses
    2. User interface software
    3. Modeling software
    4. Database software
    5. Tracking and monitoring software
    6. Energy Management System (EMS) software
    7. Supervisory Control and Data Acquisition (SCADA) system software
    8. Evaluation and assessment system software
    9. Operating, planning and transaction scheduling software
    10. Reliability applications
    11. Market application software
384 Communication Equipment.
    This account shall include the cost of communication equipment owned 
and used to acquire or share data and information used to control and 
dispatch the system.

                                  Items

    1. Fiber optic cable
    2. Remote terminal units
    3. Microwave towers
    4. Global Positioning System (GPS) equipment
    5. Servers
    6. Workstations
    7. Telephones
385 Miscellaneous Regional Transmission and Market Operation Plant.
    This account shall include the cost of regional transmission and 
market operation plant and equipment not provided for elsewhere,
386 Asset Retirement Costs for Regional Transmission and Market 
Operation Plant.
    This account shall include asset retirement costs on regional 
control and market operation plant and equipment.
389 Land and land rights.
    This account shall include the cost of land and land rights used for 
utility purposes, the cost of which is not properly includible in other 
land and land rights accounts. (See electric plant instruction 7.)
390 Structures and improvements.
    This account shall include the cost in place of structures and 
improvements used for utility purposes, the cost of which is not 
properly includible in

[[Page 444]]

other structures and improvements accounts (See electric plant 
instruction 8.)
391 Office furniture and equipment.
    This account shall include the cost of office furniture and 
equipment owned by the utility and devoted to utility service, and not 
permanently attached to buildings, except the cost of such furniture and 
equipment which the utility elects to assign to other plant accounts on 
a functional basis.

                                  Items

    1. Bookcases and shelves.
    2. Desks, chairs, and desk equipment.
    3. Drafting-room equipment.
    4. Filing, storage, and other cabinets.
    5. Floor covering.
    6. Library and library equipment.
    7. Mechanical office equipment, such as accounting machines, 
typewriters, etc.
    8. Safes.
    9. Tables.
392 Transportation equipment.
    This account shall include the cost of transportation vehicles used 
for utility purposes.

                                  Items

    1. Airplanes.
    2. Automobiles.
    3. Bicycles.
    4. Electrical vehicles.
    5. Motor trucks.
    6. Motorcycles.
    7. Repair cars or trucks.
    8. Tractors and trailers.
    9. Other transportation vehicles.
393 Stores equipment.
    This account shall include the cost of equipment used for the 
receiving, shipping, handling, and storage of materials and supplies.

                                  Items

    1. Chain falls.
    2. Counters.
    3. Cranes (portable).
    4. Elevating and stacking equipment (portable).
    5. Hoists.
    6. Lockers.
    7. Scales.
    8. Shelving.
    9. Storage bins.
    10. Trucks, hand and power driven.
    11. Wheelbarrows.
394 Tools, shop and garage equipment.
    This account shall include the cost of tools, implements, and 
equipment used in construction, repair work, general shops and garages 
and not specifically provided for or includible in other accounts.

                                  Items

    1. Air compressors.
    2. Anvils.
    3. Automobile repair shop equipment.
    4. Battery charging equipment.
    5. Belts, shafts and countershafts.
    6. Boilers.
    7. Cable pulling equipment.
    8. Concrete mixers.
    9. Drill presses.
    10. Derricks.
    11. Electric equipment.
    12. Engines.
    13. Forges.
    14. Furnaces.
    15. Foundations and settings specially constructed for and not 
expected to outlast the equipment for which provided.
    16. Gas producers.
    17. Gasoline pumps, oil pumps and storage tanks.
    18. Greasing tools and equipment.
    19. Hoists.
    20. Ladders.
    21. Lathes.
    22. Machine tools.
    23. Motor-driven tools.
    24. Motors.
    25. Pipe threading and cutting tools
    26. Pneumatic tools.
    27. Pumps.
    28. Riveters.
    29. Smithing equipment.
    30. Tool racks.
    31. Vises.
    32. Welding apparatus.
    33. Work benches.
395 Laboratory equipment.
    This account shall include the cost installed of laboratory 
equipment used for general laboratory purposes and not specifically 
provided for or includible in other departmental or functional plant 
accounts.

                                  Items

    1. Ammeters.
    2. Current batteries.
    3. Frequency changers.
    4. Galvanometers.
    5. Inductometers.
    6. Laboratory standard millivolt meters.
    7. Laboratory standard volt meters.
    8. Meter-testing equipment.
    9. Millivolt meters.

[[Page 445]]

    10. Motor generator sets.
    11. Panels.
    12. Phantom loads.
    13. Portable graphic ammeters, voltmeters, and wattmeters.
    14. Portable loading devices.
    15. Potential batteries.
    16. Potentiometers.
    17. Rotating standards.
    18. Standard cell, reactance, resistor, and shunt.
    19. Switchboards.
    20. Synchronous timers.
    21. Testing panels.
    22. Testing resistors.
    23. Transformers.
    24. Voltmeters.
    25. Other testing, laboratory, or research equipment not provided 
for elsewhere.
396 Power operated equipment.
    This account shall include the cost of power operated equipment used 
in construction or repair work exclusive of equipment includible in 
other accounts. Include, also, the tools and accessories acquired for 
use with such equipment and the vehicle on which such equipment is 
mounted.

                                  Items

    1. Air compressors, including driving unit and vehicle.
    2. Back filling machines.
    3. Boring machines.
    4. Bulldozers.
    5. Cranes and hoists.
    6. Diggers.
    7. Engines.
    8. Pile drivers.
    9. Pipe cleaning machines.
    10. Pipe coating or wrapping machines.
    11. Tractors--Crawler type.
    12. Trenchers.
    13. Other power operated equipment.

    Note: It is intended that this account include only such large units 
as are generally self-propelled or mounted on movable equipment.
397 Communication equipment.
    This account shall include the cost installed of telephone, 
telegraph, and wireless equipment for general use in connection with 
utility operations.

                                  Items

    1. Antennae.
    2. Booths.
    3. Cables.
    4. Distributing boards.
    5. Extension cords.
    6. Gongs
    7. Hand sets, manual and dial.
    8. Insulators.
    9. Intercommunicating sets.
    10. Loading coils.
    11. Operators' desks.
    12. Poles and fixtures used wholly for telephone or telegraph wire.
    13. Radio transmitting and receiving sets.
    14. Remote control equipment and lines.
    15. Sending keys.
    16. Storage batteries
    17. Switchboards.
    18. Telautograph circuit connections.
    19. Telegraph receiving sets.
    20. Telephone and telegraph circuits.
    21. Testing instruments.
    22. Towers.
    23. Underground conduit used wholly for telephone or telegraph wires 
and cable wires.
398 Miscellaneous equipment.
    This account shall include the cost of equipment, apparatus, etc., 
used in the utility operations, which is not includible in any other 
account of this system of accounts.

                                  Items

    1. Hospital and infirmary equipment.
    2. Kitchen equipment.
    3. Employees' recreation equipment.
    4. Radios.
    5. Restaurant equipment.
    6. Soda fountains.
    7. Operators' cottage furnishings.
    8. Other miscellaneous equipment.

    Note: Miscellaneous equipment of the nature indicated above wherever 
practicable shall be included in the utility plant accounts on a 
functional basis.
399 Other tangible property.
    This account shall include the cost of tangible utility plant not 
provided for elsewhere.
399.1 Asset retirement costs for general plant.
    This account shall include asset retirement costs on plant included 
in the general plant function.

                        Income Chart of Accounts

                       1. Utility Operating Income

400 Operating revenues.
401 Operation expense.
402 Maintenance expense.
403 Depreciation expense.
404 Amortization of limited-term electric plant.
405 Amortization of other electric plant.
406 Amortization of electric plant acquisition adjustments.

[[Page 446]]

407 Amortization of property losses, unrecovered plant and regulatory 
          study costs.
407.3 Regulatory debits.
407.4 Regulatory credits.
408 [Reserved]
408.1 Taxes other than income taxes, utility operating income.
409 [Reserved]
409.1 Income taxes, utility operating income.
410 [Reserved]
410.1 Provisions for deferred income taxes, utility operating income.
411 [Reserved]
411.1 Provision for deferred income taxes--Credit, utility operating 
          income.
411.3 [Reserved]
411.4 Investment tax credit adjustments, utility operations.
411.6 Gains from disposition of utility plant.
411.7 Losses from disposition of utility plant.
411.8 Gains from disposition of allowances.
411.9 Losses from disposition of allowances.
412 Revenues from electric plant leased to others.
413 Expenses of electric plant leased to others.
414 Other utility operating income.

                     2. Other Income and Deductions

                             a. other income

415 Revenues from merchandising, jobbing, and contract work.
416 Costs and expenses of merchandising, jobbing, and contract work.
417 Revenues from nonutility operations.
417.1 Expenses of nonutility operations.
418 Nonoperating rental income.
418.1 Equity in earnings of subsidiary companies (Major only).
419 Interest and dividend income.
419.1 Allowance for other funds used during construction.
420 Investment tax credits.
421 Miscellaneous nonoperating income.
421.1 Gain on disposition of property.

                       b. other income deductions

421.2 Loss on disposition of property.
425 Miscellaneous amortization.
426 [Reserved]
426.1 Donations.
426.2 Life insurance.
426.3 Penalties.
426.4 Expenditures for certain civic, political and related activities.
426.5 Other deductions.
Total other income deductions.
Total Other Income and Deductions.

           c. taxes applicable to other income and deductions

408.2 Taxes other than income taxes, other income and deductions.
409.2 Income tax, other income and deductions.
409.3 Income taxes, extraordinary items.
410.2 Provision for deferred income taxes, other income and deductions.
411.2 Provision for deferred income taxes--Credit, other income and 
          deductions.
411.5 Investment tax credit adjustments, nonutility operations.
420 Investment tax credits.
Total taxes on other income and deductions.
Net other income and deductions.

                           3. Interest Charges

427 Interest on long-term debt.
428 Amortization of debt discount and expense.
428.1 Amortization of loss on reacquired debt.
429 Amortization of premium on debt-Cr.
429.1 Amortization of gain on reacquired debt--Credit.
430 Interest on debt to associated companies.
431 Other interest expense.
432 Allowance for borrowed funds used during construction--Credit.

                         4. Extraordinary Items

434 Extraordinary income.
435 Extraordinary deductions.



Income Accounts--Table of Contents



400 Operating revenues.
    There shall be shown under this caption the total amount included in 
the electric operating revenue accounts provided herein.
401 Operation expense.
    There shall be shown under this caption the total amount included in 
the electric operation expense accounts provided herein. (See note to 
operating expense instruction 3.)
402 Maintenance expense.
    There shall be shown under this caption the total amount included in 
the electric maintenance expense accounts provided herein.
403 Depreciation expense.
    A. This account shall include the amount of depreciation expense for 
all classes of depreciable electric plant in service except such 
depreciation expense as is chargeable to clearing accounts or to account 
416, Costs and Expenses of Merchandising, Jobbing and Contract Work.
    B. The utility shall keep such records of property and property 
retirements

[[Page 447]]

as will reflect the service life of property which has been retired and 
aid in estimating probable service life by mortality, turnover, or other 
appropriate methods; and also such records as will reflect the 
percentage of salvage and costs of removal for property retired from 
each account, or subdivision thereof, for depreciable electric plant.

    Note A: Depreciation expense applicable to property included in 
account 104, Electric Plant Leased to Others, shall be charged to 
account 413, Expenses of Electric Plant Leased to Others.
    Note B: Depreciation expenses applicable to transportation 
equipment, shop equipment, tools, work equipment, power operated 
equipment and other general equipment may be charged to clearing 
accounts as necessary in order to obtain a proper distribution of 
expenses between construction and operation.
    Note C: Depreciation expense applicable to transportation equipment 
used for transportation of fuel from the point of acquisition to the 
unloading point shall be charged to Account 151, Fuel Stock.
403.1 Depreciation expense for asset retirement costs.
    This account shall include the depreciation expense for asset 
retirement costs included in electric utility plant in service.
404 Amortization of limited-term electric plant.
    This account shall include amortization charges applicable to 
amounts included in the electric plant accounts for limited-term 
franchises, licenses, patent rights, limited-term interests in land, and 
expenditures on leased property where the service life of the 
improvements is terminable by action of the lease. The charges to this 
account shall be such as to distribute the book cost of each investment 
as evenly as may be over the period of its benefit to the utility.
    (See account 111, Accumulated Provision for Amortization of Electric 
Utility Plant.)
405 Amortization of other electric plant.
    A. When authorized by the Commission, this account shall include 
charges for amortization of intangible or other electric utility plant 
which does not have a definite or terminable life and which is not 
subject to charges for depreciation expense.
    B. This account shall be supported in such detail as to show the 
amortization applicable to each investment being amortized, together 
with the book cost of the investment and the period over which it is 
being written off.
406 Amortization of electric plant acquisition adjustments.
    This account shall be debited or credited, as the case may be, with 
amounts includible in operating expenses, pursuant to approval or order 
of the Commission, for the purpose of providing for the extinguishment 
of the amount in account 114, Electric Plant Acquisition Adjustments.
407 Amortization of property losses, unrecovered plant and regulatory 
study costs.
    This account shall be charged with amounts credited to account 
182.1, Extraordinary Property Losses, and account 182.2, Unrecovered 
Plant and Regulatory Study Costs, when the Commission has authorized the 
amount in the latter account to be amortized by charges to electric 
operations.
407.3 Regulatory debits.
    This account shall be debited, when appropriate, with the amounts 
credited to Account 254, Other Regulatory Liabilities, to record 
regulatory liabilities imposed on the utility by the ratemaking actions 
of regulatory agencies. This account shall also be debited, when 
appropriate, with the amounts credited to Account 182.3, Other 
Regulatory Assets, concurrent with the recovery of such amounts in 
rates.
407.4 Regulatory credits.
    This account shall be credited, when appropriate, with the amounts 
debited to Account 182.3, Other Regulatory Assets, to establish 
regulatory assets. This account shall also be credited, when 
appropriate, with the amounts debited to Account 254, Other Regulatory 
Liabilities, concurrent with the return of such amounts to customers 
through rates.

[[Page 448]]

408 [Reserved]

             special instructions, accounts 408.1 and 408.2

    A. These accounts shall include the amounts of ad valorem, gross 
revenue or gross receipts taxes, state unemployment insurance, franchise 
taxes, Federal excise taxes, social security taxes, and all other taxes 
assessed by Federal, state, county, municipal, or other local 
governmental authorities, except income taxes.
    B. These accounts shall be charged in each accounting period with 
the amounts of taxes which are applicable thereto, with concurrent 
credits to account 236, Taxes Accrued, or account 165, Prepayments, as 
appropriate. When it is not possible to determine the exact amounts of 
taxes, the amounts shall be estimated and adjustments made in current 
accruals as the actual tax levies become known.
    C. The charges to these accounts shall be made or supported so as to 
show the amount of each tax and the basis upon which each charge is 
made. In the case of a utility rendering more than one utility service, 
taxes of the kind includible in these accounts shall be assigned 
directly to the utility department the operation of which gave rise to 
the tax in so far as practicable. Where the tax is not attributable to a 
specific utility department, it shall be distributed among the utility 
departments or nonutility operations on an equitable basis after 
appropriate study to determine such basis.

    Note 1: Special assessments for street and similar improvements 
shall be included in the appropriate utility plant or nonutility 
property account.
    Note 2: Taxes specifically applicable to construction shall be 
included in the cost of construction.
    Note 3: Gasoline and other sales taxes shall be charged as far as 
practicable to the same account as the materials on which the tax is 
levied.
    Note 4: Social security and other forms of so-called payroll taxes 
shall be distributed to utility departments and to nonutility functions 
on a basis related to payroll. Amounts applicable to construction shall 
be charged to the appropriate plant account.
    Note 5: Interest on tax refunds or deficiencies shall not be 
included in these accounts but in account 419, Interest and Dividend 
Income, or 431, Other Interest Expense, as appropriate.
408.1 Taxes other than income taxes, utility operating income.
    This account shall include those taxes other than income taxes which 
relate to utility operating income. This account shall be maintained so 
as to allow ready identification of the various classes of taxes 
relating to Utility Operating Income (by department), Utility Plant 
Leased to Others and Other Utility Operating Income.
408.2 Taxes other than income taxes, other income and deductions.
    This account shall include those taxes other than income taxes which 
relate to Other Income and Deductions.
409 [Reserved]

         special instructions, accounts 409.1, 409.2, and 409.3.

    A. These accounts shall include the amounts of local, state and 
Federal income taxes on income properly accruable during the period 
covered by the income statement to meet the actual liability for such 
taxes. Concurrent credits for the tax accruals shall be made to account 
236, Taxes Accrued, and as the exact amounts of taxes become known, the 
current tax accruals shall be adjusted by charges or credits to these 
accounts, so that these accounts as nearly as can be ascertained shall 
include the actual taxes payable by the utility.
    B. The accruals for income taxes shall be apportioned among utility 
departments and to Other Income and Deductions so that, as nearly as 
practicable, each tax shall be included in the expenses of the utility 
department or Other Income and Deductions, the income from which gave 
rise to the tax. The tax effects relating to Interest Charges shall be 
allocated between utility and nonutility operations. The basis for this 
allocation shall be the ratio of net investment in utility plant to net 
investment in nonutility plant.

    Note 1: Taxes assumed by the utility on interest shall be charged to 
account 431, Other Interest Expense.
    Note 2: Interest on tax refunds or deficiencies shall not be 
included in these accounts but in account 419, Interest and Dividend 
Income, or account 431, Other Interest Expense, as appropriate.
409.1 Income taxes, utility operating income.
    This account shall include the amount of those local, state and 
Federal income taxes which relate to utility operating income. This 
account shall be maintained so as to allow ready identification of tax 
effects (both positive and negative) relating to Utility Operating 
Income (by department), Utility Plant Leased to Others and Other Utility 
Operating Income.

[[Page 449]]

409.2 Income taxes, other income and deductions.
    This account shall include the amount of those local, state and 
Federal income taxes (both positive and negative), which relate to Other 
Income and Deductions.
409.3 Income taxes, extraordinary items.
    This account shall include the amount of those local, state and 
Federal income taxes (both positive and negative), which relate to 
Extraordinary Items.
410 [Reserved]

     special instructions, accounts 410.1, 410.2, 411.1, and 411.2.

    A. Accounts 410.1 and 410.2 shall be debited, and Accumulated 
Deferred Income Taxes shall be credited, with amounts equal to any 
current deferrals of taxes on income or any allocations of deferred 
taxes originating in prior periods, as provided by the texts of accounts 
190, 281, 282, and 283. There shall not be netted against entries 
required to be made to these accounts any credit amounts appropriately 
includible in account 411.1 or 411.2.
    B. Accounts 411.1 and 411.2 shall be credited, and Accumulated 
Deferred Income Taxes shall be debited, with amounts equal to any 
allocations of deferred taxes originating in prior periods or any 
current deferrals of taxes on income, as provided by the texts of 
accounts 190, 281, 282, and 283. There shall not be netted against 
entries required to be made to these accounts any debit amounts 
appropriately includible in account 410.1 or 410.2.
410.1 Provision for deferred income taxes, utility operating income.
    This account shall include the amounts of those deferrals of taxes 
and allocations of deferred taxes which relate to Utility Operating 
Income (by department).
410.2 Provision for deferred income taxes, other income and deductions.
    This account shall include the amounts of those deferrals of taxes 
and allocations of deferred taxes which relate to Other Income and 
Deductions.
411 [Reserved]
411.1 Provision for deferred income taxes--Credit, utility operating 
income.
    This account shall include the amounts of those allocations of 
deferred taxes and deferrals of taxes, credit, which relate to Utility 
Operating Income (by department).
411.2 Provision for deferred income taxes--Credit, other income and 
deductions.
    This account shall include the amounts of those allocations of 
deferred taxes and deferrals of taxes, credit, which relate to Other 
Income and Deductions.
411.3 [Reserved]

             special instructions--accounts 411.4 and 411.5

    A. Account 411.4 shall be debited with the amounts of investment tax 
credits related to electric utility property that are credited to 
account 255, Accumulated Deferred Investment Tax Credits, by companies 
which do not apply the entire amount of the benefits of the investment 
credit as a reduction of the overall income tax expense in the year in 
which such credit is realized (see account 255).
    B. Account 411.4 shall be credited with the amounts debited to 
account 255 for proportionate amounts of tax credit deferrals allocated 
over the average useful life of electric utility property to which the 
tax credits relate or such lesser period of time as may be adopted and 
consistently followed by the company.
    C. Account 411.5 shall also be debited and credited as directed in 
paragraphs A and B, for investment tax credits related to nonutility 
property.
411.4 Investment tax credit adjustments, utility operations.
    This account shall include the amount of those investment tax credit 
adjustments related to property used in Utility Operations (by 
department).
411.5 Investment tax credit adjustments, nonutility operations.
    This account shall include the amount of those investment tax credit 
adjustments related to property used in Nonutility Operations.

[[Page 450]]

411.6 Gains from disposition of utility plant.
    A. This account shall include, as approved by the Commission, 
amounts relating to gains from the disposition of future use utility 
plant including amounts which were previously recorded in and 
transferred from account 105, Electric Plant Held for Future Use, under 
the provisions of paragraphs B, C, and D thereof. Income taxes relating 
to gains recorded in this account shall be recorded in account 409.1, 
Income Taxes, Utility Operating Income.
    B. The utility shall record in this account gains resulting from the 
settlement of asset retirement obligations related to utility plant in 
accordance with the accounting prescribed in General Instruction 25.
411.7 Losses from disposition of utility plant.
    A. This account shall include, as approved by the Commission, 
amounts relating to losses from the disposition of future use utility 
plant including amounts which were previously recorded in and 
transferred from account 105, Electric Plant Held for Future Use, under 
the provisions of paragraphs B, C, and D thereof. Income taxes relating 
to losses, recorded in this account shall be recorded in account 409.1, 
Income Taxes, Utility Operating Income.
    B. The utility shall record in this account losses resulting from 
the settlement of asset retirement obligations related to utility plant 
in accordance with the accounting prescribed in General Instruction 25.
411.8 Gains from disposition of allowances.
    This account shall be credited with the gain on the sale, exchange, 
or other disposition of allowances in accordance with paragraph (H) of 
General Instruction No. 21. Income taxes relating to gains recorded in 
this account shall be recorded in Account 409.1, Income Taxes, Utility 
Operating Income.
411.9 Losses from disposition of allowances.
    This account shall be debited with the loss on the sale, exchange, 
or other disposition of allowances in accordance with paragraph (H) of 
General Instruction No. 21. Income taxes relating to losses recorded in 
this account shall be recorded in Account 409.1, Income Taxes, Utility 
Operating Income.
411.10 Accretion expense.
    This account shall be charged for accretion expense on the 
liabilities associated with asset retirement obligations included in 
account 230, Asset retirement obligations, related to electric utility 
plant.
412 Revenues from electric plant leased to others.
413 Expenses of electric plant leased to others.
    A. These accounts shall include respectively, revenues from electric 
property constituting a distinct operating unit or system leased by the 
utility to others, and which property is properly includible in account 
104, Electric Plant Leased to Others, and the expenses attributable to 
such property.
    B. The detail of expenses shall be kept or supported so as to show 
separately the following:
    Operation.
    Maintenance.
    Depreciation.
    Amortization.

    Note: Related taxes shall be recorded in account 408.1, Taxes Other 
Than Income Taxes, Utility Operating Income, or account 409.1, Income 
Taxes, Utility Operating Income, as appropriate.
414 Other utility operating income.
    A. This account shall include the revenues received and expenses 
incurred in connection with the operations of utility plant, the book 
cost of which is included in account 118, Other Utility Plant.
    B. The expenses shall include every element of cost incurred in such 
operations, including depreciation, rents, and insurance.

    Note: Related taxes shall be recorded in account 408.1, Taxes Other 
Than Income Taxes, Utility Operating Income, or account 409.1, Income 
Taxes, Utility Operating Income, as appropriate.

[[Page 451]]

415 Revenues from merchandising, jobbing and contract work.
416 Costs and expenses of merchandising, jobbing and contract work.
    A. These accounts shall include respectively, all revenues derived 
from the sale of merchandise and jobbing or contract work, including any 
profit or commission accruing to the utility on jobbing work performed 
by it as agent under contracts whereby it does jobbing work for another 
for a stipulated profit or commission, and all expenses incurred in such 
activities. Interest related income from installment sales shall be 
recorded in Account 419, Interest and Dividend income.
    B. Records in support of these accounts shall be so kept as to 
permit ready summarization of revenues, costs and expenses by such major 
items as are feasible.

    Note 1: The classification of revenues, costs, and expenses of 
merchandising, jobbing, and contract work as nonoperating, and thus 
inclusion in this account, is for accounting purposes. It does not 
preclude consideration of justification to the contrary for ratemaking 
or other purposes.
    Note 2: Related taxes shall be recorded in account 408.2, Taxes 
Other Than Income Taxes, Other Income and Deductions, or account 409.2, 
Income Taxes, Other Income and Deductions, as appropriate.

                                  Items

Account 415:
    1. Revenues from sale of merchandise and from jobbing and contract 
work.
    2. Discounts and allowances made in settlement of bills for 
merchandise and jobbing work.

Account 416:
Labor--
    1. Canvassing and demonstrating appliances in homes and other places 
for the purpose of selling appliances.
    2. Demonstrating and selling activities in sales rooms.
    3. Installing appliances on customer premises where such work is 
done only for purchasers of appliances from the utility.
    4. Installing wiring, piping, or other property work, on a jobbing 
or contract basis.
    5. Preparing advertising materials for appliance sales purposes.
    6. Receiving and handling customer orders for merchandise or for 
jobbing services.
    7. Cleaning and tidying sales rooms.
    8. Maintaining display counters and other equipment used in 
merchandising.
    9. Arranging merchandise in sales rooms and decorating display 
windows.
    10. Reconditioning repossessed appliances.
    11. Bookkeeping and other clerical work in connection with 
merchandise and jobbing activities.
    12. Supervising merchandise and jobbing operations.

Materials and expenses--
    13. Advertising in newspapers, periodicals, radio, television, etc.
    14. Cost of merchandise sold and of materials used in jobbing work.
    15. Stores expenses on merchandise and jobbing stocks.
    16. Fees and expenses of advertising and commercial artists' 
agencies.
    17. Printing booklets, dodgers, and other advertising data.
    18. Premiums given as inducement to buy appliances.
    19. Light, heat and power.
    20. Depreciation on equipment used primarily for merchandise and 
jobbing operations.
    21. Rent of sales rooms or of equipment.
    22. Transportation expense in delivery and pick-up of appliances by 
utility's facilities or by others.
    23. Stationery and office supplies and expenses.
    24. Losses from uncollectible merchandise and jobbing accounts.
417 Revenues from nonutility operations.
417.1 Expenses of nonutility operations.
    A. These accounts shall include revenues and expenses applicable to 
operations which are nonutility in character but nevertheless constitute 
a distinct operating activity of the enterprise as a whole, such as the 
operation of an ice department where applicable statutes do not define 
such operation as a utility, or the operation of a servicing 
organization for furnishing supervision, management, engineering, and 
similar services to others.
    B. The expenses shall include all elements of costs incurred in such 
operations, and the accounts shall be maintained so as to permit ready 
summarization as follows:

    Operation.
    Maintenance.
    Rents.
    Depreciation.
    Amortization.

    Note: Related taxes shall be recorded in account 408.2, Taxes Other 
Than Income

[[Page 452]]

Taxes, Other Income and Deductions, or account 409.2, Income Taxes, 
Other Income and Deductions, as appropriate.
418 Nonoperating rental income.
    A. This account shall include all rent revenues and related expenses 
of land, buildings, or other property included in account 121, 
Nonutility Property, which is not used in operations covered by account 
417 or 417.1.
    B. The expenses shall include all elements of costs incurred in the 
ownership and rental of property and the accounts shall be maintained so 
as to permit ready summarization as follows:

    Operation.
    Maintenance.
    Rents.
    Depreciation.
    Amortization.

    Note: Related taxes shall be recorded in account 408.2. Taxes Other 
Than Income Taxes, Other Income and Deductions, or account 409.2, Income 
Taxes, Other Income and Deductions, as appropriate.
418.1 Equity in earnings of subsidiary companies (Major only).
    This account shall include the utility's equity in the earnings or 
losses of subsidiary companies for the year.
419 Interest and dividend income.
    A. This account shall include interest revenues on securities, 
loans, notes, advances, special deposits, tax refunds and all other 
interest-bearing assets, and dividends on stocks of other companies, 
whether the securities on which the interest and dividends are received 
are carried as investments or included in sinking or other special fund 
accounts.
    B. This account may include the pro rata amount necessary to 
extinguish (during the interval between the date of acquisition and the 
date of maturity) the difference between the cost to the utility and the 
face value of interest-bearing securities. Amounts thus credited or 
charged shall be concurrently included in the accounts in which the 
securities are carried.
    C. Where significant in amount, expenses, excluding operating taxes 
and income taxes, applicable to security investments and to interest and 
dividend revenues thereon shall be charged hereto.

    Note 1: Related taxes shall be recorded in account 408.2, Taxes 
Other Than Income Taxes, Other Income and Deductions, or account 409.2, 
Income Taxes, Other Income and Deductions, as appropriate.
    Note 2: Interest accrued, the payment of which is not reasonably 
assured, dividends receivable which have not been declared or 
guaranteed, and interest or dividends upon reacquired securities issued 
or assumed by the utility shall not be credited to this account.
419.1 Allowance for other funds used during construction.
    This account shall include concurrent credits for allowance for 
other funds used during construction, not to exceed amounts computed in 
accordance with the formula prescribed in Electric Plant Instruction 
3(17).
420 Investment tax credits.
    This account shall be credited as follows with investment tax credit 
amounts not passed on to customers:
    A. By amounts equal to debits to accounts 411.4, Investment Tax 
Credit Adjustments, Utility Operations, and 411.5, Investment Tax Credit 
Adjustments, Nonutility Operations, for investment tax credits used in 
calculating income taxes for the year when the company's accounting 
provides for nondeferral of all or a portion of such credits; and,
    B. By amounts equal to debits to account 255, Accumulated deferred 
investment tax credits, for proportionate amounts of tax credit 
deferrals allocated over the average useful life of the property to 
which the tax credits relate, or such lesser period of time as may be 
adopted and consistently used by the company.
421 Miscellaneous nonoperating income.
    This account shall include all revenue and expense items except 
taxes properly includible in the income account and not provided for 
elsewhere. Related taxes shall be recorded in account 408.2, Taxes Other 
Than Income Taxes, Other Income and Deductions, or account 409.2, Income 
Taxes, Other Income and Deductions, as appropriate.

[[Page 453]]

                                  Items

    1. Profit on sale of timber. (See electric plant instruction 7C.)
    2. Profits from operations of others realized by the utility under 
contracts.
    3. Gains on disposition of investments. Also, gains on reacquisition 
and resale or retirement of utilities debt securities when the gain is 
not amortized and used by a jurisdictional regulatory agency to reduce 
embedded debt cost in establishing rates. See General Instruction 17.
    4. This account shall include the accretion expense on the liability 
for an asset retirement obligation included in account 230, Asset 
retirement obligations, related to nonutility plant.
    5. This account shall include the depreciation expense for asset 
retirement costs related to nonutility plant.
    6. The utility shall record in this account gains resulting from the 
settlement of asset retirement obligations related to nonutility plant 
in accordance with the accounting prescribed in General Instruction 25.
421.1 Gain on disposition of property.
    This account shall be credited with the gain on the sale, 
conveyance, exchange, or transfer of utility or other property to 
another. Amounts relating to gains on land and land rights held for 
future use recorded in account 105, Electric Plant Held for Future Use 
will be accounted for as prescribed in paragraphs B, C, and D thereof. 
(See electric plant instructions 5F, 7E, and 10E.) Income taxes on gains 
recorded in this account shall be recorded in account 409.2, Income 
Taxes, Other Income and Deductions.
421.2 Loss on disposition of property.
    This account shall be charged with the loss on the sale, conveyance, 
exchange or transfer of utility or other property to another. Amounts 
relating to losses on land and land rights held for future use recorded 
in account 105, Electric Plant Held for Future Use will be accounted for 
as prescribed in paragraphs B, C, and D thereof. (See electric plant 
instructions 5F, 7E, and 10E.) The reduction in income taxes relating to 
losses recorded in this account shall be recorded in account 409.2, 
Income Taxes, Other Income and Deductions.
425 Miscellaneous amortization.
    This account shall include amortization charges not includible in 
other accounts which are properly deductible in determining the income 
of the utility before interest charges. Charges includible herein, if 
significant in amount, must be in accordance with an orderly and 
systematic amortization program.

                                  Items

    1. Amortization of utility plant acquisition adjustments, or of 
intangibles included in utility plant in service when not authorized to 
be included in utility operating expenses by the Commission.
    2. Other miscellaneous amortization charges allowed to be included 
in this account by the Commission.
426 [Reserved]

   special instructions--accounts 426.1, 426.2, 426.3, 426.4 and 426.5

    These accounts shall include miscellaneous expense items which are 
nonoperating in nature but which are properly deductible before 
determining total income before interest charges.

    Note: The classification of expenses as nonoperating and their 
inclusion in these accounts is for accounting purposes. It does not 
preclude Commission consideration of proof to the contrary for 
ratemaking or other purposes.
426.1 Donations.
    This account shall include all payments or donations for charitable, 
social or community welfare purposes.
426.2 Life insurance.
    This account shall include all payments for life insurance of 
officers and employees where company is beneficiary (net premiums less 
increase in cash surrender value of policies).
426.3 Penalties.
    This account shall include payments by the company for penalties or 
fines for violation of any regulatory statutes by the company or its 
officials.
426.4 Expenditures for certain civic, political and related activities.
    This account shall include expenditures for the purpose of 
influencing public opinion with respect to the election or appointment 
of public officials, referenda, legislation, or ordinances (either with 
respect to the possible adoption of new referenda, legislation

[[Page 454]]

or ordinances or repeal or modification of existing referenda, 
legislation or ordinances) or approval, modification, or revocation of 
franchises; or for the purpose of influencing the decisions of public 
officials, but shall not include such expenditures which are directly 
related to appearances before regulatory or other governmental bodies in 
connection with the reporting utility's existing or proposed operations.
426.5 Other deductions.
    This account shall include other miscellaneous expenses which are 
nonoperating in nature, but which are properly deductible before 
determining total income before interest charges.

                                  Items

    1. Loss relating to investments in securities written-off or 
written-down.
    2. Loss on sale of investments.
    3. Loss on reacquisition, resale or retirement of utility's debt 
securities, when the loss is not amortized and used by a jurisdictional 
regulatory agency to increase embedded debt cost in establishing rates. 
See General Instruction 17.
    4. Preliminary survey and investigation expenses related to 
abandoned projects, when not written-off to the appropriate operating 
expense account.
    5. Costs of preliminary abandonment costs recorded in accounts 
182.1, Extraordinary Property Losses, and 182.2, Unrecovered Plant and 
Regulatory Study Costs, not allowed to be amortized to account 407, 
Amortization of Property Losses, Unrecovered Plant and Regulatory Study 
Costs.
    6. The utility shall record in this account losses resulting from 
the settlement of asset retirement obligations related to nonutility 
plant in accordance with the accounting prescribed in General 
Instruction 25.
427 Interest on long-term debt.
    A. This account shall include the amount of interest on outstanding 
long-term debt issued or assumed by the utility, the liability for which 
is included in account 221, Bonds, or account 224, Other Long-Term Debt.
    B. This account shall be so kept or supported as to show the 
interest accruals on each class and series of long-term debt.

    Note: This account shall not include interest on nominally issued or 
nominally outstanding long-term debt, including securities assumed.
428 Amortization of debt discount and expense.
    A. This account shall include the amortization of unamortized debt 
discount and expense on outstanding long-term debt. Amounts charged to 
this account shall be credited concurrently to accounts 181, Unamortized 
Debt Expense, and 226, Unamortized Discount on Long-Term Debt--Debit.
    B. This account shall be so kept or supported as to show the debt 
discount and expense on each class and series of long-term debt.
428.1 Amortization of loss on reacquired debt.
    A. This account shall include the amortization of the losses on 
reacquisition of debt. Amounts charged to this account shall be credited 
concurrently to account 189, Unamortized Loss on Reacquired Debt.
    B. This account shall be maintained so as to allow ready 
identification of the loss amortized applicable to each class and series 
of long-term debt reacquired. See General Instruction 17.
429 Amortization of premium on debt--Cr.
    A. This account shall include the amortization of unamortized net 
premium on outstanding long-term debt. Amounts credited to this account 
shall be charged concurrently to account 225, Unamortized Premium on 
Long-Term Debt.
    B. This account shall be so kept or supported as to show the premium 
on each class and series of long-term debt.
429.1 Amortization of gain on reacquired debt--Credit.
    A. This account shall include the amortization of the gains realized 
from reacquisition of debt. Amounts credited to this account shall be 
charged concurrently to account 257, Unamortized Gain on Reacquired 
Debt.
    B. This account shall be maintained so as to allow ready 
identification of the gains amortized applicable to each class and 
series of long-term debt reacquired. See General Instruction 17.

[[Page 455]]

430 Interest on debt to associated companies.
    A. This account shall include the interest accrued on amounts 
included in account 223, Advances from Associated Companies, and on all 
other obligations to associated companies.
    B. The records supporting the entries to this account shall be so 
kept as to show to whom the interest is to be paid, the period covered 
by the accrual, the rate of interest and the principal amount of the 
advances or other obligations on which the interest is accrued.
431 Other interest expense.
    This account shall include all interest charges not provided for 
elsewhere.

                                  Items

    1. Interest on notes payable on demand or maturing one year or less 
from date and on open accounts, except notes and accounts with 
associated companies.
    2. Interest on customers' deposits.
    3. Interest on claims and judgments, tax assessments, and 
assessments for public improvements past due.
    4. Income and other taxes levied upon bondholders of utility and 
assumed by it.
432 Allowance for borrowed funds used during construction--Credit.
    This account shall include concurrent credits for allowance for 
borrowed funds used during construction, not to exceed amounts computed 
in accordance with the formula prescribed in Electric Plant Instruction 
3(17).
434 Extraordinary income.
    This account shall be credited with gains of unusual nature and 
infrequent occurrence, which would significantly distort the current 
year's income computed before Extraordinary Items, if reported other 
than as extraordinary items. Income tax relating to the amounts recorded 
in this account shall be recorded in account 409.3, Income Taxes, 
Extraordinary Items. (See General Instruction 7.)
435 Extraordinary deductions.
    This account shall be debited with losses of unusual nature and 
infrequent occurrence, which would significantly distort the current 
year's income computed before Extraordinary Items, if reported other 
than as extraordinary items. Income tax relating to the amounts recorded 
in this account shall be recorded in account 409.3, Income Taxes, 
Extraordinary Items. (See General Instruction 7.)



Retained Earnings Chart of Accounts--Table of Contents



433 Balance transferred from income.
436 Appropriations of retained earnings.
437 Dividends declared--preferred stock.
438 Dividends declared--common stock.
439 Adjustments to retained earnings.



Retained Earnings Accounts--Table of Contents



433 Balance transferred from income.
    This account shall include the net credit or debit transferred from 
income for the year.
436 Appropriations of retained earnings.
    This account shall include appropriations of retained earnings.

                                  Items

    1. Appropriations required under terms of mortgages, orders of 
courts, contracts, or other agreements.
    2. Appropriations required by action of regulatory authorities.
    3. Other appropriations made at option of utility for specific 
purposes.
437 Dividends declared--preferred stock.
    A. This account shall include amounts declared payable out of 
retained earnings as dividends on actually outstanding preferred or 
prior lien capital stock issued by the utility.
    B. Dividends shall be segregated for each class and series of 
preferred stock as to those payable in cash, stock, and other forms. If 
not payable in cash, the medium of payment shall be described with 
sufficient detail to identify it.
438 Dividends declared--common stock.
    A. This account shall include amounts declared payable out of 
retained earnings as dividends on actually outstanding common capital 
stock issued by the utility.

[[Page 456]]

    B. Dividends shall be segregated for each class of common stock as 
to those payable in cash, stock and other forms. If not payable in cash, 
the medium of payment shall be described with sufficient detail to 
identify it.
439 Adjustments to retained earnings.
    A. This account shall, with prior Commission approval, include 
significant nonrecurring transactions accounted for as prior period 
adjustments, as follows:
    (1) Correction of an error in the financial statements of a prior 
year.
    (2) Adjustments that result from realization of income tax benefits 
of pre-acquisition operating loss carryforwards of purchased 
subsidiaries.
    All other items of profit and loss recognized during a year shall be 
included in the determination of net income for that year;
    B. Adjustments, charges, or credits due to losses on reacquisition, 
resale or retirement of the company's own capital stock shall be 
included in this account. (See account 210, Gain on Resale or 
Cancellation of Reacquired Capital Stock, for the treatment of gains.)

                   Operating Revenue Chart of Accounts

                         1. Sales of Electricity

440 Residential sales.
442 Commercial and industrial sales.
444 Public street and highway lighting.
445 Other sales to public authorities (Major only).
446 Sales to railroads and railways (Major only).
447 Sales for resale.
448 Interdepartmental sales.
449 Other sales (Nonmajor only).
449.1 Provision for rate refunds.

                       2. Other Operating Revenues

450 Forfeited discounts.
451 Miscellaneous service revenues.
453 Sales of water and water power.
454 Rent from electric property.
455 Interdepartmental rents.
456 Other electric revenues.
456.1 Revenues from transmission of electricity of others.
457.1 Regional transmission service revenues.
457.2 Miscellaneous revenues.



Operating Revenue Accounts--Table of Contents



440 Residential sales.
    A. This account shall include the net billing for electricity 
supplied for residential or domestic purposes.
    B. Records shall be maintained so that the quantity of electricity 
sold and the revenue received under each rate schedule shall be readily 
available.

    Note: When electricity supplied through a single meter is used for 
both residential and commercial purposes, the total revenue shall be 
included in this account, or account 442, Commercial and Industrial 
Sales, according to the rate schedule which is applied. If the same rate 
schedules apply to residential as to commercial and industrial service, 
classification shall be made according to principal use.
442 Commercial and industrial sales.
    A. This account shall include the net billing for electricity 
supplied to customers for commercial and industrial purposes.
    B. Records shall be maintained so that the quantity of electricity 
sold and the revenue received under each rate schedule shall be readily 
available. Records shall be maintained also so as to show separately the 
revenues from commercial and industrial customers (1) which have demands 
generally of 1000 kw or more, and (2) those which have demands generally 
less than 1000 kw. Reasonable deviations above or below the 1000 kw 
demand are permissible in order that transfers of customers between the 
two classes during the year may be minimized.

    Note A: If the utility classifies large commercial and industrial 
customers and related revenues on a lesser basis than 1000 kilowatts of 
demand, or segregates industrial customers and related revenues 
according to a recognized definition of an industrial customer, such 
classifications are acceptable in lieu of those otherwise required by 
the text of this account on the basis of 1000 kilowatts of demand.
    Note B: When electricity supplied through a single meter is used for 
both commercial and residential purposes, the total revenue shall be 
included in this account, or in account 440, Residential Sales, 
according to the rate schedule which is applied. If the same rate 
schedules apply to residential as to

[[Page 457]]

commercial and industrial service, classification shall be made 
according to the principal use.
444 Public street and highway lighting.
    A. This account shall include the net billing for electricity 
supplied and services rendered for the purposes of lighting streets, 
highways, parks and other public places, or for traffic or other signal 
system service, for municipalities or other divisions or agencies of 
state or federal governments.
    B. Records shall be maintained so that the quantity of electricity 
sold and the revenue received from each customer shall be readily 
available. In addition, the records shall be maintained so as to show 
the revenues from (1) contracts which include both electricity and 
services, and (2) contracts which include sales of electricity only.
445 Other sales to public authorities (Major only).
    A. This account shall include the net billing for electricity 
supplied to municipalities or divisions or agencies of federal or state 
governments, under special contracts or agreements or service 
classifications applicable only to public authorities, except such 
revenues as are includible in accounts 444 and 447.
    B. Records shall be maintained so as to show the quantity of 
electricity sold and the revenues received from each customer.
446 Sales to railroads and railways (Major only).
    A. This account shall include the net billing for electricity 
supplied to railroads and interurban and street railways, for general 
railroad use, including the propulsion of cars or locomotives, where 
such electricity is supplied under separate and distinct rate schedules.
    B. Records shall be maintained so that the quantity of electricity 
sold and the revenue received from each customer shall be readily 
available.

    Note: Revenues from incidental use of electricity furnished under a 
contract for propulsion of cars or locomotives shall be included herein.
447 Sales for resale.
    A. This account shall include the net billing for electricity 
supplied to other electric utilities or to public authorities for resale 
purposes.
    B. Records shall be maintained so as to show the quantity of 
electricity sold and the revenue received from each customer.

    Note: Revenues from electricity supplied to other public utilities 
for use by them and not for distribution, shall be included in account 
442, Commercial and Industrial Sales, unless supplied under the same 
contract as and not readily separable from revenues includible in this 
account.
448 Interdepartmental sales.
    A. This account shall include amounts charged by the electric 
department at tariff or other specified rates for electricity supplied 
by it to other utility departments.
    B. Records shall be maintained so that the quantity of electricity 
supplied each other department and the charges therefor shall be readily 
available.
449 Other sales (Nonmajor only).
    A. This account shall include revenues for electricity supplied 
which are not provided for elsewhere.
    B. Records shall be maintained so as to show the quantity of 
electricity sold and the revenues received from each customer.
449.1 Provision for rate refunds.
    A. This account shall be charged with provisions for the estimated 
pretax effects on net income of the portions of amounts being collected 
subject to refund which are estimated to be required to be refunded. 
Such provisions shall be credited to Account 229, Accumulated Provision 
for Rate Refunds.
    B. This account shall also be charged with amounts refunded when 
such amounts had not been previously accrued.
    C. Income tax effects relating to the amounts recorded in this 
account shall be recorded in account 410.1, Provision for Deferred 
Income Taxes, Utility Operating Income, or account 411.1, Provision for 
Deferred Income Taxes--Credit, Utility Operating Income, as appropriate.

[[Page 458]]

450 Forfeited discounts.
    This account shall include the amount of discounts forfeited or 
additional charges imposed because of the failure of customers to pay 
their electric bills on or before a specified date.
451 Miscellaneous service revenues.
    This account shall include revenues for all miscellaneous services 
and charges billed to customers which are not specifically provided for 
in other accounts.

                                  Items

    1. Fees for changing, connecting or disconnecting service.
    2. Profit on maintenance of appliances, wiring, piping or other 
installations on customers' premises.
    3. Net credit or debit (cost less net salvage and less payment from 
customers) on closing of work orders for plant installed for temporary 
service of less than one year. (See account 185, Temporary Facilities.)
    4. Recovery of expenses in connection with current diversion cases 
(billing for the electricity consumed shall be included in the 
appropriate electric revenue account).
453 Sales of water and water power.
    A. This account shall include revenues derived from the sale of 
water for irrigation, domestic, industrial or other uses, or for the 
development by others of water power, or for headwater benefits; also, 
revenues derived from furnishing water power for mechanical purposes 
when the investment in the property used in supplying such water or 
water power is carried as electric plant in service.
    B. The records for this account shall be kept in such manner as to 
permit an analysis of the rates charged and the purposes for which the 
water was used.
454 Rent from electric property.
    A. This account shall include rents received for the use by others 
of land, buildings, and other property devoted to electric operations by 
the utility.
    B. When property owned by the utility is operated jointly with 
others under a definite arrangement for apportioning the actual expenses 
among the parties to the arrangement, any amount received by the utility 
for interest or return or in reimbursement of taxes or depreciation on 
the property shall be credited to this account.

    Note: Do not include in this account rents from property 
constituting an operating unit or system. (See account 412, Revenues 
from Electric Plant Leased to Others.)
455 Interdepartmental rents.
    This account shall include rents credited to the electric department 
on account of rental charges made against other departments (gas, water, 
etc.) of the utility. In the case of property operated under a definite 
arrangement to allocate the costs among the departments using the 
property, any reimbursement to the electric department for interest or 
return and depreciation and taxes shall be credited to this account.
456 Other electric revenues.
    This account shall include revenues derived from electric operations 
not includible in any of the foregoing accounts. It shall also include 
in a separate subaccount revenues received from operation of fish and 
wildlife, and recreation facilities whether operated by the company or 
by contract concessionaires, such as revenues from leases, or rentals of 
land for cottage, homes, or campsites.

                                  Items

    1. Commission on sale or distribution of electricity of others when 
sold under rates filed by such others.
    2. Compensation for minor or incidental services provided for others 
such as customer billing, engineering, etc.
    3. Profit or loss on sale of material and supplies not ordinarily 
purchased for resale and not handled through merchandising and jobbing 
accounts.
    4. Sale of steam, but not including sales made by a steamheating 
department or transfers of steam under joint facility operations.
    5. Include in a separate subaccount revenues in payment for rights 
and/or benefits received from others which are realized through 
research, development, and demonstration ventures. In the event the 
amounts received are so large as to distort revenues for the year in 
which received (5 percent of net income before application of the 
benefit) the amounts shall be credited to Account 253, Other Deferred 
Credits, and amortized by credits to this account over a period not to 
exceed 5 years.

[[Page 459]]

       456.1 Revenues From Transmission of Electricity of Others.

    This account shall include revenues from transmission of electricity 
of others over transmission facilities of the utility.

              457.1 Regional Transmission Service Revenues.

    This account shall include revenues derived from providing 
scheduling, system control and dispatching services. Include also in 
this account reimbursements for system planning, standards development, 
and market monitoring and market compliance activities. Records shall be 
maintained so as to show: (1) The services supplied and revenues 
received from each customer and (2) the amounts billed by tariff or 
specified rates.

                      457.2 Miscellaneous Revenues.

    This account shall include revenues and reimbursements for costs 
incurred by regional transmission service providers not provided for 
elsewhere. Records shall be maintained so as to show: (1) The services 
supplied and revenues received from each customer, and (2) the amounts 
billed by tariff or specified rates.

           Operation and Maintenance Expense Chart of Accounts

                      1. Power Production Expenses

                        a. steam power generation

                                Operation

500 Operation supervision and engineering.
501 Fuel.
502 Steam expenses (Major only).
503 Steam from other sources.
504 Steam transferred--Credit.
505 Electric expenses (Major only).
506 Miscellaneous steam power expenses (Major only).
507 Rents.
508 Operation supplies and expenses (Nonmajor only).
509 Allowances.

                               Maintenance

510 Maintenance supervision and engineering (Major only).
511 Maintenance of structures (Major only).
512 Maintenance of boiler plant (Major only).
513 Maintenance of electric plant (Major only).
514 Maintenance of miscellaneous steam plant (Major only).
515 Maintenance of steam production plant (Nonmajor only).

                       b. nuclear power generation

                                Operation

517 Operation supervision and engineering (Major only).
518 Nuclear fuel expense (Major only).
519 Coolants and water (Major only).
520 Steam expenses (Major only).
521 Steam from other sources (Major only).
522 Steam transferred--Credit. (Major only).
523 Electric expenses (Major only).
524 Miscellaneous nuclear power expenses (Major only).
525 Rents (Major only).

                               Maintenance

528 Maintenance supervision and engineering (Major only).
529 Maintenance of structures (Major only).
530 Maintenance of reactor plant equipment (Major only).
531 Maintenance of electric plant (Major only).
532 Maintenance of miscellaneous nuclear plant (Major only).

                      c. hydraulic power generation

                                Operation

535 Operation supervision and engineering.
536 Water for power.
537 Hydraulic expenses (Major only).
538 Electric expenses (Major only).
539 Miscellaneous hydraulic power generation expenses (Major only).
540 Rents.
540.1 Operation supplies and expenses (Nonmajor only).

                               Maintenance

541 Maintenance supervision and engineering (Major only).
542 Maintenance of structures (Major only).
543 Maintenance of reservoirs, dams and waterways (Major only).
544 Maintenance of electric plant (Major only).
545 Maintenance of miscellaneous hydraulic plant (Major only).
545.1 Maintenance of hydraulic production plant (Nonmajor only).

                        d. other power generation

                                Operation

546 Operation supervision and engineering.
547 Fuel.
548 Generation expenses (Major only).
549 Miscellaneous other power generation expenses (Major only).
550 Rents.
550.1 Operation supplies and expenses (Nonmajor only).

[[Page 460]]

                               Maintenance

551 Maintenance supervision and engineering (Major only).
552 Maintenance of structures (Major only).
553 Maintenance of generating and electric plant (Major only).
554 Maintenance of miscellaneous other power generation plant (Major 
          only).
554.1 Maintenance of other power production plant (Nonmajor only).

                     e. other power supply expenses

555 Purchased power.
556 System control and load dispatching (Major only).
557 Other expenses.

                        2. Transmission Expenses

                                Operation

560 Operation supervision and engineering.
561.1 Load dispatch--Reliability.
561.2 Load dispatch--Monitor and operate transmission system.
561.3 Load dispatch--Transmission service and scheduling.
561.4 Scheduling, system control and dispatch services.
561.5 Reliability planning and standards development.
561.6 Transmission service studies.
561.7 Generation interconnection studies.
561.8 Reliability planning and standards development services.
562 Station expenses (Major only).
563 Overhead line expense (Major only).
564 Underground line expenses (Major only).
565 Transmission of electricity by others (Major only).
566 Miscellaneous transmission expenses (Major only).
567 Rents.
567.1 Operation supplies and expenses (Nonmajor only).

                               Maintenance

568 Maintenance supervision and engineering (Major only).
569 Maintenance of structures (Major only).
569.1 Maintenance of computer hardware.
569.2 Maintenance of computer software.
569.3 Maintenance of communication equipment.
569.4 Maintenance of miscellaneous regional transmission plant.
570 Maintenance of station equipment (Major only).
571 Maintenance of overhead lines (Major only).
572 Maintenance of underground lines (Major only).
573 Maintenance of miscellaneous transmission plant (Major only).
574 Maintenance of transmission plant (Nonmajor only).

                       3. Regional Market Expenses

                                Operation

575.1 Operation Supervision.
575.2 Day-ahead and real-time market administration.
575.3 Transmission rights market administration.
575.4 Capacity market administration.
575.5 Ancillary services market administration.
575.6 Market monitoring and compliance.
575.7 Market facilitation, monitoring and compliance services.
575.8 Rents.

                               Maintenance

576.1 Maintenance of structures and improvements.
576.2 Maintenance of computer hardware.
576.3 Maintenance of computer software.
576.4 Maintenance of communication equipment.
576.5 Maintenance of miscellaneous market operation plant.

                        4. Distribution Expenses

                                Operation

580 Operation supervision and engineering.
581 Load dispatching (Major only).
581.1 Line and station expenses (Nonmajor only).
582 Station expenses (Major only).
583 Overhead line expenses (Major only).
584 Underground line expenses (Major only).
585 Street lighting and signal system expenses.
586 Meter expenses.
587 Customer installations expenses.
588 Miscellaneous distribution expenses.
589 Rents.

                               Maintenance

590 Maintenance supervision and engineering (Major only).
591 Maintenance of structures (Major only).
592 Maintenance of station equipment (Major only).
592.1 Maintenance of structures and equipment (Nonmajor only).
593 Maintenance of overhead lines (Major only).
594 Maintenance of underground lines (Major only).
594.1 Maintenance of lines (Nonmajor only).
595 Maintenance of line transformers.
596 Maintenance of street lighting and signal systems.
597 Maintenance of meters.
598 Maintenance of miscellaneous distribution plant.

[[Page 461]]

                      5. Customer Accounts Expenses

                                Operation

901 Supervision (Major only).
902 Meter reading expenses.
903 Customer records and collection expenses.
904 Uncollectible accounts.
905 Miscellaneous customer accounts expenses (Major only).

             6. Customer Service and Informational Expenses

                                Operation

906 Customer service and informational expenses (Nonmajor only).
907 Supervision (Major only).
908 Customer assistance expenses (Major only).
909 Informational and instructional advertising expenses (Major only).
910 Miscellaneous customer service and informational expenses (Major 
          only).

                            7. Sales Expenses

                                Operation

911 Supervision (Major only).
912 Demonstrating and selling expenses (Major only).
913 Advertising expenses (Major only).
916 Miscellaneous sales expenses (Major only).
917 Sales expenses (Nonmajor only).

                 8. Administrative and General Expenses

                                Operation

920 Administrative and general salaries.
921 Office supplies and expenses.
922 Administrative expenses transferred--Credit.
923 Outside services employed.
924 Property insurance.
925 Injuries and damages.
926 Employee pensions and benefits.
927 Franchise requirements.
928 Regulatory commission expenses.
929 Duplicate charges--Credit.
930.1 General advertising expenses.
930.2 Miscellaneous general expenses.
931 Rents.
933 Transportation expenses (Nonmajor only).

                               Maintenance

935 Maintenance of general plant.



Operation and Maintenance Expense Accounts--Table of Contents



500 Operation supervision and engineering.
    A. For Major Utilities, this account shall include the cost of labor 
and expenses incurred in the general supervision and direction of the 
operation of steam power generating stations. Direct supervision of 
specific activities, such as fuel handling, boiler room operations, 
generator operations, etc., shall be charged to the appropriate account. 
(See operating expense instruction 1.)
    B. For Nonmajor Utilities, this account shall include the cost of 
supervision and labor in the operation of steam power generating 
stations.

                          Items (Nonmajor only)

                           Boiler Room Labor:

    1. Supervising steam production.
    2. Operating fuel conveying, storage, weighing and processing 
equipment within boiler plant.
    3. Operating boiler and boiler auxiliary equipment.
    4. Operating boiler feed water purification and treatment equipment.
    5. Operating ash collection and disposal equipment located inside 
the plant.
    6. Operating boiler plant electrical equipment.
    7. Keeping boiler plant log and records and preparing reports on 
boiler plant operations.
    8. Testing boiler water.
    9. Testing, checking, and adjusting meters, gauges and other 
instruments in boiler plant.
    10. Cleaning boiler plant equipment when not incidental to 
maintenance work.
    11. Repacking glands and replacing gauge classes where the work 
involved is of a minor nature and is performed by regular operating 
crews. Where the work is of a major character such as that performed on 
high pressure boilers the item should be considered as maintenance.

                          Electric Plant Labor:

    12. Supervising electric production.
    13. Operating turbines, engines, generators and exciters.
    14. Operating condensers, circulating water systems and other 
auxiliary apparatus.
    15. Operating generator cooling system.
    16. Operating lubrication and oil control system, including oil 
purification.
    17. Operating switchboards, switch gear and electric control and 
protective equipment.

[[Page 462]]

    18. Keeping electric plant log and records and preparing reports on 
electric plant operations.
    19. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in electric plant.
    20. Cleaning electric plant equipment when not incidental to 
maintenance work.
    21. Repacking glands and replacing gauge glasses.

                          Miscellaneous Labor:

    22. General clerical and stenographic work at plant.
    23. Guarding and patrolling plant and yard.
    24. Building service.
    25. Care of grounds including snow removal, cutting grass, etc.
    26. Miscellaneous labor.
501 Fuel.
    A. This account shall include the cost of fuel used in the 
production of steam for the generation of electricity, including 
expenses in unloading fuel from the shipping media and handling thereof 
up to the point where the fuel enters the first boiler plant bunker, 
hopper, bucket, tank or holder of the boiler-house structure. Records 
shall be maintained to show the quantity, B.t.u. content and cost of 
each type of fuel used.
    B. The cost of fuel shall be charged initially to account 151, Fuel 
Stock (for Nonmajor utilities, appropriate fuel accounts carried under 
account 154, Plant Materials and Operating Supplies) and cleared to this 
account on the basis of the fuel used. Fuel handling expenses may be 
charged to this account as incurred or charged initially to account 152, 
Fuel Stock Expenses Undistributed (for Nonmajor utilities, an 
appropriate subaccount of account 154, Plant Materials and Operating 
Supplies). In the latter event, they shall be cleared to this account on 
the basis of the fuel used. Respective amounts of fuel stock and fuel 
stock expenses shall be readily available.

                                  Items

Labor:
    1. Supervising purchasing and handling of fuel.
    2. All routine fuel analyses.
    3. Unloading from shipping facility and putting in storage.
    4. Moving of fuel in storage and transferring fuel from one station 
to another.
    5. Handling from storage or shipping facility to first bunker, 
hopper, bucket, tank or holder of boiler-house structure.
    6. Operation of mechanical equipment, such as locomotives, trucks, 
cars, boats, barges, cranes, etc.

Materials and Expenses:
    7. Operating, maintenance and depreciation expenses and ad valorem 
taxes on utility-owned transportation equipment used to transport fuel 
from the point of acquisition to the unloading point (Major only).
    8. Lease or rental costs of transportation equipment used to 
transport fuel from the point of acquisition to the unloading point 
(Major only).
    9. Cost of fuel including freight, switching, demurrage and other 
transportation charges.
    10. Excise taxes, insurance, purchasing commissions and similar 
items.
    11. Stores expenses to extent applicable to fuel.
    12. Transportation and other expenses in moving fuel in storage.
    13. Tools, lubricants and other supplies.
    14. Operating supplies for mechanical equipment.
    15. Residual disposal expenses less any proceeds from sale of 
residuals.

    Note: Abnormal fuel handling expenses occasioned by emergency 
conditions shall be charged to expense as incurred.
502 Steam expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in production of steam for electric generation. This 
includes all expenses of handling and preparing fuel beginning at the 
point where the fuel enters the first boiler plant bunker, hopper, tank 
or holder of the boiler-house structure.

                                  Items

Labor:
    1. Supervising steam production.
    2. Operating fuel conveying, storage weighing and processing 
equipment within boiler plant.
    3. Operating boiler and boiler auxiliary equipment.
    4. Operating boiler feed water purification and treatment equipment.
    5. Operating ash-collecting and disposal equipment located inside 
the plant.
    6. Operating boiler plant electrical equipment.
    7. Keeping boiler plant log and records and preparing reports on 
boiler plant operation.
    8. Testing boiler water.
    9. Testing, checking, and adjusting meters, gauges, and other 
instruments and equipment in boiler plant.

[[Page 463]]

    10. Cleaning boiler plant equipment when not incidental to 
maintenance work.
    11. Repacking glands and replacing gauge glasses where the work 
involved is of a minor nature and is performed by regular operating 
crews. Where the work is of a major character, such as that performed on 
high-pressure boilers, the item should be considered as maintenance.

Materials and Expenses:
    12. Chemicals and boiler inspection fees.
    13. Lubricants.
    14. Boiler feed water purchased and pumping supplies.
503 Steam from other sources.
    This account shall include the cost of steam purchased, or 
transferred from another department of the utility or from others under 
a joint facility operating arrangement, for use in prime movers devoted 
to the production of electricity.

    Note: The records shall be so kept as to show separately for each 
company from which steam is purchased, the point of delivery, the 
quantity, the price, and the total charge. When steam is transferred 
from another department or from others under a joint operating 
arrangement, the utility shall be prepared to show full details of the 
cost of producing such steam, the basis of the charge to electric 
generation and the extent and manner of use by each department or party 
involved.
504 Steam transferred--Credit.
    A. This account shall include credits for expenses of producing 
steam which are charged to others or to other utility departments under 
a joint operating arrangement. Include also credits for steam expenses 
chargeable to other electric accounts outside of the steam generation 
group. Full details of the basis of determination of the cost of steam 
transferred shall be maintained.
    B. If the charges to others or to other departments of the utility 
include an amount for depreciation, taxes and return on the joint steam 
facilities, such portion of the charge shall be credited, in the case of 
others, to account 454, Rent from Electric Property, and in the case of 
other departments of the utility, to account 455, Interdepartmental 
Rents.
505 Electric expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in operating prime movers, generators, and their 
auxiliary apparatus, switch gear and other electric equipment to the 
points where electricity leaves for conversion for transmission or 
distribution.

                                  Items

Labor:
    1. Supervising electric production.
    2. Operating turbines, engines, generators and exciters.
    3. Operating condensers, circulating water systems and other 
auxiliary apparatus.
    4. Operating generator cooling system.
    5. Operating lubrication and oil control system, including oil 
purification.
    6. Operating switchboards, switch gear and electric control and 
protective equipment.
    7. Keeping electric plant log and records and preparing reports on 
electric plant operations.
    8. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in the electric plant.
    9. Cleaning electric plant equipment when not incidental to 
maintenance work.
    10. Repacking glands and replacing gauge glasses.

Materials and Expenses:
    11. Lubricants and control system oils.
    12. Generator cooling gases.
    13. Circulating water purification supplies.
    14. Cooling water purchased.
    15. Motor and generator brushes.
506 Miscellaneous steam power expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred which are not specifically provided for or are not 
readily assignable to other steam generation operation expense accounts.

                                  Items

Labor:
    1. General clerical and stenographic work.
    2. Guarding and patrolling plant and yard.
    3. Building service.
    4. Care of grounds including snow removal, cutting grass, etc.
    5. Miscellaneous labor.

Materials and Expenses:
    6. General operating supplies, such as tools, gaskets, packing 
waste, gauge glasses, hose, indicating lamps, record and report forms, 
etc.
    7. First-aid supplies and safety equipment.
    8. Employees' service facilities expenses.
    9. Building service supplies.
    10. Communication service.

[[Page 464]]

    11. Miscellaneous office supplies and expenses, printing and 
stationery.
    12. Transportation expenses.
    13. Meals, traveling and incidental expenses.
    14. Research, development, and demonstration expenses.
507 Rents.
    This account shall include all rents of property of others used, 
occupied or operated in connection with steam power generation. (See 
operating expense instruction 3.)
508 Operation supplies and expenses (Nonmajor only).
    This account shall include the cost of materials used and expenses 
incurred in the operation of steam power generating stations.

                                  Items

    1. Chemicals and boiler inspection fees.
    2. Lubricants and control system oils.
    3. Boiler feed water purchased and pumping supplies.
    4. Generator cooling gases.
    5. Circulating water purification supplies.
    6. Cooling water purchased.
    7. Motor and generator brushes.
    8. General operating supplies, such as tools, gaskets, packing 
waste, gauge glasses, hose, indicating lamps, record and report forms, 
etc.
    9. First-aid supplies and safety equipment.
    10. Employees' service facilities expenses.
    11. Building service supplies.
    12. Communication service.
    13. Miscellaneous office supplies and expenses, printing and 
stationery.
    14. Transportation expenses.
    15. Meals, traveling and incidental expenses.
509 Allowances.
    This account shall include the cost of allowances expensed 
concurrent with the monthly emission of sulfur dioxide. (See General 
Instruction No. 21.)
510 Maintenance supervision and engineering (Major only).
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of steam 
generation facilities. Direct field supervision of specific jobs shall 
be charged to the appropriate maintenance account. (See operating 
expense instruction 1.)
511 Maintenance of structures (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of steam structures, the book cost 
of which is includible in account 311, Structures and Improvements. (See 
operating expense instruction 2.)
512 Maintenance of boiler plant (Major only).
    A. This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of steam plant, the book cost of 
which is includible in account 312, Boiler Plant Equipment. (See 
operating expense instruction 2.)
    B. For the purpose of making charges hereto and to account 513, 
Maintenance of Electric Plant, the point at which steam plant is 
distinguished from electric plant is defined as follows:
    1. Inlet flange of throttle valve on prime mover.
    2. Flange of all steam extraction lines on prime mover.
    3. Hotwell pump outlet on condensate lines.
    4. Inlet flange of all turbine-room auxiliaries.
    5. Connection to line side of motor starter for all boiler-plant 
equipment.
513 Maintenance of electric plant (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of electric plant, the book cost of 
which is includible in account 313, Engines and Engine-Driven 
Generators, account 314, Turbogenerator Units, and account 315, 
Accessory Electric Equipment. (See operating expense instruction 2 and 
paragraph B of account 512.)
514 Maintenance of miscellaneous steam plant (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of miscellaneous steam generation 
plant, the book cost of which is includible in account 316, 
Miscellaneous Power Plant Equipment. (See operating expense instruction 
2.)

[[Page 465]]

515 Maintenance of steam production plant (Nonmajor only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of steam production plant the book 
cost of which is includible in plant accounts 311 to 316, inclusive. 
(See operating expense instruction 2.)
517 Operation supervision and engineering (Major only).
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of the operation of nuclear 
power generating stations. Direct supervision of specific activities, 
such as fuel handling, reactor operations, generator operations, etc., 
shall be charged to the appropriate account. (See operating expense 
instruction 1.)
518 Nuclear fuel expense (Major only).
    A. This account shall be debited and account 120.5, Accumulated 
Provision for Amortization of Nuclear Fuel Assemblies, credited for the 
amortization of the net cost of nuclear fuel assemblies used in the 
production of energy. The net cost of nuclear fuel assemblies subject to 
amortization shall be the cost of nuclear fuel assemblies plus or less 
the expected net salvage of uranium, plutonium, and other byproducts and 
unburned fuel. The utility shall adopt the necessary procedures to 
assure that charges to this account are distributed according to the 
thermal energy produced in such periods.
    B. This account shall also include the costs involved when fuel is 
leased.
    C. This account shall also include the cost of other fuels, used for 
ancillary steam facilities, including superheat.
    D. This account shall be debited or credited as appropriate for 
significant changes in the amounts estimated as the net salvage value of 
uranium, plutonium, and other byproducts contained in account 157, 
Nuclear Materials Held for Sale and the amount realized upon the final 
disposition of the materials. Significant declines in the estimated 
realizable value of items carried in account 157 may be recognized at 
the time of market price declines by charging this account and crediting 
account 157. When the declining change occurs while the fuel is recorded 
in account 120.3, Nuclear Fuel Assemblies in Reactor, the effect shall 
be amortized over the remaining life of the fuel.
519 Coolants and water (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred for heat transfer materials and water used for steam 
and cooling purposes.

                                  Items

Labor:
    1. Operation of water supply facilities.
    2. Handling of coolants and heat transfer materials.

Materials and Expenses:
    3. Chemicals.
    4. Additions to or refining of, fluids used in reactor systems.
    5. Lubricants.
    6. Pumping supplies and expenses.
    7. Miscellaneous supplies and expenses.
    8. Purchased water.

    Note: Do not include in this account water for general station use 
or the initial charge for coolants, heat transfer or moderator fluids, 
chemicals or other supplies capitalized.
520 Steam expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in production of steam through nuclear processes, and 
similar expenses for operation of any auxiliary superheat facilities.

                                  Items

Labor:
    1. Supervising steam production.
    2. Fuel handling including removal, insertion, disassembly and 
preparation for cooling operations and shipment.
    3. Testing instruments and gauges.
    4. Health, safety, monitoring and decontamination activities.
    5. Waste disposal.
    6. Operating steam boilers and auxiliary steam, superheat 
facilities.

Materials and Expenses:
    7. Chemical supplies.
    8. Charts, logs, etc.
    9. Health, safety, monitoring and decontamination supplies.
    10. Boiler inspection fees.
    11. Lubricants.

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521 Steam from other sources (Major only).
    This account shall include the cost of steam purchased or 
transferred from another department of the utility or from others under 
a joint facility operating arrangement for use in prime movers devoted 
to the production of electricity.

    Note: The records shall be so kept as to show separately for each 
company from which steam is purchased, the point of delivery, the 
quantity, the price, and the total charge. When steam is transferred 
from another operating department, the utility shall be prepared to show 
full details of the cost of producing such steam, the basis of the 
charges to electric generation, and the extent and manner of use by each 
department involved.
522 Steam transferred--Credit (Major only).
    A. This account shall include credits for expenses of producing 
steam which are charged to others or to other utility departments under 
a joint operating arrangement. Include also credits for steam expenses 
chargeable to other electric accounts outside of the steam generation 
group. Full details of the basis of determination of the cost of steam 
transferred shall be maintained.
    B. If the charges to others or to other departments of the utility 
include an amount for depreciation, taxes and return on the joint steam 
facilities, such portion of the charge shall be credited, in the case of 
others, to account 454, Rent from Electric Property, and in the case of 
other departments of the utility, to account 455, Interdepartmental 
Rents.
523 Electric expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in operating turbogenerators, steam turbines and their 
auxiliary apparatus, switch gear and other electric equipment to the 
points where electricity leaves for conversion for transmission or 
distribution.

                                  Items

Labor:
    1. Supervising electric production.
    2. Operating turbines, engines, generators and exciters.
    3. Operating condensers, circulating water systems and other 
auxiliary apparatus.
    4. Operating generator cooling system.
    5. Operating lubrication and oil control system, including oil 
purification.
    6. Operating switchboards, switch gear and electric control and 
protective equipment.
    7. Keeping plant log and records and preparing reports on electric 
plant operations.
    8. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in the electric plant.
    9. Cleaning electric plant equipment when not incidental to 
maintenance.
    10. Repacking glands and replacing gauge glasses.

Materials and Expenses:
    11. Lubricants and control system oils.
    12. Generator cooling gases.
    13. Log sheets and charts.
    14. Motor and generator brushes.
524 Miscellaneous nuclear power expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred which are not specifically provided for or are not 
readily assignable to other nuclear generation operation accounts.

                                  Items

Labor:
    1. General clerical and stenographic work.
    2. Plant security.
    3. Building service.
    4. Care of grounds, including snow removal, cutting grass, etc.
    5. Miscellaneous labor.

Materials and Expenses:
    6. General operating supplies, such as tools, gaskets, hose, 
indicating lamps, record and report forms, etc.
    7. First-aid supplies and safety equipment.
    8. Employees' service facilities expenses.
    9. Building service supplies.
    10. Communication service.
    11. Miscellaneous office supplies and expenses, printing and 
stationery.
    12. Transportation expenses.
    13. Meals, traveling and incidental expenses.
    14. Research, development, and demonstration expenses.
525 Rents (Major only).
    This account shall include all rents of property of others used, 
occupied or operated in connection with nuclear generation. (See 
operating expense instruction 3.)

[[Page 467]]

528 Maintenance supervision and engineering (Major only).
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of nuclear 
generation facilities. Direct field supervision of specific jobs shall 
be charged to the appropriate maintenance account. (See operating 
expense instruction 1.)
529 Maintenance of structures (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures, the book cost of 
which is includible in account 321, Structures and Improvements. (See 
operating expense instruction 2.)
530 Maintenance of reactor plant equipment (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of reactor plant, the book cost of 
which is includible in account 322, Reactor Plant Equipment. (See 
operating expense instruction 2.)
531 Maintenance of electric plant (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of electric plant, the book cost of 
which is includible in account 323, Turbogenerator Units, and account 
324, Accessory Electric Equipment. (See operating expense instruction 
2.)
532 Maintenance of miscellaneous nuclear plant (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of miscellaneous nuclear generating 
plant, the book cost of which is includible in account 325, 
Miscellaneous Power Plant Equipment. (See operating expense instruction 
2.)
535 Operation supervision and engineering.
    A. For Major utilities, this account shall include the cost of labor 
and expenses incurred in the general supervision and direction of the 
operation of hydraulic power generating stations. Direct supervision of 
specific activities, such as hydraulic operation, generator operation, 
etc., shall be charged to the appropriate account (See operating expense 
instruction 1).
    B. For Nonmajor utilities, this account shall include the cost of 
supervision and labor in the operation of hydraulic power generating 
stations.

                          Items (Nonmajor Only)

Hydraulic Labor:
    1. Supervising hydraulic operation.
    2. Removing debris and ice from trash racks, reservoirs and 
waterways.
    3. Patrolling reservoirs and waterways.
    4. Operating intakes, spillways, sluiceways and outlet works.
    5. Operating bubbler, heater or other deicing systems.
    6. Ice and log jam work.
    7. Operating navigation facilities.
    8. Operations relating to conservation of game, fish, forests, etc.
    9. Insect control activities.
Electric Labor:
    10. Supervising electric production.
    11. Operating prime movers, generators and auxiliary equipment.
    12. Operating generator cooling system.
    13. Operating lubrication and oil control systems, including oil 
purification.
    14. Operating switchboards, switchgear and electric control and 
protection equipment.
    15. Keeping plant log and records and preparing reports on plant 
operations.
    16. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in the plant.
    17. Cleaning plant equipment when not incidental to maintenance 
work.
    18. Repacking glands.
Miscellaneous Labor:
    19. General clerical and stenographic work.
    20. Guarding and patrolling plant and yard.
    21. Building service.
    22. Care of grounds, including snow removal, cutting grass, etc.
    23. Snow removal from roads and bridges.
    24. Miscellaneous labor.
536 Water for power.
    This account shall include the cost of water used for hydraulic 
power generation.

                                  Items

    1. Cost of water purchased from others, including water tolls paid 
reservoir companies.
    2. Periodic payments for licenses or permits from any governmental 
agency for

[[Page 468]]

water rights, or payments based on the use of the water.
    3. Periodic payments for riparian rights.
    4. Periodic payments for headwater benefits or for detriments to 
others.
    5. Cloud seeding.
537 Hydraulic expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in operating hydraulic works including reservoirs, 
dams, and waterways, and in activities directly relating to the 
hydroelectric development outside the generating station. It shall also 
include the cost of labor, materials used and other expenses incurred in 
connection with the operation of (a) fish and wildlife, and (b) 
recreation facilities. Separate subaccounts shall be maintained for each 
of the above.

                                  Items

Labor:
    1. Supervising hydraulic operation.
    2. Removing debris and ice from trash racks, reservoirs and 
waterways.
    3. Patrolling reservoirs and waterways.
    4. Operating intakes, spillways, sluiceways, and outlet works.
    5. Operating bubbler, heater or other deicing systems.
    6. Ice and log jam work.
    7. Operating navigation facilities.
    8. Operations relating to conservation of game, fish, forests, etc.
    9. Insect control activities.

Materials and Expenses:
    10. Insect control materials.
    11. Lubricants, packing, and other supplies used in operation of 
hydraulic equipment.
    12. Transportation expense.
538 Electric expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in operating prime movers, generators, and their 
auxiliary apparatus, switchgear, and other electric equipment, to the 
point where electricity leaves for conversion for transmission or 
distribution.

                                  Items

Labor:
    1. Supervising electric production.
    2. Operating prime movers, generators and auxiliary equipment.
    3. Operating generator cooling system.
    4. Operating lubrication and oil control systems, including oil 
purification.
    5. Operating switchboards, switchgear, and electric control and 
protection equipment.
    6. Keeping plant log and records and preparing reports on plant 
operations.
    7. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls, and other equipment in the plant.
    8. Cleaning plant equipment when not incidental to maintenance work.
    9. Repacking glands.

Materials and Expenses:
    10. Lubricants and control system oils.
    11. Motor and generator brushes.
539 Miscellaneous hydraulic power generation expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred which are not specifically provided for or are not 
readily assignable to other hydraulic generation operation expense 
accounts.

                                  Items

Labor:
    1. General clerical and stenographic work.
    2. Guarding and patrolling plant and yard.
    3. Building service.
    4. Care of grounds including snow removal, cutting grass, etc.
    5. Snow removal from roads and bridges.
    6. Miscellaneous labor.

Materials and Expenses:
    7. General operating supplies, such as tools, gaskets, packing, 
waste, hose, indicating lamps, record and report forms, etc.
    8. First-aid supplies and safety equipment.
    9. Employees' service facilities expenses.
    10. Building service supplies.
    11. Communication service.
    12. Office supplies, printing and station- ery.
    13. Transportation expenses.
    14. Fuel.
    15. Meals, traveling and incidental expenses.
    16. Research, development, and demonstration expenses.
540 Rents.
    This account shall include all rents of property of others used, 
occupied or operated in connection with hydraulic power generation, 
including amounts payable to the United States for the occupancy of 
public lands and reservations for reservoirs, dams, flumes, forebays, 
penstocks, power houses, etc., but not including transmission right of 
way. (See operating expense instruction 3.)

[[Page 469]]

540.1 Operation supplies and expenses (Nonmajor only).
    This account shall include the cost of materials used and expenses 
incurred in the operation of hydraulic power generating stations.

                                  Items

    1. Insect control materials.
    2. Lubricants, packing, and other supplies used in operation of 
hydraulic equipment.
    3. Supplies and expenses in conservation of game, fish, forests, 
etc.
    4. Transportation expense.
    5. Control system oils.
    6. Motor and generator brushes.
    7. General operating supplies, such as tools, gaskets, packing, 
waste hose, indicating lamps, record and report forms, etc.
    8. First-aid supplies and safety equipment.
    9. Employees' service facilities expenses.
    10. Building service supplies.
    11. Communication service.
    12. Office supplies, printing and stationery.
    13. Transportation expenses.
    14. Fuel.
    15. Meals, traveling and incidental expenses.
541 Maintenance supervision and engineering (Major only).
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of the maintenance of hydraulic 
power generating stations. Direct field supervision of specific jobs 
shall be charged to the appropriate maintenance account. (See operating 
expense instruction 1.)
542 Maintenance of structures (Major only).
    This account shall include the cost of labor, materials used, and 
expenses incurred in maintenance of hydraulic structures, the book cost 
of which is includible in Account 331, Structures and Improvements. (See 
operating expense instruction 2) However, the cost of labor, materials 
used and expenses incurred in the maintenance of fish and wildlife, and 
recreation facilities, the book cost of which is includible in Account 
331, Structures and Improvements, shall be charged to Account 545, 
Maintenance of Miscellaneous Hydraulic Plant.
543 Maintenance of reservoirs, dams, and waterways (Major only).
    This account shall include the cost of labor, materials used, and 
expenses incurred in maintenance of plant includible in Account 332, 
Reservoirs, Dams, and Waterways. (See operating expense instruction 2) 
However, the cost of labor materials used and expenses incurred in the 
maintenance of fish and wildlife, and recreation facilities, the book 
cost of which is includible in Account 332, Reservoirs, Dams and 
Waterways, shall be charged to Account 545, Maintenance of Miscellaneous 
Hydraulic Plant.
544 Maintenance of electric plant (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of plant includible in Account 333, 
Water Wheels, Turbines and Generators, and account 334, Accessory 
Electric Equipment. (See operating expense instruction 2.)
545 Maintenance of miscellaneous hydraulic plant (Major only).
    This account shall include the cost of labor, materials used, and 
expenses incurred in maintenance of plant, the book cost of which is 
includible in Account 335, Miscellaneous Power Plant Equipment, and 
Account 336, Roads, Railroads and Bridges. (See operating expense 
instruction 2.) It shall also include the cost of labor, materials used 
and other expenses incurred in the maintenance of (a) fish and wildlife, 
and (b) recreation facilities. Separate subaccounts shall be maintained 
for each of the above.
545.1 Maintenance of hydraulic production plant (Nonmajor only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of hydraulic production plant the 
book cost of which is includible in plant accounts 331 to 336, 
inclusive. (See operating expense instruction 2.)

[[Page 470]]

546 Operation supervision and engineering.
    A. For Major utilities, this account shall include the cost of labor 
and expenses incurred in the general supervision and direction of the 
operation of other power generating stations. Direct supervision of 
specific activities, such as fuel handling, engine and generator 
operation, etc., shall be charged to the appropriate account. (See 
operating expense instruction 1.)
    B. For Nonmajor utilities, this account shall include the cost of 
supervision and labor in the operation of other power generating 
stations.

                            Generating Labor:

    1. Supervising other power generation operation.
    2. Operating prime movers, generators and auxiliary apparatus and 
switching and other electric equipment.
    3. Keeping plant log and records and preparing reports on plant 
operations.
    4. Testing, checking, cleaning, oiling and adjusting equipment.

                          Miscellaneous Labor:

    5. General clerical and stenographic work.
    6. Guarding and patrolling plant and yard.
    7. Building service.
    8. Care of grounds, including snow removal, cutting grass, etc.
    9. Miscellaneous labor.
547 Fuel.
    This account shall include the cost delivered at the station (see 
account 151, Fuel Stock, for Major utilities, and account 154, Plant 
Materials and Operating Supplies, for Nonmajor utilities) of all fuel, 
such as gas, oil, kerosene, and gasoline used in other power generation.
548 Generation expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in operating prime movers, generators and electric 
equipment in other power generating stations, to the point where 
electricity leaves for conversion for transmission or distribution.

                                  Items

Labor:
    1. Supervising other power generation operation.
    2. Operating prime movers, generators and auxiliary apparatus and 
switching and other electric equipment.
    3. Keeping plant log and records and preparing reports on plant 
operations.
    4. Testing, checking, cleaning, oiling and adjusting equipment.

Materials and Expenses:
    5. Dynamo, motor, and generator brushes.
    6. Lubricants and control system oils.
    7. Water for cooling engines and generators.
549 Miscellaneous other power generation expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the operation of other power generating stations 
which are not specifically provided for or are not readily assignable to 
other generation expense accounts.

                                  Items

Labor:
    1. General clerical and stenographic work.
    2. Guarding and patrolling plant and yard.
    3. Building service.
    4. Care of grounds, including snow removal, cutting grass, etc.
    5. Miscellaneous labor.

Materials and Expenses:
    6. Building service supplies.
    7. First-aid supplies and safety equipment.
    8. Communication service.
    9. Employees' service facilities expenses.
    10. Office supplies, printing and station- ery.
    11. Transportation expense.
    12. Meals, traveling and incidental expenses.
    13. Fuel for heating.
    14. Water for fire protection or general use.
    15. Miscellaneous supplies, such as hand tools, drills, saw blades, 
files, etc.
    16. Research, development, and demonstration expenses.
550 Rents.
    This account shall include all rents of property of others used, 
occupied, or operated in connection with other power generation. (See 
operating expense instruction 3.)
550.1 Operation supplies and expenses (Nonmajor only).
    This account shall include the cost of materials used and expenses 
incurred in the operation of other power generating stations.

[[Page 471]]

                                  Items

    1. Dynamo, motor, and generator brushes.
    2. Lubricants and control system oils.
    3. Water for cooling engines and generators.
    4. Building service supplies.
    5. First-aid supplies and safety equipment.
    6. Communication service.
    7. Employees' service facilities expenses.
    8. Office supplies, printing and stationery.
    9. Transportation expense.
    10. Meals, traveling and incidental expenses.
    11. Fuel for heating.
    12. Water for fire protection or general use.
    13. Miscellaneous supplies, such as hand tools, drills, saw blades, 
files, etc.
551 Maintenance supervision and engineering (Major only).
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of the maintenance of other 
power generating stations. Direct field supervision of specific jobs 
shall be charged to the appropriate maintenance account. (See operating 
expense instruction 1.)
552 Maintenance of structures (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of facilities used in other power 
generation, the book cost of which is includible in account 341, 
Structures and Improvements, and account 342, Fuel Holders, Producers 
and Accessories. (See operating expense instruction 2.)
553 Maintenance of generating and electric equipment (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of plant, the book cost of which is 
includible in account 343, Prime Movers, account 344. Generators, and 
account 345, Accessory Electric Equipment. (See operating expense 
instruction 2.)
554 Maintenance of miscellaneous other power generation plant (Major 
only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of other power generation plant, the 
book cost of which is includible in account 346, Miscellaneous Power 
Plant Equipment. (See operating expense instruction 2.)
554.1 Maintenance of other power production plant (Nonmajor only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of other power generation plant, 
the book cost of which is includible in plant accounts 341 to 346, 
inclusive. (See operating expense instruction 2.)
555 Purchased power.
    A. This account shall include the cost at point of receipt by the 
utility of electricity purchased for resale. It shall include, also, net 
settlements for exchange of electricity or power, such as economy 
energy, off-peak energy for on-peak energy, spinning reserve capacity, 
etc. In addition, the account shall include the net settlements for 
transactions under pooling or interconnection agreements wherein there 
is a balancing of debits and credits for energy, capacity, etc. Distinct 
purchases and sales shall not be recorded as exchanges and net amounts 
only recorded merely because debit and credit amounts are combined in 
the voucher settlement.
    B. The records supporting this account shall show, by months, the 
demands and demand charges, kilowatt-hours and prices thereof under each 
purchase contract and the charges and credits under each exchange or 
power pooling contract.
556 System control and load dispatching (Major only).
    This account shall include the cost of labor and expenses incurred 
in load dispatching activities for system control. Utilities having an 
interconnected electric system or operating under a central authority 
which controls the production and dispatching of electricity may 
apportion these costs to this account and transmission expense Accounts 
561.1 through 561.4, and Account 581, Load Dispatching-Distribution.

                                  Items

Labor:
    1. Allocating loads to plants and interconnections with others.

[[Page 472]]

    2. Directing switching.
    3. Arranging and controlling clearances for construction, 
maintenance, test and emergency purposes.
    4. Controlling system voltages.
    5. Recording loadings, water conditions, etc.
    6. Preparing operating reports and data for billing and budget 
purposes.
    7. Obtaining reports on the weather and special events.

Expenses:
    8. Communication service provided for system control purposes.
    9. System record and report forms.
    10. Meals, traveling and incidental expenses.
    11. Obtaining weather and special events reports.
557 Other expenses.
    A. This account shall be charged with any production expenses 
including expenses incurred directly in connection with the purchase of 
electricity, which are not specifically provided for in other production 
expense accounts. Charges to this account shall be supported so that a 
description of each type of charge will be readily available.
    B. Recoveries from insurance companies, under use and occupancy 
provisions of policies, of amounts in reimbursement of excessive or 
added production costs for which the insurance company is liable under 
the terms of the policy shall be credited to this account.
560 Operation supervision and engineering.
    A. For Major utilities, this account shall include the cost of labor 
and expenses incurred in the general supervision and direction of the 
operation of the transmission system as a whole. Direct supervision of 
specific activities, such as station operation, line operation, etc., 
shall be charged to the appropriate account. (See operating expense 
instruction 1.)
    B. For Nonmajor utilities, this account shall include the cost of 
supervision and labor in the operation of the transmission system.

                          Items (Nonmajor Only)

                         Load Dispatching Labor:

    1. Direct switching.
    2. Arranging and controlling clearances for construction, 
maintenance, test and emergency purposes.
    3. Controlling system voltages.
    4. Obtaining reports on the weather and special events.
    5. Preparing operating reports and data for billing and budget 
purposes.

Station Labor:
    6. Supervising station operation.
    7. Adjusting station equipment where such adjustment primarily 
affects performance, such as regulating the flow of cooling water, 
adjusting current in fields of a machine or changing voltage of 
regulators changing station transformer taps.
    8. Inspecting, testing and calibrating station equipment for the 
purpose of checking its performance.
    9. Keeping station log and records and preparing reports on station 
operation.
    10. Operating switching and other station equipment.
    11. Standing watch, guarding and patrolling station and station 
yard.
    12. Sweeping, mopping and tidying station.
    13. Care of grounds, including snow removal, cutting grass, etc.

                               Line Labor:

    14. Supervising line operation.
    15. Inspecting and testing lightning arresters, circuit breakers, 
switches and grounds.
    16. Load tests of circuits.
    17. Routine line patrolling.
    18. Routine voltage surveys made to determine the condition of 
efficiency of transmission system.
    19. Transferring loads, switching and reconnecting circuits and 
equipment for operating purposes. (Switching for construction or 
maintenance purposes is not includible in this account.)
    20. Routine inspection and cleaning of manholes, conduit, network 
and transformer vaults.
    21. Electrolysis surveys.
    22. Inspecting and adjusting line testing equipment such as 
voltmeters, ammeters, wattmeters, etc.
    23. Regulation and addition of oil or gas in high voltage cable 
systems.

                          Miscellaneous Labor:

    24. General records of physical characteristics of lines and 
stations, such as capacities, etc.
    25. Ground resistance records.
    26. Janitorial work at transmission office buildings, including care 
of grounds, snow removal, cutting grass, etc.
    27. Joint pole maps and prints.
    28. Line load and voltage records.
    29. Preparing maps and prints.
    30. General clerical and stenographic work.
    31. Miscellaneous labor.

[[Page 473]]

561.1 Load Dispatch--Reliability.
    This account shall include the cost of labor, materials used and 
expenses incurred by a regional transmission service provider or other 
transmission provider to manage the reliability coordination function as 
specified by the North American Electric Reliability Council (NERC) and 
individual reliability organizations. These activities shall include 
performing current and next day reliability analysis. This account shall 
include the costs incurred to calculate load forecasts, and performing 
contingency analysis.
561.2 Load Dispatch--Monitor and Operate Transmission System.
    This account shall include the costs of labor, materials used and 
expenses incurred by a regional transmission service provider or other 
transmission provider to monitor, assess and operate the power system 
and individual transmission facilities in real-time to maintain safe and 
reliable operation of the transmission system. This account shall also 
include the expense incurred to manage transmission facilities to 
maintain system reliability and to monitor the real-time flows and 
direct actions according to regional plans and tariffs as necessary.

                                  Items

    1. Receive and analyze outage requests
    2. Reschedule outage plans
    3. Monitor solution quality field data values, providing model 
updates to NERC and coordinating network model changes across all 
systems
    4. Conduct operating training related to NERC certification
    5. Monitor generation resources and communicate expected dispatch 
actions
    6. Ensure ancillary service requirements are met
    7. Directing switching
    8. Controlling system voltages
    9. Obtaining reports on the weather and special events
    10. Preparing operating reports and data for billing and budget 
purposes
561.3 Load Dispatch--Transmission Service and Scheduling.
    This account shall include the costs of labor, materials used and 
expenses incurred by a regional transmission service provider or other 
transmission provider to process hourly, daily, weekly and monthly 
transmission service requests using an automated system such as an Open 
Access Same-Time Information System (OASIS). It shall also include the 
expenses incurred to operate the automated transmission service request 
system and to monitor the status of all scheduled energy transactions.
561.4 Scheduling, System Control and Dispatching Services.
    This account shall include the costs billed to the transmission 
owner, load serving entity or generator for scheduling, system control 
and dispatching service. Include in this account service billings for 
system control to maintain the reliability of the transmission area in 
accordance with reliability standards, maintaining defined voltage 
profiles, and monitoring operations of the transmission facilities.
561.5 Reliability, Planning and Standards Development.
    This account shall include the cost of labor, materials used and 
expenses incurred for the system planning of the interconnected bulk 
electric transmission systems within a planning authority area.

                                  Items

    1. Developing and maintaining transmission system models to evaluate 
transmission system performance.
    2. Maintaining and applying methodologies and tools for the analysis 
and simulation of the transmission systems for the assessment and 
development of transmission expansion plans.
    3. Assessing, developing and documenting transmission expansion 
plans.
    4. Maintaining transmission system models (steady-state, dynamics, 
and short circuit).
    5. Collecting transmission information and transmission facility 
characteristics and ratings.
    6. Notifying participants of any planned transmission changes that 
may impact their facilities.
    7. Developing and reporting on transmission expansion plans for 
assessment and compliance with reliability standards.
    8. Developing reliability standards for the planning and operation 
of the interconnected bulk electric transmission systems that serve the 
United States, Canada, and Mexico.
    9. Developing criteria and certification procedures for reliability 
authorities, transmission operators and others.

[[Page 474]]

    10. Outside services employed.

    Note: The cost of supervision, customer records and collection 
expenses, administrative and general salaries, office supplies and 
expenses, property insurance, injuries and damages, employee pension and 
benefits, regulatory commission expenses, general advertising, and rents 
shall be charged to the customer accounts, service, and administrative 
and general expense accounts contained in the Uniform System of 
Accounts.
561.6 Transmission Service Studies.
    This account shall include the cost of labor, materials used and 
expenses incurred to conduct transmission services studies for proposed 
interconnections with the transmission system. Detailed records shall be 
maintained for each study undertaken and all reimbursements received for 
conducting such a study.
561.7 Generation Interconnection Studies.
    This account shall include the cost of labor, materials used and 
expenses incurred to conduct generation interconnection studies for 
proposed interconnections with the transmission system. Detailed records 
shall be maintained for each study undertaken and all reimbursements 
received for conducting such a study.
561.8 Reliability Planning and Standards Development Services
    This account shall include the costs billed to the transmission 
owner, load serving entity, or generator for system planning of the 
interconnected bulk electric transmission system. Include also the costs 
billed by the regional transmission service provider for system 
reliability and resource planning to develop long-term strategies to 
meet customer demand and energy requirements. This account shall also 
include fees and expenses for outside services incurred by the regional 
transmission service provider and billed to the load serving entity, 
transmission owner or generator.
562 Station expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in operating transmission substantions and switching 
stations. If transmission station equipment is located in or adjacent to 
a generating station the expenses applicable to transmission station 
operations shall nevertheless be charged to this account.

                                  Items

Labor:
    1. Supervising station operation.
    2. Adjusting station equipment where such adjustment primarily 
affects performance, such as regulating the flow of cooling water, 
adjusting current in fields of a machine or changing voltage of 
regulators, changing station transformer taps.
    3. Inspecting, testing and calibrating station equipment for the 
purpose of checking its performance.
    4. Keeping station log and records and preparing reports on station 
operation.
    5. Operating switching and other station equipment.
    6. Standing watch, guarding, and patrolling station and station 
yard.
    7. Sweeping, mopping, and tidying station.
    8. Care of grounds, including snow removal, cutting grass, etc.

Materials and Expenses:
    9. Building service expenses.
    10. Operating supplies, such as lubricants, commutator brushes, 
water, and rubber goods.
    11. Station meter and instrument supplies, such as ink and charts.
    12. Station record and report forms.
    13. Tool expense.
    14. Transportation expenses.
    15. Meals, traveling, and incidental expenses.
563 Overhead line expenses (Major only).
564 Underground line expenses (Major only).
    A. These accounts shall include the cost of labor, materials used 
and expenses incurred in the operation of transmission lines.
    B. If the expenses are not substantial for both overhead and 
underground lines, these accounts may be combined.

                                  Items

Labor:
    1. Supervising line operation.
    2. Inspecting and testing lightning arresters, circuit breakers, 
switches, and grounds
    3. Load tests of circuits.
    4. Routine line patrolling.
    5. Routine voltage surveys made to determine the condition or 
efficiency of transmission system.

[[Page 475]]

    6. Transferring loads, switching and reconnecting circuits and 
equipment for operating purposes. (Switching for construction or 
maintenance purposes is not includible in this account.)
    7. Routine inspection and cleaning of manholes, conduit, network and 
transformer vaults.
    8. Electrolysis surveys.
    9. Inspecting and adjusting line-testing equipment, such as 
voltmeters, ammeters, wattmeters, etc.
    10. Regulation and addition of oil or gas in high-voltage cable 
systems.

Materials and Expenses:
    11. Transportation expenses.
    12. Meals, traveling and incidental expenses.
    13. Tool expenses.
    14. Operating supplies, such as instrument charts, rubber goods, 
etc.
565 Transmission of electricity by others (Major only).
    This account shall include amounts payable to others for the 
transmission of the utility's electricity over transmission facilities 
owned by others.
566 Miscellaneous transmission expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in transmission map and record work, transmission 
office expenses, and other transmission expenses not provided for 
elsewhere.

                                  Items

Labor:
    1. General records of physical characteristics of lines and 
stations, such as capacities, etc.
    2. Ground resistance records.
    3. Janitor work at transmission office buildings, including care of 
grounds, snow removal, cutting grass, etc.
    4. Joint pole maps and records.
    5. Line load and voltage records.
    6. Preparing maps and prints.
    7. General clerical and stenographic work.
    8. Miscellaneous labor.

Materials and Expenses:
    9. Communication service.
    10. Building service supplies.
    11. Map and record supplies.
    12. Transmission office supplies and expenses, printing and 
stationery.
    13. First-aid supplies.
    14. Research, development, and demonstration expenses.
567 Rents.
    This account shall include rents of property of others used, 
occupied, or operated in connection with the transmission system, 
including payments to the United States and others for use of public or 
private lands and reservations for transmission line rights of way. (See 
operating expense instruction 3.)
567.1 Operation supplies and expenses (Nonmajor only).
    This account shall include the cost of materials used and expenses 
incurred in the operation of the transmission system.

                                  Items

    1. Building service expenses.
    2. Operating supplies, such as lubricants, commutator brushes, 
water, and rubber goods.
    3. Station meter and instrument supplies, such as ink and charts.
    4. Station record and report forms.
    5. Communication service.
    6. First-aid supplies.
    7. Tool expense.
    8. Transportation expenses.
    9. Meals, traveling, and incidental expenses.
568 Maintenance supervision and engineering (Major only).
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of the 
transmission system. Direct field supervision of specific jobs shall be 
charged to the appropriate maintenance account. (See operating expense 
instruction 1.)
569 Maintenance of structures (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures, the book cost of 
which is includible in account 352, Structures and Improvements. (See 
operating expense instruction 2.)
569.1 Maintenance of Computer Hardware.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer

[[Page 476]]

hardware serving the transmission function.
569.2 Maintenance of Computer Software.
    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products serving the transmission function.

                                  Items

    1. Telephone support
    2. Onsite support
    3. Software updates and minor revisions
569.3 Maintenance of Communication Equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment serving 
the transmission function.
569.4 Maintenance of Miscellaneous Regional Transmission Plant.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of miscellaneous regional 
transmission plant serving the transmission function.
570 Maintenance of station equipment (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of station equipment the book cost of 
which is includible in account 353, Station Equipment. (See operating 
expense instruction 2.)
571 Maintenance of overhead lines (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of transmission plant, the book cost of 
which is includible in accounts 354, Towers and Fixtures, 355, Poles and 
Fixtures, 356, Overhead Conductors and Devices, 359, Roads and Trails. 
(See operating expense instruction 2.)

                                  Items

    1. Work of the following character on poles, towers and fixtures:
    a. Installing or removing additional clamps or strain insulators on 
guys in place.
    b. Moving line or guy pole in relocation of the same pole or section 
of line.
    c. Painting poles, towers, crossarms or pole extensions.
    d. Readjusting and changing position of guys or braces.
    e. Realigning and straightening poles, cross arms braces, and other 
pole fixtures.
    f. Reconditioning reclaimed pole fixtures.
    g. Relocating crossarms, racks, brackets, and other fixtures on 
poles.
    h. Repairing or realigning pins, racks, or brackets.
    i. Repairing pole supported platform.
    j. Repairs by others to jointly owned poles.
    k. Shaving, cutting rot, or treating poles or crossarms in use or 
salvaged for reuse.
    l. Stubbing poles already in service.
    m. Supporting fixtures and conductors and transferring them to new 
pole during poles replacements.
    n. Maintenance of pole signs, stencils, tags, etc.
    2. Work of the following character on overhead conductors and 
devices:
    a. Overhauling and repairing line cutouts, line switches, line 
breakers, etc.
    b. Cleaning insulators and bushings.
    c. Refusing cutouts.
    d. Repairing line oil circuit breakers and associated relays and 
control wiring.
    e. Repairing grounds.
    f. Resagging, retying, or rearranging position or spacing of 
conductors.
    g. Standing by phones, going to calls, cutting faulty lines clear, 
or similar activities at times of emergencies.
    h. Sampling, testing, changing, purifying, and replenishing 
insulating oil.
    i. Repairing line testing equipment.
    j. Transferring loads, switching and reconnecting circuits and 
equipment for maintenance purposes.
    k. Trimming trees and clearing brush.
    l. Chemical treatment of right of way areas when occurring 
subsequent to construction of line.
    3. Work of the following character on roads and trails:
    a. Repairing roadway, bridges, etc.
    b. Trimming trees and brush to maintain previous roadway clearance.
    c. Snow removal from roads and trails.
    d. Maintenance work on publicly owned roads and trails when done by 
utility at its expense.
572 Maintenance of underground lines (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of transmission

[[Page 477]]

plant, the book cost of which is includible in accounts 357, Underground 
Conduit, and 358, Underground Conductors and Devices. (See operating 
expense instruction 2.)

                                  Items

    1. Work of the following character on underground conduit:
    a. Cleaning ducts, manholes, and sewer connections.
    b. Minor alterations of handholes, manholes, or vaults.
    c. Refastening, repairing, or moving racks, ladders, or hangers in 
manholes, or vaults.
    d. Plugging and shelving or replugging ducts.
    e. Repairs to sewers and drains, walls and floors, rings and covers.
    2. Work of the following character on underground conductors and 
devices:
    a Repairing oil circuit breakers, switches, cutouts, and control 
wiring.
    b. Repairing grounds.
    c. Retraining and reconnecting cables in manhole, including transfer 
of cables from one duct to another.
    d. Repairing conductors and splices.
    e. Repairing or moving junction boxes and potheads.
    f. Refireproofing of cables and repairing supports.
    g. Repairing electrolysis preventive devices for cables.
    h. Repairing cable bonding systems.
    i. Sampling, testing, changing, purifying and replenishing 
insulating oil.
    j. Transferring loads, switching and reconnecting circuits and 
equipment for maintenance purposes.
    k. Repairing line testing equipment.
    l. Repairs to oil or gas equipment in highvoltage cable system and 
replacement of oil or gas.
573 Maintenance of miscellaneous transmission plant (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of owned or leased plant which is 
assignable to transmission operations and is not provided for elsewhere. 
(See operating expense instruction 2.)
574 Maintenance of transmission plant (Nonmajor only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of transmission plant the book cost 
of which is includible in plant accounts 351 to 359 inclusive. (See 
operating expense instruction 2.)

                                  Items

    1. Work of the following character on poles, towers and fixtures:
    a. Installing or removing additional clamps or strain insulators on 
guys in place.
    b. Moving line or guy pole in relocation of the same pole or section 
of line.
    c. Painting poles, towers, crossarms or pole extensions.
    d. Readjusting and changing position of guys or braces.
    e. Realigning and straightening poles, crossarms, braces and other 
pole fixtures.
    f. Reconditioning reclaimed pole fixtures.
    g. Relocating crossarms, racks, brackets, and other fixtures on 
poles.
    h. Repairing or realigning pins, racks, or brackets.
    i. Repairing pole supported platform.
    j. Repairs by others to jointly owned poles.
    k. Shaving, cutting rot, or treating poles or crossarms in use or 
salvaged for reuse.
    l. Stubbing poles already in service.
    m. Supporting fixtures and conductors and transferring them to new 
pole during pole replacement.
    n. Maintenance of pole signs, stencils, tags, etc.
    2. Work of the following character on overhead conductors and 
devices:
    a. Overhauling and repairing line cutouts, line switches, line 
breakers, etc.
    b. Cleaning insulators and bushings.
    c. Refusing cutouts.
    d. Repairing line oil circuit breakers and associated relays and 
control wiring.
    e. Repairing grounds.
    f. Resagging, retying, or rearranging position or spacing of 
conductors.
    g. Standing by phones, going to calls, cutting faulty lines clear, 
or similar activities at times of emergencies.
    h. Sampling, testing, changing, purifying, and replenishing 
insulating oil.
    i. Repairing line testing equipment.
    j. Transferring loads, switching and reconnecting circuits and 
equipment for maintenance purposes.
    k. Trimming trees and clearing brush.
    l. Chemical treatment of right of way areas when occurring 
subsequent to construction of line.
    3. Work of the following character on roads and trails:
    a. Repairing roadway, bridges, etc.
    b. Trimming trees and brush to maintain previous roadway clearance.
    c. Snow removal from roads and trails.
    d. Maintenance work on publicly owned roads and trails when done by 
utility at its expense.
    4. Work of the following character on underground conduit:

[[Page 478]]

    a. Cleaning ducts, manholes, and sewer connections.
    b. Minor alterations of handholes, manholes, or vaults.
    c. Refasting, repairing, or moving racks, ladders, or hangers in 
manholes, or vaults.
    d. Plugging and shelving or replugging ducts.
    e. Repairs to sewers and drains, walls and floors, rings and covers.
    5. Work of the following character on underground conductors and 
devices:
    a. Repairing oil circuit breakers, switches, cutouts, and control 
wiring.
    b. Repairing grounds.
    c. Retraining and reconnecting cables in manhole, including transfer 
of cables from one duct to another.
    d. Repairing conductors and splices.
    e. Repairing or moving junction boxes and potheads.
    f. Refireproofing of cables and repairing supports.
    g. Repairing electrolysis preventive devices for cables.
    h. Repairing cable bonding systems.
    i. Sampling, testing, changing, purifying and replenishing 
insulating oil.
    j. Transferring loads, switching and reconnecting circuits and 
equipment for maintenance purposes.
    k. Repairing line testing equipment.
    l. Repairs to oil or gas equipment in high voltage cable system and 
replacement of oil or gas.
575.1 Operation Supervision.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of the regional energy markets.
575.2 Day-Ahead and Real-Time Market Administration.
    This account shall include the cost of labor, materials used and 
expenses incurred to facilitate the Day-Ahead and Real-Time markets. 
This account shall also include the costs incurred to manage the real-
time deployment of resources to meet generation needs and to provide 
capacity adequacy verification. Include in this account the costs 
incurred to maintain related sections of the tariff, market rules, 
operating procedures, and standards and coordinating with neighboring 
areas.

                                  Items

    1. Consultant fees and expenses
    2. System record and report forms
    3. Meals, traveling and incidental expenses

    Note: The cost of supervision, customer records and collection 
expenses, administrative and general salaries, office supplies and 
expenses, property insurance, injuries and damages, employee pension and 
benefits, regulatory commission expenses, general advertising, and rents 
shall be charged to the customer accounts, service, and administrative 
and general expense accounts contained in the Uniform System of 
Accounts.
575.3 Transmission Rights Market Administration.
    This account shall include the cost of labor, materials used and 
expenses incurred to manage the allocation and auction of transmission 
rights.
575.4 Capacity Market Administration.
    This account shall include the cost of labor, materials used and 
expenses incurred to manage the allocation of capacity rights.
575.5 Ancillary Services Market Administration.
    This account shall include the cost of labor, materials used and 
expenses incurred to manage all other ancillary services market 
functions.
575.6 Market Monitoring and Compliance.
    This account shall include the cost of labor, materials used and 
expenses incurred to review market data and operational decisions for 
compliance with market rules. It shall also include the costs incurred 
to interface with external market monitors.
575.7 Market Administration, Monitoring and Compliance Services.
    This account shall include the costs billed to the transmission 
owner, load serving entity or generator for market administration, 
monitoring and compliance services.
575.8 Rents.
    This account shall include all rents of property of others used, 
occupied, or operated in connection with market administration and 
monitoring. (See operating expense instruction 3.)

[[Page 479]]

576.1 Maintenance of Structures and Improvements.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures used in market 
administration and monitoring. (See operating expense instruction 2.)
576.2 Maintenance of Computer Hardware.
    The account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware used in market 
administration and monitoring.
576.3 Maintenance of Computer Software.
    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products used in market administration and monitoring.

                                  Items

    1. Telephone support
    2. Onsite support
    3. Software updates and minor revisions
576.4 Maintenance of Communication Equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment used in 
market administration and monitoring.
576.5 Maintenance of Miscellaneous Market Operation Plant.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of miscellaneous market operation 
plant used in market administration and monitoring.
580 Operation supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of the operation of the 
distribution system. Direct supervision of specific activities, such as 
station operation, line operation, meter department operation, etc., 
shall be charged to the appropriate account. (For Major utilities, see 
operating expense instruction 1.)
581 Load dispatching (Major only).
    This account (the keeping of which is optional with the utility) 
shall include the cost of labor, materials used and expenses incurred in 
load dispatching operations pertaining to the distribution of 
electricity.

                                  Items

Labor:
    1. Directing switching.
    2. Arranging and controlling clearances for construction, 
maintenance, test and emergency purposes.
    3. Controlling system voltages.
    4. Preparing operating reports.
    5. Obtaining reports on the weather and special events.

Expenses:
    6. Communication service provided for system control purposes.
    7. System record and report forms.
    8. Meals, traveling and incidental expenses.
581.1 Line and station supplies and expenses (Nonmajor only).
582 Station expenses (Major only).
583 Overhead line expenses (Major only).
584 Underground line expenses (Major only).
    Accounts 581.1 through 584 shall include, respectively, the cost of 
labor, materials used and expenses incurred in the operation of overhead 
and underground distribution lines and stations.

                                  Items

Line Labor:
    1. Supervising line operation.
    2. Changing line transformer taps.
    3. Inspecting and testing lightning arresters, line circuit 
breakers, switches and grounds.
    4. Inspecting and testing line transformers for the purpose of 
determining load, temperature or operating performance.
    5. Patrolling lines.
    6. Load tests and voltages surveys of feeders, circuits and line 
transformers.
    7. Removing line transformers and voltage regulators with or without 
replacements.
    8. Installing line transformers or voltage regulators with or 
without change in capacity provided that the first installation of these 
items is included in account 368, Line transformers.

[[Page 480]]

    9. Voltage surveys, either routine or upon request of customers, 
including voltage tests at customers' main switch.
    10. Transferring loads, switching and reconnecting circuits and 
equipment for operation purposes.
    11. Electrolysis surveys.
    12. Inspecting and adjusting line testing equipment.

Line Supplies and Expenses:
    13. Tool expenses.
    14. Transportation expenses.
    15. Meals, traveling and incidental expense.
    16. Operating supplies, such as instrument charts, rubber goods, 
etc.

Station Labor:
    1. Supervising station operation.
    2. Adjusting station equipment where such adjustment primarily 
affects performance, such as regulating the flow of cooling water, 
adjusting current in fields of a machine, changing voltage of regulators 
or changing station transformer taps.
    3. Keeping station log and records and preparing reports on station 
operation.
    4. Inspecting, testing and calibrating station equipment for the 
purpose of checking its performance.
    5. Operating switching and other station equipment.
    6. Standing watch, guarding and patrolling station and station yard.
    7. Sweeping, mopping and tidying station.
    8. Care of grounds, including snow removal, cutting grass, etc.
Station Supplies and Expenses:
    9. Building service expenses.
    10. Operating supplies, such as lubricants, commutator brushes, 
water and rubber goods.
    11. Station meter and instrument supplies, such as ink and charts.
    12. Station record and report forms.
    13. Tool expenses.
    14. Transportation expenses.
    15. Meals, traveling and incidental expenses.

    Note (Major only): If the utility owns storage battery equipment 
used for supplying electricity to customers in periods of emergency, the 
cost of operating labor and of supplies, such as acid, gloves, 
hydrometers, thermometers, soda, automatic cell fillers, acid proof 
shoes, etc., shall be included in this account. If significant in 
amount, a separate subdivision shall be maintained for such expenses.
585 Street lighting and signal system expenses.
    A. For Nonmajor utilities, this account shall include the cost of 
labor, materials used and expenses incurred in the operation of street 
lighting and signal system plant.
    B. For Major utilities, this account shall include the cost of 
labor, materials used and expenses incurred in: (a) The operation of 
street lighting and signal system plant which is owned or leased by the 
utility; and (b) the operation and maintenance of such plant owned by 
customers where such work is done regularly as a part of the street 
lighting and signal system service.

                                  Items

Labor:
    1. Supervising street lighting and signal systems operation.
    2. Replacing lamps and incidental cleaning of glassware and fixtures 
in connection therewith.
    3. Routine patrolling for lamp outages, extraneous nuisances or 
encroachments, etc.
    4. Testing lines and equipment including voltage and current 
measurement.
    5. Winding and inspection of time switch and other controls.

Materials and Expenses:
    6. Street lamp renewals.
    7. Transportation and tool expense.
    8. Meals, traveling, and incidental expenses.
586 Meter expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in the operation of customer meters and associated 
equipment.

                                  Items

Labor:
    1. Supervising meter operation.
    2. Clerical work on meter history and associated equipment record 
cards, test cards, and reports.
    3. Disconnecting and reconnecting, removing and reinstalling, 
sealing and unsealing meters and other metering equipment in connection 
with initiating or terminating services including the cost of obtaining 
meter readings, if incidental to such operation.
    4. Consolidating meter installations due to elimination of separate 
meters for different rates of service.
    5. Changing or relocating meters, instrument transformers, time 
switches, and other metering equipment.
    6. Resetting time controls, checking operation of demand meters and 
other metering equipment, when done as an independent operation.
    7. Inspecting and adjusting meter testing equipment.
    8. Inspecting and testing meters, instrument transformers, time 
switches, and other metering equipment on premises or in shops

[[Page 481]]

excluding inspecting and testing incidental to maintenance

Materials and Expenses:
    9. Meter seals and miscellaneous meter supplies.
    10. Transportation expenses.
    11. Meals, traveling, and incidental expenses.
    12. Tool expenses.

    Note: The cost of the first setting and testing of a meter is 
chargeable to utility plant account 370, Meters.
587 Customer installations expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in work on customer installations in inspecting 
premises and in rendering services to customers of the nature of those 
indicated by the list of items hereunder.

                                  Items

Labor:
    1. Supervising customer installations work.
    2. Inspecting premises, including check of wiring for code 
compliance.
    3. Investigating, locating, and clearing grounds on customers' 
wiring.
    4. Investigating service complaints, including load tests of motors 
and lighting and power circuits on customers' premises; field 
investigations of complaints on bills or of voltage.
    5. Installing, removing, renewing, and changing lamps and fuses.
    6. Radio, television and similar interference work including 
erection of new aerials on customers' premises and patrolling of lines, 
testing of lightning arresters, inspection of pole hardware, etc., and 
examination on or off premises of customers' appliances, wiring, or 
equipment to locate cause of interference.
    7. Installing, connecting, reinstalling, or removing leased property 
on customers' premises.
    8. Testing, adjusting, and repairing customers' fixtures and 
appliances in shop or on premises.
    9. Cost of changing customers' equipment due to changes in service 
characteristics.
    10. Investigation of current diversion including setting and removal 
of check meters and securing special readings thereon; special calls by 
employees in connection with discovery and settlement of current 
diversion; changes in customer wiring and any other labor cost 
identifiable as caused by current diversion.

Materials and Expenses:
    11. Lamp and fuse renewals.
    12. Materials used in servicing customers' fixtures, appliances and 
equipment.
    13. Power, light, heat, telephone, and other expenses of appliance 
repair department.
    14. Tool expense.
    15. Transportation expense, including pickup and delivery charges.
    16. Meals, traveling and incidental expenses.
    17. Rewards paid for discovery of current diversion.

    Note A: Amounts billed customers for any work, the cost of which is 
charged to this account, shall be credited to this account. Any excess 
over costs resulting therefrom shall be transferred to account 451, 
Miscellaneous Service Revenues.
    Note B: Do not include in this account expenses incurred in 
connection with merchandising, jobbing and contract work.
588 Miscellaneous distribution expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in distribution system operation not provided for 
elsewhere.

                                  Items

Labor:
    1. General records of physical characteristics of lines and 
substations, such as capacities, etc.
    2. Ground resistance records.
    3. Joint pole maps and records.
    4. Distribution system voltage and load records.
    5. Preparing maps and prints.
    6. Service interruption and trouble records.
    7. General clerical and stenographic work except that chargeable to 
account 586, Meter expenses.

Expenses:
    8. Operating records covering poles, transformers, manholes, cables, 
and other distribution facilities. Exclude meter records chargeable to 
account 586. Meter Expenses and station records chargeable to account 
582, Station Expenses (For Nonmajor utilities, account 581.1, Line and 
Station Expenses), and stores records (For Nonmajor utilities, station 
records) chargeable to account 163, Stores Expense Undistributed (For 
Nonmajor utilities, account 581.1, Line and Station Expenses).
    9. Janitor work at distribution office buildings including snow 
removal, cutting grass, etc.

Materials and Expenses:
    10. Communication service.
    11. Building service expenses.
    12. Miscellaneous office supplies and expenses, printing, and 
stationery, maps and records and first-aid supplies.

[[Page 482]]

    13. Research, development, and demonstration expenses (Major only).
589 Rents.
    This account shall include rents of property of others used, 
occupied, or operated in connection with the distribution system, 
including payments to the United States and others for the use and 
occupancy of public lands and reservations for distribution line rights 
of way. (See operating expense instruction 3.)
590 Maintenance supervision and engineering (Major only).
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of the 
distribution system. Direct field supervision of specific jobs shall be 
charged to the appropriate maintenance account. (See operating expense 
instruction 1.)
591 Maintenance of structures (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of structures, the book cost of which 
is includible in account 361, Structures and Improvements. (See 
operating expense instruction 2.)
592 Maintenance of station equipment (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of plant, the book cost of which is 
includible in account 362, Station Equipment, and account 363, Storage 
Battery Equipment. (See operating expense instruction 2.)
592.1 Maintenance of structures and equipment (Nonmajor only).
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of structures, the book cost of which 
is includible in account 361, Structures and Improvements, account 362, 
Station Equipment, and account 363, Storage Battery Equipment. (See 
operating expense instruction 2.)
593 Maintenance of overhead lines (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of overhead distribution line 
facilities, the book cost of which is includible in account 364, Poles, 
Towers and Fixtures, account 365, Overhead Conductors and Devices, and 
account 369, Services. (See operating expense instruction 2.)

                                  Items

    1. Work of the following character on poles, towers, and fixtures:
    a. Installing additional clamps or removing clamps or strain 
insulators on guys in place.
    b. Moving line or guy pole in relocation of pole or section of line.
    c. Painting poles, towers, crossarms, or pole extensions.
    d. Readjusting and changing position of guys or braces.
    e. Realigning and straightening poles, crossarms, braces, pins, 
racks, brackets, and other pole fixtures.
    f. Reconditioning reclaimed pole fixtures.
    g. Relocating crossarms, racks, brackets, and other fixtures on 
poles.
    h. Repairing pole supported platform.
    i. Repairs by others to jointly owned poles.
    j. Shaving, cutting rot, or treating poles or crossarms in use or 
salvaged for reuse.
    k. Stubbing poles already in service.
    l. Supporting conductors, transformers, and other fixtures and 
transferring them to new poles during pole replacements.
    m. Maintaining pole signs, stencils, tags, etc.
    2. Work of the following character on overhead conductors and 
devices:
    a. Overhauling and repairing line cutouts, line switches, line 
breakers, and capacitor installations.
    b. Cleaning insulators and bushings.
    c. Refusing line cutouts.
    d. Repairing line oil circuit breakers and associated relays and 
control wiring.
    e. Repairing grounds.
    f. Resagging, retying, or rearranging position or spacing of 
conductors.
    g. Standing by phones, going to calls, cutting faulty lines clear, 
or similar activities at times of emergency.
    h. Sampling, testing, changing, purifying, and replenishing 
insulating oil.
    i. Transferring loads, switching, and reconnecting circuits and 
equipment for maintenance purposes.
    j. Repairing line testing equipment.
    k. Trimming trees and clearing brush.
    l. Chemical treatment of right of way area when occurring subsequent 
to construction of line.

[[Page 483]]

    3. Work of the following character on overhead services:
    a. Moving position of service either on pole or on customers' 
premises.
    b. Pulling slack in service wire.
    c. Retying service wire.
    d. Refastening or tightening service bracket.
594 Maintenance of underground lines (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of underground distribution line 
facilities, the book cost of which is includible in account 366, 
Underground Conduit, account 367, Underground Conductors and Devices, 
and account 369, Services. (See operating expense instruction 2.)

                                  Items

    1. Work of the following character on underground conduit:
    a. Cleaning ducts, manholes, and sewer connections.
    b. Moving or changing position of conduit or pipe.
    c. Minor alterations of handholes, manholes, or vaults.
    d. Refastening, repairing, or moving racks, ladders, or hangers in 
manholes or vaults.
    e. Plugging and shelving ducts.
    f. Repairs to sewers, drains, walls, and floors, rings and covers.
    2. Work of the following character on underground conductors and 
devices:
    a. Repairing circuit breakers, switches, cutouts, network 
protectors, and associated relays and control wiring.
    b. Repairing grounds.
    c. Retraining and reconnecting cables in manholes including transfer 
of cables from one duct to another.
    d. Repairing conductors and splices.
    e. Repairing or moving junction boxes and potheads.
    f. Refireproofing cables and repairing supports.
    g. Repairing electrolysis preventive devices for cables.
    h. Repairing cable bonding systems.
    i. Sampling, testing, changing, purifying and replenishing 
insulating oil.
    j. Transferring loads, switching and reconnecting circuits and 
equipment for maintenance purposes.
    k. Repairing line testing equipment.
    l. Repairing oil or gas equipment in high voltage cable systems and 
replacement of oil or gas.
    3. Work of the following character on underground services:
    a. Cleaning ducts.
    b. Repairing any underground service plant.
594.1 Maintenance of lines (Nonmajor only).
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of distribution line facilities, 
the book cost of which is includible in account 364, Poles, Towers and 
Fixtures, account 365, Overhead Conductors and Devices, account 366, 
Underground Conduit, account 367, Underground Conductors and Devices, 
and account 369, Services. (See operating expense instruction 2.)

                                  Items

    1. Work of the following character on poles, towers, and fixtures:
    a. Installing additional clamps or removing clamps or strain 
insulators on guys in place.
    b. Moving line or guy pole in relocation of pole or section of line.
    c. Painting poles, towers, crossarms, or pole extensions.
    d. Readjusting and changing position of guys or braces.
    e. Realigning and straightening poles, crossarms, braces, pins, 
racks, brackets, and other pole fixtures.
    f. Reconditioning reclaimed pole fixtures.
    g. Relocating crossarms, racks, brackets, and other fixtures on 
pole.
    h. Repairing pole supported platform.
    i. Repairs by others to jointly owned poles.
    j. Shaving, cutting rot, or treating poles or crossarms in use or 
salvage for reuse.
    k. Stubbing poles already in service.
    l. Supporting conductors, transformers, and other fixtures and 
transferring them to new poles during pole replacement.
    m. Maintaining pole signs, stencils, tags, etc.
    2. Work of the following character on overhead conductors and 
devices:
    a. Overhauling and repairing line cutouts, line switches, line 
breakers, and capacitor installations.
    b. Cleaning insulators and bushings.
    c. Refusing line cutouts.
    d. Repairing line oil circuit breakers and associated relays and 
control wiring.
    e. Repairing grounds.
    f. Resagging, retying, or rearranging position or spacing of 
conductors.
    g. Standing by phones, going to calls, cutting faulting lines clear, 
or similar activities at times of emergencies.
    h. Sampling, testing, changing, purifying, and replenishing 
insulating oil.
    i. Transferring loads, switching, and reconnecting circuits and 
equipment for maintenance purposes.

[[Page 484]]

    j. Repairing line testing equipment.
    k. Trimming trees and clearing brush.
    l. Chemical treatment of right of way area when occurring subsequent 
to construction of line.
    3. Work of the following character on underground conduit:
    a. Cleaning ducts, manholes, and sewer connections.
    b. Moving or changing position of conduit or pipe.
    c. Minor alterations of handholes, manholes, or vaults.
    d. Refastening, repairing or moving racks, ladders, or hangers in 
manholes or vaults.
    e. Plugging and shelving ducts.
    f. Repairs to sewers, drains, walls and floors, rings and covers.
    4. Work of the following character on underground conductors and 
devices:
    a. Repairing circuit breakers, switches, cutouts, network 
protectors, and associated relays and control wiring.
    b. Repairing grounds.
    c. Retraining and reconnecting cables in manhole including transfer 
of cables from one duct to another.
    d. Repairing conductors and splices.
    e. Repairing or moving junction boxes and potheads.
    f. Refireproofing cables and repairing supports.
    g. Repairing electrolysis preventive devices for cables.
    h. Repairing cable bonding systems.
    i. Sampling, testing, changing, purifying and replenishing 
insulating oil.
    j. Transferring loads, switching and reconnecting circuits and 
equipment for maintenance purposes.
    k. Repairing line testing equipment.
    l. Repairing oil or gas equipment in high voltage cable system and 
replacement of oil or gas.
    5. Work of the following character on services:
    a. Moving position of service either on pole or on customers' 
premises.
    b. Pulling slack in service wire.
    c. Retying service wire.
    d. Refastening or tightening service bracket.
    e. Cleaning ducts.
595 Maintenance of line transformers.
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of distribution line transformers, the 
book cost of which is includible in account 368, Line Transformers. (See 
operating expense instruction 2.)
596 Maintenance of street lighting and signal systems.
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of plant, the book cost of which is 
includible in account 373, Street Lighting and Signal Systems. (See 
operating expense instruction 2.)
597 Maintenance of meters.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of meters and meter testing 
equipment, the book cost of which is includible in account 370, Meters, 
and account 395, Laboratory Equipment, respectively. (See operating 
expense instruction 2.)
598 Maintenance of miscellaneous distribution plant.
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of plant, the book cost of which is 
includible in accounts 371, Installations on Customers' Premises, and 
372, Leased Property on Customers' Premises, and any other plant the 
maintenance of which is assignable to the distribution function and is 
not provided for elsewhere. (See operating expense instruction 2.)

                                  Items

    a. Work of similar nature to that listed in other distribution 
maintenance accounts.
    b. Maintenance of office furniture and equipment used by 
distribution system department.
901 Supervision (Major only).
    This account shall include the cost of labor and expenses incurred 
in the general direction and supervision of customer accounting and 
collecting activities. Direct supervision of a specific activity shall 
be charged to account 902, Meter Reading Expenses, or account 903, 
Customer Records and Collection Expenses, as appropriate. (See operating 
expense instruction 1.)
902 Meter reading expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in reading customer meters, and

[[Page 485]]

determining consumption when performed by employees engaged in reading 
meters.

                                  Items

Labor:
    1. Addressing forms for obtaining meter readings by mail.
    2. Changing and collecting meter charts used for billing purposes.
    3. Inspecting time clocks, checking seals, etc., when performed by 
meter readers and the work represents a minor activity incidental to 
regular meter reading routine.
    4. Reading meters, including demand meters, and obtaining load 
information for billing purposes. Exclude and charge to account 586, 
Meter Expenses, or to account 903, Customer Records and Collection 
Expenses, as applicable, the cost of obtaining meter readings, first and 
final, if incidental to the operation of removing or resetting, sealing, 
or locking, and disconnecting or reconnecting meters.
    5. Computing consumption from meter reader's book or from reports by 
mail when done by employees engaged in reading meters.
    6. Collecting from prepayment meters when incidental to meter 
reading.
    7. Maintaining record of customers' keys.
    8. Computing estimated or average consumption when performed by 
employees engaged in reading meters.

Materials and Expenses:
    9. Badges, lamps, and uniforms.
    10. Demand charts, meter books and binders and forms for recording 
readings, but not the cost of preparation.
    11. Postage and supplies used in obtaining meter readings by mail.
    12. Transportation, meals, and incidental expenses.
903 Customer records and collection expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in work on customer applications, contracts, orders, 
credit investigations, billing and accounting, collections and 
complaints.

                                  Items

Labor:
    1. Receiving, preparing, recording and handling routine orders for 
service, disconnections, transfers or meter tests initiated by the 
customer, excluding the cost of carrying out such orders, which is 
chargeable to the account appropriate for the work called for by such 
orders.
    2. Investigations of customers' credit and keeping of records 
pertaining thereto, including records of uncollectible accounts written 
off.
    3. Receiving, refunding or applying customer deposits and 
maintaining customer deposit, line extension, and other miscellaneous 
records.
    4. Checking consumption shown by meter readers' reports where 
incidental to preparation of billing data.
    5. Preparing address plates and addressing bills and delinquent 
notices.
    6. Preparing billing data.
    7. Operating billing and bookkeeping machines.
    8. Verifying billing records with contracts or rate schedules.
    9. Preparing bills for delivery, and mailing or delivering bills.
    10. Collecting revenues, including collection from prepayment meters 
unless incidental to meter-reading operations.
    11. Balancing collections, preparing collections for deposit, and 
preparing cash reports.
    12. Posting collections and other credits or charges to customer 
accounts and extending unpaid balances.
    13. Balancing customer accounts and controls.
    14. Preparing, mailing, or delivering delinquent notices and 
preparing reports of delinquent accounts.
    15. Final meter reading of delinquent accounts when done by 
collectors incidental to regular activities.
    16. Disconnecting and reconnecting service because of nonpayment of 
bills.
    17. Receiving, recording, and handling of inquiries, complaints, and 
requests for investigations from customers, including preparation of 
necessary orders, but excluding the cost of carrying out such orders, 
which is chargeable to the account appropriate for the work called for 
by such orders.
    18. Statistical and tabulating work on customer accounts and 
revenues, but not including special analyses for sales department, rate 
department, or other general purposes, unless incidental to regular 
customer accounting routines.
    19. Preparing and periodically rewriting meter reading sheets.
    20. Determining consumption and computing estimated or average 
consumption when performed by employees other than those engaged in 
reading meters.

Materials and Expenses:
    21. Address plates and supplies.
    22. Cash overages and shortages.
    23. Commissions or fees to others for collecting.
    24. Payments to credit organizations for investigations and reports.
    25. Postage.
    26. Transportation expenses (Major only), including transportation 
of customer bills and meter books under centralized billing procedure.

[[Page 486]]

    27. Transportation, meals, and incidental expenses.
    28. Bank charges, exchange, and other fees for cashing and 
depositing customers' checks.
    29. Forms for recording orders for services removals, etc.
    30. Rent of mechanical equipment.
    31. Communication service (Nonmajor only).
    32. Miscellaneous office supplies and expenses and stationery and 
printing (Nonmajor only).
    Note: The cost of work on meter history and meter location records 
is chargeable to account 586, Meter Expenses.
904 Uncollectible accounts.
    This account shall be charged with amounts sufficient to provide for 
losses from uncollectible utility revenues. Concurrent credits shall be 
made to account 144, Accumulated Provision for Uncollectible Accounts--
Cr. Losses from uncollectible accounts shall be charged to account 144.
905 Miscellaneous customer accounts expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred not provided for in other accounts.

                                  Items

Labor:
    1. General clerical and stenographic work.
    2. Miscellaneous labor.

Materials and Expenses:
    3. Communication service.
    4. Miscellaneous office supplies and expenses and stationery and 
printing other than those specifically provided for in accounts 902 and 
903.
906 Customer service and informational expenses (Nonmajor only).
    This account shall include the cost of supervision, labor, and 
expenses incurred in customer service and informational activities, the 
purpose of which is to encourage safe and efficient use of the utility's 
service, to encourage conservation of the utility's service, and to 
assist present customers in answering specific inquiries as to the 
proper and economic use of the utility's service and the customer's 
equipment utilizing the service.
907 Supervision (Major only).
    This account shall include the cost of labor and expenses incurred 
in the general direction and supervision of customer service activities, 
the object of which is to encourage safe, efficient and economical use 
of the utility's service. Direct supervision of a specific activity 
within customer service and informational expense classification shall 
be charged to the account wherein the costs of such activity are 
included. (See operating expense instruction 1.)
908 Customer assistance expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in providing instructions or assistance to customers, 
the object of which is to encourage safe, efficient and economical use 
of the utility's service.

                                  Items

Labor:
    1. Direct supervision of department.
    2. Processing customer inquiries relating to the proper use of 
electric equipment, the replacement of such equipment and information 
related to such equipment.
    3. Advice directed to customers as to how they may achieve the most 
efficient and safest use of electric equipment.
    4. Demonstrations, exhibits, lectures, and other programs designed 
to instruct customers in the safe, economical or efficient use of 
electric service, and/or oriented toward conservation of energy.
    5. Engineering and technical advice to customers, the object of 
which is to promote safe, efficient and economical use of the utility's 
service.

Materials and Expenses:
    6. Supplies and expenses pertaining to demonstrations, exhibits, 
lectures, and other programs.
    7. Loss in value on equipment and appliances used for customer 
assistance programs.
    8. Office supplies and expenses.
    9. Transportation, meals, and incidental expenses.

    Note: Do not include in this account expenses that are provided for 
elsewhere, such as accounts 416, Costs and Expenses of Merchandising, 
Jobbing and Contract Work, 587, Customer Installations Expenses, and 
912, Demonstrating and Selling Expenses.

[[Page 487]]

909 Informational and instructional advertising expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in activities which primarily convey information as to 
what the utility urges or suggests customers should do in utilizing 
electric service to protect health and safety, to encourage 
environmental protection, to utilize their electric equipment safely and 
economically, or to conserve electric energy.

Labor:
    1. Direct supervision of informational activities.
    2. Preparing informational materials for newspapers, periodicals, 
billboards, etc., and preparing and conducting informational motion 
pictures, radio and television programs.
    3. Preparing informational booklets, bulletins, etc., used in direct 
mailings.
    4. Preparing informational window and other displays.
    5. Employing agencies, selecting media and conducting negotiations 
in connection with the placement and subject matter of information 
programs.

Materials and Expenses:
    6. Use of newspapers, periodicals, billboards, radio, etc., for 
informational purposes.
    7. Postage on direct mailings to customers exclusive of postage 
related to billings.
    8. Printing of informational booklets, dodgers, bulletins, etc.
    9. Supplies and expenses in preparing informational materials by the 
utility.
    10. Office supplies and expenses.

    Note A: Exclude from this account and charge to account 930.2, 
Miscellaneous General Expenses, the cost of publication of stockholder 
reports, dividend notices, bond redemption notices, financial 
statements, and other notices of a general corporate character. Exclude 
also all expenses of a promotional, institutional, goodwill or political 
nature, which are includible in such accounts as 913, Advertising 
Expenses, 930.1, General Advertising Expenses, and 426.4, Expenditures 
for Certain Civic, Political and Related Activities.
    Note B: Entries relating to informational advertising included in 
this account shall contain or refer to supporting documents which 
identify the specific advertising message. If references are used, 
copies of the advertising message shall be readily available.
910 Miscellaneous customer service and informational expenses (Major 
only).
    This account shall include the cost of labor, materials used and 
expenses incurred in connection with customer service and informational 
activities which are not includible in other customer information 
expense accounts.

Labor:
    1. General clerical and stenographic work not assigned to specific 
customer service and informational programs.
    2. Miscellaneous labor.

Materials and Expenses:
    3. Communication service.
    4. Printing, postage and office supplies expenses.
911 Supervision (Major only).
    This account shall include the cost of labor and expenses incurred 
in the general direction and supervision of sales activities, except 
merchandising. Direct supervision of a specific activity, such as 
demonstrating, selling, or advertising shall be charged to the account 
wherein the costs of such activity are included. (See operating expense 
instruction 1.)
912 Demonstrating and selling expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in promotional, demonstrating, and selling activities, 
except by merchandising, the object of which is to promote or retain the 
use of utility services by present and prospective customers.

                                  Items

Labor:
    1. Demonstrating uses of utility services.
    2. Conducting cooking schools, preparing recipes, and related home 
service activities.
    3. Exhibitions, displays, lectures, and other programs designed to 
promote use of utility services.
    4. Experimental and development work in connection with new and 
improved appliances and equipment, prior to general public acceptance.
    5. Solicitation of new customers or of additional business from old 
customers, including commissions paid employees.
    6. Engineering and technical advice to present or prospective 
customers in connection with promoting or retaining the use of utility 
services.

[[Page 488]]

    7. Special customer canvasses when their primary purpose is the 
retention of business or the promotion of new business.

Materials and Expenses:
    8. Supplies and expenses pertaining to demonstration, and 
experimental and development activities.
    9. Booth and temporary space rental.
    10. Loss in value on equipment and appliances used for demonstration 
purposes.
    11. Transportation, meals, and incidental expenses.
913 Advertising expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in advertising designed to promote or retain the use 
of utility service, except advertising the sale of merchandise by the 
utility.

                                  Items

Labor:
    1. Direct supervision of department.
    2. Preparing advertising material for newspapers, periodicals, 
billboards, etc., and preparing and conducting motion pictures, radio 
and television programs.
    3. Preparing booklets, bulletins, etc., used in direct mail 
advertising.
    4. Preparing window and other displays.
    5. Clerical and stenographic work.
    6. Investigating advertising agencies and media and conducting 
negotiations in connection with the placement and subject matter of 
sales advertising.

Materials and expenses:
    7. Advertising in newspapers, periodicals, billboards, radio, etc., 
for sales promotion purposes, but not including institutional or 
goodwill advertising includible in account 930.1, General Advertising 
Expenses.
    8. Materials and services given as prizes or otherwise in connection 
with civic lighting contests, canning, or cooking contests, bazaars, 
etc., in order to publicize and promote the use of utility services.
    9. Fees and expenses of advertising agencies and commercial artists.
    10. Novelties for general distribution.
    11. Postage on direct mail advertising.
    12. Premiums distributed generally, such as recipe books, etc., when 
not offered as inducement to purchase appliances.
    13. Printing booklets, dodgers, bulletins, etc.
    14. Supplies and expenses in preparing advertising material.
    15. Office supplies and expenses.

    Note A: The cost of advertisements which set forth the value or 
advantages of utility service without reference to specific appliances 
or, if reference is made to appliances invites the reader to purchase 
appliances from his dealer or refer to appliances not carried for sale 
by the utility, shall be considered sales promotion advertising and 
charged to this account. However, advertisements which are limited to 
specific makes of appliances sold by the utility and prices, terms, 
etc., thereof, without referring to the value or advantages of utility 
service, shall be considered as merchandise advertising and the cost 
shall be charged to Costs and Expenses of Merchandising, Jobbing and 
Contract Work, Account 416.
    Note B: Advertisements which substantially mention or refer to the 
value or advantages of utility service, together with specific reference 
to makes of appliances sold by the utility and the price, terms, etc., 
thereof and designed for the joint purpose of increasing the use of 
utility service and the sales of appliances, shall be considered as a 
combination advertisement and the costs shall be distributed between 
this account and Account 416 on the basis of space, time, or other 
proportional factors.
    Note C: Exclude from this account and charge to Account 930.2, 
Miscellaneous General Expenses, the cost of publication of stockholder 
reports, dividend notices, bond redemption notices, financial 
statements, and other notices of a general corporate character. Exclude 
also all institutional or goodwill advertising. (See Account 930.1, 
General Advertising Expenses.)
916 Miscellaneous sales expenses (Major only).
    This account shall include the cost of labor, materials used and 
expenses incurred in connection with sales activities, except 
merchandising, which are not includible in other sales expense accounts.

                                  Items

Labor:
    1. General clerical and stenographic work not assigned to specific 
functions.
    2. Special analysis of customer accounts and other statistical work 
for sales purposes not a part of the regular customer accounting and 
billing routine.
    3. Miscellaneous labor.

Materials and Expenses:
    4. Communication service.
    5. Printing, postage, and office supplies and expenses applicable to 
sales activities, except those chargeable to account 913, Advertising 
Expenses.
917 Sales expenses (Nonmajor only).
    This account shall include the cost of labor and expenses incurred 
for the

[[Page 489]]

purpose of promoting the sale of electricity, other than merchandising, 
jobbing or contract work activities.

                                  Items

    1. Advertising.
    2. Demonstrating uses of utility service.
    3. Home service activities.
    4. Solicitation of new business.
920 Administrative and general salaries.
    A. This account shall include the compensation (salaries, bonuses, 
and other consideration for services, but not including directors' fees) 
of officers, executives, and other employees of the utility properly 
chargeable to utility operations and not chargeable directly to a 
particular operating function.
    B. This account may be subdivided in accordance with a 
classification appropriate to the departmental or other functional 
organization of the utility.
921 Office supplies and expenses.
    A. This account shall include office supplies and expenses incurred 
in connection with the general administration of the utility's 
operations which are assignable to specific administrative or general 
departments and are not specifically provided for in other accounts. 
This includes the expenses of the various administrative and general 
departments, the salaries and wages of which are includible in account 
920.
    B. This account may be subdivided in accordance with a 
classification appropriate to the departmental or other functional 
organization of the utility.

    Note: Office expenses which are clearly applicable to any group of 
operating expenses other than the administrative and general group shall 
be included in the appropriate account in such group. Further, general 
expenses which apply to the utility as a whole rather than to a 
particular administrative function shall be included in account 930.2, 
Miscellaneous General Expenses.

                                  Items

    1. Automobile service, including charges through clearing account.
    2. Bank messenger and service charges.
    3. Books, periodicals, bulletins and subscriptions to newspapers, 
newsletters, tax services, etc.
    4. Building service expenses for customer accounts, sales, and 
administrative and general purposes.
    5. Communication service expenses.
    6. Cost of individual items of office equipment used by general 
departments which are of small value or short life.
    7. Membership fees and dues in trade, technical, and professional 
associations paid by a utility for employees. (Company memberships are 
includible in account 930.2.)
    8. Office supplies and expenses.
    9. Payment of court costs, witness fees and other expenses of legal 
department.
    10. Postage, printing and stationery.
    11. Meals, traveling and incidental expenses.
922 Administrative expenses transferred--Credit.
    This account shall be credited with administrative expenses recorded 
in accounts 920 and 921 which are transferred to construction costs or 
to nonutility accounts. (See electric plant instruction 4.)
923 Outside services employed.
    A. This account shall include the fees and expenses of professional 
consultants and others for general services which are not applicable to 
a particular operating function or to other accounts. It shall include 
also the pay and expenses of persons engaged for a special or temporary 
administrative or general purpose in circumstances where the person so 
engaged is not considered as an employee of the utility.
    B. This account shall be so maintained as to permit ready 
summarization according to the nature of service and the person 
furnishing the same.

                                  Items

    1. Fees, pay and expenses of accountants and auditors, actuaries, 
appraisers, attorneys, engineering consultants, management consultants, 
negotiators, public relations counsel, tax consultants, etc.
    2. Supervision fees and expenses paid under contracts for general 
management services.

    Note: Do not include inspection and brokerage fees and commissions 
chargeable to other accounts or fees and expenses in connection with 
security issues which are includible in the expenses of issuing 
securities.
924 Property insurance.
    A. This account shall include the cost of insurance or reserve 
accruals to protect the utility against losses and

[[Page 490]]

damages to owned or leased property used in its utility operations. It 
shall include also the cost of labor and related supplies and expenses 
incurred in property insurance activities.
    B. Recoveries from insurance companies or others for property 
damages shall be credited to the account charged with the cost of the 
damage. If the damaged property has been retired, the credit shall be to 
the appropriate account for accumulated provision for depreciation.
    C. Records shall be kept so as to show the amount of coverage for 
each class of insurance carried, the property covered, and the 
applicable premiums. Any dividends distributed by mutual insurance 
companies shall be credited to the accounts to which the insurance 
premiums were charged.

                                  Items

    1. Premiums payable to insurance companies for fire, storm, 
burglary, boiler explosion, lightning, fidelity, riot, and similar 
insurance.
    2. Amounts credited to account 228.1, Accumulated Provision for 
Property Insurance, for similar protection.
    3. Special costs incurred in procuring insurance.
    4. Insurance inspection service.
    5. Insurance counsel, brokerage fees, and expenses.

    Note A: The cost of insurance or reserve accruals capitalized shall 
be charged to construction either directly or by transfer to 
construction work orders from this account.
    Note B: The cost of insurance or reserve accruals for the following 
classes of property shall be charged as indicated.
    (1) Materials and supplies and stores equipment, to account 163, 
Stores Expense Undistributed (store expenses in the case of Nonmajor 
utilities), or appropriate materials account.
    (2) For Major Utilities, transportation and other general equipment 
to appropriate clearing accounts that may be maintained. For Nonmajor 
utilities, transportation and garage equipment, to account 933, 
Transportation Expenses.
    (3) Electric plant leased to others, to account 413, Expenses of 
Electric Plant Leased to Others.
    (4) Nonutility property, to the appropriate nonutility income 
account.
    (5) Merchandise and jobbing property, to Account 416, Costs and 
Expenses of Merchandising, Jobbing and Contract Work.
    Note C (Major only): The cost of labor and related supplies and 
expenses of administrative and general employees who are only 
incidentally engaged in property insurance work may be included in 
accounts 920 and 921, as appropriate.
925 Injuries and damages.
    A. This account shall include the cost of insurance or reserve 
accruals to protect the utility against injuries and damages claims of 
employees or others, losses of such character not covered by insurance, 
and expenses incurred in settlement of injuries and damages claims. For 
Major utilities, it shall also include the cost of labor and related 
supplies and expenses incurred in injuries and damages activities.
    B. Reimbursements from insurance companies or others for expenses 
charged hereto on account of injuries and damages and insurance 
dividends or refunds shall be credited to this account.

                                  Items

    1. Premiums payable to insurance companies for protection against 
claims from injuries and damages by employees or others, such as public 
liability, property damages, casualty, employee liability, etc., and 
amounts credited to account 228.2, Accumulated Provision for Injuries 
and Damages, for similar protection.
    2. Losses not covered by insurance or reserve accruals on account of 
injuries or deaths to employees or others and damages to the property of 
others.
    3. Fees and expenses of claim investigators.
    4. Payment of awards to claimants for court costs and attorneys' 
services.
    5. Medical and hospital service and expenses for employees as the 
result of occupational injuries, or resulting from claims of others.
    6. Compensation payments under workmen's compensation laws.
    7. Compensation paid while incapacitated as the result of 
occupational injuries. (See Note A.)
    8. Cost of safety, accident prevention and similar educational 
activities.

    Note A: Payments to or in behalf of employees for accident or death 
benefits, hospital expenses, medical supplies or for salaries while 
incapacitated for service or on leave of absence beyond periods normally 
allowed, when not the result of occupational injuries, shall be charged 
to account 926, Employee Pensions and Benefits. (See also Note B of 
account 926.)
    Note B: The cost of injuries and damages or reserve accruals 
capitalized shall be

[[Page 491]]

charged to construction directly or by transfer to construction work 
orders from this account.
    Note C: Exclude herefrom the time and expenses of employees (except 
those engaged in injuries and damages activities) spent in attendance at 
safety and accident prevention educational meetings, if occurring during 
the regular work period.
    Note D: The cost of labor and related supplies and expenses of 
administrative and general employees who are only incidentally engaged 
in injuries and damages activities may be included in accounts 920 and 
921, as appropriate.
926 Employee pensions and benefits.
    A. This account shall include pensions paid to or on behalf of 
retired employees, or accruals to provide for pensions, or payments for 
the purchase of annuities for this purpose, when the utility has 
definitely, by contract, committed itself to a pension plan under which 
the pension funds are irrevocably devoted to pension purposes, and 
payments for employee accident, sickness, hospital, and death benefits, 
or insurance therefor. Include, also, expenses incurred in medical, 
educational or recreational activities for the benefit of employees, and 
administrative expenses in connection with employee pensions and 
benefits.
    B. The utility shall maintain a complete record of accruals or 
payments for pensions and be prepared to furnish full information to the 
Commission of the plan under which it has created or proposes to create 
a pension fund and a copy of the declaration of trust or resolution 
under which the pension plan is established.
    C. There shall be credited to this account the portion of pensions 
and benefits expenses which is applicable to nonutility operations or 
which is charged to construction unless such amounts are distributed 
directly to the accounts involved and are not included herein in the 
first instance.
    D. For Major utilities, records in support of this account shall be 
so kept that the total pensions expense, the total benefits expense, the 
administrative expenses included herein, and the amounts of pensions and 
benefits expenses transferred to construction or other accounts will be 
readily available.

                                  Items

    1. Payment of pensions under a nonaccrual or nonfunded basis.
    2. Accruals for or payments to pension funds or to insurance 
companies for pension purposes.
    3. Group and life insurance premiums (credit dividends received).
    4. Payments for medical and hospital services and expenses of 
employees when not the result of occupational injuries.
    5. Payments for accident, sickness, hospital, and death benefits or 
insurance.
    6. Payments to employees incapacitated for service or on leave of 
absence beyond periods normally allowed, when not the result of 
occupational injuries, or in excess of statutory awards.
    7. Expenses in connection with educational and recreational 
activities for the benefit of employees.

    Note A: The cost of labor and related supplies and expenses of 
administrative and general employees who are only incidentally engaged 
in employee pension and benefit activities may be included in accounts 
920 and 921, as appropriate.
    Note B: Salaries paid to employees during periods of nonoccupational 
sickness may be charged to the appropriate labor account rather than to 
employee benefits.
927 Franchise requirements.
    A. This account shall include payments to municipal or other 
governmental authorities, and the cost of materials, supplies and 
services furnished such authorities without reimbursement in compliance 
with franchise, ordinance, or similar requirements; provided, however, 
that the utility may charge to this account at regular tariff rates, 
instead of cost, utility service furnished without charge under 
provisions of franchises.
    B. When no direct outlay is involved, concurrent credit for such 
charges shall be made to account 929, Duplicate Charges--Credit.
    C. The account shall be maintained so as to readily reflect the 
amounts of cash outlays, utility service supplied without charge, and 
other items furnished without charge.

    Note A: Franchise taxes shall not be charged to this account but to 
account 408.1, Taxes Other Than Income Taxes, Utility Operating Income.
    Note B: Any amount paid as initial consideration for a franchise 
running for more than one year shall be charged to account 302, 
Franchises and Consents.

[[Page 492]]

928 Regulatory commission expenses.
    A. This account shall include all expenses (except pay of regular 
employees only incidentally engaged in such work) properly includible in 
utility operating expenses, incurred by the utility in connection with 
formal cases before regulatory commissions, or other regulatory bodies, 
or cases in which such a body is a party, including payments made to a 
regulatory commission for fees assessed against the utility for pay and 
expenses of such commission, its officers, agents, and employees, and 
also including payments made to the United States for the administration 
of the Federal Power Act.
    B. Amounts of regulatory commission expenses which by approval or 
direction of the Commission are to be spread over future periods shall 
be charged to account 186, Miscellaneous Deferred Debits, and amortized 
by charges to this account.
    C. The utility shall be prepared to show the cost of each formal 
case.

                                  Items

    1. Salaries, fees, retainers, and expenses of counsel, solicitors, 
attorneys, accountants, engineers, clerks, attendants, witnesses, and 
others engaged in the prosecution of, or defense against petitions or 
complaints presented to regulatory bodies, or in the valuation of 
property owned or used by the utility in connection with such cases.
    2. Office supplies and expenses, payments to public service or other 
regulatory commissions, stationery and printing, traveling expenses, and 
other expenses incurred directly in connection with formal cases before 
regulatory commissions.

    Note A: Exclude from this account and include in other appropriate 
operating expense accounts, expenses incurred in the improvement of 
service, additional inspection, or rendering reports, which are made 
necessary by the rules and regulations, or orders, of regulatory bodies.
    Note B: Do not include in this account amounts includible in account 
302, Franchises and Consents, account 181, Unamortized Debt Expense, or 
account 214, Capital Stock Expense.
929 Duplicate charges--Credit.
    This account shall include concurrent credits for charges which may 
be made to operating expenses or to other accounts for the use of 
utility service from its own supply. Include, also, offsetting credits 
for any other charges made to operating expenses for which there is no 
direct money outlay.
930.1 General advertising expenses.
    This account shall include the cost of labor, materials used, and 
expenses incurred in advertising and related activities, the cost of 
which by their content and purpose are not provided for elsewhere.

                                  Items

Labor:
    1. Supervision.
    2. Preparing advertising material for newspapers, periodicals, 
billboards, etc., and preparing or conducting motion pictures, radio and 
television programs.
    3. Preparing booklets, bulletins, etc., used in direct mail 
advertising.
    4. Preparing window and other displays.
    5. Clerical and stenographic work.
    6. Investigating and employing advertising agencies, selecting media 
and conducting negotiations in connection with the placement and subject 
matter of advertising.

Materials and Expenses:
    7. Advertising in newspapers, periodicals, billboards, radio, etc.
    8. Advertising matter such as posters, bulletins, booklets, and 
related items.
    9. Fees and expenses of advertising agencies and commercial artists.
    10. Postage and direct mail advertising.
    11. Printing of booklets, dodgers, bulletins, etc.
    12. Supplies and expenses in preparing advertising materials.
    13. Office supplies and expenses.

    Note A: Properly includible in this account is the cost of 
advertising activities on a local or national basis of a good will or 
institutional nature, which is primarily designed to improve the image 
of the utility or the industry, including advertisements which inform 
the public concerning matters affecting the company's operations, such 
as, the cost of providing service, the company's efforts to improve the 
quality of service, the company's efforts to improve and protect the 
environment, etc. Entries relating to advertising included in this 
account shall contain or refer to supporting documents which identify 
the specific advertising message. If references are used, copies of the 
advertising message shall be readily available.
    Note B: Exclude from this account and include in account 426.4, 
Expenditures for Certain Civic, Political and Related Activities, 
expenses for advertising activities, which are designed to solicit 
public support or the support of public officials in matters of a 
political nature.

[[Page 493]]

930.2 Miscellaneous general expenses.
    This account shall include the cost of labor and expenses incurred 
in connection with the general management of the utility not provided 
for elsewhere.

                                  Items

Labor:
    1. Miscellaneous labor not elsewhere provided for.

Expenses:
    2. Industry association dues for company memberships.
    3. Contributions for conventions and meetings of the industry.
    4. For Major utilities, research, development, and demonstration 
expenses not charged to other operation and maintenance expense accounts 
on a functional basis.
    5. Communication service not chargeable to other accounts.
    6. Trustee, registrar, and transfer agent fees and expenses.
    7. Stockholders meeting expenses.
    8. Dividend and other financial notices.
    9. Printing and mailing dividend checks.
    10. Directors' fees and expenses.
    11. Publishing and distributing annual reports to stockholders.
    12. Public notices of financial, operating and other data required 
by regulatory statutes, not including, however, notices required in 
connection with security issues or acquisitions of property. For 
Nonmajor utilities, transportation and garage equipment, to account 933, 
Transportation Expenses.
931 Rents.
    This account shall include rents properly includible in utility 
operating expenses for the property of others used, occupied, or 
operated in connection with the customer accounts, customer service and 
informational, sales, and general and administrative functions of the 
utility. (See operating expense instruction 3.)
933 Transportation expenses (Nonmajor only).
    A. This account shall include the cost of labor, materials used and 
expenses incurred in the operation and maintenance of general 
transportation equipment of the utility.
    B. This account may be used as a clearing account in which event the 
charges hereto shall be cleared by apportionment to the appropriate 
operating expense, electric plant, or other accounts on a basis which 
will distribute the expenses equitably. Credits to this account shall be 
made in such detail as to permit ready analysis.

                                  Items

    1. Supervision.
    2. Building service.
    3. Care of grounds, including snow removal, cutting grass, etc.
    4. Utility services.
    5. Depreciation of transportation equipment.
    6. Fuel and lubricants for vehicles (including sales and excise 
taxes thereon).
    7. Insurance on garage equipment and transportation equipment, 
including public liability and property damage.
    8. Maintenance of transportation and garage equipment.
    9. Compensation of drivers, mechanics, clerks, and other garage 
employees.
    10. Rent of garage buildings and grounds, vehicles or equipment.
    11. Replacement of tires, tubes, batteries, etc.
    12. Direct taxes, licenses, and permits.
    13. Miscellaneous garage supplies, tools, and equipment.
    14. Miscellaneous office supplies and expenses, printing, and 
stationery.
    15. Transportation, meals, and incidental expenses.

    Note A: The pay of employees driving trucks or other transportation 
equipment incidental to their regular occupation, shall not be included 
herein but charged directly to the appropriate expense or other account.
    Note B: Transportation expenses applicable to construction shall not 
be included in operating expenses.
935 Maintenance of general plant.
    A. This account shall include the cost assignable to customer 
accounts, sales and administrative and general functions of labor, 
materials used and expenses incurred in the maintenance of property, the 
book cost of which is includible in account 390, Structures and 
Improvements, account 391, Office Furniture and Equipment, account 397, 
Communication Equipment, and account 398 Miscellaneous Equipment. For 
Nonmajor utilities, include also other general equipment accounts (not 
including transportation equipment). (See operating expense instruction 
2.)
    B. Maintenance expenses on office furniture and equipment used 
elsewhere than in general, commercial and sales offices shall be charged 
to the following accounts:

    Steam Power Generation, Account 514.

[[Page 494]]

    Nuclear Power Generation, Account 532 (Major only).
    Hydraulic Power Generation, Account 545.
    Other Power Generation, Account 554.
    Transmission, Account 573.
    Distribution, Account 598.
    Merchandise and Jobbing, Account 416.
    Garages, Shops, etc., Appropriate clearing account, if used.

    Note: Maintenance of plant included in other general equipment 
accounts shall be included herein unless charged to clearing accounts or 
to the particular functional maintenance expense account indicated by 
the use of the equipment.

                           PART 104 [RESERVED]

    Note: For the Uniform System of Accounts for all Public Utilities, 
see part 101 of this subchapter.



PART 125_PRESERVATION OF RECORDS OF PUBLIC UTILITIES AND LICENSEES--Table of 

Contents



Sec.
125.1 Promulgation.
125.2 General instructions.
125.3 Schedule of records and periods of retention.

    Authority: 16 U.S.C. 825, 825c, and 825h; 44 U.S.C. 3501 et seq.



Sec. 125.1  Promulgation.

    This Part is prescribed and promulgated as the regulations governing 
the preservation of records by public utilities subject to the 
jurisdiction of the Commission and by licensees holding licenses issued 
by the Commission, to the extent and in the manner set forth therein.

[Order 617, 65 FR 48155, Aug. 7, 2000]



Sec. 125.2  General instructions.

    (a) Scope of this part. (1) The regulations in this part apply to 
all books of account and other records prepared by or on behalf of the 
public utility or licensee. See item 40 of the schedule (Sec. 125.3) 
for those records that come into possession of the public utility or 
licensee in connection with the acquisition of property, such as 
purchase, consolidation, merger, etc.
    (2) The regulations in this part should not be construed as excusing 
compliance with other lawful requirements of any other governmental 
body, Federal or State, prescribing other record keeping requirements or 
for preservation of records longer than those prescribed in this part.
    (3) To the extent that any Commission regulations may provide for a 
different retention period, the records should be retained for the 
longer of the retention periods.
    (4) Records other than those listed in the schedule may be destroyed 
at the option of the public utility or licensee: Provided, however, That 
records which are used in lieu of those listed shall be preserved for 
the periods prescribed for the records used for substantially similar 
purposes. And, provided further, That retention of records pertaining to 
added services, functions, plant, etc., the establishment of which 
cannot be presently foreseen, shall conform to the principles embodied 
herein.
    (5) Notwithstanding the provisions of the Records Retention 
Schedule, the Commission may, upon the request of the Company, authorize 
a shorter period of retention for any record listed therein upon a 
showing by the Company that preservation of such record for a longer 
period is not necessary or appropriate in the public interest or for the 
protection of investors or consumers.
    (b) Designation of supervisory official. Each public utility or 
licensee subject to the regulations in this part shall designate one or 
more persons with official responsibility to supervise the utility's or 
licensee's program for preservation and the authorized destruction of 
its records.
    (c) Protection and storage of records. The public utility or 
licensee shall provide reasonable protection for records subject to the 
regulations in this part from damage by fire, floods, and other hazards 
and, in the selection of storage spaces, safeguards the records from 
unnecessary exposure to deterioration from excessive humidity, dryness, 
or lack of proper ventilation.
    (d) Record storage media. Each public utility and licensee has the 
flexibility to select its own storage media subject to the following 
conditions.
    (1) The storage media must have a life expectancy at least equal to 
the applicable record retention period provided in Sec. 125.3 unless 
there is a quality

[[Page 495]]

transfer from one media to another with no loss of data.
    (2) Each public utility and licensee is required to implement 
internal control procedures that assure the reliability of, and ready 
access to, data stored on machine readable media. Internal control 
procedures must be documented by a responsible supervisory official.
    (3) Each transfer of data from one media to another must be verified 
for accuracy and documented. Software and hardware required to produce 
readable records must be retained for the same period the media format 
is used.
    (e) Destruction of records. At the expiration of the retention 
period, public utilities and licensees may use any appropriate method to 
destroy records.
    (f) Premature destruction or loss of records. When records are 
destroyed or lost before the expiration of the prescribed period of 
retention, a certified statement listing, as far as may be determined, 
the records destroyed and describing the circumstances of accidental or 
other premature destruction or loss must be filed with the Commission 
within ninety (90) days from the date of discovery of the destruction.
    (g) Schedule of records and periods of retention. (1) Records 
related to plant in service must be retained until the facilities are 
permanently removed from utility service, all removal and restoration 
activities are completed, and all costs are retired from the accounting 
records unless accounting adjustments resulting from reclassification 
and original costs studies have been approved by the regulatory 
commission having jurisdiction. If the plant is sold, the associated 
records or copies thereof, must be transferred to the new owners.
    (2) Records related to hydroelectric facilities and additions, 
retirements, and betterments thereto must be retained until:
    (i) The Commission has determined the actual legitimate original 
cost of the facilities, or the licenses are surrendered. If the plant is 
sold, the associated records or copies thereof, must be transferred to 
the new owners.
    (ii) Records related to the determination of amortization reserves 
pursuant to section 10(d) of the Federal Power Act must be retained 
until a final determination and adjudication of the amortization 
reserves are made.
    (h) Retention periods designated ``Destroy at option''. ``Destroy at 
option'' constitutes authorization for destruction of records at 
managements' discretion if it does not conflict with other legal 
retention requirements or usefulness of such records in satisfying 
pending regulatory actions or directives.
    (i) Records of services performed by associated companies. Public 
utilities and licensees must assure the availability of records of 
services performed by and for associated or affiliated companies with 
supporting cost information for the periods indicated in Sec. 125.3 as 
necessary to be able to readily furnish detailed information as to the 
nature of the transaction, the amounts involved, and the accounts used 
to record the transactions.
    (j) Index of records. Public utilities and licensees must arrange, 
file, and index records so records may be readily identified and made 
available to Commission representatives.
    (k) Rate case. Notwithstanding the minimum retention periods 
provided in these regulations, if a public utility or licensee wants to 
reflect costs in a current, future, or pending rate case, or if a public 
utility or licensee has abandoned or retired a plant subsequent to the 
test period of the utility's rate case, the utility must retain the 
appropriate records to support the costs and adjustments proposed in the 
current or next rate case.
    (l) Pending complaint litigation or governmental proceedings. 
Notwithstanding the minimum requirements, if a public utility or 
licensee is involved in pending litigation, complaint procedures, 
proceedings remanded by the court, or governmental proceedings, it must 
retain all relevant records.
    (m) Life or mortality study data. Life or mortality study data for 
depreciation purposes must be retained for 25

[[Page 496]]

years or for 10 years after plant is retired, whichever is longer.

(Secs. 3, 4, 15, 16, 308; 41 Stat. 1063-1066, 1068, 1072, 1075; 49 Stat. 
838-841; 82 Stat. 617 (16 U.S.C. 796, 797, 803, 808, 809, 816, 825b, 
825g, 826i); secs. 8, 10, 16; 52 Stat. 825, 826, 830 (15 U.S.C. 717g, 
717i, 717o))

[Order 450, 37 FR 6293, Mar. 28, 1972, as amended by Order 567, 42 FR 
30615, June 16, 1977; Order 258, 47 FR 42724, Sept. 29, 1982; Order 335, 
48 FR 44483, Sept. 29, 1983; Order 617, 65 FR 48155, Aug. 7, 2000]



Sec. 125.3  Schedule of records and periods of retention.

                            Table of Contents

                          Corporate and General

1. Reports to stockholders.
2. Organizational documents.
3. Contracts including amendments and agreements.
4. Accountants' and auditors' reports.

                    Information Technology Management

5. Automatic data processing records.

                       General Accounting Records

6. General and subsidiary ledgers.
7. Journals: General and subsidiary.
8. Journal vouchers and entries.
9. Cash books.
10. Voucher registers.
11. Vouchers.

                                Insurance

12. Insurance records.

                       Operations and Maintenance

13.1. Production--Public utilities and licensees (less nuclear).
13.2 Production--Nuclear.
14. Transmission and distribution--Public utilities and licensees.
15. Maintenance work orders and job orders.

                         Plant and Depreciation

16. Plant ledgers.
17. Construction work in progress ledgers.
18. Retirement work in progress ledgers.
19. Summary sheets.
20. Appraisals and valuations.
21. Engineering records.
22. Contracts relating to utility plant.
23. Reclassification of utility plant account records.
24. Accumulated depreciation and depletion of utility plant account 
          records.

                           Purchase and Stores

25. Procurement.
26. Material ledgers.
27. Materials and supplies received and issued.
28. Records of sales of scrap and materials and supplies.

                    Revenue Accounting and Collection

29. Customers' service applications and contracts.
30. Rate schedules.
31. Maximum demand and demand meter record cards.
32. Miscellaneous billing data.
33. Revenue summaries.

                                   Tax

34. Tax records.

                                Treasury

35. Statements of funds and deposits.
36. Records of deposits with banks and others.

                              Miscellaneous

37. [Reserved.]
38. Statistics.
39. Budgets and other forecasts.
40. Records of predecessors companies.
41. Reports to Federal and State regulatory commissions.
42. Advertising.

              Schedule of Records and Periods of Retention
------------------------------------------------------------------------
        Item No. and description                 Retention period
------------------------------------------------------------------------
         Corporate and General
 
1. Reports to stockholders: Annual       5 years.
 reports or statements to stockholders.
2. Organizational documents:
    (a) Minute books of stockholders',   5 years or termination of the
     directors', and directors'           corporation's existence,
     committee meetings.                  whichever occurs first.
    (b) Titles, franchises, and          6 years after final non-
     licenses: Copies of formal orders    appealable order.
     of regulatory commissions served
     upon the utility.
3. Contracts, including amendments and
 agreements (except contracts provided
 for elsewhere):
    (a) Service contracts, such as for   All contracts, related
     management, accounting, and          memoranda, and revisions
     financial services.                  should be retained for 4 years
                                          after expiration or until the
                                          conclusion of any contract
                                          disputes pertaining to such
                                          contracts, whichever is later.

[[Page 497]]

 
    (b) Contracts with others for        All contracts, related
     transmission or the purchase, sale   memoranda, and revisions
     or interchange of product.           should be retained for 4 years
                                          after expiration or until the
                                          conclusion of any contract
                                          disputes or governmental
                                          proceedings pertaining to such
                                          contracts, whichever is later.
    (c) Memoranda essential to           For the same periods as
     clarifying or explaining             contracts to which they
     provisions of contracts listed       relate.
     above, including requests for
     discounts.
    (d) Card or book records of          For the same periods as
     contracts, leases, and agreements    contracts to which they
     made, showing dates of expirations   relate.
     and of renewals, memoranda of
     receipts, and payments under such
     contracts.
4. Accountants' and auditors' reports:
    (a) Reports of examinations and      5 years after the date of the
     audits by accountants and auditors   report.
     not in the regular employ of the
     utility (such as reports of public
     accounting firms and commission
     accountants).
    (b) Internal audit reports and       5 years after the date of the
     working papers.                      report.
 
   Information Technology Management
 
5. Automatic data processing records     Retain as long as it represents
 (retain original source data used as     an active viable program or
 input for data processing and data       for periods prescribed for
 processing report printouts for the      related output data, whichever
 applicable periods prescribed            is shorter.
 elsewhere in the schedule): Software
 program documentation and revisions
 thereto.
 
       General Accounting Records
 
6. General and subsidiary ledgers:
    (a) Ledgers:
        (1) General ledgers............  10 years.
        (2) Ledgers subsidiary or        10 years.
         auxiliary to general ledgers
         except ledgers provided for
         elsewhere.
    (b) Indexes:
        (1) Indexes to general ledgers.  10 years.
        (2) Indexes to subsidiary        10 years.
         ledgers except ledgers
         provided for elsewhere.
    (c) Trial balance sheets of general  2 years.
     and subsidiary ledgers.
7. Journals: General and subsidiary....  10 years.
8. Journal vouchers and journal entries
 including supporting detail:
    (a) Journal vouchers and journal     10 years.
     entries.
    (b) Analyses, summarization,
     distributions, and other
     computations which support journal
     vouchers and journal entries:
        (1) Charging plant accounts....  25 years. See Sec.  125.2(g).
        (2) Charging all other accounts  6 years.
9. Cash books: General and subsidiary    5 years after close of fiscal
 or auxiliary books.                      year.
10. Voucher registers: Voucher           5 years. See Sec.  125.2(g).
 registers or similar records when used
 as a source document.
11. Vouchers:
    (a) Paid and canceled vouchers (one  5 years. See Sec.  125.2(g).
     copy-analysis sheets showing
     detailed distribution of charges
     on individual vouchers and other
     supporting papers).
    (b) Original bills and invoices for  5 years. See Sec.  125.2(g).
     materials, services, etc., paid by
     vouchers.
    (c) Paid checks and receipts for     5 years.
     payments of specific vouchers.
    (d) Authorization for the payment    5 years. See Sec.  125.2(g).
     of specific vouchers.
    (e) Lists of unaudited bills         Destroy at option.
     (accounts payable), list of
     vouchers transmitted, and
     memoranda regarding changes in
     audited bills.
    (f) Voucher indexes................  Destroy at option.
 
               Insurance
 
12. Insurance records:
    (a) Records of insurance policies    Destroy at option after
     in force, showing coverage,          expiration of such policies.
     premiums paid, and expiration
     dates.
    (b) Records of amounts recovered     6 years. See Sec.  125.2(g).
     from insurance companies in
     connection with losses and of
     claims against insurance
     companies, including reports of
     losses, and supporting papers.
 

[[Page 498]]

 
       Operations and Maintenance
 
13.1 Production--Public utilities and
 licensees (less Nuclear):
    (a) Boiler-tube failure report.....  3 years.
    (b) Generation and output logs with  3 years.
     supporting data:.
    (c) Station and system generation
     reports and clearance logs:
        (1) Hydro-electric.............  25 years. See Sec.  125.2(g).
        (2) Steam and others...........  6 years. See Sec.  125.2(g).
    (d) Generating high-tension and low- 3 years.
     tension load records.
    (e) Load curves, temperature logs,   3 years.
     coal, and water logs.
    (f) Gauge-reading reports..........  2 years, except river flow data
                                          collected in connection with
                                          hydro operation must be
                                          retained for life of
                                          corporation.
    (g) Recording instrumentation        1 year, except where the basic
     charts.                              chart information is
                                          transferred to another record,
                                          the charts need only be
                                          retained 6 months provided the
                                          record containing the basic
                                          data is retained 1 year.
13.2 Production--Nuclear:
    For informational purposes, refer
     to the document retention
     requirements of the Nuclear
     Regulatory Commission.
14. Transmission and distribution--
 Public utilities and licensees.
    (a) Substation and transmission      3 years.
     line logs.
    (b) System operator's daily logs     3 years.
     and reports of operation.
    (c) Transformer history records....  For life of transformer.
    (d) Records of transformer           Destroy at option.
     inspections, oil tests, etc.
15. Maintenance work orders and job
 orders:
    (a) Authorizations for expenditures  5 years.
     for maintenance work to be covered
     by work orders, including
     memoranda showing the estimates of
     costs to be incurred.
    (b) Work order sheets to which are   5 years.
     posted in detail the entries for
     labor, material, and other charges
     in connection with maintenance,
     and other work pertaining to
     utility operations.
    (c) Summaries of expenditures on     5 years.
     maintenance and job orders and
     clearances to operating other
     accounts (exclusive of plant
     accounts).
         Plant and Depreciation
 
16. Plant ledgers:
    (a) Ledgers of utility plant         25 years. See Sec.  125.2(g).
     accounts including land and other
     detailed ledgers showing the cost
     of utility plant by classes.
    (b) Continuing plant inventory       25 years. See Sec.  125.2(g).
     ledger, book or card records
     showing description, location,
     quantities, cost, etc., of
     physical units (or items) of
     utility plant owned.
17. Construction work in progress
 ledgers, work orders, and supplemental
 records:
    (a) Construction work in progress    5 years after clearance to
     ledgers.                             plant account, provided
                                          continuing plant inventory
                                          records are maintained;
                                          otherwise 5 years after plant
                                          is retired.
    (b) Work orders sheets to which are  5 years after clearance to
     posted in summary form or in         plant account, provided
     detail the entries for labor,        continuing plant inventory
     materials, and other charges for     records are maintained;
     utility plant additions and the      otherwise 5 years after plant
     entries closing the work orders to   is retired.
     utility plant in service at
     completion.
    (c) Authorizations for expenditures  5 years after clearance to
     for additions to utility plant,      plant account except where
     including memoranda showing the      there are ongoing Commission
     detailed estimates of cost, and      proceedings.
     the bases therefor (including
     original and revised or subsequent
     authorizations).
    (d) Requisitions and registers of    5 years after clearance to
     authorizations for utility plant     plant account except where
     expenditures.                        there are ongoing Commission
                                          proceedings.
    (e) Completion or performance        5 years after clearance to
     reports showing comparison between   plant account except where
     authorized estimates and actual      there are ongoing Commission
     expenditures for utility plant       proceedings.
     additions.

[[Page 499]]

 
    (f) Analysis or cost reports         5 years after clearance to
     showing quantities of materials      plant account except where
     used, unit costs, number of man-     there are ongoing Commission
     hours etc., in connection with       proceedings.
     completed construction project.
    (g) Records and reports pertaining   Destroy at option.
     to progress of construction work,
     the order in which jobs are to be
     completed, and similar records
     which do not form a basis of
     entries to the accounts.
18. Retirement work in progress
 ledgers, work orders, and supplemental
 records:
    (a) Work order sheets to which are   5 years after plant is retired.
     posted the entries for removal
     costs, materials recovered, and
     credits to utility plant accounts
     for cost of plant retirement.
    (b) Authorizations for retirement    5 years after plant is retired.
     of utility plant, including
     memoranda showing the basis for
     determination to be retired and
     estimates of salvage and removal
     costs.
    (c) Registers of retirement work...  5 years.
19. Summary sheets, distribution         5 years.
 sheets, reports, statements, and
 papers directly supporting debits and
 credits to utility plant accounts not
 covered by construction or retirement
 work orders and their supporting
 records.
20. Appraisals and valuations:
    (a) Appraisals and valuations made   3 years after appraisal.
     by the company of its properties
     or investments or of the
     properties or investments of any
     associated companies. (Includes
     all records essential thereto.).
    (b) Determinations of amounts by
     which properties or investments of
     the company or any of its
     associated companies will be
     either written up or written down
     as a result of:
        (1) Mergers or acquisitions....  10 years after completion of
                                          transaction or as ordered by
                                          the Commission.
        (2) Asset impairments..........  10 years after recognition of
                                          asset impairment.
        (3) Other bases................  10 years after the asset was
                                          written up or down.
21. The original or reproduction of      Retain until retired.
 engineering records, drawings, and
 other supporting data for proposed or
 as-constructed utility facilities:
 Maps, diagrams, profiles, photographs,
 field survey notes, plot plan, detail
 drawings, records of engineering
 studies, and similar records showing
 the location of proposed or as-
 constructed facilities.
22. Contracts relating to utility
 plant:
    (a) Contracts relating to            6 years after plant is retired
     acquisition or sale of plant.        or sold.
    (b) Contracts and other agreements   6 years after plant is retired
     relating to services performed in    or sold.
     connection with construction of
     utility plant (including contracts
     for the construction of plant by
     others for the utility and for
     supervision and engineering
     relating to construction work).
23. Records pertaining to                6 years.
 reclassification of utility plant
 accounts to conform to prescribed
 systems of accounts including
 supporting papers showing the bases
 for such reclassifications.
24. Records of accumulated provisions
 for depreciation and depletion of
 utility plant and supporting
 computation of expense:
    (a) Detailed records or analysis     25 years.
     sheets segregating the accumulated
     depreciation according to
     functional classification of plant.
    (b) Records reflecting the service   25 years.
     life of property and the
     percentage of salvage and cost of
     removal for property retired from
     each account for depreciable
     utility plant.
 
          Purchase and Stores
 
25. Procurement:
    (a) Agreements entered into for the
     acquisition of goods or the
     performance of services. Includes
     all forms of agreements not
     specifically set forth in
     Subsection 7 such as but not
     limited to: Letters of intent,
     exchange of correspondence, master
     agreements, term contracts, rental
     agreements, and the various types
     of purchase orders:

[[Page 500]]

 
        (1) For goods or services        6 years. See Sec.  125.2(g).
         relating to plant construction.
        (2) For other goods or services  6 years.
    (b) Supporting documents including   6 years. See Sec.  125.2(g).
     accepted and unaccepted bids or
     proposals (summaries of unaccepted
     bids or proposals may be kept in
     lieu of originals) evidencing all
     relevant elements of the
     procurement.
26. Material ledgers: Ledger sheets of   6 years after the date the
 materials and supplies received,         records/ledgers were created.
 issued, and on hand
27. Materials and supplies received and  6 years. See Sec.  125.2(g).
 issued: Records showing the detailed
 distribution of materials and supplies
 issued during accounting periods
28. Records of sales of scrap and
 materials and supplies:
    (a) Authorization for sale of scrap  3 years.
     and materials and supplies.
    (b) Contracts for sale of scrap      3 years.
     materials and supplies.
 
   Revenue Accounting and Collecting
 
29. Customers' service applications and  4 years after expiration.
 contracts: Contracts, including
 amendments for extensions of service,
 for which contributions are made by
 customers and others
30. Rate schedules: General files of     6 years after published rate
 published rate sheets and schedules of   sheets and schedules are
 utility service. Including schedules     superseded or no longer used
 suspended or superseded                  to charge for utility service.
31. Maximum demand, and demand meter     1 year, except where the basic
 record cards                             chart information is
                                          transferred to another record
                                          the charts need only be
                                          retained 6 months, provided
                                          the basic data is retained 1
                                          year.
32. Miscellaneous billing data: Billing  Destroy at option.
 department's copies of contracts with
 customers (other than contracts in
 general files)
33. Revenue summaries: Summaries of      5 years.
 monthly operating revenues according
 to classes of service. Including
 summaries of forfeited discounts and
 penalties
 
                  Tax
 
34. Tax records:
    (a) Copies of tax returns and
     supporting schedules filed with
     taxing authorities, supporting
     working papers, records of appeals
     of tax bills, and receipts for
     payment. See Subsection 11(b) for
     vouchers evidencing disbursements:
        (1) Income tax returns.........  2 years after final tax
                                          liability is determined.
        (2) Property tax returns.......  2 years after final tax
                                          liability is determined.
        (3) Sales and other use taxes..  2 years.
        (4) Other taxes................  2 years after final tax
                                          liability is determined.
        (5) Agreements between           2 years after final tax
         associate companies as to        liability is determined.
         allocation of consolidated
         income taxes.
        (6) Schedule of allocation of    2 years after final tax
         consolidated Federal income      liability is determined.
         taxes among associate
         companies.
        (b) Filings with taxing          5 years after discontinuance of
         authorities to qualify           plan.
         employee benefit plans.
        (c) Information returns and      3 years after final tax
         reports to taxing authorities.   liability is determined.
                Treasury
35. Statements of funds and deposits...  For nuclear decommissioning
                                          funds, retain records for all
                                          items listed for 3 years after
                                          final decommissioning is
                                          completed.
                                         If amortization reserve funds
                                          related to licensed projects
                                          are maintained, retain until
                                          the Commission makes a final
                                          determination of the
                                          disposition of amortization
                                          reserves.
    (a) Statements of periodic deposits  Retain records for the most
     with fund administrators or          recent 3 years.
     trustees.
    (b) Statements of periodic           Retain records for the most
     withdrawals from fund.               recent 3 years.
    (c) Statements prepared by fund      Retain records until the fund
     administrator or trustees of fund    is dissolved or terminated.
     activity including:
        (1) Beginning of the year
         balance of fund;
        (2) Deposits with the fund;
        (3) Acquisition of investments
         held by the fund;

[[Page 501]]

 
        (4) Disposition of investments
         held by the fund;
        (5) Disbursements from the
         fund, including party to whom
         disbursement was made;
        (6) End of year balance of
         fund.
36. Records of deposits with banks and
 others:
    (a) Statements from depositories     Destroy at option after
     showing the details of funds         completion of audit by
     received, disbursed, transferred,    independent accountants.
     and balances on deposit.
    (b) Check stubs, registers, or       3 years.
     other records of checks issued.
             Miscellaneous
37. [Reserved]
38. Statistics: Financial, operating     5 years.
 and statistical reports used for
 internal administrative or operating
 purposes.
39. Budgets and other forecasts          3 years.
 (prepared for internal administrative
 or operating purposes) of estimated
 future income, receipts and
 expenditures in connection with
 financing, construction and
 operations, including acquisitions and
 disposals of properties or investments.
40. Records of predecessor companies...  Retain consistent with the
                                          requirements for the same
                                          types of records of the
                                          utility.
41. Reports to Federal and State         5 years.
 regulatory commissions including
 annual financial, operating and
 statistical reports.
42. Advertising: Copies of               2 years.
 advertisements by or for the company
 on behalf of itself or any associate
 company in newspapers, magazines, and
 other publications, including costs
 and other records relevant thereto
 (excluding advertising of appliances,
 employment opportunities, routine
 notices, and invitations for bids all
 of which may be destroyed at option).
------------------------------------------------------------------------


[Order 617, 65 FR 48156, Aug. 7, 2000; 65 FR 50638, Aug. 21, 2000]


[[Page 502]]



   SUBCHAPTER D_APPROVED FORMS, FEDERAL POWER ACT AND PUBLIC UTILITY 

                     REGULATORY POLICIES ACT OF 1978



PART 131_FORMS--Table of Contents



Sec.
131.20 Application for approval of transfer of license.
131.31 FERC Format No. FERC 561, Annual report of interlocking 
          positions.
131.43 Report of securities issued.
131.50 Reports of proposals received.
131.51 [Reserved]
131.52 Certificate of concurrence.
131.53 [Reserved]
131.70 Form of application by State and municipal licensees for 
          exemption from payment of annual charges.
131.80 FERC Form No. 556, Certification of qualifying facility (QF) 
          status for a small power production or cogeneration facility.

    Authority: 16 U.S.C. 792-828c, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352.



Sec. 131.20  Application for approval of transfer of license.

    (See Sec. Sec. 9.1 through 9.10 of this chapter.)

(This application and all accompanying documents shall be submitted in 
quadruplicate, together with one additional copy for each interested 
State commission)

             Before the Federal Energy Regulatory Commission

             application for approval of transfer of license

    (1)------------------, licensee under the license for Project No. --
----, issued by the Commission on ------------------ (Month, day, year) 
and
    (2) ------------------, (hereinafter referred to as the Transferee).
    (3) Hereby jointly and severally apply for the written approval by 
the Federal Energy Regulatory Commission of the transfer of the 
aforesaid license from the transferor to the transferee and request that 
the instrument of such approval by the Commission be made effective as 
of the date of conveyance of the project properties; and in support 
thereof show the Commission as follows:
    (4) The said transferee is:
    (a) \4\ A citizen of the United States, whereof proof is submitted 
herewith as Exhibit A, which is hereby incorporated herein and made a 
part hereof;
---------------------------------------------------------------------------

    \4\ In par. 4 include only the subparagraph which is applicable.
---------------------------------------------------------------------------

    (b) \4\ An association of citizens under articles of association, a 
certified copy of which as now in effect is attached hereto as exhibit A 
and hereby incorporated herein and made a part hereof;
    (c) \4\ A municipality organized under the following statutes: ----
--------------, proof of such organization being submitted herewith as 
Exhibits A-1, A-2, etc., which is [are] hereby incorporated herein and 
made a part hereof;
    (d) \5\ A ------------------ (e.g., private, nonprofit, etc.) 
corporation, organized under the laws of the State of ------------------
, and domesticated in the States of ------------------, ----------------
--; certified copies of its charter or certificate or incorporation, 
articles of incorporation, corporate by-laws, and certificates of 
authority to do business, with all amendments of each to date, being 
submitted herewith as exhibits A-1, A-2, etc., said exhibits being 
hereby incorporated herein and made a part hereof;
---------------------------------------------------------------------------

    \5\ This form for application contemplates the filing of the 
application and Commission action thereon prior to any conveyance of the 
project properties. If the Commission acts favorably upon the 
application, it will issue to the applicants an order approving the 
transfer of the license. Applicants may then consummate the conveyance 
of the project properties and transferee shall submit to the Commission 
certified copies of the instruments of such conveyance (see par. 6 of 
this form). The transferor shall at the same time make payment of annual 
charges to the date of the conveyance (see par. 6 of this form). The 
transferor shall at the same time make payment of annual charges to the 
date of the conveyance (see par. 8 of this form). The transferee shall 
at the same time submit to the Commission final proofs showing its 
compliance with state laws. See par. 5 of this form. The transferor 
shall at the same time turn over to the transferee all license 
instruments and all maps, plans, specifications, contracts, reports of 
engineers, accounts, books, records, and all other papers and documents, 
relating to the original project and to all additions thereto and 
betterments thereof.
---------------------------------------------------------------------------

    (5) The transferee submits as [partial] evidence of its compliance 
with all applicable State laws as required by section 9(a)(2) of the 
Federal Power Act ------------------ submitted herewith as exhibits B-1, 
B-2, etc., and proposes to complete its showing of such compliance by 
submitting ------------

[[Page 503]]

to be submitted as exhibits B-3, B-4, etc., at the time it submits proof 
of the conveyance to it of the project properties as hereinafter 
provided for; \5\
---------------------------------------------------------------------------

    \5\ See footnote 5 on preceding page.
---------------------------------------------------------------------------

    (6) The transferee will submit certified copies of all instruments 
of conveyance whereby title to the project properties is conveyed to it, 
upon the completion of such conveyance, if and when the Commission shall 
have given its approval to the proposed transfer;
    (7) If and when the Commission shall have given its approval to the 
proposed transfer, and upon completion of conveyance of the project 
properties to the transferee, the transferor will deliver to the 
transferee and the transferee will accept and permanently retain all 
license instruments and all maps, plans, specifications, contracts, 
reports of engineers, accounts, books, records, and all other papers and 
documents relating to the original project and to all additions thereto 
and betterments thereof;
    (8) The transferor certifies that it has fully complied with the 
terms and conditions of its license, as amended, and that it has fully 
satisfied and discharged all of its liabilities and obligations 
thereunder to the date hereof, and obligates itself to pay all annual 
charges accrued under the license to the date of transfer;
    (9) Contingent upon the final written approval by the Commission of 
the transfer of the license, the transferee accepts all the terms and 
conditions of the said license [as amended] and the act, and agrees to 
be bound thereby to the same extent as though it were the original 
licensee thereunder;
    (10) The name, title, and post-office address of the person or 
persons to whom correspondence in regard to this application shall be 
addressed are as follows:

________________________________________________________________________

________________________________________________________________________

    In witness whereof the transferor has caused its name to be hereunto 
signed by ------------------------ (Name), its ------------------------ 
(Title--chief executive officer), and its corporate seal to be hereunto 
affixed by ------------------------ (Name), its ------------------------ 
(Title--custodian of seal), thereunto duly authorized, this ------------
---- day of ----------------, 19----; and the transferee has caused its 
name to be hereunto signed by ------------------ (Name), its ----------
-------- (Title--chief executive officer), and its corporate seal to be 
hereunto affixed by ------------------ (Name), its ------------------ 
(Title--custodian of seal), thereunto duly authorized this ------------
-- day of ----------------, 19----. \6\
---------------------------------------------------------------------------

    \6\ If applicant is a natural citizen modify final paragraph.
---------------------------------------------------------------------------

                                          ------------------------------
                                              (Exact name of transferor)
 By_____________________________________________________________________
                                                                  (Name)
                                          ------------------------------
                                                                 (Title)
                                              (Exact name of transferee)
 By_____________________________________________________________________
                                          ------------------------------
                                                                  (Name)
                                          ------------------------------
                                                                 (Title)
Attest:
                                          ------------------------------
                                                             (Secretary)

                            verification \7\
---------------------------------------------------------------------------

    \7\ To be separately executed by each of the persons signing the 
foregoing application.
---------------------------------------------------------------------------

State of________________________________________________________________

                       County of ------------, ss:

------------------------ being duly sworn deposes and says: That he is 
the_____________________________________________________________________

(Title of person signing the application) of the ----------------------
-- (Name of one of applicants), one of the applicants for approval of 
transfer of license; that he has read the foregoing application and 
knows the contents thereof; and that the same are true to the best of 
his knowledge and belief.

                                              --------------------------
                                                             (Signature)
    Subscribed and sworn to before me, a notary public of the State of 
-------------- this -------------- day of --------------, 19----.
________________________________________________________________________

                                Exhibit A

                        proof of citizenship \8\
---------------------------------------------------------------------------

    \8\ If the applicant is a natural person or an association of 
citizens, proof of citizenship is required. Such proof may be made by 
affidavit in the form indicated.
---------------------------------------------------------------------------

State of________________________________________________________________

                      County of --------------, ss:

    --------------------, -------------------- and --------------------, 
being duly sworn, each for himself, deposes and says that he is a 
citizen of the United States of America.
________________________________________________________________________
________________________________________________________________________
    Subscribed and sworn to before me, a notary public of the State of 
-------------- this -------------- day of --------------, 19----.

[[Page 504]]

________________________________________________________________________

[Order 141, 12 FR 8588, Dec. 19, 1947, as amended by Order 175, 19 FR 
5218, Aug. 18, 1954; Order 541, 57 FR 21734, May 22, 1992; Order 699, 72 
FR 45325, Aug. 14, 2007]



Sec. 131.31  FERC Form No. 561, Annual report of interlocking positions.

    (See section 46.4 of this chapter.)

[[Page 505]]

[GRAPHIC] [TIFF OMITTED] TR31DE98.003


[[Page 506]]



   INSTRUCTIONS FOR COMPLETING ANNUAL REPORT OF INTERLOCKING POSITIONS

                          GENERAL INFORMATION:

Purpose of Report
    The data collected by this report will be used by the Federal Energy 
Regulatory Commission's staff for the review and oversight of 
interlocking positions between public utilities and certain other 
entities as described below.
Who Must Submit
    This report must be completed by all persons holding interlocking 
positions between public utilities and certain other entities (described 
in the specific instructions) during any portion of the calendar year.
When to Submit
    Submit this report on or before April 30 of each year for the 
preceding calendar year. (For example, the report for the year 1999 
would be filed on or before April 30, 2000.)
What and Where to Submit
    Submit an original and one (1) copy of this report to: Federal 
Energy Regulatory Commission, Office of the Secretary, Attention FERC 
561, 888 First Street NE, Washington, DC 20426
Sanctions
    This report is mandatory and is prescribed by Section 305(c)(1) of 
the Federal Power Act and 18 CFR 46.4. Failure to report may result in 
certain penalties and other sanctions as provided by law.
Where to Send Comments on Public Reporting Burden
    The public reporting burden for this collection of information is 
estimated to average 0.25 hours per response, including the time for 
reviewing the instructions, searching existing data sources, gathering 
and maintaining the data needed, and completing and reviewing the 
collection of information. Send comments regarding this burden estimate 
or any other aspect of this collection of information to: Federal Energy 
Regulatory Commission, Attn: Federal Energy Regulatory Commission 
Information Clearance Officer, 888 First Street NE., Washington, DC 
20426.
    You shall not be penalized for failure to respond to this collection 
of information unless the collection of information displays a valid OMB 
control number.

                          GENERAL INSTRUCTIONS

    1. Prepare this report in conformity with the requirements 
prescribed in 18 CFR 46.4.
    2. Leave blank any columns that are not applicable.

                          SPECIFIC INSTRUCTIONS

                          Item and Instruction

                         Respondent Information

1 and 2 Enter your full name and your business address.
3 Enter the calendar year for which this report is filed.
4 and 5 If you are authorized by this Commission to hold the position of 
          officer or director in accordance with Part 45 of the 
          Commission's regulations: enter in space 4 the complete FERC 
          docket number of such authorization; enter in space 5 the 
          latest date of such authorization. Otherwise, leave these 
          spaces blank.
6 Enter the public utility or public utility holding company to which 
          you want next year's Form 561 sent.

                           Public Utility Data

Col (1) and Col (2) Enter in column (1) the name of each public utility 
          in which you hold an executive position. In column (2) enter 
          the appropriate code for each such position, according to the 
          list below:

                              Code and Name

Dir Director
CEO Chief Executive Officer
PRES President
VP Vice President
SEC Secretary
TREA Treasurer
GM General Manager
COMP Comptroller
PURA Chief Purchasing Agent
OEP Other Executive Position

                        Interlocking Entity Data

Col (3) and Col (4) Enter in Column (3) the name of each entity in which 
          you hold an interlocking position. Enter the appropriate code 
          for each executive position you hold in the entity named in 
          Column (3), using the list below:

                              Code and Name

DIR Director
CEO Chief Executive Officer
PRES President
VP Vice President
SEC Secretary
TREA Treasurer
GM General Manager
COMP Comptroller
PURA Chief Purchasing Agent
PART Partner
APPT Appointee
REP Representative
OEP Other Executive Position
Col (5) Enter in Column (5) the appropriate code type for each entity 
          listed in Column (3), using the list below:

[[Page 507]]

                              Code and Name

FIN Investment bank; bank holding company; foreign bank or subsidiary 
          thereof doing business in the United States; other 
          organization primarily engaged in the business of providing 
          financial services or credit; mutual savings bank; or savings 
          and loan association
FINI Insurance company
SECU Entity authorized by law to underwrite or participate in the 
          marketing of securities of a public utility
ELEQ Entity which produces/supplies electric equipment for the use of 
          any public utility
FUEL Entity which produces/supplies coal, natural gas, nuclear fuel, or 
          other fuel for the use of any public utility
20CL Entity specified in 18 CFR 46.3 (one of the 20 largest purchasers 
          of electric energy from a utility)
CNEN Entity which is controlled by any one of the above named entities
305B Entity referred to in Section 305(b) of the Federal Power Act (not 
          otherwise identified above)
Col (6) For each entity that supplies electric equipment (ELEQ) named in 
          Column (3) enter the aggregate amount of revenues from 
          producing or supplying electrical equipment to any public 
          utility named in column (1) in the subject calendar year, 
          rounded to the nearest $100,000. Otherwise, leave this column 
          blank.
Signature The original of this report must be dated and signed. The copy 
          must bear the date that appeared on the original. The 
          signature on the copy may be stamped or typed on the copy.

[Order 601, 63 FR 72169, Dec. 31, 1998]



Sec. 131.43  Report of securities issued.

    (See Sec. 34.10 of this chapter.)
    (Submit an original and four copies.)

                          [Name of respondent]

                       Report of Securities Issued
       Description of security....................................
------------------------------------------------------------------------
                          Description                            Amount
------------------------------------------------------------------------
1. Face value or principal amount.............................  ........
2. Plus premium or less discount..............................  ........
3. Gross proceeds.............................................  ........
                                                               =========
4. Underwriter's spread or commission.........................  ........
5. Securities and Exchange Commission registration fee........  ........
6. State mortgage registration tax............................  ........
7. State commission fee.......................................  ........
8. Fee for recording indenture................................  ........
9. United States document tax.................................  ........
10. Printing and engraving expenses...........................  ........
11. Trustee's charges.........................................  ........
12. Counsel fees..............................................  ........
13. Accountant's fees.........................................  ........
14. Cost of listing...........................................  ........
15. Miscellaneous expenses of issue...........................  ........
  (Describe large items)......................................  ........
                                                               ---------
16. Total deductions..........................................  ........
                                                               =========
17. Net amount realized.......................................  ........
------------------------------------------------------------------------


[Order 141, 12 FR 8591, Dec. 19, 1947, as amended by Order 182, 46 FR 
50517, Oct. 14, 1981]

    Effective Date Note: At 70 FR 35375, June 20, 2005, Sec. 131.43 
introductory text was revised, effective at the time of the next e-
filing release during the Commission's next fiscal year. For the 
convenience of the user, the revised text follows:



Sec. 131.43  Report of securities issued.

    (See Sec. 34.10 of this chapter)
    (Submit in electronic format in accordance with Sec. 385.2003 of 
this chapter.)

                                * * * * *



Sec. 131.50  Reports of proposals received.

    No later than 30 days after the sale or placement of long-term debt 
or equity securities or the entry into guarantees or assumptions of 
liabilities (collectively referred to as ``placement'') pursuant to 
authority granted under Part 34 of this chapter, the applicant must file 
a summary of each proposal or proposals received for the placement. The 
proposal or proposals accepted must be indicated. The information to be 
filed must include:
    (a) Par or stated value of securities;
    (b) Number of units (shares of stock, number of bonds) issued;
    (c) Total dollar value of the issue;
    (d) Life of the securities, including maximum life and average life 
of sinking fund issue;
    (e) Dividend or interest rate;
    (f) Call provisions;
    (g) Sinking fund provisions;
    (h) Offering price;
    (i) Discount or premium;
    (j) Commission or underwriter's spread;
    (k) Net proceeds to company for each unit of security and for the 
total issue;

[[Page 508]]

    (l) Net cost to the company for securities with a stated interest or 
dividend rate.

[Order 575, 60 FR 4855, Jan. 25, 1995]

    Effective Date Note: At 70 FR 35375, June 20, 2005, Sec. 131.50 
paragraphs (a) and (b) were revised, effective at the time of the next 
e-filing release during the Commission's next fiscal year. For the 
convenience of the user, the revised text follows:



Sec. 131.50  Report of proposals received.

    (a) No later than 30 days after the sale or placement of long-term 
debt or equity securities or the entry into guarantees or assumptions of 
liabilities (collectively referred to as ``placement'') pursuant to 
authority granted under Part 34 of this chapter, the applicant must 
file, in electronic format, a summary of each proposal or proposals 
received for the placement. The proposal or proposals accepted must be 
indicated. The information to be filed must include:
    (1) Par or stated value of securities;
    (2) Number of units (shares of stock, number of bonds) issued;
    (3) Total dollar value of the issue;
    (4) Life of the securities, including maximum life and average life 
of sinking fund issue;
    (5) Dividend or interest rate;
    (6) Call provisions;
    (7) Sinking fund provisions;
    (8) Offering price;
    (9) Discount or premium;
    (10) Commission or underwriter's spread;
    (11) Net proceeds to company for each unit of security and for the 
total issue;
    (12) Net cost to the company for securities with a stated interest 
or dividend rate.
    (b) This report must be filed with the Commission as prescribed in 
Sec. 385.2003 of this chapter and as indicated in the instructions set 
out in this report. This report is an electronic file that is classified 
as a ``qualified document'' in accordance with Sec. 385.2003(c)(1) and 
(2). As a qualified document, no paper copy version of the filing is 
required unless there is a request for privileged or protected treatment 
or the document is combined with another document as provided in Sec. 
385.2003(c)(3) or (4).

                                * * * * *



Sec. 131.51  [Reserved]



Sec. 131.52  Certificate of concurrence.

    (See Sec. Sec. 35.1 through 35.21 of this chapter.)
    This is to certify that------------------
                                     (Name of public utility concurring)
assents to and concurs in the rate schedule (rate schedule supplement) 
described below, which the---------------------------- (Name of public 
utility filing rate schedule) has filed, and hereby files this 
certificate of concurrence in lieu of the filing of the rate schedule 
(rate schedule supplement) specified.
(Here give exact description of rate schedule or supplement, including 
F.E.R.C. number)

________________________________________________________________________
                                                (Name of public utility)
By______________________________________________________________________
________________________________________________________________________
                                                                 (Title)

    Dated ------------------ 19----.

[Order 141, 12 FR 8591, Dec. 19, 1947, as amended by Order 271, 28 FR 
11404, Oct. 24, 1963; Order 541, 57 FR 21734, May 22, 1992; Order 714, 
73 FR 57533, Oct. 3, 2008]



Sec. 131.53  [Reserved]



Sec. 131.70  Form \12\ of application by State and municipal licensees for 

exemption from payment of annual charges.
---------------------------------------------------------------------------

    \12\ Copies of this form may be obtained upon request from the 
Federal Energy Regulatory Commission.
---------------------------------------------------------------------------

    (See Sec. 11.6 of this chapter.) Application by State and municipal 
licensees for exemption from payment of annual charges must be prepared 
on this form. The form specifies that in filing application for 
exemption, the following data and schedules shall be submitted:

    1. Name and address of correspondent;
    2. Basis for claimed exemption;
    3. Generating plants owned or operated by licensee;
    4. Transmission lines and distribution lines;
    5. KWH of power generated, purchased and interchanged;
    6. Power sold or otherwise disposed of (kwh);
    7. Power interchange (in detail);
    8. Statement of unusual conditions attending the disposition of 
electric power;
    9. Book cost of electric property;
    10. Operating revenues;
    11. Operating expenses and other deductions from revenues;
    12. Affidavit.

[Order 143, 13 FR 6682, Nov. 13, 1948, as amended by Order 756, 77 FR 
4894, Feb. 1, 2012]

[[Page 509]]



Sec. 131.80  FERC Form No. 556, Certification of qualifying facility (QF) 

status for a small power production or cogeneration facility.

    (a) Who must file. Any person seeking to certify a facility as a 
qualifying facility pursuant to sections 3(17) or 3(18) of the Federal 
Power Act, 16 U.S.C. 796(3)(17), (3)(18), unless otherwise exempted or 
granted a waiver by Commission rule or order pursuant to Sec. 
292.203(d), must complete and file the Form of Certification of 
Qualifying Facility (QF) Status for a Small Power Production or 
Cogeneration Facility, FERC Form No. 556. Every Form of Certification of 
Qualifying Status must be submitted on the FERC Form No. 556 then in 
effect and must be prepared in accordance with the instructions 
incorporated in that form.
    (b) Availability of FERC Form No. 556. The currently effective FERC 
Form No. 556 shall be made available for download from the Commission's 
Web site.
    (c) How to file a FERC Form No. 556. All applicants must file their 
FERC Forms No. 556 electronically via the Commission's eFiling Web site.

[Order 732, 75 FR 15965, Mar. 30, 2010]



PART 141_STATEMENTS AND REPORTS (SCHEDULES)--Table of Contents



Sec.
141.1 FERC Form No. 1, Annual report of Major electric utilities, 
          licensees and others.
141.2 FERC Form No. 1-F, Annual report for Nonmajor public utilities and 
          licensees.
141.14 Form No. 80, Licensed Hydropower Development Recreation Report.
141.15 Annual Conveyance Report.
141.51 FERC Form No. 714, Annual Electric Balancing Authority Area and 
          Planning Area Report.
141.61 [Reserved]
141.100 Original cost statement of utility property.
141.300 FERC Form No. 715, Annual Transmission Planning and Evaluation 
          Report.
141.400 FERC Form No. 3-Q, Quarterly financial report of electric 
          utilities, licensees, and natural gas companies.
141.500 Cash management programs.

    Authority: 15 U.S.C. 79; 15 U.S.C. 717-717z; 16 U.S.C. 791a-828c, 
2601-2645; 31 U.S.C. 9701; 42 U.S.C. 7101-7352.



Sec. 141.1  FERC Form No. 1, Annual report of Major electric utilities, 

licensees and others.

    (a) Prescription. The Form of Annual Report for Major electric 
utilities, licensees and others, designated herein as FERC Form No. 1, 
is prescribed for the reporting year 1981 and each year thereafter.
    (b) Filing requirements--(1) Who must file--(i) Generally. Each 
Major and each Nonoperating (formerly designated as Major) electric 
utility (as defined in part 101 of Subchapter C of this chapter) and 
each licensee as defined in section 3 of the Federal Power Act (16 
U.S.C. 796), including any agency, authority or other legal entity or 
instrumentality engaged in generation, transmission, distribution, or 
sale of electric energy, however produced, throughout the United States 
and its possessions, having sales or transmission service equal to Major 
as defined above, must prepare and file electronically with the 
Commission the FERC Form 1 pursuant to the General Instructions as 
provided in that form.
    (ii) Exceptions. This report form is not prescribed for any agency, 
authority or instrumentality of the United States, nor is it prescribed 
for municipalities as defined in section 3 of the Federal Power Act; 
(i.e., a city, county, irrigation district, drainage district, or other 
political subdivision or agency of a State competent under the laws 
thereof to carry on the business of developing, transmitting, utilizing, 
or distributing power).
    (2) When to file and what to file. (i) The annual report for the 
year ending December 31, 2004, must be filed on April 25, 2005.
    (ii) The annual report for each year thereafter must be filed on 
April 18.
    (iii) This report must be filed with the Federal Energy Regulatory 
Commission as prescribed in Sec. 385.2011 of this chapter and as 
indicated in the General Instructions set out in this form, and must be 
properly completed and verified. Filing on electronic media

[[Page 510]]

pursuant to Sec. 385.2011 of this chapter is required.

[Order 200, 47 FR 1280, Jan. 12, 1982, as amended by Order 390, 49 FR 
32515, Aug. 14, 1984; Order 574, 60 FR 1718, Jan. 5, 1995; Order 626, 67 
FR 36096, May 23, 2002; 69 FR 9043, Feb. 26, 2004; Order No. 694, 72 FR 
20723, Apr. 26, 2007; 73 FR 58736, Oct. 7, 2008]



Sec. 141.2  FERC Form No. 1-F, Annual report for Nonmajor public utilities and 

licensees.

    (a) Prescription. The form of Annual Report for Nonmajor Public 
Utilities and Licensees, designated herein as FERC Form No. 1-F, is 
prescribed for the year 1980 and each year thereafter.
    (b) Filing Requirements--(1) Who Must File--(i) Generally. Each 
Nonmajor and each Nonoperating (formerly designated as Nonmajor) public 
utility and licensee as defined by the Federal Power Act, which is 
considered Nonmajor as defined in Part 101 of this chapter, shall 
prepare and file with the Commission an original and conformed copies of 
FERC Form No. 1-F pursuant to the General Instructions set out in that 
form.
    (ii) Exceptions. FERC Form No. 1-F is not prescribed for any 
municipality as defined in Section 3 of the Federal Power Act, i.e., a 
city, county, irrigation district, drainage district, or other political 
subdivision or agency of a State competent under the laws thereof to 
carry on the business of developing, transmitting, utilizing, or 
distributing power.
    (2) When to file. (i) The annual report for the year ending December 
31, 2004, must be filed on April 25, 2005.
    (ii) The annual report for each year thereafter must be filed on 
April 18.

[Order 101, 45 FR 60899, Sept. 15, 1980, as amended by Order 390, 49 FR 
32515, Aug. 14, 1984; 50 FR 5744, Feb. 12, 1985; 69 FR 9043, Feb. 26, 
2004; Order No. 694, 72 FR 20723, Apr. 26, 2007]



Sec. 141.14  Form No. 80, Licensed Hydropower Development Recreation Report.

    The form of the report, Licensed Hydropower Development Recreation 
Report, designated as FERC Form No. 80, for use by licensees in 
reporting information with respect to existing and potential 
recreational use at developments within projects under major and minor 
license, is approved and prescribed for use as provided in Sec. 8.11 of 
this chapter.

[46 FR 50059, Oct. 9, 1981]



Sec. 141.15  Annual Conveyance Report.

    If a licensee of a hydropower project is required by its license to 
file with the Commission an annual report of conveyances of easements or 
rights-of-way across, or leases of, project lands, the report must be 
filed only if such a conveyance or lease of project lands has occurred 
in the previous year.

[Order 540, 57 FR 21738, May 22, 1992]



Sec. 141.51  FERC Form No. 714, Annual Electric Balancing Authority Area and 

Planning Area Report.

    (a) Who must file. (1) Any electric utility, as defined by section 
3(4) of the Public Utility Regulatory Policies Act, 16 U.S.C. 2602, 
operating a balancing authority area, and any group of electric 
utilities, which by way of contractual arrangements operates as a single 
balancing authority area, must complete and file the applicable 
schedules in FERC Form No. 714 with the Federal Energy Regulatory 
Commission.
    (2) Any electric utility, or group of electric utilities that 
constitutes a planning area and that has a peak load greater than 200 
megawatts (MW) based on net energy for load for the reporting year, must 
complete applicable schedules in FERC Form No. 714.
    (b) When to file. FERC Form No. 714 must be filed on or before each 
June 1 for the preceding calendar year.
    (c) What to file. FERC Form No. 714, Annual Electric Balancing 
Authority Area and Planning Area Report, must be filed with the Federal 
Energy Regulatory Commission as prescribed in Sec. 385.2011 of this 
chapter and as indicated in the General Instructions set out in this 
form.

[58 FR 52436, Oct. 8, 1993 as amended by Order No. 20723, 72 FR 20725, 
Apr. 26, 2007]

    Effective Date Note: At 58 FR 52436, Oct. 8, 1993, Sec. 141.51 was 
revised. The section contains information collection and recordkeeping 
requirements and will not become effective until approval has been given 
by the Office of Management and Budget.

[[Page 511]]



Sec. 141.61  [Reserved]



Sec. 141.100  Original cost statement of utility property.

    Any public utility or licensee becoming subject to the jurisdiction 
of the Commission shall file, insofar as applicable, the following 
statements properly sworn to by the officer in responsible charge of 
their compilation:

                               Statement A

    Statement A showing in outline the origin and development of the 
company including particularly a description (giving names of parties 
and dates) of each consolidation and merger to which the company, or a 
predecessor, was a party and each acquisition of an electric operating 
unit or system.

                               Statement B

    Statement B showing for each acquisition by the reporting company or 
any of its predecessors of an electric operating unit or system, the 
original cost, estimated, if not known, the cost of such company and the 
amount entered in the books in respect thereto as of the date of 
acquisition. If the depreciation, retirement, or amortization reserve 
was adjusted as of the date of acquisition and in connection therewith, 
a full disclosure of the pertinent facts should be made. The difference 
between the original cost and the amount entered in respect thereto of 
each acquisition of an electric operating unit or system, as of the date 
of acquisition, should be clearly stated, and a summary of all 
transactions affecting such difference through the end of the calendar 
year prior to the year in which the filing is made, and the resultant 
amount at the latter date, should be set forth. The amount to be 
included in account 114, Electric Plant Acquisition Adjustments, shall 
be subdivided so as to show the amounts applicable to (1) electric plant 
in service, (2) electric plant leased to others, and (3) electric plant 
held for future use. Whenever practical, such amount shall be classified 
according to nature, i.e., going value, structural value, etc.
    Where estimates are used in arriving at original cost or the amount 
to be included in account 114, a full disclosure of the method and 
underlying facts should be given. The method of determining the original 
cost of the electric plant acquired as operating units or systems should 
be described in sufficient detail to permit a clear understanding of the 
nature of the investigations which were made for that purpose.

                               Statement C

    Statement C showing any amounts arrived at by appraisals in the 
electric plant accounts (and not eliminated) in lieu of cost to the 
reporting company. This statement should give the full journal entry at 
the time the appraisal was originally recorded and if the entry had the 
effect of appreciating or writing up the electric plant account, the 
amount of the appreciation of writeup should be traced, by proper 
description and explanation of changes, from the date recorded through 
the end of the calendar year prior to the year in which the filing is 
made.

                               Statement D

    Statement D showing electric plant as classified in the books of 
account immediately prior to reclassification in accordance with the 
Uniform System of Accounts, including, under a descriptive heading, any 
unclassified amounts applicable jointly to the electric department and 
other departments of the utility.

                               Statement E

    Statement E showing summary of adjustments necessary to state 
accounts 101, 103-107, 114, and 116, as prescribed in the Uniform System 
of Accounts.

                               Statement F

    Statement F showing electric plant classified according to the 
accounts prescribed in the Uniform System of Accounts, and showing also 
the amount includible in account 116, Other Electric Plant Adjustments.

                               Statement G

    Statement G giving a comparative balance sheet showing the accounts 
and amounts appearing in the books before the adjusting entries have 
been made and after such entries shall have been made.

                               Statement H

    Statement H giving a suggested plan for depreciating, amortizing, or 
otherwise disposing in whole or in part of the amounts includible in 
account 114, Electric Plant Acquisition Adjustments, and account 116, 
Other Electric Plant Adjustments.

                               Statement I

    Statement I giving the following statistical information relative to 
electric plant.

                            Production Plant

    Steam production. Separately for each steam plant: Name of plant, 
date of construction, nameplate generating capacity (kw.) as originally 
constructed and as at present, also nameplate capacity and date of 
installation of each addition to generating capacity. The original cost, 
where available, by accounts 310 and 316, of each steam production 
plant.

[[Page 512]]

    Hydraulic production. Separately for each hydroplant: Name of plant, 
date of construction, capacity of reservoirs (acre-feet), nameplate 
generating capacity (kw.) as originally constructed and as at present, 
also nameplate capacity and date of installation of each addition to 
generating capacity. The original cost, where available, by accounts 330 
and 336, of each hydraulic production plant.
    Internal combustion engine production. For each internal combustion 
engine plant: Name of plant, date of construction, nameplate generating 
capacity (kw.) as originally constructed and as at present, also 
nameplate capacity and date of installation of each addition to 
generating capacity. The original cost, where available, by accounts 340 
to 346, of each internal combustion engine production plant.

                           Transmission Plant

    Overhead transmission lines. For each overhead transmission line or 
for each group of transmission lines of the same voltage, same general 
type of construction, and same number of circuits per structure; the 
voltage, length in miles, type of construction, kind and size of 
conductor. The original cost, where available, by accounts 350, 352, 
354, 355, 356, and 359, of each such line or group of lines.
    Underground transmission lines. For each underground transmission 
line or for each group of transmission lines of the same voltage, same 
general type of construction and same number of circuits per structure: 
The voltage length in miles and type of construction. The original cost, 
where available, by accounts 350, 352, 357, 358, and 359, of each such 
line or group of lines.
    Transmission substations. For each substation: Function, capacity 
(kva), high and low voltages of transformers, description and capacity 
of special items of equipment.

                           Distribution Plant

    Overhead system. \1\ Number of pole and circuit miles, number of 
active meters or services connected (if available), description and 
number of each type of pole or tower.
---------------------------------------------------------------------------

    \1\ If number of active meters or services is not available 
separately for overhead and underground systems, report totals.
---------------------------------------------------------------------------

    Underground system. \2\ Number of circuit miles, number of active 
meters or services connected (if available), description of type of 
construction and general statement of any special construction problem.
---------------------------------------------------------------------------

    \2\ To be shown on the original when tendered for filing with the 
Commission of every paper as specified in Sec. 1.17(f) of this chapter.
---------------------------------------------------------------------------

    Distribution substation. General description of number, capacity 
(kva) and high and low voltages of transformers.
    Line transformers. Number and capacity.
    Street lighting and signal systems. Description and number of each 
type of street lighting standard, number and wattage of lamps, and 
description of signal system.

                              General Plant

    Description of principal structures and improvements.
    Number and type of transportation vehicles and appurtenant 
equipment.
    Description of store, shop, and laboratory equipment.
    Description of communication equipment.
    Description of miscellaneous equipment.

[38 FR 7214, Mar. 19, 1973. Redesignated by Order 541, 57 FR 21734, May 
22, 1992]



Sec. 141.300  FERC Form No. 715, Annual Transmission Planning and Evaluation 

Report.

    (a) Who must file. Any transmitting utility, as defined in Sec. 
3(23) of the Federal Power Act, that operates integrated (that is, non-
radial) transmission facilities at or above 100 kilovolts must complete 
FERC Form No. 715.
    (b) When to file. FERC Form No. 715 must be filed on or before each 
April 1.
    (c) What to file. FERC Form No. 715 must be filed with the Federal 
Energy Regulatory Commission in accordance with the instructions on that 
form.
    (d) Critical Energy Infrastructure Information. (1) If the 
instructions in Form No. 715 require a utility to reveal Critical Energy 
Infrastructure Information (CEII), as defined in Sec. 388.113(c) of 
this chapter, to any person, the utility shall omit the CEII from the 
information made available and insert the following in its place:
    (i) A statement that CEII is being withheld;
    (ii) A brief description of the omitted information that does not 
reveal any CEII; and
    (iii) This statement: ``Procedures for obtaining access to Critical 
Energy Infrastructure Information (CEII) may be found at 18 CFR 388.113. 
Requests for access to CEII should be made to the Commission's CEII 
Coordinator.''
    (2) The utility completing Form No. 715, in determining whether 
information constitutes CEII, shall treat the information in a manner 
consistent

[[Page 513]]

with any filings that utility has made with the Commission and shall to 
the extent practicable adhere to any previous determinations by the 
Commission or the CEII Coordinator involving the same or like 
information.
    (3) The procedures contained in Sec. Sec. 388.112 and 388.113 of 
this chapter regarding designation of, and access to, CEII, shall apply 
in the event of a challenge to a CEII designation or a request for 
access to CEII. If it is determined that information is not CEII or that 
a requester should be granted access to CEII, the utility will be 
directed to make the information available to the requester.
    (4) Nothing in this section shall be construed to prohibit any 
persons from voluntarily reaching arrangements or agreements calling for 
the disclosure of CEII.

[58 FR 52436, Oct. 8, 1993, as amended by Order 643, 68 FR 52095, Sept. 
2, 2003]

    Effective Date Note: At 58 FR 52436, Oct. 8, 1993, Sec. 141.300 was 
added. The new section contains information collection provisions which 
will not become effective until approved by the Office of Management and 
Budget.



Sec. 141.400  FERC Form No. 3-Q, Quarterly financial report of electric 

utilities, licensees, and natural gas companies.

    (a) Prescription. The quarterly report of electric utilities, 
licensees, and natural gas companies, designated as FERC Form No. 3-Q, 
is prescribed for the reporting quarter ending March 31, 2004, and each 
quarter thereafter.
    (b) Filing requirements--(1) Who must file--(i) Generally. Each 
electric utility and each Nonoperating (formerly designated as Major or 
Nonmajor) electric utility (as defined in part 101 of subchapter C of 
this chapter) and other entity, i.e., each corporation, person, or 
licensee as defined in section 3 of the Federal Power Act (16 U.S.C. 792 
et seq.), including any agency or instrumentality engaged in generation, 
transmission, distribution, or sale of electric energy, however 
produced, throughout the United States and its possessions, having sales 
or transmission service must prepare and file with the Commission FERC 
Form No. 3-Q pursuant to the General Instructions set out in that form.
    (ii) Exceptions. This report form is not prescribed for any agency, 
authority or instrumentality of the United States, nor is it prescribed 
for municipalities as defined in section 3 of the Federal Power Act; 
(i.e. a city, county, irrigation district, or other political 
subdivision or agency of a State competent under the laws thereof to 
carry on the business of developing, transmitting, utilizing, or 
distributing power).
    (2) Each Major and Nonoperating (formerly designated as Major) (as 
defined in part 101 of subchapter C of this chapter) public utility and 
licensee must file the quarterly financial report form as follows:
    (i) The quarterly financial report for the period January 1 through 
March 31, 2004, must be filed on or before July 9, 2004.
    (ii) The quarterly financial report for the period April 1 through 
June 30, 2004, must be filed on or before September 8, 2004.
    (iii) The quarterly financial report for the period July 1 through 
September 30, 2004, must be filed on or before December 9, 2004.
    (iv) The quarterly financial report for the period January 1 through 
March 31, 2005, must be filed on or before May 31, 2005.
    (v) The quarterly financial report for the period April 1 through 
June 30, 2005, must be filed on or before August 29, 2005.
    (vi) The quarterly financial report for the period July 1 through 
September 30, 2005 must be filed on or before November 29, 2005.
    (vii) Subsequent quarterly financial reports must be filed within 60 
days from the end of the reporting quarter.
    (3) Nonmajor and Nonoperating (formerly designated as Nonmajor) 
public utilities and licensees must file the quarterly financial report 
form as follows:
    (i) The quarterly financial report for the period January 1 through 
March 31, 2004, must be filed on or before July 23, 2004.
    (ii) The quarterly financial report for the period April 1 through 
June 30,

[[Page 514]]

2004, must be filed on or before September 22, 2004.
    (iii) The quarterly financial report for the period July 1 through 
September 30, 2004, must be filed on or before December 23, 2004.
    (iv) The quarterly financial report for the period January 1 through 
March 31, 2005, must be filed on or before June 13, 2005.
    (v) The quarterly financial report for the period April 1 through 
June 30, 2005, must be filed on or before September 12, 2005.
    (vi) The quarterly financial report for the period July 1 through 
September 30, 2005 must be filed on or before December 13, 2005.
    (vii) Subsequent quarterly financial reports must be filed within 70 
days from the end of the reporting quarter.
    (4) This report must be filed as prescribed in Sec. 385.2011 of 
this chapter and as indicated in the General Instructions set out in the 
quarterly financial report form, and must be properly completed and 
verified. Filing on electronic media pursuant to Sec. 385.2011 of this 
chapter will be required commencing with the quarterly financial report 
ending March 31, 2004, due on or before July 9, 2004 for major public 
utilities and licensees, and due on or before July 23, 2004 for nonmajor 
public utilities and licensees.

[69 FR 9043, Feb. 26, 2004, as amended by Order 646-A, 69 FR 32443, June 
10, 2004; Order 646, 69 FR 34568, June 22, 2004; Order 695, 72 FR 20723, 
Apr. 26, 2007; 73 FR 58736, Oct. 7, 2008]



Sec. 141.500  Cash management programs.

    Public utilities and licensees subject to the provisions of the 
Commission's Uniform System of Accounts prescribed in part 101 and Sec. 
141.1 or Sec. 141.2 of this title that participate in cash management 
programs must file these agreements with the Commission. The 
documentation establishing the cash management program and entry into 
the program must be filed within 10 days of the effective date of the 
rule or entry into the program. Subsequent changes to the cash 
management agreement must be filed with the Commission within 10 days of 
the change.

[Order 634-A, 68 FR 62003, Oct. 31, 2003, as amended at 69 FR 9044, Feb. 
26, 2004]

                        PARTS 142-149 [RESERVED]

[[Page 515]]



             SUBCHAPTER E_REGULATIONS UNDER NATURAL GAS ACT



PART 152_APPLICATION FOR EXEMPTION FROM THE PROVISIONS OF THE NATURAL GAS ACT 

PURSUANT TO SECTION 1(C) THEREOF AND ISSUANCE OF BLANKET CERTIFICATES 

AUTHORIZING CERTAIN SALES FOR RESALE--Table of Contents



Sec.
152.1 Exemption applications and blanket certificates.
152.2 Form of application; service.
152.3 Contents of application.
152.4 Certificate from State Commission.
152.5 Applicability of exemption.

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.



Sec. 152.1  Exemption applications and blanket certificates.

    (a) Application for exemption from the provisions of the Natural Gas 
Act and the rules and regulations of the Commission issued pursuant 
thereto may be made by any person as defined in the Natural Gas Act 
engaged in, or authorized to engage in the transportation in interstate 
commerce or the sale in interstate commerce for resale, of natural gas 
received by such applicant from another person within or at the boundary 
of a State, if all of the natural gas so received is ultimately consumed 
in such State: Provided, That the natural-gas rates (including rates for 
sales for resale) and service of the applicant and its natural-gas 
facilities are subject to regulation by a State Commission, as defined 
in the Natural Gas Act, and that such State Commission is exercising 
that jurisdiction.
    (b)(1)(i) For purposes of the Commission's regulations implementing 
the Natural Gas Act, ``vehicular natural gas'' or ``VNG'' means natural 
gas that will be used, in either a gaseous or liquefied state, as fuel 
in any self-propelled vehicle.
    (ii) For purposes of the Commission's regulations implementing the 
Natural Gas Act, vehicular natural gas, or VNG, is deemed to be 
ultimately consumed in the state in which the gas is physically 
delivered into the vehicle's fuel tank regardless of whether the tank is 
attached to the vehicle at the time it is filled.
    (2)(i) Blanket certificates of public convenience and necessity are 
issued pursuant to section 7(c) of the Natural Gas Act to all persons 
that engage in sales for resale of VNG that are subject to the 
Commission's authority under section 1(b) of the NGA, such authorization 
to be effective upon that person's engagement in the jurisdictional 
sale. A blanket certificate issued under this paragraph (b)(2)(i) is a 
certificate of limited jurisdiction which will not subject the 
certificate holder to any other regulation under the Natural Gas Act 
jurisdiction of the Commission by virtue of transactions under the 
certificate. Such certificate will not impair the continued validity of 
any Natural Gas Act exemption from Commission jurisdiction.
    (ii) A blanket certificate issued under paragraph (b)(2)(i) of this 
section authorizes the holder to make sales of VNG for resale in 
interstate commerce at market rates.
    (iii) Abandonment of the sales service authorized in paragraph 
(b)(2)(i) of this section is authorized pursuant to section 7(b) of the 
Natural Gas Act upon the expiration of the contractual term or upon 
termination of each individual sales arrangement.

(Sec. 1(c), 68 Stat. 36; 15 U.S.C. 717(c))

[Order 306, 30 FR 12729, Oct. 6, 1965, as amended by Order 543, 57 FR 
32894, July 24, 1992]



Sec. 152.2  Form of application; service.

    The application must be filed with the Secretary of the Commission 
in accordance with filing procedures posted on the Commission's Web site 
at http://www.ferc.gov. A copy of the application shall be served on the 
State Commission which has jurisdiction over the applicant and upon each 
wholesale customer of the applicant.

[Order 737, 75 FR 43404, July 26, 2010]



Sec. 152.3  Contents of application.

    Every application shall set forth in the order indicated, the 
following:
    (a) The exact legal name of applicant.

[[Page 516]]

    (b) The name, title, and post office address of the person to whom 
correspondence in regard to the application shall be addressed.
    (c) A statement of pertinent facts as to the existing service, if 
any, or authorized service by applicant, including a showing that all of 
the natural gas which applicant receives from out-of-State sources is 
and will be ultimately consumed within the State in which the operations 
sought to be exempted are conducted.

(Secs. 3, 16, 52 Stat. 822, 830; 15 U.S.C. 717b, 717o)

[Order 173, 19 FR 4276, July 13, 1954, as amended by Order 317, 31 FR 
432, Jan. 13, 1966; Order 433, 50 FR 40345, Oct. 3, 1985; Order 737, 75 
FR 43404, July 26, 2010]



Sec. 152.4  Certificate from State Commission.

    Applications for exemption under Sec. 152.3 shall contain, or there 
shall be separately filed, a certificate from the appropriate State 
Commission that the natural-gas (a) rates (including rates for sales for 
resale), (b) service, and (c) facilities of the applicant are subject to 
the regulatory jurisdiction of the State Commission and that the State 
Commission is exercising such jurisdiction.

(Sec. 1(c), 68 Stat. 36; 15 U.S.C. 717(c))

[Order 306, 30 FR 12729, Oct. 6, 1965]



Sec. 152.5  Applicability of exemption.

    Nothing in this part shall be construed to relieve any person 
exempted from the provisions of the Natural Gas Act by section 1(c) 
thereof from compliance with valid State regulatory requirements. If an 
exemption from the provisions of the Natural Gas Act is effective 
pursuant to section 1(c), the exempted person shall be responsible for 
calling to the attention of the State Commission by which it is 
regulated and of the Federal Energy Regulatory Commission any future 
operations in which it may engage which may make the exemption 
inapplicable to it. The exempted person shall also be responsible for 
calling to the attention of the Federal Energy Regulatory Commission any 
changes, amendment, or judicial or administrative interpretation of the 
State law pursuant to which it is regulated, which may make the 
exemption inapplicable to it.

(Sec. 1(c), 68 Stat. 36; 15 U.S.C. 717(c))

[Order 306, 30 FR 12729, Oct. 6, 1965, as amended by Order 737, 75 FR 
43404, July 26, 2010]



PART 153_APPLICATIONS FOR AUTHORIZATION TO CONSTRUCT, OPERATE, OR MODIFY 

FACILITIES USED FOR THE EXPORT OR IMPORT OF NATURAL GAS--Table of Contents



                      Subpart A_General Provisions

Sec.
153.1 Purpose and scope.
153.2 Definitions.
153.3 Notice requirements.

                  Subpart B_Application Under Section 3

153.4 General requirements.
153.5 Who shall apply.
153.6 Time of filing.
153.7 Contents of application.
153.8 Required exhibits.
153.9 Transferability.
153.10 Authorization not exclusive.
153.11 Supplemental orders.
153.12 Pre-filing procedures for applications for authorization to site, 
          construct, maintain, connect or modify facilities to be used 
          for the export or import of natural gas.
153.13 Emergency reconstruction.

             Subpart C_Application for a Presidential Permit

153.15 Who shall apply.
153.16 Contents of application.
153.17 Effectiveness of Presidential Permit.

              Subpart D_Paper Media and Other Requirements

153.20 General rule.
153.21 Conformity with requirements.
153.22 Amendments and withdrawals.
153.23 Reporting requirements.

    Authority: 15 U.S.C. 717b, 717o; E.O. 10485, 3 CFR, 1949-1953 Comp., 
p. 970, as amended by E.O. 12038, 3 CFR, 1978 Comp., p. 136, DOE 
Delegation Order No. 0204-112, 49 FR 6684 (February 22, 1984).

    Source: Order 595, 62 FR 30446, June 4, 1997, unless otherwise 
noted.

[[Page 517]]



                      Subpart A_General Provisions



Sec. 153.1  Purpose and scope.

    The purpose of this part is to implement the Commission's delegated 
authorities under section 3 of the Natural Gas Act and Executive Order 
10485, as amended by Executive Order 12038. Subpart B of this part 
establishes filing requirements an applicant must follow to obtain 
authorization under section 3 of the Natural Gas Act for the siting, 
construction, operation, place of entry for imports or place of exit for 
exports. Subpart C of this part establishes filing requirements an 
applicant must follow to apply for a Presidential Permit, or an 
amendment to an existing Presidential Permit, for border facilities at 
the international boundary between the United States and Canada or 
Mexico.



Sec. 153.2  Definitions.

    (a) DOE/FE means the Department of Energy/Office of Fossil Energy or 
its successor office.
    (b) NBSIR means the National Bureau of Standards Information Report.
    (c) Person means an individual or entity as defined in 10 CFR 
590.102(m).
    (d) LNG Terminal means all natural gas facilities located onshore or 
in state waters that are used to receive, unload, load, store, 
transport, gasify, liquefy, or process natural gas that is imported to 
the United States from a foreign country, exported to a foreign country 
from the United States, or transported in interstate commerce by a 
waterborne vessel, but does not include:
    (1) Waterborne vessels used to deliver natural gas to or from any 
such facility; or
    (2) Any pipeline or storage facility subject to the jurisdiction of 
the Commission under section 7 of the Natural Gas Act.
    (e) For purposes of this part and Sec. 157.21, related 
jurisdictional natural gas facilities means any pipeline or other 
natural gas facilities which are subject to section 7 of the NGA; will 
directly interconnect with the facilities of an LNG terminal, as defined 
in paragraph (d) of this section; and which are necessary to transport 
gas to or regasified LNG from:
    (1) A planned but not yet authorized LNG terminal; or
    (2) An existing or authorized LNG terminal for which prospective 
modifications are subject pursuant to section 157.21(e)(2) to a 
mandatory pre-filing process.
    (f) Waterway Suitability Assessment (WSA) means a document used by 
the U.S. Coast Guard in assessing the suitability of a waterway for LNG 
marine traffic pursuant to 33 CFR 127.007. The Preliminary WSA initiates 
the process of analyzing the safety and security risks posed by proposed 
LNG tanker operations to a port and waterways, and the Follow-On WSA 
provides a detailed analysis of the same issues.

[Order 595, 62 FR 30446, June 4, 1997, as amended by Order 665, 70 FR 
60440, Oct. 18, 2005]



Sec. 153.3  Notice requirements.

    All applications filed under this part are subject to the landowner 
notification requirements in Sec. 157.6(d) of this chapter.

[Order 609, 64 FR 57390, Oct. 25, 1999]



                  Subpart B_Application Under Section 3



Sec. 153.4  General requirements.

    The procedures in Sec. Sec. 157.5, 157.6, 157.8, 157.9, 157.10, 
157.11, and 157.12 of this chapter are applicable to the applications 
described in this subpart.

[Order 687, 71 FR 62920, Oct. 27, 2006]



Sec. 153.5  Who shall apply.

    (a) Applicant. Any person proposing to site, construct, or operate 
facilities which are to be used for the export of natural gas from the 
United States to a foreign country or for the import of natural gas from 
a foreign country or to amend an existing Commission authorization, 
including the modification of existing authorized facilities, shall file 
with the Commission an application for authorization therefor under 
subpart B of this part and section 3 of the Natural Gas Act.
    (b) Cross-reference. Any person applying under paragraph (a) of this 
section to construct facilities at the borders of

[[Page 518]]

the United States and Canada or Mexico must also simultaneously apply 
for a Presidential Permit under subpart C of this part.



Sec. 153.6  Time of filing.

    (a) An application filed pursuant to Sec. 153.5(a) shall state 
whether DOE/FE authorization for the import/export of natural gas is 
required and whether DOE/FE has granted all required authorizations for 
the import/export of natural gas.
    (b) If all required DOE/FE authorizations have not been obtained 
prior to filing an application with the Commission, the applicant 
agrees, as a condition of its authorization, to file a statement that 
all required DOE/FE authorizations have been obtained prior to 
applicant's construction of border facilities.
    (c) When a prospective applicant for authorization for LNG terminal 
facilities, related jurisdictional natural gas facilities or 
modifications to existing LNG terminal facilities is required by Sec. 
157.21(a) to comply with that section's pre-filing procedures, no 
application for such authorization may be made before 180 days after the 
date of issuance of the notice by the Director of the Office of Energy 
Projects, as provided in Sec. 157.21(e), of the commencement of the 
prospective applicant's pre-filing process under Sec. 157.21.

[Order 595, 62 FR 30446, June 4, 1997, as amended by Order 665, 70 FR 
60440, Oct. 18, 2005]



Sec. 153.7  Contents of application.

    Every application under subpart B of this part shall include, in the 
order indicated, the following:
    (a) Information regarding applicant. (1) The exact legal name of 
applicant;
    (2) The name, title, and post office address, telephone and 
facsimile numbers of the person to whom correspondence in regard to the 
application shall be addressed;
    (3) If a corporation, the state or territory under the laws of which 
the applicant was organized, and the town or city where applicant's 
principal office is located. If applicant is incorporated under the laws 
of, or authorized to operate in, more than one state, all pertinent 
facts should be stated. If applicant company is owned wholly or in part 
by any foreign government entity, or directly or indirectly subsidized 
by any foreign government entity; or, if applicant company has any 
agreement for such ownership or subsidization from any foreign 
government, provide full details of ownership and/or subsidies.
    (b) Summary. A detailed summary of the proposal, including 
descriptions of the facilities utilized in the proposed export or import 
of natural gas; state, foreign, or other Federal governmental licenses 
or permits for the construction, operation, or modification of 
facilities in the United States, Canada, or Mexico; and the status of 
any state, foreign, or other Federal regulatory proceedings which are 
related to the proposal.
    (c) Statements. (1) A statement demonstrating that the proposal or 
proposed construction is not inconsistent with the public interest, 
including, where applicable to the applicant's operations and proposal, 
a demonstration that the proposal:
    (i) Will improve access to supplies of natural gas, serve new market 
demand, enhance the reliability, security, and/or flexibility of the 
applicant's pipeline system, improve the dependability of international 
energy trade, or enhance competition within the United States for 
natural gas transportation or supply;
    (ii) Will not impair the ability of the applicant to render 
transportation service in the United States at reasonable rates to its 
existing customers; and,
    (iii) Will not involve any existing contract(s) between the 
applicant and a foreign government or person concerning the control of 
operations or rates for the delivery or receipt of natural gas which may 
restrict or prevent other United States companies from extending their 
activities in the same general area, with copies of such contracts; and,
    (2) A statement representing that the proposal will be used to 
render transportation services under parts 157 or 284 of this chapter, 
private transportation, or service that is exempt from the provisions of 
the Natural Gas Act

[[Page 519]]

pursuant to sections 1(b) or 1(c) thereof. The applicant providing 
transportation service under part 157 of this chapter must represent 
that the pipeline's proposed increase in capacity at an existing import/
export point is not exclusively reserved for part 157 users and that all 
new service made available as a result of a new or modified import/
export facility will be under part 284 of this chapter.



Sec. 153.8  Required exhibits.

    (a) An application must include the following exhibits:
    (1) Exhibit A. A certified copy of articles of incorporation, 
partnership or joint venture agreements, and by-laws of applicant; the 
amount and classes of capital stock; nationality of officers, directors, 
and stockholders, and the amount and class of stock held by each;
    (2) Exhibit B. A detailed statement of the financial and corporate 
relationship existing between applicant and any other person or 
corporation;
    (3) Exhibit C. A statement, including signed opinion of counsel, 
showing that the construction, operation, or modification of facilities 
for the export or the import of natural gas is within the authorized 
powers of applicant, that applicant has complied with laws and 
regulations of the state or states in which applicant operates;
    (4) Exhibit D. If the proposal is for a pipeline interconnection to 
import or export natural gas, a copy of any construction and operation 
agreement between the applicant and the operator(s) of border facilities 
in the United States and Canada or Mexico;
    (5) Exhibit E. If the proposal is to import or export LNG, evidence 
that an appropriate and qualified concern will properly and safely 
receive or deliver such LNG, including a report containing detailed 
engineering and design information. The Commission staff's ``Guidance 
Manual for Environmental Report Preparation'' may be obtained from the 
Commission's Office of Energy Projects, 888 First Street, NE., 
Washington, DC 20426;
    (6) Exhibit E-1. If the LNG import/export facility is to be located 
at a site in zones 2, 3, or 4 of the Uniform Building Code's Seismic 
Risk Map of the United States, or where there is a risk of surface 
faulting or ground liquefaction, a report on earthquake hazards and 
engineering. Guidelines are contained in ``Data Requirements for the 
Seismic Review of LNG Facilities,'' NBSIR 84-2833. This document may be 
obtained from the National Technical Information Service or the 
Commission's Office of Energy Projects, 888 First Street, NE., 
Washington, DC 20426;
    (7) Exhibit F. (i) An environmental report as specified in Sec. 
380.3 and Sec. 380.12 of this chapter. Applicant must submit all 
appropriate revisions to Exhibit F whenever route or site changes are 
filed. These revisions should identify the specific differences 
resulting from the route or site changes, and not just provide revised 
totals for the resources affected;
    (8) Exhibit G. A geographical map of a suitable scale and detail 
showing the physical location of the facilities to be utilized for the 
applicant's proposed export or import operations The map should indicate 
with particularity the ownership of such facilities at or on each side 
of the border between the United States and Canada or Mexico, if 
applicable; and
    (9) Exhibit H. A statement identifying each Federal authorization 
that the proposal will require; the Federal agency or officer, or State 
agency or officer acting pursuant to delegated Federal authority, that 
will issue each required authorization; the date each request for 
authorization was submitted; why any request was not submitted and the 
date submission is expected; and the date by which final action on each 
Federal authorization has been requested or is expected.
    (b) The applicant may incorporate by reference any Exhibit required 
by paragraph (a) of this section already on file with the Commission.

[Order 595, 62 FR 30446, June 4, 1997, as amended by Order 603, 64 FR 
26604, May 14, 1999; Order 687, 71 FR 62920, Oct. 27, 2006; Order 699, 
72 FR 45325, Aug. 14, 2007]

[[Page 520]]



Sec. 153.9  Transferability.

    (a) Non-transferable. Authorizations under subpart B of this part 
and section 3 of the Natural Gas Act and related facilities shall not be 
transferable or assignable without prior Commission authorization.
    (b) Involuntary transfer. A Commission order granting such 
authorization shall continue in effect temporarily for a reasonable time 
in the event of the involuntary transfer of facilities used thereunder 
by operation of law (including such transfers to receivers, trustees, or 
purchasers under foreclosure or judicial sale) pending the making of an 
application for permanent authorization and decision thereon, provided 
notice is promptly given in writing to the Commission accompanied by a 
statement that the physical facts relating to operations of the 
facilities remain substantially the same as before the transfer and as 
stated in the initial application for such authorization.



Sec. 153.10  Authorization not exclusive.

    No authorization granted pursuant to subpart B of this part and 
section 3 of the Natural Gas Act shall be deemed to prevent the 
Commission from granting authorization under subpart B to any other 
person at the same general location, or to prevent any other person from 
making application for such authorization.



Sec. 153.11  Supplemental orders.

    The Commission also may make, at any time subsequent to the original 
order of authorization, after opportunity for hearing, such supplemental 
orders implementing its authority under section 3 of the Natural Gas Act 
as it may find necessary or appropriate.



Sec. 153.12  Pre-filing procedures for applications for authorization to site, 

construct, maintain, connect or modify facilities to be used for the export or 

import of natural gas.

    The definitions in Sec. 157.1 and the pre-filing procedures in 
Sec. 157.21 of this chapter are applicable to applications under 
section 3 of the Natural Gas Act filed pursuant to subpart B of this 
part.

[Order 665, 70 FR 60440, Oct. 18, 2005]



Sec. 153.13  Emergency reconstruction.

    The provisions of subpart F of part 157 of this chapter that permit 
reconstruction for the purpose of immediately restoring interrupted 
service for the protection of life or health or for maintenance of 
physical property in an emergency due to a sudden unanticipated loss of 
gas supply or capacity are applicable to facilities subject to section 3 
of the Natural Gas Act.

[Order 633, 68 FR 31604, May 28, 2003]



             Subpart C_Application for a Presidential Permit



Sec. 153.15  Who shall apply.

    (a) Applicant. Any person proposing to construct, operate, maintain, 
or connect facilities at the borders of the United States and Canada or 
Mexico, for the export or import of natural gas to or from those 
countries, or to amend an existing Presidential Permit, shall file with 
the Commission an application for a Presidential Permit under subpart C 
of this part and Executive Order 10485, as amended by Executive Order 
12038.
    (b) Cross-reference. Any person applying under paragraph (a) of this 
section for a Presidential Permit for the construction and operation of 
border facilities must also simultaneously apply for authorization under 
subpart B of this part.



Sec. 153.16  Contents of application.

    (a) Cross-reference. The submission of information under Sec. Sec. 
153.7 and 153.8 of subpart B of this part shall be deemed sufficient for 
purposes of applying for a Presidential Permit or an amendment to an 
existing Presidential Permit under subpart C of this part for the 
construction and operation of border facilities.
    (b) Amendment not proposing construction. An applicant proposing to 
amend the article(s) of an existing Presidential Permit (other than 
facilities aspects) must file information pursuant to Sec. 153.7(a) and 
a summary and justification of its proposal.

[[Page 521]]



Sec. 153.17  Effectiveness of Presidential Permit.

    A Presidential Permit, once issued by the Commission, shall not be 
effective until it has been accepted by the highest authority of the 
Permittee, as indicated by Permittee's execution of a Testimony of 
Acceptance, and a certified copy of the accepted Presidential Permit and 
the executed Testimony of Acceptance has been filed with the Commission.



              Subpart D_Paper Media and Other Requirements



Sec. 153.20  General rule.

    (a) Filing procedures. Applications under Subparts B and C must be 
submitted to the Secretary of the Commission in accordance with filing 
procedures posted on the Commission's Web site at http://www.ferc.gov.
    (b) Certification. All applications must be signed in compliance 
with Sec. 385.2005 of this chapter.
    (1) The signature on an application constitutes a certification 
that: The signer has read the filing signed and knows the contents of 
the paper copies; and, the signer possesses the full power and authority 
to sign the filing.
    (2) An application must be signed by one of the following:
    (i) The person on behalf of whom the application is made;
    (ii) An officer, agent, or employee of the governmental authority, 
agency, or instrumentality on behalf of which the filing is made; or,
    (iii) A representative qualified to practice before the Commission 
under Sec. 385.2101 of this chapter who possesses authority to sign.
    (c) Where to file. The paper copies and an accompanying transmittal 
letter must be submitted in one package to: Office of the Secretary, 
Federal Energy Regulatory Commission, Washington, DC 20426.

[Order 595, 62 FR 30446, June 4, 1997, as amended by Order 737, 75 FR 
43404, July 26, 2010]



Sec. 153.21  Conformity with requirements.

    (a) General Rule. Applications under subparts B and C of this part 
must conform with the requirements of this part.
    (b) Rejection of applications. If an application patently fails to 
comply with applicable statutory requirements or with applicable 
Commission rules, regulations, and orders for which a waiver has not 
been granted, the Director of the Office of Energy Projects may reject 
the application within 10 days of filing as provided by Sec. 
385.2001(b) of this chapter. This rejection is without prejudice to an 
applicant's refiling a complete application. However, an application 
will not be rejected solely on the basis of: Environmental reports that 
are incomplete because the company has not been granted access by the 
affected landowner(s) to perform required surveys, or environmental 
reports that are incomplete, but where the minimum checklist 
requirements of part 380, appendix A of this chapter have been met. An 
application that relates to an operation, service, or construction 
concerning which a prior application has been filed and rejected, shall 
be docketed as a new application. Such new application shall state the 
docket number of the prior rejected application.

[Order 595, 62 FR 30446, June 4, 1997, as amended by Order 603, 64 FR 
26604, May 14, 1999; Order 699, 72 FR 45325, Aug. 14, 2007]



Sec. 153.22  Amendments and withdrawals.

    Amendments to or withdrawals of applications must conform to the 
requirements of Sec. Sec. 385.215 and 385.216 of this chapter.



Sec. 153.23  Reporting requirements.

    Each person authorized under this part 153 that is not otherwise 
required to file information concerning the start of construction or 
modification of import/export facilities, the completion of construction 
or modification, and the commencement of service must file such 
information with the Commission within 10 days after such event. Each 
person, other than entities without pipeline capacity, must also report 
by March 1 of each year the estimated peak day capacity and actual peak 
day usage of its import/export facilities.

[[Page 522]]



PART 154_RATE SCHEDULES AND TARIFFS--Table of Contents



               Subpart A_General Provisions and Conditions

Sec.
154.1 Application; Obligation to file.
154.2 Definitions.
154.3 Effective tariff.
154.4 Electronic filing of tariffs and related materials.
154.5 Rejection of filings.
154.6 Acceptance for filing not approval.
154.7 General requirements for the submission of a tariff filing or 
          executed service agreement.
154.8 Informal submission for staff suggestions.

                Subpart B_Form and Composition of Tariff

154.101 [Reserved]
154.102 Requirements for filing rate schedules and tariffs.
154.103 Composition of tariff.
154.104 Table of contents.
154.105 Preliminary statement.
154.106 Map.
154.107 Currently effective rates.
154.108 Composition of rate schedules.
154.109 General terms and conditions.
154.110 Form of service agreement.
154.111 Index of customers.
154.112 Exception to form and composition of tariff.

                Subpart C_Procedures for Changing Tariffs

154.201 Filing requirements.
154.202 Filings to initiate a new rate schedule.
154.203 Compliance filings.
154.204 Changes in rate schedules, forms of service agreements, or the 
          general terms and conditions.
154.205 Withdrawals and amendments of tariff filings and executed 
          service agreements.
154.206 Motion to place suspended rates into effect.
154.207 Notice requirements.
154.208 Service of tariff filings on customers and other parties.
154.209 [Reserved]
154.210 Protests, interventions, and comments.

               Subpart D_Material to be Filed With Changes

154.301 Changes in rates.
154.302 Previously submitted material.
154.303 Test periods.
154.304 Format of statements, schedules, workpapers and supporting data.
154.305 Tax normalization.
154.306 Cash working capital.
154.307 Joint facilities.
154.308 Representation of chief accounting officer.
154.309 Incremental expansions.
154.310 Zones.
154.311 Updating of statements.
154.312 Composition of Statements.
154.313 Schedules for minor rate changes.
154.314 Other support for a filing.
154.315 Asset retirement obligations.

                     Subpart E_Limited Rate Changes

154.400 Additional requirements.
154.401 RD&D expenditures.
154.402 ACA expenditures.
154.403 Periodic rate adjustments.

                      Subpart F_Refunds and Reports

154.501 Refunds.
154.502 Reports.

                     Subpart G_Other Tariff Changes

154.600 Compliance with other subparts.
154.601 Change in executed service agreement.
154.602 Cancellation or termination of a tariff, executed service 
          agreement or part thereof.
154.603 Adoption of the tariff by a successor.

    Authority: 15 U.S.C. 717-717w; 31 U.S.C. 9701; 42 U.S.C. 7102-7352.

    Source: Order 582, 60 FR 52996, Oct. 11, 1995, unless otherwise 
noted.



               Subpart A_General Provisions and Conditions



Sec. 154.1  Application; Obligation to file.

    (a) The provisions of this part apply to filings pursuant to section 
4 of the Natural Gas Act.
    (b) Every natural gas company must file with the Commission and post 
in conformity with the requirements of this part, schedules showing all 
rates and charges for any transportation or sale of natural gas subject 
to the jurisdiction of the Commission, and the classifications, 
practices, rules, and regulations affecting such rates, charges, and 
services, together with all contracts related thereto.
    (c) No natural gas company may file, under this part, any new or 
changed rate schedule or contract for the performance of any service for 
which a certificate of public convenience and necessity or certificate 
amendment must be obtained pursuant to section

[[Page 523]]

7(c) of the Natural Gas Act, until such certificate has been issued.
    (d) For the purposes of paragraph (b) of this section, any contract 
that conforms to the form of service agreement that is part of the 
pipeline's tariff pursuant to Sec. 154.110 does not have to be filed. 
Any contract or executed service agreement which deviates in any 
material aspect from the form of service agreement in the tariff is 
subject to the filing requirements of this part.



Sec. 154.2  Definitions.

    (a) Contract means any agreement which in any manner affects or 
relates to rates, charges, classifications, practices, rules, 
regulations, or services for any transportation or sale of natural gas 
subject to the jurisdiction of the Commission. This term includes an 
executed service agreement.
    (b) FERC Gas Tariff or tariff means a compilation, on electronic 
media, of all of the effective rate schedules of a particular natural 
gas company, and a copy of each form of service agreement.
    (c) Form of service agreement means an unexecuted agreement for 
service included as an example in the tariff.
    (d) Post means: to make a copy of a natural gas company's tariff and 
contracts available during regular business hours for public inspection 
in a convenient form and place at the natural gas company's offices 
where business is conducted with affected customers; and, to serve each 
affected customer and interested state Commission in accordance with 
Sec. 154.208 of this Part.
    (e) Rate schedule means a statement of a rate or charge for a 
particular classification of transportation or sale of natural gas 
subject to the jurisdiction of the Commission, and all terms, 
conditions, classifications, practices, rules, and regulations affecting 
such rate or charge.
    (f) Filing date means the day on which a tariff, or part thereof, or 
a contract is received in the Office of the Secretary of the Commission 
for filing in compliance with the requirements of this part.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 714, 73 FR 
57533, Oct. 3, 2008]



Sec. 154.3  Effective tariff.

    (a) The effective tariff of a natural gas company is the tariff 
filed pursuant to the requirements of this part, and permitted by the 
Commission to become effective. A natural gas company must not directly 
or indirectly, demand, charge, or collect any rate or charge for, or in 
connection with, the transportation or sale of natural gas subject to 
the jurisdiction of the Commission, or impose any classifications, 
practices, rules, or regulations, different from those prescribed in its 
effective tariff and executed service agreements on file with the 
Commission, unless otherwise specifically permitted by order of the 
Commission.
    (b) No tariff provision may purport to change an effective rate or 
charge except in the manner provided in section 4 of the Natural Gas 
Act, and the regulations in this part. The tariff may not provide for 
any rate or charge to be automatically changed by an index or other 
periodic adjustment, without filing for a rate change pursuant to these 
regulations.



Sec. 154.4  Electronic filing of tariffs and related materials.

    (a) General rule. All filings made in proceedings initiated under 
this part must be made electronically, including tariffs, rate 
schedules, service agreements, and contracts, or parts thereof, and 
material that relates to or bears upon such documents, such as 
cancellations, amendments, withdrawals, termination, or adoption of 
tariffs, and motions relating to suspension.
    (b) Requirement for signature. All filings must be signed in 
compliance with the following:
    (1) The signature on a filing constitutes a certification that the 
contents are true to the best knowledge and belief of the signer, and 
that the signer possesses full power and authority to sign the filing.
    (2) A filing must be signed by one of the following:
    (i) The person on behalf of whom the filing is made;
    (ii) An officer, agent, or employee of the company, governmental 
authority, agency, or instrumentality on behalf of which the filing is 
made; or,

[[Page 524]]

    (iii) A representative qualified to practice before the Commission 
under Sec. 385.2101 of this chapter who possesses authority to sign.
    (3) All signatures on the filing or any document included in the 
filing must comply, where applicable, with the requirements in Sec. 
385.2005 of this chapter with respect to sworn declarations or 
statements and electronic signatures.
    (c) Format requirements for electronic filing. The requirements and 
formats for electronic filing are listed in instructions for electronic 
filing and for each form. These formats are available on the Internet at 
http://www.ferc.gov and can be obtained at the Federal Energy Regulatory 
Commission, Public Reference Room, 888 First Street, NE., Washington, DC 
20426.

[Order 714, 73 FR 57533, Oct. 3, 2008]



Sec. 154.5  Rejection of filings.

    A filing that fails to comply with this part may be rejected by the 
Director of the Office of Energy Market Regulation pursuant to the 
authority delegated to the Director in Part 375 of this chapter.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 699, 72 FR 
45325, Aug. 14, 2007; Order 701, 72 FR 61054, Oct. 29, 2007; Order 714, 
73 FR 57534, Oct. 3, 2008]



Sec. 154.6  Acceptance for filing not approval.

    The acceptance for filing of any tariff, contract or part thereof 
does not constitute approval by the Commission. Any filing which does 
not comply with any applicable statute, rule, or order, may be rejected.



Sec. 154.7  General requirements for the submission of a tariff filing or 

executed service agreement.

    The following must be included with the filing of any tariff, 
executed service agreement, or part thereof, or change thereto.
    (a) A letter of transmittal containing:
    (1) A list of the material enclosed,
    (2) The name of a responsible company official to whom questions 
regarding the filing may be addressed, with a telephone number at which 
the official may be reached,
    (3) The date on which such filing is proposed to become effective,
    (4) Reference to the authority under which the filing is made, 
including the specific section of a statute, subpart of these 
regulations, order of the Commission, provision of the company's tariff, 
or any other appropriate authority. If an order is referenced, the 
letter must include the citation to the FERC Reports, the date of 
issuance, and the lead docket number of the proceeding in which the 
order was issued.
    (5) A list of the tariff sheets or sections enclosed,
    (6) A statement of the nature, the reasons, and the basis for the 
filing. The statement must include a summary of the changes or additions 
made to the tariff or executed service agreement, as appropriate. The 
statement must include a quantified summary comparing the cost of 
service, rate base and throughput underlying each change in rate made to 
the tariff or executed service agreement compared to the same 
information underlying the last rate found by the Commission to be just 
and reasonable. A detailed explanation of the need for each change or 
addition to the tariff or executed service agreement must be included. 
The natural gas company also must note all relevant precedents relied 
upon to prepare its filing.
    (7) Any requests for waiver. A request for waiver must include a 
reference to the specific section of the statute, regulations, or the 
company's tariff from which waiver is sought, and a justification for 
the waiver.
    (8) Where the natural gas company proposes a new rate, 
identification of the last rate, found by the Commission to be just and 
reasonable, that underlies the proposed rate.
    (9) A motion, in case of minimal suspension, to place the proposed 
rates into effect at the end of the suspension period; or, a specific 
statement that the pipeline reserves its right to file a later motion to 
place the proposed rates into effect at the end of the suspension 
period.

[[Page 525]]

    (b) A certification of service to all customers and state 
commissions pursuant to Sec. 154.2(d).

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 582-A, 61 FR 
9628, Mar. 11, 1996; Order 714, 73 FR 57534, 57535, Oct. 3, 2008]



Sec. 154.8  Informal submission for staff suggestions.

    Any natural gas company may informally submit a proposed tariff or 
any part thereof or material relating thereto for the suggestions of the 
Commission staff prior to filing. Opinions of the Commission staff are 
not binding upon the Commission.



                Subpart B_Form and Composition of Tariff



Sec. 154.101  [Reserved]



Sec. 154.102  Requirements for filing rate schedules and tariffs.

    (a) All rates schedules, tariffs, and service agreements may be 
filed either by dividing the rate schedule, tariff, or agreement into 
individual tariff sheets, or tariff sections, or as an entire document 
except as provided in paragraph (b) of this section.
    (b) Open access transportation tariffs must be filed either as 
individual sheets or sections. If filed as sections, each section must 
include only material of related subject matter and must be of 
reasonable length and must include at a minimum a section for each item 
listed in the table of contents under Sec. 154.103 of this section and 
each topic listed under General Terms and Conditions of Service.
    (c) Individual negotiated rate agreements, non-conforming service 
agreements, or other agreements that are included in the tariff may be 
filed as entire documents.
    (d) The first section or sheet of the tariff must include:
    (1) The FERC Gas Tariff Volume Number and Name of the Natural Gas 
Company, for example
    FERC Gas Tariff Volume No. [ ] of [Name of Natural Gas Company]
    (2) The name, title, address, telephone number, e-mail address and 
facsimile number of a person to whom communications concerning the 
tariff should be sent.

[Order 714, 73 FR 57534, Oct. 3, 2008]



Sec. 154.103  Composition of tariff.

    (a) The tariff must contain sections, in the following order: A 
table of contents, a preliminary statement, a map of the system, 
currently effective rates, composition of rate schedules, general terms 
and conditions, form of service agreement, and an index of customers.
    (b) Rate schedules must be grouped according to class and numbered 
serially within each group, using letters before the serial number to 
indicate the class of service. For example: FT-1, FT-2 may be used for 
firm transportation service; IT-1, IT-2 may be used for interruptible 
transportation service; X-1, X-2 may be used for schedules for which 
special exception has been obtained.



Sec. 154.104  Table of contents.

    The table of contents must contain a list of the rate schedules, 
sections of the general terms and conditions, and other sections in the 
order in which they appear, showing the sheet number of the first page 
of each section or the section number. The list of rate schedules must 
consist of: The alphanumeric designation of each rate schedule, a very 
brief description of the service, and the sheet number of the first page 
of each rate schedule or the section number.

[Order 714, 73 FR 57534, Oct. 3, 2008]



Sec. 154.105  Preliminary statement.

    The preliminary statement must contain a brief general description 
of the company's operations and may also contain a general explanation 
of its policies and practices. General rules and regulations, and any 
material necessary for the interpretation or application of the rate 
schedules, may not be included in the preliminary statement.



Sec. 154.106  Map.

    (a) The map must show the general geographic location of the 
company's principal pipeline facilities and of the points at which 
service is rendered

[[Page 526]]

under the tariff. The boundaries of any rate zones or rate areas must be 
shown and the areas or zones identified. The entire system should be 
displayed on a single map. In addition, a separate map should be 
provided for each zone.
    (b) [Reserved]
    (c) The map must be revised to reflect any major changes. The 
revised map must be filed no later than April 30 of the calendar year 
after the major change.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 714, 73 FR 
57534, Oct. 3, 2008]



Sec. 154.107  Currently effective rates.

    (a) This section of the tariff must present the currently effective 
rates and charges under each rate schedule.
    (b) All rates must be stated clearly in cents or dollars and cents 
per thermal unit. The unit of measure must be stated for each component 
of a rate.
    (c) A rate having more than one part must have each component set 
out separately under appropriate headings (e.g., ``Reservation Charge,'' 
``Usage Charge.'')
    (d) Where a component of a rate is adjusted pursuant to a mechanism 
approved under subpart E of this part, the adjustment must be stated in 
a separate column on the rate sheet or section.
    (e) Exception to paragraph (d) of this section. Where the rate 
component is an Annual Charge Adjustment surcharge approved by the 
Commission, the adjustment or surcharge may be stated in a footnote on 
the rate sheet or section.
    (f) A total rate, indicating the sum of the rate components under 
paragraph (c) of this section plus the adjustments under paragraph (d) 
of this section, must be shown in the last column at the end of a line 
for a rate, so that a reader can readily determine the separate 
components comprising the total rate for a service.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 714, 73 FR 
57534, Oct. 3, 2008]



Sec. 154.108  Composition of rate schedules.

    The rate schedule must contain a statement of the rate or charge and 
all terms and conditions governing its application, arranged as follows:
    (a) Title. Each rate schedule must have a title consisting of a 
designation of the type or classification of service (see Sec. 
154.103(b)), and a statement of the type or classification of service to 
which the rate is applicable.
    (b) Availability. This paragraph must describe the conditions under 
which the rate is offered, including any geographic zone limitations.
    (c) Applicability and character of service. This paragraph must 
fully describe the kind or classification of service to be rendered.
    (d) Summary of rates. This paragraph must briefly set forth all 
components of the rates, refer to the location of the rates in the 
Currently Effective Rates, and provide a description of the calculation 
of the monthly charges for each rate component.
    (e) Other provisions. All other major provisions governing the 
application of the rate schedule, such as determination of billing 
demand, contract demand, heat content, and measurement base, must be set 
forth with appropriate headings or incorporated by reference to the 
applicable general terms and conditions.
    (f) Applicable terms and conditions. This paragraph either states 
that all of the general terms and conditions set forth in the tariff 
apply to the rate schedule, or specifies which of the general terms and 
conditions do not apply.



Sec. 154.109  General terms and conditions.

    (a) This section of the tariff contains terms and conditions of 
service applicable to all or any of the rate schedules. Subsections and 
paragraphs must be numbered for convenient reference.
    (b) The general terms and conditions of the tariff must contain a 
statement of the company's policy with respect to the financing or 
construction of laterals including when the pipeline will pay for or 
contribute to the construction cost. The term ``lateral'' means any 
pipeline extension (other than a mainline extension) built from an 
existing pipeline facility to deliver

[[Page 527]]

gas to one or more customers, including new delivery points and 
enlargements or replacements of existing laterals.
    (c) The general terms and conditions of the tariff must contain a 
statement of the order in which the company discounts its rates and 
charges. The statement, specifying the order in which each rate 
component will be discounted, must be in accordance with Commission 
policy.



Sec. 154.110  Form of service agreement.

    The tariff must contain an unexecuted pro forma copy of each form of 
service agreement. The form for each service must refer to the service 
to be rendered and the applicable rate schedule of the tariff; and, 
provide spaces for insertion of the name of the customer, effective 
date, expiration date, and term. Spaces may be provided for the 
insertion of receipt and delivery points, contract quantity, and other 
specifics of each transaction as appropriate.



Sec. 154.111  Index of customers.

    (a) If a pipeline is in compliance with the reporting requirements 
of Sec. 284.13(c) of this chapter, then an index of customers need not 
be provided in the tariff.
    (b) If all of a pipeline's jurisdictional transportation and sales 
are pursuant to part 157 of this chapter, then an index of customers 
must be provided that contains: a list of the pipeline's firm 
transportation, storage, and sales customers, and the rate schedule 
number for the services for which the shippers are contracting; the 
effective date of the contract; the expiration date of the contract; if 
the service is transportation or sales, the maximum daily contract 
demand under the contract; and, if the service is storage, the maximum 
storage quantity. Specify units of measurement when reporting contract 
quantities.
    (c) The index of customers must be kept current by filing new or 
revised sheets or sections, semi-annually. One filing must coincide with 
the filing of the natural gas company's FERC Form No. 2 or 2-A with a 
proposed effective date of June 1. The other filing must be made six 
months later with a proposed effective date of December 1. The Index of 
Customers must contain a list of the contracts in effect as of the 
filing date.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 637, 65 FR 
10219, Feb. 25, 2000; Order 714, 73 FR 57535, Oct. 3, 2008]



Sec. 154.112  Exception to form and composition of tariff.

    (a) The Commission may permit a special rate schedule to be filed in 
the form of an agreement in the case of a special operating arrangement, 
previously certificated pursuant to part 157 of this chapter, such as 
for the exchange of natural gas. The special rate schedule must contain 
a title page showing the parties to the agreement, the date of the 
agreement, a brief description of services to be rendered, and the 
designation: ``Rate Schedule X-[number].'' Special rate schedules may 
not contain any supplements. Modifications must be by revised or insert 
sheets. Special rate schedules must be included in Volume No. 2 of the 
tariff.Modifications must be made by inserting revised sheets, sections 
or the entire document as appropriate. Special rate schedules must be 
included in a separate volume of the tariff. Each such separate volume 
must contain a table of contents which is incorporated as a sheet or 
section in the open access transmission tariff.
    (b) Contracts for service pursuant to part 284 of this chapter that 
deviate in any material aspect from the form of service agreement must 
be filed. Such non-conforming agreements must be referenced in the open 
access transmission tariff.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 714, 73 FR 
57534, Oct. 3, 2008]



                Subpart C_Procedures for Changing Tariffs



Sec. 154.201  Filing requirements.

    In addition to the requirements of subparts A and B of this part, 
the following must be included with the filing of any tariff, executed 
service agreement, or part thereof, that changes or supersedes any 
tariff, contract, or part thereof, on file with the Commission.

[[Page 528]]

    (a) A list in the transmittal letter of the tariff sheets or 
sections being revised and a marked version of the sheets or sections to 
be changed or superseded showing additions and deletions. New numbers 
and text must be marked by either highlight, background shading, bold, 
or underline. Deleted text and numbers must be indicated by strike-
through. Only those revisions appropriately designated and marked 
constitute the filing. Revisions to unmarked portions of the rate 
schedule or tariff are not considered part of the filing nor will any 
acceptance of the filing by the Commission constitute acceptance of such 
unmarked changes.
    (b) Documentation whether in the form of workpapers, or otherwise, 
sufficiently detailed to support the company's proposed change.
    (1) The documentation must include but is not limited to the 
schedules, workpapers, and supporting documentation required by these 
rules and regulations and the Commission's orders.
    (2) All rate changes in the filing must be supported by step-by-step 
mathematical calculations and sufficient written narrative to allow the 
Commission and interested parties to duplicate the company's 
calculations.
    (3) Any data or summaries included in the filing purporting to 
reflect the books of account must be supported by accounting workpapers 
setting forth all necessary particulars from which an auditor may 
readily verify that such data are in agreement with the company's books 
of account. All statements, schedules, and workpapers must be prepared 
in accordance with the classifications of the Commission's Uniform 
System of Accounts. Workpapers in support of all adjustments, 
computations, and other information, properly indexed and cross-
referenced to the filing and other workpapers, must be available for 
Commission examination.
    (4) Where a rate, cost, or volume is derived from another rate, 
cost, or volume, the derivation must be shown mathematically and be 
accompanied by a written narrative sufficient to allow the Commission 
and interested parties to duplicate the calculations. If the derivation 
is due to a load factor adjustment, application of a percentage, or 
other adjusting factor, the pipeline must also note or explain the 
origin of the adjusting factor.
    (5) Where workpapers show progressive calculations, any 
discontinuity between one working paper and another must be explained.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 714, 73 FR 
57534, Oct. 3, 2008]



Sec. 154.202  Filings to initiate a new rate schedule.

    (a) When the filing is to initiate a new service authorized under a 
blanket authority in part 284 of this chapter, the filing must comply 
with the requirements of this paragraph.
    (1) Filings under this paragraph must:
    (i) Adhere to the requirements of subparts A, B, and C of this part;
    (ii) Contain a description of the new service, including, but not 
limited to, the proposed effective date for commencement of service, 
applicability, whether the service is interruptible or firm, and the 
necessity for the service;
    (iii) Explain how the new service will differ from existing 
services, including a concise description of the natural gas company's 
existing operations;
    (iv) Explain the impact of the new service on existing firm and 
interruptible customers, including but not limited to:
    (A) The adequacy of existing capacity, if the proposed service is a 
firm service, and
    (B) The effect on receipt and delivery point flexibility, nominating 
and scheduling priorities, allocation of capacity, operating conditions, 
and curtailment, for any new service;
    (v) Include workpapers that detail the computations underlying the 
proposed rate under the new rate schedule; or, if the rate is a 
currently effective rate, include the appropriate reference and an 
explanation of why the rate is appropriate;
    (vi) Give a justification, similar in form to filed testimony in a 
general section 4 rate case, explaining why the proposed rate design and 
proposed allocation of costs are just and reasonable;

[[Page 529]]

    (vii) If the costs relating to existing services are reallocated to 
new services, explain the method for allocating the costs and the impact 
on the existing customers;
    (viii) Include workpapers showing the estimated effect on revenue 
and costs over the twelve-month period commencing on the proposed 
effective date of the filing.
    (ix) List other filings pending before the Commission at the time of 
the filing which may significantly affect the filing. Explain how the 
instant filing would be affected by the outcome of each related pending 
filing;
    (2) Any interdependent filings must be filed concurrently and 
contain a notice of the interdependence.
    (b) If a new service, facility, or rate is specifically authorized 
by a Commission order pursuant to section 7 of the Natural Gas Act, with 
the filing of tariff sheets or sections to implement the new rate 
schedule, the natural gas company must:
    (1) Comply with the requirements of Sec. 154.203; and
    (2) Where the rate or charge proposed differs from the rate or 
charge approved in the certificate order, the natural gas company must: 
Show that the change is due to a rate adjustment under a periodic rate 
change mechanism previously accepted under Sec. 154.403 which has taken 
effect since the certificate order was issued; or, show that the rate 
change is in accordance with the terms of the certificate, and provide 
workpapers justifying the change.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 714, 73 FR 
57535, Oct. 3, 2008]



Sec. 154.203  Compliance filings.

    (a) In addition to the requirements of subparts A, B, and C of this 
part, filings made to comply with orders issued by the Commission, 
including those issued under delegated authority, must contain the 
following:
    (1) A list of the directives with which the company is complying;
    (2) Revised workpapers, data, or summaries with cross-references to 
the originally filed workpapers, data, or summaries;
    (b) Filings made to comply with Commission orders must include only 
those changes required to comply with the order. Such compliance filings 
may not be combined with other rate or tariff change filings. A 
compliance filing that includes other changes or that does not comply 
with the applicable order in every respect may be rejected.



Sec. 154.204  Changes in rate schedules, forms of service agreements, or the 

general terms and conditions.

    A filing to revise rate schedules, forms of service agreements, or 
the general terms and conditions, must:
    (a) Adhere to the requirements of subparts A, B, and C, of this 
part;
    (b) Contain a description of the change in service, including, but 
not limited to, applicability, necessity for the change, identification 
of services and types of customers that will be affected by the change;
    (c) Explain how the proposed tariff provisions differ from those 
currently in effect, including an example showing how the existing and 
proposed tariff provisions operate. Explain why the change is being 
proposed at this time;
    (d) Explain the impact of the proposed revision on firm and 
interruptible customers, including any changes in a customer's rights to 
capacity in the manner in which a customer is able to use such capacity, 
receipt or delivery point flexibility, nominating and scheduling, 
curtailment, capacity release;
    (e) Include workpapers showing the estimated effect on revenues and 
costs over the 12-month period commencing on the proposed effective date 
of the filing. If the filing proposes to change an existing penalty 
provision, provide workpapers showing the penalty revenues and 
associated quantities under the existing penalty provision during the 
latest 12-month period; and
    (f) List other filings pending before the Commission which may 
significantly affect the filing.



Sec. 154.205  Withdrawals and amendments of tariff filings and executed 

service agreements.

    (a) Withdrawals of tariff filings or service agreements prior to 
Commission action. (1) A natural gas company may withdraw in its 
entirety a tariff filing or executed service agreement that has not

[[Page 530]]

become effective and upon which no Commission or delegated order has 
been issued by filing a withdrawal motion with the Commission. Upon the 
filing of such motion, the proposed tariff sheets, sections or service 
agreements will not become effective under section 4(d) of the Natural 
Gas Act in the absence of Commission action making the rate schedule or 
tariff filing effective.
    (2) The withdrawal motion will become effective, and the rate 
schedule or tariff filing will be deemed withdrawn, at the end of 15 
days from the date of filing of the withdrawal motion, if no answer in 
opposition to the withdrawal motion is filed within that period and if 
no order disallowing the withdrawal is issued within that period. If an 
answer in opposition is filed within the 15 day period, the withdrawal 
is not effective until an order accepting the withdrawal is issued.
    (b) Amendments or modifications to tariff sheets, sections or 
service agreements prior to Commission action on a tariff filing. A 
natural gas company may file to amend or modify a tariff or service 
agreement contained in a tariff filing upon which no Commission or 
delegated order has yet been issued. Such filing will toll the notice 
period in section 4(d) of the Natural Gas Act for the original filing, 
and establish a new date on which the entire filing will become 
effective, in the absence of Commission action, no earlier than 31 days 
from the date of the filing of the amendment or modification.
    (c) Withdrawal of suspended tariffs, executed service agreements, or 
parts thereof. A natural gas company may not, within the period of 
suspension, withdraw a proposed tariff, executed service agreement, or 
part thereof, that has been suspended by order of the Commission, except 
by special permission of the Commission granted upon application 
therefor and for good cause shown.
    (d) Changes in suspended tariffs, executed service agreements, or 
parts thereof. A natural gas company may not, within the period of 
suspension, file any change in a proposed tariff, executed service 
agreement, or part thereof, that has been suspended by order of the 
Commission, except by special permission of the Commission granted upon 
application therefor and for good cause shown.
    (e) Changes in tariffs, executed service agreements, or parts 
thereof continued in effect, and which were to be changed by the 
suspended filing. A natural gas company may not, within the period of 
suspension, file any change in a tariff, executed service agreement, or 
part thereof, that is continued in effect by operation of the order of 
suspension, and that was proposed to be changed by the suspended filing, 
except:
    (1) Under a previously approved tariff provision permitting a 
limited rate change, or
    (2) By special permission of the Commission.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 714, 73 FR 
57534, Oct. 3, 2008]



Sec. 154.206  Motion to place suspended rates into effect.

    (a) If, prior to the end of the suspension period, the Commission 
has issued an order requiring changes in the filed rates, or the filed 
rates recover costs for facilities not certificated and in service as of 
the proposed effective date, in order to place the suspended rates into 
effect, the pipelne must file a motion at least one day prior to the 
effective date requested by the pipeline. The motion must be accompanied 
by revised tariff sheets or sections reflecting any changes ordered by 
the Commission or modifications approved by the Commission during the 
suspension period under Sec. 154.205. The filing of the revised tariff 
sheets or sections must:
    (1) Comply with the requirements of subparts A, B, and C of this 
part;
    (2) Identify the Commission order directing the revision;
    (3) List the modifications made to the currently effective rate 
during the suspension period, the docket number in which the 
modifications were filed, and identify the order permitting the 
modifications.
    (b) Where the Commission has suspended the effective date of a 
change of rate, charge, classification, or service for a minimal period 
and the pipeline has not included a motion in its transmittal letter, or 
has specified in its

[[Page 531]]

transmittal letter pursuant to Sec. 154.7(a)(9), that it reserves its 
right to file motion to place the proposed change of rate, charge, 
classification, or service into effect at the end of the suspension 
period, the change will go into effect, subject to refund, upon motion 
of the pipeline.
    (c) Where the Commission has suspended the effective date of a 
change of rate, charge, classification, or service for a minimal period 
and the pipeline has included, in its transmittal letter pursuant to 
Sec. 154.7(a)(9), a motion to place the proposed change of rate, 
charge, classification, or service into effect at the end of the 
suspension period, the change will go into effect, subject to refund, on 
the authorized effective date.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 714, 73 FR 
57535, Oct. 3, 2008]



Sec. 154.207  Notice requirements.

    All proposed changes in tariffs, contracts, or any parts thereof 
must be filed with the Commission and posted not less than 30 days nor 
more than 60 days prior to the proposed effective date thereof, unless a 
waiver of the time periods is granted by the Commission.



Sec. 154.208  Service of tariff filings on customers and other parties.

    (a) On or before the filing date, the company must serve, upon all 
customers as of the date of the filing and all affected state regulatory 
commissions, an abbreviated form of the filing consisting of: The Letter 
of Transmittal; the Statement of Nature, Reason, and Basis; the changed 
tariff sheets or sections; a summary of the cost-of-service and rate 
base; and, summary of the magnitude of the change.
    (b) On or before the filing date, the company must serve a full copy 
of the filing upon all customers and state regulatory commissions that 
have made a standing request for such service.
    (c) Within two business days of receiving a request for a complete 
copy from any customer or state commission that has not made a standing 
request, the company must serve a full copy of any filing.
    (d) A customer or other party may designate a recipient of service. 
The filing company must serve the designated recipient, in accordance 
with this section, instead of the customer or other party. For the 
purposes of this section, service upon the designated recipient will be 
deemed service upon the customer or other party.
    (e) The company may choose to effect service either electronically 
or by paper. Such service must be made in accordance with the 
requirements of Part 385 of this chapter.
    (f) Unless it seeks a waiver of electronic service, each customer or 
party entitled to service of initial tariff filings under this section 
must notify the company of the e-mail address to which service should be 
directed. A customer or party may seek a waiver of electronic service by 
filing a waiver request under Part 390 of this chapter, providing good 
cause for its inability to accept electronic service.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 582A, 61 FR 
9628, Mar. 11, 1996; Order 714, 73 FR 57535, Oct. 3, 2008]



Sec. 154.209  [Reserved]



Sec. 154.210  Protests, interventions, and comments.

    (a) Unless the notice issued by the Commission provides otherwise, 
any protest, intervention or comment to a tariff filing made pursuant to 
this part must be filed in accordance with Sec. 385.211 of this 
chapter, not later than 12 days after the subject tariff filing. A 
protest must state the basis for the objection. A protest will be 
considered by the Commission in determining the appropriate action to be 
taken, but will not serve to make the protestant a party to the 
proceeding. A person wishing to become a party to the proceeding must 
file a motion to intervene.
    (b) Any motion to intervene must be filed not later than 12 days 
after the subject tariff filing in accordance with Sec. 385.214 of this 
chapter.

[[Page 532]]



               Subpart D_Material To Be Filed With Changes



Sec. 154.301  Changes in rates.

    (a) Except for changes in rates pursuant to subparts E, F and G, of 
this part, any natural gas company filing for a change in rates or 
charges, except for a minor rate change, must submit, in addition to the 
material required by subparts A, B, and C of this part, the Statements 
and Schedules described in Sec. 154.312.
    (b) A natural gas company filing for a minor rate change must file 
the Statements and Schedules described in Sec. 154.313.
    (c) A natural gas company filing for a change in rates or charges 
must be prepared to go forward at a hearing and sustain, solely on the 
material submitted with its filing, the burden of proving that the 
proposed changes are just and reasonable. The filing and supporting 
workpapers must be of such composition, scope, and format as to comprise 
the company's complete case-in-chief in the event that the change is 
suspended and the matter is set for hearing. If the change in rates or 
charges presented are not in full accord with any prior Commission 
decision directly involving the filing company, the company must include 
in its working papers alternate material reflecting the effect of such 
prior decision.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 582-A, 61 FR 
9628, Mar. 11, 1996]



Sec. 154.302  Previously submitted material.

    (a) If all, or any portion, of the information called for by this 
part has already been submitted to the Commission within six months of 
the filing date of this application, or is included in other data filed 
pursuant to this part, specific reference thereto may be made in lieu of 
resubmission.
    (b) If a new FERC Form No. 2 or 2-A is required to be filed within 
60 days from the end of the base period, the new FERC Form No. 2 or 2-A 
must be filed concurrently with the rate change filing. There must be 
furnished to the Director, Office of Energy Market Regulation, with the 
rate change filing, one copy of the FERC Form No. 2 or 2-A.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 699, 72 FR 
45325, Aug. 14, 2007; Order 701, 72 FR 61054, Oct. 29, 2007]



Sec. 154.303  Test periods.

    Statements A through M, O, P, and supporting schedules, in Sec. 
154.312 and Sec. 154.313, must be based upon a test period.
    (a) If the natural gas company has been in operation for 12 months 
on the filing date, then the test period consists of a base period 
followed by an adjustment period.
    (1) The base period consists of 12 consecutive months of the most 
recently available actual experience. The last day of the base period 
may not be more than 4 months prior to the filing date.
    (2) The adjustment period is a period of up to 9 months immediately 
following the base period.
    (3) The test period may not extend more than 9 months beyond the 
filing date.
    (4) The rate factors (volumes, costs, and billing determinants) 
established during the base period may be adjusted for changes in 
revenues and costs which are known and measurable with reasonable 
accuracy at the time of the filing and which will become effective 
within the adjustment period. The base period factors must be adjusted 
to eliminate nonrecurring items. The company may adjust its base period 
factors to normalize items eliminated as nonrecurring.
    (b) If the natural gas company has not been in operation for 12 
months on the filing date, then the test period must consist of 12 
consecutive months ending not more than one year after the filing date. 
Rate factors may be adjusted as in paragraph (a)(4) of this section but 
must not be adjusted for occurrences anticipated after the 12-month 
period.
    (c)(1) Adjustments to base period experience, or to estimates where 
12 months' experience is not available, may include the costs for 
facilities for which either a permanent or temporary certificate has 
been granted, provided such facilities will be in service within

[[Page 533]]

the test period; or a certificate application is pending. The filing 
must identify facilities, related costs and the docket number of each 
such outstanding certificate. Subject to paragraph (c)(2) of this 
section, adjustments to base period experience, or to estimates where 12 
months' experience is not available, may include any amounts for 
facilities that require a certificate of public convenience and 
necessity, where a certificate has not been issued by the filing date 
but is expected to be issued before the end of the test period. 
Adjustments to base period may include costs for facilities that do not 
require a certificate and are in service by the end of the test period.
    (2) When a pipeline files a motion to place the rates into effect, 
the filing must be revised to exclude the costs associated with any 
facilities that will not be in service as of the end of the test period, 
or for which certificate authorization is required but will not be 
granted as of the end of the test period. At the end of the test period, 
the pipeline must remove from its rates costs associated with any 
facility that is not in service or for which certificate authority is 
required but has not been granted.
    (d) The Commission may allow reasonable deviation from the 
prescribed test period.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 582-A, 61 FR 
9629, Mar. 11, 1996]



Sec. 154.304  Format of statements, schedules, workpapers and supporting data.

    (a) All statements, schedules, and workpapers must be prepared in 
accordance with the Commission's Uniform System of Accounts.
    (b) The data in support of the proposed rate change must include the 
required particulars of book data, adjustments, and other computations 
and information on which the company relies, including a detailed 
narrative explanation placed at the beginning of the specific statement 
or schedule to which they apply, explaining each proposed adjustment to 
base period actual volumes and costs.
    (c) Book data included in statements and schedules required to be 
prepared or submitted as part of the filing must be reported in a 
separate column or columns. All adjustments to book data must also be 
reported in a separate column or columns so that book amounts, 
adjustments thereto, and adjusted amounts will be clearly disclosed. All 
adjustments must be supported by a narrative explanation placed at the 
beginning of the specific statement or schedule to which they apply.
    (d) Certain of the statements and schedules of Sec. 154.313 are 
workpapers. Any data or summaries reflecting the books of account must 
be supported by accounting workpapers setting forth all necessary 
particulars from which an auditor may readily identify the book data 
included in the filing and verify that such data are in agreement with 
the company's books of account.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 582-A, 61 FR 
9629, Mar. 11, 1996]



Sec. 154.305  Tax normalization.

    (a) Applicability. An interstate pipeline must compute the income 
tax component of its cost-of-service by using tax normalization for all 
transactions.
    (b) Definitions. (1) Tax normalization means computing the income 
tax component as if transactions recognized in each period for 
ratemaking purposes are also recognized in the same amount and in the 
same period for income tax purposes.
    (2) Commission-approved ratemaking method means a ratemaking method 
approved by the Commission in a final decision. This includes a 
ratemaking method that is part of an approved settlement or arbitration 
providing that the ratemaking method is to be effective beyond the term 
of the settlement or arbitration.
    (3) Income tax purposes means for the purpose of computing actual 
income tax under the provisions of the Internal Revenue Code or the 
income tax provisions of the laws of a State or political subdivision of 
a State (including franchise taxes).
    (4) Income tax component means that part of the cost-of-service that 
covers

[[Page 534]]

income tax expenses allowable by the Commission.
    (5) Ratemaking purposes means for the purpose of fixing, modifying, 
accepting, approving, disapproving, or rejecting rates under the Natural 
Gas Act.
    (6) Tax effect means the tax reduction or addition associated with a 
specific expense or revenue transaction.
    (7) Transaction means an activity or event that gives rise to an 
accounting entry.
    (c) Reduction of, and addition to, Rate Base. (1) The rate base of 
an interstate pipeline using tax normalization under this section must 
be reduced by the balances that are properly recordable in Account 281, 
``Accumulated deferred income taxes-accelerated amortization property''; 
Account 282, ``Accumulated deferred income taxes--other property'': and 
Account 283, ``Accumulated deferred income taxes--other.'' Balances that 
are properly recordable in Account 190, ``Accumulated deferred income 
taxes,'' must be treated as an addition to rate base. Include, as an 
addition or reduction, as appropriate, amounts in Account 182.3, Other 
regulatory assets, and Account 254, Other regulatory liabilities, that 
result from a deficiency or excess in the deferred tax accounts (see 
paragraph (d) of this section) and which have been, or are soon expected 
to be, authorized for recovery or refund through rates.
    (2) Such rate base reductions or additions must be limited to 
deferred taxes related to rate base, construction, or other costs and 
revenues affecting jurisdictional cost-of-service.
    (d) Special rules. (1) This paragraph applies:
    (i) If the rate applicant has not provided deferred taxes in the 
same amount that would have accrued had tax normalization always been 
applied; or
    (ii) If, as a result of changes in tax rates, the accumulated 
provision for deferred taxes becomes deficient in, or in excess of, 
amounts necessary to meet future tax liabilities.
    (2) The interstate pipeline must compute the income tax component in 
its cost-of-service by making provision for any excess or deficiency in 
deferred taxes.
    (3) The interstate pipeline must apply a Commission-approved 
ratemaking method made specifically applicable to the interstate 
pipeline for determining the cost-of-service provision described in 
paragraph (d)(2) of this section. If no Commission-approved ratemaking 
method has been made specifically applicable to the interstate pipeline, 
then the interstate pipeline must use some ratemaking method for making 
such provision, and the appropriateness of such method will be subject 
to case-by-case determination.
    (4) An interstate pipeline must continue to include, as an addition 
or reduction to rate base, any deficiency or excess attributable to 
prior flow-through or changes in tax rates (paragraphs (d)(1)(i) and 
(d)(1)(ii) of this section), until such deficiency or excess is fully 
amortized in accordance with a Commission approved ratemaking method.



Sec. 154.306  Cash working capital.

    A natural gas company that files a tariff change under this part may 
not receive a cash working capital adjustment to its rate base unless 
the company or other participant in a rate proceeding under this part 
demonstrates, with a fully developed and reliable lead-lag study, a net 
revenue receipt lag or a net expense payment lag (revenue lead). Any 
demonstrated net revenue receipt lag will be credited to rate base; and, 
any demonstrated net expense payment lag will be deducted from rate 
base.



Sec. 154.307  Joint facilities.

    The Statements required by Sec. 154.312 must show all costs 
(investment, operation, maintenance, depreciation, taxes) that have been 
allocated to the natural gas operations involved in the subject rate 
change and are associated with joint facilities. The methods used in 
making such allocations must be provided.

[[Page 535]]



Sec. 154.308  Representation of chief accounting officer.

    The filing must include a statement executed by the chief accounting 
officer or other authorized accounting representative of the filing 
company representing that the cost statements, supporting data, and 
workpapers, that purport to reflect the books of the company do, in 
fact, set forth the results shown by such books.



Sec. 154.309  Incremental expansions.

    (a) For every expansion for which incremental rates are charged, the 
company must provide a summary with applicable cross-references to Sec. 
154.312 and Sec. 154.313, of the costs and revenues associated with the 
expansion, until the Commission authorizes the costs of the incremental 
facilities to be rolled-in to the pipeline's rates. For every expansion 
that has an at-risk provision in the certificate authorization, the 
costs and revenues associated with the facility must be shown in summary 
format with applicable cross-references to Sec. 154.312 and Sec. 
154.313, until the Commission removes the at-risk condition.
    (b) The summary statements must provide the formulae and explain the 
bases used in the allocation of common costs to each incremental 
facility.



Sec. 154.310  Zones.

    If the company maintains records of costs by zone, and proposes a 
zone rate methodology based on these costs, the statements and schedules 
in Sec. 154.312 and Sec. 154.313 must reflect costs detailed by zone.



Sec. 154.311  Updating of statements.

    (a) Certain statements and schedules in Sec. 154.312, that include 
test period data, must be updated with actual data by month and must be 
resubmitted in the same format and with consecutive monthly totals for 
each month of the adjustment period with a single set of updates 
encompassing a 12-month period. The updated statements or schedules must 
be filed 45 days after the end of the test period. The updated filing 
must be provided to parties specifically requesting them. The updated 
filing must reference the associated docket number and must be filed in 
the same format, form, and number as the original filing.
    (b) The statements and schedules in Sec. 154.312 to be updated are: 
Statements C, D and H-4; Schedules B-1, B-2, C-3, D-2, E-2, E-4, G-1, G-
4, G-5, G-6, H-1 (1)(a), H-1 (1)(b), H-1 (1)(c), H-1 (2)(a) through H-1 
(2)(k), H-2 (1), H-3 (3), I-4, and I-6.
    (c) This requirement to file updates may be extended by the 
Secretary pursuant to Sec. 375.302 of this chapter.

[Order 582-A, 61 FR 9629, Mar. 11, 1996]



Sec. 154.312  Composition of Statements.

    (a) Statement A. Cost-of-service Summary. Summarize the overall gas 
utility cost-of-service: operation and maintenance expenses, 
depreciation, taxes, credits to cost-of-service, and return as developed 
in other statements and schedules.
    (b) Statement B. Rate Base and Return Summary. Summarize the overall 
gas utility rate base shown in Statements C, D, E, and Schedules B-1 and 
B-2. Show the application of the claimed rate of return to the overall 
rate base.
    (1) Schedule B-1. Accumulated Deferred Income Taxes (Account Nos. 
190, 282, and 283). Show monthly book balances of accumulated deferred 
income taxes for each of the 12 months during the base period. List all 
items for which the accumulated deferred income taxes are calculated. In 
adjoining columns, show additions and reductions for the adjustment 
period balance and the total adjusted balance. Separately identify the 
individual components and the amounts in these accounts that the company 
seeks to include in its rate base.
    (2) Schedule B-2. Regulatory Asset and Liability. If the pipeline 
seeks recovery of such balances in rate base, show monthly book balances 
of regulatory assets (Account 182.3) and liabilities (Account 254) for 
each of the 12 months during the base period. In adjoining columns, show 
additions and reductions for the adjustment period balance and the total 
adjusted balance.

[[Page 536]]

Separately identify the individual components and the amounts in these 
accounts that the company seeks to include in its rate base. Identify 
any specific Commission authority that required the establishment of 
these amounts. Regulatory asset or liability net of deferred tax amounts 
should be included. Also, separately state the gross amounts of the 
regulatory asset and liability.
    (c) Statement C. Cost of Plant Summary. Show the amounts of gas 
utility plant classified by Accounts 101, 102, 103, 104, 105, 106, 107, 
117.1, and 117.2 as of the beginning of the 12 months of actual 
experience, the book additions and reductions (in separate columns) 
during the 12 months, and the book balances at the end of the 12-month 
period. In adjoining columns, show the claimed adjustments, if any, to 
the book balances and the total cost of plant to be included in rate 
base. For Account 117, also provide the volumes by subaccount. State the 
method used for accounting for system gas recorded in Account 117.2. 
Explain all adjustments in the following schedules.
    (1) Schedule C-1. End of Base and Test Period Plant Functionalized. 
Demonstrate the ending base and test period balances for Plant in 
Service, in columnar form, by detailed plant account prescribed by the 
Commission's Uniform System of Accounts for Natural Gas Companies (part 
201 of this chapter) with subtotals by functional classifications, e.g., 
Intangible Plant, Manufactured Gas Production Plant, Natural Gas 
Production and Gathering Plant, Products Extraction Plant, Storage 
Plant, Transmission Plant, Distribution Plant, and General Plant. Show 
zones, to the extent required by Sec. 154.310, and expansions, to the 
extent required by Sec. 154.309. Separately identify those facilities 
and associated costs claimed for the test period that require 
certificate authority but such authority has not been obtained at the 
time of filing. Give the docket number of the certificate proceeding.
    (2) Schedule C-2. Show, for Accounts 106 and 107, a list of work 
orders claimed in the rate base. Give the work order number, docket 
number, description, amount of each work order, and the amounts of each 
type of undistributed construction overhead. Work orders amounting to 
$500,000 or less may be grouped by category of items.
    (3) Schedule C-3. A cross-reference to updated information in the 
company's FERC Form No. 2 may be substituted for this Schedule. Give 
details of each storage project owned and storage projects under 
contract to the company, showing cost by major functions. Show base and 
system gas storage quantities and associated costs by account for the 
test period and for the 12 months of actual experience with monthly 
inputs and outputs to system gas.
    (4) Schedule C-4. This schedule is part of the workpapers. State the 
methods and procedures followed in capitalizing the allowance for funds 
used during construction and other construction overheads. This schedule 
must be provided only in situations when the pipeline has changed any of 
its procedures since the last filed FERC Forms No. 2 or 2-A.
    (5) Schedule C-5. This schedule is part of the workpapers. Set forth 
the cost of Plant in Service carried on the company's books as gas 
utility plant which was not being used in rendering gas service. 
Describe the plant. This schedule must be provided only if there is a 
significant change of $500,000 or more since the end of the year 
reported in the company's last FERC Form No. 2 or 2-A.
    (d) Statement D. Accumulated Provisions for Depreciation, Depletion, 
and Amortization. Show the accumulated provisions for depreciation, 
depletion, amortization, and abandonment (Account 108, detailed by 
functional plant classification, and Account 111), as of the beginning 
of the 12 months of actual experience, the book additions and reductions 
during the 12 months, and the balances at the end of the 12-month 
period. In adjoining columns, show adjustments to these ending book 
balances and the total adjusted balances. All adjustments must be 
explained in the supporting material. Any authorized negative salvage 
must be maintained in a separate subaccount of account 108, and shall 
not include any amounts related to asset retirement obligations. For 
each functional plant

[[Page 537]]

classification, show depreciation reserve associated with offshore and 
onshore plant separately. The following schedules and additional 
material must be submitted as part of Statement D:
    (1) Schedule D-1. This schedule is part of the workpapers. Show the 
depreciation reserve book balance applicable to that portion of the 
depreciation rate not yet approved by the Commission, the depreciation 
rates, the docket number of the order approving such rate, and an 
explanation of any difference. Reflect actual end of base period 
depreciation reserve functionalized and test period depreciation reserve 
functionalized. Show accumulated depreciation and amortization, in 
columnar form, for the ending base and test period balances by 
functional classifications of Accumulated Depreciation reserve. 
(Examples are provided in Schedule C-1). For each functional plant 
classification, show depreciation reserve associated with offshore and 
onshore plant separately.
    (2) Schedule D-2. This schedule is part of the workpapers. Give a 
description of the methods and procedures used in depreciating, 
depleting, and amortizing plant and in recording abandonments. This 
schedule must be filed only if a policy change has been made effective 
since the period covered by the last annual report on FERC Form No. 2 or 
2-A was filed with the Commission.
    (e) Statement E. Working Capital. Show the components of working 
capital in sufficient detail to explain how the amount of each component 
was computed. Components of working capital, other than cash working 
capital, may include an allowance for the average of 13 monthly balances 
of materials and supplies and prepayments actually expended and gas for 
resale. To the extent the applicant files to adjust the average of any 
13 monthly balances, workpapers must be submitted that support the 
adjustment(s). Show the computations, cross-references, and sources from 
which the data used in computing claimed working capital are derived. 
The following schedules and material must be submitted as part of 
Statement E:
    (1) Schedule E-1. Show the computation of cash working capital 
claimed as an adjustment to the gas company's rate base. Any adjustment 
to rate base requested must be based on a fully-developed and reliable 
lead-lag study. The components of the lead-lag study must include actual 
total company revenues, purchased gas costs, storage expense, 
transportation and compression of gas by others, salaries and wages, 
administrative and general expenses, income taxes payable, taxes other 
than income taxes, and any other operating and maintenance expenses for 
the base period. Cash working capital allowances in the form of 
additions to rate base may not exceed one-eighth of the annual operating 
expenses, as adjusted, net of non-cash items.
    (2) Schedule E-2. Set forth monthly balances for materials, 
supplies, and prepayments in such detail as to disclose, either by 
subaccounts regularly maintained on the books or by analysis of the 
principal items included in the main account, the nature of such 
charges.
    (3) Schedule E-3. For FERC Accounts 117.3, 164.1, 164.2 and 164.3, 
show the quantities and the respective costs of natural gas stored at 
the beginning of the test period, the input, output and balance 
remaining in Dth and associated costs by months. The method of pricing 
input, output and balance, and the claimed adjustments shall be 
disclosed and clearly and fully explained. Pipelines using the inventory 
method for system gas should not include any system gas inventory 
balances in this schedule.
    (f) Statement F-1. Rate of Return Claimed. Show the percentage rate 
of return claimed and the general reasons therefor. Where any component 
of the capital of the filing company is not primarily obtained through 
its own financing, but is primarily obtained from a company by which the 
filing company is controlled, as defined in the Commission's Uniform 
System of Accounts, then the data required by these statements must be 
submitted with respect to the debt capital, preferred stock capital, and 
common stock capital of such controlling company or any intermediate 
company through which such funds have been secured. Furnish the 
Commission staff a copy of the latest prospectus issued by

[[Page 538]]

the filing natural gas company, any superimposed holding company, or 
subsidiary companies.
    (g) Statement F-2. Show
    (1) The capitalization, capital structure, cost of debt capital, 
preferred stock capital, and the claimed return on stockholders' equity;
    (2) The weighted cost of each capital class based on the capital 
structure; and,
    (3) The overall rate of return claimed.
    (h) Statement F-3. Debt Capital. Show the weighted average cost of 
debt capital based upon the following data for each class and series of 
long-term debt outstanding according to the balance sheet, as of the end 
of the 12-month base period of actual experience and as of the end of 
the 9-month test period.
    (1) Title.
    (2) Date of issuance and date of maturity.
    (3) Interest rate.
    (4) Principal amount of issue: Gross proceeds; Underwriters' 
discount or commission: Amount; Percent gross proceeds; Issuance 
expense: Amount; Percent gross proceeds; Net proceeds; Net proceeds per 
unit.
    (5) Cost of money: Yield to maturity based on the interest rate and 
net proceeds per unit outstanding determined by reference to any 
generally accepted table of bond yields. The yield to maturity is to be 
expressed as a nominal annual interest rate. For example, for bonds 
having semiannual payments, the yield to maturity is twice the 
semiannual rate.
    (6) If the issue is owned by an affiliate, state the name and 
relationship of the owner.
    (7) If the filing company has acquired, at a discount or premium, 
some part of its outstanding debt which could be used in meeting sinking 
fund requirements, or for other reasons, separately show: The annual 
amortization of the discount or premium for each series of debt from the 
date of reacquisition over the remaining life of the debt being retired; 
and, the total discount and premium, as a result of such amortization, 
applicable to the test period.
    (i) Statement F-4. Preferred Stock Capital. Show the weighted 
average cost of preferred stock capital based upon the following data 
for each class and series of preferred stock outstanding according to 
the balance sheet, as of the end of the 12-month base period of actual 
experience and as of the end of the nine-month test period.
    (1) Title.
    (2) Date of issuance.
    (3) If callable, call price.
    (4) If convertible, terms of conversion.
    (5) Dividend rate.
    (6) Par or stated amount of issue: Gross proceeds; Underwriters' 
discount or commission: Amount; Percent gross proceeds; Issuance 
expenses: Amount; Percent gross proceeds; Net proceeds; Net proceeds per 
unit.
    (7) Cost of money: Annual dividend rate divided by net proceeds per 
unit.
    (8) State whether the issue was offered to stockholders through 
subscription rights or to the public.
    (9) If the issue is owned by an affiliate, state the name and 
relationship of the owner.
    (j) Statement G. Revenues, Credits, and Billing Determinants.
    (1) Show in summary format the information requested below on 
revenues, credits and billing determinants for the base period and the 
base period as adjusted. Explain the basis for adjustment to the base 
period. The level of billing determinants should not be adjusted for 
discounting.
    (i) Revenues. Provide the total revenues, from jurisdictional and 
non-jurisdictional services, classified in accordance with the 
Commission's Uniform System of Accounts for the base period and for the 
base period as adjusted. Separate operating revenues by major rate 
component (e.g., reservation charges, demand charges, usage charges, 
commodity charges, injection charges, withdrawal charges, etc.) from 
revenues received from penalties, surcharges or other sources (e.g., 
ACA, GRI, transition costs). Show revenues by rate schedule and by 
receipt and delivery rate zones, if applicable. Show separately the 
revenues for firm services under contracts with a primary term of less 
than one year. For services provided through released capacity,

[[Page 539]]

identify total revenues by rate schedule and by receipt and delivery 
rate zones, if applicable.
    (ii) Credits. Show the principal components comprising each of the 
various items which are reflected as credits to the cost-of-service in 
preparing Statement A, Overall Cost-of-service for the base period and 
the base period as adjusted. Any transition cost component of 
interruptible transportation revenue must not be treated as operating 
revenues as defined above.
    (iii) Billing Determinants. Show total reservation and usage billing 
determinants for the base period and the base period as adjusted, by 
rate schedule by receipt and delivery rate zones, if applicable. Show 
separately the billing determinants for firm services under contracts 
with a primary term of less than one year. For services provided through 
released capacity, identify billing determinants by rate schedule and by 
receipt and delivery rate zones, if applicable.
    (2) The Schedules G-1 through G-6 must be filed at the FERC and 
served on all state commissions having jurisdiction over the affected 
customers within fifteen days after the rate case is filed. Schedules G-
1 through G-6 must also be served on parties that request such service 
within 15 days of the filing of the rate case.
    (i) Schedule G-1. Base Period Revenues. For the base period, show 
total actual revenues and billing determinants by month by customer 
name, by rate schedule, by receipt and delivery zone, if applicable, by 
major rate component (e.g., reservation charges) and totals. Billing 
determinants must not be adjusted for discounting. Provide actual 
throughput (i.e., usage or commodity quantities, unadjusted for 
discounting) and actual contract demand levels (unadjusted for 
discounting). Provide this information separately for firm service under 
contracts with a primary term of less than one year. Separate operating 
revenues from revenues received from surcharges or other sources (e.g., 
ACA, GRI, transition costs). Identify customers who are affiliates. 
Identify rate schedules under which costs are allocated and rate 
schedules under which revenues are credited for the base period with 
cross-references to the other filed statements and schedules.
    (ii) Schedule G-2. Adjustment Period Revenues.
    (A) Show revenues and billing determinants by month, by customer 
name, by rate schedule, by receipt and delivery zone, if applicable, by 
major rate component (e.g., reservation charges) and totals for the base 
period adjusted for known and measurable changes which are expected to 
occur within the adjustment period computed under the rates expected to 
be charged. Billing determinants must not be adjusted for discounting. 
Provide projected throughput (i.e., usage or commodity quantities, 
unadjusted for discounting) and projected contract demand levels 
(unadjusted for discounting). Provide this information separately for 
firm service under contracts with a primary term of less than one year. 
Separate operating revenues from revenues received from surcharges or 
other sources (e.g., ACA, GRI, transition costs). Identify customers who 
are affiliates. Identify rate schedules under which costs are allocated 
and rate schedules under which revenues are credited for the adjustment 
period with cross-references to the other filed statements and 
schedules.
    (B) Provide a reconciliation of the base period revenues and billing 
determinants and the revenues and billing determinants for the base 
period as adjusted.
    (iii) Schedule G-3. Specify, quantify, and justify each proposed 
adjustment (capacity release, plant closure, contract termination, etc.) 
to base period actual billing determinants, and provide a detailed 
explanation for each factor contributing to the adjustment. Include 
references to any certificate docket authorizing changes. Submit 
workpapers with all formulae.
    (iv) Schedule G-4. At-Risk Revenue. For each instance where there is 
a separate cost-of-service associated with facilities for which the 
applicant is ``at risk,'' show the base period and adjustment period 
revenue by customer or customer code, by rate schedule, by receipt and 
delivery zone, if applicable, and as 12-month totals. Provide this 
information by month unless otherwise agreed to by interested parties 
and if

[[Page 540]]

monthly reporting is consistent with past practice of the pipeline. 
However, if seasonal services are involved, or if billing determinants 
vary from month to month, the information must be provided monthly. 
Provide projected throughput (i.e., usage or commodity quantities, 
unadjusted for discounting) and projected contract demand levels 
(unadjusted for discounting).
    (v) Schedule G-5. Other Revenues.
    (A) Describe and quantify, by month, the types of revenue included 
in Account Nos. 490-495 for the base and test periods. Show revenues 
applicable to the sale of products. Show the principal components 
comprising each of the various items which are reflected as credits to 
cost-of-service in Statement A.
    (B) To the extent the credits to the cost-of-service reflected in 
Statement A differ from the amounts shown on Schedule G-5, compare and 
reconcile the two statements. Quantify and explain each proposed 
adjustment to base period actuals. For Account No. 490, show the name 
and location of each product extraction plant processing gas for the 
applicant, and the inlet and outlet monthly dth of the pipeline's gas at 
each plant. Show the revenues received by the applicant by product by 
month for each extraction plant for the base period and proposed for the 
test period.
    (C) Separately state each item and revenue received for the 
transportation of liquids, liquefiable hydrocarbon, or nonhydrocarbon 
constituents owned by shippers. For both the base and test periods, 
indicate by shipper contract: The quantity transported and the revenues 
received.
    (D) Separately state the revenues received from the release by the 
pipeline of transportation and compression capacity it holds on other 
pipeline systems. The revenues must equal the revenues reflected on 
Schedule I-4(iv).
    (vi) Schedule G-6. Miscellaneous Revenues. Separately state by month 
the base and adjustment period revenues and the associated quantities 
received as penalties from jurisdictional customers; the revenues 
received from cash outs and other imbalance adjustments; and, the 
revenues received from exit fees.
    (k) Statement H-1. Operation and Maintenance Expenses. Show the gas 
operation and maintenance expenses according to each applicable account 
of the Commission's Uniform System of Accounts for Natural Gas 
Companies. Show the expenses under columnar headings, with subtotals for 
each functional classification, as follows: Operation and maintenance 
expense by months, as booked, for the 12 months of actual experience, 
and the 12-month total; adjustments, if any, to expenses as booked; and, 
total adjusted operation and maintenance expenses. Provide a detailed 
narrative explanation of, and the basis and supporting workpapers for, 
each adjustment. The following schedules and additional material must be 
submitted as part of Statement H-1:
    (1) Schedule H-1 (1). This schedule is part of the workpapers. Show 
the labor costs, materials and other charges (excluding purchased gas 
costs) and expenses associated with Accounts 810, 811, and 812 recorded 
in each gas operation and maintenance expense account of the Uniform 
System of Accounts. Show these expenses, under the columnar headings, 
with subtotals for each functional classification, as follows: operation 
and maintenance expenses by months, as booked, for the 12 months of 
actual experience, and the 12-month total; adjustments, if any, to 
expenses as booked; and total adjusted operation and maintenance 
expenses. Disclose and explain all accrual on the books at the end of 
the base period or other normalizing accounting entries for internal 
purposes reflected in the monthly expenses presented per book. Explain 
any amounts not currently payable, except depreciation charged through 
clearing accounts, included in operation and maintenance expenses.
    (2) Schedule H-1 (1)(a). Labor Costs.
    (3) Schedule H-1 (1)(b). Materials and Other Charges (Excluding 
Purchased Gas Costs and items shown in Schedule H-1 (1)(c)).
    (4) Schedule H-1 (1)(c). Quantities Applicable to Accounts Nos. 810, 
811, and 812. Show the quantities for each of the contra-accounts for 
both base and test periods.
    (5) Schedule H-1 (2). This schedule is part of the workpapers. Show, 
for the

[[Page 541]]

12 months of actual experience and claimed adjustments: A classification 
of principal charges, credits and volumes; particulars of supporting 
computations and accounting bases; a description of services and related 
dollar amounts for which liability is incurred or accrued; and, the name 
of the firm or individual rendering such services. Expenses reported in 
Schedules H-1 (2)(a) through H-1 (2)(k) of $100,000 or less per type of 
service may be grouped.
    (6) Schedule H-1 (2)(a). Accounts 806, 808.1, 808.2, 809.1, 809.2, 
813, 823, and any other account used to record fuel use or gas losses. 
Provide details of each type of expense.
    (7) Schedule H-1 (2)(b). Accounts 913 and 930.1. Advertising 
Expenses. Disclose principal types of advertising such as TV, newspaper, 
etc.
    (8) Schedule H-1 (2)(c). Account 921. Office Supplies and Expenses.
    (9) Schedule H-1 (2)(d). Account 922. Administrative Expenses 
Transferred Credit.
    (10) Schedule H-1 (2)(e). Account 923. Outside Services Employed.
    (11) Schedule H-1 (2)(f). Account 926. Employee Pensions and 
Benefits.
    (12) Schedule H-1 (2)(g). Account 928. Regulatory Commission 
Expenses.
    (13) Schedule H-1 (2)(h). Account 929. Duplicate Charges. Credit.
    (14) Schedule H-1 (2)(i). Account 930.2. Miscellaneous General 
Expenses.
    (15) Schedule H-1 (2)(j). Intercompany and Interdepartmental 
Transactions. Provide a complete disclosure of all corporate overhead 
allocated to the company. If the expense accounts contain charges or 
credits to and from associated or affiliated companies or nonutility 
departments of the company, submit a schedule, or schedules, as to each 
associated or affiliated company or nonutility department showing:
    (i) The amount of the charges, or credits, during each month and in 
total for the base period and the adjustment period.
    (ii) The FERC Account No. charged (or credited).
    (iii) Descriptions of the specific services performed for, or by, 
the associated/affiliated company or nonutility department.
    (iv) The bases used in determining the amounts of the charges 
(credits). Explain and demonstrate the derivation of the allocation 
bases with underlying calculations used to allocate costs among 
affiliated companies, and identify (by account number) all costs paid 
to, or received from affiliated companies which are included in a 
pipeline's cost-of-service for both the base and test periods.
    (16) Schedule H-1 (2)(k). Show all lease payments applicable to gas 
operation contained in the operation and maintenance accounts. Leases of 
$500,000 or less may be grouped by type of lease.
    (l) Statement H-2. Depreciation, Depletion, Amortization and 
Negative Salvage Expenses. Show, separately, the gas plant depreciation, 
depletion, amortization, and negative salvage expenses by functional 
classifications. For each functional plant classification, show 
depreciation reserve associated with offshore and onshore plant 
separately. Show, in separate columns: expenses for the 12 months of 
actual experience; adjustments, if any, to such expense; and, the total 
adjusted expense claimed. Explain the bases, methods, essential 
computations, and derivation of unit rates for the calculation of 
depreciation, depletion, and amortization expense for the 12 months of 
actual experience and for the adjustments. The amounts of depreciable 
plant must be shown by the functions specified in paragraph C of Account 
108, Accumulated Provisions for Depreciation of Gas Utility Plant, and 
Account 111, Accumulated Provision for Amortization and Depletion of Gas 
Utility Plant, of the Commission's Uniform System of Accounts for 
Natural Gas Companies, and, if available, for each detailed plant 
account (300 Series) together with the rates used in computing such 
expenses. Explain any deviation from the rates determined to be just and 
reasonable by the Commission. Show the rate or rates previously used 
together with supporting data for the new rate or rates used for this 
filing. The following schedule and additional material must be submitted 
as a part of Statement H-2:
    (1) Schedule H-2 (1). Depreciable Plant.

[[Page 542]]

    (i) Reconcile the depreciable plant shown in Statement H-2 with the 
aggregate investment in gas plant shown in Statement C, and the expense 
charged to other than prescribed depreciation, depletion, amortization, 
and negative salvage expense accounts. Identify the amounts of plant 
costs and associated plant accounts used as the bases for depreciation 
expense charged to clearing accounts. For each functional plant 
classification, show depreciation reserve associated with offshore and 
onshore plant separately.
    (ii) Schedule H-2 (1) must be updated, as set forth in Sec. 
154.310, with actual depreciable plant and reconciled with updated 
Statement C.
    (m) Statement H-3. Income Taxes. Show the computation of allowances 
for Federal and State income taxes for the test period based on the 
claimed return applied to the overall gas utility rate base. To indicate 
the accounting classification applicable to the amount claimed, the 
computation of the Federal income tax allowance must show, separately, 
the amounts designated as current tax and deferred tax. Section 154.306, 
Tax Normalization, is incorporated in these instructions by reference. 
All the requirements of this section apply to Schedule H-3. The 
following schedules and additional material must be submitted as a part 
of Statement H-3:
    (1) Schedule H-3 (1). This schedule is part of the workpapers. Show 
the income tax paid each State in the current and/or previous year 
covered by the test period.
    (2) Schedule H-3 (2). This schedule is part of the workpapers. Show 
the computation of an updated reconciliation between book depreciable 
plant and tax depreciable plant and accumulated provision for deferred 
income taxes, for the base period or latest calendar or fiscal year 
(depending on the company's reporting period). Regulatory asset or 
liability net of deferred tax amounts should be included in this 
reconciliation. Also, separately state the gross amounts of the 
regulatory asset and liability.
    (n) Statement H-4. Other Taxes. Show the gas utility taxes, other 
than Federal or state income taxes, in separate columns, as follows: Tax 
expense per books for the 12 months of actual experience (separately 
identify the amounts expensed or accrued during the period); 
adjustments, if any, to amounts booked; and, the total adjusted taxes 
claimed. Show the kind and amount of taxes paid under protest or in 
connection with taxes under litigation. Show taxes by state and by type 
of tax. The following schedules and additional material must be 
submitted as a part of Statement H-4:
    (1) Schedule H-4. This schedule is part of the workpapers. Show the 
computations of adjusted taxes claimed in Statement H(4).
    (o) Statement I. Statement I consists of the following Schedules:
    (1) Schedule I-1. Functionalization of Cost-of-service. Show the 
overall cost-of-service contained in Statement A as supported by 
Statements B, C, D, E, G (revenue credits), and H:
    (i) Schedule I-1(a). Separate overall cost-of-service by function of 
facility.
    (ii) Schedule I-1(b). Separate the transmission, storage, and 
gathering facilities between incremental and non-incremental facilities. 
If the pipeline proposes to directly assign the costs of specific 
facilities, it must provide a separate cost-of-service for every 
directly assigned facility (e.g., lateral or storage field).
    (iii) Schedule I-1(c). If the pipeline maintains records of costs by 
zone and proposes a zone rate methodology based on those costs 
separately state transmission, storage, and gathering costs, for each 
zone.
    (iv) Schedule I-1(d). Show the method used to allocate common and 
joint costs to various functions including the allocation of A&G. 
Provide the factors underlying the allocation of general costs (e.g., 
miles of pipe, cost of plant, labor). Show the formulae used and explain 
the bases for the allocation of common and joint costs.
    (2) Schedule I-2. Classification of Cost-of-service.
    (i) For each functionalized cost-of-service provided in Schedule I-1 
(a), (b), and (c), show the classification of costs between fixed costs 
and variable costs and between reservation costs and usage costs. The 
classification must be for each element of the cost-of-service

[[Page 543]]

(e.g., depreciation expenses, state income taxes, revenue credits). For 
operation and maintenance expenses and revenue credits, the 
classification must be provided by account and by total.
    (ii) Explain the basis for the classification of costs.
    (iii) Explain any difference between the method for classifying 
costs and the classification method underlying the pipeline's currently 
effective rates.
    (3) Schedule I-3. Allocation of Cost-of-service.
    (i) If the company provides gas sales and transportation as a 
bundled service, show the allocation of costs between direct sales or 
distribution sales and the other services. If the company provides 
unbundled transportation, show the allocation of costs between services 
with cost-of-service rates and services with market-based rates, 
including products extraction, sales, and company-owned production. If 
the cost-of-service is allocated among rate zones, show how the 
classified cost-of-service is allocated among rate zones by function. If 
the pipeline proposes to establish rate zones for the first time, or to 
change existing rate zone boundaries, explain how the rate zone 
boundaries are established.
    (ii) Show how the classified costs of service provided in Schedule 
I-2 or Schedule I-3 (i) are allocated among the pipeline's services and 
rate schedules.
    (iii) Provide the formulae used in the allocation of the cost-of-
service. Provide the factors underlying the allocation of the cost-of-
service (e.g., contract demand, annual billing determinants, three-day 
peak). Provide the load factor or other basis for any imputed demand 
quantities.
    (iv) Explain any changes in the basis for the allocation of the 
cost-of-service from the allocation methodologies underlying the 
currently effective rates.
    (4) Schedule I-4. Transmission and Compression of Gas by Others 
(Account 858). Provide the following information for each transaction 
for the base and adjustment period:
    (i) The name of the transporter.
    (ii) The name of the rate schedule under which service is provided, 
and the expiration date of the contract.
    (iii) Monthly usage volumes.
    (iv) Monthly costs.
    (v) The monthly revenues for volumes flowing under released 
capacity. The revenues in Schedule I-4 (iv) must also be reflected, 
separately, as a credit in Schedule G-5.
    (5) Schedule I-5. Gas Balance. Show by months and total, for the 12 
months of actual experience, the company's Gas Account, in the form 
required by FERC Form No. 2 pages 520 and 521. Show corresponding 
estimated data, if claimed to be different from actual experience. 
Provide the basis for any variation between estimated and actual base 
period data.
    (p) Statement J. Comparison and Reconciliation of Estimated 
Operating Revenues With Cost-of-service. Compare the total revenues by 
rate schedule (Schedule G-2) to the allocated cost-of-service (Statement 
I). Identify any surcharges that are reflected in Statement N or in 
Statement I.
    (1) Schedule J-1. Summary of Billing Determinants. Provide a summary 
of all billing determinants used to derive rates. Provide a 
reconciliation of customers' total billing determinants as shown on 
Schedule G-2 with those used to derive rates in Schedule J-2. Provide an 
explanation of how any discount adjustment is developed. If billing 
determinants are imputed for interruptible service, explain the method 
for calculating the billing determinants.
    (2) Schedule J-2. Derivation of Rates. Show the derivation of each 
rate component of each rate. For each rate component of each rate 
schedule, include:
    (i) A reference (by page, line, and column) to the allocated cost-
of-service in Statement I.
    (ii) A reference to the appropriate billing determinants in Schedule 
J-1.
    (iii) Explain any changes in the method used for the derivation of 
rates from the method used in developing the underlying rates.
    (q) Statement K. [Reserved]
    (r) Statement L. Balance Sheet. Provide a balance sheet in the form 
prescribed by the Commission's Uniform System of Accounts for Natural 
Gas Companies as of the beginning and end of the base period. Include 
any notes. If the natural gas company is a member of a group of 
companies, also provide a balance sheet on a consolidated basis.

[[Page 544]]

    (s) Statement M. Income Statement. Provide an income statement, 
including a section on earnings, in the form prescribed by the 
Commission's Uniform System of Accounts for Natural Gas Companies for 
the base period. Include any notes. If the natural gas company is a 
member of a system group of companies, provide an income statement on a 
consolidated basis.
    (t) Statement N. [Reserved]
    (u) Statement O. Description of Company Operations. Provide a 
description of the company's service area and diversity of operations. 
Include the following:
    (1) Only if significant changes have occurred since the filing of 
the last FERC Form No. 2 or 2-A, provide a detailed system map.
    (2) A list of each major expansion and abandonment since the 
company's last general rate case. Provide brief descriptions, 
approximate dates of operation or retirement from service, and costs 
classified by functions.
    (3) A detailed description of how the company designs and operates 
its systems. Include design temperature.
    (v) Statement P. Explanatory Text and Prepared Testimony. Provide 
copies of prepared testimony indicating the line of proof which the 
company would offer for its case-in-chief in the event that the rates 
are suspended and the matter set for hearing. Name the sponsoring 
witness of all text and testimony. Statement P must be filed 
concurrently with the other schedules.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 582-A, 61 FR 
9629, Mar. 11, 1996; Order 631, 68 FR 19622, Apr. 21, 2003]



Sec. 154.313  Schedules for minor rate changes.

    (a) A change in a rate or charge that, for the test period, does not 
increase the company's revenues by the smaller of $1,000,000 or 5 
percent is a minor rate change. A change in a rate level that does not 
directly or indirectly result in an increased rate or charge to any 
customer or class of customers is a minor rate change.
    (b) In addition to the schedules in this section, filings for minor 
rate changes must include Statements L, M, O, P, I-1 through I-4, and J 
of Sec. 154.312.
    (c) The schedules of this section must contain the principal 
determinants essential to test the reasonableness of the proposed minor 
rate change. Any adjustments to book figures must be separately stated 
and the basis for the adjustment must be explained.
    (d) Schedules B-1, B-2, C, D, E, H, H-2, and H-4 of Sec. 154.313, 
must be updated with actual data by month and must be resubmitted in the 
same format and with consecutive 12 month running totals, for each month 
of the adjustment period. The updated statements or schedules must be 
filed 45 days after the end of the test period. The updated filing must 
reference the associated docket number and must be filed in the same 
format, form, and number as the original filing.
    (e) Composition of schedules for minor rate changes.
    (1) Schedule A. Overall Cost-of-service by Function. Summarize the 
overall cost-of-service (operation and maintenance expenses, 
depreciation, taxes, return, and credits to cost-of-service) developed 
from the supporting schedules below.
    (2) Schedule B. Overall Rate Base and Return. Summarize the overall 
gas utility rate base by function. Include the claimed rate of return 
and show the application of the claimed rate of return to the overall 
rate base.
    (3) Schedule B-1. Accumulated Deferred Income Taxes (Account Nos. 
190, 281, 282, and 283). Show monthly book balances of accumulated 
deferred income taxes for each of the 12 months during the base period. 
In adjoining columns, show additions and reductions for the adjustment 
period balance and the total adjusted balance.
    (4) Schedule B-2. Regulatory Asset and Liability. Show monthly book 
balances of regulatory asset (Account 182.3) and liability (Account 254) 
for each of the 12 months during the base period. In adjoining columns, 
show additions and reductions for the adjustment period balance and the 
total adjusted balance. Only include these accounts if recovery of these 
balances are reflected in the company's costs. Identify the specific 
Commission authority which required the establishment of these accounts.

[[Page 545]]

    (5) Schedule C. Cost of Plant by Functional Classification as of the 
End of the Base and Adjustment Periods.
    (6) Schedule D. Accumulated Provisions for Depreciation, Depletion, 
Amortization, and Abandonment by Functional Classifications as of the 
Beginning and as of the End of the Test Period.
    (7) Schedule E. Working Capital. Show the various components 
provided for in Sec. 154.312, Statement E.
    (8) Schedule F. Show the rate of return claimed with a brief 
explanation of the basis.
    (9) Schedule G. Revenues and Billing Determinants.
    (i) Show in summary format the information requested below on 
revenues and billing determinants for the base period and the base 
period as adjusted. Schedule G must be submitted to all customers of the 
pipeline that received service during the base period or are expected to 
receive service during the base period as adjusted and on State 
commissions having jurisdiction over the affected customers.
    (A) Revenues. Provide the total revenues by rate schedule from 
jurisdictional services, classified in accordance with the Commission's 
Uniform System of Accounts for the base period and for the base period 
as adjusted. Separate operating revenues by major rate component (e.g., 
reservation charges, demand charges, usage charges, commodity charges, 
injection charges, withdrawal charges, etc.) from revenues received from 
penalties, surcharges or other sources (e.g., ACA, GRI, transition 
costs). For services provided through released capacity, identify total 
revenues by rate schedule and by receipt and delivery rate zones, if 
applicable.
    (B) Billing Determinants. Show total reservation and usage billing 
determinants by rate schedule for the base period and the base period as 
adjusted. For services provided through released capacity, identify 
total billing determinants by rate schedule and by receipt and delivery 
rate zones, if applicable.
    (ii) Schedule G-1 must be filed at the Commission and on all state 
commissions having jurisdiction over the affected customers within 15 
days after the rate case is filed. Schedule G-1 must also be served on 
parties that request such service within 15 days of the filing of the 
rate case.
    (A) Schedule G-1. Adjustment Period Revenues.
    (1) Show revenues and billing determinants by month, by customer 
name, by rate schedule, by major rate component (e.g., reservation 
charges) and totals for the base period adjusted for known and 
measurable changes which are expected to occur within the adjustment 
period computed under the rates expected to be charged. Show commodity 
billing determinants by rate schedule. Billing determinants must not be 
adjusted for discounting. Provide projected throughput (i.e., usage or 
commodity quantities, unadjusted for discounting) and projected contract 
demand levels (unadjusted for discounting). Separate operating revenues 
from revenues received from surcharges or other sources (e.g., ACA, GRI, 
transition costs). Identify customers who are affiliates. Identify rate 
schedules under which costs are allocated and rate schedules under which 
revenues are credited for the adjustment period with cross-references to 
the other filed statements and schedules.
    (2) Provide a reconciliation of the base period revenues and billing 
determinants and the revenues and billing determinants for the base 
period as adjusted.
    (10) Schedule H. Operation and Maintenance Expenses. Show the gas 
operation and maintenance expenses according to each applicable account 
of the Commission's Uniform System of Accounts for Natural Gas 
Companies. The expenses must be shown under appropriate columnar-
headings, by labor, materials and other charges, and purchased gas 
costs, with subtotals for each functional classification: Operation and 
maintenance expense by months, as booked, for the 12 months of actual 
experience, and the total thereof; adjustments, if any, to expenses as 
booked; and, total adjusted operation and maintenance expenses claimed. 
Explain all adjustments. Specify the month or months during which the 
adjustments would be applicable.

[[Page 546]]

    (11) Schedule H-1. Workpapers for Expense Accounts. Furnish 
workpapers for the 12 months of actual experience and claimed 
adjustments and analytical details as set forth in Sec. 154.312, 
Schedule H-1 (3).
    (12) Schedule H-2. Depreciation, Depletion, Amortization and 
Negative Salvage Expenses. Show, separately, the gas plant depreciation, 
depletion, amortization, and negative salvage expenses by functional 
classifications. For each functional plant classification, show 
depreciation reserve associated with offshore and onshore plant 
separately. The bases, methods, essential computations, and derivation 
of unit rates for the calculation of depreciation, depletion, 
amortization, and negative salvage expenses for actual experience must 
be explained.
    (13) Schedule H-3. Income Tax Allowances Computed on the Basis of 
the Rate of Return Claimed. Show the computation of allowances for 
Federal and State income taxes based on the claimed return applied to 
the overall gas utility rate base.
    (14) Schedule H-3 (1). This schedule is part of the workpapers. Show 
the computation of an updated reconciliation between book depreciable 
plant and tax depreciable plant and accumulated provision for deferred 
income taxes, for the base period or latest calendar or fiscal year 
(depending on the company's reporting period).
    (15) Schedule H-4. Other Taxes. Show the gas utility taxes, other 
than Federal or state income taxes in separate columns, as follows: Tax 
expense per books for the 12 months of actual experience;) adjustments, 
if any, to amounts booked; and, the total adjusted taxes claimed. 
Provide the details of the kind and amount of taxes paid under protest 
or in connection with taxes under litigation. The taxes must be shown by 
states and by kind of taxes. Explain all adjustments.



Sec. 154.314  Other support for a filing.

    (a) Any company filing for a rate change is responsible for 
preparing prior to filing, and maintaining, workpapers sufficient to 
support the filing.
    (b) If the natural gas company has relied upon data other than those 
in Statements A through P in Sec. 154.312 in support of its general 
rate change, such other data must be identified and submitted.



Sec. 154.315  Asset retirement obligations.

    (a) A natural gas company that files a tariff change under this part 
and has recorded an asset retirement obligation on its books must 
provide a schedule, as part of the supporting workpapers, identifying 
all cost components related to the asset retirement obligations that are 
included in the book balances of all accounts reflected in the cost of 
service computation supporting the proposed rates. However, all cost 
components related to asset retirement obligations that would impact the 
calculation of rate base, such as gas plant and related accumulated 
depreciation and accumulated deferred income taxes, may not be reflected 
in rates and must be removed from the rate base calculation through a 
single adjustment.
    (b) A natural gas company seeking to recover nonrate base costs 
related to asset retirement obligations in rates must provide, with its 
filing under Sec. 154.312 or Sec. 154.313, a detailed study supporting 
the amounts proposed to be collected in rates.
    (c) A natural gas company who has recorded asset retirement 
obligations on its books but is not seeking recovery of the asset 
retirement costs in rates, must remove all asset retirement obligations 
related cost components from the cost of service supporting its proposed 
rates.

[Order 631, 68 FR 19622, Apr. 21, 2003]



                     Subpart E_Limited Rate Changes



Sec. 154.400  Additional requirements.

    In addition to the requirements of subparts A, B, and C of this 
part, any proposal to implement a limited rate change must comply with 
this subpart.



Sec. 154.401  RD&D expenditures.

    (a) Requirements. Upon approval by the Commission, a natural gas 
company may file to recover research, development, and demonstration 
(RD&D) expenditures in its rates under this subpart.

[[Page 547]]

    (b) Applications for rate treatment approval. (1) An application for 
advance approval of rate treatment may be filed by a natural gas company 
for RD&D expenditures related to a project or group of projects 
undertaken by the company or as part of a project undertaken by others. 
When more than one company supports an RD&D organization, the RD&D 
organization may submit an application that covers the organization's 
RD&D program. Approval by the Commission of such an RD&D application and 
program will constitute approval of the individual companies' 
contributions to the RD&D organization.
    (2) An application for advance approval of rate treatment must 
include a 5-year program plan and must be filed at least 180 days prior 
to the commencement of the 5-year period of the plan.
    (3) A 5-year program plan must include at a minimum:
    (i) A statement of the objectives for the 5-year period that relates 
the objectives to the interests of ratepayers, the public, and the 
industry and to the objectives of other major research organizations.
    (ii) Budget, technical, and schedule information in sufficient 
detail to explain the work to be performed and allow an assessment of 
the probability of success and a comparison with other organizations' 
research plans.
    (iii) The commencement date, expected termination date, and expected 
annual costs for individual RD&D projects to be initiated during the 
first year of the plan.
    (iv) A discussion of the RD&D efforts and progress since the 
preparation of the program plan submitted the previous year and an 
explanation of any changes that have been made in objectives, 
priorities, or budgets since the plan of the previous year.
    (v) A statement identifying all jurisdictional natural gas companies 
that will support the program and specifying the amounts of their 
budgeted support.
    (vi) A statement identifying those persons involved in the 
development, review, and approval of the plan and specifying the amount 
of effort contributed and the degree of control exercised by each.
    (c) Applications must describe the RD&D projects in such detail as 
to satisfy the Commission that the RD&D expenditures qualify as valid, 
justifiable, and reasonable.
    (d) Within 120 days of the filing of an application for rate 
treatment approval and a 5-year program plan, the Commission will state 
its decision with respect to acceptance, partial acceptance, or 
rejection of the plan, or, when the complexity of issues in the plan so 
requires, will set a date certain by which a final decision will be 
made, or will order the matter set for hearing. Partial rejection of a 
plan by the Commission will be accompanied by a decision as to the 
partial level of acceptance which will be proportionally applied to all 
contributions listed for jurisdictional companies in the plan. Approval 
by the Commission of a 5-year plan constitutes approval for rate 
treatment of all projects identified as starting during the first year 
of the approved plan. Continued rate treatment will depend upon review 
and evaluation of subsequent annual applications and 5-year program 
plans.



Sec. 154.402  ACA expenditures.

    (a) Requirements. Upon approval by the Commission, a natural gas 
pipeline company may adjust its rates, annually, to recover from its 
customers annual charges assessed by the Commission under part 382 of 
this chapter pursuant to an annual charge adjustment clause (ACA 
clause). The ACA clause must be filed with the Commission and indicate 
the amount of annual charges to be flowed through per unit of energy 
sold or transported (ACA unit charge). The ACA unit charge will be 
specified by the Commission at the time the Commission calculates the 
annual charge bills. A company must reflect the ACA unit charge in each 
of its rate schedules applicable to sales or transportation deliveries. 
The company must apply the ACA unit charge to the usage component of 
rate schedules with two-part rates. A company may recover annual charges 
through an ACA unit charge only if its rates do

[[Page 548]]

not otherwise reflect the costs of annual charges assessed by the 
Commission under Sec. 382.106(a) of this chapter. The applicable annual 
charge, required by Sec. 382.103 of this chapter, must be paid before 
the company applies the ACA unit charge.
    (b) Application for Rate Treatment Authorization. A company seeking 
authorization to use an ACA unit charge must file with the Commission a 
separate ACA tariff sheet or section containing:
    (1) A statement that the company is collecting an ACA per unit 
charge, as approved by the Commission, applicable to all the pipeline's 
sales and transportation rate schedules,
    (2) The per unit charge of the ACA,
    (3) The proposed effective date of the tariff change (30 days after 
the filing of the tariff sheet or section, unless a shorter period is 
specifically requested in a waiver petition and approved), and
    (4) A statement that the pipeline will not recover any annual 
charges recorded in FERC Account 928 in a proceeding under subpart D of 
this part.
    (c) Changes to the ACA unit charge must be filed annually, to 
reflect the annual charge unit rate authorized by the Commission each 
fiscal year.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 714, 73 FR 
57535, Oct. 3, 2008]



Sec. 154.403  Periodic rate adjustments.

    (a) This section applies to the passthrough, on a periodic basis, of 
a single cost item or revenue item for which passthrough is not 
regulated under another section of this subpart, and to revisions on a 
periodic basis of a gas reimbursement percentage.
    (b) Where a pipeline recovers fuel use and unaccounted-for natural 
gas in kind, the fuel reimbursement percentage must be stated in the 
tariff either on the tariff sheet stating the currently effective rate 
or on a separate tariff sheet or section in such a way that it is clear 
what amount of natural gas must be tendered in kind for each service 
rendered.
    (c) A natural gas company that passes through a cost or revenue item 
or adjusts its fuel reimbursement percentage under this section, must 
state within the general terms and conditions of its tariff, the 
methodology and timing of any adjustments. The following must be 
included in the general terms and conditions:
    (1) A statement of the nature of the revenue or costs to be flowed 
through to the customer;
    (2) A statement of the manner in which the cost or revenue will be 
collected or returned, whether through a surcharge, offset, or 
otherwise;
    (3) A statement of which customers are recipients of the revenue 
credit and which rate schedules are subject to the cost or fuel 
reimbursement percentage;
    (4) A statement of the frequency of the adjustment and the dates on 
which the adjustment will become effective;
    (5) A step-by-step description of the manner in which the amount to 
be flowed through is calculated and a step-by-step description of the 
flowthrough mechanism, including how the costs are classified and 
allocated. Where the adjustment modifies a rate established under 
subpart D of this part, the methodology must be consistent with the 
methodology used in the proceeding under subpart D of this part;
    (6) Where costs or revenue credits are accumulated over a past 
period for periodic recovery or return, the past period must be defined 
and the mechanism for the recovery or return must be detailed on a step-
by-step basis. Where the natural gas company proposes to use a surcharge 
to clear an account in which the difference between costs or revenues, 
recovered through rates, and actual costs and revenues accumulate, a 
statement must be included detailing, on a step-by-step basis, the 
mechanism for calculating the entries to the account and for passing 
through the account balance.
    (7) Where carrying charges are computed, the calculations must be 
consistent with the methodology and reporting requirements set forth in 
Sec. 154.501 using the carrying charge rate required by that section. A 
natural gas company must normalize all income tax timing differences 
which are the result of differences between the period in which expense 
or revenue enters into the determination of taxable income and the 
period in which the expense or revenue enters into the determination of 
pre-tax book income. Any balance

[[Page 549]]

upon which the natural gas company calculates carrying charges must be 
adjusted for any recorded deferred income taxes.
    (8) Where the natural gas company discounts the rate component 
calculated pursuant to this section, explain on a step-by-step basis how 
the natural gas company will adjust for rate discounts in its 
methodology to reflect changes in costs under this section.
    (9) If the costs passed through under a mechanism approved under 
this section are billed by an upstream natural gas company, explain how 
refunds received from upstream natural gas companies will be passed 
through to the natural gas company's customers, including the allocation 
and classification of such refunds;
    (10) A step-by-step explanation of the methodology used to reflect 
changes in the fuel reimbursement percentage, including the allocation 
and classification of the fuel use and unaccounted-for natural gas. 
Where the adjustment modifies a fuel reimbursement percentage 
established under subpart D of this part, the methodology must be 
consistent with the methodology used in the proceeding under subpart D 
of this part;
    (11) A statement of whether the difference between quantities 
actually used or lost and the quantities retained from the customers for 
fuel use and loss will be recovered or returned in a future surcharge. 
Include a step-by-step explanation of the methodology used to calculate 
such surcharge. Any period during which these differences accumulate 
must be defined.
    (d) Filing requirements. (1) Filings under this section must 
include:
    (i) A summary statement showing the rate component added to each 
rate schedule with workpapers showing all mathematical calculations.
    (ii) If the filing establishes a new fuel reimbursement percentage 
or surcharge, include computations for each fuel reimbursement or 
surcharge calculated, broken out by service, classification, area, zone, 
or other subcategory.
    (iii) Workpapers showing the allocation of costs or revenue credits 
by rate schedule and step-by-step computations supporting the 
allocation, segregated into reservation and usage amounts, where 
appropriate.
    (iv) Where the costs, revenues, rates, quantities, indices, load 
factors, percentages, or other numbers used in the calculations are 
publicly available, include references by source.
    (v) Where a rate or quantity underlying the costs or revenue credits 
is supported by publicly available data (such as another natural gas 
company's tariff or EBB), the source must be referenced to allow the 
Commission and interested parties to review the source. If the rate or 
quantity does not match the rate or quantity from the source referenced, 
provide step-by-step instructions to tie the rate in the referenced 
source to the rate in the filing.
    (vi) Where a number is derived from another number by applying a 
load factor, percentage, or other adjusting factor not referenced in 
paragraph (d)(1)(i) of this section, include workpapers and a narrative 
to explain the calculation of the adjusting factor.
    (2) If the natural gas company is adjusting its rates to reflect 
changes in transportation and compression costs paid to others:
    (i) The changes in transportation and compression costs must be 
based on the rate on file with the Commission. If the rate is not on 
file with the Commission or a discounted rate is paid, the rate 
reflected in the filing must be the rate the natural gas company is 
contractually obligated to pay;
    (ii) The filing must include appropriate credits for capacity 
released under Sec. 284.243 of this chapter with workpapers showing the 
quantity released, the revenues received from the release, the time 
period of the release, and the natural gas pipeline on which the release 
took place; and,
    (iii) The filing must include a statement of the refunds received 
from each upstream natural gas company which are included in the rate 
adjustment. The statement must conform to the requirements set forth in 
Sec. 154.501.
    (3) If the natural gas company is reflecting changes in its fuel 
reimbursement percentage, the filing must include:
    (i) A summary statement of actual gas inflows and outflows for each

[[Page 550]]

month used to calculate the fuel reimbursement percentage or surcharge. 
For purposes of establishing the surcharge, the summary statement must 
be included for each month of the period over which the differences 
defined in paragraph (c) of this section accumulate.
    (ii) Where the fuel reimbursement percentage is calculated based on 
estimated activity over a future period, the period must be defined and 
the estimates used in the calculation must be justified. If any of the 
estimates are publicly available, include a reference to the source.
    (4) The natural gas company must not recover costs and is not 
obligated to return revenues which are applicable to the period pre-
dating the effectiveness of the tariff language setting forth the 
periodic rate change mechanism, unless permitted or required to do so by 
the Commission.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 714, 73 FR 
57535, Oct. 3, 2008]



                      Subpart F_Refunds and Reports



Sec. 154.501  Refunds.

    (a) Refund Obligation. (1) Any natural gas company that collects 
rates or charges pursuant to this chapter must refund that portion of 
any increased rates or charges either found by the Commission not to be 
justified, or approved for refund by the Commission as part of a 
settlement, together with interest as required in paragraph (d) of this 
section. The refund plus interest must be distributed as specified in 
the Commission order requiring or approving the refund, or if no date is 
specified, within 60 days of a final order. For purposes of this 
paragraph, a final order is an order no longer subject to rehearing. The 
pipeline is not required to make any refund until it has collected the 
refundable money through its rates.
    (2) Any natural gas company must refund to its jurisdictional 
customers the jurisdictional portion of any refund it receives which is 
required by prior Commission order to be flowed through to its 
jurisdictional customers or represents the refund of an amount 
previously included in a filing under Sec. 154.403 and charged and 
collected from jurisdictional customers within thirty days of receipt or 
other time period established by the Commission or as established in the 
pipeline's tariff.
    (b) Costs of Refunding. Any natural gas company required to make 
refunds pursuant to this section must bear all costs of such refunding.
    (c) Supplier Refunds. The jurisdictional portion of supplier refunds 
(including interest received), applicable to periods in which a 
purchased gas adjustment clause was in effect, must be flowed through to 
the natural gas company's jurisdictional gas sales customers during that 
period with interest as computed in paragraph (d) of this section.
    (d) Interest on Refunds. Interest on the refund balance must be 
computed from the date of collection from the customer until the date 
refunds are made as follows:
    (1) At an average prime rate for each calendar quarter on all 
excessive rates or charges held (including all interest applicable to 
such rates and charges) on or after October 1, 1979. The applicable 
average prime rate for each calendar quarter must be the arithmetic 
mean, to the nearest one-hundredth of one percent, of the prime rate 
values published in the Federal Reserve Bulletin, or in the Federal 
Reserve's ``Selected Interest Rates'' (Statistical Release G, 13), for 
the fourth, third, and second months preceding the first month of the 
calendar quarter.
    (2) The interest required to be paid under paragraph (d)(1) of this 
section must be compounded quarterly.
    (3) The refund balance must be either:
    (i) The revenues resulting from the collection of the portion of any 
increased rates or charges found by the Commission not to be justified; 
or
    (ii) An amount agreed upon in a settlement approved by the 
Commission; or
    (iii) The jurisdictional portion of a refund the natural gas company 
receives.
    (e) Unless otherwise provided by the order, settlement or tariff 
provision requiring the refund, the natural gas company must file a 
report of refunds, within 30 days of the date the refund

[[Page 551]]

was made, which complies with Sec. 154.502 and includes the following:
    (1) Workpapers and a narrative sufficient to show how the refunds 
for jurisdictional services were calculated;
    (2) Workpapers and a narrative sufficient to determine the origin of 
the refund, including step-by-step calculations showing the derivation 
of the refund amount described in paragraph (d)(3) of this section, if 
necessary;
    (3) References to any publicly available sources which confirm the 
rates, quantities, or costs, which are used to calculate the refund 
balance or which confirm the refund amount itself. If the rate, 
quantity, cost or refund does not directly tie to the source, a 
workpaper must be included to show the reconciliation between the rate, 
quantity, cost, or refund in the natural gas company's report and the 
corresponding rate, quantity, cost or refund in the source document;
    (4) Workpapers showing the calculation of interest on a monthly 
basis, including how the carrying charges were compounded quarterly;
    (5) Workpapers and a narrative explaining how the refund was 
allocated to each jurisdictional customer. Where the numbers used to 
support the allocation are publicly available, a reference to the source 
must be included. Where the allocation methodology has been approved 
previously, a reference to the order or tariff provision approving the 
allocation methodology must be included.
    (6) A letter of transmittal containing:
    (i) A list of the material enclosed;
    (ii) The name and telephone number of a company official who can 
answer questions regarding the filing;
    (iii) A statement of the date the refund was disbursed;
    (iv) A reference to the authority by which the refund is made, 
including the specific subpart of these regulations, an order of the 
Commission, a provision of the company's tariff, or any other 
appropriate authority. If a Commission order is referenced, include the 
citation to the FERC Reports, the date of issuance, and the docket 
number;
    (v) Any requests for waiver. Requests must include a reference to 
the specific section of the statute, regulations, or the company's 
tariff from which waiver is sought, and a justification for the waiver.
    (7) A certification of service to all affected customers and 
interested state commissions.
    (f) Each report filed under paragraph (e) of this section must be 
posted no later than the date of filing. Each report must be posted to 
all recipients of a share of the refund and all state commissions whose 
jurisdiction includes the location of any recipient of a refund share 
that have made a standing request for such full report.
    (g) Recipients of refunds and state commissions that have not made a 
standing request for such full report shall receive an abbreviated 
report consisting of the items listed in Sec. 154.501 (e)(5) and 
(e)(6).

[Order 582, 60 FR 52996, Oct.11, 1995, as amended by Order 582-A, 61 FR 
9629, Mar. 11, 1996]



Sec. 154.502  Reports.

    (a) When the natural gas company is required, either by a Commission 
order or as a part of a settlement in a proceeding initiated under this 
part 154 or part 284 of this chapter, to make a report on a periodic 
basis, details about the nature and contents of the report must be 
provided in an appropriate section of the general terms and conditions 
of its tariff.
    (b) The details in the general terms and conditions of the tariff 
must include the frequency and timing of the report. Explain whether the 
report is filed annually, semi-annually, monthly, or is triggered by an 
event. If triggered by an event, explain how soon after the event the 
report must be filed. If the report is periodic, state the dates on 
which the report must be filed.
    (c) Each report must include:
    (1) A letter of transmittal containing:
    (i) A list of the material enclosed;
    (ii) The name and telephone number of a company official who can 
answer questions regarding the filing;
    (iii) A reference to the authority by which the report is made, 
including the specific subpart of these regulations, an order of the 
Commission, a provision of the company's tariff, or any

[[Page 552]]

other appropriate authority. If a Commission order is referenced, 
include the citation to the FERC Reports, the date of issuance, and the 
docket number;
    (iv) Any requests for waiver. Requests must include a reference to 
the specific section of the statute, regulations, or the company's 
tariff from which waiver is sought, and a justification for the waiver.
    (2) A certification of service to all affected customers and 
interested state commissions.
    (d) Each report filed under paragraph (b) of this section must be 
posted no later than the date of filing.



                     Subpart G_Other Tariff Changes



Sec. 154.600  Compliance with other subparts.

    Any proposal to implement a tariff change other than in rate level 
must comply with subparts A, B, and C of this part.



Sec. 154.601  Change in executed service agreement.

    Agreements intended to effect a change or revision of an executed 
service agreement on file with the Commission must be in the form of a 
superseding executed service agreement only. Service agreements may not 
contain any supplements, but may contain exhibits which may be 
separately superseded. The exhibits may show, among other things, 
contract demand delivery points, delivery pressures, names of industrial 
customers of the distributor-customer, or names of distributors (with 
one distributor named as agent where delivery to several distributors is 
effected at the same delivery points).



Sec. 154.602  Cancellation or termination of a tariff, executed service 

agreement or part thereof.

    When an effective tariff, contract, or part thereof on file with the 
Commission, is proposed to be canceled or is to terminate by its own 
terms and no new tariff, executed service agreement, or part thereof, is 
to be filed in its place, the natural gas company must notify the 
Commission of the proposed cancellation or termination , at least 30 
days prior to the proposed effective date of such cancellation or 
termination. With such notice, the company must submit a statement 
showing the reasons for the cancellation or termination, a list of the 
affected customers and the contract demand provided to the customers 
under the service to be canceled. A copy of the notice must be duly 
posted tariff filing in the electronic format required by Sec. 154.4.

[Order 582, 60 FR 52996, Oct. 11, 1995, as amended by Order 714, 73 FR 
57535, Oct. 3, 2008]



Sec. 154.603  Adoption of the tariff by a successor.

    Whenever the tariff or contracts of a natural gas company on file 
with the Commission is to be adopted by another company or person as a 
result of an acquisition, or merger, authorized by a certificate of 
public convenience and necessity, or for any other reason, the 
succeeding company must file with the Commission, and post within 30 
days after such succession, a tariff filing in the electronic format 
required by Sec. 154.4 bearing the name of the successor company.

[Order 714, 73 FR 57535, Oct. 3, 2008]



PART 156_APPLICATIONS FOR ORDERS UNDER SECTION 7(a) OF THE NATURAL GAS ACT--

Table of Contents



Sec.
156.1 Who may apply.
156.2 Purpose and intent of rules.
156.3 Applications; general requirements.
156.4 Form of exhibits to be attached to applications.
156.5 Exhibits.
156.6 Acceptance for filing or rejection of application.
156.7 Service of application.
156.8 Notice of application.
156.9 Protests and interventions.
156.10 Hearings.
156.11 Dismissal of application.

    Authority: 52 Stat. 824, 829, 830; 56 Stat. 83, 84; 15 U.S.C. 717f, 
717f(a), 717n, 717o.

    Source: Order 234, 26 FR 4848, June 1, 1961, unless otherwise noted.



Sec. 156.1  Who may apply.

    Any person or municipality as defined in section 2 of the Natural 
Gas Act engaged or legally authorized to

[[Page 553]]

engage in the local distribution of natural or artificial gas to the 
public may file with the Commission an application pursuant to the 
provisions of section 7(a) of the Natural Gas Act for an order of the 
Commission directing a natural gas company to extend or improve its 
transportation facilities, to establish physical connection of its 
transportation facilities with the facilities of, and sell natural gas 
to such person or municipality, and for such purpose to extend its 
transportation facilities to communities immediately adjacent to such 
facilities or to territory served by such natural gas company.



Sec. 156.2  Purpose and intent of rules.

    (a) Applications filed pursuant to the provisions of section 7(a) of 
the Natural Gas Act shall contain all information necessary to advise 
the Commission fully concerning the applicant, the service which 
applicant requests the Commission to direct the natural gas company to 
render together with a description of any improvement or extension of 
facilities which the natural gas company would be required to make in 
connection with the rendition of the service, applicant's present and 
proposed operations, construction, service, and sales together with a 
description of any extension or improvement of facilities by applicant 
which would be required to enable applicant to engage in the local 
distribution of natural gas.
    (b) Every requirement of this part shall be considered as an 
obligation upon the applicant which can be avoided only by a definite 
and positive showing that the information or data required by the 
applicable section of the regulations is not necessary to the 
consideration and ultimate determination of the application.
    (c) This part will be strictly applied to all applications as 
submitted and the burden of adequate presentation in understandable form 
as well as justification for omitted data or information rests with the 
applicant.
    (d) Under this part, the natural gas company from which applicant is 
seeking the service is a party respondent to the proceeding.



Sec. 156.3  Applications; general requirements.

    (a) Applicable rules. The application must be filed with the 
Secretary of the Commission in accordance with filing procedures posted 
on the Commission's Web site at http://www.ferc.gov. In all other 
respects applications shall conform to the requirements of Sec. Sec. 
156.1 through 156.5. Amendments to or withdrawals of applications shall 
be filed in accordance with the requirements of Sec. Sec. 385.213 and 
385.214 of this chapter.
    (b) General content of application; filing fee. Except as provided 
in paragraph (d) of this section, each application shall set forth the 
following information:
    (1) The exact legal name of the applicant; the name of the natural 
gas company (respondent) from which applicant is seeking an extension or 
improvement of transportation facilities, physical connection of 
facilities or service of natural gas together with a concise description 
of the extension, improvement, physical connection of facilities or 
service sought from such company including the estimated volumes of 
natural gas involved to meet annual and maximum day requirements for the 
estimated first three years of proposed operation.
    (2) Applicant's principal place of business; whether applicant is an 
individual, corporation or municipality as defined in section 2 of the 
Natural Gas Act; State under the laws of which applicant is 
incorporated, organized or authorized; and the name, title, and mailing 
address of the person or persons to whom communications concerning the 
application are to be addressed.
    (3) The facts relied upon by applicant to show that the proposed 
extension or improvement of transportation facilities, physical 
connection of facilities or service and sale of natural gas are 
necessary or desirable in the public interest.
    (4) A concise description of applicant's operations, if any, at the 
time the application is filed.
    (5) A concise description of applicant's proposed operations, 
construction, service and sales together with a description of any 
extension or improvement of facilities by applicant

[[Page 554]]

which would be required to enable applicant to engage in the local 
distribution of natural gas and including the proposed dates for the 
beginning and completion of construction and commencement of operations.
    (6) A full statement concerning and description of any certificate 
of public convenience and necessity, franchise or other authorization 
which applicant has applied for or received from any State commission or 
municipality covering its proposed operations.
    (7) A full statement as to whether any other application must be or 
is to be filed by applicant with any other Federal or State body, or 
other political subdivision or agency of a State to enable applicant to 
engage in the local distribution of natural gas in the territory it 
proposes to serve.
    (8) Each application shall contain a table of contents which shall 
list all exhibits and documents filed in compliance with Sec. Sec. 
156.1 through 156.2, as well as other documents and exhibits filed 
therewith, identifying them by their appropriate titles and alphabetical 
letter designations specified in Sec. 156.5. The alphabetical 
designation specified in Sec. 156.5 must be adhered to strictly and any 
additional exhibits submitted on applicant's own volition, pursuant to 
Sec. 156.5(b) shall be designated in sequence under the letter 
designation Z (Z1, Z2, Z3, etc.). Together with each exhibit applicant 
shall set forth a full and complete explanation of the data submitted, 
the manner in which it was obtained, and the reasons for the conclusions 
which are derived therefrom.
    (c) Incorporation by reference. Any information required by this 
part which is already on file with the Commission may be incorporated by 
reference.
    (d) Small distributors. A distributor requesting natural gas service 
of less than 2000 Mcf per day to serve a single community may file the 
information required by the form of application represented in Sec. 
250.6 of this chapter.

[Order 234, 26 FR 4848, June 1, 1961, as amended by Order 280, 29 FR 
4875, Apr. 7, 1964; Order 317, 31 FR 432, Jan. 13, 1966; Order 225, 47 
FR 19057, May 3, 1982; Order 737, 75 FR 43404, July 26, 2010]



Sec. 156.4  Form of exhibits to be attached to applications.

    (a) General requirements. Each exhibit shall contain a title page 
showing applicant's name, Docket No. CP- ------ (number designation to 
be left blank), title of exhibit, and if exhibit consists of 10 or more 
pages a table of contents citing by page, section number or subdivision 
the component elements or matters contained therein.
    (b) Measurement base. All gas volumes shall be stated upon a uniform 
basis of measurement, and, in addition, if the uniform basis of 
measurement used in any application is other than 14.73 p.s.i.a., then 
the volume or volumes of natural gas to be received from any source and 
delivered by applicant shall also be stated upon a basis of 14.73 
p.s.i.a. Similarly, total volumes on all summary sheets, as well as 
grand totals of volumes in any exhibit, shall also be stated upon a 
basis of 14.73 p.s.i.a. if the basis of measurement used is other than 
14.73 p.s.i.a.



Sec. 156.5  Exhibits.

    (a) Exhibits to be submitted with application. All of the following 
exhibits shall be submitted with the application when tendered for 
filing. Such exhibits may be attached to the application or furnished in 
a separate volume or separate volumes designated ``Exhibits to 
Application.'' Such separate volume or volumes shall indicate on the 
cover thereof applicant's name and bear Docket No. CP- ------ (number 
designation to be left blank).
    (1) Exhibit A--Articles of incorporation and bylaws. If applicant is 
not an individual, a conformed copy of its articles of incorporation and 
bylaws, or other similar documents. One certified copy shall be 
submitted with the original application.
    (2) Exhibit B--State and local authorizations. (i) A copy of any 
certificate of public convenience and necessity or similar authorization 
which applicant has obtained from the State commission or commissions of 
each of the States in which applicant engages or proposes to engage in 
the local distribution of natural gas; (ii) a copy of any franchise or 
similar authorization which applicant has obtained from

[[Page 555]]

each of the municipalities in which applicant engages or proposes to 
engage in the local distribution of natural gas; and (iii) a copy of any 
other authorization or form of consent which applicant has obtained from 
any State, State commission, municipality or from any agency of the 
Federal government necessary or incidental to applicant's proposal to 
engage in the local distribution of natural gas. One certified copy of 
each of the documents specified in paragraphs (a)(2) (i), (ii), and 
(iii) of this section shall be submitted as exhibits to the original 
application.
    (3) Exhibit C--Officials. A list of the names and business addresses 
of applicant's officers and directors, or similar officials if applicant 
is not a corporation.
    (4) Exhibit D--Subsidiaries and affiliation. If applicant or any of 
its officers or directors, directly or indirectly, owns, controls, or 
holds with power to vote, 10 percent or more of the outstanding voting 
securities of any other person or organized group of persons engaged in 
production, transportation, distribution, or sale of natural gas, or of 
any person or organized group of persons engaged in the construction or 
financing of such enterprises or operations, a detailed explanation of 
each such relationship, including the percentage of voting strength 
represented by such ownership of securities. If any persons or organized 
group of persons, directly or indirectly, owns, controls, or holds with 
power to vote, 10 percent or more of the outstanding voting securities 
of applicant--give a detailed explanation of each such relationship.
    (5) Exhibit F--Location of facilities. A geographical map of 
suitable scale and detail showing all of the transmission facilities 
proposed to be installed and operated by Applicant between distribution 
systems of Applicant and the transmission pipeline system of the 
proposed supplier (respondent), and include:
    (i) Location, length, and size of applicant's transmission 
pipelines.
    (ii) Location and size (related horsepower) of applicant's 
transmission compressor stations.
    (iii) Location and designation of each point of connection of 
applicant's proposed transmission facilities with (a) proposed pipeline 
supplier (respondent) main line industrial customers, gas pipeline or 
distribution systems, showing towns and communities to be served, and 
(b) gas producing and storage filed, or other sources of supply.
    (iv) Location, length and size of facilities required to be 
installed by the proposed supplier (respondent) necessary for the 
rendition of service requested by the applicant.
    (6) Exhibit G--Flow diagram showing daily design capacity and 
reflecting operation with proposed transmission facilities. A flow 
diagram showing daily design capacity of all transmission facilities 
proposed to be installed and operated by applicant between distribution 
facilities of applicant and the transmission pipeline system of the 
proposed supplier (respondent) including the following:
    (i) Diameter, wall thickness, and length of pipe to be installed.
    (ii) For each transmission compressor station, the size, type, and 
number of compressor units, horsepower required, horsepower to be 
installed, volume of gas to be used as fuel, suction and discharge 
pressures, and compression ratio.
    (iii) Pressures and volumes of gas at the main line inlet and outlet 
connections at each compressor station.
    (iv) Pressures and volumes of gas at each intake and takeoff point 
and at the beginning and terminus of all proposed transmission 
facilities.
    (7) Exhibit G-I--Flow diagram reflecting maximum capabilities. If 
Exhibit G does not reflect the maximum deliveries of all transmission 
facilities, proposed to be installed and operated by applicant between 
distribution facilities of applicant and the transmission pipeline 
system of the proposed supplier (respondent), under most favorable 
operating conditions, without installation of any facilities in addition 
to those proposed in the application, include an additional diagram or 
diagrams to depict such maximum capabilities.
    (8) Exhibit G-II--Flow diagram data. Exhibits G and G-I shall be 
accompanied by a statement of engineering design data in explanation and 
support of the diagrams and the proposed project, setting forth:

[[Page 556]]

    (i) Assumption, bases, formulae, and methods used in the development 
and preparation of such diagrams and accompanying data.
    (ii) A description of the transmission pipe and fittings to be 
installed, specifying the diameter, wall thickness, yield point, 
ultimate tensile strength, method of fabrication, and methods of testing 
proposed.
    (iii) Type, capacity, and location of each natural gas storage field 
or facility, or other similar plant or facility directly attached to the 
applicant's transmission system.
    (9) Exhibit H--Total gas supply data. A statement of the total gas 
supply committed to, controlled by, or possessed by an applicant which 
is available to it for the acts and the services proposed, together 
with:
    (i) The estimated total volume of proven reserves in place for each 
reservoir in each field from which applicant takes natural gas, giving 
names and location of fields (state, county, or parish).
    (ii) The estimated total volumes of proven reserves available to 
applicant by fee or under lease, segregated by gas fields and reservoirs 
thereof, giving names and locations of fields (state, county, or 
parish).
    (iii) The names and addresses of persons with whom applicant has gas 
purchase contracts, the effective dates and remaining terms in years of 
such contracts.
    (iv) A study, showing the daily volumes of natural gas which can and 
are proposed to be obtained each year from each source of supply.
    (v) Estimate of the Btu content of the gas available to or requested 
by applicant for proposed service.
    (vi) A study of each proposed gas storage field showing: Location; 
geology; original and present reserves for each reservoir; original and 
present pressure of each reservoir; proposed top and base storage 
pressures; proposed top and base gas volumes to be stored; a 
deliverability study, including daily and annual injection and 
withdrawal rates and pressures; and maximum daily deliverability and 
maximum storage capacity under the proposed plan of development.
    (10) Exhibit I--Market data. An estimate by distribution systems of 
the volumes of gas to be delivered during the year in which proposed 
service is estimated to begin and during each of the first 3 full years 
of operation of the proposed facilities, and actual data of like import 
for each of the 3 years next preceding the filing of the application, 
together with:
    (i) Names and locations of areas to be served, showing the number of 
residential, commercial, firm industrial, interruptible industrial, 
residential space heating, commercial space heating, and other types of 
customers for each distribution system to be served; and the names and 
locations of each firm and interruptible direct industrial customer 
whose estimated consumption totals 10,000 Mcf or more in any calendar 
month or 100,000 Mcf or more per year.
    (ii) Applicant's total annual and peak day gas requirements by 
classification of service in paragraph (a)(10)(i) of this section, 
divided as follows: Gas requirements (a) for each distribution area 
where gas is sold or to be sold by applicant at retail; (b) for all 
main-line direct industrial customers and (c) company use and 
unaccounted-for gas.
    (iii) Total past and expected curtailments of service by the 
applicant in each distribution area proposed to be supplied with gas 
from the project, all to be listed by the classifications of service as 
indicated in paragraph (a)(10)(i) of this section.
    (iv) Explanation of basic factors used in estimating future 
requirements, including, for example: Peak day and annual degree day 
deficiencies, annual load factors of applicant's deliveries to its 
proposed customers; derivation of numbers of customers proposed to be 
served; individual consumer peak day and annual consumption factors for 
each class of consumers, with supporting historical data; forecasted 
saturation of space heating as related to past experience; and full 
detail as to all other sources of gas supply available to applicant and 
to each of its customers, including manufacturing facilities and liquid 
petroleum gas.

[[Page 557]]

    (v) A full description of all facilities, other than transmission 
facilities, necessary to provide service in the communities to be 
served.
    (vi) A copy of each market survey made within the past 3 years for 
the markets proposed to be served.
    (11) Exhibit J--Conversion to natural gas. If it is assumed that 
proposed customers in new areas or firm and interruptible direct 
industrial customers whose estimated consumption totals 10,000 Mcf or 
more in any calendar month or 100,000 Mcf or more in any calendar year 
will convert from other fuels to natural gas, state the basis for such 
assumption and include a study showing estimated cost of converting 
customers' facilities to natural gas. The study should indicate the 
number of customers of each of the other fuels who applicant anticipates 
will convert to natural gas and the current cost of fuel to be displaced 
compared to the cost of natural gas on an equivalent Btu basis.
    (12) Exhibit K--Cost of facilities. A detailed estimate of total 
capital cost of the proposed facilities involved in the application, 
showing cost of construction by operating units such as distribution 
facilities, compressor stations, transmission pipelines and laterals, 
measuring and regulating stations, and separately stating the cost of 
rights-of-way, damages, surveys, materials, labor, engineering and 
inspection, administrative overhead, fees for legal and other services, 
allowance for funds used during construction, and contingencies. 
Detailed estimates of cost of facilities required to be installed by the 
pipeline supplier shall be separately stated.
    (13) Exhibit L--Financing. Plans for financing the proposed 
facilities for which the application is filed, together with:
    (i) A detailed description of applicant's outstanding and proposed 
securities and liabilities, showing amount (face value and number), 
interest or dividend rate, dates of issue and maturity, voting 
privileges, and principal terms and conditions applicable to each.
    (ii) The manner in which applicant proposes to dispose of securities 
by private sale, competitive bidding or otherwise; the persons, if 
known, to whom they will be sold or issued, and evidence that such 
persons having agreed to purchase the securities, and if not known, the 
class or classes of such persons.
    (iii) A statement showing for each proposed issue, by total amount 
and by unit, the estimated sale price and estimated net proceeds to the 
applicant.
    (iv) A statement as to the extent to which the applicant will rely 
on temporary financing in connection with the proposed construction, and 
statements tending to substantiate the fact that such temporary loans 
will be made available.
    (v) Statement of anticipated cash flow, including provision during 
the period of construction and the first 3 full years of proposed 
operation for interest requirements, dividends, and capital retirements.
    (vi) Statement showing, over the life of each issue, the annual 
amount of securities which applicant expects to retire through operation 
of a sinking fund or other extinguishment of the obligation.
    (vii) A balance sheet and income statement (12 months) of most 
recent date available.
    (viii) Comparative pro forma balance sheets and income statements 
for the period of construction and each of the first 3 full years of 
operation, giving effect to the proposed construction and proposed 
financing of the project.
    (ix) Any additional data and information upon which applicant 
proposes to rely in showing the adequacy and availability to it of 
resources for financing its proposed project.
    (14) Exhibit M--Construction, operation, and management. A concise 
statement setting forth arrangements for supervision, management, 
engineering, accounting, legal, or other similar service to be rendered 
in connection with the construction or operation of the project if not 
to be performed by employees of applicant, including reference to any 
existing or contemplated agreements therefor.
    (15) Exhibit N--Revenues, expenses income. Applicant shall submit 
pro forma statements for each of the first 3 full years of operation of 
all the proposed facilities, showing:

[[Page 558]]

    (i) Gas system annual revenues and volumes of natural gas related 
thereto subdivided by classes of service and further subdivided by sales 
to direct industrial customers, sales to other utilities (if any), 
transportation for other gas utilities and other sales.
    (ii) Gas system annual operating expenses, cost of gas purchased, 
depreciation, depletion, taxes, utility income and resulting rate of 
return on net investment in gas plant, including working capital, or in 
the case of a municipality applicant similar data and amortization-
interest schedule for life of each bond issue related to the proposed 
project. Cost of gas purchased shall be at the currently effective 
applicable rate of the pipeline supplier or applicable rate filed by 
such pipeline supplier, but not effective at date of filing, whichever 
is the higher.
    (iii) The information required by paragraphs (a)(15)(i) and (ii) of 
this section need not be furnished when the applicant furnishes as a 
part of its application a pro forma copy of a certificate of convenience 
and necessity or similar authorization issued to it by the local State 
commission having jurisdiction over its proposed operations.
    (16) Exhibit P--Rates. (i) A statement of the rates proposed to be 
charged for the proposed services to be rendered. Indicate whether rates 
are subject to regulation by the State or local authorities.
    (ii) Identification of the rate schedule of the natural gas company 
(respondent) under which gas is proposed to be purchased.
    (b) Additional exhibits. Applicant shall submit additional exhibits 
necessary to support or clarify its application. Such exhibits shall be 
identified and designated as provided by Sec. 156.3(b)(8).
    (c) Additional information. Upon request by the Secretary, prior to 
or during hearing upon the application, applicant shall submit such 
additional data, information, exhibits, or other detail as may be 
specified.

[Order 234, 26 FR 4848, June 1, 1961, as amended by Order 280, 29 FR 
4876, Apr. 7, 1964; Order 436, 36 FR 15530, Aug. 17, 1971; Order 225, 47 
FR 19057, May 3, 1982]



Sec. 156.6  Acceptance for filing or rejection of application.

    Applications will be docketed when received and the applicant so 
advised. Any application which does not conform to the requirements of 
Sec. Sec. 156.1 through 156.5 will be rejected by the Secretary. All 
but one copy of a rejected application will be returned. An application 
which relates to an operation concerning which a prior application has 
been filed and rejected, shall be docketed as a new application. Such 
new application shall state the docket number of the prior rejected 
application.



Sec. 156.7  Service of application.

    After an application has been accepted for filing, the Secretary 
will cause a copy thereof to be served upon the natural gas company 
(respondent) against which an order pursuant to section 7(a) of the 
Natural Gas Act has been requested. The natural gas company shall, 
within 30 days after the date of service of such application file its 
answer (an original and 7 conformed copies) to such application in which 
it shall state whether it has any objection to the grant of the 
application. If the natural gas company objects to the grant of the 
relief sought by the application, it shall fully state the grounds and 
reasons for its objections. The answer shall be verified and shall be 
signed by an executive of the natural gas company. In the event that the 
respondent natural gas company fails to file a timely response to the 
application it shall be deemed to have agreed to the grant thereof.

[Order 302, 30 FR 9302, July 27, 1965, as amended by Order 225, 47 FR 
19057, May 3, 1982]



Sec. 156.8  Notice of application.

    Notice of each application filed, except when rejected in accordance 
with Sec. 156.6, will be published in the Federal Register and copies 
of such notice sent to the State affected thereby via electronic means 
if practical, otherwise by mail.

[Order 653, 70 FR 8724, Feb. 23, 2005]

[[Page 559]]



Sec. 156.9  Protests and interventions.

    Notices of applications, as provided by Sec. 156.8 will fix the 
time within which any person desiring to participate in the proceeding 
or to file a protest regarding the application, may file a petition to 
intervene or protest, and within which any interested regulatory agency 
desiring to intervene may file its notice of intervention. Failure to 
make timely filing will constitute ground for denial of participation, 
in the absence of extraordinary circumstances for good cause shown.



Sec. 156.10  Hearings.

    The Commission will schedule each application for public hearing at 
the earliest possible date giving due consideration of statutory 
requirements and other matters pending, with notice thereof as provided 
by Sec. 385.2009 of this chapter: Provided, however, That where no 
protests or petitions to intervene have been received and accepted, the 
Commission may, after the due date for such protests or petitions to 
intervene, issue the requested order without hearing.

[Order 234, 26 FR 4848, June 1, 1961, as amended by Order 225, 47 FR 
19057, May 3, 1982]



Sec. 156.11  Dismissal of application.

    Except for good cause shown, failure of an applicant to go forward 
on the date set for hearing and present its full case in support of its 
application will constitute ground for the summary dismissal of the 
application and the termination of the proceedings.



 PART 157_APPLICATIONS FOR CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY 

AND FOR ORDERS PERMITTING AND APPROVING ABANDONMENT UNDER SECTION 7 OF THE 

NATURAL GAS ACT--Table of Contents



   Subpart A_Applications for Certificates of Public Convenience and 
  Necessity and for Orders Permitting and Approving Abandonment Under 
Section 7 of the Natural Gas Act, as Amended, Concerning Any Operation, 
   Sales, Service, Construction, Extension, Acquisition or Abandonment

Sec.
157.1 Definitions.
157.5 Purpose and intent of rules.
157.6 Applications; general requirements.
157.7 Abbreviated applications.
157.8 Acceptance for filing or rejection of applications.
157.9 Notice of application and notice of schedule for environmental 
          review.
157.10 Interventions and protests.
157.11 Hearings.
157.12 Dismissal of application.
157.13 Form of exhibits to be attached to applications.
157.14 Exhibits.
157.15 Requirements for applications covering acquisitions.
157.16 Exhibits relating to acquisitions.
157.17 Applications for temporary certificates in cases of emergency.
157.18 Applications to abandon facilities or service; exhibits.
157.20 General conditions applicable to certificates.
157.21 Pre-filing procedures and review process for LNG terminal 
          facilities and other natural gas facilities prior to filing of 
          applications.
157.22 Schedule for final decisions on a request for a Federal 
          authorization.

  Subpart B_Open Seasons for Alaska Natural Gas Transportation Projects

157.30 Purpose.
157.31 Definitions.
157.32 Applicability.
157.33 Requirement for open season.
157.34 Notice of open season.
157.35 Undue discrimination or preference.
157.36 Open seasons for expansions.
157.37 Project design.
157.38 Pre-approval procedures.
157.39 Rate treatment for pipeline expansions.

[[Page 560]]

Subpart C [Reserved]

  Subpart D_Exemption of Natural Gas Service for Drilling, Testing, or 
                  Purging from Certificate Requirements

157.53 Testing.

Subpart E [Reserved]

  Subpart F_Interstate Pipeline Blanket Certificates and Authorization 
  Under Section 7 of the Natural Gas Act for Certain Transactions and 
                               Abandonment

157.201 Applicability.
157.202 Definitions.
157.203 Blanket certification.
157.204 Application procedure.
157.205 Notice procedure.
157.206 Standard conditions.
157.207 General reporting requirements.
157.208 Construction, acquisition, operation, replacement, and 
          miscellaneous rearrangement of facilities.
157.209 Temporary compression facilities.
157.210 Mainline natural gas facilities.
157.211 Delivery points.
157.212 Synthetic and liquefied natural gas facilities.
157.213 Underground storage field facilities.
157.214 Increase in storage capacity.
157.215 Underground storage testing and development.
157.216 Abandonment.
157.217 Changes in rate schedules.
157.218 Changes in customer name.

Appendix I to Subpart F--Procedures for Compliance with the Endangered 
          Species Act of 1973 Under Sec. 157.206(b)(3)(i)
Appendix II to Subpart F--Procedures for Compliance With the National 
          Historic Preservation Act of 1966 Under Sec. 
          157.206(b)(3)(ii)

Subpart G--Natural Gas Producer Blanket Authorization for Sales and 
Abandonment [Reserved]

    Authority: 15 U.S.C. 717-717z.



   Subpart A_Applications for Certificates of Public Convenience and 

  Necessity and for Orders Permitting and Approving Abandonment under 

Section 7 of the Natural Gas Act, as Amended, Concerning Any Operation, 

   Sales, Service, Construction, Extension, Acquisition or Abandonment



Sec. 157.1  Definitions.

    For the purposes of this part--
    For the purposes of Sec. 157.21 of this part, Director means the 
Director of the Commission's Office of Energy Projects.
    Indian tribe means, in reference to a proposal or application for a 
certificate or abandonment, an Indian tribe which is recognized by 
treaty with the United States, by federal statute, or by the U.S. 
Department of the Interior in its periodic listing of tribal governments 
in the Federal Register in accordance with 25 CFR 83.6(b), and whose 
legal rights as a tribe may be affected by the proposed construction, 
operation or abandonment of facilities or services (as where the 
construction or operation of the proposed facilities could interfere 
with the tribe's hunting or fishing rights or where the proposed 
facilities would be located within the tribe's reservation).
    Resource agency means a Federal, state, or interstate agency 
exercising administration over the areas of recreation, fish and 
wildlife, water resource management, or cultural or other relevant 
resources of the state or states in which the facilities or services for 
which a certificate or abandonment is proposed are or will be located.

[Order 608, 64 FR 51220, Sept. 22, 1999, as amended by Order 665, 70 FR 
60440, Oct. 18, 2005]



Sec. 157.5  Purpose and intent of rules.

    (a) Applications under section 7 of the Natural Gas Act shall set 
forth all information necessary to advise the

[[Page 561]]

Commission fully concerning the operation, sales, service, construction, 
extension, or acquisition for which a certificate is requested or the 
abandonment for which permission and approval is requested. Some 
applications may be of such character that an abbreviated application 
may be justified under the provisions of Sec. 157.7. Applications for 
permission and approval to abandon pursuant to section 7(b) of the Act 
shall conform to Sec. 157.18 and to such other requirements of this 
part as may be pertinent. However, every applicant shall file all 
pertinent data and information necessary for a full and complete 
understanding of the proposed project, including its effect upon 
applicant's present and future operations and whether, and at what 
docket, applicant has previously applied for authorization to serve any 
portion of the market contemplated by the proposed project and the 
nature and disposition of such other project.
    (b) Every requirement of this part shall be considered as a 
forthright obligation of the applicant which can only be avoided by a 
definite and positive showing that the information or data called for by 
the applicable rules is not necessary for the consideration and ultimate 
determination of the application.
    (c) This part will be strictly applied to all applications as 
submitted and the burden of adequate presentation in intelligible form 
as well as justification for omitted data or information rests with the 
applicant.

[17 FR 7386, Aug. 14, 1952, as amended by Order 280, 29 FR 4876, Apr. 7, 
1964]



Sec. 157.6  Applications; general requirements.

    (a) Applicable rules--(1) Submission required to be furnished by 
applicant under this subpart. Applications, amendments thereto, and all 
exhibits and other submissions required to be furnished by an applicant 
to the Commission under this subpart must be submitted in an original 
and 7 conformed copies. To the extent that data required under this 
subpart has been provided to the Commission, this data need not be 
duplicated. The applicant must, however, include a statement identifying 
the forms and records containing the required information and when that 
form or record was submitted.
    (2) Maps and diagrams. An applicant required to submit a map or 
diagram under this subpart must submit one paper copy of the map or 
diagram.
    (3) The following must be submitted in electronic format as 
prescribed by the Commission:
    (i) Applications filed under this part 157 and all attached 
exhibits;
    (ii) Applications covering acquisitions and all attached exhibits;
    (iii) Applications for temporary certificates and all attached 
exhibits;
    (iv) Applications to abandon facilities or services and all attached 
exhibits;
    (v) The progress reports required under Sec. 157.20(c) and (d);
    (vi) Applications submitted under subpart E of this part and all 
attached exhibits;
    (vii) Applications submitted under subpart F of this part and all 
attached exhibits;
    (viii) Requests for authorization under the notice procedures 
established in Sec. 157.205 and all attached exhibits;
    (ix) The annual report required by Sec. 157.207;
    (x) The report required under Sec. 157.214 when storage capacity is 
increased;
    (xi) Amendments to any of the foregoing.
    (4) All filings must be signed in compliance with the following.
    (i) The signature on a filing constitutes a certification that: The 
signer has read the filing signed and knows the contents of the paper 
copies and electronic filing; the paper copies contain the same 
information as contained in the electronic filing; the contents as 
stated in the copies and in the electronic filing are true to the best 
knowledge and belief of the signer; and the signer possesses full power 
and authority to sign the filing.
    (ii) A filing must be signed by one of the following:
    (A) The person on behalf of whom the filing is made;
    (B) An officer, agent, or employee of the governmental authority, 
agency, or instrumentality on behalf of which the filing is made; or,
    (C) A representative qualified to practice before the Commission 
under

[[Page 562]]

Sec. 385.2101 of this chapter who possesses authority to sign.
    (5) Other requirements. Applications under section 7 of the Natural 
Gas Act must conform to the requirements of Sec. Sec. 157.5 through 
157.14. Amendments to or withdrawals of applications must conform to the 
requirements of Sec. Sec. 385.215 and 385.216 of this chapter. If the 
application involves an acquisition of facilities, it must conform to 
the additional requirements prescribed in Sec. Sec. 157.15 and 157.16. 
If the application involves an abandonment of facilities or service, it 
must conform to the additional requirements prescribed in Sec. 157.18.
    (b) General content of application. Each application filed other 
than an application for permission and approval to abandon pursuant to 
section 7(b) shall set forth the following information:
    (1) The exact legal name of applicant; its principal place of 
business; whether an individual, partnership, corporation, or otherwise; 
State under the laws of which organized or authorized; and the name, 
title, and mailing address of the person or persons to whom 
communications concerning the application are to be addressed.
    (2) The facts relied upon by applicant to show that the proposed 
service, sale, operation, construction, extension, or acquisition is or 
will be required by the present or future public convenience and 
necessity.
    (3) A concise description of applicant's existing operations.
    (4) A concise description of the proposed service, sale, operation, 
construction, extension, or acquisition, including the proposed dates 
for the beginning and completion of construction, the commencement of 
operations and of acquisition, where involved.
    (5) A full statement as to whether any other application to 
supplement or effectuate applicant's proposals must be or is to be filed 
by applicant, any of applicant's customers, or any other person, with 
any other Federal, State, or other regulatory body; and if so, the 
nature and status of each such application.
    (6) A table of contents which shall list all exhibits and documents 
filed in compliance with Sec. Sec. 157.5 through 157.18, as well as all 
other documents and exhibits otherwise filed, identifying them by their 
appropriate titles and alphabetical letter designations. The 
alphabetical letter designations specified in Sec. Sec. 157.14, 157.16, 
and 157.18 must be strictly adhered to and extra exhibits submitted at 
the volition of applicant shall be designated in sequence under the 
letter Z (Z1, Z2, Z3, etc.).
    (7) A form of notice of the application suitable for publication in 
the Federal Register in accordance with the specifications in Sec. 
385.203(d) of this chapter.
    (8) For applications to construct new facilities, detailed cost-of-
service data supporting the cost of the expansion project, a detailed 
study showing the revenue responsibility for each firm rate schedule 
under the pipeline's currently effective rate design and under the 
pipeline's proposed rates, a detailed rate impact analysis by rate 
schedule (including by zone, if applicable), and an analysis reflecting 
the impact of the fuel usage resulting from the proposed expansion 
project (including by zone, if applicable).
    (c) Requests for shortened procedure. If shortened procedure is 
desired a request therefor shall be made in conformity with Sec. 
385.802 of this chapter and may be included in the application or filed 
separately.
    (d) Landowner notification. (1) For all applications filed under 
this subpart which include construction of facilities or abandonment of 
facilities (except for abandonment by sale or transfer where the 
easement will continue to be used for transportation of natural gas), 
the applicant shall make a good faith effort to notify all affected 
landowners and towns, communities, and local, state and federal 
governments and agencies involved in the project:
    (i) By certified or first class mail, sent within 3 business days 
following the date the Commission issues a notice of the application; or
    (ii) By hand, within the same time period; and
    (iii) By publishing notice twice of the filing of the application, 
no later than 14 days after the date that a docket number is assigned to 
the application, in a daily or weekly newspaper of general circulation 
in each county in which the project is located.

[[Page 563]]

    (2) All affected landowners includes owners of property interests, 
as noted in the most recent county/city tax records as receiving the tax 
notice, whose property:
    (i) Is directly affected (i.e., crossed or used) by the proposed 
activity, including all facility sites (including compressor stations, 
well sites, and all above-ground facilities), rights of way, access 
roads, pipe and contractor yards, and temporary workspace;
    (ii) Abuts either side of an existing right-of-way or facility site 
owned in fee by any utility company, or abuts the edge of a proposed 
facility site or right-of-way which runs along a property line in the 
area in which the facilities would be constructed, or contains a 
residence within 50 feet of the proposed construction work area;
    (iii) Is within one-half mile of proposed compressors or their 
enclosures or LNG facilities; or
    (iv) Is within the area of proposed new storage fields or proposed 
expansions of storage fields, including any applicable buffer zone.
    (3) The notice shall include:
    (i) The docket number of the filing;
    (ii) The most recent edition of the Commission's pamphlet that 
explains the Commission's certificate process and addresses the basic 
concerns of landowners. Except: pipelines are not required to include 
the pamphlet in notifications of abandonments or in the published 
newspaper notice. Instead, they should provide the title of the pamphlet 
and indicate its availability at the Commission's Internet address;
    (iii) A description of the applicant and the proposed project, its 
location (including a general location map), its purpose, and the timing 
of the project;
    (iv) A general description of what the applicant will need from the 
landowner if the project is approved, and how the landowner may contact 
the applicant, including a local or toll-free phone number and a name of 
a specific person to contact who is knowledgeable about the project;
    (v) A brief summary of what rights the landowner has at the 
Commission and in proceedings under the eminent domain rules of the 
relevant state. Except: pipelines are not required to include this 
information in the published newspaper notice. Instead, the newspaper 
notice should provide the Commission's Internet address and the 
telephone number for the Commission's Office of External Affairs; and
    (vi) Information on how the landowner can get a copy of the 
application from the company or the location(s) where a copy of the 
application may be found as specified in Sec. 157.10.
    (vii) A copy of the Commission's notice of application, specifically 
stating the date by which timely motions to intervene are due, together 
with the Commission's information sheet on how to intervene in 
Commission proceedings. Except: pipelines are not required to include 
the notice of application and information sheet in the published 
newspaper notice. Instead, the newspaper notice should indicate that a 
separate notice is to be mailed to affected landowners and governmental 
entities.
    (4) If the notice is returned as undeliverable, the applicant will 
make a reasonable attempt to find the correct address and notify the 
landowner.
    (5) Within 30 days of the date the application was filed, applicant 
shall file an updated list of affected landowners, including information 
concerning notices that were returned as undeliverable.
    (6) If paragraph (d)(3) of this section requires an applicant to 
reveal Critical Energy Infrastructure Information (CEII), as defined by 
Sec. 388.113(c) of this chapter, to any person, the applicant shall 
follow the procedures set out in Sec. 157.10(d).

[17 FR 7386, Aug. 14, 1952]

    Editorial Note: For Federal Register citations affecting Sec. 
157.6, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 157.7  Abbreviated applications.

    (a) General. When the operations sales, service, construction, 
extensions, acquisitions or abandonment proposed by an application do 
not require all the data and information specified by this part to 
disclose fully the nature and extent of the proposed undertaking, an 
abbreviated application may be filed in the manner prescribed in Sec. 
385.2011 of this chapter, provided it contains all

[[Page 564]]

information and supporting data necessary to explain fully the proposed 
project, its economic justification, its effect upon applicant's present 
and future operations and upon the public proposed to be served, and is 
otherwise in conformity with the applicable requirements of this part 
regarding form, manner of presentation, and filing. Such an application 
shall (1) state that it is an abbreviated application; (2) specify which 
of the data and information required by this part are omitted; and (3) 
relate the facts relied upon to justify separately each such omission.

[Order 280, 29 FR 4876, Apr. 7, 1964]

    Editorial Note: For Federal Register citations affecting Sec. 
157.7, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 157.8  Acceptance for filing or rejection of applications.

    Applications will be docketed when received and the applicant so 
advised.
    (a) If an application patently fails to comply with applicable 
statutory requirements or with applicable Commission rules, regulations, 
and orders for which a waiver has not been granted, the Director of the 
Office of Energy Projects or the Director of the Office of Energy Market 
Regulation may reject the application within 10 business days of filing 
as provided by Sec. 385.2001(b) of this chapter. This rejection is 
without prejudice to an applicant's refiling a complete application. 
However, an application will not be rejected solely on the basis of:
    (1) Environmental reports that are incomplete because the company 
has not been granted access by the affected landowner(s) to perform 
required surveys; or,
    (2) Environmental reports that are incomplete, but where the minimum 
checklist requirements of part 380, appendix A of this chapter have been 
met.
    (b) An application which relates to an operation, sale, service, 
construction, extension, acquisition, or abandonment concerning which a 
prior application has been filed and rejected, shall be docketed as a 
new application. Such new application shall state the docket number of 
the prior rejected application.
    (c) The Director of the Office of Energy Projects or the Director of 
the Office of Energy Market Regulation may also reject an application 
after it has been noticed, at any time, if it is determined that such 
application does not conform to the requirements of this part.

[Order 603-A, 64 FR 54536, Oct. 7, 1999, as amended by Order 699, 72 FR 
45325, Aug. 14, 2007; Order 701, 72 FR 61054, Oct. 29, 2007]



Sec. 157.9  Notice of application and notice of schedule for environmental 

review.

    (a) Notice of each application filed, except when rejected in 
accordance with Sec. 157.8, will be issued within 10 business days of 
filing, and subsequently will be published in the Federal Register and 
copies of such notice sent to States affected thereby, by electronic 
means if practical, otherwise by mail. Persons desiring to receive a 
copy of the notice of every application shall so advise the Secretary.
    (b) For each application that will require an environmental 
assessment or an environmental impact statement, notice of a schedule 
for the environmental review will be issued within 90 days of the notice 
of the application, and subsequently will be published in the Federal 
Register.

[Order 653, 70 FR 8724, Feb. 23, 2005, as amended by Order 687, 71 FR 
62920, Oct. 27, 2006]



Sec. 157.10  Interventions and protests.

    (a) Notices of applications, as provided by Sec. 157.9, will fix 
the time within which any person desiring to participate in the 
proceeding may file a petition to intervene, and within which any 
interested regulatory agency, as provided by Sec. 385.214 of this 
chapter, desiring to intervene may file its notice of intervention.
    (1) Any person filing a petition to intervene or notice of 
intervention shall state specifically whether he seeks formal hearing on 
the application.
    (2) Any person may file to intervene on environmental grounds based 
on the draft environmental impact statement as stated at Sec. 
380.10(a)(1)(i) of this chapter. In accordance with that section,

[[Page 565]]

such intervention will be deemed timely as long as it is filed within 
the comment period for the draft environmental impact statement.
    (3) Failure to make timely filing will constitute grounds for denial 
of participation in the absence of extraordinary circumstances or good 
cause shown.
    (4) Protests may be filed in accordance with Sec. 385.211 of this 
chapter within the time permitted by any person who does not seek to 
participate in the proceeding.
    (b) A copy of each application, supplement and amendment thereto, 
including exhibits required by Sec. Sec. 157.14, 157.16, and 157.18, 
shall upon request be promptly supplied by the applicant to anyone who 
has filed a petition for leave to intervene or given notice of 
intervention.
    (1) An applicant is not required to serve voluminous or difficult to 
reproduce material, such as copies of certain environmental information, 
to all parties, as long as such material is publicly available in an 
accessible central location in each county throughout the project area.
    (2) An applicant shall make a good faith effort to place the 
materials in a public location that provides maximum accessibility to 
the public.
    (c) Complete copies of the application must be available in 
accessible central locations in each county throughout the project area, 
either in paper or electronic format, within three business days of the 
date a filing is issued a docket number. Within five business days of 
receiving a request for a complete copy from any party, the applicant 
must serve a full copy of any filing on the requesting party. Such copy 
may exclude voluminous or difficult to reproduce material that is 
publicly available. Pipelines must keep all voluminous material on file 
with the Commission and make such information available for inspection 
at buildings with public access preferably with evening and weekend 
business hours, such as libraries located in central locations in each 
county throughout the project area.
    (d) Critical Energy Infrastructure Information. (1) If this section 
requires an applicant to reveal Critical Energy Infrastructure 
Information (CEII), as defined in Sec. 388.113(c) of this chapter, to 
the public, the applicant shall omit the CEII from the information made 
available and insert the following in its place:
    (i) A statement that CEII is being withheld;
    (ii) A brief description of the omitted information that does not 
reveal any CEII; and
    (iii) This statement: ``Procedures for obtaining access to Critical 
Energy Infrastructure Information (CEII) may be found at 18 CFR 388.113. 
Requests for access to CEII should be made to the Commission's CEII 
Coordinator.''
    (2) The applicant, in determining whether information constitutes 
CEII, shall treat the information in a manner consistent with any 
filings that applicant has made with the Commission and shall to the 
extent practicable adhere to any previous determinations by the 
Commission or the CEII Coordinator involving the same or like 
information.
    (3) The procedures contained in Sec. Sec. 388.112 and 388.113 of 
this chapter regarding designation of, and access to, CEII, shall apply 
in the event of a challenge to a CEII designation or a request for 
access to CEII. If it is determined that information is not CEII or that 
a requester should be granted access to CEII, the applicant will be 
directed to make the information available to the requester.
    (4) Nothing in this section shall be construed to prohibit any 
persons from voluntarily reaching arrangements or agreements calling for 
the disclosure of CEII.

[Order 603-A, 64 FR 54536, Oct. 7, 1999, as amended by Order 643, 68 FR 
52095, Sept. 2, 2003]



Sec. 157.11  Hearings.

    (a) General. The Commission will schedule each application for 
public hearing at the earliest date possible giving due consideration to 
statutory requirements and other matters pending, with notice thereof as 
provided by Sec. 1.19(b) of this chapter: Provided, however, That when 
an application is filed less than fifteen days prior to the commencement 
of a hearing theretofore ordered on a pending application and

[[Page 566]]

seeks authority to serve some or all of the markets sought in such 
pending application or is otherwise competitive with such pending 
application, the Commission will not schedule the new application for 
hearing until it has rendered its final decision on such pending 
application, except when, on its own motion, or on appropriate 
application, it finds that the public interest requires otherwise.
    (b) Shortened procedure. If no protest or petition to intervene 
raises an issue of substance, the Commission may upon request of the 
applicant dispose of an application in accordance with the provisions of 
Sec. 385.802 of this chapter.

[17 FR 7386, Aug. 14, 1952, as amended by Order 225, 47 FR 19057, May 3, 
1982]



Sec. 157.12  Dismissal of application.

    Except for good cause shown, failure of an applicant to go forward 
on the date set for hearing and present its full case in support of its 
application will constitute ground for the summary dismissal of the 
application and the termination of the proceedings.

[17 FR 7386, Aug. 14, 1952]



Sec. 157.13  Form of exhibits to be attached to applications.

    Each exhibit attached to an application must conform to the 
following requirements:
    (a) General requirements. Each exhibit must be submitted in the 
manner prescribed in Sec. Sec. 157.6(a) and 385.2011 of this chapter 
and contain a title page showing applicant's name, docket number (to be 
left blank), title of the exhibit, the proper letter designation of the 
exhibit, and, if of 10 or more pages, a table of contents, citing by 
page, section number or subdivision, the component elements or matters 
therein contained.
    (b) Reference to annual reports and previous applications. An 
application may refer to annual reports and previous applications filed 
with the Commission and shall specify the exact pages or exhibit numbers 
of the filing to which reference is made, including the page numbers in 
any exhibit to which reference is made. When reference is made to a 
previous application the docket number shall be stated. No part of a 
rejected application may be incorporated by reference.
    (c) Interdependent applications. When an application considered 
alone is incomplete and depends vitally upon information in another 
application, it will not be accepted for filing until the supporting 
application has been filed. When applications are interdependent, they 
shall be filed concurrently.
    (d) Measurement base. All gas volumes, including gas purchased from 
producers, shall be stated upon a uniform basis of measurement, and, in 
addition, if the uniform basis of measurement used in any application is 
other than 14.73 p.s.i.a., then any volume or volumes delivered to or 
received from any interstate natural-gas pipeline company shall also be 
stated upon a basis of 14.73 p.s.i.a.; similarly, total volumes on all 
summary sheets, as well as grand totals of volumes in any exhibit, shall 
also be stated upon a basis of 14.73 p.s.i.a. if the uniform basis of 
measurement used is other than 14.73 p.s.i.a.

[17 FR 7387, Aug. 14, 1952, as amended by Order 185, 21 FR 1486, Mar. 8, 
1956; Order 280, 29 FR 4877, Apr. 7, 1964; Order 493, 53 FR 15029, Apr. 
27, 1988]



Sec. 157.14  Exhibits.

    (a) To be attached to each application. All exhibits specified must 
accompany each application when tendered for filing. Together with each 
exhibit applicant must provide a full and complete explanation of the 
data submitted, the manner in which it was obtained, and the reasons for 
the conclusions derived from the exhibits. If the Commission determines 
that a formal hearing upon the application is required or that testimony 
and hearing exhibits should be filed, the Secretary will promptly notify 
the applicant that submittal of all exhibits and testimony of all 
witnesses to be sponsored by the applicant in support of his case-in-
chief is required. Submittal of these exhibits and testimony must be 
within 20 days from the date of the Secretary's notice, or any other 
time as the Secretary will specify. Exhibits, except exhibits F, F-1, G, 
G-I, and G-II, must be submitted to the Commission on electronic media 
as prescribed in Sec. 385.2011 of this chapter. Interveners and persons 
becoming

[[Page 567]]

interveners after the date of the Secretary's notice must be advised by 
the applicant of the afore-specified exhibits and testimony, and must be 
furnished with copies upon request. If this section requires an 
applicant to reveal Critical Energy Infrastructure Information (CEII), 
as defined by Sec. 388.113(c) of this chapter, to any person, the 
applicant shall follow the procedures set out in Sec. 157.10(d).
    (1) Exhibit A--Articles of incorporation and bylaws. If applicant is 
not an individual, a conformed copy of its articles of incorporation and 
bylaws, or other similar documents.
    (2) Exhibit B--State authorization. For each State where applicant 
is authorized to do business, a statement showing the date of 
authorization, the scope of the business applicant is authorized to 
carry on and all limitations, if any, including expiration dates and 
renewal obligations. A conformed copy of applicant's authorization to do 
business in each State affected shall be supplied upon request.
    (3) Exhibit C--Company officials. A list of the names and business 
addresses of applicant's officers and directors, or similar officials if 
applicant is not a corporation.
    (4) Exhibit D--Subsidiaries and affiliation. If applicant or any of 
its officers or directors, directly or indirectly, owns, controls, or 
holds with power to vote, 10 percent or more of the outstanding voting 
securities of any other person or organized group of persons engaged in 
production, transportation, distribution, or sale of natural gas, or of 
any person or organized group of persons engaged in the construction or 
financing of such enterprises or operations, a detailed explanation of 
each such relationship, including the percentage of voting strength 
represented by such ownership of securities. If any person or organized 
group of persons, directly or indirectly, owns, controls, or holds with 
power to vote, 10 percent or more of the outstanding voting securities 
of applicant--a detailed explanation of each such relationship.
    (5) Exhibit E--Other pending applications and filings. A list of 
other applications and filings under sections 1, 3, 4 and 7 of the 
Natural Gas Act filed by the applicant which are pending before the 
Commission at the time of the filing of an application and which 
directly and significantly affect the application filed, including an 
explanation of any material effect the grant or denial of those other 
applications and filings will have on the application and of any 
material effect the grant or denial of the application will have on 
those other applications and filings.
    (6) Exhibit F--Location of facilities. Unless shown on Exhibit G or 
elsewhere, a geographical map of suitable scale and detail showing, and 
appropriately differentiating between all of the facilities proposed to 
be constructed, acquired or abandoned and existing facilities of 
applicant, the operation or capacity of which will be directly affected 
by the proposed facilities or the facilities proposed to be abandoned. 
This map, or an additional map, shall clearly show the relationship of 
the new facilities to the applicant's overall system and shall include:
    (i) Location, length, and size of pipelines.
    (ii) Location and size (rated horsepower) of compressor stations.
    (iii) Location and designation of each point of connection of 
existing and proposed facilities with (a) main-line industrial 
customers, gas pipeline or distribution systems, showing towns and 
communities served and to be served at wholesale and retail, and (b) 
gas-producing and storage fields, or other sources of gas supply.
    (6-a) Exhibit F-I--Environmental report. An environmental report as 
specified in Sec. Sec. 380.3 and 380.12 of this chapter. Applicant must 
submit all appropriate revisions to Exhibit F-I whenever route or site 
changes are filed. These revisions should identify the locations by mile 
post and describe all other specific differences resulting from the 
route or site changes, and should not simply provide revised totals for 
the resources affected.
    (7) Exhibit G--Flow diagrams showing daily design capacity and 
reflecting operation with and without proposed facilities added. A flow 
diagram showing daily design capacity and reflecting operating 
conditions with only existing facilities in operation. A second flow 
diagram showing daily design capacity and reflecting operating 
conditions

[[Page 568]]

with both proposed and existing facilities in operation. Both flow 
diagrams shall include the following for the portion of the system 
affected:
    (i) Diameter, wall thickness, and length of pipe installed and 
proposed to be installed and the diameter and wall thickness of the 
installed pipe to which connection is proposed.
    (ii) For each proposed new compressor station and existing station, 
the size, type and number of compressor units, horsepower required, 
horsepower installed and proposed to be installed, volume of gas to be 
used as fuel, suction and discharge pressures, and compression ratio.
    (iii) Pressures and volumes of gas at the main line inlet and outlet 
connections at each compressor station.
    (iv) Pressures and volumes of gas at each intake and take-off point 
and at the beginning and terminus of the existing and proposed 
facilities and at the intake or take-off point of the existing 
facilities to which the proposed facilities are to be connected.
    (8) Exhibit G-I--Flow diagrams reflecting maximum capabilities. If 
Exhibit G does not reflect the maximum deliveries which applicant's 
existing and proposed facilities would be capable of achieving under 
most favorable operating conditions with utilization of all facilities, 
include an additional diagram or diagrams to depict such maximum 
capabilities. If the horsepower, pipelines, or other facilities on the 
segment of applicant's system under consideration are not being fully 
utilized due, e.g., to capacity limitation of connecting facilities or 
because of the need for standby or spare equipment, the reason for such 
nonutilization shall be stated.
    (9) Exhibit G-II--Flow diagram data. Exhibits G and G-I shall be 
accompanied by a statement of engineering design data in explanation and 
support of the diagrams and the proposed project, setting forth:
    (i) Assumptions, bases, formulae, and methods used in the 
development and preparation of such diagrams and accompanying data.
    (ii) A description of the pipe and fittings to be installed, 
specifying the diameter, wall thickness, yield point, ultimate tensile 
strength, method of fabrication, and methods of testing proposed.
    (iii) When lines are looped, the length and size of the pipe in each 
loop.
    (iv) Type, capacity, and location of each natural gas storage field 
or facility, and of each dehydration, desulphurization, natural gas 
liquefaction, hydrocarbon extraction, or other similar plant or facility 
directly attached to the applicant's system, indicating which of such 
plants are owned or operated by applicant, and which by others, giving 
their names and addresses.
    (v) If the daily design capacity shown in Exhibit G is predicated 
upon an ability to meet each customer's maximum contract quantity on the 
same day, explain the reason for such coincidental peak-day design. If 
the design day capacity shown in Exhibit G is predicated upon an assumed 
diversity factor, state that factor and explain its derivation.
    (vi) The maximum allowable operating pressure of each proposed 
facility for which a certificate is requested, as permitted by the 
Department of Transportation's safety standards. The applicant shall 
certify that it will design, install, inspect, test, construct, operate, 
replace, and maintain the facilities for which a certificate is 
requested in accordance with Federal safety standards and plans for 
maintenance and inspection or shall certify that it has been granted a 
waiver of the requirements of the safety standards by the Department of 
Transportation in accordance with the provisions of section 3(e) of the 
Natural Gas Pipeline Safety Act of 1968. Pertinent details concerning 
the waiver shall be set forth.
    (10) Exhibit H--Total gas supply data. A statement by applicant 
describing:
    (i) Those production areas accessible to the proposed construction 
that contain sufficient existing or potential gas supplies for the 
proposed project; and
    (ii) How those production areas are connected to the proposed 
construction.
    (11) Exhibit I--Market data. A system-wide estimate of the volumes 
of gas to be delivered during each of the first 3 full years of 
operation of the proposed service, sale, or facilities and during the 
years when the proposed facilities

[[Page 569]]

are under construction, and actual data of like import for each of the 3 
years next preceding the filing of the application, together with:
    (i) Names and locations of customer companies and municipalities, 
showing the number of residential, commercial, firm industrial, 
interruptible industrial, residential space-heating, commercial space-
heating, and other types of customers for each distribution system to be 
served at retail or wholesale; and the names and locations of each firm 
and interruptible direct industrial customer whose estimated consumption 
totals 10,000 Mcf or more in any calendar month or 100,000 Mcf or more 
per year together with an explanation of the end use to which each of 
these industrial customers will put the gas.
    (ii) Applicant's total annual and peak day gas requirements by 
classification of service in paragraph (a)(11)(i) of this section, 
divided as follows: Gas requirements (a) for each distribution area 
where gas is sold by applicant at retail; (b) for each wholesale 
customer; (c) for all main line direct industrial customers; and (d) 
company use and unaccounted-for gas, for both the applicant and each 
wholesale customer.
    (iii) Total past and expected curtailments of service by the 
applicant and each wholesale customer proposing to receive new or 
additional supplies of gas from the project, all to be listed by the 
classifications of service in paragraph (a)(11)(i) of this section.
    (iv) Explanation and derivation of basic factors used in estimating 
future requirements, including, for example: Peak-day and annual degree-
day deficiencies, annual load factors of applicant's system and of its 
deliveries to its proposed customers; individual consumer peak-day and 
annual consumption factors for each class of consumers, with supporting 
historical data; forecasted saturation of space-heating as related to 
past experience; and full detail as to all other sources of gas supply 
available to applicant and to each of its customers, including 
manufacturing facilities and liquid petroleum gas.
    (v) Conformed copy of each contract, letter of intent or other 
agreement for sale or transportation of natural gas proposed by the 
application. Indicate the rate to be charged. If no agreements have been 
made, indicate the basis for assuming that contracts will be consummated 
and that service will be rendered under the terms contemplated in the 
application.
    (vi) A full description of all facilities, other than those covered 
by the application, necessary to provide service in the communities to 
be served, the estimated cost of such facilities, by whom they are to be 
constructed, and evidence of economic feasibility.
    (vii) A copy of each market survey made within the past three years 
for such markets as are to receive new or increased service from the 
project applied for.
    (viii) A statement showing the franchise rights of applicant or 
other person to distribute gas in each community in which service is 
proposed.
    (ix) When an application requires a statement of total peak-day or 
annual market requirements of affiliates, whose operations are 
integrated with those of applicant, to demonstrate applicant's ability 
to provide the service proposed or to establish a gas supply, estimates 
and data required by this subparagraph shall also be stated in like 
detail for such affiliates.
    (x) When the proposed project is for service which would not 
decrease the life index of the total system gas supply by more than one 
year, the data required in paragraphs (a)(11) (i) to (ix), inclusive, of 
this section need be submitted only as to the particular market to 
receive new or additional service.
    (12) Exhibit J--Federal authorizations. A statement identifying each 
Federal authorization that the proposal will require; the Federal agency 
or officer, or State agency or officer acting pursuant to delegated 
Federal authority, that will issue each required authorization; the date 
each request for authorization was submitted; why any request was not 
submitted and the date submission is expected; and the date by which 
final action on each Federal authorization has been requested or is 
expected.
    (13) Exhibit K--Cost of facilities. A detailed estimate of total 
capital cost of the proposed facilities for which application is made, 
showing cost of construction by operating units such as

[[Page 570]]

compressor stations, main pipelines, laterals, measuring and regulating 
stations, and separately stating the cost of right-of-way, damages, 
surveys, materials, labor, engineering and inspection, administrative 
overhead, fees for legal and other services, allowance for funds used 
during construction, and contingencies. Include a brief statement 
indicating the source of information used as the basis for the above 
estimate. If not otherwise set forth, submit data on preliminary bids, 
if any, for the proposed facilities and recent experienced cost data for 
facilities of similar character.
    (14) Exhibit L--Financing. Plans for financing the proposed 
facilities for which the application is filed, together with:
    (i) A description of the class (e.g., commercial paper, long-term 
debt, preferred stock) and cost rates for securities expected to be 
issued with construction period and post- operational sources of 
financing separately identified.
    (ii) Statement of anticipated cash flow, including provision during 
the period of construction and the first 3 full years of operation of 
proposed facilities for interest requirements, dividends, and capital 
requirements.
    (iii) A balance sheet and income statement (12 months) of most 
recent data available.
    (iv) Comparative pro forma balance sheets and income statements for 
the period of construction and each of the first 3 full years of 
operation, giving effect to the proposed construction and proposed 
financing of the project.
    (v) Any additional data and information upon which applicant 
proposes to rely in showing the adequacy and availability of resources 
for financing its proposed project.
    (vi) In instances for which principal operations of the company have 
not commenced or where proposed rates for services are developed on an 
incremental basis, a brief statement explaining how the applicant will 
determine the actual allowance for funds used during construction 
(AFUDC) rate, or if a rate is not to be used, how the applicant will 
determine the actual amount of AFUDC to be capitalized as a component of 
construction cost, and why the method is appropriate under the 
circumstances.
    (15) Exhibit M--Construction, operation, and management. A concise 
statement setting forth arrangements for supervision, management, 
engineering, accounting, legal, or other similar service to be rendered 
in connection with the construction or operation of the project, if not 
to be performed by employees of applicant, including reference to any 
existing or contemplated agreements therefor, together with:
    (i) A statement showing affiliation between applicant and any 
parties to such agreements or arrangements. See Exhibit D, paragraph 
(a)(4) of this section.
    (ii) Conformed copies of all construction, engineering, management, 
and other similar service agreements or contracts in any way operative 
with respect to construction, operation, or financing of facilities 
which are the subject of the application or will be applicable under 
system operations.
    (16) Exhibit N--Revenues--Expenses--Income. When the estimated 
revenues and expenses related to a proposed facility will significantly 
affect the operating revenues or operating expenses of an applicant, 
there shall be submitted a system-wide statement for the last year 
preceding the proposed construction or service and pro forma system-wide 
and incremental statements for each of the first three full years of 
operation of the proposed facilities, showing:
    (i) Gas system annual revenues and volumes of natural gas related 
thereto, subdivided by classes of service, and further subdivided by 
sales to direct industrial customers, sales to other gas utilities, and 
other sales, indicating billing quantities used for computing charges, 
e. g., actual demands, billing demands, volumes, heat-content adjustment 
or other determinants. In addition, if enlargement or extension of 
facilities is involved, the revenues attributable solely to the proposed 
facilities shall be stated separately, and the basis and data used in 
such computation shall be clearly shown.
    (ii) Gas system annual operating expenses classified in accordance 
with the Commission's Uniform System of Accounts for Natural Gas 
Companies;

[[Page 571]]

the annual depreciation, depletion, taxes, utility income, and resulting 
rate of return on net investment in gas plant including working capital. 
In addition if enlargement or extension of facilities is involved, the 
cost of service attributable solely to the proposed facilities shall be 
stated separately with supporting data.
    (iii) When the data required in paragraphs (a)(16)(i) and (ii) of 
this section is not submitted, applicant shall provide in lieu thereof a 
statement in sufficient detail to show clearly the effect on the 
operating revenues and operating expenses of the estimated revenues and 
expenses related to the proposed facility.
    (17) Exhibit O--Depreciation and depletion. Depreciation and 
depletion rates to be established, the method of determination and the 
justification therefor.
    (18) Exhibit P--Tariff. (i) A statement of the rates to be charged 
for the proposed sales or service, including:
    (a) Identification of the applicable presently effective rate 
schedules, when no additional tariff filings will be required, or
    (b) When changes are required in applicant's presently effective 
tariff, or if applicant has no tariff, pro forma copies of appropriate 
changes in or additions to the effective tariff or a pro forma copy of 
the new gas tariff proposed, or
    (c) When a new rate is proposed, a statement explaining the basis 
used in arriving at the proposed rate. Such statement shall clearly show 
whether such rate results from negotiation, cost-of-service 
determination, competitive factors or others, and shall give the nature 
of any studies which have been made in connection therewith.
    (ii) When new rates or changes in present rates are proposed or when 
the proposed facilities will result in a material change in applicant's 
average cost of service, such statement shall be accompanied by 
supporting data showing:
    (a) System cost of service for the first calendar year of operation 
after the proposed facilities are placed in service.
    (b) An allocation of such costs to each particular service 
classification, with the basis for each allocation clearly stated.
    (c) The proposed rate base and rate of return.
    (d) Gas operating expenses, segregated functionally by accounts.
    (e) Depletion and depreciation.
    (f) Taxes with the basis upon which computed.
    (b) Additional exhibits. Applicant shall submit additional exhibits 
necessary to support or clarify its application. Such exhibits shall be 
identified and designated as provided by Sec. 157.6(b)(6).
    (c) Additional information. Upon request by the Secretary, prior to 
or during hearing upon the application, applicant shall submit such 
additional data, information, exhibits, or other detail as may be 
specified. An original and 7 conformed copies of such additional 
information shall be furnished to the Commission. The Commission 
reserves the right to request additional copies.
    (d) Availability of Commission staff for advice prior to formal 
filing. Prior to filing an application, any person may informally confer 
with the staff of the Commission to obtain advice on any problem of 
statement or presentation of an application or any part thereof.

(Secs. 3(e), 7, 8, 82 Stat. 721, 725 (49 U.S.C. 1672, 1676, 1677; 
Natural Gas Act (15 U.S.C. 717-717w); Natural Gas Policy Act (15 U.S.C. 
3301-3432); Department of Energy Organization Act (42 U.S.C. 7101-7352); 
E.O. 12009, 3 CFR 142)

[17 FR 7387, Aug. 14, 1952]

    Editorial Note: For Federal Register citations affecting Sec. 
157.14, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 157.15  Requirements for applications covering acquisitions.

    An application for a certificate authorizing acquisition of 
facilities, in addition to complying with the applicable provisions of 
Sec. Sec. 157.5 through 157.14, shall include a statement showing:
    (a) The exact legal name of the vendor, lessor, or other party in 
interest (hereinafter referred to as ``vendor'') the State or other laws 
under which vendor was organized, location of vendor's principal place 
of business, and a description of the business, operation

[[Page 572]]

or property of vendor covered by the application.
    (b) Any certificate from the Commission, held by vendor, relating 
directly to the facilities which applicant seeks to acquire, citing the 
order, date thereof, docket designation, and title of the proceeding; 
reference to and designation of any companion applications by vendor for 
permission and approval pursuant to section 7(b) of the Natural Gas Act.
    (c) The manner in which the facilities are to be acquired, the 
consideration to be paid, the method of arriving at the amount thereof, 
and anticipated expenses in addition to the consideration.
    (d) The facilities to be acquired, their present use, their proposed 
use after acquisition, and whether they constitute all of vendor's 
facilities.
    (e) Any franchise, license, or permit respecting the facilities 
involved, showing expiration date thereof, and the effect of the 
proposed acquisition thereon.

[17 FR 7389, Aug. 14, 1952]



Sec. 157.16  Exhibits relating to acquisitions.

    In addition to the exhibits required by Sec. 157.14, every 
application involving acquisition of facilities must be accompanied by 
the exhibits listed below. Together with each exhibit applicant must 
provide a full and complete explanation of the data submitted, the 
manner in which it was obtained, and the reasons for the conclusions 
derived from the exhibits, unless the applicant includes a statement 
identifying the schedule and rate containing the required information 
and data filed as prescribed in Sec. 385.2011 of this chapter. If the 
Commission determines that a formal hearing upon the application is 
required or that testimony and hearing exhibits should be filed, the 
Secretary will promptly notify the applicant that submittal of all the 
exhibits and testimony of all witnesses to be sponsored by the applicant 
in support of his case-in-chief is required. Submittal of these exhibits 
and testimony must be within 20 days from the date of the Secretary's 
notice, or any other time specified by the Secretary in the notice. 
Sections 157.6(a) and 385.2011 of this chapter will govern the 
submissions required to be furnished to the Commission. Interveners and 
persons becoming interveners after the date of the Secretary's notice 
must be advised by the applicant of the afore-specified exhibits and 
testimony, and must be furnished with copies upon request. If this 
section requires an applicant to reveal Critical Energy Infrastructure 
Information (CEII), as defined by Sec. 388.113(c) of this chapter, to 
any person, the applicant shall follow the procedures set out in Sec. 
157.10(d).
    (a) Exhibit Q--Effect of acquisition on existing contracts and 
tariffs. A statement showing the effect of the proposed transaction upon 
any agreements for the purchase, sale, or interchange of natural gas, 
and upon any rate schedules or tariffs on file with this Commission, 
together with pro forma rate schedule sheets, notices of cancellation, 
or other tariff filings required to be made with this Commission.
    (b) Exhibit R--Acquisition contracts. A summary statement of all 
contracts, agreements or undertakings relating to the proposed 
acquisition, including:
    (1) A conformed copy of each contract or other agreement covering or 
relating to the acquisition of the facilities.
    (2) The names and addresses of all persons employed or to be 
employed concerning the transaction, including engineering, financial 
accounting, legal, or other services, and the compensation, fees, or 
other payments, paid or payable, to such persons.
    (3) A disclosure of affiliation between applicant and vendor or 
between either of them and any other party in interest in the proposed 
acquisition. See Exhibit D, Sec. 157.14(a)(4).
    (c) Exhibit S--Accounting. A statement showing:
    (1) The amounts recorded upon the books of the vendor, as being 
applicable to the facilities to be acquired, and the related 
depreciation, depletion, and amortization reserves. Include a brief 
statement explaining the basis or methods used to derive the related 
depreciation, depletion and amortization reserves.
    (2) The original cost of the facilities to be acquired, segregated 
by accounts

[[Page 573]]

prescribed in the Commission's Uniform System of Accounts for Natural 
Gas Companies; the method by which the original cost was determined; and 
whether such statement of original cost has been approved by any 
regulatory body.
    (3) If the original cost has not been determined, an estimate 
thereof, based upon records or data of vendor or its predecessors, 
together with an explanation of the manner in which such estimate was 
made and the name and address of the present custodian of all existing 
pertinent records and data.
    (4) The depreciation, depletion, and amortization reserve 
requirements applicable to the original cost of the facilities to be 
acquired, estimated service lives, the approximate average age of the 
facilities to which the depreciation reserve applies, the amortization 
period, and the depletion rates and estimated gas reserves upon which 
accruals to the depletion reserve are based.
    (5) The amount at which applicant proposes to record the facilities 
upon its books; the amount of the original cost to be recorded, the 
depreciation, depletion, and amortization reserves; and the acquisition 
adjustments, if any, together with applicant's proposed disposition of 
all adjustments.
    (6) Duplicate facilities to be acquired and retired, property which 
must be extensively rehabilitated, including a clear description of such 
property, the additional costs to be incurred, and the accounting 
therefor proposed.
    (7) A balance sheet of the company to be acquired as of the most 
recent date available, if the acquisition involved is by purchase of 
capital stock and liquidation of the acquired company.
    (8) A pro forma consolidating balance sheet, as of the date of the 
merger if the acquisition is by merger, showing the merging of the 
accounts and the adjustments relating thereto.

[17 FR 7389, Aug. 14, 1952, as amended by Order 493, 53 FR 15029, Apr. 
27, 1988; Order 603, 64 FR 26605, May 14, 1999; Order 643, 68 FR 52096, 
Sept. 2, 2003]



Sec. 157.17  Applications for temporary certificates in cases of emergency.

    In cases of emergency and pending the determination of any 
application on file with the Commission for a certificate of public 
convenience and necessity pursuant to section 7 of the Natural Gas Act, 
application may be made for a temporary certificate authorizing the 
construction and operation of extensions of existing facilities, 
interconnections of pipeline systems, or sales of natural gas that may 
be required to assure maintenance of adequate service, or to service 
particular customers. This application must be submitted in the manner 
prescribed in Sec. Sec. 157.6(a) and 385.2011 of this chapter.
    (a) Whenever the waiver provisions of Sec. 385.2011 of this chapter 
apply, the application must be submitted in writing, must be subscribed 
and verified by a responsible officer of applicant having knowledge of 
the facts, and must state clearly and specifically the exact character 
of the emergency, the proposed method of meeting it, and the facts 
claimed to warrant issuance of a temporary certificate.
    (b) The application must be submitted on electronic media as 
prescribed in Sec. 385.2011 of this chapter, must be subscribed and 
verified by a responsible officer of applicant having knowledge of the 
facts, and must state clearly and specifically the exact character of 
the emergency, the proposed method of meeting it, and the facts claimed 
to warrant issuance of a temporary certificate.

[Order 493, 53 FR 15029, Apr. 27, 1988, as amended by Order 493-B, 53 FR 
49653, Dec. 9, 1988; Order 603, 64 FR 26606, May 14, 1999]



Sec. 157.18  Applications to abandon facilities or service; exhibits.

    Applications for an order authorizing abandonment of facilities or 
service pursuant to section 7(b) of the Natural Gas Act must contain a 
statement providing in detail the reasons for the abandonment and must 
contain the exhibits listed below, unless the applicant includes a 
statement identifying the schedule and rate containing the required 
information and data filed as prescribed in Sec. 385.2011 of this 
chapter. Any application for an abandonment that is not excluded by 
Sec. 380.4(a)(28) or

[[Page 574]]

(29), must include an environmental report as specified by Sec. 
380.3(c)(2). Sections 157.6(a) and 385.2011 of this chapter will govern 
the submission of applications and exhibits required to be furnished. 
Together with each exhibit, applicant must provide a full and complete 
explanation of the data submitted, the manner in which it was obtained, 
and the reasons for the conclusions derived from the data. The Secretary 
may, in addition, require that the testimony of all witnesses to be 
presented by the applicant be filed together with all exhibits upon 
which applicant will base its case-in-chief.
    (a) Exhibit T--Related applications. A statement showing:
    (1) The docket numbers of the prior proceedings in which the 
facilities or services sought to be abandoned were certificated.
    (2) The docket numbers of related applications pending before or 
which have been authorized by the Commission with an explanation of the 
interrelationship of those applications with the instant application.
    (b) Exhibit U--Contracts and other agreements. A conformed copy of 
each contract or other agreement pertaining directly or indirectly to 
the abandonment of facilities or service, including all agreements which 
influenced applicant to seek the abandonment and all agreements which 
are dependent upon the approval of the proposed abandonment.
    (c) Exhibit V--Flow diagram showing daily design capacity and 
reflecting operation of applicant's system after abandonment. A flow 
diagram showing daily design capacity and reflecting operating 
conditions of applicant's system after abandonment of facilities on that 
segment of the system affected by the abandonment, including the 
following:
    (1) Diameter, wall thickness, and length of pipe remaining.
    (2) For each remaining compressor station, the size, type and number 
of compressor units, horsepower required, horsepower installed, volume 
of gas to be used as fuel, suction and discharge pressures, and 
compression ratio.
    (3) Pressures and volumes of gas at the main line inlet and outlet 
connections at each compressor station.
    (4) Pressures and volumes of gas at each intake and takeoff point 
and at the beginning and terminus of all remaining facilities.
    (d) Exhibit W--Impact on customers whose service will be terminated. 
A statement indicating the availability of natural gas from other 
sources to applicant's customers whose service will be terminated by the 
abandonment and a statement showing the economic effect of the 
abandonment on applicant's customers. If no other natural gas is 
available, indicate the availability of other fuels to those customers 
and explain why the abandonment of service to each customer is permitted 
by the public convenience and necessity.
    (e) Exhibit X--Effect of the abandonment on existing tariffs. A 
statement showing the effect of the proposed abandonment upon any rate 
schedules or tariffs on file with this Commission, together with pro 
forma rate schedule sheets, notices of cancellation, or other tariff 
filings required to be made with this Commission.
    (f) Exhibit Y--Accounting treatment of abandonment. Concisely 
describe the changes of property, indicating the cost of property to be 
abandoned in place, the cost of property to be removed and salvaged, the 
proposed disposition of salvaged material, and a description of 
equipment to be relocated setting forth its cost, its proposed new 
location, and the extent of rehabilitation required. Include the 
information required below.
    (1) State the proposed accounting treatment for property changes, 
showing, for example, retirements by primary plant accounts, cost of 
removal, salvage realized for materials and equipment sold, original 
cost of reusable materials and equipment recovered (see Account 154 of 
the Uniform System of Accounts), and maintenance costs for 
reconditioning of reusable materials and equipment.
    (2) If the abandonment will be by sale of property, describe the 
property to be sold, together with the proposed accounting treatment as 
required by paragraph F of Gas Plant Instruction 5 of the Uniform System 
of Accounts. Include a brief statement explaining the basis or methods 
used to derive the accumulated depreciation related to the

[[Page 575]]

property to be disposed of. Applicant may use pro forma accounting 
entries based on estimated amounts, provided that upon consummation of 
the sale he must file proposed accounting entries in conformity with the 
requirements of the Uniform System of Accounts. If the proposed sale 
will result in a taxable gain to the applicant, indicate the amount of 
federal and state income taxes to be allocated to the gain. If no 
allocation is to be made, explain the reasons.
    (3) State the amount of accumulated deferred income taxes 
attributable to the property to be abandoned and the tax basis of the 
property. Indicate the proposed accounting treatment of those 
accumulated deferred taxes.
    (g) Exhibit Z--Location of facilities. Unless shown on Exhibit V or 
elsewhere, a geographic map of suitable scale and detail showing, and 
appropriately differentiating between, all of the facilities proposed to 
be abandoned and the other existing facilities of applicant, the 
operation or capacity of which will be directly affected by the 
facilities to be abandoned. This map shall clearly show the relationship 
of the facilities to be abandoned to the applicant's overall system and 
shall include:
    (1) Location, length and size of pipelines.
    (2) Location and size (rated horsepower) of compressor stations.
    (3) Location and designation of each point of connection of existing 
facilities with (i) main line industrial and other consumers, pipeline 
or distribution companies and municipalities, indicating towns and 
communities served at wholesale or retail and (ii) gas-producing and 
storage fields, or other sources of gas supply. Designate on the map 
those facilities and services proposed to be abandoned.

[Order 280, 29 FR 4879, Apr. 7, 1964, as amended by Order 295, 30 FR 
4130, Mar. 30, 1965; Order 493, 53 FR 15029, Apr. 27, 1988; Order 603, 
64 FR 26606, May 14, 1999]



Sec. 157.20  General conditions applicable to certificates.

    Such of the following terms and conditions, among others, as the 
Commission shall find is required by the public convenience and 
necessity, shall attach to the issuance of each certificate and to the 
exercise of the rights granted thereunder.
    (a) The certificate shall be void and without force or effect unless 
accepted in writing by applicant within 30 days from the issue date of 
the order issuing such certificate: Provided, however, That when an 
application for rehearing of such order is filed in accordance with 
section 19 of the Natural Gas Act, such acceptance shall be filed within 
30 days from the issue date of the order of the Commission upon the 
application for rehearing or within 30 days from the date on which such 
application may be deemed to have been denied when the Commission has 
not acted on such application within 30 days after it has been filed: 
Provided further, That when a petition for review is filed in accordance 
with the provisions of section 19 of the Natural Gas Act, such 
acceptance shall be filed within 30 days after final disposition of the 
judicial review proceedings thus initiated.
    (b) Any authorized construction, extension, or acquisition shall be 
completed and made available for service by applicant and any authorized 
operation, service, or sale shall be available for regular performance 
by applicant within (period of time to be specified by the Commission in 
each order) from the issue date of the Commission's order issuing the 
certificate. Applicant shall notify the Commission in writing no later 
than 10 days after expiration of this time period that the end-user/
shipper is unable to meet the imposed timetable to commence service.
    (c) Applicant must file with the Commission, in writing and under 
oath, an original and four conformed copies, as prescribed in Sec. 
385.2011 of this chapter and, upon request must furnish an intervener 
with a single copy, of the following:
    (1) Within ten days after the bona fide beginning of construction, 
notice of the date of such beginning;
    (2) Within ten days after authorized facilities have been 
constructed and placed in service or any authorized operation, sale, or 
service has commenced, notice of the date of such placement and 
commencement and
    (3) Within six months after authorized facilities have been 
constructed, a

[[Page 576]]

statement showing, on the basis of all costs incurred to that date and 
estimated to be incurred for final completion of the project, the cost 
of constructing authorized facilities, such total costs to be classified 
according to the estimates submitted in the certificate proceeding and 
compared therewith and any significant differences explained.
    (d) With respect to an acquisition authorized by the certificate, 
applicant must file with the Commission, in writing and under oath, an 
original and four conformed copies as prescribed in Sec. 385.2011 of 
this chapter the following:
    (1) Within 10 days after acquisition and the beginning of authorized 
operations, notice of the dates of acquisition and the beginning of 
operations; and
    (2) Within 10 days after authorized facilities have been constructed 
and within 10 days after such facilities have been placed in service or 
any authorized operation, sale, or service has commenced, notice of the 
date of such completion, placement, and commencement, and
    (e) The certificate issued to applicant is not transferable in any 
manner and shall be effective only so long as applicant continues the 
operations authorized by the order issuing such certificate and in 
accordance with the provisions of the Natural Gas Act, as well as 
applicable rules, regulations, and orders of the Commission.
    (f) In the interest of safety and reliability of service, facilities 
authorized by the certificate shall not be operated at pressures 
exceeding the maximum operating pressure set forth in Exhibit G-II to 
the application as it may be amended prior to issuance of the 
certificate. In the event the applicant thereafter wishes to change such 
maximum operating pressure it shall file an appropriate petition for 
amendment of the certificate. Such petition shall include the reasons 
for the proposed change. Nothing contained herein authorizes a natural 
gas company to operate any facility at a pressure above the maximum 
prescribed by state law, if such law requires a lower pressure than 
authorized hereby.

(Sec. 20, 52 Stat. 832; 15 U.S.C. 717s)

[17 FR 7389, Aug. 14, 1952, as amended by Order 280, 29 FR 4879, Apr. 7, 
1964; Order 317, 31 FR 432, Jan. 13, 1966; Order 324, 31 FR 9348, July 
8, 1966; Order 493, 53 FR 15030, Apr. 27, 1988; Order 493-B, 53 FR 
49653, Dec. 9, 1988; Order 603, 64 FR 26606, May 14, 1999]



Sec. 157.21  Pre-filing procedures and review process for LNG terminal 

facilities and other natural gas facilities prior to filing of applications.

    (a) LNG terminal facilities and related jurisdictional natural gas 
facilities. A prospective applicant for authorization to site, construct 
and operate facilities included within the definition of ``LNG 
terminal,'' as defined in Sec. 153.2(d), and any prospective applicant 
for related jurisdictional natural gas facilities must comply with this 
section's pre-filing procedures and review process. These mandatory pre-
filing procedures also shall apply when the Director finds in accordance 
with paragraph (e)(2) of this section that prospective modifications to 
an existing LNG terminal are modifications that involve significant 
state and local safety considerations that have not been previously 
addressed. Examples of such modifications include, but are not limited 
to, the addition of LNG storage tanks; increasing throughput requiring 
additional tanker arrivals or the use of larger vessels; or changing the 
purpose of the facility from peaking to base load. When a prospective 
applicant is required by this paragraph to comply with this section's 
pre-filing procedures:
    (1) The prospective applicant must make a filing containing the 
material identified in paragraph (d) of this section and concurrently 
file a Letter of Intent pursuant to 33 CFR 127.007, and a Preliminary 
Waterway Suitability Assessment (WSA) with the U.S. Coast Guard (Captain 
of the Port/Federal Maritime Security Coordinator). The latest 
information concerning the documents to be filed with the Coast Guard 
should be requested from the U.S. Coast Guard. For modifications to an 
existing or approved LNG terminal, this requirement can be satisfied by 
the prospective applicant's certifying

[[Page 577]]

that the U.S. Coast Guard did not require such information.
    (2) An application:
    (i) Shall not be filed until at least 180 days after the date that 
the Director issues notice pursuant to paragraph (e) of this section of 
the commencement of the prospective applicant's pre-filing process; and
    (ii) Shall contain all the information specified by the Commission 
staff after reviewing the draft materials filed by the prospective 
applicant during the pre-filing process, including required 
environmental material in accordance with the provisions of part 380 of 
this chapter, ``Regulations Implementing the National Environmental 
Policy Act.''
    (3) The prospective applicant must provide sufficient information 
for the pre-filing review of any pipeline or other natural gas 
facilities, including facilities not subject to the Commission's Natural 
Gas Act jurisdiction, which are necessary to transport regassified LNG 
from the subject LNG terminal facilities to the existing natural gas 
pipeline infrastructure.
    (b) Other natural gas facilities. When a prospective applicant for 
authorization for natural gas facilities is not required by paragraph 
(a) of this section to comply with this section's pre-filing procedures, 
the prospective applicant may file a request seeking approval to use the 
pre-filing procedures.
    (1) A request to use the pre-filing procedures must contain the 
material identified in paragraph (d) of this section unless otherwise 
specified by the Director as a result of the Initial Consultation 
required pursuant to paragraph (c) of this subsection; and
    (2) If a prospective applicant for non-LNG terminal facilities is 
approved to use this section's pre-filing procedures:
    (i) The application will normally not be filed until at least 180 
days after the date that the Director issues notice pursuant to 
paragraph (e)(3) of this section approving the prospective applicant's 
request to use the pre-filing procedures under this section and 
commencing the prospective applicant's pre-filing process. However, a 
prospective applicant approved by the Director pursuant to paragraph 
(e)(3) of this section to undertake the pre-filing process is not 
prohibited from filing an application at an earlier date, if necessary; 
and
    (ii) The application shall contain all the information specified by 
the Commission staff after reviewing the draft materials filed by the 
prospective applicant during the pre-filing process, including required 
environmental material in accordance with the provisions of part 380 of 
this chapter, ``Regulations Implementing the National Environmental 
Policy Act.''
    (c) Initial consultation. A prospective applicant required or 
potentially required or requesting to use the pre-filing process must 
first consult with the Director on the nature of the project, the 
content of the pre-filing request, and the status of the prospective 
applicant's progress toward obtaining the information required for the 
pre-filing request described in paragraph (d) of this section. This 
consultation will also include discussion of the specifications for the 
applicant's solicitation for prospective third-party contractors to 
prepare the environmental documentation for the project, and whether a 
third-party contractor is likely to be needed for the project.
    (d) Contents of the initial filing. A prospective applicant's 
initial filing pursuant to paragraph (a)(1) of the section for LNG 
terminal facilities and related jurisdictional natural gas facilities or 
paragraph (b)(1) of this section for other natural gas facilities shall 
include the following information:
    (1) A description of the schedule desired for the project including 
the expected application filing date and the desired date for Commission 
approval.
    (2) For LNG terminal facilities, a description of the zoning and 
availability of the proposed site and marine facility location.
    (3) For natural gas facilities other than LNG terminal facilities 
and related jurisdictional natural gas facilities, an explanation of why 
the prospective applicant is requesting to use the pre-filing process 
under this section.
    (4) A detailed description of the project, including location maps 
and plot plans to scale showing all major plant components, that will 
serve as

[[Page 578]]

the initial discussion point for stakeholder review.
    (5) A list of the relevant federal and state agencies in the project 
area with permitting requirements. For LNG terminal facilities, the list 
shall identify the agency designated by the governor of the state in 
which the project will be located to consult with the Commission 
regarding state and local safety considerations. The filing shall 
include a statement indicating:
    (i) That those agencies are aware of the prospective applicant's 
intention to use the pre-filing process (including contact names and 
telephone numbers);
    (ii) Whether the agencies have agreed to participate in the process;
    (iii) How the applicant has accounted for agency schedules for 
issuance of federal authorizations; and
    (iv) When the applicant proposes to file with these agencies for 
their respective permits or other authorizations.
    (6) A list and description of the interest of other persons and 
organizations who have been contacted about the project (including 
contact names and telephone numbers).
    (7) A description of what work has already been done, e.g., 
contacting stakeholders, agency consultations, project engineering, 
route planning, environmental and engineering contractor engagement, 
environmental surveys/studies, and open houses. This description shall 
also include the identification of the environmental and engineering 
firms and sub-contractors under contract to develop the project.
    (8) For LNG terminal projects, proposals for at least three 
prospective third-party contractors from which Commission staff may make 
a selection to assist in the preparation of the requisite NEPA document.
    (9) For natural gas facilities other than LNG terminal facilities 
and related jurisdictional natural gas facilities, proposals for at 
least three prospective third-party contractors from which Commission 
staff may make a selection to assist in the preparation of the requisite 
NEPA document, or a proposal for the submission of an applicant-prepared 
draft Environmental Assessment as determined during the initial 
consultation described in paragraph (c) of this section.
    (10) Acknowledgement that a complete Environmental Report and 
complete application are required at the time of filing.
    (11) A description of a Public Participation Plan which identifies 
specific tools and actions to facilitate stakeholder communications and 
public information, including a project website and a single point of 
contact. This plan shall also describe how the applicant intends to 
respond to requests for information from federal and state permitting 
agencies, including, if applicable, the governor's designated agency for 
consultation regarding state and local safety considerations with 
respect to LNG facilities.
    (12) Certification that a Letter of Intent and a Preliminary WSA 
have been submitted to the U.S. Coast Guard or, for modifications to an 
existing or approved LNG terminal, that the U.S. Coast Guard did not 
require such information.
    (e) Director's notices. (1) When the Director finds that a 
prospective applicant for authority to site and construct a new LNG 
terminal has adequately addressed the requirements of paragraphs (a), 
(c) and (d) of this section, the Director shall issue a notice of such 
finding. Such notice shall designate the third-party contractor. The 
pre-filing process shall be deemed to have commenced on the date of the 
Director's notice, and the date of such notice shall be used in 
determining whether the date an application is filed is at least 180 
days after commencement of the pre-filing process.
    (2) When the Director finds that a prospective applicant for 
authority to make modifications to an existing or approved LNG terminal 
has adequately addressed the requirements of paragraphs (a), (c) and (d) 
of this section, the Director shall issue a notice making a 
determination whether prospective modifications to an existing LNG 
terminal shall be subject to this section's pre-filing procedures and 
review process. Such notice shall designate the third-party contractor, 
if appropriate. If the Director determines that the prospective 
modifications are significant modifications that involve

[[Page 579]]

state and local safety considerations, the Director's notice will state 
that the pre-filing procedures shall apply, and the pre-filing process 
shall be deemed to have commenced on the date of the Director's notice 
in determining whether the date an application is filed is at least 180 
days after commencement of the pre-filing process.
    (3) When a prospective applicant requests to use this section's pre-
filing procedures and review for facilities not potentially subject to 
this section's mandatory requirements, the Director shall issue a notice 
approving or disapproving use of the pre-filing procedures of this 
section and determining whether the prospective applicant has adequately 
addressed the requirements of paragraphs (b), (c) and (d) of this 
section. Such notice shall designate the third-party contractor, if 
appropriate. The pre-filing process shall be deemed to have commenced on 
the date of the Director's notice, and the date of such notice shall be 
used in determining whether the date an application is filed is at least 
180 days after commencement of the pre-filing process.
    (f) Upon the Director's issuance of a notice commencing a 
prospective applicant's pre-filing process, the prospective applicant 
must:
    (1) Within seven days and after consultation with Commission staff, 
establish the dates and locations at which the prospective applicant 
will conduct open houses and meetings with stakeholders (including 
agencies) and Commission staff.
    (2) Within 14 days, conclude the contract with the selected third-
party contractor.
    (3) Within 14 days, contact all stakeholders not already informed 
about the project, including all affected landowners as defined in 
paragraph Sec. 157.6(d)(2) of this section.
    (4) Within 30 days, submit a stakeholder mailing list to Commission 
staff.
    (5) Within 30 days, file a draft of Resource Report 1, in accordance 
with Sec. 380.12(c), and a summary of the alternatives considered or 
under consideration.
    (6) On a monthly basis, file status reports detailing the 
applicant's project activities including surveys, stakeholder 
communications, and agency meetings.
    (7) Be prepared to provide a description of the proposed project and 
to answer questions from the public at the scoping meetings held by OEP 
staff.
    (8) Be prepared to attend site visits and other stakeholder and 
agency meetings arranged by the Commission staff, as required.
    (9) Within 14 days of the end of the scoping comment period, respond 
to issues raised during scoping.
    (10) Within 60 days of the end of the scoping comment period, file 
draft Resource Reports 1 through 12.
    (11) At least 60 days prior to filing an application, file revised 
draft Resource Reports 1 through 12, if requested by Commission staff.
    (12) At least 90 days prior to filing an application, file draft 
Resource Report 13 (for LNG terminal facilities).
    (13) Certify that a Follow-on WSA will be submitted to the U.S. 
Coast Guard no later than the filing of an application with the 
Commission (for LNG terminal facilities and modifications thereto, if 
appropriate). The applicant shall certify that the U.S. Coast Guard has 
indicated that a Follow-On WSA is not required, if appropriate.
    (g) Commission staff and third-party contractor involvement during 
the pre-filing process will be designed to fit each project and will 
include some or all of the following:
    (1) Assisting the prospective applicant in developing initial 
information about the proposal and identifying affected parties 
(including landowners, agencies, and other interested parties).
    (2) Issuing an environmental scoping notice and conducting such 
scoping for the proposal.
    (3) Facilitating issue identification and resolution.
    (4) Conducting site visits, examining alternatives, meeting with 
agencies and stakeholders, and participating in the prospective 
applicant's public information meetings.
    (5) Reviewing draft Resource Reports.
    (6) Initiating the preparation of a preliminary Environmental 
Assessment or Draft Environmental Impact Statement, the preparation of 
which

[[Page 580]]

may involve cooperating agency review.
    (h) A prospective applicant using the pre-filing procedures of this 
section shall comply with the procedures in Sec. 388.112 for the 
submission of documents containing critical energy infrastructure 
information, as defined in Sec. 388.113.

[Order 665, 70 FR 60440, Oct. 18, 2005, as amended by Order 756, 77 FR 
4894, Feb. 1, 2012]



Sec. 157.22  Schedule for final decisions on a request for a Federal 

authorization

    For an application under section 3 or 7 of the Natural Gas Act that 
requires a Federal authorization--i.e., a permit, special use 
authorization, certification, opinion, or other approval--from a Federal 
agency or officer, or State agency or officer acting pursuant to 
delegated Federal authority, a final decision on a request for a Federal 
authorization is due no later than 90 days after the Commission issues 
its final environmental document, unless a schedule is otherwise 
established by Federal law.

[Order 687, 71 FR 62921, Oct. 27, 2006]



  Subpart B_Open Seasons for Alaska Natural Gas Transportation Projects

    Source: Order 2005, 70 FR 8286, Feb. 18, 2005, unless otherwise 
noted.



Sec. 157.30  Purpose.

    This subpart establishes the procedures for conducting open seasons 
for the purpose of making binding commitments for the acquisition of 
initial or voluntary expansion capacity on Alaska natural gas 
transportation projects, as defined herein.



Sec. 157.31  Definitions.

    (a) ``Alaska natural gas transportation project'' means any natural 
gas pipeline system that carries Alaska natural gas to the international 
border between Alaska and Canada (including related facilities subject 
to the jurisdiction of the Commission) that is authorized under the 
Alaska Natural Gas Transportation Act of 1976 or section 103 of the 
Alaska Natural Gas Pipeline Act.
    (b) ``Commission'' means the Federal Energy Regulatory Commission.
    (c) ``Voluntary expansion'' means any expansion in capacity of an 
Alaska natural gas transportation project above the initial certificated 
capacity, including any increase in mainline capacity, any extension of 
mainline pipeline facilities, and any lateral pipeline facilities beyond 
those certificated in the initial certificate order, voluntarily made by 
the pipeline. An expansion done pursuant to section 105 of the Alaska 
Natural Gas Pipeline Act is not a voluntary expansion.



Sec. 157.32  Applicability.

    These regulations shall apply to any application to the Commission 
for a certificate of public convenience and necessity or other 
authorization for an Alaska natural gas transportation project, whether 
filed pursuant to the Natural Gas Act, the Alaska Natural Gas 
Transportation Act of 1976, or the Alaska Natural Gas Pipeline Act, and 
to applications for expansion of such projects. Absent a Commission 
order to the contrary, these regulations are not applicable in the case 
of an expansion ordered by the Commission pursuant to section 105 of the 
Alaska Natural Gas Pipeline Act.



Sec. 157.33  Requirement for open season.

    (a) Any application for a certificate of public convenience and 
necessity or other authorization for a proposed Alaska natural gas 
transportation project must include a demonstration that the applicant 
has conducted an open season for capacity on its proposed project, in 
accordance with the requirements of this subpart. Failure to provide the 
requisite demonstration will result in an application being rejected as 
incomplete.
    (b) Initial capacity on a proposed Alaska natural gas transportation 
project may be acquired prior to an open season through pre-subscription 
agreements, provided that in any open season as required in paragraph 
(a) of this section, capacity is offered to all prospective bidders at 
the same rates and on the same terms and conditions as contained in the 
pre-subscription

[[Page 581]]

agreements. All pre-subscription agreements shall be made public by 
posting on Internet websites and press releases within ten days of their 
execution. In the event there is more than one such agreement, all 
prospective bidders shall be allowed the option of selecting among the 
several agreements all of the rates, terms and conditions contained in 
any one such agreement.

[Order 2005, 70 FR 8286, Feb. 18, 2005, as amended by Order 2005-A, 70 
FR 35026, June 16, 2005]



Sec. 157.34  Notice of open season.

    (a) Notice. A prospective applicant must provide reasonable public 
notice of an open season through methods including postings on Internet 
Web sites, press releases, direct mail solicitations, and other 
advertising. In addition, a prospective applicant must provide actual 
notice of an open season to the State of Alaska and to the Federal 
Coordinator for Alaska Natural Gas Transportation Projects.
    (b) In-State Needs Study. A prospective applicant must conduct or 
adopt a study of gas consumption needs and prospective points of 
delivery within the State of Alaska and rely upon such study to develop 
the contents of the notice required in paragraph (a) of this section. 
Such study shall be identified in the notice and if practicable, shall 
include or consist of a study conducted, approved, or otherwise 
sanctioned by an appropriate governmental agency, office or commission 
of the State of Alaska. In its open season proposal, a prospective 
applicant shall include an estimate based upon the study, of how much 
capacity will be used in-state.
    (c) Contents of notice. Notice of the open season required in 
paragraph (a) of this section, shall contain at least the following 
information; however, to the extent that any item of such information is 
not known or determined at the time the notice is issued, the 
prospective applicant shall make a good faith estimate based on the best 
information available of all such unknown or undetermined items of 
required information and further, must identify the source of 
information relied on, explain why such information is not presently 
known, and update the information when and if it is later determined 
during the open season period:
    (1) The general route of the proposed project, including receipt and 
delivery points, and any alternative routes under consideration; 
delivery points must include those within the State of Alaska as 
determined by the In-State Study in paragraph (b) of this section.
    (2) Size and design capacity (including proposed certificate 
capacity at the delivery points named in paragraph (c)(1) of this 
section to the extent that it differs from design capacity), a 
description of possible designs for expanded capacity beyond initial 
capacity, together with any estimated date when such expansions designs 
may be considered;
    (3) Maximum allowable operating pressure and expected actual 
operating pressure;
    (4) Delivery pressure at all delivery points named in paragraph 
(c)(1) of this section;
    (5) Projected in-service date;
    (6) An estimated unbundled transportation rate for each delivery 
point named in paragraph (c)(1) of this section, stated on a volumetric 
or thermal basis, for each service offered, including reservation rates 
for pipeline capacity, interruptible transportation rates, usage rates, 
fuel retention percentages, and other applicable charges, or surcharges, 
such as the Annual Charge Adjustment (ACA); (if rates are estimated on a 
volumetric basis then the notice must inform bidders that final pro 
forma service agreements and the sponsor's proposed FERC tariff will 
have to be submitted with rates based on a thermal basis.)
    (7) The estimated cost of service (i.e., estimated cost of 
facilities, depreciation, rate of return and capitalization, taxes and 
operational and maintenance expenses), and estimated cost allocations, 
rate design volumes and rate design;
    (8) Based on the In-State Study and the delivery points within the 
State of Alaska identified in paragraph (c)(1) of this section, there 
must be an estimated transportation rate for such deliveries, based on 
the amount of in-state needs shown in the study. Such estimated 
transportation rate must be based on the costs to make such in-

[[Page 582]]

state deliveries and shall not include costs to make deliveries outside 
the State of Alaska;
    (9) Negotiated rate and other rate options under consideration, 
including any rates and terms of any precedent agreements with 
prospective anchor shippers that have been negotiated or agreed to 
outside of the open season process prescribed in this section;
    (10) Quality specifications and any other requirements applicable to 
gas to be delivered to the project; provided that a prospective 
applicant shall not require that potential shippers process or treat 
their gas at any designated plant or facility;
    (11) Terms and conditions for each service offered;
    (12) Creditworthiness standards to be applied to, and any collateral 
requirements for, prospective shippers;
    (13) The date, if any, by which potential shippers and the 
prospective applicant must execute precedent agreements;
    (14) A detailed methodology for determining the value of bids for 
deliveries within the State of Alaska and for deliveries outside the 
State of Alaska;
    (15) The methodology by which capacity will be awarded, in the case 
of over-subscription, clearly stating all terms that will be considered, 
except that if any capacity is acquired through pre-subscription 
agreements as provided in Sec. 157.33(b) and the prospective applicant 
does not redesign the project to accommodate all capacity requests, only 
that capacity that was acquired through pre-subscription or was bid in 
the open season on the same rates, terms, and conditions as any one of 
the pre-subscription agreements shall be allocated on a pro rata basis 
and no other capacity acquired through the open season shall be 
allocated.
    (16) Required bid information, whether bids are binding or non-
binding, receipt and delivery point requirements, the form of a 
precedent agreement and time of execution of the precedent agreement, 
definition and treatment of non-conforming bids;
    (17) The projected date for filing an application with the 
Commission;
    (18) All information that the prospective applicant has in its 
possession pertaining to the proposed service to be offered, projected 
pipeline capacity and design, proposed tariff provisions, and cost 
projections, or that the prospective applicant has made available to, or 
obtained from, any potential shipper, including any affiliates of the 
project sponsor and any shippers with pre-subscribed capacity, prior to 
the issuance of the public notice of open season;
    (19) A list of the names and addresses of the prospective 
applicant's affiliated sales and marketing units and affiliates involved 
in the production of natural gas in the State of Alaska. Affiliated unit 
means ``Affiliate'' as defined in Sec. 358.3(a) of this chapter. 
Marketing units and or affiliates are those conducting a ``marketing 
function'' as defined in Sec. 358.3(c) of this chapter, except that the 
exemption in Sec. 358.3(c)(2)(iii) shall not apply;
    (20) A comprehensive organizational chart showing:
    (i) The organizational structure of the prospective applicant's 
parent corporation(s) with the relative position in the corporate 
structure of marketing and sales units and any affiliates involved in 
the production of natural gas in the State of Alaska.
    (ii) The job titles and descriptions, and chain of command for all 
officers and directors of the prospective applicant's marketing and 
sales units and any affiliates involved in the production of natural gas 
in the State of Alaska; and
    (21) A statement that any officers and directors of the prospective 
applicant's affiliated sales and marketing units and affiliates involved 
in the production of natural gas in the State of Alaska named in 
paragraph (c)(19) of this section will be prohibited from obtaining 
information about the conduct of the open season or allocation of 
capacity that is not posted on the open season Internet Web site or that 
is otherwise also available to the general public or other participants 
in the open season.
    (d) Timing. (1) A prospective applicant must provide prospective 
shippers at least 90 days from the date on which

[[Page 583]]

notice of the open season is given within which to submit requests for 
transportation services. No bid shall be rejected because a prospective 
shipper has submitted another bid in another open season conducted under 
this subpart.
    (2) A prospective applicant must consider any bids tendered after 
the expiration of the open season by qualifying bidders and may reject 
them only if they cannot be accommodated due to economic, engineering, 
design, capacity or operational constraints, or accommodating the 
request would otherwise adversely impact the timely development of the 
project, and a detailed explanation must accompany the rejection. Any 
bids tendered after the expiration of the open season must contain a 
good faith showing, including a statement of the circumstances which 
prevented the late bidder from tendering a timely bid and how those 
circumstances have changed. If a prospective applicant determines at any 
time that, based on the criteria stated in this paragraph, no further 
late bids for capacity can be accommodated, it may request Commission 
approval to summarily reject any further requests.
    (3) Within 10 days after precedent agreements have been executed for 
capacity allocated in the open season, the prospective applicant shall 
make public on the Internet and through press releases the results of 
the open season, at least including the name of the prospective shipper, 
amount of capacity awarded, and term of agreement.
    (4) Within 20 days after precedent agreements have been executed for 
capacity allocated in the open season, the prospective applicant must 
submit copies of all such precedent agreements to the Commission and 
copies of any relevant correspondence with bidders for capacity who were 
not allocated capacity that identifies why such bids were not accepted 
(all documents identified in this paragraph (d)(4) may be filed under 
confidential treatment pursuant to Sec. 388.112 of this chapter if 
desired.

[Order 2005, 70 FR 8286, Feb. 18, 2005, as amended by Order 2005-A, 70 
FR 35026, June 16, 2005; 75 FR 15342, Mar. 29, 2010]



Sec. 157.35  Undue discrimination or preference.

    (a) All binding open seasons shall be conducted without undue 
discrimination or preference in the rates, terms or conditions of 
service and all capacity allocated as a result of any open season shall 
be awarded without undue discrimination or preference of any kind.
    (b) Any complaint filed pursuant to Sec. 385.206 of this chapter 
alleging non-compliance with any of the requirements of this subpart 
shall be processed under the Commission's Fast Track Processing 
procedures contained in Sec. 385.206(h).
    (c) Each prospective applicant conducting an open season under this 
subpart must function independent of the other divisions of the 
prospective applicant as well as the prospective applicant's 
``affiliates'' performing a ``marketing function'' as those terms are 
defined in Sec. 358.3(a) and (c) of the Commission's regulations, 
except that the exemption in Sec. 358.3(c)(2)(iii) shall not apply. In 
instances in which the prospective applicant is not an entity created 
specifically to conduct an open season under this subpart, the 
prospective applicant must create or designate a unit or division to 
conduct the open season that must function independent of the other 
divisions of the project applicant as well as the project applicant's 
``affiliates'' performing a ``marketing function'' as those terms are 
defined in Sec. 358.3(a) of this chapter, except that the exemption in 
358.3(c)(2)(iii) shall not apply.
    (d) Each project applicant conducting an open season under this 
subpart that is not otherwise subject to the provisions of part 358 of 
this chapter must comply with the following sections of that part: 
Sec. Sec. 358.4(c) and (d), 358.5, 358.6, 358.7(a), (b), and (c), and 
358.8 (b) and (c) of this chapter.

[Order 2005, 70 FR 8286, Feb. 18, 2005, as amended by Order 2005-A, 70 
FR 35026, June 16, 2005; 75 FR 15342, Mar. 29, 2010]



Sec. 157.36  Open seasons for expansions.

    Any open season for capacity exceeding the initial capacity of an 
Alaska natural gas transportation project must provide the opportunity 
for the transportation of gas other than

[[Page 584]]

Prudhoe Bay or Point Thomson production. In considering a proposed 
voluntary expansion of an Alaska natural gas pipeline project, the 
Commission will consider the extent to which the expansion will be 
utilized by shippers other than those who are the initial shippers on 
the project and, in order to promote competition and open access to the 
project, may require design changes to ensure that some portion of the 
expansion capacity be allocated to new shippers willing to sign long-
term firm transportation contracts, including shippers seeking to 
transport natural gas from areas other than Prudhoe Bay and Point 
Thomson.

[Order 2005-A, 70 FR 35026, June 16, 2005]



Sec. 157.37  Project design.

    In reviewing any application for an Alaska natural gas pipeline 
project, the Commission will consider the extent to which a proposed 
project has been designed to accommodate the needs of shippers who have 
made conforming bids during an open season, as well as the extent to 
which the project can accommodate low-cost expansion, and may require 
changes in project design necessary to promote competition and offer a 
reasonable opportunity for access to the project.

[Order 2005, 70 FR 8286, Feb. 18, 2005; Order 756, 77 FR 4894, Feb. 1, 
2012]



Sec. 157.38  Pre-approval procedures.

    No later than 90 days prior to providing the notice of open season 
required by Sec. 157.34(a), a prospective applicant must file, for 
Commission approval, a detailed plan for conducting an open season in 
conformance with this subpart. The prospective applicant's plan shall 
include the proposed notice of open season. Upon receipt of a request 
for such a determination, the Secretary of the Commission shall issue a 
notice of the request, which will then be published in the Federal 
Register. The notice shall establish a date on which comments from 
interested persons are due and a date, which shall be within 60 days of 
receipt of the prospective applicant's request unless otherwise directed 
by the Commission, by which the Commission will act on the proposed 
plan.

[Order 2005-A, 70 FR 35026, June 16, 2005]



Sec. 157.39  Rate treatment of pipeline expansions.

    There shall be a rebuttable presumption that rates for any expansion 
of an Alaska natural gas transportation project shall be determined on a 
rolled-in basis.

Subpart C [Reserved]



  Subpart D_Exemption of Natural Gas Service for Drilling, Testing, or 

                  Purging from Certificate Requirements

    Authority: Natural Gas Act, as amended, 15 U.S.C. 717 et. seq., 
Energy Supply and Environmental Coordination Act, 15 U.S.C. 791 et. 
seq., Federal Energy Administration Act, 15 U.S.C. 761 et. seq., Natural 
Gas Policy Act of 1978, Pub. L. 95-621, 92 Stat. 3350, Department of 
Energy Organization Act, Pub. L. 95-91, E.O. 12009, 42 FR 46267.



Sec. 157.53  Testing.

    (a) Construction and operation of facilities necessary to render 
direct natural gas service for use in the testing and purging of new 
natural gas pipeline facilities are exempted from the certificate 
requirements of section 7(c) of the Natural Gas Act, when the 
construction and operation of such facilities are conducted in 
accordance with paragraph (b) of this section.
    (b) Operations undertaken to render direct natural gas service shall 
be terminated upon the completion of the purging or testing of the 
pipeline facilities. Persons undertaking any construction or operation 
of facilities or service under this section shall file an original and 
two copies of an annual statement, by February 1 of each year, 
describing their activities hereunder.

[43 FR 56544, Dec. 1, 1978, as amended at 60 FR 53065, Oct. 11, 1995]

Subpart E [Reserved]

[[Page 585]]



  Subpart F_Interstate Pipeline Blanket Certificates and Authorization 

  Under Section 7 of the Natural Gas Act for Certain Transactions and 

                               Abandonment



Sec. 157.201  Applicability.

    (a) Scope. This subpart establishes a procedure whereby an 
interstate pipeline may obtain a blanket certificate authorizing certain 
construction and operation of facilities and certain certificate 
amendments and abandonment under section 7 of the Natural Gas Act.
    (b) Who may apply. This procedure is only applicable to interstate 
pipelines.
    (c) Cross-reference. The procedures applicable to transportation by 
interstate pipelines under blanket certificates are set forth in subpart 
G of part 284 of this chapter.
    (d) Availability of case-specific certificates. Nothing in this 
subpart shall preclude an interstate pipeline from proceeding under any 
other provision of the Commission's regulations to obtain Commission 
approval of abandonments or a temporary or permanent certificate of 
public convenience and necessity.

[Order 234, 47 FR 24266, June 4, 1982, as amended by Order 436, 50 FR 
42490, Oct. 18, 1985; Order 603, 64 FR 26606, May 14, 1999]



Sec. 157.202  Definitions.

    (a) General rule. Terms defined in the Natural Gas Policy Act of 
1978 (NGPA) shall have the same meaning for the purposes of this subpart 
as they have under the Natural Gas Policy Act of 1978.
    (b) Subpart F definitions. For purposes of this subpart:
    (1) Certificate holder means any interstate pipeline with an 
effective blanket certificate issued pursuant to this subpart.
    (2)(i) Eligible facility means, except as provided in paragraph 
(b)(2)(ii) of this section, any facility subject to the Natural Gas Act 
jurisdiction of the Commission that is necessary to provide service 
within existing certificated levels. Eligible facility also includes any 
gas supply facility or any facility, including receipt points, needed by 
the certificate holder to receive gas into its system for further 
transport or storage, and interconnecting facilities between 
transporters that transport natural gas under part 284 of this chapter. 
Further, eligible facility includes main line, lateral, and compressor 
replacements that do not qualify under Sec. 2.55(b) of this chapter 
because they will result in an incidental increase in the capacity of 
main line facilities, or because they will not satisfy the location or 
work space requirements of Sec. 2.55(b). Replacements must be done for 
sound engineering purposes. Replacements for the primary purpose of 
creating additional main line capacity are not eligible facilities; 
however, replacements and the modification of facilities to rearrange 
gas flows or increase compression for the primary purpose of restoring 
service in an emergency due to sudden unforeseen damage to main line 
facilities are eligible facilities.
    (ii) Exclusions: ``Eligible facility'' does not include:
    (A) A main line of a transmission system, except replacement 
facilities covered under Sec. 157.202(b)(2)(i).
    (B) An extension of a main line, except replacement facilities 
covered under Sec. 157.202(b)(2)(i).
    (C) A facility, including compression and looping, that alters the 
capacity of a main line, except replacement facilities and facility 
modifications covered under paragraph (b)(2)(i) of this section;
    (D) A facility required to test or develop an underground storage 
field or that alters the certificated capacity, deliverability, or 
storage boundary, or a facility required to store gas above ground in 
either a gaseous or liquified state, or a facility used to receive gas 
from plants manufacturing synthetic gas or from plants gasifying 
liquefied natural gas, or wells needed to utilize an underground storage 
field.
    (E) Delivery points under Sec. 157.211.
    (F) Temporary compression under Sec. 157.209;
    (G) A facility that crosses a state line and is constructed for the 
primary purpose of transporting gas which is also transported by an 
intrastate pipeline under section 311(a)(2) of the NGPA;

[[Page 586]]

    (3) Facility does not include the items described in Sec. 2.55 of 
this chapter.
    (4) Temporary compression means compressor facilities installed and 
operated at existing compressor locations for the limited purpose of 
temporarily replacing existing permanent compressor facilities that are 
undergoing maintenance or repair or that are pending permanent 
replacement.
    (5) Main line means the principal transmission facilities of a 
pipeline system extending from supply areas to market areas and does not 
include small diameter supply or delivery laterals or gathering lines.
    (6) Miscellaneous rearrangement of any facility means any 
rearrangement of a facility, excluding underground storage injection/
withdrawal wells, that does not result in any change of service rendered 
by means of the facilities involved, including changes in existing field 
operations or relocation of existing facilities:
    (i) On the same property;
    (ii) When required by highway construction, dam construction, 
encroachment of residential, commercial, or industrial areas, erosion, 
or the expansion or change of course of rivers, streams or creeks, or
    (iii) To respond to other natural forces beyond the certificate 
holder's control when necessary to ensure safety or maintain the 
operational integrity of the certificate holder's facilities.
    (7) Project means a unit of improvement or construction that is used 
and useful upon completion.
    (8) Project cost means the total actual cost of constructing the 
jurisdictional portions of a project. In the case of a project 
constructed jointly by more than one interstate pipeline, the project 
cost is the total cost, irrespective of the amount paid by each 
pipeline.
    (9) Right-of-way grantor means (i) a person who grants a right-of-
way easement to the certificate holder; or (ii) any successor to an 
interest which is subject to the easement.
    (10) Delivery point means a tap and/or metering and appurtenant 
facilities, such as heaters, minor gas conditioning, treatment, 
odorization, and similar equipment, necessary to enable the certificate 
holder to deliver gas to any party.
    (11) Sensitive environmental area means:
    (i) The habitats of species which have been identified as endangered 
or threatened under the Endangered Species Act (Pub. L. 93-205, as 
amended) and essential fish habitat as identified under the Magnuson-
Stevens Fishery Conservation and Management Act (16 U.S.C. 1801, et 
seq.);
    (ii) National or State Forests or Parks;
    (iii) Properties listed on, or eligible for inclusion in, the 
National Register of Historic Places, or the National Register of 
Natural Landmarks;
    (iv) Floodplains and wetlands;
    (v) Designated or proposed wilderness areas, national or state wild 
and scenic rivers, wildlife refuges and management areas and 
sanctuaries;
    (vi) Prime agricultural lands, designated by the Department of 
Agriculture; or
    (vii) Sites which are subject to use by American Indians and other 
Native Americans for religious purposes.
    (12) Interconnection facilities means the interconnecting point, 
which includes the tap, metering, and M&R facilities and the related 
interconnecting pipeline.
    (13) Emergency means a sudden unanticipated loss of gas supply or 
capacity that requires an immediate restoration of interrupted service 
for protection of life or health or for maintenance of physical 
property.

[Order 234, 47 FR 24266, June 4, 1982, as amended by Order 319, 48 FR 
34888, Aug. 1, 1983; Order 319-A, 48 FR 51446, Nov. 9, 1983; Order 436, 
50 FR 42490, Oct. 18, 1985; Order 603, 64 FR 26606, May 14, 1999; Order 
603-A, 64 FR 54536, Oct. 7, 1999; Order 609, 64 FR 57391, Oct. 25, 1999; 
Order 603-B, 65 FR 11464, Mar. 3, 2000; Order 633, 68 FR 31604, May 28, 
2003]



Sec. 157.203  Blanket certification.

    (a) Effect. A blanket certificate issued pursuant to this subpart 
authorizes the certificate holder, in accordance with the provisions of 
this subpart, to engage in any of the activities specified in Sec. 
157.208 through Sec. 157.218 (as may be amended from time to time).
    (b) Automatic authorization. A blanket certificate issued pursuant 
to this subpart authorizes the certificate holder

[[Page 587]]

to engage in transactions described in Sec. 157.208(a), Sec. 
157.209(a), Sec. 157.211(a)(1), Sec. 157.213(a), Sec. 157.215, Sec. 
157.216(a), or Sec. 157.218 without further Commission approval.
    (c) Prior notice required. A blanket certificate issued pursuant to 
this subpart authorizes the certificate holder to engage in activities 
described in Sec. 157.208(b), Sec. 157.210,Sec. 157.211(a)(2), Sec. 
157.212, Sec. 157.213(b), Sec. 157.214, or Sec. 157.216(b), if the 
requirements of Sec. 157.205 have been fulfilled.
    (d) Landowner notification. (1) Except as identified in paragraph 
(d)(3) of this section, no activity described in paragraph (b) of this 
section is authorized unless the company makes a good faith effort to 
notify, in writing all affected landowners, as defined in Sec. 
157.6(d)(2), at least 45 days prior to commencing construction or at the 
time it initiates easement negotiations, whichever is earlier. A 
landowner may waive the 45-day prior notice requirement in writing as 
long as the notice has been provided. For activity required to restore 
service in an emergency, the 45-day prior notice period is satisfied in 
the event a company obtains all necessary easements. The notification 
shall include at least:
    (i) A brief description of the facilities to be constructed or 
replaced and the effect the construction activity will have on the 
landowner's property;
    (ii) The name and phone number of a company representative who is 
knowledgeable about the project;
    (iii) A description of the company's environmental complaint 
resolution procedure that must:
    (A) Provide landowners with clear and simple directions for 
identifying and resolving their environmental mitigation problems and 
concerns during construction of the project and restoration of the 
right-of way;
    (B) Provide a local or toll-free phone number and a name of a 
specific person to be contacted by landowners and with responsibility 
for responding to landowner problems and concerns, and who will indicate 
when a landowner should expect a response;
    (C) Instruct landowners that if they are not satisfied with the 
response, they may call the company's Hotline; and
    (D) Instruct landowners that, if they are still not satisfied with 
the response, they may contact the Commission's Dispute Resolution 
Service at the current telephone number and e-mail address, which is to 
be provided in the notification.
    (2) For activities described in paragraph (c) of this section, the 
company shall make a good faith effort to notify in writing all affected 
landowners, as defined in Sec. 157.6(d)(2), within at least three 
business days following the date that a docket number is assigned to the 
application or at the time it initiates easement negotiations, whichever 
is earlier. The notice should include at least:
    (i) A brief description of the company and the proposed project, 
including the facilities to be constructed or replaced and the location 
(including a general location map), the purpose, and the timing of the 
project and the effect the construction activity will have on the 
landowner's property;
    (ii) A general description of what the company will need from the 
landowner if the project is approved, and how the landowner may contact 
the company, including a local or toll-free phone number and a name of a 
specific person to contact who is knowledgeable about the project;
    (iii) The docket number (if assigned) for the company's application;
    (iv) A general description of the blanket certificate program and 
procedures, as posted on the Commission's Web site at the time the 
landowner notification is prepared, and the link to the information on 
the Commission's Web site;
    (v) A brief summary of the rights the landowner has in Commission 
proceedings and in proceedings under the relevant eminent domain rules; 
and
    (vi) The following paragraph: This project is being proposed under 
the prior notice requirements of the blanket certificate program 
administered by the Federal Energy Regulatory Commission. Under the 
Commission's regulations, you have the right to protest this project 
within 60 days of the date the Commission issues a notice of the 
pipeline's filing. If you file a protest, you should include the docket 
number listed in this letter and provide

[[Page 588]]

the specific reasons for your protest. The protest should be mailed to 
the Secretary of the Federal Energy Regulatory Commission, 888 First 
St., NE., Room 1A, Washington, DC 20426. A copy of the protest should be 
mailed to the pipeline at [pipeline address]. If you have any questions 
concerning these procedures you can call the Commission's Office of 
External Affairs at (202) 208-1088; and
    (vii) The description of the company's environmental complaint 
resolution procedure as described in paragraph (d)(1)(iii) of this 
section.
    (3) Exceptions. (i) No landowner notice is required for replacements 
which would have been done under Sec. 2.55 of this chapter but for the 
fact that the replacement facilities are not of the same capacity and as 
long as they meet the location requirements of Sec. 2.55(b)(1)(ii) of 
this chapter; or any replacement done for safety, DOT compliance, 
environmental, or unplanned maintenance reasons that are not foreseen 
and that require immediate attention by the certificate holder.
    (ii) No landowner notice is required for abandonments which involve 
only the sale or transfer of the facilities, and the easement will 
continue to be used for transportation of natural gas.
    (iii) No landowner notice is required if there is only one landowner 
and that landowner has requested the service or facilities.
    (iv) No landowner notice is required for activities that do not 
involve ground disturbance or changes to operational air and noise 
emissions.
    (4) If paragraphs (d)(1) or (d)(2) of this section require an 
applicant to reveal Critical Energy Infrastructure Information (CEII), 
as defined by Sec. 388.113(c) of this chapter, to any person, the 
applicant shall follow the procedures set out in Sec. 157.10(d).

[Order 234, 47 FR 24266, June 4, 1982, as amended by Order 319, 48 FR 
34888, Aug. 1, 1983; Order 436, 50 FR 42490, Oct. 18, 1985; Order 603, 
64 FR 26607, May 14, 1999; Order 609, 64 FR 57391, Oct. 25, 1999; Order 
609-A, 65 FR 15238, Mar. 22, 2000; Order 633, 68 FR 31605, May 28, 2003; 
Order 643, 68 FR 52096, Sept. 2, 2003; Order 686, 71 FR 63692, Oct. 31, 
2006; Order 686-A, 72 FR 37436, July 10, 2007; Order 734, 75 FR 21505, 
Apr. 26, 2010]



Sec. 157.204  Application procedure.

    (a) Who may apply. Any interstate pipeline which has been issued a 
certificate other than a limited-jurisdiction certificate, pursuant to 
section 7 of the Natural Gas Act and had rates accepted by the 
Commission may apply for a blanket certificate under this subpart in the 
manner prescribed in Sec. Sec. 157.6(a), 157.14(a) and 385.2011 of this 
chapter.
    (b) Hearing procedure. Upon receiving an application for a blanket 
certificate under this subpart, the Commission will conduct a hearing 
pursuant to section 7(c) of the Natural Gas Act and Sec. Sec. 1.32 and 
157.11 of this chapter.
    (c) Issuance. If required by the present or future public 
convenience and necessity, the Commission will issue a blanket 
certificate to the applicant.
    (d) Application contents. Applications for blanket certificates 
shall contain:
    (1) Information indicating the exact legal name of the applicant; 
its principal place of business; whether the applicant is an individual, 
partnership, corporation or otherwise; citation to the certificate 
proceeding in which the applicant was found to be a natural gas company; 
the state under the laws of which the applicant is organized or 
authorized to do business; and the name, title, and mailing address and 
telephone number of the person or persons to whom communications 
concerning the application are to be addressed;
    (2) A statement that the applicant will comply with the terms, 
conditions and procedures specified in this subpart.

[Order 234, 47 FR 24266, June 4, 1982, as amended by Order 319, 48 FR 
34888, Aug. 1, 1983; Order 433, 50 FR 40345, Oct. 3, 1985; Order 436, 50 
FR 42490, Oct. 18, 1985; Order 493, 53 FR 15030, Apr. 27, 1988; Order 
603, 64 FR 26607, May 14, 1999]



Sec. 157.205  Notice procedure.

    (a) Applicability. No activity described in Sec. Sec. 157.208(b), 
Sec. 157.210, Sec. 157.211(a)(2), Sec. 157.212, Sec. 157.213(b), 
157.214 or 157.216(b), except for activity required to restore service 
in an emergency, is authorized by a blanket certificate granted under 
this subpart, unless, prior to undertaking such activity:

[[Page 589]]

    (1) The notice requirements have been fulfilled in accordance with 
the provisions of this section; and
    (2) Either (i) no protest has been filed pursuant to paragraph (e) 
of this section or, (ii) if a protest has been filed, it has been 
withdrawn or dismissed pursuant to paragraph (g) of this section.
    (b) Contents. For any activity subject to the requirements of this 
section, the certificate holder must file with the Secretary of the 
Commission an original and seven copies, as prescribed in Sec. Sec. 
157.6(a) and 385.2011 of this chapter, a request for authorization under 
the notice procedures of this section that contains:
    (1) The exact legal name of the certificate holder and mailing 
address and telephone number of the person or persons to whom 
communications concerning the request are to be addressed;
    (2) The docket number in which its blanket certificate was issued;
    (3) Any information required in Sec. 157.208 through Sec. 157.218 
of this chapter for the particular activity;
    (4) A verified statement that the proposed activity complies with 
the requirements of this subpart;
    (5) A form of notice of the application suitable for publication in 
the Federal Register in accordance with the specifications in Sec. 
385.203(d) of this chapter; and
    (6) Identities and docket numbers of other applications related to 
the transaction. All related filings must be made within 10 days of the 
first filing. Otherwise the applications on file will be rejected under 
paragraph (c) of this section without prejudice to refiling when all 
parties are ready to proceed.
    (c) Rejection of request. The Director of the Office of Energy 
Projects shall reject within 10 days of the date of filing a request 
which patently fails to comply with the provisions of paragraph (b) of 
this section, without prejudice to the pipeline's refiling a complete 
application.
    (d) Publication of notice of request. (1) Unless the request has 
been rejected pursuant to paragraph (c) of this section, the Secretary 
of the Commission shall issue a notice of the request within 10 days of 
the date of the filing, which will then be published in the Federal 
Register. The notice shall designate a deadline for filing protests, or 
interventions to the request. The deadline shall be 60 days after the 
date of issuance of the notice of the request.
    (2) [Reserved]
    (e) Protests. (1) Any person or the Commission's staff may file a 
protest prior to the deadline. Copies of the protest must be served on 
the Secretary of the Commission and the certificate holder.
    (2) Protests shall be filed in the following form:

United States of America Before the Federal Energy Regulatory Commission

[Name of pipeline holding the blanket certificate] Docket No. [Include 
both docket no. of the blanket certificate and the prior notice 
transaction]

            Protest to Proposed Blanket Certificate Activity

    (Name of Protestor) hereby protests the request filed by (Name of 
pipeline) to conduct a (construction of facilities, abandonment, etc.) 
under Sec. 157.---- of the Commission's regulations. Protestor seeks to 
have this request processed as a separate application.
    (Include a detailed statement of Protestor's interest in the 
activity and the specific reasons and rationale for the objection and 
whether the protestor seeks to be an intervener.)

    (f) Effect of protest. If a protest is filed in accordance with 
paragraph (e) of this section, then the certificate holder, the person 
who filed the protest, any intervenors, and staff shall have 30 days 
from the deadline determined in accordance with paragraph (d) of this 
section, to resolve the protest, and to file a withdrawal of the protest 
pursuant to paragraph (g) of this section. Informal settlement 
conferences may be convened by the Director of the Office of Energy 
Projects or his designee. If a protest is not withdrawn or dismissed 
pursuant to paragraph (g) of this section, the activity shall not be 
deemed authorized by the blanket certificate. Instead, the request filed 
by the certificate holder shall be treated as an application for section 
7 authorization for the particular activity. The Federal Register notice 
of the request shall be deemed to be notice of the section 7 application 
sufficient to fulfill the notice requirement of Sec. Sec. 157.9 and 
157.10.

[[Page 590]]

    (g) Withdrawal or dismissal of protests. The protestor may withdraw 
a protest within the 30 day period following the deadline determined in 
accordance with paragraph (d) of this section by submitting written 
notice of withdrawal to the Secretary of the Commission and serving a 
copy on the certificate holder, any intervenors and any other party 
requesting service. The withdrawal must state that the certificate 
holder and the protestor concur in the withdrawal. Within 10 days of the 
filing of a protest, the Director of the Office of Energy Projects will 
dismiss that protest if it does not raise a substantive issue and fails 
to provide any specific detailed reason or rationale for the objection. 
If a protest is dismissed, the notice requirements of this section will 
not be fulfilled until the earlier of: (1) a 30 day period following the 
deadline determined in paragraph (d) of this section has run; or the 
dismissed protesting party notifying the Secretary of the Commission 
that its concerns have been resolved.
    (h) Final authorization. (1) If no protest is filed within the time 
allowed by the Secretary, the certificate holder is authorized to 
conduct the activity under its blanket certificate, effective on the day 
after time expires for filing protests and interventions unless, during 
that time, the certificate holder withdraws its application in 
accordance with Sec. 385.216 of this chapter.
    (2) If any protest is filed within the time allowed for protest and 
interventions and is subsequently withdrawn under paragraph (g) of this 
section, the certificate holder is authorized to conduct the activity 
under its blanket certificate, effective upon the day after the 
withdrawal of all protests, unless the certificate holder withdraws its 
application in accordance with Sec. 385.216 of this chapter prior to 
that date.

[Order 234, 47 FR 24266, June 4, 1982]

    Editorial Note: For Federal Register citations affecting Sec. 
157.205, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 157.206  Standard conditions.

    Any activity authorized under a blanket certificate issued under 
this subpart is subject to the following conditions:
    (a) Revisions. (1) The Commission reserves the right to amend the 
requirements of this subpart from time to time.
    (2) The blanket certificate is not transferable in any manner and 
shall be effective only so long as the certificate holder continues the 
activities authorized by the order issuing such certificate and does so 
in accordance with the provisions of the Natural Gas Act, as well as 
applicable rules, regulations, and orders of the Commission.
    (b) Environmental compliance. This paragraph only applies to 
activities that involve ground disturbance or changes to operational air 
and noise emissions.
    (1) The certificate holder shall adopt the requirements set forth in 
Sec. 380.15 of this chapter for all activities authorized by the 
blanket certificate and shall issue the relevant portions thereof to 
construction personnel, with instructions to use them.
    (2) All activities shall be consistent with all applicable law 
including the provisions of the following statutes and regulations or 
compliance plans developed to implement these statutes:
    (i) Clean Water Act, as amended (33 U.S.C. 1251 et seq.) and the 
National Pollution Discharge Elimination System Program, 40 CFR part 122 
et seq.;
    (ii) Clean Air Act, as amended (42 U.S.C. 1801 et seq.) and air 
quality regulations and state implementation plans adopted pursuant to 
40 CFR parts 50-99;
    (iii) National Historic Preservation Act of 1966 (16 U.S.C. 470 et 
seq.);
    (iv) Archeological and Historic Preservation Act of 1974 (Pub. L. 
93-291);
    (v) Coastal Zone Management Act of 1972, as amended (16 U.S.C. 1451 
et seq.);
    (vi) Endangered Species Act of 1973, Pub. L. 93-205, as amended (16 
U.S.C. 1531 et seq.);
    (vii) Executive Order 11988, May 24, 1977 requiring Federal agencies 
to evaluate the potential effects of any actions it may take on a 
floodplain;
    (viii) Executive Order 11990, May 24, 1977 requiring an evaluation 
of the potential effects of construction on wetland;
    (ix) Wild and Scenic Rivers Act (16 U.S.C. 1274 et seq.);

[[Page 591]]

    (x) National Wilderness Act (16 U.S.C. 1133 et seq.);
    (xi) National Parks and Recreation Act of 1978 (16 U.S.C. 1 and 230 
et seq.).
    (xii) Magnuson-Stevens Fishery Conservation and Management Act (16 
U.S.C. 1801, et seq.)
    (3) The certificate holder shall be deemed in compliance with:
    (i) Paragraph (b)(2)(vi) of this section only if it adheres to the 
procedures in appendix I of this subpart in which case the Commission 
finds that endangered species and their critical habitat are protected 
in accordance with 16 U.S.C. 1536;
    (ii) Paragraph (b)(2)(iii) of this section only if it adheres to the 
procedures in appendix II of this subpart in which case the Commission 
finds that there is no effect on any property protected by 16 U.S.C. 
470f;
    (iii) Paragraph (b)(2)(v) of this section only if the appropriate 
state agency designated to administer the state's coastal zone 
management plan, prior to construction of the project, waives its right 
of review or determines that the project complies with the state's 
coastal zone management plan.
    (iv) Paragraphs (b)(2)(i) and (viii) of this section only if it 
adheres to Commission staff's current ``Upland Erosion Control, 
Revegetation and Maintenance Plan'' and ``Wetland and Waterbody 
Construction and Mitigation Procedures'' which are available on the 
Commission Internet home page or from the Commission staff, or gets 
written approval from the staff or the appropriate Federal or state 
agency for the use of project-specific alternatives to clearly 
identified portions of those documents.
    (4) Any transaction authorized under a blanket certificate shall not 
have a significant adverse impact on a sensitive environmental area.
    (5)(i) The noise attributable to any new compressor station, 
compression added to an existing station, or any modification, upgrade 
or update of an existing station, must not exceed a day-night level 
(Ldn) of 55 dBA at any pre-existing noise-sensitive area 
(such as schools, hospitals, or residences).
    (ii) A compressor facility installed under this section must be 
designed to meet the following noise emissions criteria. For each new 
compressor station facility, and for each addition or modification to an 
existing compression station, the blanket certificate holder must file a 
noise survey with the Secretary within 60 days of placing the facility 
in service.
    (A) If noise emitted from a new compressor facility operating at 
full load exceeds an Ldn of 55 dBA at any noise-sensitive 
area (NSA), or if an addition or modification to an existing compressor 
station operating at full load at or below an Ldn of 55 dBA 
at NSAs causes overall noise attributable to the station to exceed an 
Ldn of 55 dBA at an NSA, the blanket certificate holder must 
come into compliance with an Ldn of 55 dBA at NSAs within 1 
year of placing the facility in service.
    (B) If an addition or modification to an existing compressor station 
operating at full load above an Ldn of 55 dBA at NSAs causes 
overall noise attributable to the station to increase at an NSA, the 
blanket certificate holder must act within 1 year of placing the added 
or modified facility in service to reduce noise at NSAs to the level 
that existed prior to the addition or modification.
    (C) If the initial noise survey demonstrates a need to take action 
to mitigate noise, within 60 days of completing such action, the blanket 
certificate holder must file a subsequent noise survey with the 
Secretary demonstrating that each new compressor station facility, and 
each addition or modification to an existing compressor station, 
complies with the noise level limits.
    (iii) Any horizontal directional drilling or drilling of wells which 
will occur between 10 p.m. and 7 a.m. local time must be conducted with 
the goal of keeping the perceived noise from the drilling at any pre-
existing noise-sensitive area (such as schools, hospitals, or 
residences) at or below a night level (Ln) of 55 dBA.
    (6)(i) Any activity otherwise subject to authorization under Sec. 
157.208 shall not be authorized if the activity is located within 0.5 
mile of a nuclear power plant which is either operating or under 
construction, or for which a construction permit has been filed with the 
Nuclear Regulatory Commission.

[[Page 592]]

    (ii) Any activity otherwise subject to authorization under Sec. 
157.215 shall not be authorized if the activity is located within 2.0 
miles of a nuclear power plant which is either operating or under 
construction, or for which a construction permit has been filed with the 
Nuclear Regulatory Commission.
    (7) The certificate holder shall act as the Commission's non-Federal 
representative upon acceptance of the blanket certificate for purposes 
of complying with the Endangered Species Act of 1973.
    (c) Commencement. Any authorized construction, extension, or 
acquisition shall be completed and made available for service by the 
certificate holder and any authorized operation, or service, shall be 
available within one year of the date the activity is authorized 
pursuant to Sec. 157.205(h). The certificate holder may apply to the 
Director of the Office of Energy Projects for an extension of this 
deadline. However, if the request for extension is due to the end-user/
shipper not being ready to accept service, the certificate holder must 
so notify the Commission in writing no later than 10 days after 
expiration of the one-year period.
    (d) Reports. The certificate holder shall file reports as required 
by this subpart.

[Order 234, 47 FR 24266, June 4, 1982, as amended by Order 234-A, 47 FR 
38877, Sept. 3, 1982; Order 436, 50 FR 42490, Oct. 18, 1985; Order 603, 
64 FR 26607, May 14, 1999; Order 603-A, 64 FR 54536, Oct. 7, 1999; Order 
609, 64 FR 57392, Oct. 25, 1999; Order 686, 71 FR 63693, Oct. 31, 2006; 
Order 686-A, 72 FR 37436, July 10, 2007; Order 699, 72 FR 45325, Aug. 
14, 2007; 72 FR 59942, Oct. 23, 2007]



Sec. 157.207  General reporting requirements.

    On or before May 1, or each year, or in the case of emergency 
reconstruction activity, prior to any activity, the certificate holder 
must file, in the manner prescribed in Sec. Sec. 157.6(a) and 385.2011 
of this chapter, an annual report signed under oath by a senior official 
of the company, that lists for the previous calendar year:
    (a) For each new facility authorized by Sec. Sec. 157.208, 157.210, 
157.212, or 157.213, the information specified in Sec. 157.208(e);
    (b) For each delivery point authorized under Sec. 157.211(a)(1), 
the information required by Sec. 157.211(c);
    (c) for each temporary compressor facility under Sec. 157.209, the 
information required by Sec. 157.209(b);
    (d) For each storage project tested or developed under Sec. 
157.215, the information specified in Sec. 157.215(b)(1);
    (e) For each abandonment authorized under Sec. 157.216(a), the 
information specified in Sec. 157.216(d);
    (f) For each change in rate schedule authorized under Sec. 157.217, 
the information specified in Sec. 157.217(b);
    (g) For each change in customer name authorized under Sec. 157.218, 
the information specified in Sec. 157.218(b); and
    (h) If any activity required to be reported under this section was 
not undertaken, a statement to that effect.

[Order 436, 50 FR 42490, Oct. 18, 1985, as amended by Order 493, 53 FR 
15030, Apr. 27, 1988; Order 603, 64 FR 26607, May 14, 1999; Order 603, 
66 FR 15347, Mar. 19, 2001; Order 633, 68 FR 31605, May 28, 2003; Order 
686, 71 FR 63693, Oct. 31, 2006; Order 686-A, 72 FR 37436, July 10, 
2007]



Sec. 157.208  Construction, acquisition, operation, replacement, and 

miscellaneous rearrangement of facilities.

    (a) Automatic authorization. If the project cost does not exceed the 
cost limitations set forth in column 1 of Table I, under paragraph (d) 
of this section, or if the project is required to restore service in an 
emergency, the certificate holder is authorized to make miscellaneous 
rearrangements of any facility, or acquire, construct, replace, or 
operate any eligible facility. The certificate holder shall not segment 
projects in order to meet the cost limitations set forth in column 1 of 
Table I.
    (b) Prior notice. If the project cost is greater than the amount 
specified in column 1 of Table I, but less than the amount specified in 
column 2 of Table I, the certificate holder is authorized to make 
miscellaneous rearrangements of any facility, or acquire, construct, 
replace, or operate any eligible facility. The certificate holder shall 
not segment projects in order to meet the cost limitations set forth in 
column 2 of Table I.
    (c) Contents of request. In addition to the requirements of Sec. 
157.205(b), requests filed for activities described

[[Page 593]]

under paragraph (b) of this section shall contain:
    (1) A description of the purpose of the proposed facilities 
including their relationship to other existing or planned facilities;
    (2) A detailed description of the proposed facilities specifying 
length, diameter, wall thickness and maximum operating pressure for 
pipeline; and for compressors, the size, type, and number of compressor 
units, horsepower required, horsepower existing and proposed, volume of 
fuel gas, suction and discharge pressure and compression ratio;
    (3) A USGS 7\1/2\ minute series (scale 1:24000) topographic map (or 
map of equivalent or greater detail, as appropriate) showing the 
location of the proposed facilities, and indicating the location of any 
sensitive environmental areas within one-quarter mile of project-related 
construction activities;
    (4) A map showing the relationship of the proposed facilities to the 
applicant's existing facilities;
    (5) A flow diagram or comparative study showing daily design 
capacity, daily maximum capacity and operating pressures with and 
without the proposed facilities for that portion of the certificate 
holder's system affected by the proposal;
    (6) The estimated cost and method of financing the proposed 
facilities;
    (7) A statement explaining how the public convenience and necessity 
requires the approval of the project;
    (8) For acquisitions of facilities:
    (i) A statement referencing the date of issuance, docket number and 
title of the proceeding for any certificate issued by the Commission 
authorizing the facilities proposed to be acquired; and
    (ii) The amounts recorded in the accounts of the vendor (seller or 
lessor) that apply to the facilities proposed to be acquired and the 
accumulated provisions for depreciation, depletion, and amortization;
    (9) A concise analysis discussing the relevant issues outlined in 
Sec. 380.12 of this chapter. The analysis must identify the existing 
environmental conditions and the expected significant impacts that the 
proposed action, including proposed mitigation measures, will cause to 
the quality of the human environment, including impact expected to occur 
to sensitive environmental areas. When compressor facilities are 
proposed, the analysis must also describe how the proposed action will 
be made to comply with applicable State Implementation Plans developed 
under the Clean Air Act. The analysis must also include a description of 
the contacts made, reports produced, and results of consultations which 
took place to ensure compliance with the Endangered Species Act, 
National Historic Preservation Act and the Coastal Zone Management Act. 
Include a copy of the agreements received for compliance with the 
Endangered Species Act, National Historic Preservation Act, and Coastal 
Zone Management Act, or if no written concurrence is issued, a 
description of how the agency relayed its opinion to the company. 
Describe how drilling for wells or horizontal direction drilling would 
be designed to meet the goal of limiting the perceived noise at NSAs to 
an Ldn of 55 dBA or what mitigation would be offered to 
landowners.
    (10) A commitment to having the Environmental Inspector's report 
filed every week.
    (d) Limits and inflation adjustment. The limits specified in Tables 
I and II shall be adjusted each calendar year to reflect the ``GDP 
implicit price deflator'' published by the Department of Commerce for 
the previous calendar year. The Director of the Office of Energy 
Projects is authorized to compute and publish limits for future calendar 
years as a part of Tables I and II, pursuant to Sec. 375.308(x)(1) of 
this chapter.

                                 Table I
------------------------------------------------------------------------
                                                       Limit
                                         -------------------------------
                  Year                      Auto. proj.    Prior notice
                                            cost limit      proj. cost
                                             (Col. 1)     limit (Col. 2)
------------------------------------------------------------------------
1982....................................      $4,200,000     $12,000,000
1983....................................       4,500,000      12,800,000
1984....................................       4,700,000      13,300,000
1985....................................       4,900,000      13,800,000
1986....................................       5,100,000      14,300,000
1987....................................       5,200,000      14,700,000
1988....................................       5,400,000      15,100,000
1989....................................       5,600,000      15,600,000
1990....................................       5,800,000      16,000,000
1991....................................       6,000,000      16,700,000
1992....................................       6,200,000      17,300,000
1993....................................       6,400,000      17,700,000

[[Page 594]]

 
1994....................................       6,600,000      18,100,000
1995....................................       6,700,000      18,400,000
1996....................................       6,900,000      18,800,000
1997....................................       7,000,000      19,200,000
1998....................................       7,100,000      19,600,000
1999....................................       7,200,000      19,800,000
2000....................................       7,300,000      20,200,000
2001....................................       7,400,000      20,600,000
2002....................................       7,500,000      21,000,000
2003....................................       7,600,000      21,200,000
2004....................................       7,800,000      21,600,000
2005....................................       8,000,000      22,000,000
2006....................................       9,600,000      27,400,000
2007....................................       9,900,000      28,200,000
2008....................................      10,200,000      29,000,000
2009....................................      10,400,000      29,600,000
2010....................................      10,500,000      29,900,000
2011....................................      10,600,000      30,200,000
2012....................................      10,800,000      30,800,000
------------------------------------------------------------------------

    (e) Reporting requirements. For each facility completed during the 
calendar year pursuant to paragraph (a) of this section and Sec. 
157.213(a), the certificate holder shall file in the manner prescribed 
in Sec. Sec. 157.6(a) and 385.2011 of this chapter as part of the 
required annual report under Sec. 157.207(a) the information described 
in paragraphs (e)(1)-(5) of this section. For each facility completed 
during the calendar year pursuant to paragraph (b) of this section, and 
Sec. Sec. 157.210, 157.212, and 157.213(b), the certificate holder 
shall file in the manner prescribed above only the information described 
in paragraph (e)(3) of this section.
    (1) A description of the facilities installed pursuant to this 
section, including a description of the length and size of pipelines, 
compressor horsepower, metering facilities, taps, valves, and any other 
facilities constructed;
    (2) The specific purpose, location, and beginning and completion 
date of construction of the facilities installed, the date service 
commenced, and, if applicable, a statement indicating the extent to 
which the facilities were jointly constructed;
    (3) The actual installed cost of each facility item listed pursuant 
to paragraph (e)(1), separately stating the cost of materials and labor 
as well as other costs allocable to the facilities;
    (4)(i) A description of the contacts made, reports produced, and 
results of consultations which took place to ensure compliance with the 
Endangered Species Act, the National Historic Preservation Act and the 
Coastal Zone Management Act;
    (ii) Documentation, including images, that restoration of work areas 
is progressing appropriately;
    (iii) A discussion of problems or unusual construction issues, 
including those identified by affected landowners, and corrective 
actions taken or planned; and
    (iv) For new or modified compression, a noise survey verifying 
compliance with Sec. 157.206(b)(5).
    (5) For acquisitions of facilities:
    (i) A statement referencing the date of issuance, docket number and 
title of the proceeding for any certificate issued by the Commission 
authorizing the facilities acquired; and
    (ii) The amounts recorded in the accounts of the vendor (seller or 
lessor) that apply to the facilities acquired and the accumulated 
provisions for depreciation, depletion, and amortization.
    (f) Special conditions. (1) For purposes of comparing the project 
cost of leased facilities with the per-project cost limitations in Table 
I of this section, the project cost of leased facilities shall be the 
annual lease charge multiplied by the number of years of the lease.
    (2) In the interest of safety and reliability of service, facilities 
authorized by the certificate shall not be operated at pressures 
exceeding the maximum operating pressure set forth in the request. In 
the event that the certificate holder thereafter wishes to change the 
maximum operating pressure of supply or delivery lateral facilities 
constructed under section 7(c) of the Natural Gas Act or facilities 
constructed under this section, it shall file an appropriate request 
pursuant to the procedures set forth in Sec. 157.205(b). Such request 
shall include the reasons for the proposed change. Nothing contained 
herein authorizes the certificate holder to operate any facility at a 
pressure above the maximum prescribed by State law, if such law requires 
a lower pressure than authorized hereby.
    (g) If the actual cost of the project exceeds the per-project cost 
authorized under a blanket certificate in Table I of this section, the 
certificate holder

[[Page 595]]

shall apply to the Director of the Office of Energy Projects for a 
waiver of those project cost limits.

[Order 234, 47 FR 24266, June 4, 1982]

    Editorial Note: For Federal Register citations affecting Sec. 
157.208, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 157.209  Temporary compression facilities.

    (a) Automatic authorization. If the cost does not exceed the cost 
limitations set forth in column 1 of Table I, under Sec. 157.208(d) of 
this chapter, the certificate holder may install, operate and remove 
temporary facilities provided that the temporary compressor facilities 
shall not be used to increase the volume or service above that rendered 
by the involved existing permanent compressor unit(s).
    (b) Reporting requirements. As part of the certificate holder's 
annual report of projects authorized under paragraph (a) of this 
section, the certificate holder must report the following in the manner 
prescribed in Sec. Sec. 157.6(a) and 385.2011 of this chapter;
    (1) A description of the temporary compression facility, including 
the size, type and number of compressor units;
    (2) The location at which temporary compression was installed, 
operated and removed, including its location relative to existing 
facilities;
    (3) A description of the permanent compression facility which was 
unavailable, and a statement explaining the reason for the temporary 
compression;
    (4) The dates for which the temporary compression was installed, 
operated and removed; and
    (5) If applicable, the information required in Sec. 157.208(e)(4).

[Order 603, 64 FR 26608, May 14, 1999, as amended by Order 699, 72 FR 
45325, Aug. 14, 2007]



Sec. 157.210  Mainline natural gas facilities.

    Subject to the notice requirements of Sec. Sec. 157.205(b) and 
157.208(c), the certificate holder is authorized to acquire, construct, 
modify, replace, and operate natural gas mainline facilities, including 
compression and looping, that are not eligible facilities under Sec. 
157.202(b)(2)(i). The cost of a project may not exceed the cost 
limitation provided in column 2 of Table I of Sec. 157.208(d). The 
certificate holder must not segment projects in order to meet this cost 
limitation.

[Order 686, 71 FR 63693, Oct. 31, 2006]



Sec. 157.211  Delivery points.

    (a) Construction and operation--(1) Automatic authorization. The 
certificate holder may acquire, construct, replace, modify, or operate 
any delivery point, excluding the construction of certain delivery 
points subject to the prior notice provisions in paragraph (a)(2) of 
this section if:
    (i) The natural gas is being delivered to, or for the account of, a 
shipper for whom the certificate holder is, or will be, authorized to 
transport gas; and
    (ii) The certificate holder's tariff does not prohibit the addition 
of new delivery points.
    (2) Prior notice. Subject to the notice procedure in Sec. 157.205, 
the certificate holder may acquire, construct, replace, modify, or 
operate any delivery point if:
    (i) The natural gas is being delivered to, or for the account of, an 
end-user that is currently being served by a local distribution company; 
and
    (ii) The natural gas is being delivered to a shipper for whom the 
certificate holder is, or will be, authorized to transport gas; and
    (iii) The certificate holder's tariff does not prohibit the addition 
of new delivery points.
    (b) Contents of request. In addition to the requirements of Sec. 
157.205(b), requests for activities authorized under paragraph (a)(2) 
must contain:
    (1) The name of the end-user, the location of the delivery point, 
and the distribution company currently serving the end-user;
    (2) A description of the facility and any appurtenant facilities;
    (3) A USGS 7\1/2\-minute series (scale 1:24,000 or 1:25,000) 
topographic map (or map of equivalent or greater detail, as appropriate) 
showing the location of the proposed facilities;
    (4) The quantity of gas to be delivered through the proposed 
facility;

[[Page 596]]

    (5) A description, with supporting data, of the impact of the 
service rendered through the proposed delivery tap upon the certificate 
holder's peak day and annual deliveries.
    (c) Reporting requirements. As part of the certificate holder's 
annual report of projects authorized under paragraph (a) of this 
section, the certificate holder must report in the manner prescribed in 
Sec. Sec. 157.6(a) and 385.2011 of this chapter:
    (1) A description of the facilities acquired, constructed, replaced, 
modified or operated pursuant to this section;
    (2) The location and maximum quantities delivered at such delivery 
point;
    (3) The actual cost and the completion date of the delivery point; 
and
    (4) The date of each agreement obtained pursuant to Sec. 
157.206(b)(3) and the date construction began.

[Order 436, 50 FR 42491, Oct. 18, 1985, as amended by Order 493, 53 FR 
15030, Apr. 27, 1988; Order 603, 64 FR 26608, May 14, 1999; Order 603-B, 
65 FR 11464, Mar. 3, 2000]



Sec. 157.212  Synthetic and liquefied natural gas facilities.

    Subject to the notice requirements of Sec. Sec. 157.205(b) and 
157.208(c), the certificate holder is authorized to acquire, construct, 
modify, replace, and operate natural gas facilities that are used to 
transport either a mix of synthetic and natural gas or exclusively 
revaporized liquefied natural gas and that are not ``related 
jurisdictional natural gas facilities'' as defined in Sec. 153.2(e) of 
this chapter. The cost of a project may not exceed the cost limitation 
provided in column 2 of Table I in Sec. 157.208(d). The certificate 
holder must not segment projects in order to meet this cost limitation.

[Order 686, 71 FR 63693, Oct. 31, 2006]



Sec. 157.213  Underground storage field facilities.

    (a) Automatic authorization. If the project cost does not exceed the 
cost limitations provided in column 1 of Table I in Sec. 157.208(d), 
the certificate holder may acquire, construct, modify, replace, and 
operate facilities for the remediation and maintenance of an existing 
underground storage facility, provided the storage facility's 
certificated physical parameters--including total inventory, reservoir 
pressure, reservoir and buffer boundaries, and certificated capacity 
remain unchanged--and provided compliance with environmental and safety 
provisions is not affected. The certificate holder must not alter the 
function of any well that is drilled into or is active in the management 
of the storage facility. The certificate holder must not segment 
projects in order to meet this cost limitation.
    (b) Prior Notice. Subject to the notice requirements of Sec. Sec. 
157.205(b) and 157.208(c), the certificate holder is authorized to 
acquire, construct, modify, replace, and operate natural gas underground 
storage facilities, provided the storage facility's certificated 
physical parameters--including total inventory, reservoir pressure, 
reservoir and buffer boundaries, and certificated capacity remain 
unchanged--and provided compliance with environmental and safety 
provisions is not affected. The cost of a project may not exceed the 
cost limitation provided in column 2 of Table I in Sec. 157.208(d). the 
certificate holder must not segment projects in order to meet this cost 
limitation.
    (c) Contents of request. In addition to the requirements of 
Sec. Sec. 157.206(b) and 157.208(c), requests for activities authorized 
under paragraph (b) of this section must contain, to the extent 
necessary to demonstrate that the proposed project will not alter a 
storage reservoir's total inventory, reservoir pressure, reservoir or 
buffer boundaries, or certificated capacity:
    (1) A description of the current geological interpretation of the 
storage reservoir, including both the storage formation and the caprock, 
including summary analysis of any recent cross-sections, well logs, 
quantitative porosity and permeability data, and any other relevant data 
for both the storage reservoir and caprock;
    (2) The latest isopach and structural maps of the storage field, 
showing the storage reservoir boundary, as defined by fluid contacts or 
natural geological barriers; the protective buffer boundary; the surface 
and bottomhole locations of the existing and proposed injection/
withdrawal wells and observation wells; and the lengths of open-hole

[[Page 597]]

sections of existing and proposed injection/withdrawal wells;
    (3) Isobaric maps (data from the end of each injection and 
withdrawal cycle) for the last three injection/withdrawal seasons, which 
include all wells, both inside and outside the storage reservoir and 
within the buffer area;
    (4) A detailed description of present storage operations and how 
they may change as a result of the new facilities or modifications. 
Include a detailed discussion of all existing operational problems for 
the storage field, including but not limited to gas migration and gas 
loss;
    (5) Current and proposed working gas volume, cushion gas volume, 
native gas volume, deliverability (at maximum and minimum pressure), 
maximum and minimum storage pressures, at the present certificated 
maximum capacity or pressure, with volumes and rates in MMcf and 
pressures in psia;
    (6) The latest field injection/withdrawal capability studies 
including curves at present and proposed working gas capacity, including 
average field back pressure curves and all other related data;
    (7) The latest inventory verification study for the storage field, 
including methodology, data, and work papers;
    (8) The shut-in reservoir pressures (average) and cumulative gas-in-
place (including native gas) at the beginning of each injection and 
withdrawal season for the last 10 years; and
    (9) A detailed analysis, including data and work papers, to support 
the need for additional facilities (wells, gathering lines, headers, 
compression, dehydration, or other appurtenant facilities) for the 
modification of working gas/cushion gas ratio and/or to improve the 
capability of the storage field.

[Order 686, 71 FR 63693, Oct. 31, 2006, as amended by Order 686-A, 72 FR 
37436, July 10, 2007]



Sec. 157.214  Increase in storage capacity.

    (a) Prior notice. Subject to the notice requirements of Sec. 
157.205, the certificate holder is authorized to increase the maximum 
volume of natural gas authorized to be stored in a storage field to the 
extent that geological data and operating experience have demonstrated 
that a volume of natural gas greater than that currently certificated 
may be safely stored without the construction of additional facilities.
    (b) Contents of request. In addition to the requirements of Sec. 
157.205(b), requests filed for activities described in paragraph (a) 
shall contain:
    (1) Current and requested maximum storage capacity;
    (2) Current and requested maximum storage pressure;
    (3) Average depth of the storage formation;
    (4) Copies of any geological or engineering studies that demonstrate 
the feasibility of the increase in storage volume; and
    (5) A statement setting forth the purpose of the proposed increased 
capacity.
    (c) Reporting requirements. For any storage facility whose capacity 
is increased pursuant to this section, the certificate holder shall 
submit, in the manner prescribed in Sec. 385.2011 of this chapter, 
semi-annual reports (to coincide with the termination of the injection 
and withdrawal cycles) containing the information listed in subdivisions 
(1) through (8) of this paragraph. The certificate holder shall continue 
to file semi-annual reports until the storage inventory volume has 
reached, or closely approximates, the maximum specified in the request. 
Thereafter, the reports shall continue on a semi-annual basis for a 
period of one year. The filing of reports shall be discontinued 
thereafter unless otherwise ordered by the Commission. (Volumes shall be 
stated at 14.73 psia and 60 [deg]F, and pressures shall be stated in 
psia.)
    (1) The daily volume of natural gas injected into and withdrawn from 
the storage reservoir.
    (2) The volume of natural gas in the reservoir at the end of the 
reporting period.
    (3) The maximum daily injection or withdrawal rate experienced 
during the reporting period and the average working pressure on such 
maximum days taken at a central measuring point where the total volume 
injected or withdrawn is measured.
    (4) Results of any tracer program by which the leakage of injected 
gas may

[[Page 598]]

be determined. If the leakage of gas exists, the report should show the 
estimated total volume of gas leakage, the volume of recycled gas and 
the remaining inventory of gas in the reservoir at the end of the 
reporting period.
    (5) Any surveys of pressures in gas wells, water levels in 
observation wells, pump test results for the aquifer-type reservoirs, 
and the results of back-pressure tests conducted during the reporting 
period.
    (6) The latest revised structure and isopachous contour maps showing 
the location of the wells, the location and extent of the gas bubble in 
the storage reservoir for aquifer-type reservoirs and in any other 
reservoirs of the project in which gas bubbles are known to exist. This 
map need not be filed if there is no material change from the map 
previously filed.
    (7) Discussion of current operating problems and conclusions.
    (8) Such other data or reports which may aid the Commission in the 
evaluation of the storage project.

[Order 234, 47 FR 24266, June 4, 1982, as amended by Order 493, 53 FR 
15030, Apr. 27, 1988]



Sec. 157.215  Underground storage testing and development.

    (a) Automatic authorization. The certificate holder is authorized to 
acquire, construct and operate natural gas pipeline and compression 
facilities, including injection, withdrawal, and observation wells for 
the testing or development of underground reservoirs for the possible 
storage of gas, if:
    (1) The testing and development of a particular storage project will 
be completed within a three-year-period;
    (2) The quantity of natural gas injected into the prospective 
storage fields pursuant to the blanket certificate does not exceed a 
total of 10,000,000 Mcf at any time in all fields with no more than 
2,000,000 Mcf injected into any single field;
    (3) Gas will be injected for testing purposes only during off-peak 
periods;
    (4) The storage field developed pursuant to this section will not be 
utilized to render service without further authorization from the 
Commission, except that gas may be withdrawn on occasion for testing 
purposes; and
    (5) The total expenditures per calendar year pursuant to this 
section do not exceed the amount specified in Table II as adjusted 
pursuant to Sec. 157.208(d). These costs shall include expenditures for 
leases, wells, pipeline, compressors, and related facilities, but shall 
exclude the cost of the natural gas to be used for testing purposes.

                                Table II
------------------------------------------------------------------------
                         Year                                 Limit
------------------------------------------------------------------------
1982..................................................        $2,700,000
1983..................................................         2,900,000
1984..................................................         3,000,000
1985..................................................         3,100,000
1986..................................................         3,200,000
1987..................................................         3,300,000
1988..................................................         3,400,000
1989..................................................         3,500,000
1990..................................................         3,600,000
1991..................................................         3,800,000
1992..................................................         3,900,000
1993..................................................         4,000,000
1994..................................................         4,100,000
1995..................................................         4,200,000
1996..................................................         4,300,000
1997..................................................         4,400,000
1998..................................................         4,500,000
1999..................................................         4,550,000
2000..................................................         4,650,000
2001..................................................         4,750,000
2002..................................................         4,850,000
2003..................................................         4,900,000
2004..................................................         5,000,000
2005..................................................         5,100,000
2006..................................................         5,250,000
2007..................................................         5,400,000
2008..................................................         5,550,000
2009..................................................         5,600,000
2010..................................................         5,700,000
2011..................................................         5,750,000
2012..................................................         5,850,000
------------------------------------------------------------------------

    (b) Reporting requirements--(1) Annual reports. For any storage 
project tested or developed pursuant to this section, the certificate 
holder shall file, in the manner prescribed in Sec. Sec. 157.6(a) and 
385.2011 of this chapter as part of the annual report required under 
Sec. 157.207(a), the following information:
    (i) A description of the facilities constructed and the type of 
storage reservoir, i.e., gas expansion or dry gas, water-drive or 
aquifer;
    (ii) The location of the facilities;
    (iii) The cost of such facilities, the date construction began, and 
the date they were placed in service;
    (iv) The monthly volumes of gas injected into and withdrawn from 
each reservoir;
    (v) An estimate of the storage capacity and daily deliverability of 
each project; and

[[Page 599]]

    (vi) A description of the contacts made, reports produced, and 
results of consultations which took place to ensure compliance with the 
Endangered Species Act, the National Historic Preservation Act and the 
Coastal Zone Management Act.
    (2) Quarterly reports. If the reservoir to be tested and developed 
is an aquifer-type reservoir, the certificate holder shall file, in the 
manner prescribed in Sec. Sec. 157.6(a) and 385.2011 of this chapter 
unless otherwise ordered by the commission, for each such project 
quarterly reports, under oath, until the project is either certificated 
for regular service or abandoned. The quarterly report shall contain the 
following information in addition to the data required by paragraph 
(b)(1) of this section:
    (i) The daily volumes of natural gas injected into and withdrawn 
from the aquifer during the quarter and the volume of gas in the aquifer 
at the end of each month;
    (ii) The maximum daily injection or withdrawal rate experienced 
during the quarter and the average working pressure on such maximum days 
taken at a central measuring point where the total volume injected or 
withdrawn is measured;
    (iii) Results of any tracer program by which leakage of gas may be 
determined;
    (iv) Any pressure surveys of gas wells and water levels in 
observation wells conducted during the quarter by individual well, and 
copies of any core analyses, gamma ray, neutron or other electric log 
surveys and back-pressure tests taken during the quarter;
    (v) A map of the storage project showing the location of the wells, 
the latest revised structure contours, and the location and extent of 
the gas bubble. This map need not be filed if there is no material 
change from the map previously filed; and
    (vi) Such other data or reports which may aid the Commission in the 
evaluation of the project.
    (c) Accounting. The cost of any project ultimately determined to be 
infeasible for storage shall be charged to Account No. 822 of part 201, 
Underground Storage Exploration and Development Expenses.

[Order 234, 47 FR 24266, June 4, 1982, as amended by Order 493, 53 FR 
15030, Apr. 27, 1988; Order 603, 64 FR 26609, May 14, 1999; 72 FR 5614, 
Feb. 7, 2007; 73 FR 8191, Feb. 13, 2008; 74 FR 6539, Feb. 10, 2009; 75 
FR 8246, Feb. 24, 2010; 76 FR 8294, Feb. 14, 2011; 77 FR 8725, Feb.15, 
2012]



Sec. 157.216  Abandonment.

    (a) Automatic authorization. The certificate holder is authorized 
pursuant to section 7(b) of the Natural Gas Act to abandon gas supply 
facilities, and:
    (1) A receipt or delivery point, or related supply or delivery 
lateral, provided the facility has not been used to provide:
    (i) Interruptible transportation service during the one year period 
prior to the effective date of the proposed abandonment, or
    (ii) Firm transportation service during the one year period prior to 
the effective date of the proposed abandonment, provided the point is no 
longer covered under a firm contract; or
    (2) A facility that did or could now qualify for automatic 
authorization as described in Sec. 157.203(b), provided the certificate 
holder obtains the written consent of each customer served using the 
facility during the past 12 months.
    (b) Prior notice. Subject to the notice requirements of Sec. 
157.205, the certificate holder is authorized pursuant to section 7(b) 
of the Natural Gas Act to abandon:
    (1) Any receipt or delivery point if all of the existing customers 
of the pipeline served through the receipt or delivery point consent in 
writing to the abandonment. When filing a request for authorization of 
the proposed abandonment under the notice procedures of Sec. 157.205, 
the certificate holder shall notify, in writing, the State public 
service commission having regulatory authority over retail service to 
the customers served through the delivery point.
    (2) Any other facility that did or could now qualify for prior 
notice authorization as described in Sec. 157.203(c), provided the 
certificate holder obtains the written consent of each customer served 
using the facility during the past 12 months.

[[Page 600]]

    (c) Contents of request. In addition to the requirements of Sec. 
157.205(b), requests filed for activities described under paragraph (b) 
shall describe:
    (1) The location, type, size, and length of the subject facilities. 
For facilities not constructed or acquired under blanket certificate 
authority, an estimate of the current cost to replicate such facilities;
    (2) The docket authorizing the construction and operation of the 
facilities to be abandoned;
    (3) For each facility an oath statement that all of the customers 
served during the past year by the subject facilities have consented to 
the abandonment, or an explanation of why the customers' consent is not 
available;
    (4) A proposed accounting treatment of any facilities to be 
abandoned.
    (5) For any abandonment resulting in earth disturbance, a USGS 7\1/
2\-minute-series (scale 1:24,000 or 1:25,000) topographic map (or map of 
equivalent or greater detail, as appropriate) showing the location of 
the proposed facilities and a concise analysis discussing the relevant 
issues outlined in Sec. 380.12 of this chapter.
    (d) Reporting requirements. The annual report filed by the 
certificate holder shall contain, for each abandonment authorized under 
paragraph (a) of this section:
    (1) A description of the facilities abandoned under this section. 
For facilities not constructed or acquired under blanket certificate 
authority, an estimate of the current cost to replicate such facilities;
    (2) The docket number(s) of the certificate(s) authorizing the 
construction and operation of the facilities to be abandoned;
    (3) The accounting treatment of the facilities abandoned; and
    (4) The date earth disturbance, if any, related to the abandonment 
began and the date the facilities were abandoned; and
    (5) The date of the agreements obtained pursuant to Sec. 
157.206(b)(3), if earth disturbance was involved.

[Order 234, 47 FR 24266, June 4, 1982, as amended by Order 234-A, 47 FR 
38877, Sept. 3, 1982; Order 603, 64 FR 26609, May 14, 1999; Order 603-A, 
64 FR 54536, Oct. 7, 1999; Order 686, 71 FR 63694, Oct. 31, 2006; 72 FR 
54820, Sept. 27, 2007]



Sec. 157.217  Changes in rate schedules.

    (a) Automatic authorization. The certificate holder is authorized to 
permit an existing customer, at the customer's request, to change from 
part 157 individually certificated transportation or storage service to 
part 284 transportation or storage service, and to abandon the part 157 
service, if:
    (1) The combined volumetric limitations on deliveries to the 
customer under both rate schedules are not increased, for either annual 
or peak day limitations;
    (2) The conversion will reflect all the maximum rates and charges 
associated with the service;
    (3) The changes are consistent with the terms of the effective 
tariffs on file with the Commission. The certificate holder is granted a 
limited waiver of its tariff requiring posting of available capacity.
    (4) The certificate holder shall make a filing to reflect removal of 
the part 157 rate schedule from its tariff. This tariff filing must be 
filed in the electronic format required by Sec. 154.4 of this chapter.
    (b) Reporting requirements. In the annual report for any year in 
which the certificate holder has permitted an existing customer to 
change from one rate schedule to another pursuant to this section, the 
certificate holder shall state:
    (1) The name of the customer;
    (2) The rate schedules and associated rates involved; and
    (3) The effective date of the change.

[Order 234, 47 FR 24266, June 4, 1982, as amended by Order 603, 64 FR 
26609, May 14, 1999; Order 603-A, 64 FR 54537, Oct. 7, 1999; Order 714, 
73 FR 57535, Oct. 3, 2008]

[[Page 601]]



Sec. 157.218  Changes in customer name.

    (a) Automatic authorization. The effective certificates of the 
certificate holder may be amended to the extent necessary to reflect the 
change in the name of an existing customer, if the certificate holder 
has filed any necessary conforming changes in its Index of Customers, 
including the customer's old name.
    (b) Reporting requirements. For each customer name change authorized 
during a calendar year, the certificate holder shall include as a part 
of its annual report:
    (1) The old and new names of the customer; and
    (2) A brief explanation of the reason for the name change.

[Order 234, 47 FR 24266, June 4, 1982, as amended by Order 603, 64 FR 
26609, May 14, 1999]



Sec. Appendix I to Subpart F of Part 157--Procedures for Compliance With 

     the Endangered Species Act of 1973 Under Sec. 157.206(b)(3)(i)

    The following procedures apply to any certificate holder which 
undertakes a project to be authorized under a blanket certificate issued 
pursuant to subparts E or F of part 157 and to any other service subject 
to Sec. 157.206(b) of the Federal Energy Regulatory Commission's 
(Commission) regulations.
    Pursuant to Sec. 157.206(b)(7) of the Commission's regulations, the 
certificate holder shall, upon acceptance of its blanket certificate, be 
designated as the Commission's non-Federal representative to the U.S. 
Fish and Wildlife Service (FWS) and the National Marine Fisheries 
Service (NMFS) in order to conduct informal consultations with those 
agencies. For purposes of this appendix, ``listed species'' and 
``critical habitat'' shall have the same meanings as set forth in 50 CFR 
402.02. The certificate holder shall be deemed in compliance with Sec. 
157.206(b)(2)(vi) of the Commission's regulations only if, prior to 
constructing facilities or abandoning facilities by removal under the 
blanket certificate, it complies with the following procedures:
    1. The certificate holder shall contact the appropriate regional 
office of either the FWS or the NMFS (or both the FWS and the NMFS, if 
appropriate) as determined pursuant to 50 CFR 402.01 for the purpose of 
initiating informal consultations.
    2. The certificate holder shall be deemed in compliance with Sec. 
157.206(b)(2)(vi) of the Commission's regulations if the consulted 
agency (either the FWS or NMFS, or both if appropriate) initially 
determines, pursuant to the informal consultations:
    (a) That no listed species or its critical habitat occur in the 
project area; and
    (b) That no species proposed to be listed under 16 U.S.C. 1533 or 
its critical habitat occur in the project area.
    3. If the consulted agency, pursuant to the informal consultations, 
initially determines that any species proposed to be listed under 16 
U.S.C. 1533 or its critical habitat occur in the project area, then the 
certificate holder shall confer with the consulted agency on how 
potential impact can be avoided or reduced. Upon completion of the 
conference and the implementation of any mitigating measures the 
certificate holder elects to implement, and compliance with paragraph 4 
of this Appendix, if applicable, the certificate holder shall be deemed 
in compliance with Sec. 157.206(b)(2)(vi) of the Commission's 
regulations.
    4. (a) If the consulted agency initially determines, pursuant to the 
informal consultations, that a listed species or its critical habitat 
may occur in the project area, then the certificate holder shall 
continue informal consultation with the consulted agency to determine if 
the proposed project may affect such species or habitat. Continued 
informal consultations may include discussions with experts (including 
experts provided by the consulted agency), field surveys, biological 
assessments, and formulation of mitigation measures.
    (b) The certificate holder shall be deemed in compliance with Sec. 
157.206(b)(2)(vi) of the Commission's regulations if the consulted 
agency agrees with the certificate holder's determination resulting from 
the continued informal consultations, that the proposed project is not 
likely to adversely affect a listed species or critical habitat, or that 
no further consultation is necessary.
    (c) If the consulted agency does not agree with such determination 
by the certificate holder, or if the certificate holder concludes that 
the proposed project may affect listed species or the critical habitat 
of such species, then the certificate holder may not proceed with the 
proposed project under the blanket certificate.

[Order 234, 47 FR 24266, June 4, 1982, as amended by Order 436, 50 FR 
42491, Oct. 18, 1985; Order 603, 64 FR 26609, May 14, 1999; Order 603-A, 
64 FR 54537, Oct. 7, 1999]



  Sec. Appendix II to Subpart F of Part 157--Procedures for Compliance 

    With the National Historic Preservation Act of 1966 Under Sec. 

                            157.206(b)(3)(ii)

    The following procedures apply to any certificate holder which 
undertakes a project under the authority of a blanket certificate

[[Page 602]]

issued pursuant to subparts E or F of part 157 and to any other service 
subject to Sec. 157.206(b) of the Federal Energy Regulatory 
Commission's (Commission) regulations. For the purposes of this 
appendix, the following definitions apply:
    (a) ``Listed property'' means any district, site, building, 
structure or object which is listed (1) on the National Register of 
Historic Places, or (2) in the Federal Register as a property determined 
to be eligible for inclusion on the National Register.
    (b) ``SHPO'' means the State Historic Preservation Officer or any 
alternative person duly designated, in accordance with section (1)(b) of 
Appendix II to Subpart F, to advise on cultural resource matters.
    (c) ``Unlisted property'' means any district, site, building, 
structure or object which is not a listed property.
    (d) ``THPO'' means the Tribal Historic Preservation Officer, as 
defined at 36 CFR 800.2(c)(2).
    The certificate holder shall be deemed to be in compliance with 
Sec. 157.206(b)(2)(iii) of the Commission's regulations only if, prior 
to constructing facilities or abandoning facilities by removal under the 
blanket certificate, it complies with the following procedures:
    (1)(a) If federally administered land would be directly affected by 
the project, then the procedures used by the appropriate Tribal or 
Federal land managing agency to comply with section 106 of the National 
Historic Preservation Act of 1966, 16 U.S.C. 470f, shall take precedence 
over these procedures. The procedures in this appendix apply to State 
and private lands, and Federal lands for which there are no other 
Federal procedures.
    (b) If there is no SHPO, or THPO, if appropriate, or if the SHPO, or 
THPO, as appropriate, declines to consult with the certificate holder, 
the certificate holder shall so inform the environmental staff of the 
Office of Energy Projects and shall not proceed with these procedures or 
the project until an alternate consultant has been duly designated.
    (2) It shall be the certificate holder's responsibility to identify 
or cause to be identified listed properties and unlisted properties that 
satisfy the National Register Criteria for Evaluation (36 CFR 1202.6), 
that are located within the area of the project's potential 
environmental impact and that may be affected by the undertaking.
    (3) The certificate holder shall:
    (a) Check the National Register of Historic Places and consult with 
the SHPO, or THPO, as appropriate, to identify all listed properties 
within the area of the project's potential environmental impact;
    (b) Consult with the SHPO, or THPO, as appropriate, and to the 
extent deemed appropriate by the SHPO, or THPO, as appropriate, check 
public records and consult with other individuals and organizations with 
historical and cultural expertise, to determine whether unlisted 
properties that satisfy the National Register Criteria for Evaluation 
are known or likely to occur within the area of the project's potential 
environmental impact; and
    (c) Consult with the SHPO, or THPO, as appropriate, to determine the 
need for surveys to identify unknown unlisted properties. The 
certificate holder shall evaluate the eligibility of any known unlisted 
properties located within the area of the project's potential 
environmental impact according to the National Register Criteria for 
Evaluation.
    (4) The certificate holder shall be deemed in compliance with Sec. 
157.206(b)(2)(iii) of the Commission's regulations if the SHPO, or THPO, 
as appropriate, agrees with the certificate holder that no survey is 
required, and that no listed properties or unlisted properties that 
satisfy the National Register Criteria for Evaluation occur in the area 
of the project's potential environmental impact.
    (5) If the SHPO, or THPO, as appropriate, determines that surveys 
are required to ensure that no listed properties, or unlisted properties 
that satisfy the National Register Criteria for Evaluation, occur within 
the area of the project's potential environmental impact, the 
certificate holder shall perform surveys deemed by the SHPO, or THPO, as 
appropriate, to be of sufficient scope and intensity to identify and 
evaluate such properties. The certificate holder shall submit the 
results of the surveys including a statement as to which unlisted 
properties satisfy the National Register Criteria for Evaluation, to the 
SHPO and solicit comments on the surveys and the conclusions.
    (6) The certificate holder shall be deemed in compliance with Sec. 
157.206(b)(2)(iii) of the Commission's regulations if, upon conclusion 
of the surveys, the certificate holder and the SHPO, or THPO, as 
appropriate, agree that no listed properties, and no unlisted properties 
which satisfy the National Register Criteria for Evaluation, occur in 
the area of the project's potential environmental impact.
    (7) For each listed property, and each unlisted property which 
satisfies the National Register Criteria for Evaluation, which is 
located within the area of the project's potential environmental impact, 
the certificate holder, in consultation with the SHPO, or THPO, as 
appropriate, shall apply the Criteria of Effect (36 CFR 800.5) to 
determine whether the project will have an effect upon the historical, 
architectural, archeological, or cultural characteristics of the 
property that qualified it to meet National Register Criteria for 
Evaluation. The certificate holder shall be deemed in compliance with 
Sec. 157.206(b)(2)(iii) of the Commission's regulations if the 
certificate holder and the SHPO,

[[Page 603]]

or THPO, as appropriate, agree that the project will not affect these 
characteristics.
    (8) If either the certificate holder or the SHPO, or THPO, as 
appropriate, finds that the project may affect a listed property or an 
unlisted property which satisfies the National Register Criteria for 
Evaluation, located within the area of the project's potential 
environmental impact, then the project shall not be authorized under the 
blanket certificate unless such properties can be avoided by relocation 
of the project to an area where the SHPO, or THPO, as appropriate, 
agrees that no listed properties or unlisted properties that satisfy the 
National Register Criteria for Evaluation occur. The certificate holder 
shall be deemed in compliance with Sec. 157.206(b)(2)(iii) of the 
Commission's regulations if the project is relocated as described above.
    (9) If the certificate holder and the SHPO, or THPO, as appropriate, 
are unable to agree upon the need for a survey, the adequacy of a 
survey, or the results of application of the National Register Criteria 
for Evaluation to an unlisted property, the project shall not be 
authorized under the blanket certificate.

[Order 603, 64 FR 26610, May 14, 1999, as amended by Order 603-A, 64 FR 
54537, Oct. 7, 1999; Order 699, 72 FR 45325, Aug. 14, 2007]

Subpart G--Natural Gas Producer Blanket Authorization for Sales and 
Abandonment [Reserved]



PART 158_ACCOUNTS, RECORDS, MEMORANDA AND DISPOSITION OF CONTESTED AUDIT 

FINDINGS AND PROPOSED REMEDIES--Table of Contents



      Disposition of Contested Audit Findings and Proposed Remedies

Sec.
158.1 Notice to audited person.
158.2 Response to notification.
158.3 Shortened procedure.
158.4 Form and style.
158.5 Verification.
158.6 Determination.
158.7 Assignment for oral hearing.
158.8 Burden of proof.

         Certification of Compliance With Accounting Regulations

158.10 Examination of accounts.
158.11 Report of certification.
158.12 Qualifications of accountants.

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7102-7352.

    Source: Order 141, 12 FR 8603, Dec. 19, 1947, unless otherwise 
noted.

      Disposition of Contested Audit Findings and Proposed Remedies



Sec. 158.1  Notice to audited person.

    An audit conducted by the Commission's staff under authority of the 
Natural Gas Act may result in a notice of deficiency or audit report or 
similar document containing a finding or findings that the audited 
person has not complied with a requirement of the Commission with 
respect to, but not limited to, the following: A filed tariff or 
tariffs, contracts, data, records, accounts, books, communications or 
papers relevant to the audit of the audited person; matters under the 
Standards of Conduct or the Code of Conduct; and the activities or 
operations of the audited person. The notice of deficiency, audit report 
or similar document may also contain one or more proposed remedies that 
address findings of noncompliance. Where such findings, with or without 
proposed remedies, appear in a notice of deficiency, audit report or 
similar document, such document shall be provided to the audited person, 
and the finding or findings, and any proposed remedies, shall be noted 
and explained. The audited person shall timely indicate in a written 
response any and all findings or proposed remedies, or both, in any 
combination, with which the audited person disagrees. The audited person 
shall have 15 days from the date it is sent the notice of deficiency, 
audit report or similar document to provide a written response to the 
audit staff indicating any and all findings or proposed remedies, or 
both, in any combination, with which the audited person disagrees, and 
such further time as the audit staff may provide in writing to the 
audited person at the time the document is sent to the audited person. 
The audited person may move the Commission for additional time to 
provide a written response to the audit staff and such motion shall be 
granted for good cause shown. Any initial order that the Commission 
subsequently may issue with respect to the notice of deficiency, audit 
report or similar document shall note, but not address on the merits, 
the finding or findings, or the proposed remedy or remedies, or both,

[[Page 604]]

in any combination, with which the audited person disagreed. The 
Commission shall provide the audited person 30 days to respond to the 
initial Commission order concerning a notice of deficiency, audit report 
or similar document with respect to the finding or findings or any 
proposed remedy or remedies, or both, in any combination, with which it 
disagreed.

[Order 675-A, 71 FR 29784, May 24, 2006]



Sec. 158.2  Response to notification.

    Upon issuance of a Commission order that notes a finding or 
findings, or proposed remedy or remedies, or both, in any combination, 
with which the audited person has disagreed, the audited person may: 
Acquiesce in the findings and/or proposed remedies by not timely 
responding to the Commission order, in which case the Commission may 
issue an order approving them or taking other action; or challenge the 
finding or findings and/or any proposed remedies, with which it 
disagreed by timely notifying the Commission in writing that it requests 
Commission review by means of a shortened procedure or, if there are 
material facts in dispute which require cross-examination, a trial-type 
hearing.

[Order 675, 71 FR 9706, Feb. 27, 2006]



Sec. 158.3  Shortened procedure.

    If the audited person subject to a Commission order described in 
Sec. 158.1 notifies the Commission that it seeks to challenge one or 
more audit findings, or proposed remedies, or both, in any combination, 
by the shortened procedure, the Commission shall thereupon issue a 
notice setting a schedule for the filing of memoranda. The person 
electing the use of the shortened procedure, and any other interested 
entities, including the Commission staff, shall file, within 45 days of 
the notice, an initial memorandum that addresses the relevant facts and 
applicable law that support the position or positions taken regarding 
the matters at issue. Reply memoranda shall be filed within 20 days of 
the date by which the initial memoranda are due to be filed. Only 
participants who filed initial memoranda may file reply memoranda. 
Subpart T of part 385 of this chapter shall apply to all filings. Within 
20 days after the last date that reply memoranda under the shortened 
procedure may be timely filed, the audited person who elected the 
shortened procedure may file a motion with the Commission requesting a 
trial-type hearing if new issues are raised by a party. To prevail in 
such a motion, the audited person must show that a party to the 
shortened procedure raised one or more new issues of material fact 
relevant to resolution of a matter in the shortened procedure such that 
fundamental fairness requires a trial-type hearing to resolve the new 
issue or issues so raised. Parties to the shortened procedure and the 
Commission staff may file responses to the motion. In ruling upon the 
motion, the Commission may determine that some or all of the issues be 
litigated in a trial-type hearing.

[Order 675, 71 FR 9706, Feb. 27, 2006]



Sec. 158.4  Form and style.

    Each memoranda must be complete in itself. All pertinent data should 
be set forth fully, and each memorandum should set out the facts and 
argument as prescribed for briefs in Sec. 385.706 of this chapter.

[Order 141, 12 FR 8603, Dec. 19, 1947, as amended by Order 225, 47 FR 
19057, May 3, 1982]



Sec. 158.5  Verification.

    The facts stated in the memorandum must be sworn to by persons 
having knowledge thereof, which latter fact must affirmatively appear in 
the affidavit. Except under unusual circumstances, such persons should 
be those who would appear as witnesses if hearing were had to testify as 
to the facts stated in the memorandum.



Sec. 158.6  Determination.

    If no formal hearing is had the matter in issue will be determined 
by the Commission on the basis of the facts and arguments submitted.



Sec. 158.7  Assignment for oral hearing.

    In case consent to the shortened procedure is not given, or if at 
any stage of the proceeding prior to the submission of the case to the 
Commission any party in interest requests a hearing,

[[Page 605]]

the proceeding will be assigned for hearing as provided for by subpart E 
of part 385 of this chapter. The Commission may also in its discretion 
set the proceeding for hearing on its own motion at any stage thereof.

[Order 141, 12 FR 8603, Dec. 19, 1947, as amended by Order 225, 47 FR 
19057, May 3, 1982]



Sec. 158.8  Burden of proof.

    The burden of proof to justify every accounting entry shall be on 
the person making, authorizing, or requiring such entry.

         Certification of Compliance with Accounting Regulations



Sec. 158.10  Examination of accounts.

    All natural gas companies not classified as Class C or Class D prior 
to January 1, 1984 shall secure for each year, the services of an 
independent certified public accountant, or independent licensed public 
accountant (licensed on or before December 31, 1970), certified or 
licensed by a regulatory authority of a State or other political 
subdivision of the United States, to test compliance in all material 
respects of those schedules that are indicated in the General 
Instructions set out in the applicable Annual Report, Form No. 2 or Form 
No. 2-A, with the Commission's Uniform System of Accounts and published 
accounting releases. The Commission expects that identification of 
questionable matters by the independent accountant will facilitate their 
early resolution and that the independent accountant will seek advisory 
rulings by the Commission on such items. This examination shall be 
deemed supplementary to periodic Commission examinations of compliance.

[Order 581, 60 FR 53065, Oct. 11, 1995]



Sec. 158.11  Report of certification.

    Each natural gas company not classified as Class C or Class D prior 
to January 1, 1984 must file with the Commission by May 18 of the 
following calendar year, a letter or report of the independent 
accountant certifying approval, covering the subjects and in the format 
prescribed in the General Instructions of the applicable Form No. 2 or 
Form No. 2-A. The letter or report must also identify which, if any, of 
the examined schedules do not conform to the Commission's requirements 
and must describe the discrepancies that exist. The Commission will not 
be bound by the certification of compliance made by an independent 
accountant under this paragraph.

[Order 710, 73 FR 19399, Apr. 10, 2008]



Sec. 158.12  Qualifications of accountants.

    The Commission will recognize only independent certified public 
accountants, or independent licensed public accountants who were 
licensed on or before December 31, 1970, who are in fact independent. 
For example, an accountant will not be considered independent with 
respect to any person or any of its parents or subsidiaries in who he 
has, or had during the period of report, any direct financial interest. 
The Commission will determine the fact of independence by considering 
all the relevant circumstances including evidence bearing on the 
relationships between the accountant and that person or any affiliate 
thereof.

(Sec. 10, 52 Stat. 826; 15 U.S.C. 717i)

[37 FR 26006, Dec. 7, 1972, as amended at 60 FR 53065, Oct. 11, 1995]

[[Page 606]]



                 SUBCHAPTER F_ACCOUNTS, NATURAL GAS ACT



PART 201_UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR NATURAL GAS COMPANIES 

SUBJECT TO THE PROVISIONS OF THE NATURAL GAS ACT--Table of Contents



    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352, 7651-
7651o.

    Source: Order 219, 25 FR 5616, June 21, 1960, unless otherwise 
noted.

    Editorial Note: For Federal Register citations affecting part 201, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and at www.fdsys.gov.

    Effective Date Note: At 58 FR 18006, April 7, 1993, part 201 was 
amended by redesignating definitions 31 through 39 as 32 through 40 and 
adding a new definition 31; Accounts 182.3 and 254 were added under 
Balance Sheet Accounts; and Accounts 407.3 and 407.4 were added under 
Income Accounts. The added text contains information collection and 
recordkeeping requirements and will not become effective until approval 
has been given by the Office of Management and Budget.

    Note: Order 141, 12 FR 8504, Dec. 19, 1947, provides in part as 
follows:
    Prescribing a system of accounts for natural gas companies under the 
Natural Gas Act. The Federal Power Commission acting pursuant to 
authority granted by the Natural Gas Act (58) Stat. 821, as amended; 15 
U.S.C. and Sup. 717 et seq.), particularly sections 8(a), 10(a) and 16 
thereof, and finding such action necessary and appropriate for carrying 
out the provisions of said Act, ordered that:
    (a) The accompanying system of accounts, entitled ``Uniform System 
of Accounts Prescribed for Natural Gas Companies Subject to the 
Provisions of the Natural Gas Act,'' and the rules and regulations 
contained therein, be adopted;
    (b) Said system of accounts and said rules and regulations contained 
therein be and the same are hereby prescribed and promulgated as the 
system of accounts and rules and regulations of the Commission to be 
kept and observed by natural gas companies subject to the jurisdiction 
of the Commission, to the extent and in the manner set forth therein;
    (c) Said system of accounts and rules and regulations therein 
contained as to all natural gas companies now subject to the 
jurisdiction of the Commission, became effective on January 1, 1940, and 
as to any natural gas company which may hereafter become subject to the 
jurisdiction of the Commission, they shall become effective as of the 
date when such natural gas company becomes subject to the jurisdiction 
of the Commission.

Uniform System of Accounts Prescribed for Natural Gas Companies Subject 
                to the Provisions of the Natural Gas Act

                               Definitions

    When used in this system of accounts:
    1. Accounts means the accounts prescribed in this system of 
accounts.
    2. Actually issued, as applied to securities issued or assumed by 
the utility, means those which have been sold to bona fide purchasers 
for a valuable consideration, those issued as dividends on stock, and 
those which have been issued in accordance with contractual requirements 
direct to trustees of sinking funds.
    3. Actually outstanding, as applied to securities issued or assumed 
by the utility, means those which have been actually issued and are 
neither retired nor held by or for the utility; provided, however, that 
securities held by trustees shall be considered as actually outstanding.
    4. Amortization means the gradual extinguishment of an amount in an 
account by distributing such amount over a fixed period, over the life 
of the asset or liability to which it applies, or over the period during 
which it is anticipated the benefit will be realized.
    5. A. Associated (affiliated) companies means companies or persons 
that directly or indirectly, through one or more intermediaries, 
control, or are controlled by, or are under common control with the 
accounting company.
    B. Control (including the terms ``controlling,'' ``controlled by,'' 
and ``under common control with'') means the possession, directly or 
indirectly, of the power to direct or cause the direction of the 
management and policies of a company, whether such power is exercised 
through one or more intermediary companies, or alone, or in conjunction 
with, or pursuant to an agreement, and whether such power is established 
through a majority or minority

[[Page 607]]

ownership or voting of securities, common directors, officers, or 
stockholders, voting trusts, holding trusts, associated companies, 
contract or any other direct or indirect means.
    6. Book cost means the amount at which property is recorded in these 
accounts without deduction of related provisions for accrued 
depreciation, depletion, amortization, or for other purposes.
    7. Commission, means the Federal Energy Regulatory Commission.
    8. Continuing plant inventory record means company plant records for 
retirement units and mass property that provide, as either a single 
record, or in separate records readily obtainable by references made in 
a single record, the following information:
    A. For each retirement unit;
    (1) The name or description of the unit, or both;
    (2) The location of the unit;
    (3) The date the unit was placed in service;
    (4) The cost of the unit as set forth in Plant Instructions 2 and 3 
of this part; and
    (5) The plant control account to which the cost of the units is 
charged; and
    B. For each category of mass property;
    (1) A general description of the property and quantity;
    (2) The quantity placed in service by vintage year;
    (3) The average cost as set forth in Plant Instructions 2 and 3 of 
this part; and
    (4) The plant control account to which the costs are charged.
    9. Cost means the amount of money actually paid for property or 
services. When the consideration given is other than cash in a purchase 
and sale transaction, as distinguished from a transaction involving the 
issuance of common stock in a merger or a pooling of interest, the value 
of such consideration shall be determined on a cash basis.
    10. Cost of removal means the cost of demolishing, dismantling, 
tearing down or otherwise removing gas plant, including the cost of 
transportation and handling incidental thereto. It does not include the 
cost of removal activities associated with asset retirement obligations 
that are capitalized as part of the tangible long-lived assets that give 
rise to the obligation. (See General Instruction 24).
    11. Debt expense means all expenses in connection with the issuance 
and initial sale of evidences of debt, such as fees for drafting 
mortgages and trust deeds; fees and taxes for issuing or recording 
evidences of debt; cost of engraving and printing bonds and certificates 
of indebtedness; fees paid trustees; specific costs of obtaining 
governmental authority; fees for legal services; fees and commissions 
paid underwriters, brokers, and salesmen for marketing such evidences of 
debt; fees and expenses of listing on exchanges; and other like costs.
    12. A. Depletion, as applied to natural gas producing land and land 
rights, means the loss in service value incurred in connection with the 
exhaustion of the natural resource in the course of service.
    B. Depreciation, as applied to depreciable gas plant, means the loss 
in service value not restored by current maintenance, incurred in 
connection with the consumption or prospective retirement of gas plant 
in the course of service from causes which are known to be in current 
operation and against which the utility is not protected by insurance. 
Among the causes to be given consideration are wear and tear, decay, 
action of the elements, inadequacy, obsolescence, changes in the art, 
changes in demand and requirements of public authorities, and, in the 
case of natural gas companies, the exhaustion of natural resources.
    13. Development costs, when used with respect to hydrocarbons, 
include all costs incurred in the readying of hydrocarbon deposits for 
commercial production including developmental well drilling costs.
    14. Discount, as applied to the securities, issued or assumed by the 
utility, means the excess of the par (stated value of no-par stocks) or 
fact value of the securities plus interest or dividends accrued at the 
date of the sale over the cash value of the consideration received from 
their sale.

[[Page 608]]

    15. Exploration costs, include all costs incurred in proving the 
existence of hydrocarbon deposits including geological, geophysical, 
lease acquisition (including delay rentals), administrative and general, 
and exploratory well drilling costs.
    16. Full-cost accounting for exploration and development costs, 
means the capitalization of all exploration and development costs 
incurred on or related to hydrocarbon leases, on properties in the 
contiguous 48 States and the State of Alaska, acquired after October 7, 
1969.
    17. Investment advances means advances, represented by notes or by 
book accounts only, with respect to which it is mutually agreed or 
intended between the creditor and debtor that they shall be settled by 
the issuance of securities or shall not be subject to current 
settlement.
    18. Lease, capital means a lease of property used in utility or non-
utility operations, which meets one or more of the criteria stated in 
General Instruction 19.
    19. Lease, operating means a lease of property used in utility or 
non-utility operations, which does not meet any of the criteria stated 
in General Instruction 19.
    20. Minor items of property means the associated parts or items of 
which retirement units are composed.
    21. Natural gas means either natural gas unmixed, or any mixture of 
natural and artificial gas.
    22. Natural gas company means a person engaged in the transportation 
of natural gas in interstate commerce, or the sale in interstate 
commerce of such gas for resale.
    23. Net salvage value means the salvage value of property retired 
less the cost of removal.
    24. Nominally issued, as applied to securities issued or assumed by 
the utility, means those which have been signed, certified, or otherwise 
executed, and placed with the proper officer for sale and delivery, or 
pledged, or otherwise placed in some special fund of the utility, but 
which have not been sold, or issued direct to trustees of sinking funds 
in accordance with contractual requirements.
    25. Nominally outstanding, as applied to securities issued or 
assumed by the utility, means those which, after being actually issued, 
have been reacquired by or for the utility under circumstances which 
require them to be considered as held alive and not retired, provided, 
however, that securities held by trustees shall be considered as 
actually outstanding.
    26. Original cost, as applied to gas plant, means the cost of such 
property to the person first devoting it to public service.
    27. Person means an individual, a corporation, a partnership, an 
association, a joint stock company, a business trust, or any organized 
group of persons, whether incorporated or not, or any receiver or 
trustee.
    28. Premium, as applied to securities issued or assumed by the 
utility, means the excess of the cash value of the consideration 
received from their sale over the sum of their par (stated value of no-
par stocks) or face value and interest or dividends accrued at the date 
of sale.
    29. Production, transmission, and distribution plant. For the 
purposes of this system of accounts:
    A. Production system shall consist of plant and equipment used in 
the production of gas. It shall include producing lands and leaseholds, 
gas rights, other land rights, structures, drilling and clearing 
equipment, gas wells, well head equipment, separation and other 
facilities used in the production of natural gas. The production system 
ends where the gas enters a gathering system, transmission system or 
distribution system, as applicable, in accordance with the practices in 
the pricing area where such system is located.
    B. Transmission system means the land, structures, mains, valves, 
meters, boosters, regulators, tanks, compressors, and their driving 
units and appurtenances, and other equipment used primarily for 
transmitting gas from a production plant, delivery point of purchased 
gas, gathering system, storage area, or other wholesale source of gas, 
to one or more distribution areas. The transmission system begins at the 
outlet side of the valve at the connection to the last equipment in a 
manufactured gas plant, the connection to

[[Page 609]]

gathering lines or delivery point of purchased gas, and includes the 
equipment at such connection that is used to bring the gas to 
transmission pressure, and ends at the outlet side of the equipment 
which meters or regulates the entry of gas into the distribution system 
or into a storage area. It does not include storage land, structures or 
equipment. Pipeline companies, including those companies which measure 
deliveries of gas to their own distribution systems, shall include city 
gate and main line industrial measuring and regulating stations in the 
transmission function.
    C. Distribution system means the mains which are provided primarily 
for distributing gas within a distribution area, together with land, 
structures, valves, regulators, services and measuring devices, 
including the mains for transportation of gas from production plants or 
points of receipt located within such distribution area to other points 
therein. The distribution system owned by companies having no 
transmission facilities connected to such distribution system begins at 
the inlet side of the distribution system equipment which meters or 
regulates the entry of gas into the distribution system and ends with 
and includes property on the customer's premises. For companies which 
own both transmission and distribution facilities on a continuous line, 
the distribution system begins at the outlet side of the equipment which 
meters or regulates the entry of gas into the distribution system and 
ends with and includes property on the customer's premises. The 
distribution system does not include storage land, structures, or 
equipment.
    D. Distribution area means a metropolitan area or other urban area 
comprising one or more adjacent or nearby cities, villages or 
unincorporated areas, including developed areas contiguous to main 
highways.
    30. Property retired, as applied to gas plant, means property which 
has been removed, sold, abandoned, destroyed, or which for any cause has 
been withdrawn from service.
    31. Regulatory Assets and Liabilities are assets and liabilities 
that result from rate actions of regulatory agencies. Regulatory assets 
and liabilities arise from specific revenues, expenses, gains, or losses 
that would have been included in net income determinations in one period 
under the general requirements of the Uniform System of Accounts but for 
it being probable: 1) that such items will be included in a different 
period(s) for purposes of developing the rates the utility is authorized 
to charge for its utility services; or 2) in the case of regulatory 
liabilities, that refunds to customers, not provided for in other 
accounts, will be required.
    32. A. Replacing or replacement, when not otherwise indicated in the 
context, means the construction or installation of gas plant in place of 
property retired, together with the removal of the property retired.
    B. Research, Development, and Demonstration (RD&D), means 
expenditures incurred by natural gas companies either directly or 
through another person or organization (such as research institute, 
industry association, foundation, university, engineering company, or 
similar contractor) in pursuing research, development, and demonstration 
activities including experiment, design, installation, construction, or 
operation. This definition includes expenditures for the implementation 
or development of new and/or existing concepts until technically 
feasible and commercially feasible operations are verified. Such 
research, development, and demonstration costs should be reasonably 
related to the existing or future utility business, broadly defined, of 
the public utility or licensee or in the environment in which it 
operates or expects to operate. The term includes, but is not limited 
to: All such costs incidental to the design, development or 
implementation of an experimental facility, a plant process, a product, 
a formula, an invention, a system or similar items, and the improvement 
of already existing items of a like nature; amounts expended in 
connection with the proposed development and/or proposed delivery of 
substitute or synthetic gas supplies (alternate fuel sources for 
example, an experimental coal gasification plant or an experimental 
plant synthetically producing gas from liquid hydrocarbons); and the 
costs of obtaining its own patent, such

[[Page 610]]

as attorney's fees expended in making and perfecting a patent 
application. The term includes preliminary investigations and detailed 
planning of specific projects for securing for customers non-
conventional pipeline gas supplies that rely on technology that has not 
been verified previously to be feasible. The term does not include 
expenditures for efficiency surveys; studies of management, management 
techniques and organization; consumer surveys, advertising, promotions, 
or items of a like nature.
    33. Retained earnings (formerly earned surplus) means the 
accumulated net income of the utility less distribution to stockholders 
and transfers to other capital accounts.
    34. Retirement units means those items of gas plant which, when 
retired, with or without replacement, are accounted for by crediting the 
book cost thereof to the gas plant account in which included.
    35. Salvage value means the amount received for property retired, 
less any expenses incurred in connection with the sale or in preparing 
the property for sale; or, if retained, the amount at which the material 
recoverable is chargeable to Materials and Supplies, or other 
appropriate account.
    36. Service life means the time between the date gas plant is 
includible in gas plant in service, or gas plant leased to others, and 
the date of its retirement. If depreciation is accounted for on a 
production basis rather than on a time basis, then service life should 
be measured in terms of the appropriate unit of production.
    37. Service value means the difference between original cost and net 
salvage value of gas plant.
    38. Unsuccessful exploration and development costs, means 
exploration and development costs related to efforts which do not 
directly result in the discovery of commercially recoverable hydrocarbon 
reserves.
    39. Subsidiary company, means a company which is controlled by the 
utility through ownership of voting stock. (See ``Definitions''--item 5B 
``Control''). A corporate joint venture in which a corporation is owned 
by a small group of businesses as a separate and specific business or 
project for the mutual benefit of the members of the group is a 
subsidiary company for the purposes of this system of accounts.
    40. Utility, as used herein and when not otherwise indicated in the 
context, means any natural gas company to which this system of accounts 
is applicable.

                          General Instructions

    1. Applicability. Each natural gas company must apply the system of 
accounts prescribed by the Commission.
    Major --Each natural gas company as defined in the Natural Gas Act, 
whose combined gas sold for resale and gas transported or stored for a 
fee exceeds 50 million Mcf at 14.73 psi (60 [deg]F) in each of the three 
previous calendar years.
    Nonmajor--Natural gas companies that are not classified as a ``major 
company'' (as defined above), and had total gas sales or volume 
transactions exceeding 200,000 Mcf at 14.73 psi (60 [deg]F) in each of 
the three previous calendar years.
    B. This system applies to both Major and Nonmajor natural gas 
companies. Provisions have been incorporated into this system for those 
entities which prior to January 1, 1984, were applying the Commission's 
Uniform System of Accounts Prescribed for Class C and Class D (part 104 
of this chapter) now revoked. The notations ``(Nonmajor)'' and 
``(Major)'' have been used to indicate those instructions and accounts 
from the previous systems and classifications, which by definition, are 
not interchangeable without causing a loss of detail for the Major 
(previous Class A and Class B) or an increase in detail burden for the 
Nonmajor (previous Class C and Class D).
    C. The class to which any natural gas company belongs shall 
originally be determined by its annual gas volume in each of the last 
three consecutive years, or, in the case of a newly established entity, 
the projected data shall be the basis. Subsequent changes in 
classification shall be made when the volume for each of the three 
immediately preceding years exceeds the upper limit, or is less than the 
lower limit of the classification previously applicable to the natural 
gas company.

[[Page 611]]

    D. Any utility may, at its option, adopt the system of accounts 
prescribed by the Commission for any larger class of utilities.
    2. Records. A. Each utility shall keep its books of account, and all 
other books, records, and memoranda 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.
    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.
    C. No utility shall destroy any such books or records unless the 
destruction thereof is permitted by rules and regulations of the 
Commission.
    D. In addition to prescribed accounts, clearing accounts, temporary 
or experimental accounts, and subdivisions of any accounts, may be kept, 
provided the integrity of the prescribed accounts is not impaired.
    E. All amounts included in the accounts prescribed herein for gas 
plant and operating expenses shall be just and reasonable and any 
payments or accruals by the utility in excess of just and reasonable 
charges shall be included in account 426.5, Other Deductions.
    F. The arrangement or sequence of the accounts prescribed herein 
shall not be controlling as to the arrangement or sequence in report 
forms which may be prescribed by the Commission.
    3. Numbering system. A. The account numbering plan used herein 
consists of a system of three-digit whole numbers as follows:

100-199 Assets and Other Debits.
200-299 Liabilities and Other Credits.
300-399 Plant Accounts.
400-432, 434-435 Income Accounts.
433, 436-439 Retained Earnings Accounts.
480-499 Revenue Accounts.
700-899 Production, Transmission and Distribution Expenses.
900-949 Customer Accounts, Customer Service and Informational, Sales and 
General and Administrative Expenses.

    B. In certain instances, numbers have been skipped in order to allow 
for possible later expansion or to permit better coordination with the 
numbering system for other utility departments.
    C. The numbers prefixed to account titles are to be considered as 
part of the titles. Each utility, however, may adopt for its own 
purposes a different system of account numbers (See also general 
instruction 2D) provided that the numbers herein prescribed shall appear 
in the descriptive headings of the ledger accounts and in the various 
sources of original entry; however, if a utility uses a different group 
of account numbers and it is not practicable to show the prescribed 
account numbers in the various sources of original entry, such reference 
to the prescribed account numbers may be omitted from the various 
sources of original entry. Moreover, each utility using different 
account numbers for its own purposes shall keep readily available a list 
of such account numbers which it uses and a reconciliation of such 
account numbers with the account numbers provided herein. It is intended 
that the utility's records shall be so kept as to permit ready analysis 
by prescribed accounts (by direct reference to sources of original entry 
to the extent practicable) and to permit preparation of financial and 
operating statements directly from such records at the end of each 
accounting period according to the prescribed accounts.
    4. Accounting period. Each utility shall keep its books on a monthly 
basis so that for each month all transactions applicable thereto, as 
nearly as may be ascertained, shall be entered in the books of the 
utility. Amounts applicable or assignable to specific utility 
departments shall be so segregated monthly. Each utility shall close its 
books at the end of each calendar year unless otherwise authorized by 
the Commission.
    5. Submittal of questions. To maintain uniformity of accounting, 
utilities shall submit questions of doubtful interpretation to the 
Commission for consideration and decision.

[[Page 612]]

    6. Item lists. Lists of ``items'' appearing in the texts of the 
accounts or elsewhere herein are for the purpose of more clearly 
indicating the application of the prescribed accounting. The lists are 
intended to be representative, but not exhaustive. The appearance of an 
item in a list warrants the inclusion of the item in the account 
mentioned only when the text of the account also indicates inclusion 
inasmuch as the same item frequently appears in more than one list. The 
proper entry in each instance must be determined by the texts of the 
accounts.
    7. Extraordinary items. It is the intent that net income shall 
reflect all items of profit and loss during the period with the 
exception of prior period adjustments as described in paragraph 7.1 and 
long-term debt as described in paragraph 17 below. Those items related 
to the effects of events and transactions which have occurred during the 
current period and which are of unusual nature and infrequent occurrence 
shall be considered extraordinary items. Accordingly, they will be 
events and transactions of significant effect which are abnormal and 
significantly different from the ordinary and typical activities of the 
company, and which would not reasonably be expected to recur in the 
foreseeable future. (In determining significance, items should be 
considered individually and not in the aggregate. However, the effects 
of a series of related transactions arising from a single specific and 
identifiable event or plan of action should be considered in the 
aggregate.) To be considered as extraordinary under the above 
guidelines, an item should be more than approximately 5 percent of 
income, computed before extraordinary items. Commission approval must be 
obtained to treat an item of less than 5 percent, as extraordinary. (See 
accounts 434 and 435.)
    7.1 Prior period items. A. Items of profit and loss related to the 
following shall be accounted for as prior period adjustments and 
excluded from the determination of net income for the current year.
    (1) Correction of an error in the financial statements of a prior 
year.
    (2) Adjustments that result from realization of income tax benefits 
of pre-acquisition operating loss carryforwards of purchased 
subsidiaries.
    B. All other items of profit and loss recognized during the year 
shall be included in the determination of net income for that year.
    8. Unaudited items. Whenever a financial statement is required by 
the Commission, if it is known that a transaction has occurred which 
affects the accounts but the amount involved in the transaction and its 
effect upon the accounts cannot be determined with absolute accuracy, 
the amount shall be estimated and such estimated amount included in the 
proper accounts. The utility is not required to anticipate minor items 
which would not appreciably affect the accounts.
    9. Distribution of pay and expenses of employees. The charges to gas 
plant, operating expense and other accounts for services and expenses of 
employees engaged in activities chargeable to various accounts, such as 
construction, maintenance, and operations, shall be based upon the 
actual time engaged in the respective classes of work, or in case that 
method is impracticable, upon the basis of a study of the time actually 
engaged during a representative period.
    10. Payroll distribution. Underlying accounting data shall be 
maintained so that the distribution of the cost of labor charged direct 
to the various accounts will be readily available. Such underlying data 
shall permit a reasonably accurate distribution to be made of the cost 
of labor charged initially to clearing accounts so that the total labor 
cost may be classified among construction, cost of removal, gas 
operating functions (manufactured gas production, natural gas production 
and gathering, products extraction, underground storage, transmission, 
distribution, etc.), and nonutility operations.
    11. Accounting to be on accrual basis. A. The utility is required to 
keep its accounts on the accrual basis. This requires the inclusion in 
its accounts of all known transactions of appreciable amount which 
affect the accounts. If bills covering such transactions have not been 
received or rendered, the

[[Page 613]]

amounts shall be estimated and appropriate adjustments made when the 
bills are received.
    B. When payments are made in advance for items such as insurance, 
rents, taxes or interest, the amount applicable to future periods shall 
be charged to account 165, Prepayments, and spread over the periods to 
which applicable by credits to account 165, and charges to the accounts 
appropriate for the expenditure.
    12. Records for each plant. A. Separate records shall be maintained 
by gas plant accounts of the book cost of each plant owned, including 
additions by the utility to plant leased from others, and of the cost of 
operating and maintaining each plant owned or operated. The term 
``plant,'' as here used, means each manufactured gas production plant, 
the wells and gathering lines of each distinct production area, each 
system of interconnected transmission mains, each system of wells and 
lines of an underground storage project, each large purification or 
dehydration plant, each compressor station, other than a distribution 
compressor station, and each products extraction plant.
    B. A natural gas company may, with the approval of the Commission, 
group certain of its systems of gathering lines and wells, small 
compressor stations, systems of underground storage lines and wells, and 
systems of interconnected transmission mains for the purpose of 
complying with the portion of this instruction requiring a segregation 
of the cost of operating and maintaining each plant.

    Note A: Where manufactured gas is produced by two or more processes 
at one location, each process shall be accounted for separately.
    Note B: Each natural gas company shall maintain operating or 
accounting records for each well showing (a) acreage on which drilled, 
(b) dates of drilling period, (c) cost of drilling, (d) depth of well, 
(e) particulars and depth of each stratum drilled through, (f) 
geological formation from which gas is obtained, (g) initial rock 
pressure and open flow capacity, (h) sizes of casing used and the 
lengths of each size, (i) total cost of well as recorded in gas plant 
accounts, (j) date well abandoned, for wells once productive, (k) date 
transferred to underground storage plant, for wells converted to storage 
use, and (l) date drilling discontinued, for wells determined to be 
nonproductive. The foregoing data, as appropriate, shall also be 
maintained for each subsequent change in the depth of each well.

    13. Accounting for other departments. If the utility also operates 
other utility departments, such as electric, water, etc., it shall keep 
such accounts for the other departments as may be prescribed by proper 
authority and in the absence of prescribed accounts, it shall keep such 
accounts as are proper or necessary to reflect the results of operating 
each such department. It is not intended that proprietary and similar 
accounts which apply to the utility as a whole shall be 
departmentalized.
    14. Transactions with associated companies. Each utility shall keep 
its accounts and records so as to be able to furnish accurately and 
expeditiously statements of all transactions with associated companies. 
The statements may be required to show the general nature of the 
transactions, the amounts involved therein and the amounts included in 
each account prescribed herein with respect to such transactions. 
Transactions with associated companies shall be recorded in the 
appropriate accounts for transactions of the same nature. Nothing herein 
contained, however, shall be construed as restraining the utility from 
subdividing accounts for the purpose of recording separately 
transactions with associated companies.
    15. Contingent assets and liabilities. Contingent assets represent a 
possible source of value to the utility contingent upon the fulfillment 
of conditions regarded as uncertain. Contingent liabilities include 
items which may under certain conditions become obligations of the 
utility but which are neither direct nor assumed liabilities at the date 
of the balance sheet. The utility shall be prepared to give a complete 
statement of significant contingent assets and liabilities (including 
cumulative dividends on preference stock) in its annual report and at 
such other times as may be requested by the Commission.
    16. [Reserved]
    17. Long-term debt: Premium, discount and expense, and gain or loss 
on reacquisition-- A. Premium, discount and expense. A separate premium, 
discount

[[Page 614]]

and expense account shall be maintained for each class and series of 
long-term debt (including receivers' certificates) issued or assumed by 
the utility. The premium will be recorded in account 225, Unamortized 
Premium on Long-Term Debt, the discount will be recorded in account 226, 
Unamortized Discount on Long-Term Debt--Debit, and the expense of 
issuance shall be recorded in account 181, Unamortized Debt Expense.
    The premium, discount and expense shall be amortized over the life 
of the respective issues under a plan which will distribute the amounts 
equitably over the life of the securities. The amortization shall be on 
a monthly basis, and amounts thereof relating to discount and expense 
shall be charged to account 428, Amortization of Debt Discount and 
Expense. The amounts relating to premium shall be credited to account 
429, Amortization of Premium on Debt--Credit.
    B. Reacquisition, without refunding. When long-term debt is 
reacquired or redeemed without being converted into another form of 
long-term debt and when the transaction is not in connection with a 
refunding operation (primarily redemptions for sinking fund purposes), 
the difference between the amount paid upon reacquisition and the face 
value; plus any un- amortized premium less any related unamortized debt 
expense and reacquisition costs; or less any unamortized discount, 
related debt expense and reacquisition costs applicable to the debt 
redeemed, retired and canceled, shall be included in account 189, 
Unamortized Loss on Reacquired Debt, or account 257, Unamortized Gain on 
Reacquired Debt, as appropriate. The utility shall amortize the recorded 
amounts equally on a monthly basis over the remaining life of the 
respective security issues (old original debt). The amounts so amortized 
shall be charged to account 428.1, Amortization of Loss on Reacquired 
Debt, or credited to account 429.1, Amortization of Gain on Reacquired 
Debt--Credit, as appropriate.
    C. Reacquisition, with refunding. When the redemption of one issue 
or series of bonds or other long-term obligations is financed by another 
issue or series before the maturity date of the first issue, the 
difference between the amount paid upon refunding and the face value; 
plus any unamortized premium less related debt expense or less any 
unamortized discount and related debt expense, applicable to the debt 
refunded, shall be included in account 189, Unamortized Loss on 
Reacquired Debt, or account 257, Unamortized Gain on Reacquired Debt, as 
appropriate. The utility may elect to account for such amounts as 
follows:
    (1) Write them off immediately when the amounts are insignificant.
    (2) Amortize them by equal monthly amounts over the remainder of the 
original life of the issue retired, or
    (3) Amortize them by equal monthly amounts over the life of the new 
issue.
    Once an election is made, it shall be applied on a consistent basis. 
The amounts in (1), (2), or (3) above shall be charged to account 428.1, 
Amortization of Loss on Reacquired Debt, or credited to account 429.1, 
Amortization of Gain on Reacquired Debt--Credit, as appropriate.
    D. Under methods (2) and (3) above, the increase or reduction in 
current income taxes resulting from the reacquisition should be 
apportioned over the remainder of the original life of the issue retired 
or over the life of the new issue, as appropriate, as directed more 
specifically in paragraphs E and F below.
    E. When the utility recognizes the loss in the year of reacquisition 
as a tax deduction, account 410.1, Provision for Deferred Income Taxes, 
Utility Operating Income, shall be debited and account 283, Accumulated 
Deferred Income Taxes--Other, shall be credited with the amount of the 
related tax effect, such amount to be allocated to the periods affected 
in accordance with the provisions of account 283.
    F. When the utility chooses to recognize the gain in the year of 
reacquisition as a taxable gain, account 411.1, Provision for Deferred 
Income Taxes--Credit, Utility Operating Income, shall be credited and 
account 190, Accumulated Deferred Income Taxes, shall be debited with 
the amount of the related tax effect, such amount to be allocated to the 
periods affected in accordance with the provisions of account 190.

[[Page 615]]

    G. When the utility chooses to use the optional privilege of 
deferring the tax on the gain attributable to the reacquisition of debt 
by reducing the depreciable basis of utility property for tax purposes, 
pursuant to Section 108 of the Internal Revenue Code, the related tax 
effects shall be deferred as the income is recognized for accounting 
purposes, and the deferred amounts shall be amortized over the life of 
the associated property on a vintage year basis. Account 410.1, 
Provision for Deferred Income Taxes, Utility Operating Income, shall be 
debited, and account 282, Accumulated Deferred Income Taxes--Other 
Property, shall be credited with an amount equal to the estimated income 
tax effect applicable to the portion of the income, attributable to 
reacquired debt, recognized for accounting purposes during the period. 
Account 282 shall be debited and account 411.1, Provision for Deferred 
Income Taxes--Credit, Utility Operating Income, shall be credited with 
an amount equal to the estimated income tax effects, during the life of 
the property, attributable to the reduction in the depreciable basis for 
tax purposes.
    H. The tax effects relating to gain or loss shall be allocated as 
above to utility operations except in cases where a portion of the debt 
reacquired is directly applicable to nonutility operations. In that 
event, the related portion of the tax effects shall be allocated to 
nonutility operations. Where it can be established that reacquired debt 
is generally applicable to both utility and nonutility operations, the 
tax effects shall be allocated between utility and nonutility operations 
based on the ratio of net investment in utility plant to net investment 
in non- utility plant.
    I. Premium, discount, or expense on debt shall not be included as an 
element in the cost of construction or acquisition of property (tangible 
or intangible), except under the provisions of account 432, Allowance 
for Borrowed Funds Used During Construction--Credit.
    J. Alternate method. Where a regulatory authority or a group of 
regulatory authorities having prime rate jurisdiction over the utility 
specifically disallows the rate principle of amortizing gains or losses 
on reacquisition of long-term debt without refunding, and does not apply 
the gain or loss to reduce interest charges in computing the allowed 
rate of return for rate purposes, then the following alternate method 
may be used to account for gains or losses relating to reacquisition of 
long-term debt, with or without refunding.
    (1) The difference between the amount paid upon reacquisition of any 
long-term debt and the face value, adjusted for unamortized discount, 
expenses or premium, as the case may be, applicable to the debt redeemed 
shall be recognized currently in income and recorded in account 421, 
Miscellaneous Nonoperating Income, or account 426.5, Other Deductions.
    (2) When this alternate method of accounting is used, the utility 
shall include a footnote to each financial statement, prepared for 
public use, explaining why this method is being used along with the 
treatment given for ratemaking purposes.
    18. Comprehensive interperiod income tax allocation. A. Where there 
are timing differences between the periods in which transactions affect 
taxable income and the periods in which they enter into the 
determination of pretax accounting income, the income tax effects of 
such transactions are to be recognized in the periods in which the 
differences between book accounting income and taxable income arise and 
in the periods in which the differences reverse using the deferred tax 
method. In general, comprehensive interperiod tax allocation should be 
followed whenever transactions enter into the determination of pretax 
accounting income for the period even though some transactions may 
affect the determination of taxes payable in a different period, as 
further qualified below.
    B. Utilities are not required to utilize comprehensive interperiod 
income tax allocation until the deferred income taxes are included as an 
expense in the rate level by the regulatory authority having rate 
jurisdiction over the utility. Where comprehensive interperiod tax 
allocation accounting is not practiced the utility shall include as a 
note to each financial statement, prepared for public use, a footnote 
explanation

[[Page 616]]

setting forth the utility's accounting policies with respect to 
interperiod tax allocation and describing the treatment for ratemaking 
purposes of the tax timing differences by regulatory authorities having 
rate jurisdiction.
    C. Should the utility be subject to more than one agency having rate 
jurisdiction, its accounts shall appropriately reflect the ratemaking 
treatment (deferral or flow through) of each jurisdiction.
    D. Once comprehensive interperiod tax allocation has been initiated 
either in whole or in part it shall be practiced on a consistent basis 
and shall not be changed or discontinued without prior Commission 
approval.
    E. Tax effects deferred currently will be recorded as deferred 
debits or deferred credits in accounts 190, Accumulated Deferred Income 
Taxes, 281, Accumulated Deferred Income Taxes--Accelerated Amortization 
Property, 282, Accumulated Deferred Income Taxes--Other Property, and 
283, Accumulated Deferred Income Taxes--Other, as appropriate. The 
resulting amounts recorded in these accounts shall be disposed of as 
prescribed in this system of accounts or as otherwise authorized by the 
Commission.
    19. Criteria for classifying leases. A. If at its inception a lease 
meets one or more of the following criteria, the lease shall be 
classified as a capital lease. Otherwise, it shall be classified as an 
operating lease.
    (1) The lease transfers ownership of the property to the leasee by 
the end of the lease term.
    (2) The lease contains a bargain purchase option.
    (3) The lease term is equal to 75 percent or more of the estimated 
economic life of the leased property. However, if the beginning of the 
lease term falls within the last 25 percent of the total estimated 
economic life of the lease property, including earlier years of use, 
this criterion shall not be used for purposes of classifying the lease.
    (4) the present value at the beginning of the lease term of the 
minimum lease payments, excluding that portion of the payments 
representing executory costs such as insurance, maintenance, and taxes 
to be paid by the lessor, including any profit thereon, equals or 
exceeds 90 percent of the excess of the fair value of the leased 
property to the lessor at the inception of the lease over any related 
investment tax credit retained by the lessor and expected to be realized 
by the lessor. However, if the beginning of the lease term falls within 
the last 25 percent of the total estimated economic life of the lease 
property, including earlier years of use, this criterion shall not be 
used for purposes of classifying the lease. The lessee utility shall 
compute the present value of the minimum lease payments using his 
incremental borrowing rate, unless (a) it is practicable for the utility 
to learn the implicit rate computed by the lessor, and (b) the implicit 
rate computed by the lessor is less than the lessee's incremental 
borrowing rate. If both of those conditions are met, the lessee shall 
use the implicit rate.
    B. If at any time the lessee and lessor agree to change the 
provisions of the lease, other than by renewing the lease or extending 
its term, in a manner that would have resulted in a different 
classification of the lease under the criteria in paragraph A had the 
changed terms been in effect at the inception of the lease, the revised 
agreement shall be considered as a new agreement over its term, and the 
criteria in paragraph A shall be applied for purposes of classifying the 
lease. Likewise, any action that extends the lease beyond the expiration 
of the existing lease term, such as the exercise of a lease renewal 
option other than those already included in the lease term, shall be 
considered as a new agreement, and shall be classified according to the 
above provisions, Changes in estimates (for example, changes in 
estimates of the economic life or of the residual value of the leased 
property) or changes in circumstances (for example, default by the 
lessee), shall not give rise to a new classification of a lease for 
accounting purposes.
    20. Accounting for leases. A. All leases shall be classified as 
either capital or operating leases. The accounting for capitalized 
leases is effective January 1, 1984, except for the retroactive 
classification of certain leases which, in accordance with FASB No. 71, 
will not be required to be capitalized until after a three year 
transition period. For the

[[Page 617]]

purpose of reporting to the FERC, the transition period shall be deemed 
to end December 31, 1986.
    B. The utility shall record a capital lease as an asset in account 
101.1, Property under Capital Leases (or account 121, Non-utility 
Property, if appropriate), and an obligation in account 227, Obligations 
under Capital Leases--Noncurrent, or account 243, Obligations under 
Capital Leases--Current, at an amount equal to the present value at the 
beginning of the lease term of minimum lease payments during the lease 
term, excluding that portion of the payments representing executory 
costs such as insurance, maintenance, and taxes to be paid by the 
lessor, together with any profit thereon. However, if the amount so 
determined exceeds the fair value of the leased property at the 
inception of the lease, the amount recorded as the asset and obligation 
shall be the fair value.
    C. The utility, as a lessee, shall recognize an asset retirement 
obligation (See General Instruction 24) arising from the plant under a 
capital lease unless the obligation is recorded as an asset and 
liability under a capital lease. The utility shall record the asset 
retirement cost by debiting account 101.1, Property under capital 
leases, or account 121, Nonutility property, as appropriate, and 
crediting the liability for the asset retirement obligation in account 
230, Asset retirement obligations. Asset retirement costs recorded in 
account 101.1 or account 121 shall be amortized by charging rent expense 
(See Operating Expense Instruction 3) or account 421, Miscellaneous 
nonoperating income, as appropriate, and crediting a separate subaccount 
of the account in which the asset retirement costs are recorded. Charges 
for the periodic accretion of the liability in account 230, Asset 
retirement obligations, shall be recorded by a charge to account 411.10, 
Accretion expense, for gas utility plant, and account 421, Miscellaneous 
nonoperating income, for nonutility plant and a credit to account 230, 
Asset retirement obligations.
    D. Rental payments on all leases shall be charged to rent expense, 
fuel expense, construction work in progress, or other appropriate 
accounts as they become payable.
    E. For a capital lease, for each period during the lease term, the 
amounts recorded for the asset and obligation shall be reduced by an 
amount equal to the portion of each lease payment which would have been 
allocated to the reduction of the obligation, if the payment had been 
treated as a payment on an installment obligation (liability) and 
allocated between interest expense and a reduction of the obligation so 
as to produce a constant periodic rate of interest on the remaining 
balance.
    21. Gas well records. Each utility with natural gas operations shall 
maintain operating or accounting records for each well showing: (a) 
Acreage on which drilled, (b) dates of drilling period, (c) cost of 
drilling, (d) depth of well, (e) particulars and depth of each stratum 
drilled through, (f) geological formation from which gas is obtained, 
(g) initial rock pressure and open flow capacity, (h) sizes of casing 
used and lengths of each size, (i) total cost of well as recorded in gas 
plant accounts, (j) date well abandoned, for wells once productive, (k) 
date transferred to underground storage plant, for wells converted to 
storage use, and (l) date drilling discontinued, for wells determined to 
be nonproductive. The foregoing data, as appropriate, shall also be 
maintained for each subsequent change in the depth of each well.
    22. Accounting for other comprehensive income.
    A. Utilities shall record items of other comprehensive income in 
account 219, accumulated other comprehensive income. Amounts included in 
this account shall be maintained by each category of other comprehensive 
income. Examples of categories of other comprehensive income include, 
foreign currency items, minimum pension liability adjustments, 
unrealized gains and losses on available-for-sale type securities and 
cash flow hedge amounts. Supporting records shall be maintained for 
account 219 so that the company can readily identify the cumulative 
amount of other comprehensive income for each item included in this 
account.

[[Page 618]]

    B. When an item of other comprehensive income enters into the 
determination of net income in the current or subsequent periods, a 
reclassification adjustment shall be recorded in account 219 to avoid 
double counting of that amount.
    C. When it is probable that an item of other comprehensive income 
will be included in the development of cost of service rates in 
subsequent periods, that amount of unrealized losses or gains shall be 
recorded in accounts 182.3 or 254 as appropriate.
    23. Accounting for derivative instruments and hedging activities.
    A. Utilities shall recognize derivative instruments as either assets 
or liabilities in the financial statements and measure those instruments 
at fair value, except those falling within recognized exceptions, the 
most common of which being the normal purchases and sales scope 
exception. Normal purchases or sales are contracts that provide for the 
purchase or sale of goods that will be delivered in quantities expected 
to be used or sold by the utility over a reasonable period in the normal 
course of business. A derivative instrument is a financial instrument or 
other contract with all three of the following characteristics:
    (1) It has one or more underlyings and a notional amount or payment 
provision. Those terms determine the amount of the settlement or 
settlements, and, in some cases, whether or not a settlement is 
required.
    (2) It requires no initial net investment or an initial net 
investment that is smaller than would be required for other types of 
contracts that would be expected to have similar response to changes in 
market factors.
    (3) Its terms require or permit net settlement, can readily be 
settled net by a means outside the contract, or provides for delivery of 
an asset that puts the recipient in a position not substantially 
different from net settlement.
    B. The accounting for the changes in the fair value of derivative 
instruments depends upon its intended use and designation. Changes in 
the fair value of derivative instruments not designated as fair value or 
cash flow hedges will be recorded in account 175, derivative instrument 
assets, or account 244, derivative instrument liabilities, as 
appropriate, with the gains recorded in account 421, miscellaneous 
nonoperating income, and losses recorded in account 426.4, other 
deductions.
    C. A derivative instrument may be specifically designated as a fair 
value or cash flow hedge. A hedge may be used to manage risk to price, 
interest rates, or foreign currency transactions. Utilities shall 
maintain documentation of the hedge relationship at the inception of the 
hedge that details the risk management objective and strategy for 
undertaking the hedge, the nature of the risk being hedged, and how 
hedge effectiveness will be determined.
    D. If the utility designates the derivative instrument as a fair 
value hedge against exposure to changes in the fair value of a 
recognized asset, liability, or a firm commitment, it will record the 
change in fair value of the derivative instrument to account 176, 
derivative instrument assets--hedges, or account 245, derivative 
instrument liabilities--hedges, as appropriate, with a corresponding 
adjustment to the subaccount of the item being hedged. The ineffective 
portion of the hedge transaction shall be reflected in the same income 
or expense account that will be used when the hedged item enters into 
the determination of net income. In the case of a fair value hedge of a 
firm commitment a new asset or liability is created. As a result of the 
hedge relationship, the new asset or liability will become part of the 
carrying amount of the item being hedged.
    E. If the utility designates the derivative instrument as a cash 
flow hedge against exposure to variable cash flows of a probable 
forecasted transaction, it shall record changes in the fair value of the 
derivative instrument in account 176, derivative instrument assets--
hedges, or account 245, derivative instrument liabilities--hedges, as 
appropriate, with a corresponding amount in account 219, accumulated 
other comprehensive income, for the effective portion of the hedge. The 
ineffective portion of the hedge transaction shall be reflected in the 
same income or expense account that will be used when

[[Page 619]]

the hedged item enters into the determination of net income. Amounts 
recorded in other comprehensive income shall be reclassified into 
earnings in the same period or periods that the hedged forecasted item 
enters into the determination of net income.
    24. Accounting for asset retirement obligations.
    A. An asset retirement obligation represents a liability for the 
legal obligation associated with the retirement of a tangible long-lived 
asset that a utility is required to settle as a result of an existing or 
enacted law, statute, ordinance, or written or oral contract or by legal 
construction of a contract under the doctrine of promissory estoppel. An 
asset retirement cost represents the amount capitalized when the 
liability is recognized for the long-lived asset that gives rise to the 
legal obligation. The amount recognized for the liability and an 
associated asset retirement cost shall be stated at the fair value of 
the asset retirement obligation in the period in which the obligation is 
incurred.
    B. The utility shall initially record a liability for an asset 
retirement obligation in account 230, Asset retirement obligations, and 
charge the associated asset retirement costs to gas utility plant and 
nonutility plant, as appropriate, related to the plant that gives rise 
to the legal obligation. The asset retirement cost shall be depreciated 
over the useful life of the related asset that gives rise to the 
obligations. For periods subsequent to the initial recording of the 
asset retirement obligation, a utility shall recognize the period to 
period changes of the asset retirement obligation that result from the 
passage of time due to the accretion of the liability and any subsequent 
measurement changes to the initial liability for the legal obligation 
recorded in account 230, Asset retirement obligations, as follows:
    (1) The utility shall record the accretion of the liability by 
debiting account 411.10, Accretion expense, for gas utility plant, 
account 413, Expenses of gas plant leased to others, for gas plants 
leased to others, and account 421, Miscellaneous nonoperating income, 
for nonutility plant and crediting account 230, Asset retirement 
obligations; and
    (2) The utility shall recognize any subsequent measurement changes 
of the liability initially recorded in account 230, Asset retirement 
obligations, for each specific asset retirement obligation as an 
adjustment of that liability in account 230 with the corresponding 
adjustment to gas utility plant, gas plant leased to others, and 
nonutility plant, as appropriate. The utility shall on a timely basis 
monitor any measurement changes of the asset retirement obligations.
    C. Gains or losses resulting from the settlement of asset retirement 
obligations associated with utility plant resulting from the difference 
between the amount of the liability for the asset retirement obligation 
included in account 230, Asset retirement obligations, and the actual 
amount paid to settle the obligation shall be accounted for as follows:
    (1) Gains shall be credited to account 411.6, Gains from disposition 
of utility plant, and;
    (2) Losses shall be charged to account 411.7, Losses from 
disposition of utility plant.
    D. Gains or losses on the settlement of the asset retirement 
obligations associated with nonutility plant resulting from the 
difference between the amount of the liability for the asset retirement 
obligation in account 230, Asset retirement obligations, and the amount 
paid to settle the obligation, shall be accounted for as follows:
    (1) Gains shall be credited to account 421, Miscellaneous 
nonoperating income, and;
    (2) Losses shall be charged to account 426.5, Other deductions.
    E. Separate subsidiary records shall be maintained for each asset 
retirement obligation showing the initial liability and associated asset 
retirement cost, any incremental amounts of the liability incurred in 
subsequent reporting periods for additional layers of the original 
liability and related asset retirement cost, the accretion of the 
liability, the subsequent measurement changes to the asset retirement 
obligation, the depreciation and amortization of the asset retirement 
costs and related accumulated depreciation, and

[[Page 620]]

the settlement date and actual amount paid to settle the obligation. For 
purposes of analyses a utility shall maintain supporting documentation 
so as to be able to furnish accurately and expeditiously with respect to 
each asset retirement obligation the full details of the identity and 
nature of the legal obligation, the year incurred, the identity of the 
plant giving rise to the obligation, the full particulars relating to 
each component and supporting computations related to the measurement of 
the asset retirement obligation.

                         Gas Plant Instructions

    1. Classification of gas plant at the effective date of the system 
of accounts.
    A. The gas plant accounts provided herein are generally the same as 
those contained in the prior system of accounts except for some changes 
in classification in the general equipment accounts. Except for these 
changes, the balances in the various plant accounts, as determined under 
the prior system of accounts, should be carried forward. Any remaining 
balance of plant which has not yet been classified pursuant to the 
requirements of the prior system, shall be classified in accordance with 
the following instructions.
    B. The cost to the utility of its unclassified plant shall be 
ascertained by analysis of the utility's records. Adjustments shall not 
be made to record in utility plant accounts amounts previously charged 
to operating expenses or to income deductions in accordance with the 
uniform system of accounts in effect at the time or in accordance with 
the discretion of management as exercised under a uniform system of 
accounts, or under accounting practices previously followed.
    C. The detailed gas plant accounts (301 to 399, inclusive) shall be 
stated on the basis of cost to the utility of plant constructed by it 
and the original cost, estimated if not known, of plant acquired as an 
operating unit or system. The difference between the original cost as 
above, and the cost to the utility of gas plant after giving effect to 
any accumulated provision for depreciation, depletion, or amortization 
shall be recorded in account 114, Gas Plant Acquisition Adjustments. The 
original cost of gas plant shall be determined by analysis of the 
utility's records or those of the predecessor or vendor companies with 
respect to gas plant previously acquired as operating units or systems 
and the differences between the original cost so determined, less 
accumulated provisions for depreciation, depletion and amortization, and 
the cost to the utility, with necessary adjustments for retirements from 
the date of acquisition, shall be entered in account 114, Gas Plant 
Acquisition Adjustments. Any difference between the cost of gas plant 
and its book cost, when not properly includable in other accounts, shall 
be recorded in account 116, Other Gas Plant Adjustments.
    D. Plant acquired by lease which qualifies as capital lease property 
under General Instruction 19. Criteria for Classifying Leases, shall be 
recorded in Account 101.1, Property under Capital Leases.
    2. Gas plant to be recorded at cost. A. All amounts included in the 
accounts for gas plant acquired as an operating unit or system, except 
as otherwise provided in the texts of the intangible plant accounts, 
shall be stated at the cost incurred by the person who first devoted the 
property to utility service. All other gas plant shall be included in 
the accounts at the cost incurred by the utility, except for property 
acquired by lease which qualifies as capital lease property under 
General Instruction 19. Criteria for Classifying Leases, and is recorded 
in Account 101.1, Property under Capital Leases. Where the term ``cost'' 
is used in the detailed plant accounts, it shall have the meaning stated 
in this paragraph.
    B. When the consideration given for property is other than cash, the 
value of such consideration shall be determined on a cash basis. (See, 
however, definition 8.) In the entry recording such transaction, the 
actual consideration shall be described with sufficient particularity to 
identify it. The utility shall be prepared to furnish the Commission the 
particulars of its determination of the cash value of the consideration 
if other than cash.
    C. When property is purchased under a plan involving deferred 
payments, no charge shall be made to the gas plant accounts for 
interest, insurance, or

[[Page 621]]

other expenditures occasioned solely by such form of payment.
    D. The gas plant accounts shall not include the cost or other value 
of gas plant contributed to the company. Contributions in the form of 
money or its equivalent toward the construction of gas plant shall be 
credited to the accounts charged with the cost of such construction. 
Plant constructed from contributions of cash or its equivalent shall be 
shown as a reduction to gross plant constructed when assembling cost 
data in work orders for posting to plant ledger of accounts. The 
accumulated gross costs of plant accumulated in the work order shall be 
recorded as a debit in the plant ledger of accounts along with the 
related amount of contributions concurrently being recorded as a credit.
    3. Components of construction cost. A. The cost of construction 
properly includable in the gas plant accounts shall include, where 
applicable, the direct and overhead costs as listed and defined 
hereunder:
    (1) ``Contract work'' includes amounts paid for work performed under 
contract by other companies, firms, or individuals, costs incident to 
the award of such contracts, and the inspection of such work.
    (2) ``Labor'' includes the pay and expenses of employees of the 
utility engaged on construction work, and related workmen's compensation 
insurance, payroll taxes and similar items of expense. It does not 
include the pay and expenses of employees which are distributed to 
construction through clearing accounts nor the pay and expenses included 
in other items hereunder.
    (3) ``Materials and supplies'' includes the purchase price at the 
point of free delivery plus customs duties, excise taxes, the cost of 
inspection, loading and transportation, the related stores expenses, and 
the cost of fabricated materials from the utility's shop. In determining 
the cost of materials and supplies used for construction, proper 
allowance shall be made for unused materials and supplies, for materials 
recovered from temporary structures used in performing the work 
involved, and for discounts allowed and realized in the purchase of 
materials and supplies.

    Note: The cost of individual items of equipment of small value (for 
example, $500 or less) or of short life, including small portable tools 
and implements, shall not be charged to utility plant accounts unless 
the correctness of the accounting therefor is verified by current 
inventories. The cost shall be charged to the appropriate operating 
expense or clearing accounts, according to the use of such items, or, if 
such items are consumed directly in construction work, the cost shall be 
included as part of the cost of the construction.

    (4) ``Transportation'' includes the cost of transporting employees, 
materials and supplies, tools, purchased equipment, and other work 
equipment (when not under own power) to and from points of construction. 
It includes amounts paid to others as well as the cost of operating the 
utility's own transportation equipment. (See item 5 following.)
    (5) ``Special machine service'' includes the cost of labor 
(optional), materials and supplies, depreciation, and other expenses 
incurred in the maintenance, operation and use of special machines, such 
as steam shovels, pile drivers, derricks, ditchers, scrapers, material 
unloaders, and other labor saving machines; also expenditures for rental 
maintenance and operation of machines of others. It does not include the 
cost of small tools and other individual items of small value or short 
life which are included in the cost of materials and supplies. (See item 
3, above.) When a particular construction job requires the use for an 
extended period of time of special machines, transportation or other 
equipment, the net book cost thereof, less the appraised or salvage 
value at time of release from the job, shall be included in the cost of 
construction.
    (6) ``Shop service'' includes the proportion of the expense of the 
utility's shop department assignable to construction work except that 
the cost of fabricated materials from the utility's shop shall be 
included in ``materials and supplies.''
    (7) ``Protection'' includes the cost of protecting the utility's 
property from fire or other casualties and the cost of preventing 
damages to others, or to the property of others, including payments

[[Page 622]]

for discovery or extinguishment of fires, cost of apprehending and 
prosecuting incendiaries, witness fees in relation thereto, amounts paid 
to municipalities and others for fire protection, and other analogous 
items of expenditures in connection with construction work.
    (8) ``Injuries and damages'' includes expenditures or losses in 
connection with the construction work on account of injuries to persons 
and damages to the property of others; also the cost of investigation of 
and defense against actions for such injuries and damages. Insurance 
recovered or recoverable on account of compensation paid for injuries to 
persons incident to construction shall be credited to the account or 
accounts to which such compensation is charged. Insurance recovered or 
recoverable on account of property damages incident to construction 
shall be credited to the account or accounts charged with the cost of 
the damages.
    (9) ``Privileges and permits'' includes payments for and expenses 
incurred in securing temporary privileges, permits or rights in 
connection with construction work, such as for the use of private or 
public property, streets, or highways, but it does not include rents, or 
amounts chargeable as franchises and consents for which see account 302, 
Franchises and Consents.
    (10) ``Rents'' includes amounts paid for the use of construction 
quarters and office space occupied by construction forces and amounts 
properly includible in construction costs for such facilities jointly 
used.
    (11) ``Engineering and supervision'' includes the portion of the pay 
and expenses of engineers, surveyors, draftsmen, inspectors, 
superintendents and their assistants applicable to construction work.
    (12) ``General administration capitalized'' includes the portion of 
the pay and expenses of the general officers and administrative and 
general expenses applicable to construction work.
    (13) ``Engineering services'' includes amounts paid to other 
companies, firms, or individuals engaged by the utility to plan, design, 
prepare estimates, supervise, inspect, or give general advice and 
assistance in connection with construction work.
    (14) ``Insurance'' includes premiums paid or amounts provided or 
reserved as self-insurance for the protection against loss and damages 
in connection with construction, by fire or other casualty, injury to or 
death of persons other than employees, damages to property of others, 
defalcation of employees and agents, and the nonperformance of 
contractual obligations of others. It does not include workmen's 
compensation or similar insurance on employees included as ``labor'' in 
item 2, above.
    (15) ``Law expenditures'' includes the general law expenditures 
incurred in connection with construction and the court and legal costs 
directly related thereto, other than law expenses included in 
protection, item 7, and in injuries and damages, item 8.
    (16) ``Taxes'' includes taxes on physical property (including land) 
during the period of construction and other taxes properly includible in 
construction costs before the facilities become available for service.
    (17) ``Allowance for funds used during construction'' includes the 
net cost for the period of construction of borrowed funds used for 
construction purposes and a reasonable rate on other funds when so used, 
not to exceed without prior approval of the Commission allowances 
computed in accordance with the formula prescribed in paragraph (a) 
below, except when such other funds are used for exploration and 
development or leases acquired after October 7, 1969, no allowance on 
such other funds shall be included in these accounts. No allowance for 
funds used during construction charges shall be included in these 
accounts upon expenditures for construction projects which have been 
abandoned.
    (a) The formula and elements for the computation of the allowance 
for funds used during construction shall be:
[GRAPHIC] [TIFF OMITTED] TC14NO91.166

Ai=Gross allowance for borrowed funds used during 
construction rate.
Ae=Allowance for other funds used during construction rate.

[[Page 623]]

S=Average short-term debt.
s=Short-term debt interest rate.
D=Long-term debt.
d=Long-term debt interest rate.
P=Preferred stock.
p=Preferred stock cost rate.
C=Common equity.
c=Common equity cost rate.
W=Average balance in construction work in progress less asset retirement 
costs (See General Instruction 24) related to plant under construction.

    (b) The rates shall be determined annually. The balances for long-
term debt, preferred stock and common equity shall be the actual book 
balances as of the end of the prior year. The cost rates for long-term 
debt and preferred stock shall be the weighted average cost determined 
in the manner indicated in subpart D of part 154 of the Commission's 
Regulations Under the Natural Gas Act. The cost rate for common equity 
shall be the rate granted common equity in the last rate proceeding 
before the ratemaking body having primary rate jurisdiction. If such 
cost rate is not available, the average rate actually earned during the 
preceding three years shall be used. The short-term debt balances and 
related cost and the average balance for construction work in progress 
shall be estimated for the current year with appropriate adjustments as 
actual data becomes available.

    Note: When a part only of a plant or project is placed in operation 
or is completed and ready for service but the construction work as a 
whole is incomplete, that part of the cost of the property placed in 
operation, or ready for service, shall be treated as ``Gas Utility 
Plant'' and allowance for funds used during construction thereon as a 
charge to construction shall cease. Allowance for funds used during 
construction on that part of the cost of the plant which is incomplete 
may be continued as a charge to construction until such time as it is 
placed in operation or is ready for service, except as limited in item 
17, above.

    (18) ``Earnings and expenses during construction'' includes (a) all 
revenues derived during the construction period from property which is 
included in the cost of a project under construction and (b) all 
expenses which are attributable to the revenues received.
    (19) ``Training costs''. When it is necessary that employees be 
trained to operate or maintain plant facilities that are being 
constructed and such facilities are not conventional in nature or are 
new to the company's operations, these costs may be capitalized as a 
component of construction cost. Once plant is placed in service, the 
capitalization of training costs shall cease, and subsequent training 
costs shall be expensed. (See Operating Expense Instruction 4.)
    (20) ``Line pack gas.'' Line pack includes the first cost of that 
quantity of gas introduced into the utility's system necessary to bring 
the system up to its designed operating capacity or increases therein 
and which must be maintained in the system in order to sustain such 
design operating capacity.
    (21) LNG ``heel'' is the first cost of that minimum quantity of 
liquefied natural gas necessary to be retained in holding tanks and 
other facilities for purposes of temperature and/or pressure 
maintenance.
    (22) ``Studies'' includes the costs of studies such as operational, 
safety or environmental studies relative to plant under construction. 
Studies mandated by regulatory bodies relative to facilities in service, 
shall be charged to Account 183.2, Other Preliminary Survey and 
Investigation Charges.
    (23) ``Asset retirement costs.'' The costs recognized as a result of 
asset retirement obligations incurred during the construction and 
testing of utility plant shall constitute a component of construction 
costs.
    4. Overhead construction costs. A. All overhead construction costs, 
such as engineering, supervision, general office salaries and expenses, 
construction engineering and supervision by others than the accounting 
utility, law expenses, insurance, injuries and damages, relief and 
pensions, taxes and interest, shall be charged to particular jobs or 
units on the basis of the amounts of such overheads reasonably 
applicable thereto, to the end that each job or unit shall bear its 
equitable proportion of such costs and that the entire cost of the unit, 
both direct and overhead, shall be deducted from the plant accounts at 
the time the property is retired.
    B. As far as practicable, the determination of pay roll charges 
includible in construction overheads shall be

[[Page 624]]

based on time card distributions thereof. Where this procedure is 
impractical, special studies shall be made periodically of the time of 
supervisory employees devoted to construction activities to the end that 
only such overhead costs as have a definite relation to construction 
shall be capitalized. The addition to direct construction costs of 
arbitrary percentages or amounts to cover assumed overhead costs is not 
permitted.
    C. The record supporting the entries for overhead construction costs 
shall be so kept as to show the total amount of each overhead for each 
year, the nature and amount of each overhead expenditure charged to each 
construction work order and to each utility plant account, and the bases 
of distribution of such costs.
    5. Gas plant purchased or sold. A. When gas plant constituting an 
operating unit or system is acquired by purchase, merger, consolidation, 
liquidation, or otherwise, after the effective date of this system of 
accounts, the costs of acquisition, including expenses incidental 
thereto properly includible in gas plant, shall be charged to account 
102, Gas Plant Purchased or Sold.
    B. The accounting for the acquisition shall then be completed as 
follows:
    (1) The original cost of plant, estimated if not known, shall be 
credited to account 102, Gas Plant Purchased or Sold, and concurrently 
charged to the appropriate gas plant in service accounts and to account 
104, Gas Plant Leased to Others, account 105, Gas Plant Held for Future 
Use, 105.1, Production Properties Held for Future Use, and account 107, 
Construction Work in Progress--Gas, as appropriate.
    (2) The depreciation, depletion, and amortization applicable to the 
original cost of the properties purchased, shall be charged to account 
102, Gas Plant Purchased or Sold, and concurrently credited to the 
appropriate account for accumulated provision for depreciation, 
depletion or amortization.
    (3) The cost to the utility of any property includible in account 
121, Nonutility Property, shall be transferred thereto.
    (4) The amount remaining in account 102, Gas Plant Purchased or 
Sold, shall then be closed to account 114, Gas Plant Acquisition 
Adjustments.
    C. If property acquired in the purchase of an operating unit or 
system is in such physical condition when acquired that it is necessary 
substantially to rehabilitate it in order to bring the property up to 
the standards of the utility, the cost of such work, except 
replacements, shall be accounted for as a part of the purchase price of 
the property.
    D. When any property acquired as an operating unit or system 
includes duplicate or other plant which will be retired by the 
accounting utility in the reconstruction of the acquired property or its 
consolidation with previously owned property, the proposed accounting 
for such property shall be presented to the Commission.
    E. In connection with the acquisition of gas plant constituting an 
operating unit or system, the utility shall procure, if possible, all 
existing records relating to the property acquired, or certified copies 
thereof, and shall preserve such records in conformity with regulations 
or practices governing the preservation of records of its own 
construction.
    F. When gas plant constituting an operating unit or system is sold, 
conveyed, or transferred to another by sale, merger, consolidation, or 
otherwise, the book cost of the property sold or transferred to another 
shall be credited to the appropriate utility plant accounts, including 
amounts carried in account 114, Gas Plant Acquisition Adjustments. The 
amounts (estimated if not known) carried with respect thereto in the 
accounts for accumulated provision for depreciation, depletion, and 
amortization and in account 252, Customer Advances for Construction, 
shall be charged to such accounts and the contra entries made to account 
102, Gas Plant Purchased or Sold. Unless otherwise ordered by the 
Commission, the difference, if any, between (a) the net amount of debits 
and credits and (b) the consideration received for the property (less 
commissions and other expenses of making the sale) shall be included in 
account 421.1, Gain on Disposition of Property, or account 421.2, Loss 
on Disposition of Property. (See

[[Page 625]]

account 102, Gas Plant Purchased or Sold.)

    Note: In cases where existing utilities merge or consolidate because 
of financial or operating reasons or statutory requirements rather than 
as a means of transferring title of purchased properties to a new owner, 
the accounts of the constituent utilities, with the approval of the 
Commission, may be combined. In the event original cost has not been 
determined, the resulting utility shall proceed to determine such cost 
as outlined herein.

    6. Expenditures on leased property. A. The cost of substantial 
initial improvements (including repairs, rearrangements, additions, and 
betterments) made in the course of preparing for utility service 
property leased for a period of more than one year, and the cost of 
subsequent substantial additions, replacements, or betterments to such 
property, shall be charged to the gas plant account appropriate for the 
class of property leased. If the service life of the improvements is 
terminable by action of the lease, the cost, less net salvage, of the 
improvements shall be spread over the life of the lease by charges to 
account 404.3, Amortization of Other Limited-Term Gas Plant. However, if 
the service life is not terminated by action of the lease but by 
depreciation proper, the cost of the improvements, less net salvage, 
shall be accounted for as depreciable plant. The provisions of this 
paragraph are applicable to property leased under either capital leases 
or operating leases.
    B. If improvements made to property leased for a period of more than 
one year are of relatively minor cost, or if the lease is for a period 
of not more than one year, the cost of the improvements shall be charged 
to the account in which the rent is included, either directly or by 
amortization thereof.
    7. Land and land rights. A. The accounts for land and land rights 
shall include the cost of land owned in fee by the utility and rights, 
interests, and privileges held by the utility in land owned by others, 
such as leaseholds, easements, rights-of-way, natural gas rights, and 
other like interests in land. Do not include in the accounts for land 
and land rights and rights-of-way costs incurred in connection with 
first clearing and grading of land and rights-of-way and the damage 
costs associated with the construction and installation of plant. Such 
costs shall be included in the appropriate plant accounts directly 
benefited.
    B. Where special assessments for public improvements provide for 
deferred payments, the full amount of the assessments shall be charged 
to the appropriate land account and the unpaid balance shall be carried 
in an appropriate liability account. Interest on unpaid balances shall 
be charged to the appropriate interest account. If any part of the cost 
of public improvement is included in the general tax levy, the amount 
thereof shall be charged to the appropriate tax account.
    C. The net profit from the sale of timber, cord wood, sand, gravel, 
other resources or other property acquired with the rights-of-way or 
other lands shall be credited to the appropriate plant account to which 
related. Where land is held for a considerable period of time and timber 
and other natural resources on the land at the time of purchase 
increases in value, the net profit (after giving effect to the cost of 
the natural resources) from the sales of timber or its products or other 
natural resources shall be credited to the appropriate utility operating 
income account when such land has been recorded in account 105, Gas 
Plant Held for Future Use, account 105.1, Production Properties Held for 
Future Use, or classified as plant in service otherwise to account 421, 
Miscellaneous Nonoperating Income.
    D. Separate entries shall be made for the acquisition, transfer, or 
retirement of each parcel of land, and each land right, or gas right 
(except rights-of-way for distribution mains), having a life of more 
than one year. A record shall be maintained showing the nature of 
ownership, full legal description, area, map reference, purpose for 
which used, city, county, and tax district in which situated, from whom 
purchased or to whom sold, payment given or received, other costs, 
contract date and number, date of recording of deed, and book and page 
of record. Entries transferring or retiring land or land rights shall 
refer to the original entry recording its acquisition. A parcel of land 
acquired and carried on the books as a

[[Page 626]]

unit is not required to be subdivided with transfers to other land 
accounts merely because of the erection thereon of an incidental 
structure to be used in gas operations but for a purpose differing from 
that for which the land is chiefly employed; for example, a small 
storehouse on production plant land.
    E. Any difference between the amount received from the sale of land 
or land rights, less agents' commissions and other costs incident to the 
sale, and the book cost of such land or rights shall be included in 
account 411.6, Gains from Disposition of Utility Plant or 411.7, Losses 
from Disposition of Utility Plant when such property has been recorded 
in account 105, Gas Plant Held for Future Use, 105.1, Production 
Properties Held for Future Use, otherwise to account 421.1, Gain on 
Disposition of Property or 421.2, Loss on Disposition of Property, as 
appropriate, unless a reserve therefor has been authorized and provided. 
Appropriate adjustments of the accounts shall be made with respect to 
any structures or improvements located on land sold.
    F. The cost of buildings and other improvements (other than public 
improvements) shall not be included in the land accounts. If at the time 
of acquisition of an interest in land such interest extends to buildings 
or other improvements (other than public improvements), which are then 
devoted to utility operations, the land and improvements shall be 
separately appraised and the cost allocated to land and buildings or 
improvements on the basis of the appraisals. If the improvements are 
removed or wrecked without being used in operations, the cost of 
removing or wrecking shall be charged and the salvage credited to the 
account in which the cost of the land is recorded.
    G. When the purchase of land for gas operations requires the 
purchase of more land than needed for such purposes, the charge to the 
specific land account shall be based upon the cost of the land 
purchased, less the fair market value of that portion of the land which 
is not to be used in utility operations. The portion of the cost 
measured by the fair market value of the land not to be used shall be 
included in account 105, Gas Plant Held for Future Use or, account 121, 
Nonutility Property, as appropriate. Regarding land and land rights held 
for the production of natural gas, account 101, Gas Plant in Service, 
shall include (1) the cost of lands owned in fee upon which producing 
natural gas wells are located on lands owned in fee which are being 
drained through the operation by the utility of wells on the other land, 
and (2) the first cost of lands held under lease upon which the utility 
pays royalties for the natural gas obtained therefrom. The cost of all 
other land and land rights held for the production of natural gas under 
a plant for such use shall be included in account 105, Gas Plant Held 
for Future Use, or 105.1, Production Properties Held for Future Use, as 
appropriate.

    Note: In addition to the accounting records prescribed herein, 
supplemental records of land and land rights held for future use shall 
be kept in such manner as to permit the segregation within a reasonable 
time of the land and land rights constituting (1) productive but 
nonproducing fields, (2) unproven or undeveloped fields, and (3) storage 
fields, and to show the following data with respect to each natural gas 
lease, regardless of the accounting treatment accorded the lease costs; 
(a) name of lessor, (b) location of leasehold and number or other 
identification assigned thereto, (c) date and period of lease agreement, 
(d) first cost of lease including details of the elements of such cost, 
(e) annual rental provisions, (f) date and cost of drilling, (g) date 
gas determined to exist, (h) date of completion of first well drilled by 
the utility in each pool of gas, (i) royalty provisions, (j) 
amortization and depletion provisions, and (k) date of abandonment of 
lease.

    H. Provision shall be made for amortizing amounts carried in the 
accounts for limited-term interests in land, so as to apportion 
equitably the cost of each interest over the life thereof. For the 
purposes of amortization of natural gas rights, separate interests in 
land which comprise an interest in a production area may be grouped to 
form a depletion unit. (See account 111, Accumulated Provision for 
Amortization and Depletion of Gas Utility Plant, account 404.1, 
Amortization and Depletion of Producing Natural Gas Land and Land 
Rights, account 404.3, Amortization of Other Limited-Term Gas Plant, and 
account 797, Abandonment, leases.)

[[Page 627]]

    I. The items of cost to be included in the accounts for land and 
land rights are as follows:

    1. Bulkheads, buried, not requiring maintenance or replacement.
    2. Cost, first, of acquisition including mortgages and other liens 
assumed (but not subsequent interest thereon).
    3. [Reserved]
    4. Condemnation proceedings, including court and counsel costs.
    5. Consents and abutting damages, payment for.
    6. Conveyancers' and notaries' fees.
    7. Fees, commissions, and salaries to brokers, agents, and others in 
connection with the acquisition of the land or land rights.
    8. [Reserved]
    9. Leases, cost of voiding upon purchase to secure possession of 
land.
    10. Removing, relocating, or reconstructing, property of others, 
such as buildings, highways, railroads, bridges, cemeteries, churches, 
telephone and power lines, etc., in order to acquire quiet possession.
    11. Retaining walls unless identified with structures.
    12. Special assessments levied by public authorities for public 
improvements on the basis of benefits for new roads, new bridges, new 
sewers, new curbing, new pavements, and other public improvements, but 
not taxes levied to provide for the maintenance of such improvements.
    13. Surveys in connection with the acquisition, but not amounts paid 
for topographical surveys and maps where such costs are attributable to 
structures or plant equipment erected or to be erected or installed on 
such land.
    14. Taxes assumed, accrued to date of transfer of title.
    15. Title, examining, clearing, insuring, and registering in 
connection with the acquisition and defending against claims relating to 
the period prior to the acquisition.
    16. Appraisals prior to closing title.
    17. Cost of dealing with distributees or legatees residing outside 
of the state or county, such as recording power of attorney, recording 
will or exemplification of will, recording satisfaction of state tax.
    18. Filing satisfaction of mortgage.
    19. Documentary stamps.
    20. Photographs of property at acquisition.
    21. Fees and expenses incurred in the acquisition of water rights, 
and grants.
    22. Cost of fill to extend bulkhead line over land under water, 
where riparian rights are held, which is not occasioned by the erection 
of a structure.
    23. Sidewalks and curbs constructed by the utility on public 
property.
    24. Labor and expenses in connection with securing rights of way, 
where performed by company employees and company agents.

    8. Structures and improvements. A. The accounts for structures and 
improvements shall include the cost of all buildings and facilities to 
house, support, or safeguard property or persons, including all fixtures 
permanently attached to and made a part of buildings and which cannot be 
removed therefrom without cutting into the walls, ceilings, or floors, 
or without in some way impairing the buildings, and improvements of a 
permanent character on or to land. Also include those costs incurred in 
connection with the first clearing and grading of land and rights-of-
way, and the damage costs associated with construction and installation 
of plant.
    B. The cost of specially provided foundations not intended to 
outlast the machinery or apparatus for which provided, and the cost of 
angle irons, castings, etc., installed at the base of an item of 
equipment, shall be charged to the same account as the cost of the 
machinery, apparatus, or equipment.
    C. Minor buildings and structures may be considered a part of the 
facility in connection with which constructed or operated and the cost 
thereof accounted for accordingly when the nature of the structure and 
facility indicates the correctness of such accounting.
    D. Where furnaces and boilers are used primarily for furnishing 
steam for some particular department and only incidentally for 
furnishing steam for heating a building and operating the equipment 
therein, the entire cost of such furnaces and boilers shall be charged 
to the appropriate plant account, and no part to the building account.
    E. The cost of disposing of materials excavated in connection with 
construction of structures shall be considered as a part of the cost of 
such work, except as follows: (a) When such material is used for 
filling, the cost of loading, hauling, and dumping shall be equitably 
apportioned between the work in connection with which the removal occurs 
and the work in connection with which the material is used; (b) when 
such material is sold, the net amount realized from such sales shall be 
credited to the work in connection with which the removal occurs. If the

[[Page 628]]

amount realized from the sale of excavated materials exceeds the removal 
costs and the costs in connection with the sale, the excess shall be 
credited to the land account in which the site is carried.
    F. Lighting or other fixtures temporarily attached to buildings for 
purposes of display or demonstration shall not be included in the cost 
of the building but in the appropriate equipment account.
    G. The items of cost to be included in the accounts for structures 
and improvements are as follows:

    1. Architects' plans and specifications including supervision.
    2. Ash pits (when located within the building).
    3. Athletic field structures and improvements.
    4. Boilers, furnaces, piping, wiring, fixtures, and machinery for 
heating, lighting, signaling, ventilating, and air conditioning systems, 
plumbing, vacuum cleaning systems, incinerator and smoke pipe, flues, 
etc.
    5. Bulkheads, including dredging, riprap fill, piling, decking, 
concrete, fenders, etc., when exposed and subject to maintenance and 
replacement.
    6. Chimneys.
    7. Coal bins and bunkers.
    8. Commissions and fees to brokers, agents, architects and others.
    9. Conduit (not to be removed) with its contents.
    10. Damages to abutting property during construction.
    11. Docks.
    12. Door checks and door stops.
    13. Drainage and sewerage systems.
    14. Elevators, cranes, hoists, etc., and the machinery for operating 
them.
    15. Excavation, including shoring, bracing, bridging, refill, and 
disposal of excess excavated material, cofferdams around foundation, 
pumping water from cofferdam during construction, and test borings.
    16. Fences and fence curbs (not including protective fences 
insolating items of equipment, which shall be charged to the appropriate 
equipment account).
    17. Fire protection systems when forming a part of a structure.
    18. Flagpole.
    19. Floor covering (permanently attached).
    20. Foundations and piers for machinery, constructed as a permanent 
part of a building or other items listed herein.
    21. Grading and clearing when directly occasioned by the building of 
a structure.
    22. Holders--Relief.
    23. Intrasite communication system, poles, pole fixtures, wires and 
cables.
    24. Landscaping, lawns, shrubbery, etc.
    25. Leases, voiding upon purchase to secure possession of 
structures.
    26. Leased property, expenditures on.
    27. Lighting fixtures and outside lighting system.
    28. Mailchutes when part of a building.
    29. Marquee, permanently attached to building.
    30. Painting, first coat.
    31. Permanent paving, concrete, brick, flagstone, asphalt, etc. 
within the property lines.
    32. Partitions, including movable.
    33. Permits and privileges.
    34. Platforms, railings and gratings when constructed as a part of a 
structure.
    35. Power boards for services to a building.
    36. Refrigerating systems for general use.
    37. Retaining walls except when identified with land.
    38. Roadways, railroads, bridges, and trestles, intrasite, except 
railroads provided for in equipment accounts.
    39. Roofs.
    40. Scales, connected to and forming a part of a structure.
    41. Screens.
    42. Sewer systems, for general use.
    43. Sidewalks, culverts, curbs and streets constructed by the 
utility on its property.
    44. Sprinkling systems.
    45. Sump pumps and pits.
    46. Stacks--brick, steel, or concrete, when set on foundation 
forming part of general foundation and steelwork of a building.
    47. Steel inspection during construction.
    48. Storage facilities constituting a part of a building.
    49. Storm doors and windows.
    50. Subways, areaways, and tunnels, directly connected to and 
forming part of a structure.
    51. Tanks, constructed as part of a building or as a distinct 
structural unit.
    52. Temporary heating during construction (net cost).
    53. Temporary water connection during construction (net cost).
    54. Temporary shanties and other facilities used during construction 
(net cost).
    55. Topographical maps.
    56. Tunnels, intake and discharge, when constructed as part of a 
structure, including sluice gates, and those constructed to house mains.
    57. Vaults constructed as part of a building.
    58. Watchmen's sheds and clock systems (net cost when used during 
construction only).
    59. Water basins or reservoirs.
    60. Water front improvements.
    61. Water meters and supply system for a building or for general 
company purposes.
    62. Water supply piping, hydrants and wells.

[[Page 629]]

    63. Wharves.
    64. Window shades and ventilators.
    65. Yard drainage system.
    66. Yard lighting system.
    67. Yard surfacing, gravel, concrete, or oil (First cost only).

    Note: Structures and Improvements accounts shall be credited with 
the cost of coal bunkers, stacks, foundations, subways, tunnels, etc., 
the use of which has terminated with the removal of the equipment with 
which they are associated even though they have not been physically 
removed.

    9. Equipment. A. The cost of equipment chargeable to the gas plant 
accounts, unless otherwise indicated in the text of an equipment 
account, includes the net purchase price thereof, sales taxes, 
investigation and inspection expenses necessary to such purchase, 
expenses of transportation when borne by the utility, labor employed, 
materials and supplies consumed, and expenses incurred by the utility in 
unloading and placing the equipment in readiness to operate. Also 
include those costs incurred in connection with the first clearing and 
grading of land and rights-of-way and the damage costs associated with 
construction and installation of plant.
    B. Exclude from equipment accounts hand and other portable tools 
which are likely to be lost or stolen or which have relatively small 
value (for example, $500 or less) or short life, unless the correctness 
of the accounting therefor as gas plant is verified by current 
inventories. Special tools acquired and included in the purchase price 
of equipment shall be included in the appropriate plant account. 
Portable drills and similar tool equipment when used in connection with 
the operation and maintenance of a particular plant or department, such 
as production, transmission, distribution, etc., or in ``stores,'' shall 
be charged to the plant account appropriate for their use.
    C. The equipment accounts shall include angle irons and similar 
items which are installed at the base of an item of equipment, but piers 
and foundations which are designed to be as permanent as the buildings 
which house the equipment, or which are constructed as a part of the 
building and which cannot be removed without cutting into the walls, 
ceilings or floors or without in some way impairing the building, shall 
be included in the building accounts.
    D. The equipment accounts shall include the necessary costs of 
testing or running a plant or part thereof during an experimental or 
test period prior to becoming available for service. The utility shall 
furnish the Commission with full particulars of and justification for 
any test or experimental run extending beyond a period of thirty days.
    E. The cost of efficiency or other tests made subsequent to the date 
equipment becomes available for service shall be charged to the 
appropriate expense accounts, except that tests to determine whether 
equipment meets the specifications and requirements as to efficiency, 
performance, etc., guaranteed by manufacturers, made after operations 
have commenced and within the period specified in the agreement or 
contract of purchase, may be charged to the appropriate gas plant 
account.
    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.
    B. The addition and retirement of retirement units shall be 
accounted for as follows:
    (1) When a retirement unit is added to gas plant, the cost thereof 
shall be added to the appropriate gas plant account, except that when 
units are acquired in the acquisition of any gas plant constituting an 
operating system, they shall be accounted for as provided in gas plant 
instruction 5.
    (2) When a retirement unit is retired from gas plant, with or 
without replacement, the book cost thereof shall be credited to the gas 
plant account in which it is included, determined in the manner set 
forth in paragraph D, below. If the retirement unit is of a depreciable 
class, the book cost of the unit retired and credited to gas plant

[[Page 630]]

shall be charged to the accumulated provision for depreciation 
applicable to such property. The cost of removal and the salvage shall 
be charged or credited, as appropriate, to such depreciation account.
    C. The addition and retirement of minor items of property shall be 
accounted for as follows:
    (1) When a minor item of property which did not previously exist is 
added to plant, the cost thereof shall be accounted for in the same 
manner as for the addition of a retirement unit, as set forth in 
paragraph B(1), above, if a substantial addition results, otherwise the 
charge shall be to the appropriate maintenance expense account.
    (2) When a minor item of property is retired and not replaced, the 
book cost thereof shall be credited to the gas plant account in which it 
is included; and, in the event the minor item is a part of depreciable 
plant, the account for accumulated provision for depreciation shall be 
charged with the book cost and cost of removal and credited with the 
salvage. If, however, the book cost of the minor item retired and not 
replaced has been or will be accounted for by its inclusion in the 
retirement unit of which it is a part when such unit is retired, no 
separate credit to the property account is required when such minor item 
is retired.
    (3) When a minor item of depreciable property is replaced 
independently of the retirement unit of which it is a part, the cost of 
replacement shall be charged to the maintenance account appropriate for 
the item, except that if the replacement effects a substantial 
betterment (the primary aim of which is to make the property affected 
more useful, more efficient, or of greater durability, or of greater 
capacity), the excess cost of the replacement over the estimated cost at 
current prices of replacing without betterment shall be charged to the 
appropriate gas plant account.
    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.
    E. The book cost of land retired shall be credited to the 
appropriate land account. If the land is sold, the difference between 
the book cost (less any accumulated provision for depreciation, 
depletion or amortization therefor which has been authorized and 
provided) and the sale price of the land (less commissions and other 
expenses of making the sale) shall be recorded in account 411.6, Gains 
from Disposition of Utility Plant or 411.7, Losses from Disposition of 
Utility Plant when the property has been recorded in account 105, Gas 
Plant Held for Future Use account 105.1, Production Properties Held for 
Future Use, otherwise to accounts 421.1, Gain on Disposition of Property 
or 421.2, Loss on Disposition of Property, as appropriate. If the land 
is not used in utility service but is retained by the utility, the book 
cost shall be charged to account 105, Gas Plant Held for Future Use, or 
account 121, Nonutility Property as appropriate.
    F. The book cost less net salvage of depreciable gas plant retired 
shall be charged in its entirety to account 108. Accumulated Provision 
for Depreciation of Gas Plant in Service. Any amounts which, by approval 
or order of the Commission, are charged to account 182, Extraordinary 
Property Losses, shall be credited to account 108.
    G. The accounting for the retirement of amounts included in account 
302, Franchises and Consents, and account 303, Miscellaneous Intangible 
Plant, and the item of limited-term interest in land included in the 
accounts for land and land rights, shall be as provided for in the text 
of account 111, Accumulated Provision for Amortization and Depletion of 
Gas Utility Plant, account 404.3, Amortization of Other Limited-Term Gas 
Plant, and account 405, Amortization of Other Gas Plant.
    11. Work order and property record system required. A. Each utility 
shall

[[Page 631]]

record all construction and retirements of gas plant by means of work 
orders or job orders. Separate work orders may be opened for additions 
to and retirements of gas plant or the retirements may be included with 
the construction work order, provided, however, that all items relating 
to the retirements shall be kept separate from those relating to 
construction and provided, further, that any maintenance costs involved 
in the work shall likewise be segregated.
    B. Each utility shall keep its work order system so as to show the 
nature of each addition to or retirement of gas plant, the total cost 
thereof, the source or sources of costs, and the gas plant account or 
accounts to which charged or credited. Work orders covering jobs of 
short duration may be cleared monthly.
    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.
    12. Transfers of property. When property is transferred from one gas 
plant account to another, from one utility department to another (such 
as from gas to electric), from one operating division or area to 
another, to or from account 101, Gas Plant in Service, 104, Gas Plant 
Leased to Others, 105, Gas Plant Held for Future Use, 105.1, Production 
Properties held for Future Use, and 121, Nonutility Property, the 
transfer shall be recorded by transferring the original cost thereof 
from the one account, department, or location to the other. Any related 
amounts carried in the accounts for accumulated provisions for 
depreciation, depletion, or amortization shall be transferred in 
accordance with the segregation of such accounts.

    Note: Amounts included in account 111, Accumulated Provision for 
Amortization and Depletion of Gas Utility Plant, shall not be related to 
a particular natural gas lease, and therefore, shall not be transferred 
under the provisions of this instruction.

    13. Common utility plant. A. If the utility is engaged in more than 
one utility service such as gas, electric, and water, and any of its 
utility plant is used in common for several utility services or for 
other purposes to such an extent and in such manner that it is 
impracticable to segregate it by utility services currently in the 
accounts, such property, with the approval of the Commission, may be 
designated and classified as ``common utility plant.''
    B. The book amount of utility plant designated as common plant shall 
be included in account 118, Other Utility Plant, and if applicable in 
part to gas department, shall be segregated and accounted for in 
subaccounts as gas plant is accounted for in accounts 101 to 107, 
inclusive, and gas plant adjustments in account 116; any amounts 
classifiable as common plant acquisition adjustments or common plant 
adjustments shall be subject to disposition as provided in paragraph C 
and B of accounts 114 and 116, respectively, for amounts classified in 
those accounts. The original cost of common utility plant in service 
shall be classified according to detailed utility plant accounts 
appropriate for the property.
    C. The utility shall be prepared to show at any time and to report 
to the Commission annually, or more frequently, if required, and by 
utility plant accounts (301 to 399) the following: (1) The book cost of 
common utility plant, (2) the allocation of such cost to the respective 
departments using the common utility plant, and (3) the basis of the 
allocation.
    D. The accumulated provision for depreciation and amortization of 
the utility shall be segregated so as to show the amount applicable to 
the property classified as common utility plant.
    E. The expenses of operation maintenance, rents, depreciation and 
amortization of common utility plant shall be recorded in the accounts 
prescribed herein, but designated as common expenses, and the allocation 
of such expenses to the departments using the common utility plant shall 
be supported in such manner as to reflect readily the basis of 
allocation used.
    14. Employee villages and living quarters. Where employee villages 
or living quarters are provided for operators and attendants of a 
functional installation such as a compressor station or gasoline plant, 
the structures and improvements shall be classified in the related

[[Page 632]]

functional structures and improvements account. The furnishings of such 
residential and recreational facilities shall be classified in the 
equipment account of the related function.
    15. Fees for applications filed with the Commission. A. Fees for 
applications involving construction of property shall be accounted for 
as follows:
    (1) All fees paid prior to the final disposition of the certificate 
application shall be charged to account 186, Miscellaneous Deferred 
Debits.
    (2) If the certificate is granted and accepted, the amounts recorded 
in account 186 shall be cleared to account 107, Construction Work in 
Progress--Gas, and subsequently cleared to the appropriate plant 
accounts.
    (3) If the certificate requested is not granted or is not accepted 
by the applicant, the fees recorded in account 186 shall be cleared to 
account 928, Regulatory Commission Expenses.
    (4) All amounts paid after the Commission has granted the 
certificate shall be recorded in account 107, Construction Work in 
Progress--Gas, and subsequently cleared to the appropriate plant 
accounts.
    B. All amounts paid related to certificate applications involving 
the acquisitions of facilities including those acquired by merger or 
pooling of interests shall be charged to account 928, Regulatory 
Commission Expenses.
    C. All other fees for applications not involving construction or 
acquisition of facilities shall be charged to account 928, Regulatory 
Commission Expenses.

                     Operating Expense Instructions

    1. Supervision and engineering. The supervision and engineering 
includible in the operating expense accounts shall consist of the pay 
and expenses of superintendents, engineers, clerks, other employees and 
consultants engaged in supervising and directing the operation and 
maintenance of each utility function. Wherever allocations are necessary 
in order to arrive at the amount to be included in any account the 
method and basis of allocation shall be reflected by underlying records.

                                  Items

Labor:
    1. Special tests to determine efficiency of equipment operation.
    2. Preparing or reviewing budgets, estimates, and drawings relating 
to operation or maintenance for departmental approval.
    3. Preparing instructions for operations and maintenance activities.
    4. Reviewing and analyzing operating results.
    5. Establishing organizational setup of departments and executing 
changes therein.
    6. Formulating and reviewing routines of departments and executing 
changes therein.
    7. General training and instruction of employees by supervisors 
whose pay is charge- able hereto. Specific instruction and training in a 
particular type of work is chargeable to the appropriate functional 
account. (See Gas Plant Instruction 3(19).)
    8. Secretarial work for supervisory personnel, but not general 
clerical and stenographic work chargeable to other accounts.

Expenses:
    9. Consultants' fees and expenses.
    10. Meals, traveling and incidental expenses.

    2. Maintenance. A. The cost of maintenance chargeable to the various 
operating expense and clearing accounts, includes labor, materials, 
overheads and other expenses incurred in maintenance work. A list of 
work operations applicable generally to utility plant is included 
hereunder. Other work operations applicable to specific classes of plant 
are listed in functional maintenance expense accounts.
    B. Materials recovered in connection with the maintenance of 
property shall be credited to the same account to which the maintenance 
cost was charged.
    C. If the book cost of any property is carried in account 102, Gas 
Plant Purchased or Sold, the cost of maintaining such property shall be 
charged to the accounts for maintenance of property of the same class 
and use, the book cost of which is carried in other gas plant in service 
accounts. Maintenance of property leased from others shall be treated as 
provided in operating expense instruction 3.

                                  Items

    1. Direct field supervision of maintenance.
    2. Inspecting, testing, and reporting on condition of plant 
specifically to determine the need for repairs, replacements, 
rearrangements and changes and inspecting and testing the adequacy of 
repairs which have been made.

[[Page 633]]

    3. Work performed specifically for the purpose of preventing 
failure, restoring serviceability or maintaining life of plant.
    4. Rearranging and changing the location of plant not retired.
    5. Repairing for reuse materials recovered from plant.
    6. Testing for, locating and clearing trouble.
    7. Net cost of installing, maintaining, and removing temporary 
facilities to prevent interruptions in service.
    8. Replacing or adding minor items of plant which do not constitute 
a retirement unit. (See gas plant instruction 10.)

    3. Rents. A. The rent expense accounts provided under the several 
functional groups of expense accounts shall include all rents, including 
taxes paid by the lessee on leased property, for property used in 
utility operations, except (1) minor amounts paid for occasional or 
infrequent use of any property or equipment and all amounts paid for use 
of equipment that, if owned, would be includible in plant accounts 391 
to 398, inclusive, which shall be treated as an expense item and 
included in the appropriate functional account and (2) rents which are 
chargeable to clearing accounts, and distributed therefrom to the 
appropriate account. If rents cover property used for more than one 
function, such as production and transmission, or by more than one 
department, the rents shall be apportioned to the appropriate rent 
expense or clearing accounts of each department on an actual, or, if 
necessary, an estimated basis.
    B. When a portion of property or equipment rented from others for 
use in connection with utility operations is subleased, the revenue 
derived from such subleasing shall be credited to the rent revenue 
account in operating revenues: Provided, however, That in case the rent 
was charged to a clearing account, amounts received from subleasing the 
property shall be credited to such clearing account.
    C. The cost, when incurred by the lessee, of operating and 
maintaining leased property, shall be charged to the accounts 
appropriate for the expense if the property were owned.
    D. The cost incurred by the lessee of additions and replacements to 
gas plant leased from other shall be accounted for as provided in gas 
plant instruction 6.
    4. Training costs. When it is necessary that employees be trained to 
specifically operate or maintain plant facilities that are being 
constructed, the related costs shall be accounted for as a current 
operating and maintenance expense. These expenses shall be charged to 
the appropriate functional accounts currently as they are incurred. 
However, when the training costs involved relate to facilities which are 
not conventional in nature, or are new to the company's operations, then 
see Gas Plant Instruction 3(19) for accounting.

                     Balance Sheet Chart of Accounts

                         assets and other debits

                            1. Utility Plant

101 Gas plant in service.
101.1 Property under capital leases.
102 Gas plant purchased or sold.
103 Experimental gas plant unclassified.
104 Gas plant leased to others.
105 Gas plant held for future use.
105.1 Production properties held for future use.
106 Completed construction not classified--Gas.
107 Construction work in progress--Gas.
108 Accumulated provision for depreciation of gas utility plant.
109 [Reserved]
111 Accumulated provision for amortization and depletion of gas utility 
plant.
111.1-111.2 [Reserved]
112 [Reserved]
113.1-113.2 [Reserved]
114 Gas plant acquisition adjustments.
115 Accumulated provision for amortization of gas plant acquisition 
adjustments.
116 Other gas plant adjustments.
117.1 Gas stored-Base gas.
117.2 System balancing gas.
117.3 Gas stored in reservoirs and pipelines-noncurrent.
117.4 Gas owed to system gas.
118 Other utility plant.
119 Accumulated provision for depreciation and amortization of other 
utility plant.

                    2. Other Property and Investments

121 Nonutility property.
122 Accumulated provision for depreciation and amortization of 
nonutility property.
123 Investment in associated companies.
123.1 Investment in subsidiary companies.
124 Other investments.
125 Sinking funds.
126 Depreciation fund.
128 Other special funds.

[[Page 634]]

                      3. Current and Accrued Assets

131 Cash.
132 Interest special deposits.
133 Dividend special deposits.
134 Other special deposits.
135 Working funds.
136 Temporary cash investments.
141 Notes receivable.
142 Customer accounts receivable.
143 Other accounts receivable.
144 Accumulated provision for uncollectible accounts--Cr.
145 Notes receivable from associated companies.
146 Accounts receivable from associated companies.
151 Fuel stock.
152 Fuel stock expenses undistributed.
153 Residuals and extracted products.
154 Plant materials and operating supplies (Major only).
155 Merchandise.
156 Other materials and supplies.
163 Stores expense undistributed.
164.1 Gas stored--current.
164.2 Liquefied natural gas stored.
164.3 Liquefied natural gas held for processing.
165 Prepayments.
166 Advances for gas exploration, development, and production.
167 Other advances for gas.
171 Interest and dividends receivable.
172 Rents receivable.
173 Accrued utility revenues.
174 Miscellaneous current and accrued assets.

                           4. Deferred Debits

181 Unamortized debt expense.
182.1 Extraordinary property losses.
182.2 Unrecovered plant and regulatory study costs.
182.3 Other regulatory assets.
183.1 Preliminary natural gas survey and investigation charges.
183.2 Other preliminary survey and investigation charges.
184 Clearing accounts.
185 Temporary facilities.
186 Miscellaneous deferred debits.
187 Deferred losses from disposition of utility plant.
188 Research, development, and demonstration expenditures.
189 Unamortized loss on reacquired debt.
190 Accumulated deferred income taxes.
191 Unrecovered purchased gas costs.

                      liabilities and other credit

                         5. Proprietary Capital

201 Common stock issued.
202 Common stock subscribed.
203 Common stock liability for conversion.
204 Preferred stock issued.
205 Preferred stock subscribed.
206 Preferred stock liability for conversion.
207 Premium on capital stock.
208 Donations received from stockholders.
209 Reduction in par or stated value of capital stock.
210 Gain on resale or cancellation of reacquired capital stock.
211 Miscellaneous paid-in capital.
212 Installments received on capital stock.
213 Discount on capital stock.
214 Capital stock expense.
215 Appropriated retained earnings.
216 Unappropriated retained earnings.
216.1 Unappropriated undistributed subsidiary earnings.
217 Reacquired capital stock.

                            6. Long-Term Debt

221 Bonds.
222 Reacquired bonds.
223 Advances from associated companies.
224 Other long-term debt.
225 Unamortized premium on long-term debt.
226 Unamortized discount on long-term debt--Debit.

                    7. Other Noncurrent Liabilities.

227 Obligations under capital leases--noncurrent.
228.1 Accumulated provision for property insurance.
228.2 Accumulated provision for injuries and damages.
228.3 Accumulated provision for pensions and benefits.
228.4 Accumulated miscellaneous operating provisions.
229 Accumulated provision for rate refunds.

                   8. Current and Accrued Liabilities

231 Notes payable.
232 Accounts payable.
233 Notes payable to associated companies.
234 Accounts payable to associated companies.
235 Customer deposits.
236 Taxes accrued.
237 Interest accrued.
238 Dividends declared.
239 Matured long-term debt.
240 Matured interest.
241 Tax collections payable.
242 Miscellaneous current and accrued liabilities.
243 Obligations under capital leases--current.

                           9. Deferred Credits

252 Customer advances for construction.
253 Other deferred credits.
254 Other regulatory liabilities.
255 Accumulated deferred investment tax credits.
256 Deferred gains from disposition of utility plant.

[[Page 635]]

257 Unamortized gain on reacquired debt.
281 Accumulated deferred income taxes--Accelerated amortization 
property.
282 Accumulated deferred income taxes--Other property.
283 Accumulated deferred income taxes--Other.

                         Balance Sheet Accounts

101 Gas plant in service.
    A. This account shall include the original cost of gas plant, 
included in accounts 301 to 399 prescribed herein, owned and used by the 
utility in its gas operations, and having an expectation of life in 
service of more than one year from date of installation. Including such 
property owned by the utility but held by nominees. (See also account 
106 for unclassified construction costs of completed plant actually in 
service.)
    B. The cost of additions to and betterments of property leased from 
others, which are includible in this account, shall be recorded in 
subdivisions separate and distinct from those relating to owned 
property. (See gas plant instruction 6.)
101.1 Property under capital leases.
    A. This account shall include the amount recorded under capital 
leases for plant leased from others and used by the utility in its 
utility operations.
    B. The gas property included in this account shall be classified 
separately according to the detailed accounts (301 to 399) prescribed 
for gas plant in service.
    C. Records shall be maintained with respect to each capital lease 
reflecting: (1) Name of lessor, (2) basic details of lease, (3) terminal 
date, (4) original cost fair market value of property leased, (5) future 
minimum lease payments, (6) executory costs, (7) present value of 
minimum lease payments, (8) the amounts representing interest and the 
interest rate used, and (9) expenses paid. Records shall also be 
maintained for plant under a lease, to identify the asset retirement 
obligation and cost originally recognized for each lease and the 
periodic charges and credits made to the asset retirement obligations 
and asset retirement costs.
102 Gas plant purchased or sold.
    A. This account shall be charged with the cost of gas plant acquired 
as an operating unit or system by purchase, merger, consolidation, 
liquidation, or otherwise, and shall be credited with the selling price 
of like property transferred to others pending the distribution to 
appropriate accounts in accordance with gas plant instruction 5.
    B. Within six months from the date of acquisition or sale of 
property recorded herein, the utility shall file with the Commission the 
proposed journal entries to clear from this account the amounts recorded 
herein.
103 Experimental gas plant unclassified.
    A. This account shall include the cost of gas plant which was 
constructed as a research, development, and demonstration project under 
the provisions of paragraph C, Account 107, Construction Work in 
Progress--Gas, and due to the nature of the plant it is desirous to 
operate it for a period of time in an experimental status.
    B. Amounts in this account shall be transferred to Account 101, Gas 
Plant in Service, or Account 121, Nonutility Property, as appropriate, 
when the project is no longer considered as experimental. Prior to 
transfer to account 101 the subject plant must be certified by the 
Commission for use as gas plant in service.
    C. The depreciation on plant in this account shall be charged to 
account 403, Depreciation expense, and account 403.1, Depreciation 
expense for asset retirement costs, as appropriate, and credited to 
account 108, Accumulated provision for depreciation of gas utility 
plant. The amounts herein shall be depreciated over a period which 
corresponds to the estimated useful life of the relevant project 
considering the characteristics involved. However, when projects are 
transferred to account 101, Gas plant in service, a new depreciation 
rate based on the remaining service life and undepreciated amounts, will 
be established.
    D. Records shall be maintained with respect to each unit of 
experiment so that full details may be obtained as to the cost, 
depreciation, and the experimental status.

[[Page 636]]

    E. Should it be determined that experimental plants recorded in this 
account will fail to satisfactorily perform its function, the costs 
thereof shall be accounted for as directed or authorized by the 
Commission.
104 Gas plant leased to others.
    A. This account shall include the original cost of gas plant owned 
by the utility but leased to others as operating units or systems, where 
the lessee has exclusive possession.
    B. The property included in this account shall be classified 
according to the detailed accounts (301 to 399) prescribed for gas plant 
in service and this account shall be maintained in such detail as though 
the property were used by the owner in its utility operations.
105 Gas plant held for future use.
    A. This account shall include the original cost of gas plant (except 
land and land rights) owned and held for future use in gas service under 
a definite plan for such use, to include: (1) Property acquired (except 
land and land rights) but never used by the utility in gas service, but 
held for such service in the future under a definite plan, and (2) 
property (except land and land rights) previously used by the utility in 
gas service, but retired from such service and held pending its reuse in 
the future, under a definite plan, in gas service. This includes 
production properties relating to leases acquired on or before October 
7, 1969.
    B. This account shall also include the original cost of land and 
land rights owned and held for future use in gas service relating to 
leases acquired on or before October 7, 1969, under a plan for such use, 
to include land and land rights: (1) Acquired but never used by the 
utility in gas service, but held for such service in the future under a 
plan, and (2) previously held by the utility in gas service, but retired 
from such service and held pending its reuse in the future under a plan, 
in gas service. (See Gas Plant Instruction 7.)
    C. In the event that property recorded in this account shall no 
longer be needed or appropriate for future utility operations, the 
company shall request Commission approval of journal entries to remove 
such property from this account when the gain realized from the sale or 
other disposition of the property is $100,000 or more, prior to their 
being recorded. Such filings shall include the description and original 
cost of individual properties removed from this account, the accounts 
charged upon removal, and any associated gains realized upon disposition 
of such property.
    D. Gains or losses from the sale of land and land rights or other 
disposition of such property previously recorded in this account and not 
placed in utility service shall be recorded directly in accounts 411.6 
or 411.7, as appropriate, except when determined to be significant by 
the Commission. Upon such a determination, the amounts shall be 
transferred to account 256, Deferred Gains from Disposition of Utility 
Plant, or account 187, Deferred Losses from Disposition of Utility 
Plant, and amortized to accounts 411.6, Gains from Disposition of 
Utility Plant, or 411.7, Losses from Disposition of Utility Plant, as 
appropriate.
    E. The property included in this account shall be classified 
according to the detail accounts (301 to 399) prescribed for gas plant 
in service and the account shall be maintained in such detail as though 
the property were in service.

    Note A: Materials and supplies, meters and house regulators held in 
reserve, and normal spare capacity of plant in service shall not be 
included in this account.
    Note B: Include in this account natural gas wells shut in after 
construction which have not been connected with the line; also, natural 
gas wells which have been connected with the line but which are shut in 
for any reason except seasonal excess capacity or governmental proration 
requirements or for repairs, provided that the related production leases 
were acquired on or before October 7, 1969.
    Note C (Nonmajor only): The loss on abandonment of natural gas 
leases acquired after October 7, 1969, shall be charged to Account 338, 
Unsuccessful Exploration and Development Costs.
105.1 Production properties held for future use.
    A. This account shall include the cost of production properties 
(except land and land rights) relating to leases acquired on or after 
October 8, 1969,

[[Page 637]]

held under a definite plan for future use to insure a future supply of 
natural gas for use in pipeline operations, to include: (1) Production 
property (except land and land rights) acquired but never used by the 
utility in gas service, but held for such service in the future under a 
definite plan, and (2) production property (except land and land rights) 
previously used by the utility in gas service, but retired from such 
service and held pending its reuse in the future, under a definite plan, 
in gas service.
    B. This account shall also include the original cost of land and 
land rights held under a plan for future use to insure a future supply 
of natural gas for use in pipeline operations, relating to leases 
acquired on or after October 8, 1969, to include land and land rights: 
(1) Acquired but never used by the utility in gas service, but held for 
service in the future under a plan, and (2) previously used by the 
utility in gas service, but retired from such service and held pending 
its reuse in the future under a plan, in gas service. (See Gas Plant 
Instruction 7.)
    C. In the event that property recorded in this account shall no 
longer be needed or appropriate for future utility operations, the 
company shall request Commission approval of journal entries to remove 
such property from this account when the gain realized from the sale or 
other disposition of the property is $100,000 or more, prior to their 
being recorded. Such filings shall include the description and original 
cost of individual properties removed from this account, the accounts 
charged upon removal, and any associated gains realized upon disposition 
of such property.
    D. Gains or losses from the sale of land and land rights or other 
disposition of such property previously recorded in this account and not 
placed in utility service shall be recorded directly in accounts 411.6 
or 411.7, as appropriate, except when determined to be significant by 
the Commission. Upon such determination, the amounts shall be 
transferred to account 256, Deferred Gains from Sale of Utility Plant, 
or account 187, Deferred Losses from Sale of Utility Plant, and 
amortized to accounts 411.6, Gains from Disposition of Utility Plant or 
411.7, Losses from Disposition of Utility Plant, as appropriate.
    E. The property included in this account shall be classified 
according to the detailed accounts prescribed for natural gas production 
and gathering plant in service and such classification shall be 
maintained in the same detail as though the property were in service.

    Note: Unsuccessful exploration and development costs incurred on 
leases acquired after October 7, 1969, shall be charged to account 338, 
Unsuccessful Exploration and Development Costs.
106 Completed construction not classified--Gas.
    At the end of the year or such other date as a balance sheet may be 
required by the Commission, this account shall include the total of the 
balances of work orders for gas plant which have been completed and 
placed in service but which work orders have not been classified for 
transfer to the detailed gas plant accounts.

    Note: For the purpose of reporting to the Commission the 
classification of gas plant in service by accounts is required, the 
utility shall also report the balance in this account tentatively 
classified as accurately as practicable according to prescribed account 
classifications. The purpose of this provision is to avoid any 
significant omissions in reported amounts of gas plant in service.
107 Construction work in progress--Gas.
    A. This account shall include the total of the balances of work 
orders for gas plant in process of construction.
    B. Work orders shall be cleared from this account as soon as 
practicable after completion of the job. Further, if a project, such as 
a gas production plant, a compressor station, or a transmission line, is 
designed to consist of two or more units which may be placed in service 
at different dates, any expenditures which are common to and which will 
be used in the operation of the project as a whole shall be included in 
gas plant in service upon the completion and the readiness for service 
of the first unit. Any expenditures which are identified exclusively 
with units of property not yet in service shall be included in this 
account.

[[Page 638]]

    C. Expenditures on research, development, and demonstration projects 
for construction of utility facilities are to be included in a separate 
subdivision in this account. Records must be maintained to show 
separately each project along with complete detail of the nature and 
purpose of the research, development, and demonstration project together 
with the related costs.

    Note A: This account shall include certificate application fees paid 
to the Federal Energy Regulatory Commission as provided for in gas plant 
instruction 15.
    Note B: Unsuccessful exploration and development costs incurred on 
leases acquired after October 7, 1969, shall be transferred to account 
338, Unsuccessful Exploration and Development Costs.
108 Accumulated provision for depreciation of gas utility plant.
    A. This account shall be credited with the following:
    (1) Amounts charged to account 403, Depreciation Expense, or to 
clearing accounts for current depreciation expense for gas plant in 
service.
    (2) Amounts charged to account 403.1, Depreciation expense for asset 
retirement costs, for current depreciation expense related to asset 
retirement costs in gas plant in service in a separate subaccount.
    (3) Amounts charged to account 421, Miscellaneous Nonoperating 
Income, for depreciation expense on property included in account 105, 
Gas Plant Held for Future Use, or 105.1, Production Properties Held for 
Future Use. Include also, the balance of accumulated provision for 
depreciation on property when transferred to account 105 or 105.1, from 
other property accounts. Normally, account 108 will not be used for 
current depreciation provisions because, as provided herein, the service 
life during which depreciation is computed commences with the date 
property is includible in gas plant in service; however, if special 
circumstances indicate the propriety of current accruals for 
depreciation, such charges shall be made to account 421, Miscellaneous 
Nonoperating Income.
    (4) Amounts charged to account 413, Expenses of Gas Plant Leased to 
Others, for gas plant included in account 104, Gas Plant Leased to 
Others.
    (5) Amounts charged to account 416, Costs and Expenses of 
Merchandising, Jobbing and Contract Work, or to clearing accounts for 
current depreciation expense.
    (6) Amounts of depreciation applicable to gas properties acquired as 
operating units or systems. (See gas plant instruction 5.)
    (7) Amounts charged to account 182.1, Extraordinary Property Losses, 
when authorized by the Commission.
    (8) Amounts of depreciation applicable to gas plant donated to the 
utility.

(The utility shall maintain separate subaccounts for depreciation 
applicable to gas plant in service, gas plant leased to others and gas 
plant held for future use.)
    B. At the time of retirement of depreciable gas utility plant, this 
account shall be charged with the book cost of the property retired and 
the cost of removal and shall be credited with the salvage value and any 
other amounts recovered, such as insurance. When retirements, cost of 
removal and salvage are entered originally in retirement work orders, 
the net total of such work orders may be included in a separate 
subaccount hereunder. Upon completion of the work order, the proper 
distribution to subdivision of this account shall be made as provided in 
the following paragraph.
    C. For general ledger and balance sheet purposes, this account shall 
be regarded and treated as a single composite provision for 
depreciation. For purposes of analysis, however, each utility shall 
maintain subsidiary records in which this account is segregating 
according to the following functional classification for gas plant:
    (1) Production--manufactured gas, (2) production and gathering--
natural gas, (3) products extraction--natural gas, (4) underground gas 
storage, (5) other storage, (6) base load LNG terminaling and processing 
plant, (7) transmission, (8) distribution, and (9) general. These 
subsidiary records shall reflect the current credits and debits to this 
account in sufficient detail to show separately for each such functional 
classification (a) the amount of provision for depreciation, (b) the 
book cost of property retired, (c) cost of removal, (d) salvage,

[[Page 639]]

and (e) other items, including recoveries from insurance. Separate 
subsidiary records shall be maintained for the amount of accrued cost of 
removal other than legal obligations for the retirement of plant 
recorded in account 108, Accumulated provision for depreciation of gas 
utility plant.
    D. When transfers of plant are made from one gas plant account to 
another, or from or to another utility department, or from or to 
nonutility property accounts, the accounting for the related accumulated 
provision for depreciation shall be as provided in gas plant instruction 
12.
    E. The utility is restricted in its use of the provision for 
depreciation to the purposes set forth above. It shall not transfer any 
portion of this account to retained earnings or make any other use 
thereof without authorization by the Commission.
109 [Reserved]
111 Accumulated provision for amortization and depletion of gas utility 
plant.
    A. This account shall be credited with the following:
    (1) Amounts charged to account 404.1, Amortization and Depletion of 
Producing Natural Gas Land and Land Rights, for current amortization and 
depletion of such land and land rights.
    (2) Amounts charged to account 404.2, Amortization of Underground 
Storage Land and Land Rights, for current amortization.
    (3) Amounts charged to account 404.3, Amortization of Other Limited-
Term Gas Plant, for the current amortization of limited-term gas plant.
    (4) Amounts charged to account 421, Miscellaneous Nonoperating 
Income, for amortization expense on property included in account 105, 
Gas Plant Held for Future Use, or 105.1, Production Properties Held for 
Future Use. Include also, the balance of accumulated provision for 
amortization on property when transferred to account 105 or 105.1 from 
other property accounts.

    Note: See also paragraph A(2), of account 108, Accumulated Provision 
for Depreciation of Gas Utility Plant.

    (5) Amounts charged to account 405, Amortization of Other Gas Plant.
    (6) Amounts charged to account 413, Expenses of Gas Plant Leased to 
Others, for current amortization thereof.
    (7) Amounts charged to account 797, Abandoned Leases, to provide for 
the abandonment of nonproductive natural gas leases.
    (8) Amounts charged to account 425, Miscellaneous Amortization, for 
the amortization of intangible or other gas plant which does not have a 
definite or terminable life and is not subject to charges for 
depreciation expense, with Commission approval.

(The utility shall maintain subaccounts of this account for the 
amortization applicable to producing natural gas land and land rights, 
other gas plant in service, gas plant leased to others, abandonment of 
leases and gas plant held for future use.)
    B. When any property to which this account applies is sold, 
relinquished, or otherwise retired from service, this account shall be 
charged with the amount previously credited in respect to such property. 
The book cost of the property so retired less the amount chargeable to 
this account and less the net proceeds realized at retirement shall be 
included in account 421.1, Gain on Disposition of Property, or account 
421.2, Loss on Disposition of Property, as appropriate.
    C. For general ledger and balance sheet purposes, this account shall 
be regarded and treated as a single composite provision for 
amortization.

For purposes of analysis, however, each utility shall maintain 
subsidiary records in which this account is segregating according to the 
following functional classification for gas plant:
    (1) Production--manufactured gas, (2) production and gathering--
natural gas, (3) products extraction--natural gas, (4) underground gas 
storage, (5) other storage, (6) base load LNG terminaling and processing 
plant, (7) transmission, (8) distribution, and (9) general. These 
subsidiary records shall reflect the current credits and debits to this 
account in sufficient detail to show separately for each such functional 
classification (a) the amount of provision for amortization, (b) the 
book cost of property retired, (c) cost of removal, (d) salvage, and (e) 
other items, including recoveries from insurance. Records shall be

[[Page 640]]

maintained so as to show separately the balance applicable to each item 
of land and land rights which is being amortized or depleted except that 
natural gas land and land rights which comprise an interest in a 
production area may be grouped to form a unit for amortization and 
depletion and the accumulated provision applicable thereto need not be 
segregated to show the amount related to each gas right included 
therein. Records shall also be maintained so as to show separately the 
balance applicable to each underground gas storage project.
    D. The utility is restricted in its use of the accumulated provision 
for amortization to the purposes set forth above. It shall not transfer 
any portion of this account to retained earnings or make any other use 
thereof without authorization by the Commission.
112-113 [Reserved]
114 Gas plant acquisition adjustments.
    A. This account shall include the difference between (a) the cost to 
the accounting utility of gas plant acquired as an operating unit or 
system by purchase, merger, consolidation, liquidation, or otherwise, 
and (b) the original cost, estimated, if not known, of such property, 
less the amount or amounts credited by the accounting utility at the 
time of acquisition to accumulated provisions for depreciation, 
depletion, and amortization and contributions in aid of construction 
with respect to such property.
    B. With respect to acquisitions after the effective date of this 
system of accounts, this account shall be subdivided so as to show the 
amounts included herein for each property acquisition and to gas plant 
in service, gas plant held for future use and gas plant leased to 
others. (See gas plant instruction 5.)
    C. Debit amounts recorded in this account related to plant and land 
acquisition may be amortized to account 425, Miscellaneous Amortization, 
over a period not longer than the estimated remaining life of the 
properties to which such amounts relate. Amounts related to the 
acquisition of land only may be amortized to account 425 over a period 
of not more than 15 years. Should a utility wish to account for debit 
amounts in this account in any other manner, it shall petition the 
Commission for authority to do so. Credit amounts recorded in this 
account shall be accounted for as directed by the Commission.
115 Accumulated provision for amortization of gas plant acquisition 
adjustments.
    This account shall be credited or debited with amounts which are 
includible in account 406, Amortization of Gas Plant Acquisition 
Adjustments or account 425, Miscellaneous Amortization, for the purpose 
of providing for the extinguishment of amounts in account 114, Gas Plant 
Acquisition Adjustments, in instances where the amortization of account 
114 is not being made by direct write-off of the account.
116 Other gas plant adjustments.
    A. This account shall include the difference between the original 
cost, estimated if not known, and the book cost of gas plant to the 
extent that such difference is not properly includible in account 114 
Gas Plant Acquisition Adjustments. (See gas plant instruction 1C.)
    B. Amounts included in this account shall be classified in such 
manner as to show the origin of each amount and shall be disposed of as 
the Commission may approve or direct.

    Note: The provisions of this account shall not be construed as 
approving or authorizing the recording of appreciation of gas plant.

         Special Instructions to Accounts 117.1, 117.2 and 117.3

    The investment in and use of system gas included in Account 117.1, 
Gas Stored--Base Gas, and Account 117.2, System Balancing Gas, may be 
accounted for using either the ``fixed asset'' method or an 
``inventory'' method as set forth below. The cost of stored gas included 
in Account 117.3 must be accounted for using an inventory method.
    (a) Inventory Method--Gas stored during the year must be priced at 
cost according to generally accepted methods of cost determination 
consistently applied from year to year. Transmission

[[Page 641]]

expenses for facilities of the utility used in moving the gas to the 
storage area and expenses of storage facilities cannot be included in 
the inventory of gas except as may be authorized or directed by the 
Commission.
    Withdrawals of gas must be priced using the first-in-first-out, 
last-in-first-out, or weighted average cost method, provided the method 
adopted by the utility is used consistently from year to year and 
appropriate inventory records are maintained. Approval of the Commission 
must be obtained for any other pricing method, or change in the pricing 
method adopted by the utility.
    Adjustments for inventory losses related to gas held in underground 
reservoirs due to cumulative inaccuracies of gas measurements, or from 
other causes, must be charged to Account 823, Gas Losses. Losses of 
system gas not associated with underground reservoirs must be charged to 
Account 813, Other Gas Supply Expenses.
    (b) Fixed Asset Method--When replacement of the gas is made, the 
amount carried in Account 117.4 for such volumes must be cleared with a 
contra entry to Account 808.2, Gas Delivered to Storage--Credit. Any 
difference between the utility's cost of replacement gas volumes and the 
amount cleared from Account 117.4 must be recognized as a gain in 
Account 495, Other gas revenues, or as a loss in Account 813, Other gas 
supply expenses, with contra entries to Account 808.2.
    Adjustments for inventory losses related to gas held in underground 
reservoirs due to cumulative inaccuracies of gas measurements, or from 
other causes, must be charged to Account 823, Gas Losses. Losses of 
system gas not associated with underground reservoirs must be charged to 
Account 813, Other Gas Supply Expenses. Gas losses must be priced at the 
market price of gas available to the utility in the month the loss is 
recognized.
    Gas owned by the utility and injected into its system will be deemed 
to satisfy any encroachment on system gas first before any other use.
117.1 Gas stored-base gas.
    This account is to include the cost of recoverable gas volumes that 
are necessary, in addition to those volumes for which cost are properly 
includable in Account 101, Gas plant in service, to maintain pressure 
and deliverability requirements for each storage facility. 
Nonrecoverable gas volumes used for this purpose are to be recorded in 
Account 352.3, Nonrecoverable natural gas. For utilities using the fixed 
asset method of accounting, the cost of base gas applicable to each gas 
storage facility shall not be changed from the amount initially recorded 
except to reflect changes in volumes designated as base gas. If an 
inventory method is used to account for gas included herein, the utility 
may, at its election, price withdrawals in accordance with the 
instructions to Account 117.4.
117.2 System balancing gas.
    This account is to be used to record the cost of system gas 
designated as available for transmission load balancing (including no-
notice transportation) and other uses associated with maintaining 
efficient transmission operations other than gas properly recordable in 
Account 117.1 or the plant accounts. Detailed records must be kept 
separately identifying volumes and unit prices of system gas held in 
underground storage facilities and held in pipelines.
    For utilities using fixed asset accounting, the cost initially 
recorded herein cannot be changed except for adjustments to volumes 
designated as system gas. Encroachments upon system gas must be 
accounted for in accordance with the instructions to Account 117.4, Gas 
owed to system gas.
117.3 Gas stored in reservoirs and pipelines--noncurrent.
    This account is to include the cost of stored gas owned by the 
utility and available for sale or other purposes. Gas included in this 
account must be accounted for using an inventory method in accordance 
with the Special Instructions to Accounts 117.1, 117.2, and 117.3 above.
117.4 Gas owed to system gas.
    This account is to be used to record encroachments of system gas 
under the fixed asset method. This account may also be used to record 
encroachments

[[Page 642]]

of base gas for utilities electing to use an inventory method of 
accounting for system gas. Utilities may revalve cumulative net 
imbalances, net all transactions, and record one monthly entry with one 
month-end price for valuation purposes.
118 Other utility plant.
    This account shall include the balance in accounts for utility 
plant, other than gas plant, such as electric, railway, etc.
119 Accumulated provision for depreciation and amortization of other 
utility plant.
    This account shall include the accumulated provision for 
depreciation and amortization applicable to utility property other than 
gas plant.
121 Nonutility property.
    A. This account shall include the book cost of land, structures, 
equipment or other tangible or intangible property owned by the utility, 
but not used in utility service and not properly includible in account 
105, Gas Plant Held for Future Use. This account shall also include, 
where applicable, amounts recorded for asset retirement costs associated 
with nonutility plant.
    B. This account shall also include the amount recorded under capital 
leases for property leased from others and used by the utility in its 
nonutility operations. Records shall be maintained with respect to each 
lease reflecting: (1) name of lessor, (2) basic details of lease, (3) 
terminal date, (4) original cost or fair market value of property 
leased, (5) future minimum lease payments, (6) executory costs, (7) 
present value of minimum lease payments, (8) the amount representing 
interest and the interest rate used, and (9) expenses paid.
    C. This account shall be subdivided so as to show the amount of 
property used in operations which are nonutility in character but 
nevertheless constitute a distinct operating activity of the company 
(such as operation of an ice department where such activity is not 
classed as a utility) and the amount of miscellaneous property not used 
in operations. The records in support of each subaccount shall be 
maintained so as to show an appropriate classification of the property.

    Note: In the event of the subsequent sale or other disposition of 
property included in this account which had been previously recorded in 
account 105, Gas Plant Held for Future Use, or account 105.1, Production 
Properties Held for Future Use, such property costs shall be accounted 
for in accordance with paragraph C of accounts 105 and 105.1, 
respectively.
122 Accumulated provision for depreciation and amortization of 
nonutility property.
    This account shall include the accumulated provision for 
depreciation and amortization applicable to nonutility property.
123 Investment in associated companies.
    A. This account shall include the book cost of investments in 
securities issued or assumed by associated companies and investment 
advances to such companies, including interest accrued thereon when such 
interest is not subject to current settlement, provided that the 
investment does not relate to a subsidiary company. (If the investment 
relates to a subsidiary company it shall be included in account entry to 
the recording of amortization of discount or premium on interest bearing 
investments. Include herein the offsetting 123.1, Investment in 
Subsidiary Companies.) (See account 419, Interest and Dividend Income.)
    B. This account shall be maintained in such manner as to show the 
investment in securities of, and advances to, each associated company 
together with full particulars regarding any of such investments that 
are pledged.

    Note A: Securities and advances of associated companies owned and 
pledged shall be included in this account, but such securities, if held 
in special deposits or in special funds, shall be included in the 
appropriate deposit or fund account. A complete record of securities 
pledged shall be maintained.
    Note B: Securities of associated companies held as temporary cash 
investments are includible in account 136, Temporary Cash Investments.
    Note C: Balances in open accounts with associated companies, which 
are subject to current settlement, are includible in account 146, 
Accounts Receivable from Associated Companies.

[[Page 643]]

    Note D: The utility may write down the cost of any security in 
recognition of a decline in the value thereof. Securities shall be 
written off or written down to a nominal value if there be no reasonable 
prospect of substantial value. Fluctuations in market value shall not be 
recorded but a permanent impairment in the value of securities shall be 
recognized in the accounts. When securities are written off or written 
down, the amount of the adjustment shall be charged to account 426.5, 
Other Deductions, or to an appropriate account for accumulated 
provisions for loss in value established as a separate subdivision of 
this account.
123.1 Investment in subsidiary companies.
    A. This account shall include the cost of investments in securities 
issued or assumed by subsidiary companies and investment advances to 
such companies, including interest accrued thereon when such interest is 
not subject to current settlement plus the equity in undistributed 
earnings or losses of such subsidiary companies since acquisition. This 
account shall be credited with any dividends declared by such 
subsidiaries.
    B. This account shall be maintained in such a manner as to show 
separately for each subsidiary: The cost of such investments in the 
securities of the subsidiary at the time of acquisition; the amount of 
equity in the subsidiary's undistributed net earnings or net losses 
since acquisition; advances or loans to such subsidiary; and full 
particulars regarding any such investments that are pledged.
124 Other investments.
    A. This account shall include the book cost of investments in 
securities issued or assumed by nonassociated companies, investment 
advances to such companies, and any investments not accounted for 
elsewhere. This account shall also include unrealized holding gains and 
losses on trading and available-for-sale types of security investments. 
Include also the offsetting entry to the recording of amortization of 
discount or premium on interest bearing investments. (See account 419, 
interest and dividend income.)
    B. The cost of capital stock of the utility reacquired by it under a 
definite plan for resale pursuant to authorization by the Board of 
Directors may, if permitted by statutes, be included in a separate 
subdivision of this account. (See also account 210, Gain on Resale or 
Cancellation of Reacquired Capital Stock, and account 217, Reacquired 
Capital Stock.)
    C. The records shall be maintained in such manner as to show the 
amount of each investment and the investment advances to each person.

    Note A: Securities owned and pledged shall be included in this 
account, but securities held in special deposits or in special funds 
shall be included in appropriate deposit or fund accounts. A complete 
record of securities pledged shall be maintained.
    Note B: Securities held as temporary cash investments shall not be 
included in this account.
    Note C: See Note D of account 123.
125 Sinking funds.
    This account shall include the amount of cash and book cost of 
investments held in sinking funds. This account shall also include 
unrealized holding gains and losses on trading and available-for-sale 
types of security investments. A separate account, with appropriate 
title, shall be kept for each sinking fund. Transfers from this account 
to special deposit accounts may be made as necessary for the purpose of 
paying matured sinking-fund obligations, or obligations called for 
redemption but not presented, or the interest thereon.
126 Depreciation fund.
    This account shall include the amount of cash and book cost of 
investments which have been segregated in a special fund for the purpose 
of identifying such assets with the accumulated provisions for 
depreciation. This account shall also include unrealized holding gains 
and losses on trading and available-for-sale types of security 
investments.
128 Other special funds.
    This account shall include the amount of cash and book cost of 
investments which have been segregated in special funds for insurance, 
employee pensions, savings, relief, hospital, and other purposes not 
provided for elsewhere. This account shall also include unrealized 
holding gains and

[[Page 644]]

losses on trading and available-for-sale types of security investments. 
A separate account with appropriate title, shall be kept for each fund.

    Note: Amounts deposited with a trustee under the terms of an 
irrevocable trust agreement for pensions or other employee benefits 
shall not be included in this account.

           Special Instructions for Current and Accrued Assets

    Current and accrued assets are cash, those assets which are readily 
convertible into cash or are held for current use in operations or 
construction, current claims against others, payment of which is 
reasonably assured, and amounts accruing to the utility which are 
subject to current settlement, except such items for which accounts 
other than those designated as current and accrued assets are provided. 
There shall not be included in the group of accounts designated as 
current and accrued assets any item, the amount or collectibility of 
which is not reasonably assured, unless an adequate provision for 
possible loss has been made therefor. Items of current character but of 
doubtful value may be written down and for record purposes carried in 
these accounts at nominal value.
131 Cash.
    This account shall include the amount of current cash funds except 
working funds.
132 Interest special deposits.
    This account shall include special deposits with fiscal agents or 
others for the payment of interest.
133 Dividend special deposits.
    This account shall include special deposits with fiscal agents or 
others for the payment of dividends.
134 Other special deposits.
    This account shall include deposits with fiscal agents or others for 
special purposes other than the payment of interest and dividends. Such 
special deposits may include cash deposited with federal, state, or 
municipal authorities as a guaranty for the fulfillment of obligations; 
cash deposited with trustees to be held until mortgaged property sold, 
destroyed, or otherwise disposed of is replaced; cash realized from the 
sale of the accounting utility's securities and deposited with trustees 
to be held until invested in property of the utility, etc. Entries to 
this account shall specify the purpose for which the deposit is made.

    Note: Assets available for general corporate purposes shall not be 
included in this account. Further, deposits for more than one year, 
which are not offset by current liabilities, shall not be charged to 
this account but to account 128, Other Special Funds.
135 Working funds.
    This account shall include cash advanced to officers, agents, 
employees, and others as petty cash or working funds.
136 Temporary cash investments.
    A. This account shall include the book cost of investments, such as 
demand and time loans, bankers' acceptances, United States Treasury 
certificates, marketable securities, and other similar investments, 
acquired for the purpose of temporarily investing cash.
    B. This account shall be so maintained as to show separately 
temporary cash investments in securities of associated companies and of 
others. Records shall be kept of any pledged investments.
141 Notes receivable.
    This account shall include the book cost, not includible elsewhere, 
of all collectible obligations in the form of notes receivable and 
similar evidences (except interest coupons) of money due on demand or 
within one year from the date of issue, except, however, notes 
receivable from associated companies. (See account 136, Temporary Cash 
Investments, and account 145, Notes Receivable from Associated 
Companies.)

    Note: The face amount of notes receivable discounted, sold, or 
transferred without releasing the utility from liability as endorser 
thereon, shall be credited to a separate subdivision of this account and 
appropriate disclosure shall be made in financial statements of any 
contingent liability arising from such transactions.
142 Customer accounts receivable.
    A. This account shall include amounts due from customers for utility 
service, and for merchandising, jobbing, and contract work. This account

[[Page 645]]

shall not include amounts due from associated companies.
    B. This account shall be maintained so as to permit ready 
segregation of the amounts due for merchandising, jobbing, and contract 
work.
143 Other accounts receivable.
    A. This account shall include amounts due the utility upon open 
accounts, other than amounts due from associated companies and from 
customers for utility services and merchandising, jobbing, and contract 
work.
    B. This account shall be maintained so as to show separately amounts 
due on subscriptions to capital stock and from officers and employees, 
but the account shall not include amounts advanced to officers or others 
as working funds. (See account 135, Working Funds.)
144 Accumulated provision for uncollectible accounts--Cr.
    A. This account shall be credited with amounts provided for losses 
on accounts receivable which may become uncollectible, and also with 
collections on accounts previously charged hereto. Concurrent charges 
shall be made to account 904, Uncollectible Accounts, for amounts 
applicable to utility operations, and to corresponding accounts for 
other operations. Records shall be maintained so as to show the write-
offs of accounts receivable for each utility department.
    B. This account shall be subdivided to show the provision applicable 
to the following classes of accounts receivable:

Utility Customers.
Merchandising, Jobbing and Contract Work.
Officers and Employees.
Others.

    Note A: Accretions to this account shall not be made in excess of a 
reasonable provision against losses of the character provided for.
    Note B: If provisions for uncollectible notes receivable or for 
uncollectible receivables from associated companies are necessary, 
separate subaccounts therefor shall be established under the account in 
which the receivable is carried.
145 Notes receivable from associated companies.
146 Accounts receivable from associated companies.
    A. These accounts shall include notes and drafts upon which 
associated companies are liable, and which mature and are expected to be 
paid in full not later than one year from date of issue, together with 
any interest thereon, and debit balances subject to current settlement 
in open accounts with associated companies. Items which do not bear a 
specified due date but which have been carried for more than twelve 
months and items which are not paid within twelve months from due date 
shall be transferred to account 123, Investment in Associated Companies.
    B. A natural gas company participating in a cash management program 
must maintain supporting documentation for all deposits into, borrowings 
from, interest income from, and interest expense to such program. Cash 
management programs include all agreements in which funds in excess of 
the daily needs of the natural gas company along with the excess funds 
of the natural gas company's parent, affiliated and subsidiary companies 
are concentrated, consolidated, or otherwise made available for use by 
other entities within the corporate group. The written documentation 
must include the following information:
    (1) For deposits with and withdrawals from the cash management 
program: the date of the deposit or withdrawal, the amount of the 
deposit or withdrawal, and the maturity date, if any, of the deposit;
    (2) For borrowings from a cash management program: the date of the 
borrowing, the amount of the borrowing, and the maturity date, if any, 
of the borrowing;
    (3) The security, if any, provided by the cash management program 
for repayment of deposits into the cash management program and the 
security required, if any, by the cash management program in support of 
borrowings from the program; and
    (4) The monthly balance of the cash management program.
    C. The natural gas company must maintain current and up-to-date 
copies

[[Page 646]]

of the documents authorizing the establishment of the cash management 
program including the following:
    (1) The duties and responsibilities of the administrator and the 
natural gas companies in the cash management program;
    (2) The restrictions on deposits or borrowings by natural gas 
companies in the cash management program;
    (3) The interest rate, including the method used to determine the 
interest earning rates and interest borrowing rates for deposits into 
and borrowings from the program; and
    (4) The method used to allocate interest income and expenses among 
natural gas companies in the program.
    Note A: On the balance sheet, accounts receivable from an associated 
company may be set off against accounts payable to the same company.
    Note B: The face amount of notes receivable discounted, sold or 
transferred without releasing the utility from liability as endorser 
thereon, shall be credited to a separate subdivision of this account and 
appropriate disclosure shall be made in financial statements of any 
contingent liability arising from such transactions.
151 Fuel stock.
    This account shall include the book cost of fuel on hand.

                                  Items

    1. Invoice price of fuel less any cash or other discounts.
    2. Freight, switching, demurrage and other transportation charges, 
not including, however, any charges for unloading from the shipping 
medium.
    3. Excise taxes, purchasing agents' commissions, insurance and other 
expenses directly assignable to cost of fuel.
152 Fuel stock expenses undistributed.
    A. This account may include the cost of labor and of supplies used 
and expenses incurred in unloading fuel from the shipping medium and in 
the handling thereof prior to its use, if such expenses are sufficiently 
significant in amount to warrant being treated as a part of the cost of 
fuel inventory rather than being charged direct to expense as incurred.
    B. Amounts included herein shall be charged to expense as the fuel 
is used to the end that the balance herein, shall not exceed the 
expenses attributable to the inventory of fuel on hand.

                                  Items

Labor:
    1. Procuring and handling of fuel.
    2. All routine fuel analyses.
    3. Unloading from shipping facility and putting in storage.
    4. Moving of fuel in storage and transferring from one station to 
another.
    5. Handling from storage or shipping facility to first bunker, 
hopper, bucket, tank or holder of boiler house structure.
    6. Operation of mechanical equipment, such as locomotives, trucks, 
cars, boats, barges, cranes, etc.

Supplies and Expenses:
    7. Tools, lubricants and other supplies.
    8. Operating supplies for mechanical equipment.
    9. Transportation and other expenses in moving fuel.
    10. Stores expenses applicable to fuel.

153 Residuals and extracted products.
    This account shall include the book cost of residuals or extracted 
products produced in the manufacture of gas or in natural gas products 
extraction operations including like products purchased for resale.
154 Plant materials and operating supplies.
    A. This account shall include the cost of materials purchased 
primarily for use in the utility business for construction, operation 
and maintenance purposes. This account shall include also the book cost 
of materials recovered in connection with construction, maintenance or 
the retirement of property, such materials being credited to 
construction, maintenance or accumulated depreciation provision, 
respectively, and included herein as follows:
    (1) Reusable materials consisting of large individual items shall be 
included in this account at original cost, estimated if not known. The 
cost of repairing such items shall be charged to the maintenance account 
appropriate for the previous use.
    (2) Reusable materials consisting of relatively small items, the 
identity of which (from the date of original installation to the final 
abandonment or sale thereof) cannot be ascertained without undue 
refinement in accounting, shall be included in this account at current

[[Page 647]]

prices new for such items. The cost of repairing such items shall be 
charged to the appropriate expense account as indicated by previous use.
    (3) Scrap and nonusable materials included in this account shall be 
carried at the estimated net amount realizable therefrom. The difference 
between the amounts realized for scrap and nonusable materials sold and 
the net amount at which the materials were carried in this account, as 
far as practicable, shall be adjusted to the accounts credited when the 
materials were charged to this account.
    B. Materials and supplies issued shall be credited hereto and 
charged to the appropriate construction, operating expense, or other 
account on the basis of a unit price determined by the use of cumulative 
average, first-in-first out, or such other method of inventory 
accounting as conforms with accepted accounting standards consistently 
applied.

                                  Items

    1. Invoice price of materials less cash or other discounts.
    2. Freight, switching or other transportation charges when 
practicable to include as part of the cost of particular materials to 
which they relate.
    3. Customs duties and excise taxes.
    4. Costs of inspection and special tests prior to acceptance.
    5. Insurance and other directly assignable charges.

    Note: Where expenses applicable to materials purchased cannot be 
directly assigned to particular purchases, they shall be charged to 
account 163, Stores expenses Undistributed.
155 Merchandise.
    This account shall include the book cost of materials and supplies, 
and appliances and equipment held primarily for merchandising, jobbing, 
and contract work. The principles prescribed in accounting for utility 
materials and supplies shall be observed in respect to items carried in 
this account.
156 Other materials and supplies.
    This account shall include the book cost of materials and supplies 
held primarily for nonutility purposes. The principles prescribed in 
accounting for utility materials and supplies shall be observed in 
respect to items carried in this account.
163 Stores expense undistributed.
    A. This account shall include the cost of supervision, labor and 
expenses incurred in the operation of general storerooms, including 
purchasing, storage, handling and distribution of materials and 
supplies.
    B. This account shall be cleared by adding to the cost of materials 
and supplies issued a suitable loading charge which will distribute the 
expense equitably over stores issues. The balance in the account at the 
close of the year shall not exceed the amount of stores expenses 
reasonably attributable to the inventory of materials and supplies 
exclusive of fuel, as any amount applicable to fuel cost should be 
included in account 152, Fuel Stock Expenses Undistributed.

                                  Items

Labor:
    1. Inspecting and testing materials and supplies when not assignable 
to specific items.
    2. Unloading from shipping facility and putting in storage.
    3. Supervision of purchasing and stores department to extent 
assignable to materials handled through stores.
    4. Getting materials from stock and in readiness to go out.
    5. Inventorying stock received or stock on hand by stores employees 
but not including inventories by general department employees as part of 
internal or general audits.
    6. Purchasing department activities in checking material needs, 
investigating sources of supply, analyzing prices, preparing and placing 
orders, and related activities to extent applicable to materials handled 
through stores. (Optional. Purchasing department expenses may be 
included in administrative and general expenses.)
    7. Maintaining stores equipment.
    8. Cleaning and tidying storerooms and stores offices.
    9. Keeping stock records, including recording and posting of 
material receipts and issues and maintaining inventory record of stock.
    10. Collecting and handling scrap materials in stores.

Supplies and Expenses:
    11. Adjustments of inventories of materials and supplies but not 
including large differences which can readily be assigned to important 
classes of materials and equitably distributed among the accounts to 
which

[[Page 648]]

such classes of materials have been charged since the previous 
inventory.
    12. Cash and other discounts not practically assignable to specific 
materials.
    13. Freight, express, etc., when not assignable to specific items.
    14. Heat, light and power for storerooms and store offices.
    15. Brooms, brushes, sweeping compounds and other supplies used in 
cleaning and tidying storerooms and stores offices.
    16. Injuries and damages.
    17. Insurance on materials and supplies and on stores equipment.
    18. Losses due to breakage, leakage, evaporation, fire or other 
causes, less credits for amounts received from insurance, transportation 
companies or others in compensation of such losses.
    19. Postage, printing, stationery and office supplies.
    20. Rent of storage space and facilities.
    21. Communication service.
    22. Excise and other similar taxes not assignable to specific 
materials.
    23. Transportation expense on inward movement of stores and on 
transfer between storerooms but not including charges on materials 
recovered from retirements which shall be accounted for as part of cost 
of removal.

    Note: A physical inventory of each class of materials and supplies 
shall be made at least every two years.
164.1 Gas stored--current.
    This account shall be debited with such amounts as are credited to 
Account 117.2, System balancing gas, (for utilities using an inventory 
method of accounting for system gas) and Account 117.3, Gas Stored in 
Reservoirs and Pipelines-Noncurrent, to reflect classification for 
balance sheet purposes of such portion of the inventory of gas stored as 
represents a current asset according to conventional rules for 
classification of current assets.

    Note: It shall not be considered conformity to conventional rules of 
current asset classification if the amount included in this account 
exceeds an amount equal to the cost of estimated withdrawals of gas from 
storage within the 24-month period from date of the balance sheet, or if 
the amount represents a volume of gas which, in fact, could not be 
withdrawn from storage without impairing pressure levels needed for 
normal operating purposes.
164.2 Liquefied natural gas stored.
    A. This account shall include the cost of liquefied natural gas 
stored in above or below ground facilities.
    B. Natural gas purchased in a liquefied form shall be priced at the 
cost of such gas to the utility. Natural gas liquefied by the utility 
shall be priced according to generally accepted methods of cost 
determination consistently applied from year to year. Transmission 
expenses for facilities to the utility used in moving the gas to the 
storage facilities shall not be included in the inventory of gas except 
as may be authorized by the Commission.
    C. Amounts debited to this account for natural gas placed in stored 
shall be credited to account 808.2, Gas Delivered to Storage--Credit. 
Amounts credited to this account for gas withdrawn from storage shall be 
debited to account 808.1, Gas Withdrawn from Storage--Debit.
    D. Withdrawals of gas may be priced according to the first-in-first-
out, last-in-first-out, or weighted average cost method provided the 
method adopted by the utility is used consistently from year to year and 
inventory records are maintained in accordance therewith. Commission 
approval must be obtained for any other pricing method or for any change 
in the pricing method adopted by the utility. Separate records shall be 
maintained for each storage project of the Dth of gas delivered to 
storage and remaining in storage.
    E. Adjustments for inventory losses shall be charged to account 
842.3, Gas Losses.
164.3 Liquefied natural gas held for processing.
    A. This account shall include the cost of base load liquefied 
natural gas available for vaporization and injection into the utility's 
natural gas system.
    B. Natural gas purchased in a liquefied form shall be priced at the 
cost of such gas to the utility.
    C. Amounts debited to this account for liquefied natural gas 
purchased for processing shall be credited to account 809.2, Deliveries 
of Natural Gas for Processing--Credit. Amounts credited for liquefied 
natural gas processed

[[Page 649]]

shall be debited to account 809.1, Withdrawals of Liquefied Natural Gas 
Held for Processing--Debit.
    D. Withdrawals of gas held for vaporization may be priced according 
to the first-in-first-out, last-in-first-out or weighted average cost 
method provided the method adopted by the utility is used consistently 
from year to year and inventory records are maintained in accordance 
therewith. Commission approval must be obtained for any other pricing 
method or for any change from the pricing method adopted by the utility. 
Separate records shall be maintained for Dth of gas purchased for 
processing, processed, and remaining for processing.
    E. Adjustments for inventory losses shall be charged to account 
846.1, Gas Losses.
165 Prepayments.
    A. This account shall include payments for undelivered gas and other 
prepayments of rents, taxes, insurance, interest, and like disbursements 
made prior to the period to which they apply. Prepayments for gas are 
those amounts paid to a seller of gas under ``take or pay'' provisions 
of a gas purchase contract for a sale certificated by the Commission 
where future makeup of the gas not taken in the current period is 
provided for by the contract.
    B. As the periods covered by such prepayments expire, credit this 
account and charge the proper operating expense or other appropriate 
account with the amount applicable to the period.
    C. This account shall be kept or supported in such a manner as to 
disclose the amount of each class of prepayments.
166 Advances for gas exploration, development and production.
    A. This account shall include all advances made for gas (whether 
called ``advances,'' ``contributions'' or otherwise) to independent 
producers, affiliated or associated companies, or others operating 
within the lower 48 states and Alaska; for exploration, development or 
production (but not to include lease acquisition) of natural gas. Under 
each agreement with payee, such payments must be made prior to initial 
gas deliveries, or if the agreement provides for advances on a well by 
well basis, each incremental payment must be made prior to deliveries 
from an incremental well, or prior to Federal and/or State 
authorization, as appropriate. All agreements executed after June 17, 
1975, (issuance date of Order No. 529) shall specify that (1) the 
pipeline shall have first call on any gas produced, attributable to the 
advance payment, under a long-term contract which is for a minimum 
initial term computed as the lesser of fifteen years or the life of the 
reserve in the field, and (2) the selling price of the gas committed by 
producers whose sales are subject to price regulation shall be governed 
by and limited to the area rate or national rate or, under appropriate 
showing of special circumstance, such other rate as may be authorized by 
the Commission under the provisions of optional pricing and special 
relief. As a determination of the initial rate, the time of first 
delivery in interstate commerce to the purchaser shall govern. Non-
current advances not to be repaid within a two-year period shall be 
reclassified and transferred to account 124, Other Investments, for 
balance sheet purposes. This transfer is for reporting purposes only and 
has no effect on accounting and ratemaking.
    B. When a pipeline obtains a working interest as a result of funds 
advanced to producers, such amounts shall be included in appropriate 
production accounts for formal contractual agreements executed prior to 
the date of issuance of Order No. 499. When an associated company 
obtains a working interest as a result of funds advanced from a pipeline 
company, the pipeline shall include such amounts in Account 123, 
Investment in Associated Companies, or Account 146, Accounts receivable 
from Associated Companies, as appropriate, for formal contractual 
commitments made during the period on or after November 10, 1971 
(effective date of Order 441) but prior to December 29, 1972, the date 
of issuance of Order No. 465.
    C. Outstanding advances shall be fully reduced within 5 years, or as 
otherwise authorized by the Commission, from the date gas deliveries 
commence

[[Page 650]]

or the date it is determined that recovery will be in other than gas. 
This account shall be credited with advances not fully recovered within 
the five-year period, and the unrecovered portion charged directly to 
Account 426.5, Other Deductions. A sufficient portion of all gas taken 
should be credited to the related outstanding advance so as to eliminate 
the advance within the 5-year period or as otherwise authorized by the 
Commission upon request by the pipeline company. The reduction of the 
outstanding advance should not be dependent on a buyer purchasing more 
than 100 percent of the minimum take or pay quantity provided in the 
contract. In those instances where the five-year recovery period has 
lapsed, but recovery of the advance continues beyond the five-year 
period, the unrecovered advances shall be removed from this account and 
transferred to Account 167, Other Advances for Gas.
    D. Where recovery is by gas, the recovered advance shall be credited 
to this account and charged to the appropriate gas purchase account.
    E. When an advance which is or has been included in this account and 
in rate base results in a source of proven reserves of natural gas, gas 
deliveries commence but no gas flows to the pipeline company making such 
advance, the amount of the advance shall be removed from this account 
(and from rate base) and recorded in account 167, Other Advances for 
Gas. Any revenues collected as a result of the advance being included in 
rate base shall be refunded by the pipeline company to its customers, 
together with interest, per annum, at the rate established by Order No. 
513, issued October 10, 1974, or as subsequently revised by Commission 
Order, from the date of payment until refunded, within 12 months after 
the removal of the advance from this account, unless otherwise directed 
by the Commission. Where there is partial recovery of the advance by 
gas, in this situation, the amount of the advance transferred from this 
account to account 167 and the amount of revenues refunded, with 
interest, shall be appropriately apportioned.
    F. However, if 5 years elapses from the time the advance has been 
included in this account and during such time no gas deliveries have 
commenced or no determination has been made that the recovery will be in 
economic consideration other than gas, the pipeline shall at the end of 
the 5-year period, transfer the advance from this account to Account 
167, and cease rate base treatment thereof, unless otherwise directed by 
the Commission.
    G. Whenever as a result of an advance included in this account, a 
pipeline receives any amount in excess of a full recovery of the 
advance, e.g. interest income, such amount must be credited to Account 
813, Other Gas Supply Expenses, or as otherwise directed by the 
Commission. If the income or return is received in other than money, it 
shall be included at the market value of the assets received.
    H. If the recipient of an advance is unable to repay it in full, 
through no fault of the pipeline or contractual provisions, in gas or 
other assets, the unpaid or nonrecoverable portion must be credited to 
this account at the time such amount is recognized as nonrecoverable. 
Nonrecoverable advances significant in amount must be eliminated within 
5 years from the date of determination as nonrecoverable by either a 
charge to account 435, Extraordinary Deductions, or when authorized by 
the Commission, by a transfer to account 186, Miscellaneous Deferred 
Debits, and amortization to account 813, Other Gas Supply Expenses. 
Nonrecoverable advances insignificant in amount should be charged 
directly to account 813 in the year recognized as nonrecoverable, when 
authorized by the Commission.
    I. No transfers shall be made to or from this account to any other 
accounts, unless otherwise provided herein, except as specifically 
authorized by the Commission upon request by the pipeline company.
    J. Three copies of any agreement concerning advances will be filed 
with the Secretary within 30 days of the initial related entry in 
account 166.

    Note A: This account may include advances for exploration (including 
lease acquisition costs) made according to the provisions of Order Nos. 
410 and 410-A, for which a contractual commitment was made prior to 
November 10, 1971, (issue date of Order No. 441). All advances made 
pursuant to contractual commitments made prior to November

[[Page 651]]

10, 1971, (issue date of Order No. 441) shall be subject to the 
provisions of Order Nos. 410 and 410-A.
    Note B: This account shall not include advances for exploration 
(including lease acquisition costs) in accordance with Order No. 441, 
for which a contractual commitment was made on or after November 10, 
1971 (issue date of Order No. 441), but prior to December 29, 1972 
(issue date of Order No. 465). All advances made pursuant to contractual 
commitments made on or after November 10, 1971, but prior to December 
29, 1972 (issue date of Order No. 465) shall be subject to the 
provisions of Order No. 441.
    Note C: This account shall not include advances for lease 
acquisition costs but may include advances for exploration where such 
advances are pursuant to contractual commitments made on or after 
December 29, 1972 (issue date of Order No. 465).
    Note D: All advances made pursuant to contractual commitments made 
on or after December 29, 1972 (issue date of Order No. 465) but prior to 
the date of issuance of Order No. 499, shall be subject to the 
provisions of Order No. 465.
    Note E: All advances made pursuant to contractual commitments made 
on or after December 28, 1973 (issue date of Order No. 499), but prior 
to the date of issuance of Order No. 529, shall be subject to the 
provisions of Order No. 499.
    Note F: This account shall not include advances expended for delay 
rentals, nonproductive well drilling or abandoned leases where such 
advances are related to lease acquisition, except in accordance with 
Note A and Note B to this account.
    Note G: To keep the Commission informed when an advance is 
nonrecoverable by any means the company must submit the full details 
including copies of Federal and State plugging and abandonment reports 
involved as soon as such fact becomes known.
167 Other advances for gas.
    This account shall include all advances not properly includible in 
Account 166, exclusive of amounts advanced where a working interest is 
obtained.
171 Interest and dividends receivable.
    This account shall include the amount of interest on bonds, 
mortgages, notes, commercial paper, loans, open accounts, deposits, 
etc., the payment of which is reasonably assured, and the amount of 
dividends declared or guaranteed on stocks owned.

    Note A: Interest which is not subject to current settlement shall 
not be included herein but in the account in which is carried the 
principal on which the interest is accrued.
    Note B: Interest and dividends receivable from associated companies 
shall be included in account 146. Accounts Receivable from Associated 
Companies.
172 Rents receivable.
    This account shall include rents receivable or accrued on property 
rented or leased by the utility to others.

    Note: Rents receivable from associated companies shall be included 
in account 146. Accounts Receivable From Associated Companies.
173 Accrued utility revenues.
    At the option of the utility, the estimated amount accrued for 
service rendered, but not billed at the end of any accounting period, 
may be included herein. In case accruals are made for unbilled revenues, 
they shall be made likewise for unbilled expenses, such as for the 
purchase of gas.
174 Miscellaneous current and accrued assets.
    A. This account shall include the book cost of all other current and 
accrued assets, appropriately designated and supported so as to show the 
nature of each asset included herein.
    B. The utility is to include in a separate subaccount amounts 
receivable for gas in unbalanced transactions where gas is delivered to 
another party in exchange, load balancing, or no-notice transportation 
transactions. (See Account 806.) If the amount receivable is settled by 
other than gas, Account 495, Other Gas Revenues must be credited or 
Account 813, Other Gas Supply Expenses, charged for the difference 
between the amount of the consideration received and the recorded amount 
of the receivable settled. Records are to be maintained so that there is 
readily available for each party entering gas exchange, load balancing, 
or no-notice transportation transactions, the quantity and cost of gas 
delivered, and the amount and basis of consideration received, if other 
than gas.
175 Derivative instrument assets.
    This account shall include the amounts paid for derivative 
instruments, and the change in the fair value

[[Page 652]]

of all derivative instrument assets not designated as cash flow or fair 
value hedges. Account 421, miscellaneous nonoperating income, will be 
credited or debited as appropriate with the corresponding amount of the 
change in the fair value of the derivative instrument.
176 Derivative instrument assets--Hedges.
    A. This account shall include the amounts paid for derivative 
instruments, and the change in the fair value of derivative instrument 
assets designated by the utility as cash flow or fair value hedges.
    B. When a utility designates a derivative instrument asset as a cash 
flow hedge it will record the change in the fair value of the derivative 
instrument in this account with a concurrent charge to account 219, 
accumulated other comprehensive income, with the effective portion of 
the derivative gain or loss. The ineffective portion of the cash flow 
hedge shall be charged to the same income or expense account that will 
be used when the hedged item enters into the determination of net 
income.
    C. When a utility designates a derivative instrument asset as a fair 
value hedge it shall record the change in the fair value of the 
derivative instrument in this account with a concurrent charge to a 
subaccount of the asset or liability that carries the item being hedged. 
The ineffective portion of the fair value hedge shall be charged to the 
same income or expense account that will be used when the hedged item 
enters into the determination of net income.
181 Unamortized debt expense.
    This account shall include expenses related to the issuance or 
assumption of debt securities. Amounts recorded in this account shall be 
amortized over the life of each respective issue under a plan which will 
distribute the amount equitably over the life of the security. The 
amortization shall be on a monthly basis, and the amounts thereof shall 
be charged to account 428, Amortization of Debt Discount and Expense. 
Any unamortized amounts outstanding at the time that the related debt is 
prematurely reacquired shall be accounted for as indicated in General 
Instruction 17.
182.1 Extraordinary property losses.
    A. When authorized or directed by the Commission, this account shall 
include extraordinary losses, which could not reasonably have been 
anticipated and which are not covered by insurance or other provisions, 
such as unforeseen damages to property.
    B. Application to the Commission for permission to use this account 
shall be accompanied by a statement giving a complete explanation with 
respect to the items which it is proposed to include herein, the period 
over which, and the accounts to which it is proposed to write off the 
charges, and other pertinent information.
182.2 Unrecovered plant and regulatory study costs.
    A. This account shall include: (1) Nonrecurring costs of studies and 
analyses mandated by regulatory bodies related to plants in service, 
transferred from account 183.2, Other Preliminary Survey and 
Investigation Charges, and not resulting in construction; and (2) when 
authorized by the Commission, significant unrecovered costs of plant 
facilities where construction has been cancelled or which have been 
prematurely retired.
    B. This account shall be credited and account 407.1, Amortization of 
Property Losses, Unrecovered Plant and Regulatory Study Costs, shall be 
debited, over the period specified by the Commission.
    C. Any additional costs incurred, relative to the cancellation or 
premature retirement, may be included in this account and amortized over 
the remaining period of the original amortization period. Should any 
gains of recoveries be realized relative to the cancelled or prematurely 
retired plant, such amounts shall be used to reduce the unamortized 
amount of the costs recorded herein.
    D. In the event that the recovery of costs included herein is 
disallowed in rate proceedings, the disallowed costs shall be charged to 
account 426.5, Other

[[Page 653]]

Deductions, or account 435, Extraordinary deductions, in the year of 
such disallowance.
182.3 Other regulatory assets.
    A. This account shall include the amounts of regulatory-created 
assets, not includible in other accounts, resulting from the ratemaking 
actions of regulatory agencies. (See Definition No. 31.)
    B. The amounts included in this account are to be established by 
those charges which would have been included in net income, or 
accumulated other comprehensive income, determinations in the current 
period under the general requirements of the Uniform System of Accounts 
but for it being probable that such items will be included in a 
different period(s) for purposes of developing rates that the utility is 
authorized to charge for its utility services. When specific 
identification of the particular source of a regulatory asset cannot be 
made, such as in plant phase-ins, rate moderation plans, or rate 
levelization plans, account 407.4, regulatory credits, shall be 
credited. The amounts recorded in this account are generally to be 
charged, concurrently with the recovery of the amounts in rates, to the 
same account that would have been charged if included in income when 
incurred, except all regulatory assets established through the use of 
account 407.4 shall be charged to account 407.3, Regulatory debits, 
concurrent with the recovery in rates.
    C. If rate recovery of all or part of an amount included in this 
account is disallowed, the disallowed amount shall be charged to Account 
426.5, Other Deductions, or Account 435, Extraordinary Deductions, in 
the year of the disallowance.
    D. The records supporting the entries to this account shall be kept 
so that the utility can furnish full information as to the nature and 
amount of each regulatory asset included in this account, including 
justification for inclusion of such amounts in this account.
183.1 Preliminary natural gas survey and investigation charges.
    A. This account shall be charged with all expenditures for 
preliminary surveys, plans, investigations, etc. made for the purpose of 
determining the feasibility of acquiring land and land rights to provide 
a future supply of natural gas. If such land or land rights are 
acquired, this account shall be credited and the appropriate gas plant 
account (see gas plant instruction 7-G) charged with the amount of the 
expenditures relating to such acquisition. If a project is abandoned 
involving a natural gas lease acquired before October 8, 1969, the 
expenditures related thereto shall be charged to account 798, Other 
Exploration. If a project is abandoned involving a lease acquired after 
October 7, 1969, the expenditures related thereto shall be charged to 
account 338, Unsuccessful Exploration and Development Costs.
    B. The records supporting the entries to this account shall be so 
kept that the utility can furnish, for each investigation, complete 
information as to the identification and location of territory 
investigated, the number or other identification assigned to the land 
tract or leasehold acquired, and the nature and respective amounts of 
the charges.

    Note: The amount of preliminary survey and investigation charges 
transferred to gas plant shall not exceed the expenditures which may 
reasonably be determined to contribute directly and immediately and 
without duplication to gas plant.
183.2 Other preliminary survey and investigation charges.
    A. This account shall be charged with all expenditures for 
preliminary surveys, plans, investigations, etc., made for the purpose 
of determining the feasibility of utility projects under contemplation, 
other than the acquisition of land and land rights to provide a future 
supply of natural gas. If construction results, this account shall be 
credited and the appropriate utility plant account charged. If the work 
is abandoned, the charge shall be made to account 426.5, Other 
Deductions, or the appropriate operating expense account.
    B. This account shall also include costs of studies and analyses 
mandated by regulatory bodies related to plant in service. If 
construction results from such studies, this account shall be credited 
and the appropriate utility

[[Page 654]]

plant account charged with an equitable portion of such study costs 
directly attributible to new construction. The portion of such study 
costs not attributible to new construction or the entire cost if 
construction does not result shall be charged to account 182.2, 
Unrecovered Plant and Regulatory Study Costs, or the appropriate 
operating expense account. The costs of such studies relative to plant 
under construction shall be included directly in account 107, 
Construction Work in Progress--Gas.
    C. The records supporting the entries to this account shall be so 
kept that the utility can furnish complete information as to the nature 
and the purpose of the survey, plans, or investigations and the nature 
and amounts of the several charges.

    Note: The amount of preliminary survey and investigation charges 
transferred to utility plant shall not exceed the expenditures which may 
reasonably be determined to contribute directly and immediately and 
without duplication to utility plant.
184 Clearing accounts.
    This caption shall include undistributed balances in clearing 
accounts at the date of the balance sheet. Balances in clearing accounts 
shall be substantially cleared not later than the end of the calendar 
year unless items held therein relate to a future period.
185 Temporary facilities.
    This account shall include amounts shown by work orders for plant 
installed for temporary use in utility service for periods of less than 
one year. Such work orders shall be charged with the cost of temporary 
facilities and credited with payments received from customers and net 
salvage realized on removal of the temporary facilities. Any net credit 
or debit resulting shall be cleared to account 488, Miscellaneous 
Service Revenues.
186 Miscellaneous deferred debits.
    A. This account shall include all debits not elsewhere provided for, 
such as miscellaneous work in progress, construction certificate 
application fees paid prior to final disposition of the application as 
provided for in gas plant instruction 15A, and unusual or extraordinary 
expenses not included in other accounts which are in process of 
amortization, and items the final disposition of which is uncertain.
    B. The records supporting the entries to this account shall be so 
kept that the utility can furnish full information as to each deferred 
debit included herein.
187 Deferred losses from disposition of utility plant.
    This account shall include losses from the sale or other disposition 
of property previously recorded in account 105, Gas Plant Held for 
Future Use and account 105.1, Production Properties Held for Future Use, 
under the provisions of paragraphs B, C, and D thereof, where such 
losses are significant and are to be amortized over a period of 5 years, 
unless otherwise authorized by the Commission. The amortization of the 
amounts in this account shall be made by debits to account 411.7, Losses 
from Disposition of Utility Plant. Subdivision of this account shall be 
maintained so that amounts relating to account 105, Gas Plant Held for 
Future Use and account 105.1, Production Properties Held for Future Use, 
can be readily identifiable. (See accounts 105, Gas Plant Held for 
Future Use and 105.1, Production Properties Held for Future Use.)
188 Research, development, and demonstration expenditures.
    A. This account shall be charged with the cost of all expenditures 
coming within the meaning of Research, Development, and Demonstration 
(R.D. & D.) of this Uniform Systems of Accounts (see definition 28.B), 
except those expenditures properly chargeable to Account 107, 
Construction Work in Progress--Gas.
    B. Costs that are minor or of a general or recurring nature shall be 
transferred from this account to the appropriate operating expense 
function or if such costs are common to the overall operations or cannot 
be feasibly allocated to the various operating accounts, then such costs 
shall be recorded in account 930.2, Miscellaneous General Expenses.

[[Page 655]]

    C. In certain instances a company may incur large and significant 
research, development, and demonstration expenditures which are 
nonrecurring and which would distort the annual research, development, 
and demonstration charges for the period. In such a case the portion of 
such amounts that cause the distortion may be amortized to the 
appropriate operating expense account over a period not to exceed five 
years unless otherwise authorized by the Commission.
    D. The entries in this account must be so maintained as to show 
separately each project along with complete detail of the nature and 
purpose of the research, development, and demonstration project together 
with the related costs.
189 Unamortized loss on reacquired debt.
    This account shall include the losses on long-term debt reacquired 
or redeemed. The amounts in this account shall be amortized in 
accordance with General Instruction 17.
190 Accumulated deferred income taxes.
    A. This account shall be debited and account 411.1, Provision for 
Deferred Income Taxes--Credit, Utility Operating Income, or account 
411.2, Provision for Deferred Income Taxes--Credit, Other Income and 
Deductions, as appropriate, shall be credited with an amount equal to 
that by which income taxes payable for the year are higher because of 
the inclusion of certain items in income for tax purposes, which items 
for general accounting purposes will not be fully reflected in the 
utility's determination of annual net income until subsequent years.
    B. This account shall be credited and account 410.1, Provision for 
Deferred Income Taxes, Utility Operating Income, or account 410.2, 
Provision for Deferred Income Taxes, Other Income and Deductions, as 
appropriate, shall be debited with an amount equal to that by which 
income taxes payable for the year are lower because of prior payment of 
taxes as provided by paragraph A above, because of difference in timing 
for tax purposes of particular items of income or income deductions from 
that recognized by the utility for general accounting purposes. Such 
credit to this account and debit to account 410.1 or 410.2 shall, in 
general, represent the effect on taxes payable in the current year of 
the smaller amount of book income recognized, or the larger deduction 
permitted, for tax purposes as compared to the amount recognized in the 
utility's current accounts with respect to the item or class of items 
for which deferred tax concept of accounting is affected.
    C. Vintage year records with respect to entries to this account, as 
described above, and the account balance shall be so maintained as to 
show the factor of calculation with respect to each annual amount of the 
item or class of items for which deferred tax accounting by the utility 
is utilized.
    D. The utility is restricted in its use of this account to the 
purpose set forth above. It shall not make use of the balance in this 
account or any portion thereof except as provided in the text of this 
account, without prior approval of the Commission. Any remaining 
deferred tax account balance with respect to an amount for any prior 
year's tax deferral, the amortization of which or other recognition in 
the utility's income accounts has been completed, or other disposition 
made, shall be debited to account 410.1, Provision for Deferred Income 
Taxes, Utility Operating Income, or account 410.2, Provision for 
Deferred Income Taxes, Other Income and Deductions, as appropriate, or 
otherwise disposed of as the Commission may authorize or direct. (See 
General Instruction 18.)
191 Unrecovered purchased gas costs.
    A. This account shall include purchase gas costs related to 
Commission approved purchased gas adjustment clauses when such costs are 
not included in the utility's rate schedule on file with the Commission. 
This account shall also include such other costs as authorized by the 
Commission.
    B. This account shall be debited or credited, as appropriate, each 
month for increases or decreases in purchased gas costs with contra 
entries to Account 805.1, Purchased Gas Cost Adjustments.

[[Page 656]]

    C. After a change in a rate schedule recognizing the increases or 
decreases in purchased gas costs recorded in this account is approved by 
the Commission, this account shall be debited or credited, as 
appropriate, with contra entries to expense Account 805.1, Purchased Gas 
Cost Adjustments, so that the balance accumulated in this account will 
be amortized on an appropriate basis over a succeeding 6-month period or 
over such other periods that the Commission may have authorized. Any 
over or under applied debits or credits to this account shall be carried 
forward to the succeeding period of amortization.
    D. Separate subaccounts shall be maintained for the amounts relating 
to the period in which the increase or decrease is accumulated and for 
the amortization of purchase gas increases or decreases, as applicable, 
so as to keep each period separate.
201 Common stock issued.
202 Common stock subscribed.
203 Common stock liability for conversion.
204 Preferred stock issued.
    A. These accounts shall include the par value or the stated value of 
stock without par value if such stock has a stated value, and, if not, 
the cash value of the consideration received for such nonpar stock, of 
each class of capital stock actually issued, including the par or stated 
value of such capital stock in account 124, Other Investments and 
account 217, Reacquired Capital Stock.
    B. When the actual cash value of the consideration received is more 
or less than the par or stated value of any stock having a par or stated 
value, the difference shall be credited or debited, as the case may be, 
to the premium or discount account for the particular class and series.
    C. When capital stock is retired, these accounts shall be charged 
with the amount at which such stock is carried herein.
    D. A separate ledger account, with a descriptive title, shall be 
maintained for each class and series of stock. The supporting records 
shall show the shares nominally issued, actually issued, and nominally 
outstanding.

    Note: When a levy or assessment, except a call for payment on 
subscriptions, is made against holders of capital stock, the amount 
collected upon such levy or assessment shall be credited to account 207, 
Premium on Capital Stock; provided, however, that the credit shall be 
made to account 213, Discount on Capital Stock, to the extent of any 
remaining balance of discount on the issue of stock.
205 Preferred stock subscribed.
    A. These accounts shall include the amount of legally enforceable 
subscriptions to capital stock of the utility. They shall be credited 
with the par or stated value of the stock subscribed, exclusive of 
accrued dividends, if any. Concurrently, a debit shall be made to 
subscriptions to capital stock, included as a Other Accounts Receivable, 
for the agreed price and any discount or premium shall be debited or 
credited to the appropriate discount or premium account. When properly 
executed stock certificates have been issued representing the shares 
subscribed, this account separate subdivision of account 143, shall be 
debited, and the appropriate capital stock account credited, with the 
par or stated value of such stock.
    B. The records shall be kept in such manner as to show the amount of 
subscriptions to each class and series of stock.
206 Preferred stock liability for conversion.
    A. These accounts shall include the par value or stated value, as 
appropriate, of capital stock which the utility has agreed to exchange 
for outstanding securities of other companies in connection with the 
acquisition of properties of such companies under terms which allow the 
holders of the securities of the other companies to surrender such 
securities and receive in return therefor capital stock of the 
accounting utility.
    B. When the securities of the other companies have been surrendered 
and capital stock issued in accordance with the terms of the exchange, 
these accounts shall be charged and accounts

[[Page 657]]

201, Common Stock Issued, or 204, Preferred Stock Issued, as the case 
may be, shall be credited.
    C. The records shall be kept so as to show separately the stocks of 
each class and series for which a conversion liability exists.
207 Premium on capital stock.
    A. This account shall include, in a separate subdivision for each 
class and series of stock, the excess of the actual cash value of the 
consideration received on original issues of capital stock over the par 
or stated value and accrued dividends of such stock, together with 
assessments against stockholders representing payments required in 
excess of par or stated values.
    B. Premium on capital stock shall not be set off against expenses. 
Further, a premium received on an issue of a certain class or series of 
stock shall not be set off against expenses of another issue of the same 
class or series.
    C. When capital stock which has been actually issued is retired, the 
amount in this account applicable to the shares retired shall be 
transferred to account 210, Gain on Resale or Cancellation of Reacquired 
Capital Stock.
208 Donations received from stockholders.
    This account shall include the balance of credits for donations 
received from stockholders consisting of capital stock of the utility, 
cancellation or reduction of debt of the utility, and the cash value of 
other assets received as a donation.
209 Reduction in par or stated value of capital stock.
    This account shall include the balance of credits arising from a 
reduction in the par or stated value of capital stock.
210 Gain on resale or cancellation of reacquired capital stock.
    This account shall include the balance of credits arising from the 
resale or cancellation of reacquired capital stock. (See account 217, 
Reacquired Capital Stock.)
211 Miscellaneous paid-in capital.
    This account shall include the balance of all other credits for 
paid.in capital which are not properly includible in the foregoing 
accounts. This account may include all commissions and expenses incurred 
in connection with the issuance of capital stock.

    Note: Amounts included in capital surplus at the effective date of 
this system of accounts which cannot be classified as to the source 
thereof shall be included in this account.
212 Installments received on capital stock.
    A. This account shall include in a separate subdivision for each 
class and series of capital stock the amount of installments received on 
capital stock on a partial or installment payment plan from subscribers 
who are not bound by legally enforceable subscription contracts.
    B. As subscriptions are paid in full and certificates issued, this 
account shall be charged and the appropriate capital stock account 
credited with the par or stated value of such stock. Any discount or 
premium on an original issue shall be included in the appropriate 
discount or premium account.
213 Discount on capital stock.
    A. This account shall include in a separate subdivision for each 
class and series of capital stock all discount on the original issuance 
and sale of capital stock, including additional capital stock of a 
particular class or series as well as first issues.
    B. When capital stock which has been actually issued is retired, the 
amount in this account applicable to the shares retired shall be written 
off to account 210, Gain on Resale or Cancellation of Reacquired Capital 
Stock, provided, however, that the amount shall be charged to account 
439, Adjustments to Retained Earnings, to the extent that it exceeds the 
balance in account 210.
214 Capital stock expense.
    A. This account shall include in a separate subdivision for each 
class and series of stock all commissions and expenses incurred in 
connection with the original issuance and sale of capital stock, 
including additional capital

[[Page 658]]

stock of a particular class or series as well as first issues. Expenses 
applicable to capital stock shall not be deducted from premium on 
capital stock.
    B. When capital stock which has been actually issued by the utility 
is retired, the amount in this account applicable to the shares retired 
shall be written off to account 210, Gain on Resale or Cancellation of 
Reacquired Capital Stock, provided, however, that the amount shall be 
charged to account 439, Adjustments to Retained Earnings, to the extent 
that it exceeds the balance in account 210.

    Note A: Expenses in connection with the reacquisition or resale of 
the utility's capital stock shall not be included herein.
    Note B: The utility may write off capital stock expense in whole or 
in part by charges to account 211, Miscellaneous Paid-In Capital.
215 Appropriated retained earnings.
    This account shall include the amount of earned surplus which has 
been appropriated or set aside for specific purposes. Separate 
subaccounts shall be maintained under such titles as will designate the 
purpose for which each appropriation was made.
216 Unappropriated retained earnings.
    This account shall include the balances, either debit or credit, of 
unappropriated retained earnings arising from earnings of the utility. 
This account shall not include any amounts representing the 
undistributed earnings of subsidiary companies.
216.1 Unappropriated undistributed subsidiary earnings.
    This account shall include the balances, either debit or credit, of 
undistributed retained earnings of subsidiary companies since their 
acquisition. When dividends are received from subsidiary companies and 
the balances have been included in this account, this account shall be 
debited and account 216, Unappropriated Retained Earnings, credited.
217 Reacquired capital stock.
    A. This account shall include in a separate subdivision for each 
class and series of capital stock, the cost of capital stock actually 
issued by the utility and reacquired by it and not retired or canceled, 
except, however, stock which is held by trustees in sinking or other 
funds.
    B. When reacquired capital stock is retired or canceled, the 
difference between its cost, including commissions and expenses paid in 
connection with the reacquisition, and its par or stated value plus any 
premium and less any discount and expenses applicable to the shares 
retired, shall be debited or credited, as appropriate, to account 210, 
Gain on Resale or Cancellation of Reacquired Capital Stock, provided, 
however, that debits shall be charged to account 439, Adjustments to 
Retained Earnings, to the extent that they exceed the balance in account 
210.
    C. When reacquired capital stock is resold by the utility, the 
difference between the amount received on the resale of the stock, less 
expenses incurred in the resale, and the cost of the stock included in 
this account shall be accounted for as outlined in paragraph B.

    Note A: See account 124. Other Investments, for permissive 
accounting treatment of stock reacquired under a definite plan for 
resale.
    Note B: The accounting for reacquired stock shall be as prescribed 
herein unless otherwise specifically required by statute.
219 Accumulated other comprehensive income.
    A. This account shall include revenues, expenses, gains, and losses 
that are properly includable in other comprehensive income during the 
period. Examples of other comprehensive income include foreign currency 
items, minimum pension liability adjustments, unrealized gains and 
losses on certain investments in debt and equity securities, and cash 
flow hedges. Records supporting the entries to this account shall be 
maintained so that the utility can furnish the amount of other 
comprehensive income for each item included in this account.
    B. This account shall also be debited or credited, as appropriate, 
with amounts of accumulated other comprehensive income that have been 
included in the determination of net income during the period and in 
accumulated other comprehensive income in

[[Page 659]]

prior periods. Separate records for each category of items will be 
maintained to identify the amount of the reclassification adjustments 
from accumulated other comprehensive income to earnings made during the 
period.
221 Bonds.
    This account shall include in a separate subdivision for each class 
and series of bonds the face value of the actually issued and unmatured 
bonds which have not been retired or canceled; also the face value of 
such bonds issued by others the payment of which has been assumed by the 
utility.
222 Reacquired bonds.
    A. This account shall include the face value of bonds actually 
issued or assumed by the utility and reacquired by it and not retired, 
or canceled. The account for reacquired debt shall not include 
securities which are held by trustee in sinking or other funds.
    B. When bonds are reacquired, the difference between face value, 
adjusted for unamortized discount, expenses or premium, and the amount 
paid upon reacquisition, shall be included in account 189, Unamortized 
Loss on Reacquired Debt, or account 257, Unamortized Gain on Reacquired 
Debt, as appropriate. (See General Instruction 17.)
223 Advances from associated companies.
    A. This account shall include the face value of notes payable to 
associated companies and the amount of open book accounts representing 
advances from associated companies. It does not include notes and open 
accounts representing indebtedness subject to current settlement which 
are includible in account 233, Notes Payable to Associated Companies, or 
account 234, Accounts Payable to Associated Companies.
    B. The records supporting the entries to this account shall be so 
kept that the utility can furnish complete information concerning each 
note and open account.
224 Other long-term debt.
    A. This account shall include, until maturity, all long-term debt 
not otherwise provided for. This covers such items as receivers' 
certificates, real estate mortgages executed or assumed, assessments for 
public improvements, notes and unsecured certificates of indebtedness 
not owned by associated companies, receipts outstanding for long-term 
debt, and other obligations maturing more than one year from date of 
issue or assumption.
    B. Separate accounts shall be maintained for each class of 
obligation, and records shall be maintained to show for each class all 
details as to date of obligation, date of maturity, interest dates and 
rates, security for the obligation, etc.

    Note: Miscellaneous long-term debt reacquired shall be accounted for 
in accordance with the procedure set forth in account 222, Reacquired 
Bonds.
225 Unamortized premium on long-term debt.
    A. This account shall include the excess of the cash value of 
consideration received over the face value upon the issuance or 
assumption of long-term debt securities.
    B. Amounts recorded in this account shall be amortized over the life 
of each respective issue under a plan which will distribute the amount 
equitably over the life of the security. The amortization shall be on a 
monthly basis, with the amounts thereof to be credited to account 429, 
Amortization of Premium on Debt--Credit. (See General Instruction 17.)
226 Unamortized discount on long-term debt--Debit.
    A. This account shall include the excess of the face value of long-
term debt securities over the cash value of consideration received 
therefor, related to the issue or assumption of all types and classes of 
debt.
    B. Amounts recorded in this account shall be amortized over the life 
of the respective issues under a plan which will distribute the amount 
equitably over the life of the securities. The amortization shall be on 
a monthly basis, with the amounts thereof charged to account 428, 
Amortization of Debt Discount and Expense. (See General Instruction 17.)

[[Page 660]]

        Special Instructions for Current and Accrued Liabilities

    Current and accrued liabilities are those obligations which have 
either matured or which become due within one year from the date 
thereof; except, however, bonds, receivers' certificates and similar 
obligations which shall be classified as long-term debt until date of 
maturity; accrued taxes, such as income taxes, which shall be classified 
as accrued liabilities even though payable more than one year from date; 
compensation awards, which shall be classified as current liabilities 
regardless of date due; and minor amounts payable in installments which 
may be classified as current liabilities. If a liability is due more 
than one year from date of issuance or assumption by the utility, it 
shall be credited to a long-term debt account appropriate for the 
transaction, except, however, the current liabilities previously 
mentioned.
227 Obligations under capital leases--noncurrent.
    This account shall include the portion not due within one year, of 
the obligations recorded for the amounts applicable to leased property 
recorded as assets in account 101.1, Property under Capital Leases, or 
account 121, Nonutility property.

          Special Instructions to Accounts 228.1 Through 228.4

    No amounts shall be credited to these accounts unless authorized by 
a regulatory authority or authorities to be collected in a utility's 
rate levels.
228.1 Accumulated provision for property insurance.
    A. This account shall include amounts reserved by the utility for 
losses through accident, fire, flood, or other hazards to its own 
property or property leased from others, not covered by insurance. The 
amounts charged to account 924, Property Insurance, or other appropriate 
accounts to cover such risks shall be credited to this account. A 
schedule of risks covered shall be maintained, giving a description of 
the property involved, the character of the risks covered and the rates 
used.
    B. Charges shall be made to this account for losses covered, not to 
exceed the account balance. Details of these charges shall be maintained 
according to the year the casualty occurred which gave rise to the loss.
228.2 Accumulated provision for injuries and damages.
    A. This account shall be credited with amounts charged to account 
925, Injuries and Damages, or other appropriate accounts, to meet the 
probable liability, not covered by insurance, for deaths or injuries to 
employees and others, and for damages to property neither owned nor held 
under lease by the utility.
    B. When liability for any injury or damage is admitted by the 
utility either voluntarily or because of the decision of a court or 
other lawful authority, such as a workmens' compensation board, the 
admitted liability shall be charged to this account and credited to the 
appropriate current liability account. Details of these charges shall be 
maintained according to the year the casualty occurred which gave rise 
to the loss.

    Note: Recoveries or reimbursements for losses charged to this 
account shall be credited hereto; the cost of repairs to property of 
others if provided for herein shall be charged to this account.
228.3 Accumulated provision for pensions and benefits.
    A. This account shall include provisions made by the utility and 
amounts contributed by employees for pensions, accident and death 
benefits, savings, relief, hospital and other provident purposes, where 
the funds are included in the assets of the utility either in general or 
in segregated fund accounts.
    B. Amounts paid by the utility for the purposes for which this 
liability is established shall be charged hereto.
    C. A separate account shall be kept for each kind of provision 
included herein.

    Note: If employee pension or benefit plan funds are not included 
among the assets of the utility but are held by outside trustees, 
payments into such funds, or accruals therefor, shall not be included in 
this account.
228.4 Accumulated miscellaneous operating provisions.
    A. This account shall include all operating provisions which are not 
provided for elsewhere.
    B. This account shall be maintained in such manner as to show the 
amount

[[Page 661]]

of each separate provision and the nature and amounts of the debits and 
credits thereto.

    Note: This account includes only provisions as may be created for 
operating purposes and does not include any reservations of income the 
credits for which should be carried in account 215, Appropriated 
Retained Earnings.
229 Accumulated provision for rate refunds.
    A. This account shall be credited with amounts charged to Account 
496, Provision for Rate Refunds, to provide for estimated refunds where 
the utility is collecting amounts in rates subject to refund.
    B. When a refund of any amount recorded in this account is ordered 
by a regulatory authority, such amount shall be charged hereto and 
credited to Account 242, Miscellaneous Current and Accrued Liabilities.
    C. Records supporting the entries to this account shall be kept so 
as to identify each amount recorded by the respective rate filing docket 
number.
230 Asset retirement obligations.
    A. This account shall include the amount of liabilities for the 
recognition of asset retirement obligations related to gas utility plant 
and nonutility plant that gives rise to the obligations. This account 
shall be credited for the amount of the liabilities for asset retirement 
obligations with amounts charged to the appropriate gas utility plant 
accounts or nonutility plant accounts to record the related asset 
retirement costs.
    B. This account shall also include the period to period changes for 
the accretion of the liabilities in account 230, Asset retirement 
obligations. The utility shall charge the accretion expense to account 
411.10, Accretion expense, for gas utility plant, account 413, Expenses 
of gas plant leased to others, for gas plant leased to others, or 
account 421, Miscellaneous nonoperating income, for nonutility plant, as 
appropriate, and credit account 230, Asset retirement obligations.
    C. This account shall be debited with amounts paid to settle the 
asset retirement obligations recorded herein.
    D. The utility shall clear from this account any gains or losses 
resulting from the settlement of asset retirement obligations in 
accordance with the instructions prescribed in General Instruction 24.
231 Notes payable.
    This account shall include the face value of all notes, drafts, 
acceptances, or other similar evidences of indebtedness, payable on 
demand or within a time not exceeding one year from date of issue, to 
other than associated companies.
232 Accounts payable.
    This account shall include all amounts payable by the utility within 
one year, which are not provided for in other accounts.
233 Notes payable to associated companies.
234 Accounts payable to associated companies.
    These accounts shall include amounts owing to associated companies 
on notes, drafts, acceptances, or other similar evidences of 
indebtedness, and open accounts payable on demand or not more than one 
year from date of issue or creation.

    Note: Exclude from these accounts notes and accounts which are 
includible in account 223, Advances from Associated Companies.
235 Customer deposits.
    This account shall include all amounts deposited with the utility by 
customers as security for the payment of bills.
236 Taxes accrued.
    A. This account shall be credited with the amount of taxes accrued 
during the accounting period, corresponding debits being made to the 
appropriate accounts for tax charges. Such credits may be based upon 
estimates, but from time to time during the year as the facts become 
known, the amount of the periodic credits shall be adjusted so as to 
include as nearly as can be determined in each year the taxes applicable 
thereto. Any amount representing a prepayment of taxes applicable to the 
period subsequent to the

[[Page 662]]

date of the balance sheet, shall be shown under account 165, 
Prepayments.
    B. If accruals for taxes are found to be insufficient or excessive, 
correction therefor shall be made through current tax accruals.
    C. Accruals for taxes shall be based upon the net amounts payable 
after credit for any discounts, and shall not include any amounts for 
interest on tax deficiencies or refunds. Interest received on refunds 
shall be credited to account 419, Interest and Dividend Income, and 
interest paid on deficiencies shall be charged to account 431, Other 
Interest Expense.
    D. The records supporting the entries to this account shall be kept 
so as to show for each class of taxes, the amount accrued, the basis for 
the accrual, the accounts to which charged, and the amount of tax paid.
237 Interest accrued.
    This account shall include the amount of interest accrued but not 
matured on all liabilities of the utility not including, however, 
interest which is added to the principal of the debt on which incurred. 
Supporting records shall be maintained so as to show the amount of 
interest accrued on each obligation.
238 Dividends declared.
    This account shall include the amount of dividends which have been 
declared but not paid. Dividends shall be credited to this account when 
they become a liability.
239 Matured long-term debt.
    This account shall include the amount of long-term debt (including 
any obligation for premiums) matured and unpaid, without specific 
agreement for extension of the time of payment and bonds called for 
redemption but not presented.
240 Matured interest.
    This account shall include the amount of matured interest on long-
term debt or other obligations of the utility at the date of the balance 
sheet unless such interest is added to the principal of the debt on 
which incurred.
241 Tax collections payable.
    This account shall include the amount of taxes collected by the 
utility through payroll deductions or otherwise pending transmittal of 
such taxes to the proper taxing authority.

    Note: Do not include liability for taxes assessed directly against 
the utility which are accounted for as part of the utility's own tax 
expense.
242 Miscellaneous current and accrued liabilities.
    A. This account shall include the amount of all other current and 
accrued liabilities not provided for elsewhere appropriately designated 
and supported as to show the nature of each liability.
    B. The utility is to include in a separate subaccount amounts 
payable for gas in unbalanced transactions where gas is received from 
another party in exchange, load balancing, or no-notice transportation 
transactions. (See Account 806.) If the amount payable is settled by 
other than gas, Account 495, Other Gas Revenues, must be credited or 
Account 813, Other gas supply expenses, charged for the difference 
between the amount of the consideration paid and the recorded amount of 
the payable settled. Records are to be maintained so that there is 
readily available for each party entering gas exchange, load balancing, 
or no-notice transportation transactions, the quantity and cost of gas 
received and the amount and basis of consideration paid if other than 
gas.
243 Obligations under capital leases--current.
    This account shall include the portion due within one year, of the 
obligations recorded for the amounts applicable to leased property 
recorded as assets in account 101.1, Property under Capital Leases, or 
account 121, Non-Utility Property.
244 Derivative instrument liabilities.
    This account shall include the change in the fair value of all 
derivative instrument liabilities not designated as cash flow or fair 
value hedges. Account 426.5, other deductions, shall be debited or 
credited as

[[Page 663]]

appropriate with the corresponding amount of the change in the fair 
value of the derivative instrument.
245 Derivative instrument liabilities--Hedges.
    A. This account shall include the change in the fair value of 
derivative instrument liabilities designated by the utility as cash flow 
or fair value hedges.
    B. A utility shall record the change in the fair value of a 
derivative liability related to a cash flow hedge in this account, with 
a concurrent charge to account 219, accumulated other comprehensive 
income, with the effective portion of the derivative gain or loss. The 
ineffective portion of the cash flow hedge shall be charged to the same 
income or expense account that will be charged when the hedged item 
enters into the determination of net income.
    C. A utility shall record the change in the fair value of a 
derivative instrument liability related to a fair value hedge in this 
account, with a concurrent charge to a subaccount of the asset or 
liability that carries the item being hedged. The ineffective portion of 
the fair value hedge shall be charged to the same income or expense 
account that will be charged when the hedged item enters into the 
determination of net income.
252 Customer advances for construction.
    This account shall include advances by customers for construction 
which are to be refunded either wholly or in part. When a customer is 
refunded the entire amount to which he is entitled, according to the 
agreement or rule under which the advance was made, the balance, if any, 
remaining in this account shall be credited to the respective plant 
account.
253 Other deferred credits.
    This account shall include advance billings and receipts and other 
deferred credit items, not provided for elsewhere, including amounts 
which cannot be entirely cleared or disposed of until additional 
information has been received.
254 Other regulatory liabilities.
    A. This account shall include the amounts of regulatory liabilities, 
not includible in other accounts, imposed on the utility by the 
ratemaking actions of regulatory agencies. (See Definition No. 30.)
    B. The amounts included in this account are to be established by 
those credits which would have been included in net income, or 
accumulated other comprehensive income, determinations in the current 
period under the general requirements of the Uniform System of Accounts 
but for it being probable that: Such items will be included in a 
different period(s) for purposes of developing the rates that the 
utility is authorized to charge for its utility services; or refunds to 
customers, not provided for in other accounts, will be required. When 
specific identification of the particular source of the regulatory 
liability cannot be made or when the liability arises from revenues 
collected pursuant to tariffs on file at a regulatory agency, account 
407.3, regulatory debits, shall be debited. The amounts recorded in this 
account generally are to be credited to the same account that would have 
been credited if included in income when earned except: All regulatory 
liabilities established through the use of account 407.3 shall be 
credited to account 407.4, regulatory credits; and in the case of 
refunds, a cash account or other appropriate account should be credited 
when the obligation is satisfied.
    C. If it is later determined that the amounts recorded in this 
account will not be returned to customers through rates or refunds, such 
amounts shall be credited to Account 421, Miscellaneous Nonoperating 
Income, or Account 434, Extraordinary Income, as appropriate, in the 
year such determination is made.
    D. The records supporting the entries to this account shall be so 
kept that the utility can furnish full information as to the nature and 
amount of each regulatory liability included in this account, including 
justification for inclusion of such amounts in this account.

[[Page 664]]

255 Accumulated deferred investment tax credits.
    A. This account shall be credited with all investment tax credits 
deferred by companies which have elected to follow deferral accounting, 
partial or full, rather than recognizing in the income statement the 
total benefits of the tax credit as realized. After such election, a 
company may not transfer amounts from this account, except as authorized 
herein and in accounts 411.4, Investment Tax Credit Adjustments, Utility 
Operations, 411.5, Investment Tax Credit Adjustments, Nonutility 
Operations, and 420, Investment Tax Credits, or with approval of the 
Commission.
    B. Where the company's accounting provides that investment tax 
credits are to be passed on to customers, this account shall be debited 
and account 411.4 credited with a proportionate amount determined in 
relation to the average useful life of gas utility plant to which the 
tax credits relate to such lesser period of time as allowed by a 
regulatory agency having rate jurisdiction. If, however, the deferral 
procedure provides that investment tax credits are not to be passed on 
to customers the proportionate restorations to income shall be credited 
to account 420.
    C. If any of the investment tax credits to be deferred are related 
to utility operations other than gas or to non- utility operations, 
appropriate subdivisions of this account shall be maintained. Contra 
entries affecting such subdivisions shall be appropriately recorded in 
accounts 413, Expenses of Gas Plant Leased to Others; or 414, Other 
Utility Operating Income.
    D. Records shall be maintained identifying the properties related to 
the investment tax credits for each year, the weighted average service 
life of such properties, and any unused balance of such credits. Such 
records are not necessary unless the credits are deferred.
256 Deferred gains from disposition of utility plant.
    This account shall include gains from the sale or other disposition 
of property previously recorded in account 105, Gas Plant Held for 
Future Use and account 105.1, Production Properties Held for Future Use, 
under the provisions of paragraphs B, C, and D thereof, where such gains 
are significant and are to be amortized over a period of 5 years, unless 
otherwise authorized by the Commission. The amortization of the amounts 
in this account shall be made by credits to account 411.6, Gains from 
Disposition of Utility Plant. Subdivision of this account shall be 
maintained so that amounts relating to account 105, Gas Plant Held for 
Future Use and account 105.1, Production Properties Held for Future Use, 
can be readily identifiable. (See accounts 105, Gas Plant Held for 
Future Use and account 105.1, Production Properties Held for Future 
Use.)
257 Unamortized gain on reacquired debt.
    This account shall include the amounts of discount realized upon 
reacquisition or redemption of long-term debt. The amounts in this 
account shall be amortized in accordance with General Instruction 17.

                          Special Instructions

                    Accumulated Deferred Income Taxes

    A. Before using the deferred tax accounts provided below refer to 
General Instruction 18. Comprehensive Interperiod Income Tax Allocation.
    B. The text of these accounts are designed primarily to cover 
deferrals of Federal income taxes. However, they are also to be used 
when making deferrals of State and local income taxes. Natural gas 
companies which, in addition to a gas utility department, have another 
utility department, electric, water, etc., and nonutility property which 
have deferred taxes on income with respect thereto shall separately 
classify such deferrals in the accounts provided below so as to allow 
ready identification of items relating to each utility department and to 
Other Income and Deductions.

281 Accumulated deferred income taxes--Accelerated amortization 
property.
    A. This account shall include tax deferrals resulting from adoption 
of the principles of comprehensive interperiod tax allocation described 
in General Instruction 18 of this system of accounts that relate to 
property for which the utility has availed itself of the use of 
accelerated (5-year) amortization of (1)

[[Page 665]]

certified defense facilities as permitted by Section 168 of the Internal 
Revenue Code and (2) certified pollution control facilities as permitted 
by Section 169 of the Internal Revenue Code.
    B. This account shall be credited and accounts 410.1, Provision for 
Deferred Income Taxes, Utility Operating Income, or 410.2, Provision for 
Deferred Income Taxes, Other Income and Deductions, as appropriate, 
shall be debited with tax effects related to property described in 
paragraph A above where taxable income is lower than pretax accounting 
income due to differences between the periods in which revenue and 
expense transactions affect taxable income and the periods in which they 
enter into the determination of pretax accounting income.
    C. This account shall be debited and accounts 411.1, Provision for 
Deferred Income Taxes--Credit, Utility Operating Income, or 411.2, 
Provision for Deferred Income Taxes--Credit, Other Income and 
Deductions, as appropriate, shall be credited with tax effects related 
to property described in paragraph A above where taxable income is 
higher than pretax accounting income due to differences between the 
periods in which revenue and expense transactions affect taxable income 
and the periods in which they enter into the determination of pretax 
accounting income.
    D. The utility is restricted in its use of this account to the 
purposes set forth above. It shall not transfer the balance in this 
account or any portion thereof to retained earnings or make any use 
thereof except as provided in the text of this account without prior 
approval of the Commission. Upon the disposition by sale, exchange, 
transfer, abandonment or premature retirement of plant on which there is 
a related balance herein, this account shall be charged with an amount 
equal to the related income tax expense, if any, arising from such 
disposition and account 411.1, Provision for Deferred Income Taxes--
Credit, Utility Operating Income, or 411.2, Provision for Deferred 
Income Taxes--Credit, Other Income and Deductions, as appropriate, shall 
be credited. When the remaining balance, after consideration of any 
related income tax expense, is less than $25,000, this account shall be 
charged and account 411.1 or 411.2, as appropriate, credited with such 
balance. If after consideration of any related income tax expense, there 
is a remaining amount of $25,000 or more, the Commission shall authorize 
or direct how such amount shall be accounted for at the time approval 
for the disposition of accounting is granted. When plant is disposed of 
by transfer to a wholly owned subsidiary the related balance in this 
account shall also be transferred. When the disposition relates to 
retirement of an item or items under a group method of depreciation 
where there is no tax effect in the year of retirement, no entries are 
required in this account if it can be determined that the related 
balances would be necessary to be retained to offset future group item 
tax deficiencies.
282 Accumulated deferred income taxes--Other property.
    A. This account shall include the tax deferrals resulting from 
adoption of the principle of comprehensive interperiod income tax 
allocation described in General Instruction 18 of this system of 
accounts which are related to all property other than accelerated 
amortization property.
    B. This account shall be credited and accounts 410.1, Provision for 
Deferred Income Taxes, Utility Operating Income, or 410.2, Provision for 
Deferred Income Taxes, Other Income and Deductions, as appropriate, 
shall be debited with tax effects related to property described in 
paragraph A above where taxable income is lower than pretax accounting 
income due to differences between the periods in which revenue and 
expense transactions affect taxable income and the periods in which they 
enter into the determination of pretax accounting income.
    C. This account shall be debited and accounts 411.1, Provision for 
Deferred Income Taxes--Credit, Utility Operating Income, or 411.2, 
Provision for Deferred Income Taxes--Credit, Other Income and 
Deductions, as appropriate, shall be credited with tax effects related 
to property described in paragraph A above where taxable income is 
higher than pretax accounting income due to differences between the 
periods

[[Page 666]]

in which revenue and expense transactions affect taxable income and the 
periods in which they enter into the determination of pretax accounting 
income.
    D. The utility is restricted in its use of this account to the 
purposes set forth above. It shall not transfer the balance in this 
account or any portion thereof to retained earnings or make any use 
thereof except as provided in the text of this account without prior 
approval of the Commission. Upon the disposition by sale, exchange, 
transfer, abandonment or premature retirement of plant on which there is 
a related balance herein, this account shall be charged with an amount 
equal to the related income tax expense, if any, arising from such 
disposition and account 411.1, Income Taxes Deferred in Prior Years--
Credit, Utility Operating Income, or 411.2, Income Taxes Deferred in 
Prior Years--Credit, Other Income and Deductions, shall be credited. 
When the remaining balance, after consideration of any related tax 
expenses, is less than $25,000, this account shall be charged and 
account 411.1 or 411.2, as appropriate, credited with such balance. If 
after consideration of any related income tax expense, there is a 
remaining amount of $25,000 or more, the Commission shall authorize or 
direct how such amount shall be accounted for at the time approval for 
the disposition of accounting is granted. When plant disposed of by 
transfer to a wholly owned subsidiary, the related balance in this 
account shall also be transferred. When the disposition relates to 
retirement of an item or items under a group method of depreciation 
where there is no tax effect in the year of retirement, no entries are 
required in this account if it can be determined that the related 
balance would be necessary to be retained to offset future group item 
tax deficiencies.
283 Accumulated deferred income taxes--Other.
    A. This account shall include all credit tax deferrals resulting 
from the adoption of the principles of comprehensive interperiod income 
tax allocation described in General Instruction 18 of this system of 
accounts other than those deferrals which are includible in Accounts 
281, Accumulated Deferred Income Taxes--Accelerated Amortization 
Property and 282, Accumulated Deferred Income Taxes--Other Property.
    B. This account shall be credited and accounts 410.1 Provision for 
Deferred Income Taxes, Utility Operating Income, or 410.2, Provision for 
Deferred Income Taxes, Other Income and Deductions, as appropriate, 
shall be debited with tax effects related to items described in 
paragraph A above where taxable income is lower than pretax accounting 
income due to differences between the periods in which revenue and 
expense transactions affect taxable income and the periods in which they 
enter into the determination of pretax accounting income.
    C. This account shall be debited and accounts 411.1, Provision for 
Deferred Income Taxes--Credit, Utility Operating Income or 411.2, 
Provision for Deferred Income Taxes--Credit, Other Income and 
Deductions, as appropriate shall be credited with tax effects related to 
items described in paragraph A above where taxable income is higher than 
pretax accounting income due to differences between the periods in which 
revenue and expense transactions affect taxable income and the periods 
in which they enter into the determination of pretax accounting income.
    D. Records with respect to entries to this account, as described 
above, and the account balance, shall be so maintained as to show the 
factors of calculation with respect to each annual amount of the item or 
class of items.
    E. The utility is restricted in its use of this account to the 
purposes set forth above. It shall not transfer the balance in the 
account or any portion thereof to retained earnings or to any other 
account or make any use thereof except as provided in the text of this 
account, without prior approval of the Commission. Upon the disposition 
by sale, exchange, transfer, abandonment or premature retirement of 
items on which there is a related balance herein, this account shall be 
charged with an amount equal to the related income tax effect, if any, 
arising from such disposition and account 411.1, Provision For Deferred 
Income Taxes--Credit,

[[Page 667]]

Utility Operating Income, or 411.2, Provision For Deferred Income 
Taxes--Credit, Other Income and Deductions, as appropriate, shall be 
credited. When the remaining balance, after consideration of any related 
tax expenses, is less than $25,000, this account shall be charged and 
account 411.1 or 411.2, as appropriate, credited with such balance. If 
after consideration of any related income tax expense, there is a 
remaining amount of $25,000 or more, the Commission shall authorize or 
direct how such amount shall be accounted for at the time approval for 
the disposition of accounting is granted.

When plant is disposed of by transfer to a wholly owned subsidiary, the 
related balance in this account shall also be transferred. When the 
disposition relates to retirement of an item or items under a group 
method of depreciation where there is no tax effect in the year of 
retirement, no entries are required in this account if it can be 
determined that the related balance would be necessary to be retained to 
offset future group item tax deficiencies.

                           Gas Plant Accounts

                           1. Intangible Plant

301 Organization.
302 Franchises and consents.
303 Miscellaneous intangible plant.

                           2. Production Plant

                  a. manufactured gas production plant

304 Land and land rights.
305 Structures and improvements.
306 Boiler plant equipment.
307 Other power equipment.
308 Coke ovens.
309 Producer gas equipment.
310 Water gas generating equipment.
311 Liquefied petroleum gas equipment.
312 Oil gas generating equipment.
313 Generating equipment--Other processes.
314 Coal, coke, and ash handling equipment.
315 Catalytic cracking equipment.
316 Other reforming equipment.
317 Purification equipment.
318 Residual refining equipment.
319 Gas mixing equipment.
320 Other equipment.

                     b. natural gas production plant

             B.1. Natural Gas Production and Gathering Plant

325.1 Producing lands.
325.2 Producing leaseholds.
325.3 Gas rights.
325.4 Rights-of-way.
325.5 Other land and land rights.
326 Gas well structures.
327 Field compressor station structures.
328 Field measuring and regulating station structures.
329 Other structures.
330 Producing gas wells--Well construction.
331 Producing gas wells--Well equipment.
332 Field lines.
333 Field compressor station equipment.
334 Field measuring and regulating station equipment.
335 Drilling and cleaning equipment.
336 Purification equipment.
337 Other equipment.
338 Unsuccessful exploration and development costs.

                     B.2. Products Extraction Plant

340 Land and land rights.
341 Structures and improvements.
342 Extraction and refining equipment.
343 Pipe lines.
344 Extracted product storage equipment.
345 Compressor equipment.
346 Gas measuring and regulating equipment.
347 Other equipment.

               3. Natural Gas Storage and Processing Plant

                      a. underground storage plant

350.1 Land.
350.2 Rights-of-way.
351 Structures and improvements.
352 Wells.
352.1 Storage leaseholds and rights.
352.2 Reservoirs.
352.3 Nonrecoverable natural gas.
353 Lines.
354 Compressor station equipment.
355 Measuring and regulating equipment.
356 Purification equipment.
357 Other equipment.

                         b. other storage plant

360 Land and land rights.
361 Structures and improvements.
362 Gas holders.
363 Purification equipment.
363.1 Liquefaction equipment.
363.2 Vaporizing equipment.
363.3 Compressor equipment.
363.4 Measuring and regulating equipment.
363.5 Other equipment.

   c. base load liquefied natural gas terminaling and processing plant

364.1 Land and land rights .
364.2 Structures and improvements.
364.3 LNG processing terminal equipment.
364.4 LNG transportation equipment.
364.5 Measuring and regulating equipment.
364.6 Compressor station equipment.

[[Page 668]]

364.7 Communication equipment.
364.8 Other equipment.

                          4. Transmission Plant

365.1 Land and land rights.
365.2 Rights-of-way.
366 Structures and improvements.
367 Mains.
368 Compressor station equipment.
369 Measuring and regulating station equipment.
370 Communication equipment.
371 Other equipment.

                          5. Distribution Plant

374 Land and land rights.
375 Structures and improvements.
376 Mains.
377 Compressor station equipment.
378 Measuring and regulating station equipment--General.
379 Measuring and regulating station equipment--City gate check 
stations.
380 Services.
381 Meters.
382 Meter installations.
383 House regulators.
384 House regulatory installations.
385 Industrial measuring and regulating station equipment.
386 Other property on customers' premises.
387 Other equipment.

                            6. General Plant

389 Land and land rights.
390 Structures and improvements.
391 Office furniture and equipment.
392 Transportation equipment.
393 Stores equipment.
394 Tools, shop and garage equipment.
395 Laboratory equipment.
396 Power operated equipment.
397 Communication equipment.
398 Miscellaneous equipment.
399 Other tangible property.

                           Gas Plant Accounts

301 Organization.
    This account shall include all fees paid to Federal or State 
governments for the privilege of incorporation and expenditures incident 
to organizing the corporation, partnership, or other enterprises and 
putting it into readiness to do business.

                                  Items

    1. Cost of obtaining certificates authorizing an enterprise to 
engage in the public utility business.
    2. Fees and expenses for incorporation.
    3. Fees and expenses for mergers or consolidations.
    4. Office expenses incident to organizing the utility.
    5. Stock and minute books and corporate seal.

    Note A: This account shall not include any discounts upon securities 
issued or assumed; nor shall it include any costs incident to 
negotiating loans, selling bonds or other evidences of debt, or expenses 
in connection with the authorization, issuance, or sale of capital 
stock.
    Note B: Exclude from this account and include in the appropriate 
expense account the cost of preparing and filing papers in connection 
with the extension of the term of incorporation unless the first 
organization costs have been written off. When charges are made to this 
account for expenses incurred in mergers, consolidations, or 
reorganizations, amounts previously included herein or in similar 
accounts in the books of the companies concerned shall be excluded from 
this account.
302 Franchises and consents.
    A. This account shall include amounts paid to the Federal 
Government, to a State or to a political subdivision thereof in 
consideration for franchises, consents, or certificates, running in 
perpetuity or for a specified term of more than 1 year, together with 
necessary and reasonable expenses incident to procuring such franchises, 
consents, or certificates of permission and approval, including expenses 
of organizing and merging separate corporations, where statutes require, 
solely for the purpose of acquiring franchises.
    B. If a franchise, consent, or certificate is acquired by 
assignment, the charge to this account in respect thereof shall not 
exceed the amount paid therefor by the utility to the assignor, nor 
shall it exceed the amount paid by the original grantee, plus the 
expense of acquisition to such grantee. Any excess of the amount 
actually paid by the utility over the amount above specified shall be 
charged to account 426.5, Other Deductions.
    C. When any franchise has expired, the book cost thereof shall be 
credited hereto and charged to account 426.5, Other Deductions, or to 
account 111, Accumulated Provision for Amortization and Depletion of Gas 
Utility Plant, as appropriate.
    D. Records supporting this account shall be kept so as to show 
separately

[[Page 669]]

the book cost of each franchise or consent.

    Note: Annual or other periodic payments under franchises shall not 
be included herein but in the appropriate operating expense account.
303 Miscellaneous intangible plant.
    A. This account shall include the cost of patent rights, licenses, 
privileges, and other intangible property necessary or valuable in the 
conduct of the utility's gas operations and not specifically chargeable 
to any other account.
    B. When any item included in this account is retired or expires, the 
book cost thereof shall be credited hereto and charged to account 426.5, 
Other Deductions, or account 111, Accumulated Provision for Amortization 
and Depletion of Gas Utility Plant, as appropriate.
    C. This account shall be maintained in such a manner that the 
utility can furnish full information with respect to the amounts 
included herein.
304 Land and land rights.
    This account shall include the cost of land and land rights used in 
connection with manufactured gas production. (See gas plant instruction 
7.)
305 Structures and improvements.
    This account shall include the cost of structures and improvements 
used in connection with manufactured gas production. (See gas plant 
instruction 8.)

    Note: Include relief holders in this account.
306 Boiler plant equipment.
    This account shall include the cost installed of furnaces, boilers, 
steam and feed water piping, boiler apparatus, and accessories used in 
the production of steam at gas production plants.

                                  Items

    1. Accumulators.
    2. Air preheaters, including fans and drives, and ducts not part of 
building.
    3. Ash disposal equipment, including sluiceways not part of a 
building, pumps and piping, crane, ash bucket conveyor and drives, ash 
cars, etc.
    4. Belt conveyors, including drives.
    5. Blast gate valves.
    6. Blow-down tanks and piping.
    7. Boilers, including valves attached thereto, casings, safety 
valves, soot blowers, soot hoppers, superheaters, and feed water 
regulators.
    8. Cinder and dust catcher system, including mechanical and electric 
types.
    9. Coal and coke handling equipment, including hoppers, lorries, 
etc., used wholly for boilers.
    10. Combustion control system, including all apparatus installed for 
the regulation and control of the supply of fuel or air to boilers.
    11. Control apparatus.
    12. Cranes, hoists, etc., wholly identified with apparatus listed 
herein.
    13. Desuperheaters and reducing valves.
    14. Draft apparatus, including forced, induced, and other draft 
systems, with blowers, fans, and ducts not part of building.
    15. Economizers.
    16. Emergency lighting systems, not part of building, keep-a-lite 
systems, etc.
    17. Emergency signal systems, in connection with boiler operation.
    18. Feed water heaters, including primary and stage.
    19. Flues, uptakes, and breeching, whether or not stacks are 
included in this account.
    20. Foundations and settings, specially constructed for and not 
intended to outlast the apparatus for which provided.
    21. Furnaces.
    22. Gas firing system, including gas lines, burners, etc., for gas 
fired boilers.
    23. Injectors.
    24. Mechanical stoker and feeding systems, clinker grinders, 
including drives.
    25. Meters, gauges, recording instruments, etc.
    26. Oil burning equipment, including tanks, heaters, pumps with 
drives, burner equipment, piping, and conditioning apparatus.
    27. Painting, first cost.
    28. Panels, control (for operating apparatus listed herein).
    29. Piping system, steam header and exhaust header, including 
accessory pipe hangers, steam traps, etc., make-up water, feed water, 
drip, blow-off, water pipe lines used for steam plant, and valve control 
system.
    30. Platforms, railings, steps, gratings, etc., appurtenant to 
apparatus listed herein.
    31. Pulverizing equipment.
    32. Pumps and driving units, for feed water, heater condensate, 
condenser water, and drip.
    33. Stacks--brick, steel, and concrete, when set on separate 
foundations independent of substructure or superstructure of building.
    34. Steam reheaters.
    35. Steelwork, especially constructed for apparatus listed herein.
    36. Tanks, including surge, weighing, return, blow-off, feed water 
storage.

[[Page 670]]

    37. Tar burning equipment for utilization of tar as boiler fuel, 
including tanks, pumps, burner equipment, piping, etc.
    38. Waste heat boilers and accessories--stack valve and stack 
irrespective of location.
    39. Water treatment system, including purifiers, settling tanks, 
filters, chemical mixing and dosing apparatus, etc.

    Note A: This account shall not include boilers or steam pipes whose 
primary purpose is the heating of buildings.
    Note B: When the system for supplying boiler or condenser water is 
elaborate, as when it includes a dam, reservoir, canal, or pipe line, 
the cost shall not be charged to this account but to a special 
subdivision of account 305, Structures and Improvements--Manufactured 
Gas.
307 Other power equipment.
    A. This account shall include the cost installed of electric 
generating and accessory equipment used for supplying electricity in gas 
production plants.
    B. This account shall also include the cost installed of 
miscellaneous power equipment at gas production plants which is not 
included in any other account.

                                  Items

    1. Acid proofing of battery rooms.
    2. Air duct runs in battery rooms.
    3. Air pump, streamjet.
    4. Batteries for control and general station use.
    5. Belts, pulleys, hangers, shafts, and countershafts.
    6. Cables between generators and switchboards.
    7. Cabinets, control.
    8. Compartments, including buses, connections, and items permanently 
attached.
    9. Enclosure equipment not an integral part of building.
    10. Engines, including steam rotary or reciprocating, steam 
turbines, and internal combustion engines.
    11. Foundations and settings, specially constructed for and not 
intended to outlast the apparatus for which provided.
    12. Generators, a.c. or d.c., including excitation system.
    13. Ground connections, for main station ground.
    14. Lightning arresters.
    15. Motor generators, frequency changers and converters.
    16. Overhead power lines, including poles, crossarms, insulators, 
conductors, etc.
    17. Panels, control, including supports and instruments.
    18. Piping applicable to apparatus listed herein.
    19. Reactors.
    20. Rectifiers.
    21. Safety equipment, including rubber mats, remote closing devices, 
glove cabinets.
    22. Switchboards, including frames, panels, meters, and instruments.
    23. Switching equipment, including oil circuit breakers, 
disconnecting switches, and connections.
    24. Synchronous converters.
    25. Transformers, including transformer platforms.
    26. Underground conduit system, including manholes and conductors.

    Note: When any unit of equipment listed herein is wholly used to 
furnish power to equipment included in another single account, its cost 
shall be included in such account.
308 Coke ovens.
    This account shall include the cost installed of coke ovens used for 
the production of gas.

                                  Items

    1. Apparatus for placing coal in ovens.
    2. Bins, if not part of a building.
    3. Cabinets, control.
    4. Calorimeters.
    5. Cars, quenching.
    6. Charging lorry.
    7. Clay mixers.
    8. Coke guide.
    9. Coke and pusher benches.
    10. Collecting mains.
    11. Control apparatus.
    12. Conveyor, flight.
    13. Cover lifting machinery.
    14. Door handling machine.
    15. Door luting machine.
    16. Driving units for coke oven machinery.
    17. Enclosures for machinery.
    18. Engines, when not an integral part of the driven equipment.
    19. Firing equipment.
    20. Flues, uptakes, and breeching.
    21. Foundations.
    22. Fuel handling equipment used exclusively for coal to be 
carbonized in ovens.
    23. Fuel systems under ovens.
    24. Hot coke wharves.
    25. Hot coke cars.
    26. Instruments or meters, electrical.
    27. Locomotives.
    28. Mud mill.
    29. Motor control equipment.
    30. Ovens.
    31. Panel, control.
    32. Piping, including ascension pipes, hydraulic main, liquor 
flushing decanter tank, liquor pump, and return line to hydraulic main.

[[Page 671]]

    33. Pushers, including tracks and driving equipment.
    34. Quenching station including structure, tank, well, piping, etc.
    35. Quenching towers, piping, etc.
    36. Regenerator, from bottom of oven floor tile to battery 
foundation.
    37. Reversing machine, with enclosure.
    38. Scale, platform.
    39. Signal system.
    40. Skip hoist.
    41. Stacks.
    42. Steel and iron work supports, platforms, stairways, etc.
    43. Switches and switchboards.

309 Producer gas equipment.
    This account shall include the cost installed of equipment used for 
the production of producer gas.

                                  Items

    1. Ash handling equipment, used exclusively for producers.
    2. Blast apparatus, including blowers, driving units, and blast 
mains.
    3. Control apparatus.
    4. Coolers and scrubbers.
    5. Driving apparatus for producers.
    6. Foundations and settings, specially constructed for and not 
intended to outlast the apparatus for which provided.
    7. Fuel handling equipment, used exclusively for producers.
    8. Humidifiers.
    9. Piping--air, steam (commencing at steam header), water (inside of 
building), and producer gas (up to outlet of final piece of apparatus in 
building).
    10. Producer boosters, including driving units.
    11. Producers.
    12. Water separators.
310 Water gas generating equipment.
    This account shall include the cost installed of equipment used in 
the generation of water gas.

                                  Items

    1. Automatic operation equipment.
    2. Back-run installations.
    3. Blast equipment, including blowers and driving units, piping and 
supports.
    4. Bridge, coal shed to generator house.
    5. Carburetors.
    6. Charging equipment, fuel.
    7. Circulating water pumps.
    8. Concrete or brick pits, including cover, not part of building.
    9. Control apparatus.
    10. Conveyors.
    11. Dust collectors.
    12. Enclosures for equipment (barriers, fire walls, guards, 
housings, screens, etc.).
    13. Flow meters.
    14. Foundations and settings, specially constructed for and not 
intended to outlast the apparatus for which provided.
    15. Fuel handling equipment used exclusively for fuel for this 
account.
    16. Gauges, indicating and recording.
    17. Generators.
    18. Hot valves.
    19. Hydraulic operation equipment.
    20. Instruments and meters, electrical.
    21. Oil handling and storage apparatus used solely for water gas 
apparatus (tanks, pumps and oil lines, oil heaters, manholes, valve 
pits, regulators, strainers, etc.).
    22. Oil spray.
    23. Operating floors and supports, stairways, etc.
    24. Piling under foundations.
    25. Piping and valves--steam (commencing at steam header) tar (to 
decanter) water (inside of building), and gas up to outlet of final 
pieces of apparatus in building).
    26. Pressure regulators.
    27. Scales, when used in connection with items in this account.
    28. Seal pots.
    29. Superheaters and superheater stacks.
    30. Tanks, hydraulic pressure.
    31. Valve operating mechanisms.
    32. Wash boxes.
311 Liquefied petroleum gas equipment.
    A. This account shall include the cost installed of equipment used 
for the production of gas from petroleum derivatives, such as propane, 
butane, or gasoline.
    B. Subdivisions of this account shall be maintained for each 
producing process for which this account is provided. A separate 
subaccount shall be maintained also for bottling equipment included 
herein.

                                  Items

    1. Blowers.
    2. Boilers.
    3. Calorimixer.
    4. Carbureting equipment.
    5. Compression equipment.
    6. Controller.
    7. Control apparatus.
    8. Enclosures and protective fences.
    9. Foundations and settings, specially constructed for and not 
intended to outlast the apparatus for which provided.
    10. Heat exchanger.
    11. Gauges and instruments.
    12. Mixing or proportioning equipment.
    13. Motors, not an integral part of driven equipment.
    14. Odorizing equipment.
    15. Oil separator.

[[Page 672]]

    16. Piping--steam (commencing at steam header), water (inside of 
building), oil (from supply tank), and gas (up to outlet of final piece 
of apparatus in building).
    17. Pits.
    18. Prime movers.
    19. Pumps, including driving units.
    20. Regulator.
    21. Stairs, platforms, and ladders.
    22. Storage equipment, tanks, etc.
    23. Superheater.
    24. Traps.
    25. Valves--regulating and check.
    26. Vaporizing equipment.
312 Oil gas generating equipment.
    This account shall include the cost installed of equipment used for 
generating oil gas.

                                  Items

    1. Air blast equipment, including blowers and driving units, piping 
and supports.
    2. Air inlet louvres and filters.
    3. Foundations and settings, specially constructed for and not 
intended to outlast the apparatus for which provided.
    4. Generating equipment, including automatic cycle controls, 
generators, operating floor, superheaters and wash boxes.
    5. Instruments and instrument boards, complete with signal lights 
and thermocouples and including gauge board, pressure gauges, and 
pyrometers.
    6. Meters and regulators, such as, air flow meter, generator oil 
meter, steam flow meter, and steam regulator.
    7. Piping and valves, air, steam (commencing at steam header), water 
(inside building), and oil gas (up to outlet of final piece of apparatus 
in building).
    8. Pumps, hydraulic and oil.
    9. Tanks, hydraulic accumulator, hydraulic return, oil and steam 
accumulator.
313 Generating equipment--Other processes.
    This account shall include, with subdivisions for each type of gas 
produced, the cost installed of generating equipment which is not 
included in any of the foregoing accounts, such as benches and retorts 
for the production of coal gas, equipment used for generating acetylene 
gas, etc.

                                  Items

    As to coal gas production equipment:
    1. Benches.
    2. Charging and drawing machines.
    3. Control apparatus.
    4. Equipment for steaming retorts.
    5. Flues, uptakes and breeching, whether or not stacks are included 
in this account.
    6. Foundations.
    7. Fuel handling equipment used exclusively for retorts, including 
weight lorries, tracks, etc., and grinders, breakers, and screens 
located in retort house.
    8. Fuel system under retorts, including built-in producers.
    9. Piping, including ascension pipes, hydraulic main, liquor 
flushing decanter tank. liquor pump, and return line to hydraulic main.
    10. Primary atmospheric condensers.
    11. Retorts.
    12. Stacks--brick, steel, and concrete when set on separate 
foundations independent of substructure or superstructure of buildings, 
including lightning arresters.
314 Coal, coke, and ash handling equipment.
    This account shall include the cost installed of structures or 
equipment used for the transportation, storage, washing, and treatment 
of coal, coke, and ashes, when used for general gas plant operations.

                                  Items

    1. Bins--mixing, refuse, storage, etc.
    2. Boom operating mechanism.
    3. Breaker equipment.
    4. Bridges, bridge track, and machinery.
    5. Bucket conveyors and supports.
    6. Capstan.
    7. Cars.
    8. Chutes.
    9. Circuit breakers.
    10. Coal loaders.
    11. Coal preparation machinery, including washing and drying 
equipment.
    12. Conduit, electrical.
    13. Conveyors and supports.
    14. Crane, caterpillar.
    15. Driving apparatus for equipment listed herein.
    16. Elevators.
    17. Enclosure equipment.
    18. Engines, not an integral part of driven equipment.
    19. Foundations and settings, specially constructed for and not 
intended to outlast the apparatus for which provided.
    20. Gravity swing unloader.
    21. Hoppers.
    22. Instruments or meters, electrical.
    23. Ladders, fixed.
    24. Loading towers and equipment.
    25. Locomotives.
    26. Motor generators used only for equipment in this account.
    27. Panel, control.
    28. Pitts.
    29. Pulverizing equipment.
    30. Railroad sidings and yard tracks.
    31. Sampling equipment.

[[Page 673]]

    32. Scales.
    33. Screens.
    34. Sheds and fencing.
    35. Shuttle boom.
    36. Signal system equipment.
    37. Silo.
    38. Skip hoist.
    39. Stairs, railings, etc.
    40. Transfer cars and trucks.
    41. Trestles.
    42. Turntable.
    43. Unloaders.
    44. Weightometer.
315 Catalytic cracking equipment.
    This account shall include the cost installed of equipment used for 
producing gas by the catalytic cracking process.

                                  Items

    1. Caloric meters.
    2. Catalytic furnace, including catalyst and foundation.
    3. Combustion air blowers.
    4. Compressors, air.
    5. Control equipment.
    6. Cooling coils, including foundations.
    7. Cooling towers, including foundations.
    8. Enclosures.
    9. Fractionalizing units.
    10. Piping and valves.
    11. Preheaters.
    12. Pressure regulators.
    13. Proportioning controls.
    14. Tanks.
    15. Vaporizers.
316 Other reforming equipment.
    This account shall include the cost installed of equipment, other 
than catalytic cracking equipment, used primarily for reforming gas with 
resultant changes in its chemical composition and calorific value.

                                  Items

    1. Blast equipment, including blowers and driving units, piping, and 
supports.
    2. Control apparatus.
    3. Foundations and settings, specially constructed for and not 
intended to outlast the apparatus for which provided.
    4. Fuel and ash handling equipment, used wholly in reforming gas.
    5. Oil gas apparatus, used for reforming gas.
    6. Piping--steam (commencing at steam header), water (inside of 
building), and gas (up to outlet of final piece of apparatus in 
building).
    7. Pumps and driving units.
    8. Purifiers for gas to be reformed.
    9. Regulators.
    10. Water gas generators, used primarily for reforming gas.
317 Purification equipment.
    This account shall include the cost installed of apparatus used for 
the removal of impurities from gas and apparatus for conditioning gas, 
including pumps, wells, and other accessory apparatus.

                                  Items

    1. Blowers for revivifying.
    2. Blowers for activators.
    3. Condensers and washer coolers.
    4. Control apparatus--conduit, cable, cabinets, switchboards, etc.
    5. Crane or cover lifting equipment, not part of the structure.
    6. Dehydrators.
    7. Engines, not an integral part of driven equipment.
    8. Foundations and settings, specially constructed for and not 
intended to outlast the equipment for which provided.
    9. Instruments and meters, electric.
    10. Lubricators.
    11. Naphthalene and light oil scrubbers.
    12. Other accessory equipment such as coolers, spray ponds, pumps, 
platforms, railings, stairs.
    13. Oxide elevators and pits, platforms, tables, and trenches.
    14. Piping--air, steam, water, gas, condensate, liquor, tar, etc., 
from inlet valve of first piece of apparatus to outlet valve of final 
piece of apparatus (or, in building, from entrance to building to exit 
from building).
    15. Precipitators.
    16. Purifiers--iron oxide or liquid, including first filling.
    17. Recording gauges and thermometers.
    18. Revivifying air ducts.
    19. Saturator with auxiliary equipment.
    20. Scrubbers.
    21. Seal and drip pots.
    22. Signal system identified with equipment herein.
    23. Sulphur removal apparatus.
    24. Tar extractors and Cottrell precipitators.
    25. Tar pumps and tanks.
    26. Track runs for cranes and hoists.
    27. Wash boxes.
    28. Water meters, for cooling water.
318 Residual refining equipment.
    This account shall include the cost installed of apparatus used in 
refining and handling of residuals except where the apparatus is 
necessary for the operation of property included in account 317, 
Purification Equipment.

[[Page 674]]

                                  Items

    1. Ammonia stills, condensers, saturators, etc.
    2. Apparatus for removal of residuals from purifier liquids.
    3. Coke filter.
    4. Coke handling and storage facilities used solely for coke held 
for sale.
    5. Condensers.
    6. Control apparatus.
    7. Coolers.
    8. Decanters.
    9. Foundations specially constructed for and not intended to outlast 
the apparatus for which provided.
    10. Gauges.
    11. Heating equipment for apparatus included in this account.
    12. Instruments.
    13. Light oil stills, washers, etc.
    14. Piping and pumps.
    15. Platforms, stairs, and ladders.
    16. Separators.
    17. Storage tanks.
    18. Supports.
    19. Tar dehydrators, stills, etc.
319 Gas mixing equipment.
    This account shall include the cost installed of equipment used for 
mixing manufactured and natural gas, or the mixing of other gases 
incident to delivery of such mixed gases to the distribution system.

                                  Items

    1. Alcohol units.
    2. Automatic mixing controls.
    3. Btu adjustor.
    4. Calorimeter.
    5. Calorimixer.
    6. Compressor.
    7. Gas heater.
    8. Gas scrubber (air filter, dust cleaner).
    9. Gauges and instruments.
    10. Meters.
    11. Mixing chambers.
    12. Odorizing equipment.
    13. Oil pump units.
    14. Panel and control equipment.
    15. Piping and valves.
    16. Regulators, pressure and ratio.
    17. Safety alarm equipment.
320 Other equipment.
    This account shall include the cost installed of equipment used in 
the production of gas, when not assignable to any of the foregoing 
accounts.

                                  Items

    1. Cabinet, control.
    2. Compressed air system.
    3. Fire hose carts.
    4. First aid room equipment.
    5. Foamite system.
    6. Foundations and settings specially constructed for and not 
intended to outlast the apparatus for which provided.
    7. Gasoline pumps.
    8. Hand pumps.
    9. Machine shop equipment, such as lathes, pipe cutting and 
threading machines, vise grinders, power saw, shop motors, shafting and 
belting, drill press, shapers, milling machines, planes, etc.
    10. Odorizing equipment.
    11. Office furniture and equipment.
    12. Oil foggers.
    13. Panel, control.
    14. Piping--yard, when not includible in other accounts.
    15. Pits.
    16. Platforms.
    17. Portable scaffolds, ladders, etc.
    18. Power shovels.
    19. Production laboratory equipment.
    20. Scales, not associated with other equipment.
    21. Special signal equipment.
    22. Tractors for general plant use.
    23. Works exhauster including driving unit and governor.
    24. Works station meters, including gauges, piping and accessories.

                          Special Instructions

         Costs Related to Leases Acquired After October 7, 1969

    The net book value of amounts recorded in the natural gas production 
accounts incurred on or related to leases acquired after October 7, 
1969, shall, in general, not exceed the net realizable value (estimated 
selling price less estimated costs of extraction, completion, and 
disposal) of recoverable hydrocarbon reserves discovered on such leases. 
After initiation of exploration and development on leases acquired after 
October 7, 1969, the utility must determine after a reasonable period of 
time, and annually thereafter, whether the net realizable value of such 
recoverable reserves will be sufficient to absorb the net book value of 
amounts recorded in the accounts. The recoverable reserves shall be 
determined and attested to by independent appraisers no less frequently 
than every 3 years. If the net realizable value of recoverable reserves 
is not sufficient to absorb the net book value of amounts in the 
production accounts, the utility shall reduce the net book value of the 
amounts in the accounts to net realizable value of recoverable reserves. 
The reduction shall be done by first reducing the unamortized amounts 
recorded in Account 338, Unsuccessful Exploration and Development Costs, 
by debiting Account 404.1, Amortization and Depletion of Producing 
Natural Gas Land and Land Rights (for Nonmajor companies, 403.1, 
Depreciation and

[[Page 675]]

Depletion Expense). Next, if the net book value related to successful 
costs exceeds the net realizable value of the recoverable reserves, the 
production plant accounts shall be written down to such net realizable 
value by appropriate charges and credits to the expense and valuation 
accounts.
321 Asset retirement costs for manufactured gas production plant.
    This account shall include asset retirement costs on plant included 
in the manufactured gas production plant function.
325.1 Producing lands.
    This account shall include the cost of lands held in fee on which 
producing natural gas wells are located, and lands held in fee which are 
being drained of natural gas through the operation by the utility of 
wells on other land. (See gas plant instruction 7-G.)
325.2 Producing leaseholds.
    A. This account shall include the cost of acquiring leaseholds on 
which the utility pays royalties for natural gas obtained therefrom. 
(See gas plant instruction 7-G.)
    B. Exclude from this account rents paid periodically for rights 
obtained under leases. Exclude also from this account the cost of 
leaseholds which terminate in one year or less after they become 
effective.
325.3 Gas rights.
    This account shall include the cost of natural gas rights used in 
producing natural gas, whereby the utility obtains ownership in gas 
underlying land not owned or leased by the utility. It does not provide 
for gas rights which are leased and which are properly chargeable to 
account 325.2, Producing Leaseholds.
325.4 Rights-of-way.
    This account shall include the cost of all interests in land which 
terminate more than 1 year after they become effective and on which are 
located gathering pipelines, telephone pole lines, and like property 
used in connection with the production of natural gas. (See gas plant 
instruction 7.)
325.5 Other land and land rights.
    This account shall include the cost of land and land rights used in 
connection with the production of natural gas, when not properly 
assignable to any of the foregoing accounts. (See gas plant instruction 
7.)
326 Gas well structures.
    This account shall include the cost of well structures and 
improvements used in connection with the housing of permanent bailers 
and other equipment necessary to keep the wells in operation. (See gas 
plant instruction 8.)
327 Field compressor station structures.
    This account shall include the cost of structures and improvements 
used in connection with the housing of compressor station equipment used 
to raise the pressure of natural gas before it is conveyed to the 
terminus of the field lines. (See gas plant instruction 8.)
328 Field measuring and regulating station structures.
    This account shall include the cost of structures and improvements 
used in connection with the housing of meters, regulators, and 
appurtenant appliances for measuring and regulating natural gas before 
the point where it enters the transmission or distribution system. (See 
gas plant instruction 8.)
329 Other structures.
    This account shall include the cost of structures and improvements 
used in connection with natural gas production and gathering not 
provided for elsewhere. (See gas plant instruction 8.)
330 Producing gas wells--Well construction.
    This account shall include the cost of drilling producing gas wells.

                                  Items

    1. Clearing well site.
    2. Hauling, erecting, dismantling, and removing boilers, portable 
engines, derricks, rigs, and other equipment and tools used in drilling.
    3. Drilling contractors' charges.
    4. Drive pipe.
    5. Fuel or power.
    6. Labor.
    7. Rent of drilling equipment.

[[Page 676]]

    8. Water used in drilling, obtained either by driving wells, piping 
from springs or streams, or by purchase.
    9. Hauling well equipment.
    10. Shooting, fracturing, acidizing.
331 Producing gas wells--Well equipment.
    This account shall include the cost of equipment in producing gas 
wells.

                                  Items

    1. Bailing equipment.
    2. Boilers and drives permanently connected.
    3. Casing.
    4. Derrick.
    5. Fence, when solely an enclosure for equipment.
    6. Fittings, including shut-in valves, bradenheads and casing heads.
    7. Packing.
    8. Tank, oil or water, etc.
    9. Tubing.
332 Field lines.
    This account shall include the cost installed of field lines used in 
conveying natural gas from the wells to the point where it enters the 
transmission or distribution system.

                                  Items

    1. Gathering lines, including pipe, valves, fittings, and supports.
    2. Cathodic protection equipment.
    3. Creek crossings, suspension bridges and other special 
construction.
    4. Line drips and separators.
    5. Line pack gas.
333 Field compressor station equipment.
    This account shall include the cost installed of compressor station 
equipment and associated appliances used to raise the pressure of 
natural gas before it is conveyed to the terminus of the field lines.

                                  Items

    1. Boiler plant, coal handling and ash handling equipment for steam 
powered compressor station.
    2. Compressed air system equipment.
    3. Compressor equipment and driving units, including auxiliaries, 
foundations, guard rails and enclosures, etc.
    4. Electric system equipment, including generating equipment and 
driving units, power wiring, transformers, regulators, battery 
equipment, switchboard, etc.
    5. Fire fighting equipment.
    6. Gas lines and equipment, including fuel supply lines, cooling 
tower and pond and associated equipment, dehydrators, fuel gas mixers, 
special pipe bends and connections, and associated scrubbers, 
separators, tanks, gauges and instruments.
    7. Laboratory and testing equipment.
    8. Lubricating oil system, including centrifuge, filter, tanks, 
purifier, and lubricating oil piping, etc.
    9. Office furniture and fixtures and general equipment such as 
heating boilers, steel lockers, first-aid equipment, gasoline dispensing 
equipment, lawn mowers, incinerators, etc.
    10. Shop tools and equipment.
    11. Water supply and circulation system, including water well, tank, 
water piping, cooling tower, spray fence, and water treatment equipment, 
etc., but not including water system equipment solely for domestic and 
general use.
334 Field measuring and regulating station equipment.
    This account shall include the cost installed of meters, gauges, and 
other equipment used in measuring and regulating natural gas collected 
in field lines before the point where it enters the transmission or 
distribution system.

                                  Items

    1. Automatic control equipment.
    2. Boilers, heaters, etc.
    3. Foundations, pits, etc.
    4. Gas cleaners, scrubbers, separators, dehydrators, etc.
    5. Gauges and instruments, including piping, fittings, wiring, etc., 
and panel boards.
    6. Headers.
    7. Meters, orifice or positive, including piping and connections.
    8. Oil fogging equipment.
    9. Odorizing equipment.
    10. Regulators or governors, including controls and instruments.
    11. Structures of a minor nature or portable type.
335 Drilling and cleaning equipment.
    This account shall include the cost of implements and equipment used 
in drilling and cleaning natural gas wells.

                                  Items

    1. Bailers.
    2. Bits and other drilling tools.
    3. Boilers.
    4. Derricks.
    5. Drilling cables.
    6. Drilling machines.
    7. Engines.

[[Page 677]]

    8. Motors.
    9. Pulling machines.
    10. Pumps.
    11. Rigs.
    12. Tanks.
336 Purification equipment.
    This account shall include the cost installed of apparatus used for 
the removal of impurities from gas and apparatus for conditioning gas.

                                  Items

    1. Condensers and washer coolers.
    2. Dehydrators.
    3. Foundations and settings, specially constructed for and not 
intended to outlast the equipment for which provided.
    4. Other accessory equipment, such as coolers, spray ponds, pumps, 
platforms, railings, stairs.
    5. Piping, from inlet valve of first piece of apparatus to outlet 
valve of final piece of apparatus (or, in building, from entrance to 
building to exit from building).
    6. Scrubbers.
    7. Sulphur removal apparatus.
    8. Water supply system.

    Note: In general this account shall include all dehydrators located 
in or adjacent to production areas which are used to remove water and 
other stray liquids from gas produced by the utility or purchased in or 
adjacent to production areas. In some instances such dehydrators may be 
located some distance from the production sources of the gas. Where, 
however, the utility has no production and gathering facilities with 
respect to any of the gas passing through the dehydrators, such as at 
the purchase point at the head of a transmission pipe line company, the 
dehydrators may be included in account 368, Compressor Station 
Equipment, or account 367, Mains, whichever is the most practicable and 
reasonable under the circumstances. Dehydrators which are an adjunct to 
products extraction operations shall be included in account 342, 
Extraction and Refining Equipment. Dehydrators used in connection with 
underground gas storage operations shall be included in account 356, 
Purification Equipment.
337 Other equipment.
    This account shall include the cost installed of equipment used in 
the production and gathering of natural gas, when not assignable to any 
of the foregoing accounts.

                                  Items

    1. Calorimeter.
    2. Control installation.
    3. Crane.
    4. Laboratory equipment.
    5. Odorizing unit.
    6. Office furniture and equipment.
    7. Oil fogger.
338 Unsuccessful exploration and development costs.
    A. This account shall include unsuccessful exploration and 
development costs incurred on or related to hydrocarbon leases, on 
properties in the contiguous 48 States and the State of Alaska, acquired 
after October 7, 1969. It shall also include costs of a preliminary 
nature incurred in the search for natural gas in such areas after 
October 7, 1969.
    B. The costs recorded in this account shall be amortized by debiting 
account 404.1, Amortization and Depletion of Producing Natural Gas Land 
and Land Rights, and crediting this account using the unit-of-production 
or other acceptable method of amortization as hydrocarbons are extracted 
from producing wells.
    C. In general, the unamortized costs recorded in this account shall 
not exceed the net realizable value (estimated selling price less 
estimated costs of extraction, completion and disposal) of proven 
hydrocarbon reserves on leases acquired after October 7, 1969. (See 
``Special Instructions--Costs Related to Leases Acquired After October 
7, 1969,'' above.)
339 Asset retirement costs for natural gas production and gathering 
plant.
    This account shall include asset retirement costs on plant included 
in the natural gas production and gathering plant function.
340 Land and land rights.
    This account shall include the cost of land and land rights used in 
connection with the processing of natural gas for removal of gasoline, 
butane, propane, or other salable products. (See gas plant instruction 
7.)
341 Structures and improvements.
    This account shall include the cost of structures and improvements 
used in connection with the processing of natural gas for removal of 
gasoline, butane, propane, or other salable products. (See gas plant 
instruction 8.)

[[Page 678]]

342 Extraction and refining equipment.
    This account shall include the cost installed of equipment used for 
the extraction from natural gas of gasoline, butane, propane, or other 
salable products and for the refining of such products.

                                  Items

    1. Boiler plant equipment, including boiler, boiler setting, heat 
exchangers, etc.
    2. Compressed air system, including air compressor, air storage 
tank, etc.
    3. Cooling equipment such as coolers, cooling tower and accessories 
for gas, extracted products, etc.
    4. Cranes, trolleys, and hoists.
    5. Electrical system, including generator and driving unit, power 
lines, transformers, switchboard, yard lighting system, etc.
    6. Extraction and refining equipment, such as absorbers, 
reabsorbers, stills, dephlegmators, fractionating towers, stabilizing 
columns, control apparatus.
    7. Foundations and structural supports for equipment items not 
intended to outlast the equipment for which provided.
    8. Fuel regulating and measuring equipment.
    9. Gasoline blending equipment including dye pot, educator pumps, 
lead storage tanks, weighing device, etc.
    10. Gauges and instruments.
    11. Loading racks and associated other equipment.
    12. Lubricating oil system.
    13. Pumps of various types, such as boiler feed water pumps, loading 
and transfer pumps, drip still pumps, oil pumps, skimmer basin pumps, 
etc.
    14. Tanks of various types such as accumulator and dewatering tanks, 
separator tanks, gasoline feed tanks, compressed air tanks, oil surge 
tanks, etc., except tanks classifiable as storage equipment, account 
344.
    15. Water supply system including water well, water tank and 
supports, water softener or purification apparatus, traveling water 
screen and drive.
    16. Yard piping, gas, water, steam, compressed air, fuel, vapor, 
extracted products, including headers, valves, etc., but not including 
off-site lines includible in account 343, Pipe Lines.
343 Pipe lines.
    This account shall include the cost installed of gas and liquids 
pipe lines used in connection with the processing of natural gas for the 
removal of gasoline, butane, propane, or other salable products, 
exclusive of runs of pipe appropriately includible in other equipment 
accounts, embracing principally off-site gas, gasoline gathering, and 
loading lines not includible as yard piping in account 342, Extraction 
and Refining Equipment.

                                  Items

    1. Gas lines, off-site, relating solely to extraction operations.
    2. Gasoline gathering lines connecting with off-site sources.
    3. Gathering line drips.
    4. Instruments, indicating and recording.
    5. Loading lines connecting with remote off-site loading racks or 
storage facilities.
    6. Pumps and driving units.
344 Extracted product storage equipment.
    This account shall include the cost installed of storage tanks and 
associated equipment used in the storing, prior to sale, of gasoline, 
butane, propane, and other salable products extracted from natural gas.

                                  Items

    1. Foundations.
    2. Instruments.
    3. Regulators.
    4. Storage tanks for partially or fully processed products.
    5. Valves.
345 Compressor equipment.
    This account shall include the cost installed of compressor 
equipment and associated appliances used in connection with the receipt, 
processing, and return of natural gas processed for removal of gasoline, 
butane, propane, or other salable products.

                                  Items

    (See account 333 for items.)
346 Gas measuring and regulating equipment.
    This account shall include the cost installed of meters, gauges, and 
other equipment used in measuring or regulating natural gas received 
and/or returned from processing for removal of gasoline, butane, 
propane, or other salable products.

                                  Items

    1. Automatic control equipment.
    2. Boilers, heaters, etc.
    3. Foundations, pits, etc.
    4. Gas cleaners, scrubbers, separators, dehydrators, etc.

[[Page 679]]

    5. Gauges and instruments, including piping, fittings, wiring, etc., 
and panel boards.
    6. Headers.
    7. Meters, orifice or positive, including piping and connections.
    8. Oil fogging equipment.
    9. Odorizing equipment.
    10. Regulators or governors, including controls and instruments.
    11. Structures of a minor nature or portable type.
347 Other equipment.
    This account shall include the cost installed of equipment used in 
processing natural gas and refining gasoline, butane, propane, and other 
salable products extracted from natural gas, when not assignable to any 
of the foregoing accounts.

                                  Items

    1. Fire fighting equipment.
    2. Laboratory and testing equipment.
    3. Miscellaneous equipment, such as first-aid cabinet, gasoline 
dispensing pump, heating boiler, incinerator, lawn mower, warehouse 
truck.
    4. Office furniture and equipment.
    5. Shop tools and equipment.

           special instructions--accounts 350.1 through 363.5

    The above accounts are to be used by the transmission and 
distribution companies for the classification of storage facilities used 
for peak shaving operations. The accounts shall be subdivided to 
classify the peak shaving storage facilities according to the 
transmission or distribution function, if the utility operates both 
transmission and distribution systems. Only base load liquefied natural 
gas terminaling and processing facilities are to be classified in 
accounts 364.1 through 364.8.
348 Asset retirement costs for products extraction plant.
    This account shall include asset retirement costs on plant included 
in the products extraction plant function.
350.1 Land.
    This account shall include the cost of lands held in fee on which 
underground storage wells are located, and other lands held in fee 
within an area utilized for the underground storage of gas. (See gas 
plant instruction 7-G.)
350.2 Rights-of-way.
    This account shall include the cost of all interests in land which 
do not terminate until more than 1 year after they become effective and 
on which are located underground storage lines, telephone poles lines, 
and like property used in connection with underground gas storage 
operations. (See gas plant instruction 7.)
351 Structures and improvements.
    A. This account shall include the cost in place of structures and 
improvements used wholly or predominantly in connection with underground 
storage of natural gas. (See gas plant instruction 8.)
    B. This account shall be subdivided as follows:
351.1 Well structures.
351.2 Compressor station structures.
351.3 Measuring and regulating station structures.
351.4 Other structures.
352 Wells.
    This account shall include the drilling cost of wells used for 
injection and withdrawal of gas from underground storage projects, 
including wells kept open and used for observation.

                                  Items

Drilling:
    1. Clearing well site.
    2. Hauling, erecting, dismantling, and removing boilers, portable 
engines, derricks, rigs, and other equipment and tools used in drilling.
    3. Drilling contractors' charges.
    4. Drive pipe.
    5. Fuel or power.
    6. Labor.
    7. Rent of drilling equipment.
    8. Water used in drilling, obtained either by driving wells, piping 
from springs or streams, or by purchase.
    9. Hauling well equipment.
    10. Shooting, fracturing, acidizing.

Equipment:
    11. Bailing equipment.
    12. Boilers and drives permanently connected.
    13. Casing.
    14. Derrick.
    15. Fence, when solely an enclosure for equipment.
    16. Fittings, including shut-in valves, bradenheads and casing 
heads.
    17. Packing.
    18. Tank, oil or water, etc.

[[Page 680]]

    19. Tubing.
352.1 Storage leaseholds and rights.
    A. This account shall include the cost of leaseholds, storage 
rights, mineral deeds, etc. on lands for the purpose of utilizing 
subsurface reservoirs for underground gas storage operations. (See gas 
plant instruction 7-G.)
    B. Exclude from this account rents or other charges paid 
periodically for use of subsurface reservoirs for underground gas 
storage purposes.

    Note: Items such as buildings, wells, lines, equipment and 
recoverable gas used in storage operations acquired with land or storage 
leaseholds and rights are to be classified in the appropriate accounts.
352.2 Reservoirs.
    This account shall include costs to prepare underground reservoirs 
for the storage of natural gas.

                                  Items

    1. Geological, geophysical and seismic costs.
    2. Plugging abandoned wells.
    3. Fuel and power.
    4. Drilling and equipping fresh water wells, disposal wells, and 
solution wells.
    5. Leaching of salt dome caverns.
    6. Rentals on storage rights and leases incurred during construction 
and development period.
    7. Gas used during the development period.
    8. Costs incident to maintaining covenants of production leaseholds 
during the period required to convert them to storage leaseholds.
    9. Other rehabilitation work.
352.3 Nonrecoverable natural gas.
    A. This account shall include the cost of gas in underground 
reservoirs, including depleted gas or oil fields and other underground 
caverns or reservoirs used for the storage of gas which will not be 
recoverable.
    B. Such nonrecoverable gas shall be priced at cost according to 
generally accepted methods of cost determination consistently applied. 
(See the Special Instructions to Accounts 117.1, 117.2, and 117.3.
353 Lines.
    This account shall include the cost installed of gas pipe lines used 
wholly or predominantly for conveying gas from point of connection with 
transmission or field lines to underground storage wells and from 
underground storage wells to the point where the gas enters the 
transmission or distribution system.

                                  Items

    1. Cathodic protection equipment.
    2. Creek crossings, suspension bridges and other special 
construction.
    3. Lines, including pipe, valves, fittings, and supports.
    4. Line drips and separators.
    5. Line pack gas.
354 Compressor station equipment.
    This account shall include the cost installed of compressor station 
equipment used wholly or predominantly for the purpose of raising the 
pressure of gas for delivery to underground storage or to raise the 
pressure of gas withdrawn from underground storage for delivery to the 
transmission or distribution system.

                                  Items

    1. Boiler plant, coal handling and ash handling equipment for steam 
powered compressor station.
    2. Compressed air system equipment.
    3. Compressor equipment and driving units, including auxiliaries, 
foundations, guard rails and enclosures, etc.
    4. Electric system equipment, including generating equipment and 
driving units, power wiring, transformers, regulators, battery 
equipment, switchboard, etc.
    5. Fire fighting equipment.
    6. Gas lines and equipment, including fuel supply lines, cooling 
tower and pond and associated equipment, dehydrators, fuel gas mixers, 
special pipe bends and connections, and associated scrubbers, 
separators, tanks, gauges and instruments.
    7. Laboratory and testing equipment.
    8. Lubricating oil system, including centrifuge, filter, tanks, 
purifier, and lubricating oil piping, etc.
    9. Office furniture and fixtures and general equipment such as steel 
lockers, first-aid equipment, gasoline dispensing equipment, lawn 
mowers, incinerators, etc.
    10. Shop tools and equipment.
    11. Water supply and circulation system, including water well, tank, 
water piping, cooling tower, spray fence, and water treatment equipment, 
etc., but not including water system equipment solely for domestic and 
general use.

[[Page 681]]

355 Measuring and regulating equipment.
    This account shall include the cost installed if equipment used 
wholly or predominantly for the purpose of measuring and regulating 
deliveries of gas to underground storage and withdrawals of gas from 
underground storage.

                                  Items

    1. Automatic control equipment.
    2. Boilers, heaters, etc.
    3. Foundations, pits, etc.
    4. Gas cleaners, scrubbers, separators, dehydrators, etc.
    5. Gauges and instruments, including piping, fittings, wiring, etc., 
and panel boards.
    6. Headers.
    7. Meters, orifice or positive, including piping and connections.
    8. Oil fogging equipment.
    9. Odorizing equipment.
    10. Regulators or governors, including controls and instruments.
    11. Structures of a minor nature or portable type.
356 Purification equipment.
    This account shall include the cost installed of apparatus used 
wholly or predominantly for the removal of impurities from and the 
conditioning of, gas delivered to or removed from underground storage 
fields.

                                  Items

    1. Condensers and washer coolers.
    2. Dehydrators.
    3. Foundations and settings, specially constructed for and not 
intended to outlast the equipment for which provided.
    4. Other accessory equipment, such as coolers, spray ponds, pumps, 
platforms, railings, stairs.
    5. Piping, from inlet valve of first piece of apparatus to outlet 
valve of final piece of apparatus (or, in building, from entrance to 
building to exit from building).
    6. Scrubbers.
    7. Sulphur removal apparatus.
    8. Water supply system.
357 Other equipment.
    This account shall include the cost installed of equipment used 
wholly or predominantly in connection with underground storage of gas, 
when not assignable to any of the foregoing accounts.

                                  Items

    1. Calorimeter.
    2. Control installation.
    3. Crane.
    4. Odorizing unit.
    5. Office furniture and equipment.
    6. Oil foggers.
358 Asset retirement costs for underground storage plant.
    This account shall include asset retirement costs on plant included 
in the underground storage plant function.
360 Land and land rights.
    This account shall include the cost of land and land rights used in 
connection with the storage of gas in holders. (See gas plant 
instruction 7.)
361 Structures and improvements.
    This account shall include the cost in place of structures and 
improvements used in connection with the storage of gas in holders. (See 
gas plant instruction 8.)
362 Gas holders.
    This account shall include the cost installed of holders and 
associated appliances used in the storage of gas above ground, or in 
underground receptacles.

                                  Items

    1. Alarm systems.
    2. Buried piping, tanks or other underground construction for gas 
storage.
    3. Flood and fire control equipment.
    4. Foundations.
    5. Holder pistons.
    6. Holders-waterless, including elevators, tar apparatus, and inlet 
and outlet connections.
    7. Holders-waterseal, including oil skimmer, heating equipment, 
drips, and inlet and outlet connections.
    8. Hortonspheres and high pressure tanks, including inlet and outlet 
connections, access equipment, etc.
    9. Lighting.
    10. Pumps.
    11. Ventilating equipment.
    12. Walkways.

    Note A: If the utility stores gas by the liquefaction process the 
holders for such liquids, whether above or below ground, shall be 
included in a separate subaccount hereunder.
    Note B: Relief holders used in connection with manufactured gas 
operations shall be

[[Page 682]]

included in account 305, Structures and Improvements.
363 Purification equipment.
    This account shall include the cost installed of apparatus used for 
the removal of impurities from gas and apparatus for conditioning gas.

                                  Items

    1. Condensers and washer coolers.
    2. Dehydrators.
    3. Foundations and settings, specially constructed for and not 
intended to outlast the equipment for which provided.
    4. Other accessory equipment, such as coolers, spray ponds, pumps, 
platforms, railings, stairs.
    5. Piping from inlet valve of first piece of apparatus to outlet 
valve of final piece of apparatus (or, in building from entrance to 
building to exit from building).
    6. Scrubbers.
    7. Sulphur removal apparatus.
    8. Water supply system.
363.1 Liquefaction equipment.
    This account shall include the cost installed of equipment used in 
liquefaction of natural gas.

                                  Items

    1. Cold box.
    2. Heat exchanger.
    3. Condensers.
    4. Pumps.
    5. Tanks.
363.2 Vaporizing equipment.
    This account shall include the cost installed of vaporizing 
equipment used in connection with liquefied natural gas storage.
363.3 Compressor equipment.
    This account shall include the cost installed of compressor 
equipment and associated appliances used in connection with other 
storage plant.
363.4 Measuring and regulating equipment.
    This account shall include the cost installed of equipment used to 
measure deliveries of gas to other storage and withdrawals of gas from 
other storage.

                                  Items

    1. Automatic control equipment.
    2. Boilers, heaters, etc.
    3. Foundations, pits, etc.
    4. Gas cleaners, scrubbers, separators, dehydrators, etc.
    5. Gauges and instruments, including piping, fittings, wiring, etc., 
and panel boards.
    6. Headers.
    7. Meters, orifice or positive, including piping and connections.
    8. Oil fogging equipment.
    9. Odorizing equipment.
    10. Regulators or governors, including controls and instruments.
    11. Structures of a minor nature or portable type.
363.5 Other equipment.
    This account shall include the cost installed of other equipment 
used in connection with the storage of gas in holders.

                                  Items

    1. Complete inlet and outlet connections.
    2. Compressor.
    3. Foundation.
    4. Gauges and instruments.
    5. Regulating apparatus.
    6. Line pack gas.
363.6 Asset retirement costs for other storage plant.
    This account shall include asset retirement costs on plant included 
in the other storage plant function.
364.1 Land and land rights.
    A. This account shall include the cost of land and land rights used 
in connection with liquefied natural gas terminaling and processing 
operations. (See gas plant instruction 7.)
364.2 Structures and improvements.
    A. This account shall include the cost in place of structures and 
improvements used in connection with liquefied natural gas terminaling 
and processing operations. (See gas plant instruction 8.)
    B. This account shall be subdivided as follows:

    1. Docking and harbor facilities.
    2. LNG processing terminal structures.
    3. Measuring and regulating structures.
    4. Compressor station structures.
    5. Other structures.
364.3 LNG processing terminal equipment.
    This account shall include the cost installed of equipment used to 
receive, hold, and regasify liquefied natural gas

[[Page 683]]

for delivery into the utility's transmission or distribution system.

                                  Items

    1. Aftercoolers.
    2. Air compressors.
    3. Air coolers.
    4. Alarm systems.
    5. Blowers.
    6. Cold box, condensers.
    7. Controls and control apparatus.
    8. Dikes.
    9. Drums.
    10. Electrical power and ignition circuits including wiring and 
conduits.
    11. Emission control equipment.
    12. Fire control devices and equipment.
    13. Foundations.
    14. Generators.
    15. Heat exchangers.
    16. Heaters and reheaters.
    17. Instrumentation.
    18. Intercoolers.
    19. Liquefaction compressors.
    20. Liquefied gas holders and storage tanks.
    21. Nitrogen system equipment.
    22. Plant piping including pipe supports.
    23. Pollution control facilities.
    24. Pumps and driving units.
    25. Stacks.
    26. Tanks, other than LNG storage tanks (including ladders, stairs, 
walkways, and lighting).
    27. Unloading and loading arms, and appurtenant equipment.
    28. Valves.
    29. Vaporizers.
    30. Waste heat recovery units.
    31. Water craft not to include LNG tankers and barges.
    32. Miscellaneous other equipment.
    33. Line pack gas.
364.4 LNG transportation equipment.
    This account shall include the cost of vehicles used for the 
transportation of liquefied natural gas.

                                  Items

    1. LNG barges.
    2. LNG maritime tankers.
    3. LNG tank trucks.
    4. Other LNG transportation equipment.
364.5 Measuring and regulating equipment.
    This account shall include the cost installed of meters, gauges and 
other equipment used in base load LNG operations for measuring or 
regulating natural gas prior to its entrance into the utility's 
transmission or distribution system.

                                  Items

    1. Automatic control equipment.
    2. Boilers, heaters, etc.
    3. Foundation, pits, etc.
    4. Gas analyzer equipment.
    5. Gas cleaners, scrubbers, separators, dehydrators, etc.
    6. Gauges and instruments, including piping, fittings, wiring, etc., 
and panel boards.
    7. Headers.
    8. Meters, orifice or positive, including piping and connections.
    9. Oil fogging equipment.
    10. Odorizing equipment.
    11. Regulators or governors, including controls and instruments.
    12. Stabilization equipment.
    13. Structures of a minor or portable type.
    14. Other equipment.
364.6 Compressor station equipment.
    This account shall include the cost installed of compressor station 
equipment and associated appliances used in connection with liquefied 
natural gas operations prior to entrance of vaporized gas into the 
utility's transmission or distribution system.

                                  Items

    1. Boiler plant, coal handling, and ash handling equipment for steam 
powered compressor station.
    2. Compressed air system equipment.
    3. Compressor equipment and driving units, including auxiliaries, 
foundations, guard rails, and enclosures, etc.
    4. Electric system equipment, including generating equipment and 
driving units, power wiring, transformers, regulators, battery 
equipment, switchboard, etc.
    5. Fire fighting equipment.
    6. Gas lines and equipment, including fuel supply lines, cooling 
tower and pond and associated equipment, dehydrators, fuel gas mixers, 
special pipebends and connections, and associated scrubbers, separators, 
tanks, gauges, and instruments.
    7. Laboratory and testing equipment.
    8. Lubricating oil system, including centrifuge, filter, tanks, 
purifier, and lubricating oil piping, etc.
    9. Office furniture and fixtures and general equipment such as steel 
lockers, first-aid equipment, gasoline dispensing equipment, lawn 
mowers, incinerators, etc.
    10. Shop tools and equipment.
    11. Water supply and circulation system, including water well, tank, 
water pipeline, cooling tower, spray fence, and water treatment 
equipment, etc., but not including water system equipment used solely 
for domestic and general use.
    12. Other equipment.

[[Page 684]]

364.7 Communication equipment.
    This account shall include the cost installed of radio, telephone, 
microwave, and other equipment used wholly or predominantly in 
connection with the operation and maintenance of the liquefied natural 
gas system. (See also accounts 370 and 397, Communication Equipment.)

                                  Items

    1. Carrier terminal equipment including repeaters, power supply 
equipment, transmitting and receiving sets.
    2. Microwave equipment, including power supply equipment, 
transmitters, amplifiers, paraboloids, towers, reflectors, receiving 
equipment, etc.
    3. Radio equipment, fixed and mobile, including antenna, power 
equipment, transmitter units.
    4. Telephone equipment including switchboards, power and testing 
equipment, conductors, pole lines, etc.
    5. Other equipment.
364.8 Other equipment.
    This account shall include the cost installed of equipment used in 
liquefied natural gas operations, when not assignable to any of the 
foregoing accounts.

                                  Items

    1. Garage and service equipment.
    2. General tools, including power operated equipment.
    3. Laboratory equipment.
    4. Materials handling equipment.
    5. Office furniture and equipment.
    6. Power generation equipment.
    7. Shop equipment.
    8. Tools, other than small hand tools.
    9. Other equipment.
364.9 Asset retirement costs for base load liquefied natural gas 
terminaling and processing plant.
    This account shall include asset retirement costs on plant included 
in the base load liquefied natural gas terminaling and processing plant 
function.
365.1 Land and land rights.
    This account shall include the cost of land and land rights except 
rights-of-way used in connection with transmission operations. (See gas 
plant instruction 7.)
365.2 Rights-of-way.
    This account shall include the cost of rights-of-way used in 
connection with transmission operations. (See gas plant instruction 7.)
366 Structures and improvements.
    A. This account shall include the cost in place of structures and 
improvements used in connection with transmission operations. (See gas 
plant instruction 8.)
    B. This account shall be subdivided as follows:
366.1 Compressor station structures.
366.2 Measuring and regulating station structures.
366.3 Other structures.
367 Mains.
    A. This account shall include the cost installed of transmission 
system mains.
    B. The records supporting this account shall be so kept as to show 
separately the cost of mains of different sizes and types and of each 
tunnel, bridge, or river crossing.

                                  Items

    1. Anti-freeze lubricating equipment.
    2. Automatic valve operating mechanisms, including pressure tanks, 
etc.
    3. By-pass assembly.
    4. Caissons, tunnels, trestles, etc., for submarine mains.
    5. Cathodic protection equipment.
    6. Drip lines and pots.
    7. Excavation, including shoring, bracing, bridging, pumping, 
backfill, and disposal of excess excavated material.
    8. Foundations.
    9. Gas cleaners, scrubbers, etc. when not part of compressor station 
or measuring and regulating equipment.
    10. Leak clamps. (See gas plant instruction 10-C (1).)
    11. Line pack gas.
    12. Linewalkers' bridges.
    13. Manholes.
    14. Municipal inspection.
    15. Pavement disturbed, including cutting and replacing pavement, 
pavement base, and sidewalks.
    16. Permits.
    17. Pipe coating.
    18. Pipe and fittings.
    19. Pipe laying.
    20. Pipe supports.
    21. Protection of street openings.

[[Page 685]]

    22. River, highway, and railroad crossings, including revetments, 
pipe anchors, etc.
    23. Valves.
    24. Welding.
368 Compressor station equipment.
    This account shall include the cost installed of compressor station 
equipment and associated appliances used in connection with transmission 
system operations.

                                  Items

    1. Boiler plant, coal handling and ash handling equipment for steam 
powered compressor station.
    2. Compressed air system equipment.
    3. Compressor equipment and driving units, including auxiliaries, 
foundations, guard rails and enclosures, etc.
    4. Electric system equipment, including generating equipment and 
driving units, power wiring, transformers, regulators, battery 
equipment, switchboard, etc.
    5. Fire fighting equipment.
    6. Gas lines and equipment, including fuel supply lines, cooling 
tower and pond and associated equipment, dehydrators, fuel gas mixers, 
special pipe bends and connections, and associated scrubbers, 
separators, tanks, gauges and instruments.
    7. Laboratory and testing equipment.
    8. Lubricating oil system, including centrifuge, filter, tanks, 
purifier, and lubricating oil piping, etc.
    9. Office furniture and fixtures and general equipment such as steel 
lockers, first-aid equipment, gasoline dispensing equipment, lawn 
mowers, incinerators, etc.
    10. Shop tools and equipment.
    11. Water supply and circulation system, including water well, tank, 
water piping, cooling tower, spray fence, and water treatment equipment, 
etc., but not including water system equipment solely for domestic and 
general use.
369 Measuring and regulating station equipment.
    This account shall include the cost installed of meters, gauges, and 
other equipment used in measuring or regulating gas in connection with 
transmission system operations.

                                  Items

    1. Automatic control equipment.
    2. Boilers, heaters, etc.
    3. Foundations, pits, etc.
    4. Gas cleaners, scrubbers, separators, dehydrators, etc.
    5. Gauges and instruments, including piping, fittings, wiring, etc., 
and panel boards.
    6. Headers.
    7. Meters, orifice or positive, including piping and connections.
    8. Oil fogging equipment.
    9. Odorizing equipment.
    10. Regulators or governors, including controls and instruments.
    11. Structures of a minor nature or portable type.

    Note: Pipeline companies, including companies who measure deliveries 
of gas to their own distribution system, shall include in the 
transmission function classification city gate and main line industrial 
measuring and regulating stations.
370 Communication equipment.
    This account shall include the cost installed of radio, telephone, 
microwave, and other equipment used wholly or predominantly in 
connection with the operation and maintenance of the gas transmission 
system. (See also account 397, Communication Equipment.)

                                  Items

    1. Carrier terminal equipment including repeaters, power supply 
equipment, transmitting and receiving sets.
    2. Microwave equipment, including power supply equipment, 
transmitters, amplifiers, paraboloids, towers, reflectors, receiving 
equipment, etc.
    3. Radio equipment, fixed and mobile, including antenna, power 
equipment, transmitters and receivers, and portable receiver-transmitter 
units.
    4. Telephone equipment including switchboards, power and testing 
equipment, conductors, pole lines, etc.
371 Other equipment.
    This account shall include the cost installed of equipment used in 
transmission system operations, when not assignable to any of the 
foregoing accounts.
372 Asset retirement costs for transmission plant.
    This account shall include asset retirement costs on plant included 
in the transmission plant function.
374 Land and land rights.
    This account shall include the cost of land and land rights used in 
connection with distribution operations. (See gas plant instruction 7.)

[[Page 686]]

375 Structures and improvements.
    This account shall include the cost in place of structures and 
improvements used in connection with distribution operations. (See gas 
plant instruction 8.)
376 Mains.
    A. This account shall include the cost installed of distribution 
system mains.
    B. The records supporting this account shall be so kept as to show 
separately the cost of mains of different sizes and types and of each 
tunnel, bridge, or river crossing.

                                  Items

    1. Caissons, tunnels, trestles, etc. for submarine mains.
    2. Clamps, leak (bell and spigot) when installed at time of 
construction; when clamps are installed subsequent to construction, the 
accounting shall be in accordance with gas plant instruction 10, 
paragraph (C) 1.
    3. Drip lines and pots.
    4. Electrolysis tests, in connection with new construction.
    5. Excavation, including shoring, bracing, bridging, pumping, 
backfill, and disposal of excess excavated material.
    6. Hauling, unloading, and stringing pipe.
    7. Lamping and watching new construction.
    8. Line pack gas.
    9. Municipal inspection.
    10. Pavement disturbed, including cutting and replacing pavement, 
pavement base, and sidewalks.
    11. Permits.
    12. Pipe coating.
    13. Pipe and fittings.
    14. Pipe laying.
    15. Pipe supports.
    16. Protection of street openings.
    17. Relocating city storm and sanitary sewers, catch basins, etc., 
or protecting same in connection with new construction.
    18. Replacement of municipal drains and culverts in connection with 
new construction.
    19. Roadway boxes.
    20. Shifting excavated material due to traffic conditions in 
connection with new construction.
    21. Sleeves and couplings.
    22. Special crossovers, bridges and foundations for special 
construction.
    23. Surveying and staking lines.
    24. Valves not associated with pumping or regulating equipment.
    25. Welding.
    26. Wood blocking.
377 Compressor station equipment.
    This account shall include the cost installed of compressor station 
equipment and associated appliances used in connection with distribution 
system operations.

                                  Items

    1. Boiler plant, coal handling and ash handling equipment for steam 
powered compressor station.
    2. Compressed air system equipment.
    3. Compressor equipment and driving units, including auxiliaries, 
foundations, guard rails and enclosures, etc.
    4. Electric system equipment, including generating equipment and 
driving units power wiring, transformers, regulators, battery equipment, 
switchboard, etc.
    5. Fire fighting equipment.
    6. Gas lines and equipment, including fuel supply lines, cooling 
tower and pond and associated equipment, dehydrators, fuel gas mixers, 
special pipe bends and connections, and associated scrubbers, 
separators, tanks, gauges and instruments.
    7. Laboratory and testing equipment.
    8. Lubricating oil system, including centrifuge, filter, tanks, 
purifier, and lubricating oil piping, etc.
    9. Office furniture and fixtures and general equipment such as steel 
lockers, first-aid equipment, gasoline dispensing equipment, lawn 
mowers, incinerators, etc.
    10. Shop tools and equipment.
    11. Water supply and circulation system, including water well, tank 
water piping, cooling tower, spray fence and water treatment equipment, 
etc., but not including water system equipment solely for domestic and 
general use.
378 Measuring and regulating station equipment--General.
    This account shall include the cost installed of meters, gauges and 
other equipment used in measuring and regulating gas in connection with 
distribution system operations other than the measurement of gas 
deliveries to customers.

                                  Items

    1. Automatic control equipment.
    2. Foundations.
    3. Gauges and instruments.
    4. Governors or regulators.
    5. Meters.
    6. Odorizing equipment.
    7. Oil fogging equipment.
    8. Piping.
    9. Pressure relief equipment.
    10. Vaults or pits, including valves contained therein.


[[Page 687]]


    Note: By-passes outside governor pits are includible in account 376, 
Mains.
379 Measuring and regulating station equipment--City gate check 
stations.
    This account shall include the cost installed of meters, gauges, and 
other equipment used in measuring and regulating the receipt of gas at 
entry points to distribution systems.

    Note: Pipeline companies, including companies who measure deliveries 
of gas to their own distribution system, shall include in the 
transmission function classification city gate and main line industrial 
measuring and regulating stations.

                                  Items

    (See account 378 for items.)
380 Services.
    A. This account shall include the cost installed of service pipes 
and accessories leading to the customers' premises.
    B. A complete service begins with the connection on the main and 
extends to but does not include the connection with the customer's 
meter. A stub service extends from the main to the property line, or the 
curb stop.
    C. Services which have been used but have become inactive shall be 
retired from utility plant in service immediately if there is no 
prospect for reuse, and, in any event, shall be retired by the end of 
the second year following that during which the service became inactive 
unless reused in the interim.

                                  Items

    1. Curb valves and curb boxes.
    2. Excavation, including shoring, bracing, bridging, pumping, 
backfill, and disposal of excess excavated material.
    3. Landscaping, including lawns, and shrubbery.
    4. Municipal inspection.
    5. Pavement disturbed, including cutting and replacing pavement, 
pavement base, and sidewalks.
    6. Permits.
    7. Pipe and fittings, including saddle, T, or other fitting on 
street main.
    8. Pipe coating.
    9. Pipe laying.
    10. Protection of street openings.
    11. Service drips.
    12. Service valves, at head of service, when installed or furnished 
by the utility.
381 Meters.
    A. This account shall include the cost installed of meters or 
devices and appurtenances thereto, for use in measuring gas delivered to 
users, whether actually in service or held in reserve.
    B. When a meter is permanently retired from service, the installed 
cost included herein shall be credited to this account.
    C. The records of meters shall be so kept that the utility can 
furnish information as to the number of meters of each type and capacity 
in service and in reserve as well as the location of each meter.

                                  Items

    1. Meters, including badging and initial testing.
Meter installations:
    2. Cocks.
    3. Labor.
    4. Locks.
    5. Meter bars.
    6. Pipe and fittings.
    7. Seals.
    8. Shelves.
    9. Swivels and bushings.
    10. Transportation.

    Note A: At the option of the utility, costs of meter installations 
may be accounted for separately from the cost of meters in accordance 
with the provisions of account 382, Meter Installations. The practice of 
the utility, however, shall be consistent from year to year and 
throughout the utility's system.
    Note B: The cost of removing and resetting meters shall be charged 
to account 878, Meter and House Regulator Expenses.
382 Meter installations.
    A. This account shall include the cost of labor and materials used, 
and expenses incurred in connection with the original installation of 
customer meters.
    B. When a meter installation is permanently retired from service, 
the cost thereof shall be credited to this account.

                                  Items

    1. Cocks.
    2. Locks.
    3. Labor.
    4. Meter bars.
    5. Pipe and fittings.
    6. Seals.
    7. Shelves.
    8. Swivels and bushings.

[[Page 688]]

    9. Transportation.

    Note: At the option of the utility, meter installations may be 
accounted for as part of the cost installed of meters, in accordance 
with the provisions of account 381, Meters. The practice of the utility, 
however, shall be consistent from year to year and throughout the 
utility's system.
383 House regulators.
    A. This account shall include the cost installed of house regulators 
whether actually in service or held in reserve.
    B. When a house regulator is permanently retired from service, the 
installed cost thereof shall be credited to this account.

                                  Items

    1. House regulator.
House regulator installations:
    2. Cocks.
    3. Labor.
    4. Locks.
    5. Pipe and fittings.
    6. Regulator vents.
    7. Swivels and bushings.
    8. Transportation.

    Note: At the option of the utility, costs of house regulator 
installations may be accounted for separately from the cost of house 
regulators in accordance with the provisions of account 384, House 
Regulator Installations. The practice of the utility, however, shall be 
consistent from year to year and throughout the utility's system.
384 House regulator installations.
    A. This account shall include the cost of labor and materials used 
and expenses incurred in connection with the original installation of 
house regulators.
    B. When a house regulator installation is permanently retired from 
service, the cost thereof shall be credited to this account.

                                  Items

    1. Cocks.
    2. Labor.
    3. Locks.
    4. Pipe and fittings.
    5. Regulator vents.
    6. Swivels and bushings.
    7. Transportation.

    Note: At the option of the utility, house regulator installations 
may be accounted for as part of the cost installed of house regulators 
in accordance with the provisions of account 383. House Regulators. The 
practice, however, shall be consistent from year to year and throughout 
the utility's system.
385 Industrial measuring and regulating station equipment.
    This account shall include the cost of special and expensive 
installations of measuring and regulating station equipment, located on 
the distribution system, serving large industrial customers.

                                  Items

    (See account 378 for items.)

    Note A: Do not include in this account measuring and regulating 
station equipment serving main line industrial customers. (See account 
369.
    Note B: By-passes outside of governor pits are includible in account 
376, Mains.
386 Other property on customers' premises.
    This account shall include the cost, including first setting and 
connecting, of equipment owned by the utility installed on customer 
premises which is not includible in other accounts.
387 Other equipment.
    This account shall include the cost installed of all other 
distribution system equipment not provided for in the foregoing 
accounts, including street lighting equipment.

                                  Items

    1. Carbon monoxide tester and indicators.
    2. Explosimeters.
    3. Fire extinguisher.
    4. Gas masks.
    5. Lockers.
    6. Portable pump.
    7. Recording gauges.
    8. Street lighting equipment.
    9. Test meters.
    10. Watchmen's clocks.
388 Asset retirement costs for distribution plant.
    This account shall include asset retirement costs on plant included 
in the distribution plant function.
389 Land and land rights.
    This account shall include the cost of land and land rights used for 
utility purposes, the cost of which is not properly includible in other 
land and land

[[Page 689]]

rights accounts. (See gas plant instruction 7.)
390 Structures and improvements.
    This account shall include the cost in place of structures and 
improvements used for utility purposes, the cost of which is not 
properly includible in other structures and improvements accounts. (See 
gas plant instruction 8.)
391 Office furniture and equipment.
    This account shall include the cost of office furniture and 
equipment owned by the utility and devoted to utility service, and not 
permanently attached to buildings, except the cost of such furniture and 
equipment which the utility elects to assign to other plant accounts on 
a functional basis.

                                  Items

    1. Book cases and shelves.
    2. Desks, chairs, and desk equipment.
    3. Drafting-room equipment.
    4. Filing, storage and other cabinets.
    5. Floor covering.
    6. Library and library equipment.
    7. Mechanical office equipment such as accounting machines, 
typewriters, etc.
    8. Safes.
    9. Tables.
392 Transportation equipment.
    This account shall include the cost of transportation vehicles used 
for utility purposes.

                                  Items

    1. Airplanes.
    2. Automobiles.
    3. Bicycles.
    4. Electrical vehicles.
    5. Motor trucks.
    6. Motorcycles.
    7. Repair cars or trucks.
    8. Tractors and trailers.
    9. Other transportation vehicles.
393 Stores equipment.
    This account shall include the cost of equipment used for the 
receiving, shipping, handling and storage of materials and supplies.

                                  Items

    1. Chain falls.
    2. Counters.
    3. Cranes (portable).
    4. Elevating and stacking equipment (portable).
    5. Hoists.
    6. Lockers.
    7. Scales.
    8. Shelving.
    9. Storage bins.
    10. Trucks, hand and power driven.
    11. Wheelbarrows.
394 Tools, shop and garage equipment.
    This account shall include the cost of tools, implements, and 
equipment used in construction, repair work, general shops and garages 
and not specifically provided for or includible in other accounts.

                                  Items

    1. Air compressors.
    2. Anvils.
    3. Automobile repair shop equipment.
    4. Battery charging equipment.
    5. Belts, shafts and countershafts.
    6. Boilers.
    7. Cable pulling equipment.
    8. Concrete mixers.
    9. Derricks.
    10. Drill presses.
    11. Electric equipment.
    12. Engines.
    13. Forges.
    14. Foundations and settings specially constructed for equipment in 
this account and not expected to outlast the equipment for which 
provided.
    15. Furnaces.
    16. Gas producers.
    17. Gasoline pumps, oil pumps, and storage tanks.
    18. Greasing tools and equipment.
    19. Hoists.
    20. Ladders.
    21. Lathes.
    22. Machine tools.
    23. Motor driven tools.
    24. Motors.
    25. Pipe threading and cutting tools.
    26. Pneumatic tools.
    27. Pumps.
    28. Riveters.
    29. Smithing equipment.
    30. Tool racks.
    31. Vises.
    32. Welding apparatus.
    33. Work benches.
395 Laboratory equipment.
    This account shall include the cost installed of laboratory 
equipment used for general laboratory purposes and not specially 
provided for or includible in other departmental or functional plant 
accounts.

                                  Items

    1. Balances and scales.

[[Page 690]]

    2. Barometers.
    3. Calorimeters-bomb, flow, recording types, etc.
    4. Electric furnaces.
    5. Gas burning equipment.
    6. Gauges.
    7. Glassware, beakers, burettes, etc.
    8. Humidity testing apparatus.
    9. Laboratory hoods.
    10. Laboratory tables and cabinets.
    11. Muffles.
    12. Oil analysis apparatus.
    13. Piping.
    14. Specific gravity apparatus.
    15. Standard bottles for meter prover testing.
    16. Stills.
    17. Sulphur and ammonia apparatus.
    18. Tar analysis apparatus.
    19. Thermometers--indicating and recording.
    20. Any other item of equipment for testing gas, fuel, flue gas, 
water, residuals, etc.
396 Power operated equipment.
    This account shall include the cost of power operated equipment used 
in construction or repair work exclusive of equipment includible in 
other accounts. Include, also, the tools and accessories acquired for 
use with such equipment and the vehicle on which such equipment is 
mounted.

                                  Items

    1. Air compressors, including driving unit and vehicle.
    2. Back filling machines.
    3. Boring machines.
    4. Bulldozers.
    5. Cranes and hoists.
    6. Diggers.
    7. Engines.
    8. Pile drivers.
    9. Pipe cleaning machines.
    10. Pipe coating or wrapping machines.
    11. Tractors--Crawler type.
    12. Trenchers.
    13. Other power operated equipment.

    Note: It is intended that this account include only such large units 
as are generally self-propelled or mounted on movable equipment.
397 Communication equipment.
    This account shall include the cost installed of telephone, 
telegraph and wireless equipment for general use in connection with the 
utility's gas operations. (See account 370 for communication equipment 
used wholly or predominantly in connection with operation and 
maintenance of the transmission system.)

                                  Items

    1. Carrier terminal equipment including repeaters, power supply 
equipment, transmitting and receiving sets.
    2. Microwave equipment, including power supply equipment, 
transmitters, amplifiers, paraboloids, towers, reflectors, receiving 
equipment, etc.
    3. Radio equipment, fixed and mobile, including antenna, power 
equipment, transmitters and receivers, and portable receiver-transmitter 
units.
    4. Telephone equipment including switchboards, power and testing 
equipment, conductors, pole lines, etc.
398 Miscellaneous equipment.
    This account shall include the cost of equipment, apparatus, etc., 
used and useful in gas operations, which is not includible in any other 
account.

                                  Items

    1. Hospital and infirmary equipment.
    2. Kitchen equipment.
    3. Operator's cottage furnishings.
    4. Radios.
    5. Recreation equipment.
    6. Restaurant equipment.
    7. Soda fountains.
    8. Other miscellaneous equipment.

    Note: Miscellaneous equipment of the nature indicated above wherever 
practicable shall be assigned to the utility plant accounts on a 
functional basis.
399 Other tangible property.
    This account shall include the cost of tangible utility plant not 
provided for elsewhere.
399.1 Asset retirement costs for general plant.
    This account shall include asset retirement costs on plant included 
in the general plant function.

                        Income Chart of Accounts

                       1. Utility Operating Income

                           operating expenses

400 Operating revenues.
401 Operation expense.
402 Maintenance expense.
403 Depreciation expense.
404.1 Amortization and depletion of producing natural gas land and land 
rights.
404.2 Amortization of underground storage land and land rights.

[[Page 691]]

404.3 Amortization of other limited-term gas plant.
405 Amortization of other gas plant.
406 Amortization of gas plant acquisition adjustments.
407.1 Amortization of property losses, unrecovered plant and regulatory 
study costs.
407.2 Amortization of conversion expense.
407.3 Regulatory debits.
407.4 Regulatory credits.
408 [Reserved]
408.1 Taxes other than income taxes, utility operating income.
409 [Reserved]
409.1 Income taxes, utility operating income.
410 [Reserved]
410.1 Provision for deferred income taxes, utility operating income.
411 [Reserved]
411.1 Provision for deferred income taxes--Credit, utility operating 
income.
411.3 [Reserved]
411.4 Investment tax credit adjustments, utility operations.
411.6 Gains from disposition of utility plant.
411.7 Losses from disposition of utility plant. Total utility operating 
expenses.

                         other operating income

412 Revenues from gas plant leased to others.
413 Expenses of gas plant leased to others.
414 Other utility operating income. Net utility operating income.

                     2. Other Income and Deductions

                             a. other income

415 Revenues from merchandising, jobbing and contract work.
416 Costs and expenses of merchandising, jobbing and contract work.
417 Revenues from nonutility operations.
417.1 Expenses of nonutility operations.
418 Nonoperating rental income.
418.1 Equity in earnings of subsidiary companies.
419 Interest and dividend income.
419.1 Allowance for other funds used during construction.
421 Miscellaneous nonoperating income.
421.1 Gain on disposition of property. Total other income.

                       b. other income deductions

421.2 Loss on disposition of property.
425 Miscellaneous amortization.
426 [Reserved]
426.1 Donations.
426.2 Life insurance.
426.3 Penalties.
426.4 Expenditures for certain civic, political and related activities.
426.5 Other deductions. Total other income deductions. Total other 
income and deductions.

           c. taxes applicable to other income and deductions

408.2 Taxes other than income taxes, other income and deductions.
409.2 Income taxes, other income and deductions.
410.2 Provision for deferred income taxes, other income and deductions.
411.2 Provision for deferred income taxes--Credit, other income and 
deductions.
411.5 Investment tax credit adjustments, nonutility operations.
420 Investment tax credits. Total taxes on other income and deductions. 
Net other income and deductions.

                           3. Interest Charges

427 Interest on long-term debt.
428 Amortization of debt discount and expense.
428.1 Amortization of loss on reacquired debt.
429 Amortization of premium on debt--Credit.
429.1 Amortization of gain on reacquired debt--Credit.
430 Interest on debt to associated companies.
431 Other interest expense.
432 Allowance for borrowed funds used during construction--Credit. Net 
interest charges.

                         4. Extraordinary Items

434 Extraordinary income.
435 Extraordinary deductions.
409.3 Income taxes, extraordinary items. Net income



Income Accounts--Table of Contents



400 Operating revenues.
    There shall be shown under this caption the total amount included in 
the gas operating revenue accounts provided herein.
401 Operation expense.
    There shall be shown under this caption the total amount included in 
the gas operation expense accounts provided herein. (See note to 
operating expense instruction 3.)
402 Maintenance expense.
    There shall be shown under this caption the total amount included in 
the gas maintenance expense accounts provided herein.
403 Depreciation expense.
    A. This account shall include the amount of depreciation expense for 
all classes of depreciable gas plant in service except such depreciation 
expense as

[[Page 692]]

is chargeable to clearing accounts or to account 416, Costs and Expenses 
of Merchandising, Jobbing and Contract Work.
    B. The utility shall keep such records of property and property 
retirements as will reflect the service life of property which has been 
retired and aid in estimating probable service life by mortality, 
turnover, or other appropriate methods; and also such records as will 
reflect the percentage of salvage and cost of removal for property 
retired from each account, or subdivision thereof, for depreciable gas 
plant.

    Note A: Depreciation expense applicable to property included in 
account 104, Gas Plant Leased to Others, shall be charged to account 
413, Expenses of Gas Plant Leased to Others.
    Note B: Depreciation expense applicable to transportation equipment, 
shop equipment, tools, work equipment, power operated equipment and 
other general equipment may be charged to clearing accounts as necessary 
in order to obtain a proper distribution of expenses between 
construction and operation.
403.1 Depreciation expense for asset retirement costs.
    This account shall include the depreciation expense for asset 
retirement costs included in gas utility plant in service.
404.1 Amortization and depletion of producing natural gas land and land 
rights.
    A. This account shall include charges for amortization and depletion 
of producing natural gas land and land rights. (See account 111, 
Accumulated Provision for Amortization and Depletion of Gas Utility 
Plant).
    B. The charges to this account shall be made in such manner as to 
distribute the cost of producing natural gas land and land rights over 
the period of their benefit to the utility, based upon the exhaustion of 
the natural gas deposits recoverable from such land and land rights.
404.2 Amortization of underground storage land and land rights.
    A. This account shall include charges for amortization of land and 
land rights of underground storage projects for natural gas. (See 
account 111, Accumulated Provision for Amortization and Depletion of Gas 
Utility Plant.)
    B. The charges to this account shall be made in such manner as to 
distribute the cost of amortizable land and land rights over the period 
of their benefit to the utility, and with respect to any land or land 
rights which include native gas in the storage reservoir, such amounts 
shall be amortized or depleted on the basis of production of such native 
gas after the volume of stored gas has been withdrawn from the 
reservoir.
404.3 Amortization of other limited-term gas plant.
    This account shall include amortization charges applicable to 
amounts included in the gas plant accounts for limited-term franchises, 
licenses, patent rights limited-term interests in land, and expenditures 
on leased property where the service life of the improvements is 
terminable by action of the lease. The charges to this account shall be 
such as to distribute the book cost of each investment as evenly as may 
be over the period of its benefit to the utility. (See account 111, 
Accumulated Provision for Amortization and Depletion of Gas Utility 
Plant.)
405 Amortization of other gas plant.
    A. When authorized by the Commission, this account shall include 
charges for amortization of intangible or other gas utility plant, which 
does not have a definite or terminable life and which is not subject to 
charges for depreciation expense.
    B. This account shall be supported in such detail as to show the 
amortization applicable to each investment being amortized, together 
with the book cost of the investment and the period over which it is 
being written off.
406 Amortization of gas plant acquisition adjustments.
    This account shall be debited or credited, as the case may be, with 
amounts includible in operating expenses, pursuant to approval or order 
of the Commission, for the purpose of providing for the extinguishment 
of the amount in account 114, Gas Plant Acquisition Adjustments.

[[Page 693]]

407.1 Amortization of property losses, unrecovered plant and regulatory 
study costs.
    This account shall be charged with amounts credited to Account 
182.1, Extraordinary Property Losses, and Account 182.2 Unrecovered 
Plant and Regulatory Study Costs, when the Commission has authorized the 
amount in the latter account to be amortized by charges to gas operating 
expenses.
407.2 Amortization of conversion expenses.
    This account shall be charged with amortization of amounts 
authorized by the Commission to be included in Account 186, 
Miscellaneous Deferred Debits, for expenses incurred in the conversion 
of distribution plant from manufactured gas service to natural gas 
service.
407.3 Regulatory debits.
    This account shall be debited, when appropriate, with the amounts 
credited to Account 254, Other Regulatory Liabilities, to record 
regulatory liabilities imposed on the utility by the ratemaking actions 
of regulatory agencies. This account shall also be debited, when 
appropriate, with the amounts credited to Account 182.3, Other 
Regulatory Assets, concurrent with the recovery of such amounts in 
rates.
407.4 Regulatory credits.
    This account shall be credited, when appropriate, with the amounts 
debited to Account 182.3, Other Regulatory Assets, to establish 
regulatory assets. This account shall also be credited, when 
appropriate, with the amounts debited to Account 254, Other Regulatory 
Liabilities, concurrent with the return of such amounts to customers 
through rates.
408 [Reserved]

                          Special Instructions

                        Accounts 408.1 and 408.2

    A. These accounts shall include the amounts of ad valorem, gross 
revenue or gross receipts, taxes, state unemployment insurance, 
franchise taxes, federal excise taxes, social security taxes, and all 
other taxes assessed by federal, state, county, municipal, or other 
local governmental authorities, except income taxes.
    B. These accounts shall be charged in each accounting period with 
the amounts of taxes which are applicable thereto, with concurrent 
credits to account 236, Taxes Accrued, or account 165, Prepayments, as 
appropriate. When it is not possible to determine the exact amounts of 
taxes, the amounts shall be estimated and adjustments made in current 
accruals as the actual tax levies become known.
    C. The charges to these accounts shall be made or supported so as to 
show the amount of each tax and the basis upon which each charge is 
made. In the case of a utility rendering more than one utility service, 
taxes of the kind includible in these accounts shall be assigned 
directly to the utility department the operation of which gave rise to 
the tax in so far as a specific utility department, it shall be 
distributed among the utility departments or nonutility operations on an 
equitable basis after appropriate study to determine such basis.

    Note A: Special assessments for street and similar improvements 
shall be included in the appropriate utility plant or nonutility 
property account.
    Note B: Taxes specifically applicable to construction shall be 
included in the cost of construction.
    Note C: Gasoline and other sales taxes shall be charged as far as 
practicable to the same amount as the materials on which the tax is 
levied.
    Note D: Social security and other forms of so-called payroll taxes 
shall be distributed to utility departments and to nonutility functions 
on a basis related to payroll. Amounts applicable to construction shall 
be charged to the appropriate plant accounts.
    Note E: Interest on tax refunds or deficiencies shall not be 
included in these accounts but in account 419, Interest and Dividend 
Income, or 431, Other Interest Expense, as appropriate.
408.1 Taxes other than income taxes, utility operating income.
    This account shall include those taxes other than income taxes which 
relate to utility operating income This account shall be maintained so 
as to allow ready identification of the various classes of taxes 
relating to Utility Operating Income (by department), Utility Plant 
Leased to Others and Other Utility Operating Income.

[[Page 694]]

408.2 Taxes other than income taxes, other income and deductions.
    This account shall include those taxes other than income taxes which 
relate to Other Income and Deductions.
409 [Reserved]

                          Special Instructions

                     Accounts 409.1, 409.2 and 409.3

    A. These accounts shall include the amounts of local, state and 
federal income taxes on income properly accruable during the period 
covered by the income statement to meet the actual liability for such 
taxes. Concurrent credits for the tax accruals shall be made to account 
236, Taxes Accrued, and as the exact amounts of taxes become known, the 
current tax accruals shall be adjusted by charges or credits to these 
accounts so that these accounts as nearly as can be ascertained shall 
include the actual taxes payable by the utility.
    B. The accruals for income taxes shall be apportioned among utility 
departments and to Other Income and Deductions so that, as nearly as 
practicable, each tax shall be included in the expenses of the utility 
department or Other Income and Deductions, the income from which gave 
rise to the tax. The tax effects relating to Interest Charges shall be 
allocated between utility and nonutility operations. The basis for this 
allocation shall be the ratio of net investment in utility plant to net 
investment in nonutility plant.

    Note A: Taxes assumed by the utility on interest shall be charged to 
account 431, Other Interest Expense.
    Note B: Interest on tax refunds or deficiencies shall not be 
included in these accounts but in account 419, Interest and Dividend 
Income, or account 431, Other Interest Expense, as appropriate.
409.1 Income taxes, utility operating income.
    This account shall include the amount of those local, state and 
federal income taxes which relate to utility operating income. This 
account shall be maintained so as to allow ready identification of tax 
effects (both positive and negative) relating to Utility Operating 
Income (by department), Utility Plant Leased to Others and Other Utility 
Operating Income.
409.2 Income taxes, other income and deductions.
    This account shall include the amount of those local, state and 
federal income taxes (both positive and negative), which relate to Other 
Income and Deductions.
409.3 Income taxes, extraordinary items.
    This account shall include the amount of those local, state and 
federal income taxes (both positive and negative), which relate to 
Extraordinary Items.
410 [Reserved]

                          Special Instructions

                 Accounts 410.1, 410.2, 411.1 and 411.2

    A. Accounts 410.1 and 410.2 shall be debited, and Accumulated 
Deferred Income Taxes shall be credited with amounts equal to any 
current deferrals of taxes on income or any allocations of deferred 
taxes originating in prior periods, as provided by the texts of accounts 
190, 281, 282 and 283. There shall not be netted against entries 
required to be made to these accounts any credit amounts appropriately 
includible in accounts 411.1 or 411.2.
    B. Accounts 411.1 and 411.2 shall be credited, and Accumulated 
Deferred Income Taxes shall be debited with amounts equal to any 
allocations of deferred taxes originating in prior periods or any 
current deferrals of taxes on income, as provided by the texts of 
accounts 190, 281, 282, and 283. There shall not be netted against 
entries required to be made to these accounts any debit amounts 
appropriately includible in accounts 410.1 or 410.2.
410.1 Provision for deferred income taxes, utility operating income.
    This account shall include the amounts of those deferrals of taxes 
and allocations of deferred taxes which relate to Utility Operating 
Income (by department).
410.2 Provision for deferred income taxes, other income and deductions.
    This account shall include the amounts of those deferrals of taxes 
and allocations of deferred taxes which relate to other income and 
deductions.
411 [Reserved]
411.1 Provision for deferred income taxes--Credit, utility operating 
income.
    This account shall include the amounts of those allocations of 
deferred taxes and deferrals of taxes,

[[Page 695]]

credit, which relate to Utility Operating Income (by department).
411.2 Provision for deferred income taxes--Credit, other income and 
deductions.
    This account shall include the amounts of those allocations of 
deferred taxes and deferrals of taxes, credit, which relate to Other 
Income and Deductions.
411.3 [Reserved]

                          Special Instructions

                        Accounts 411.4 and 411.5

    A. Account 411.4 shall be debited with the amounts of investment tax 
credits related to gas utility property that are credited to account 
255, Accumulated Deferred Investment Tax Credits, by companies which do 
not apply the entire amount of the benefits of the investment credit as 
a reduction of the overall income tax expense in the year in which such 
credit is realized (see account 255).
    B. Account 411.4 shall be credited with the amounts debited to 
account 255 for proportionate amounts of tax credit deferrals allocated 
over the average useful life of gas utility property to which the tax 
credits relate or such lesser period of time as may be adopted and 
consistently followed by the company.
    C. Account 411.5 shall also be debited and credited as directed in 
paragraphs A and B, for investment tax credits related to non- utility 
property.
411.4 Investment tax credit adjustments, utility operations.
    This account shall include the amount of those investment tax credit 
adjustments related to property used in Utility Operations (by 
department).
411.5 Investment tax credit adjustments, nonutility operations.
    This account shall include the amount of those investment tax credit 
adjustments related to property used in Nonutility Operations.
411.6 Gains from disposition of utility plant.
    A. This account shall include, as approved by the Commission, 
amounts relating to gains from the disposition of future use utility 
plant including amounts which were previously recorded in and 
transferred from account 105, Gas Plant Held for Future Use and account 
105.1, Production Properties Held for Future Use, under the provisions 
of paragraphs B, C, and D thereof. Income taxes relating to gains 
recorded in this account shall be recorded in account 409.1, Income 
Taxes, Utility Operating Income.
    B. The utility shall record in this account gains resulting from the 
settlement of asset retirement obligations related to utility plant in 
accordance with the accounting prescribed in General Instruction 24.
411.7 Losses from disposition of utility plant.
    A. This account shall include, as approved by the Commission, 
amounts relating to losses from the disposition of future use utility 
plant including amounts which were previously recorded in and 
transferred from account 105, Gas Plant Held for Future Use and account 
105.1, Production Properties Held for Future Use, under the provisions 
of paragraphs B, C, and D thereof. Income taxes relating to losses 
recorded in this account shall be recorded in account 409.1, Income 
Taxes, Utility Operating Income.
    B. The utility shall record in this account losses resulting from 
the settlement of asset retirement obligations related to utility plant 
in accordance with the accounting prescribed in General Instruction 24.
411.10 Accretion expense.
    This account shall be charged for accretion expense on the 
liabilities associated with asset retirement obligations included in 
account 230, Asset retirement obligations, related to gas utility plant.
412 Revenues from gas plant leased to others.
413 Expenses of gas plant leased to others.
    A. These accounts shall include, respectively, revenues from gas 
property constituting a distinct operating unit or system leased by the 
utility to others, and which property is properly includible in account 
104, Gas Plant Leased to Others, and the expenses attributable to such 
property.

[[Page 696]]

    B. The detail of expenses shall be kept or supported so as to show 
separately the following:

    Operation.
    Maintenance.
    Depreciation.
    Amortization.

    Note: Related taxes shall be recorded in account 408.1, Taxes Other 
Than Income Taxes, Utility Operating Income, or account 409.1, Income 
Taxes, Utility Operating Income, as appropriate.
414 Other utility operating income.
    A. This account shall include the revenues received and expenses 
incurred in connection with the operations of utility plant, the book 
cost of which is included in account 118, Other Utility Plant.
    B. The expenses shall include every element of cost incurred in such 
operations, including depreciation, rents, and insurance.

    Note: Related taxes shall be recorded in account 408.1, Taxes Other 
Than Income Taxes, Utility Operating Income, or account 409.1, Income 
Taxes, Utility Operating Income, as appropriate.
415 Revenues from merchandising, jobbing and contract work.
416 Costs and expenses of merchandising, jobbing and contract work.
    A. These accounts shall include, respectively, all revenues derived 
from the sale of merchandise and jobbing or contract work, including any 
profit or commission accruing to the utility on jobbing work performed 
by it as agent under contracts whereby it does jobbing work for another 
for a stipulated profit or commission, and all expenses incurred in such 
activities. Interest related income from installment sales shall be 
recorded in Account 419, Interest and Dividend Income.
    B. Records in support of these accounts shall be so kept as to 
permit ready summarization of revenues, costs and expenses by such major 
items as are feasible.

    Note A: The classification of revenues, costs and expenses of 
merchandising, jobbing and contract work as nonoperating, and thus 
inclusion in this account, is for accounting purposes. It does not 
preclude consideration for justification to the contrary for ratemaking 
or other purpose.
    Note B: Related taxes shall be recorded in account 408.2, Taxes 
Other Than Income Taxes, Other Income and Deductions, or account 409.2, 
Income Taxes, Other Income and Deductions, as appropriate.

                                  Items

Account 415:
    1. Revenues from sale of merchandise and from jobbing and contract 
work.
    2. Discounts and allowances made in settlement of bills for 
merchandise and jobbing work.

Account 416:
Labor:
    1. Canvassing and demonstrating appliances in homes and other places 
for the purpose of selling appliances.
    2. Demonstrating and selling activities in sales rooms.
    3. Installing appliances on customer premises where such work is 
done only for purchasers of appliances from the utility.
    4. Installing piping or other property work on a jobbing or contract 
basis.
    5. Preparing advertising materials for appliance sales purposes.
    6. Receiving and handling customer orders for merchandise or for 
jobbing services.
    7. Cleaning and tidying sales rooms.
    8. Maintaining display counters and other equipment used in 
merchandising.
    9. Arranging merchandise in sales rooms and decorating display 
windows.
    10. Reconditioning repossessed appliances.
    11. Bookkeeping and other clerical work in connection with 
merchandise and jobbing activities.
    12. Supervising merchandise and jobbing operations.

Materials and expenses:
    13. Advertising in newspapers, periodicals, radio, television, etc.
    14. Cost of merchandise sold and of materials used in jobbing work.
    15. Stores expenses on merchandise and jobbing stocks.
    16. Fees and expenses of advertising and commercial artists' 
agencies.
    17. Printing booklets, dodgers, and other advertising data.
    18. Premiums given as inducement to buy appliances.
    19. Light, heat, and power.
    20. Depreciation on equipment used primarily for merchandise and 
jobbing operations.
    21. Rent of sales rooms or of equipment.
    22. Transportation expense in delivery and pick-up of appliances by 
utility's facilities or by others.
    23. Stationery and office supplies and expenses.
    24. Losses from uncollectible merchandise and jobbing accounts.

[[Page 697]]

417 Revenues from nonutility operations.
417.1 Expenses of nonutility operations.
    A. These accounts shall include revenues and expenses applicable to 
operations which are nonutility in character but nevertheless constitute 
a distinct operating activity of the enterprise as a whole, such as the 
operation of an ice department where applicable statutes do not define 
such operation as a utility, or the operation of a servicing 
organization for furnishing supervision, management, engineering, and 
similar services to others.
    B. The expenses shall include all elements of costs incurred in such 
operations, and the accounts shall be maintained so as to permit ready 
summarization as follows:

    Operation.
    Maintenance.
    Rents.
    Depreciation.
    Amortization.

    Note B: Related taxes shall be recorded in account 408.2, Taxes 
Other Than Income Taxes, Other Income and Deductions, or account 409.2, 
Income Taxes, Other Income and Deductions, as appropriate.
418 Nonoperating rental income.
    A. This account shall include all rent revenues and related expenses 
of land, buildings, or other property included in account 121, 
Nonutility Property, which is not used in operations covered by accounts 
417 or 417.1.
    B. The expenses shall include all elements of costs incurred in the 
ownership and rental of property and the accounts shall be maintained so 
as to permit ready summarization as follows:

    Operation.
    Maintenance.
    Rents.
    Depreciation.
    Amortization.

    Note: Related taxes shall be recorded in account 408.2, Taxes Other 
Than Income Taxes, Other Income and Deductions, or account 409.2, Income 
Taxes, Other Income and Deductions, as appropriate.
418.1 Equity in earnings of subsidiary companies.
    This account shall include the utility's equity in the earnings or 
losses of subsidiary companies for the year.
419 Interest and dividend income.
    A. This account shall include interest revenues on securities, 
loans, notes, advances, special deposits, tax refunds and all other 
interest-bearing assets, and dividends on stocks of other companies, 
whether the securities on which the interest and dividends are received 
are carried as investments or included in sinking or other special fund 
accounts.
    B. This account may include the pro rata amount necessary to 
extinguish (during the interval between the date of acquisition and the 
date of maturity) the difference between the cost to the utility and the 
face value of interest-bearing securities. Amounts thus credited or 
charged shall be concurrently included in the accounts in which the 
securities are carried.
    C. Where significant in amount expenses, excluding operating taxes 
and income taxes, applicable to security investments and to interest and 
dividend revenues thereon shall be charged hereto.

    Note A: Related taxes shall be recorded in account 408.2, Taxes 
Other Than Income Taxes, Other Income and Deductions, or account 409.2, 
Income Taxes, Other Income and Deductions, as appropriate.
    Note B: Interest accrued, the payment of which is not reasonably 
assured, dividends receivable which have not been declared or 
guaranteed, and interest or dividends upon reacquired securities issued 
or assumed by the utility shall not be credited to this account.
419.1 Allowance for other funds used during construction.
    This account shall include concurrent credits for allowance for 
other funds used during construction, not to exceed amounts computed in 
accordance with the formula prescribed in Gas Plant Instruction 3(17).
420 Investment tax credits.
    This account shall be credited as follows with investment tax credit 
amounts not passed on to customers:

[[Page 698]]

    (a) By amounts equal to debits to accounts 411.4, Investment Tax 
Credit Adjustments, Utility Operations, and 411.5, Investment Tax Credit 
Adjustments, Nonutility Operations, for investment tax credits used in 
calculating income taxes for the year when the company's accounting 
provides for nondeferral of all or a portion of such credits; and,
    (b) By amounts equal to debits to account 255, Accumulated Deferred 
Investment Tax Credits, for proportionate amounts of tax credit 
deferrals allocated over the average useful life of the property to 
which the tax credits relate, or such lesser period of time as may be 
adopted and consistently used by the company.
421 Miscellaneous nonoperating income.
    This account shall include all revenue and expense items except 
taxes properly includible in the income account and not provided for 
elsewhere. Related taxes shall be recorded in account 408.2, Taxes Other 
Than Income Taxes, Other Income and Deductions, or account 409.2, Income 
Taxes, Other Income and Deductions, as appropriate.

                                  Items

    1. Profit on sale of timber. (See gas plant instruction 7C.)
    2. Profits from operations of others realized by the utility under 
contracts.
    3. Gains on disposition of investments. Also gains on reacquisition 
and resale or retirement of utilities debt securities when the gain is 
not amortized and used by a jurisdictional regulatory agency to reduce 
embedded debt cost in establishing rates. See General Instruction 17.
    4. This account shall include the accretion expense on the liability 
for an asset retirement obligation included in account 230, Asset 
retirement obligations, related to nonutility plant.
    5. This account shall include the depreciation expense for asset 
retirement costs related to nonutility plant.
    6. The utility shall record in this account gains resulting from the 
settlement of asset retirement obligations related to nonutility plant 
in accordance with the accounting prescribed in General Instruction 24.
421.1 Gain on disposition of property.
    This account shall be credited with the gain on the sale, 
conveyance, exchange or transfer of utility or other property to 
another. Amounts relating to gains on land and land rights held for 
future use recorded in accounts 105, Gas Plant Held for Future Use and 
105.1, Production Properties Held for Future Use, will be accounted for 
as prescribed in paragraphs B, C, and D thereof. (See gas plant 
instructions 5F, 7E, and 10E.) Income taxes on gains recorded in this 
account shall be recorded in account 409.2, Income Taxes, Other Income 
and Deductions.
421.2 Loss on disposition of property.
    This account shall be charged with the loss on the sale, conveyance, 
exchange or transfer of utility or other property to another. Amounts 
relating to losses on land and land rights held for future use recorded 
in accounts 105, Gas Plant Held for Future Use and 105.1, Production 
Properties Held for Future Use, will be accounted for as prescribed in 
paragraphs B, C, and D thereof. (See gas plant instructions 5F, 7E, and 
10E.) The reduction in income taxes relating to losses recorded in this 
account shall be recorded in account 409.2, Income Taxes, Other Income 
and Deductions.
425 Miscellaneous amortization.
    This account shall include amortization charges not includible in 
other accounts which are properly deductible in determining the income 
of the utility before interest charges. Charges includible herein, if 
significant in amount, must be in accordance with an orderly and 
systematic amortization program.

                                  Items

    1. Amortization of utility plant acquisition adjustments, or of 
intangibles included in utility plant in service when not authorized to 
be included in utility operating expenses by the Commission.
    2. Other miscellaneous amortization charges allowed to be included 
in this account by the Commission.

                          Special Instructions

              Accounts 426.1, 426.2, 426.3, 426.4 and 426.5

    These accounts shall include miscellaneous expense items which are 
nonoperating in nature but which are properly deductible before 
determining total income before interest charges.


[[Page 699]]


    Note: The classification of expenses as nonoperating and their 
inclusion in these accounts is for accounting purposes. It does not 
preclude Commission consideration of proof to the contrary for 
ratemaking or other purposes.
426.1 Donations.
    This account shall include all payments or donations for charitable, 
social or community welfare purposes.
426.2 Life insurance.
    This account shall include all payments for life insurance of 
officers and employees where company is beneficiary (net premiums less 
increase in cash surrender value of policies).
426.3 Penalties.
    This account shall include payments by the company for penalties or 
fines for violation of any regulatory statutes by the company or its 
officials.
426.4 Expenditures for certain civic, political and related activities.
    This account shall include expenditures for the purpose of 
influencing public opinion with respect to the election or appointment 
of public officials, referenda, legislation, or ordinances (either with 
respect to the possible adoption of new referenda, legislation or 
ordinances or repeal or modification of existing referenda, legislation 
or ordinances) or approval, modification, or revocation of franchises; 
or for the purpose of influencing the decisions of public officials, but 
shall not include such expenditures which are directly related to 
appearances before regulatory or other governmental bodies in connection 
with the reporting utility's existing or proposed operations.
426.5 Other deductions.
    This account shall include other miscellaneous expenses which are 
nonoperating in nature, but which are properly deductible before 
determining total income before interest charges.

                                  Items

    1. Loss relating to investments in securities written-off or 
written-down.
    2. Loss on sale of investments.
    3. Loss on reacquisition, resale or retirement of utility's debt 
securities, when the loss is not amortized and used by a jurisdictional 
regulatory agency to increase embedded debt cost in establishing rates. 
See General Instruction 17.
    4. Preliminary survey and investigation expenses related to 
abandoned projects, when not written-off to the appropriate operating 
expense account.
    5. Costs of preliminary abandonment costs recorded in accounts 
182.1, Extraordinary Property Losses, and 182.2, Unrecovered Plant and 
Regulatory Study Costs, not allowed to be amortized to account 407.1, 
Amortization of Property Losses, Unrecovered Plant and Regulatory Study 
Costs.
    6. The utility shall record in this account losses resulting from 
the settlement of asset retirement obligations related to nonutility 
plant in accordance with the accounting prescribed in General 
Instruction 24.
427 Interest on long-term debt.
    A. This account shall include the amount of interest on outstanding 
long-term debt issued or assumed by the utility, the liability for which 
is included in account 221, Bonds, or account 224, Other Long-Term Debt.
    B. This account shall be so kept or supported as to show the 
interest accruals on each class and series of long-term debt.

    Note: This account shall not include interest on nominally issued or 
nominally outstanding long-term debt, including securities assumed.
428 Amortization of debt discount and expense.
    A. This account shall include the amortization of unamortized debt 
discount and expense on outstanding long-term debt. Amounts charged to 
this account shall be credited concurrently to accounts 181, Unamortized 
Debt Expense, and 226, Unamortized Discount on Long-Term Debt--Debit.
    B. This account shall be so kept or supported as to show the debt 
discount and expense on each class and series of long-term debt.
428.1 Amortization of loss on reacquired debt.
    A. This account shall include the amortization of the losses on 
reacquisition of debt. Amounts charged to this account shall be credited 
concurrently to account 189, Unamortized Loss on Reacquired Debt.
    B. This account shall be maintained so as to allow ready 
identification of

[[Page 700]]

the loss amortized applicable to each class and series of long-term debt 
reacquired. See General Instruction 17.
429 Amortization of premium on debt--Credit.
    A. This account shall include the amortization of unamortized net 
premium on outstanding long-term debt. Amounts credited to this account 
shall be charged concurrently to account 225, Unamortized Premium on 
Long-Term Debt.
    B. This account shall be so kept or supported as to show the premium 
on each class and series of long-term debt.
429.1 Amortization of gain on reacquired debt--Credit.
    A. This account shall include the amortization of the gains realized 
from reacquisition of debt. Amounts credited to this account shall be 
charged concurrently to account 257, Unamortized Gain on Reacquired 
Debt.
    B. This account shall be maintained so as to allow ready 
identification of the gains amortized applicable to each class and 
series of long-term debt reacquired. See General Instruction 17.
430 Interest on debt to associated companies.
    A. This account shall include interest accrued on amounts included 
in account 223, Advances from Associated Companies, and on all other 
obligations to associated companies.
    B. The records supporting the entries to this account shall be so 
kept as to show to whom the interest is to be paid, the period covered 
by the accrual, the rate of interest and the principal amount of the 
advances or other obligations on which the interest is accrued.
431 Other interest expense.
    This account shall include all interest charges not provided for 
elsewhere.

                                  Items

    1. Interest on notes payable on demand or maturing one year or less 
from date and on open accounts, except notes and accounts with 
associated companies.
    2. Interest on customers' deposits.
    3. Interest on claims and judgments, tax assessments, and 
assessments for public improvements past due.
    4. Income and other taxes levied upon bondholders of utility and 
assumed by it.
432 Allowance for borrowed funds used during construction--Credit.
    This account shall include concurrent credits for allowance for 
borrowed funds used during construction, not to exceed amounts computed 
in accordance with the formula prescribed in Gas Plant Instruction 
3(17).
434 Extraordinary income.
    This account shall be credited with gains of unusual nature and 
infrequent occurrence, which would significantly distort the current 
year's income computed before Extraordinary Items, if reported other 
than as extraordinary items. Income tax relating to the amounts recorded 
in this account shall be recorded in account 409.3, Income Taxes, 
Extraordinary Items. (See General Instruction 7.)
435 Extraordinary deductions.
    This account shall be debited with losses of unusual nature and 
infrequent occurrence, which would significantly distort the current 
year's income computed before Extraordinary Items, if reported other 
than as extraordinary items. Income tax relating to the amounts recorded 
in this account shall be recorded in account 409.3, Income Taxes, 
Extraordinary Items. (See General Instruction 7.)

                   Retained Earnings Chart of Accounts

433 Balance transferred from income.
436 Appropriations of retained earnings.
437 Dividends declared--preferred stock.
438 Dividends declared--common stock.
439 Adjustments to retained earnings.



Retained Earnings Accounts--Table of Contents



433 Balance transferred from income.
    This account shall include the net credit or debit transferred from 
income for the year.
436 Appropriations of retained earnings.
    This account shall include appropriations of retained earnings.

[[Page 701]]

                                  Items

    1. Appropriations required under terms of mortgages, orders of 
courts, contracts, or other agreements.
    2. Appropriations required by action of regulatory authorities.
    3. Other appropriations made at option of utility for specific 
purposes.
437 Dividends declared--preferred stock.
    A. This account shall include amounts declared payable out of 
retained earnings as dividends on actually outstanding preferred or 
prior lien capital stock issued by the utility.
    B. Dividends shall be segregated for each class and series of 
preferred stock as to those payable in cash, stock and other forms. If 
not payable in cash, the medium of payment shall be described with 
sufficient detail to identify it.
438 Dividends declared--common stock.
    A. This account shall include amounts declared payable out of 
retained earnings as dividends on actually outstanding common capital 
stock issued by the utility.
    B. Dividends shall be segregated for each class of common stock as 
to those payable in cash, stock and other forms. If not payable in cash, 
the medium of payment shall be described with sufficient detail to 
identify it.
439 Adjustments to retained earnings.
    A. This account shall, with prior Commission approval, include 
significant nonrecurring transactions accounted for as prior period 
adjustments, as follows:
    (1) Correction of an error in the financial statements of a prior 
year.
    (2) Adjustments that result from realization of income tax benefits 
of pre-acquisition operating loss carryforwards of purchased 
subsidiaries.

All other items of profit and loss recognized during a year shall be 
included in the determination of net income for that year.
    B. Adjustments, charges, or credits due to losses on reacquisition, 
resale or retirement of the company's own capital stock shall be 
included in this account. (See account 210, Gain on Resale or 
Cancellation of Reacquired Capital Stock, for the treatment of gains.)

                   Operating Revenue Chart of Accounts

                             1. Sales of Gas

480 Residential sales.
481 Commercial and industrial sales.
482 Other sales to public authorities.
483 Sales for resale.
484 Interdepartmental sales.
485 Intracompany transfers.

                       2. Other Operating Revenues

487 Forfeited discounts.
488 Miscellaneous service revenues.
489.1 Revenues from transportation of gas of others through gathering 
facilities.
489.2 Revenues from transportation of gas of others through transmission 
facilities.
489.3 Revenues from transportation of gas of others through distribution 
facilities.
489.4 Revenues from storing gas of others.
490 Sales of products extracted from natural gas.
491 Revenues from natural gas processed by others.
492 Incidental gasoline and oil sales.
493 Rent from gas property.
494 Interdepartmental rents.
495 Other gas revenues.
496 Provision for rate refunds.



Operating Revenue Accounts--Table of Contents



480 Residential sales.
    A. This account shall include the net billing for gas supplied for 
residential or domestic purposes.
    B. Records shall be maintained so that the quantity of gas sold and 
the revenues received under each rate schedule shall be readily 
available.

    Note: When gas supplied through a single meter is used for both 
residential and commercial purposes, the total revenue shall be included 
in this account or account 481, Commercial and Industrial Sales, 
according to the rate schedule which is applied. If the same rate 
schedules are applicable to both residential and commercial service, 
classification shall be according to principal use.
481 Commercial and industrial sales.
    A. This account shall include the net billing for gas supplied to 
commercial and industrial customers.
    B. Records shall be maintained so that the quantity of gas sold and 
revenue received under each rate schedule shall be readily available.

[[Page 702]]

    C. Records shall be maintained so as to show separately the revenues 
from commercial and industrial customers, as follows:

Large commercial and industrial sales (wherein shall be included the 
revenues from customers which use large volumes of gas, generally in 
excess of 200,000 Dth per year or approximately 800 Dth per day of 
normal requirements. Reasonable deviations are permissible in order that 
transfers of customers between the large and small classifications may 
be minimized).

Small commercial and industrial sales (wherein shall be included the 
revenues from customers which use volumes of gas generally less than 
200,000 Mcf per year or less than approximately 800 Mcf per day of 
normal requirements).

    Note: When gas supplied through a single meter is used for both 
commercial and residential purposes, the total revenue shall be included 
in this account or in account 480, Residential Sales, according to the 
rate schedule which is applied. If the same rate schedules are 
applicable to both residential and commercial service, classification 
shall be according to principal use.
482 Other sales to public authorities.
    A. This account shall include the net billing for gas supplied to 
municipalities or divisions or agencies of Federal or State Governments, 
under special contracts or agreements or service classifications, 
applicable only to public authorities, for general governmental and 
institutional purposes, except any revenues under rate schedules the 
revenues from which are includible in account 481 or 483, and except any 
revenues from gas used for purposes such as powerplant fuel for publicly 
owned electric systems, manufacturing processes of arsenals, etc., and 
other major uses of gas which appropriately may be classified in account 
481, Commercial and Industrial Sales.
    B. Records shall be maintained so that the quantity of gas sold and 
the revenue received from each customer and from each major special 
contract shall be readily available.
483 Sales for resale.
    A. This account shall include the net billing for gas supplied to 
other gas utilities or to public authorities for resale purposes.
    B. Records shall be maintained so that there shall be readily 
available the revenues for each customer under each revenue schedule and 
the billing determinants, as applicable, i.e., volume of gas (actual and 
billing), contract demand, maximum actual demand, billing demand, and 
Btu adjustment factor.

    Note: Revenues from gas supplied to other public utilities for use 
by them and not for distribution, shall be included in account 481, 
Commercial and Industrial Sales, unless supplied under the same contract 
as and not readily separable from revenues includible in this account.
484 Interdepartmental sales.
    A. This account shall include amounts charged by the gas department 
at tariff or other specified rates for gas supplied by it to other 
utility departments.
    B. Records shall be maintained so that the quantity of gas supplied 
each other department and the charge made therefor shall be readily 
available.
485 Intracompany transfers
    A. This account shall include, for informational purposes only, the 
amount recorded for gas supplied by the production division when the 
price is not determined by a cost-of-service rate proceeding.
    B. Records shall be maintained so that the quality of gas 
transferred shall be readily available.
487 Forfeited discounts.
    This account shall include the amount of discounts forfeited or 
additional charges imposed because of the failure of customers to pay 
gas bills on or before a specified date.
488 Miscellaneous service revenues.
    This account shall include revenues from all miscellaneous services 
and charges billed to customers which are not specifically provided for 
in other accounts.

                                  Items

    1. Fees for changing, connecting, or disconnecting service.

[[Page 703]]

    2. Profit on maintenance of appliances, piping, gas firing, and 
other utilization facilities, or other installations on customers' 
premises.
    3. Net credit or debit (cost less net salvage and less payment from 
customers) on closing work orders for plant installed for temporary 
service of less than 1 year. (See account 185, Temporary Facilities.)
    4. Recovery of expenses in connection with gas diversion cases. 
(Billing for the gas consumed shall be included in the appropriate gas 
revenue account.)
    5. Services performed for other gas companies for testing and 
adjusting meters, changing charts, etc.
489.1 Revenues from transportation of gas of others through gathering 
facilities.
    This account includes revenues from transporting gas for other 
companies through the gathering facilities of the utility.
489.2 Revenues from transportation of gas of others through transmission 
facilities.
    This account includes revenues from transporting gas for other 
companies through the transmission facilities of the utility.
489.3 Revenues from transportation of gas of others through distribution 
facilities.
    This account includes revenues from transporting gas for other 
companies through the distribution facilities of the utility.
489.4 Revenues from storing gas of others.
    This account includes revenues from storing gas for other companies.
490 Sales of products extracted from natural gas.
    A. This account shall include revenues from sales of gasoline, 
butane, propane, and other products extracted from natural gas, net of 
allowances, adjustments, and discounts, including sales of similar 
products purchased for resale.
    B. Records shall be maintained so that the quantity, sales price, 
and revenues for each type of product sold to each purchaser shall be 
readily available.
491 Revenues from natural gas processed by others.
    A. This account shall include revenues from royalties and permits, 
or other bases of settlement, for permission granted others to remove 
products from natural gas of the utility.
    B. The records supporting this account must be maintained so that 
full information concerning determination of the revenues will be 
readily available concerning each processor of gas of the utility, 
including as applicable (a) The Dth of gas delivered to such other party 
for processing, (b) the Dth of gas received back from the processor, (c) 
the field, general production area , or other source of the gas 
processed, (d) Dth of gas used for processing fuel, etc., which is 
chargeable to the utility, (e) total gallons of each product recovered 
by the processor and the utility's share thereof, (f) the revenues 
accruing to the utility, and (g) the basis of determination of the 
revenues accruing to the utility. Such records shall be maintained even 
though no revenues are derived from the processor.
492 Incidental gasoline and oil sales.
    This account shall include revenues from natural gas gasoline 
produced direct from gas wells or recovered from drips or obtained in 
connection with purification or dehydration processes, and revenues from 
oil obtained from wells which produce oil and gas, the investment in 
which is carried in accounts 330, Producing Gas Wells--Well 
Construction, and 331, Producing Gas Wells--Well Equipment.
493 Rent from gas property.
    A. This account shall include rents received for the use by others 
of land, buildings, and other property devoted to gas operations by the 
utility.
    B. When property owned by the utility is operated jointly with 
others under a definite arrangement for sharing the actual expenses 
among the parties to the arrangement, any amount received by the utility 
for interest or return or in reimbursement of taxes or depreciation on 
the property shall be credited to this account.


[[Page 704]]


    Note: Do not include rent from property constituting an operating 
unit or system in this account. (See account 412, Revenues From Gas 
Plant Leased to Others.)
494 Interdepartmental rents.
    This account shall include credits for rental charges made against 
other departments of the utility. In the case of property operated under 
a definite arrangement to allocate actual costs among the departments 
using the property, any allowance to the gas department for interest or 
return and depreciation and taxes shall be credited to this account.
495 Other gas revenues.
    This account includes revenues derived from gas operations not 
includible in any of the foregoing accounts.

                                  Items

    1. Commission on sale or distribution of gas of others when sold 
under rates filed by such others.
    2. Compensation for minor or incidental services provided for others 
such as customer billing, engineering, etc.
    3. Profit or loss on sale of material and supplies not ordinarily 
purchased for resale and not handled through merchandising and jobbing 
accounts.
    4. Sales of steam, water, or electricity, including sales or 
transfers to other departments of the utility.
    5. Miscellaneous royalties received.
    6. Revenues from dehydration and other processing of gas of others, 
except products extraction where products are received as compensation 
and sales of such are includible in account 490, Sales of Products 
Extracted From Natural Gas, and except compression of gas of others, 
revenues from which are includible in accounts 489.1, 489.2, or 489.3, 
Revenues from Transportation of Gas of Others.
    7. Include in a separate subaccount, revenues in payment for rights 
and/or benefits received from others which are realized through 
research, development, and demonstration ventures.
    8. Include in a separate subaccount, gains on settlements of 
imbalance receivables and payables (See Accounts 174 and 242) and gains 
on replacement of encroachment volumes (See Account 117.4). Records must 
be maintained and readily available to support the gains included in 
this account.
    9. Include in a separate subaccount revenues from penalties earned 
pursuant to tariff provisions, including penalties associated with cash-
out settlements.
496 Provision for rate refunds.
    A. This account shall be charged with provisions for the estimated 
pretax effects on net income of the portions of amounts being collected 
subject to refund which are estimated to be required to be refunded. 
Such provisions shall be credited to Account 229, Accumulated Provision 
for Rate Refunds.
    B. This account shall also be charged with amounts refunded when 
such amounts had not been previously accrued.
    C. Income tax effects relating to the amounts recorded in this 
account shall be recorded in account 410.1, Provision for Deferred 
Income Taxes, Utility Operating Income, or account 411.1, Provision for 
Deferred Income Taxes--Credit, Utility Operating Income, as appropriate.

           Operation and Maintenance Expense Chart of Accounts

                         1. Production Expenses

                     a. manufactured gas production

                          A.1. Steam Production

                                Operation

700 Operation supervision and engineering.
701 Operation labor.
702 Boiler fuel.
703 Miscellaneous steam expenses.
704 Steam transferred--Credit.

                               Maintenance

705 Maintenance supervision and engineering.
706 Maintenance of structures and improvements.
707 Maintenance of boiler plant equipment.
708 Maintenance of other steam production plant.

                    A.2. Manufactured Gas Production

                                Operation

710 Operation supervision and engineering.

                      Production Labor and Expenses

711 Steam expenses.
712 Other power expenses.
713 Coke oven expenses.
714 Producer gas expenses.
715 Water gas generating expenses.
716 Oil gas generating expenses.
717 Liquefied petroleum gas expenses.
718 Other process production expenses.

                                gas fuels

719 Fuel under coke ovens.

[[Page 705]]

720 Producer gas fuel.
721 Water gas generator fuel.
722 Fuel for oil gas.
723 Fuel for liquefied petroleum gas process.
724 Other gas fuels.

                            gas raw materials

725 Coal carbonized in coke ovens.
726 Oil for water gas.
727 Oil for oil gas.
728 Liquefied petroleum gas.
729 Raw materials for other gas processes.
730 Residuals expenses.
731 Residuals produced--Credit.
732 Purification expenses.
733 Gas mixing expenses.
734 Duplicate charges--Credit.
735 Miscellaneous production expenses.
736 Rents.

                               Maintenance

740 Maintenance supervision and engineering.
741 Maintenance of structures and improvements.
742 Maintenance of production equipment.

                   b. natural gas production expenses

                B.1. Natural Gas Production and Gathering

                                Operation

750 Operation supervision and engineering.
751 Production maps and records.
752 Gas wells expenses.
753 Field lines expenses.
754 Field compressor station expenses.
755 Field compressor station fuel and power.
756 Field measuring and regulating station expenses.
757 Purification expenses.
758 Gas well royalties.
759 Other expenses.
760 Rents.

                               Maintenance

761 Maintenance supervision and engineering.
762 Maintenance of structures and improvements.
763 Maintenance of producing gas wells.
764 Maintenance of field lines.
765 Maintenance of field compressor station equipment.
766 Maintenance of field measuring and regulating station equipment.
767 Maintenance of purification equipment.
768 Maintenance of drilling and cleaning equipment.
769 Maintenance of other equipment.

                        B.2. Products Extraction

                                Operation

770 Operation supervision and engineering.
771 Operation labor.
772 Gas shrinkage.
773 Fuel.
774 Power.
775 Materials.
776 Operation supplies and expenses.
777 Gas processed by others.
778 Royalties on products extracted.
779 Marketing expenses.
780 Products purchased for resale.
781 Variation in products inventory.
782 Extracted products used by the utility--Credit.
783 Rents.

                               Maintenance

784 Maintenance supervision and engineering.
785 Maintenance of structures and improvements.
786 Maintenance of extraction and refining equipment.
787 Maintenance of pipe lines.
788 Maintenance of extracted products storage equipment.
789 Maintenance of compressor equipment.
790 Maintenance of gas measuring and regulating equipment.
791 Maintenance of other equipment.

                 c. exploration and development expenses

                                Operation

795 Delay rentals.
796 Nonproductive well drilling.
797 Abandoned leases.
798 Other exploration.

                      d. other gas supply expenses

                                Operation

800 Natural gas well head purchases.
800.1 Natural gas well head purchases, intracompany transfers.
801 Natural gas field line purchases.
802 Natural gas gasoline plant outlet purchases.
803 Natural gas transmission line purchases.
804 Natural gas city gate purchases.
804.1 Liquefied natural gas purchases.
805 Other gas purchases.
805.1 Purchased gas cost adjustments.
806 Exchange gas.
807 Purchased gas expenses.
808.1 Gas withdrawn from storage--Debt.
808.2 Gas delivered to storage--Credit.
809.1 Withdrawals of liquefied natural gas held for processing--Debt.
809.2 Deliveries of natural gas for processing--Credit.
810 Gas used for compressor station fuel--Credit.
811 Gas used for products extraction--Credit.
812 Gas used for other utility operations--Credit.
813 Other gas supply expenses.

[[Page 706]]

       2. Natural Gas Storage, Terminaling and Processing Expenses

                     a. underground storage expenses

814 Operation supervision and engineering.
815 Maps and records.
816 Wells expenses.
817 Lines expenses.
818 Compressor station expenses.
819 Compressor station fuel and power.
820 Measuring and regulating station expenses.
821 Purification expenses.
822 Exploration and development.
823 Gas losses.
824 Other expenses.
825 Storage well royalties.
826 Rents.

                               Maintenance

830 Maintenance supervision and engineering.
831 Maintenance of structures and improvements.
832 Maintenance of reservoirs and wells.
833 Maintenance of lines.
834 Maintenance of compressor station equipment.
835 Maintenance of measuring and regulating station equipment.
836 Maintenance of purification equipment.
837 Maintenance of other equipment.

                        b. other storage expenses

                                Operation

840 Operation supervision and engineering.
841 Operation labor and expenses.
842 Rents.
842.1 Fuel.
842.2 Power.
842.3 Gas losses.

                               Maintenance

843.1 Maintenance supervision and engineering.
843.2 Maintenance of structures and improvements.
843.3 Maintenance of gas holders.
843.4 Maintenance of purification equipment.
843.5 Maintenance of liquefaction equipment.
843.6 Maintenance of vaporizing equipment.
843.7 Maintenance of compressor equipment.
843.8 Maintenance of measuring and regulating equipment.
843.9 Maintenance of other equipment.

      c. liquefied natural gas terminaling and processing expenses

                                Operation

844.1 Operation supervision and engineering.
844.2 LNG processing terminal labor and expenses.
844.3 Liquefaction processing labor and expenses.
844.4 LNG transportation labor and expenses.
844.5 Measuring and regulating labor and expenses.
844.6 Compressor station labor and expenses.
844.7 Communication system expenses.
844.8 System control and load dispatching.
845.1 Fuel.
845.2 Power.
845.3 Rents.
845.4 Demurrage charges.
845.5 Wharfage receipts--credit.
845.6 Processing liquefied or vaporized gas by others.
846.1 Gas losses.
846.2 Other expenses.

                               Maintenance

847.1 Maintenance supervision and engineering.
847.2 Maintenance of structures and improvements.
847.3 Maintenance of LNG processing terminal equipment.
847.4 Maintenance of LNG transportation equipment.
847.5 Maintenance of measuring and regulating equipment.
847.6 Maintenance of compressor station equipment.
847.7 Maintenance of communication equipment.
847.8 Maintenance of other equipment.

                        3. Transmission Expenses

                                Operation

850 Operation supervision and engineering.
851 System control and load dispatching.
852 Communication system expenses.
853 Compressor station labor and expenses.
854 Gas for compressor station fuel.
855 Other fuel and power for compressor stations.
856 Mains expenses.
857 Measuring and regulating station expenses.
858 Transmission and compression of gas by others.
859 Other expenses.
860 Rents.

                               Maintenance

861 Maintenance supervision and engineering.
862 Maintenance of structures and improvements.
863 Maintenance of mains.
864 Maintenance of compressor station equipment.
865 Maintenance of measuring and regulating station equipment.
866 Maintenance of communication equipment.
867 Maintenance of other equipment.
870 Operation supervision and engineering.

[[Page 707]]

                        4. Distribution Expenses

                                Operation

871 Distribution load dispatching.
872 Compressor station labor and expenses.
873 Compressor station fuel and power (Major only).
874 Mains and services expenses.
875 Measuring and regulating station expenses--General.
876 Measuring and regulating station expenses--Industrial.
877 Measuring and regulating station expenses--City gate check stations.
878 Meter and house regulator expenses.
879 Customer installations expenses.
880 Other expenses.
881 Rents.

                               Maintenance

885 Maintenance supervision and engineering.
886 Maintenance of structures and improvements.
887 Maintenance of mains.
888 Maintenance of compressor station equipment.
889 Maintenance of measuring and regulating station equipment--General.
890 Maintenance of measuring and regulating station equipment--
Industrial.
891 Maintenance of measuring and regulating station equipment--City gate 
check stations.
892 Maintenance of services.
893 Maintenance of meters and house regulators.
894 Maintenance of other equipment.

                      5. Customer Accounts Expenses

                                Operation

901 Supervision.
902 Meter reading expenses.
903 Customer records and collection expenses.
904 Uncollectible accounts.
905 Miscellaneous customer accounts expenses.

             6. Customer Service and Informational Expenses

                                Operation

907 Supervision.
908 Customer assistance expenses.
909 Informational and instructional advertising expenses.
910 Miscellaneous customer service and informational expenses.

                            7. Sales Expenses

                                Operation

911 Supervision.
912 Demonstrating and selling expenses.
913 Advertising expenses.
914 [Reserved]
915 [Reserved]
916 Miscellaneous sales expenses.

                 8. Administrative and General Expenses

                                Operation

920 Administrative and general salaries.
921 Office supplies and expenses.
922 Administrative expenses transferred--Credit.
923 Outside services employed.
924 Property insurance.
925 Injuries and damages.
926 Employee pensions and benefits.
927 Franchise requirements.
928 Regulatory commission expenses.
929 Duplicate charges--Credit.
930.1 General advertising expenses.
930.2 Miscellaneous general expenses.
931 Rents.

                               Maintenance

932 Maintenance of general plant.



Operation and Maintenance Expense Accounts--Table of Contents



700 Operation supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of the operation of steam 
production. (See operating expense instruction 1.)
701 Operation labor.
    This account shall include the cost of labor used in boiler rooms 
and elsewhere about the premises engaged in the production of steam or 
assignable to the production of steam.

                                  Items

    1. Blowing flues.
    2. Cleaning boilers.
    3. Handling coal, coke, and breeze from place of storage to boilers.
    4. Janitorial, messenger, watchmen, and similar services.
    5. Operating boilers.
    6. Operating elevators.
    7. Pulverizing coal.
    8. Pumping tar from storage tank to boilers.
    9. Removing ashes.
    10. Testing steam meters, gauges, and other instruments.
702 Boiler fuel.
    A. This account shall include the cost of coal, oil, gas, or other 
fuel used

[[Page 708]]

in the production of steam, including applicable amounts of fuel stock 
expenses. It shall also include the net cost of, or the net amount 
realized from, the disposal of ashes.
    B. Records shall be maintained to show the quantity and cost of each 
type of fuel used. Respective amounts of fuel stock and fuel stock 
expenses shall be readily available.

    Note: The cost of fuel, except gas, and related fuel stock expenses, 
shall be charged initially to appropriate fuel accounts carried under 
accounts 151, Fuel Stock, and 152, Fuel Stock Expenses Undistributed, 
and cleared to this account on the basis of fuel used. See accounts 151 
and 152 for basis of fuel costs and includible items of fuel stock 
expenses.
703 Miscellaneous steam expenses.
    This account shall include the cost of materials used and expenses 
incurred in the production of steam, not includible in the foregoing 
accounts.

                                  Items

    1. Boiler compounds.
    2. Building service expenses.
    3. Chemicals.
    4. Communication service.
    5. Lubricants.
    6. Miscellaneous supplies.
    7. Pumping supplies and expenses.
    8. Purification supplies and expenses.
    9. Tools, hand.
    10. Waste.
    11. Water purchased.
    12. Research, development, and demonstration expenses.
704 Steam transferred--Credit.
    A. This account shall include such portion of the cost of producing 
steam as is charged to other gas operating expense accounts, or to 
others or to a coordinate department under a joint facility arrangement.
    B. The records supporting the entries to this account shall be so 
kept that the utility can furnish readily an explanation of the bases of 
the credits to this account and the amounts charged to (1) other gas 
accounts, (2) other utility departments, and (3) outside parties under a 
joint facility arrangement. The records shall show, likewise, the 
amounts of steam production operation and steam production maintenance 
expenses, respectively, chargeable to each of the foregoing.

    Note A: If the utility produces gas by a single process at only one 
plant, credits need not be made to this account for the cost of steam 
used in such gas production facility.
    Note B: Where steam is produced by producer gas equipment or waste 
heat boilers, and such steam becomes part of the general plant supply, 
this account should be charged and the steam expense account in the 
appropriate functional group of accounts (coal gas production, water gas 
production, etc.) credited with the value of such steam. However, if the 
steam so produced is used in the same functional operation as that 
through which derived, such entries need not be made.
705 Maintenance supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of steam 
production facilities. Direct field supervision of specific jobs shall 
be charged to the appropriate maintenance accounts. (See operating 
expense instruction 1.)
706 Maintenance of structures and improvements.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures and improvements used 
in steam production operations, the book cost of which is includible in 
account 305, Structures and Improvements. (See operating expense 
instruction 2.)
707 Maintenance of boiler plant equipment.
    This account shall indicate the cost of labor, materials used and 
expenses incurred in the maintenance of equipment used in steam 
production the book cost of which is includible in account 306, Boiler 
Plant Equipment. (See operating expense instruction 2.)
708 Maintenance of other steam production plant.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment used in steam 
production operations, the book cost of which is includible in account 
314, Coal, Coke, and Ash Handling Equipment, or account 320, Other 
Equipment. (See operating expense instruction 2.)

[[Page 709]]

710 Operation supervision and engineering.
    A. This account shall include the cost of labor and expenses 
occurred in the general supervision and direction of the operation of 
manufactured gas stations. Direct supervision of specific activities 
such as steam production and power operations, coke oven operations, 
water gas generation, etc., shall be charged to the appropriate account. 
(See operating expense instruction 1.)
711 Steam expenses.
    A. This account shall include the cost of steam used in manufactured 
gas production. This includes the cost of steam transferred from the gas 
department's own supply and charges for steam transferred from others or 
from coordinate departments under joint facility arrangements. (See 
account 704, Steam Transferred--Credit.)
    B. This account shall be so kept as to show separately for each 
source of steam the point of delivery, the quantity, the charges 
therefor, and the bases of such charges.
712 Other power expenses.
    This account shall include the cost of electricity or other power, 
except steam, used in manufactured gas operation. This includes the cost 
of power purchased, the operation cost of electricity or other power 
such as compressed air produced by the gas department and charges from 
others or from coordinate departments for power produced under joint 
facility arrangements.
713 Coke oven expenses.
    This account shall include the cost of labor used and expenses 
incurred in the operation of coke ovens for the production of coal gas, 
exclusive of the cost of fuel for the coke ovens and coal carbonized.

                                  Items

Labor:
    1. Supervising.
    2. Work of the following character in operation of coke ovens:
    a. Charging and leveling coal.
    b. Heating ovens to produce coke.
    c. Pushing, transporting, quenching, and dumping coke on wharf.
    d. Reclaiming coke spillage, removing, replacing, and luting oven 
doors and lids.
    e. Handling and mixing luting mud.
    f. Controlling oven heats and gas heating value with dilution gas.
    g. Controlling flue temperature, stack drafts, collecting main 
pressure and the flow of flushing liquor and drains.
    h. Operating, cleaning, and lubricating equipment not incidental to 
maintenance work, such as: charger, pusher, door operating and luting, 
mud mixing, gas reversal, transportation machinery and equipment, 
quenching pumps and tower, together with valves, instruments, meters, 
controls, gauges, and records connected with their operation.
    i. Tar chasing (spooning tar in hot drains.)
    j. Cleaning doors, jambs, and stand pipes.
    3. Handling and transporting coal from storage or boats to battery 
bins.
    4. Operating, cleaning and lubricating mechanical equipment, such 
as: hoist machines, conveyors and their housing, hammermills and 
breakers, mixing and battery bins, together with their control valves, 
instruments, etc.
    5. Wetting and handling coke to the coke wharf or storage including 
cleaning and lubricating of equipment not incident to maintenance.
    6. Pumping gas from ovens and maintaining the proper pressures on 
the collecting main and throughout the apparatus train, including 
cleaning and lubricating the oven gas exhausters and revivifying 
blowers, not incident to maintenance.
    7. Removing and disposing of carbon, fines, sediment, and waste 
material.
    8. Cleaning ovens and exhauster house, including janitor service in 
the employees' locker and wash room within this operating area.

Materials and expenses:
    9. Packing, waste, lubricants, etc.
    10. Small hand tools.
    11. Building service, communication service, transportation.
714 Producer gas expenses.
    This account shall include the cost of labor used and expenses 
incurred in making producer gas exclusive of the cost of fuel for 
producer gas.

                                  Items

Labor:
    1. Supervising.
    2. Work of the following character in connection with operation of 
producer gas sets (excepting the waste heat boiler and auxiliaries):
    a. Inspecting, testing, clinkering, lighting and starting set.
    b. Controlling fire and heats with fuel charges.

[[Page 710]]

    c. Barring, measuring, and rodding fires.
    d. Observing pyrometers, pressures and CO2 in stack 
gases.
    e. Regulating input materials, such as coke, steam and air and 
making required flow rate and operating cycle changes.
    f. Cleaning and removal of ash, dust, sediment and materials from 
the set and connections, seal pots, duct pockets, bootlegs, collectors 
and pumps.
    g. Cleaning and reluting producer set doors.
    h. Operating, cleaning and lubricating fuel charging lorries, 
grates, jackets and auxiliaries, ash removal apparatus, and associated 
instruments, meters, gauges, controls, etc.
    3. Handling fuel from storage into bins with conveyors.
    4. Operating, cleaning and lubricating auxiliary equipment, not 
incident to maintenance work, such as coolers, pumps, blowers, 
exhausters or boosters, fuel handling equipment, etc.
    5. Removing and disposing of ashes, sediment and other waste 
material.
    6. Cleaning the producer and booster houses including janitorial and 
similar services.

Materials and expenses:
    7. Packing, waste, lubricants, etc.
    8. Small hand tools.
    9. Building service, communication service, transportation.
715 Water gas generating expenses.
    This account shall include the cost of labor used and expenses 
incurred in the operation of water gas sets exclusive of the cost of 
fuel and oil for water gas production.

                                  Items

Labor:
    1. Supervising.
    2. Work of the following character in connection with the operation 
of water gas sets (excepting the waste heat boiler and auxiliaries):
    a. Inspecting, testing, clinkering, lighting and starting up.
    b. Controlling fire and heats with fuel charges, barring and rodding 
fires, operating grates and jackets, taking stains, observing 
pyrometers, pressures, seal pot water flow and stack gases, regulating 
input materials such as coke, oil, natural gas, steam and air.
    c. Making required flow rate and operating cycle changes.
    d. Cleaning and removing ashes, carbon, and sediment from the set 
and connections, the wash box, seal pot, oil spray, duct pockets, 
bootlegs, and collectors, and cleaning and reluting producer set doors.
    e. Operating, cleaning and lubricating fuel charging lorries, 
blowers, valves, automatic operators, and grates, together with their 
instruments, gauges, and controls, also the ash belts.
    3. Operating, cleaning and lubricating auxiliary equipment, such as 
hydraulic pumps, circulating water pumps, oil pumps from storage to 
sets, steam accumulators and regulators and reducers on natural gas for 
reforming, exhausters, revivifying air blowers, and purifier exhausters.
    4. Handling fuel from storage into bins with conveyors.
    5. Removing and disposing of ashes, carbon, sediment, and other 
waste material.
    6. Cleaning of generator and exhauster houses, including janitorial 
and similar services.

Materials and expenses:
    7. Packing, waste, lubricants, etc.
    8. Small hand tools.
    9. Building service, communication service, transportation.
716 Oil gas generating expenses.
    This account shall include the cost of labor used and expenses 
incurred in the operation of equipment for the production of oil gas 
exclusive of cost of the oil.

                                  Items

Labor:
    1. Supervising.
    2. Cleaning, firing and operating oil gas machines.
    3. Handling oil from place of storage to oil gas sets.
    4. Measuring oil.
    5. Removing and disposing of carbon deposits, and other cleaning and 
incidental labor.

Materials and expenses:
    6. Packing, waste, lubricants, etc.
    7. Small hand tools.
    8. Building service, communication service, transportation.
717 Liquefied petroleum gas expenses.
    This account shall include the cost of labor used and expenses 
incurred in the operation of equipment used for vaporizing petroleum 
derivatives such as propane, butane or gasoline exclusive of cost of the 
materials vaporized or used for fuel in the vaporizing process.

                                  Items

Labor:
    1. Supervising.
    2. Operating, cleaning and lubricating liquid petroleum vaporizers 
and injectors.
    3. Taking pressures and temperatures, and reading gauges on storage 
tanks.

[[Page 711]]

    4. Inspecting and testing equipment and setting and adjusting 
controls and regulators.
    5. Watching pressure gauges, maintaining pressures and relieving 
excess pressures through lines.
    6. Repressuring storage tanks.

Materials and expenses:
    7. Packing, waste, lubricants, etc.
    8. Small hand tools.
    9. Building service, communication service, transportation.
718 Other process production expenses.
    This account shall include the cost of labor used and expenses 
incurred in operating equipment used for the production of gas by 
processes not provided for in the foregoing accounts.
719 Fuel under coke ovens.
    A. This account shall include the cost of gas, other than coke oven 
gas or producer gas, or other fuel used under coke ovens for making coal 
gas. Concurrent credits shall be made to account 734, Duplicate 
Charges--Credit, for gas made by the utility and so used, or account 
812, Gas Used for Other Utility Operations--Credit, for other gas used 
under coke ovens.
    B. Records shall be kept to show the quantity and cost of each type 
of fuel used and fuel handling expenses.

                                  Items

    1. Gas made by the utility and used under coke ovens.
    2. Natural and other purchased gas used under coke ovens.
720 Producer gas fuel.
    A. This account shall include the cost of fuel used in making 
producer gas including applicable amounts of fuel stock expenses. It 
shall also include the net cost of, or the net amount realized from, the 
disposal of ashes.
    B. Records shall be kept to show the quantity and the cost of each 
type of fuel used. Respective amounts of fuel stock and fuel stock 
expenses shall be readily available.

    Note: The cost of fuel and related fuel stock expenses shall be 
charged initially to the appropriate fuel account carried under accounts 
151, Fuel Stock, and 152, Fuel Stock Expenses Undistributed, and cleared 
to this account on the basis of fuel used. See accounts 151 and 152 for 
basis of fuel costs and includible items of fuel stock expenses.
721 Water gas generator fuel.
    A. This account shall include the cost of fuel used in making water 
gas, including applicable amounts of fuel stock expenses. It shall also 
include the net cost of, or net proceeds from, the disposal of ashes.
    B. Records shall be kept to show the quantity and cost of each type 
of fuel used. Respective amounts of fuel stock and fuel stock expenses 
shall be readily available.

    Note: The cost of fuel and related fuel stock expenses shall be 
charged initially to the appropriate fuel account carried under accounts 
151, Fuel Stock, and 152, Fuel Stock Expenses Undistributed, and cleared 
to this account on the basis of fuel used. See accounts 151 and 152 for 
basis of fuel costs and includible items of fuel stock expenses.
722 Fuel for oil gas.
    This account shall include the cost of fuel for the manufacture of 
gas by the oil gas process.
723 Fuel for liquefied petroleum gas process.
    This account shall include the cost of fuel for vaporization of 
liquefied petroleum gas and for the compression of air in liquefied 
petroleum gas process.
724 Other gas fuels.
    This account shall include the cost of fuel for the manufacture of 
gas by processes not provided for in the above fuel accounts.
725 Coal carbonized in coke ovens.
    A. This account shall include the cost of coal used in coke ovens 
for making coal gas, including applicable amounts of fuel stock 
expenses.
    B. Records shall be kept to show the type, quantity, and cost of 
coal used. Respective amounts of fuel stock and fuel stock expenses 
shall be readily available.

    Note: The cost of coal carbonized and related fuel stock expenses 
shall be charged initially to the appropriate account carried under 
accounts 151, Fuel Stock, and 152, Fuel Stock Expenses Undistributed, 
and cleared to this account on the basis of coal used. See accounts 151 
and 152 for basis of costs and includible items of fuel stock expenses.

[[Page 712]]

726 Oil for water gas.
    A. This account shall include the cost of oil used in carbureting 
water gas, including applicable amounts of fuel stock expenses.
    B. Records shall be kept to show the type, quantity, and cost of oil 
used. Respective amounts of fuel stock and fuel stock expenses shall be 
readily available.

    Note: The cost of oil and related fuel stock expenses shall be 
charged initially to the appropriate accounts carried under accounts 
151, Fuel Stock, and 152, Fuel Stock Expenses Undistributed, and cleared 
to this account on the basis of oil used. See accounts 151 and 152 for 
basis of costs and includible items of fuel stock expenses.
727 Oil for oil gas.
    A. This account shall include the cost of oil used in making oil 
gas, including applicable amounts of fuel stock expenses.
    B. Records shall be kept to show the type, quantity, and cost of oil 
used. Respective amounts of fuel stock and fuel stock expenses shall be 
readily available.

    Note: The cost of oil and related fuel stock expenses shall be 
charged initially to the appropriate raw materials account carried under 
accounts 151, Fuel Stock, and 152, Fuel Stock Expenses Undistributed, 
and cleared to this account on the basis of oil used. See accounts 151 
and 152 for basis of costs and includible items of fuel stock expenses.
728 Liquefied petroleum gas.
    A. This account shall include the cost of liquefied petroleum gas, 
such as propane, butane, or gasoline, vaporized for mixing with other 
gases or for sale unmixed, including applicable amounts of fuel stock 
expenses.
    B. Records shall be kept to show the type, quantity, and cost of 
liquefied petroleum gas. Respective amounts of fuel stock and fuel stock 
expenses shall be readily available.

    Note: The cost of liquefied petroleum gas and related fuel stock 
expenses shall be charged initially to the appropriate accounts under 
accounts 151, Fuel Stock, and 152, Fuel Stock Expenses Undistributed, 
and cleared to this account on the basis of liquefied petroleum gas 
used. See accounts 151 and 152 for basis of costs and includible items 
of fuel stock expenses.
729 Raw materials for other gas processes.
    A. This account shall include the cost of raw materials used in the 
production of manufactured gas by any process not provided for by the 
foregoing accounts including the production of coal gas by use of 
retorts, including applicable amounts of fuel stock expenses.
    B. Records shall be kept to show the type, quantity, and cost of 
each raw material used, comparable to the accounting specified in the 
foregoing accounts for specified types of gas processes. Respective 
amount of fuel stock and fuel stock expenses shall be readily available.

    Note: The cost of raw materials and fuel stock expenses shall be 
charged initially to the appropriate accounts carried under accounts 
151, Fuel Stock, and 152, Fuel Stock Expenses Undistributed, and cleared 
to this account on the basis of raw materials used. See accounts 151 and 
152 for basis of raw materials costs and includible items of raw 
materials stock expenses.
730 Residuals expenses.
    A. This account shall include the cost of labor, materials used and 
expenses incurred including uncollectible accounts in obtaining, 
handling, preparing, refining, and marketing residuals produced in 
manufactured gas production processes.
    B. Divisions of this account shall be maintained for each of the 
principal types of expenses chargeable hereto and for each residual or 
by-product carried in account 731, Residuals Produced--Credit.
731 Residuals produced--Credit.
    A. This account shall be credited and the appropriate subdivision of 
account 153, Residuals and Extracted Products, debited monthly with the 
estimated value of residuals and other by-products obtained in 
connection with the production of manufactured gas, whether intended for 
sale or for use in operations.
    B. If the net amount realized from the sale of residuals is greater 
or less than the amount at which they were originally credited hereto, 
an adjusting entry shall be made crediting or debiting this account and 
charging or

[[Page 713]]

crediting the appropriate subdivision of account 153, Residuals and 
Extracted Products, with the difference.
732 Purification expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating purification equipment and apparatus used 
for conditioning manufactured gas.

                                  Items

Labor:
    1. Supervising.
    2. Operating conveyors, condensers, coolers, tar extractors and 
precipitators, shaving scrubbers and naphthalene and light oil 
scrubbers.
    3. Emptying, rearranging, shifting, cleaning, purging, and refilling 
purifier boxes.
    4. Removing spent oxide to refuse pile.
    5. Revivifying oxide.
    6. Oiling dip sheets of purifier boxes.
    7. Inspecting, testing, controlling adjustments, and taking stains.
    8. Cleaning and lubricating purification equipment.

Materials and expenses:
    9. Iron oxide.
    10. Unslacked lime.
    11. Shavings.
    12. Soda ash for liquid purifiers.
    13. Wash oil for naphthalene scrubber.
    14. Sulphuric acid.
733 Gas mixing expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating equipment for mixing natural and 
manufactured gas, or vaporized liquefied petroleum gases for delivery to 
the distribution system.

                                  Items

Labor:
    1. Supervising.
    2. Mixing enrichment gas and other gases or air, including mixing of 
liquid petroleum gas with air in a liquid petroleum air gas plant, and 
operation of air jetting equipment and controls.
    3. Operating, cleaning and lubricating of cleaners, reducers, 
calorimeters, calorimixers, appliances and mixing apparatus with their 
related recorders, gauges, valves and controls, and gravitometers.
    4. Inspecting, testing and adjusting mixing equipment.
    5. Reading instruments and gauges, changing charts, and recording 
instrument and gauge readings.

Materials and expenses:
    6. Packing, waste, lubricants, etc.
    7. Small hand tools.
    8. Building service, communication service, transportation.
734 Duplicate charges--Credit.
    This account shall include concurrent credits for charges which are 
made to manufactured gas production operating expenses for manufactured 
gas not entering common system supply, steam or electricity used for 
which there is no direct money outlay.

    Note: For manufactured gas used from the common system supply, 
concurrent credits shall be made to account 812, Gas Used for Other 
Utility Operations--Credit.
735 Miscellaneous production expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in manufacturing gas production operations not 
includible in any of the foregoing accounts.

                                  Items

Labor:
    1. Supervising.
    2. Cleaning gas works yard of coke dust and other waste materials.
    3. Humidifying gas or oil fogging gas at the production plant.
    4. Cutting grass and care of the grounds around the gas works.
    5. Clearing gas works yard of snow.
    6. Janitor service and messenger service.
    7. Operating elevators and other conveyances for general use at the 
gas works.
    8. General clerical and stenographic work at gas works.
    9. Guarding and patrolling plant and yard.
    10. Testing plant instruments not elsewhere provided for.
    11. Laboratory labor, except that chargeable to other accounts.
    12. Reading manufactured gas meters, and calculating and recording 
hourly volumes produced.
    13. Pumping drips (water) at plant (not provided for elsewhere).
    14. Odorizing manufactured gas.
    15. Operating, cleaning, and lubricating of air compressors with 
their tanks, instruments, meters, gauges, and controls when used to 
supply compressed air into the plant's air system.
    16. Operating effluent water treatment systems, including chemical 
treatment ozonation, filter, and related equipment, including treatment 
of carbon and residual sludge, and removing spent oxide, and spent 
filtering materials.
    17. Pumping water for cooling and condensing.

[[Page 714]]

    18. Cleaning filters and other operating duties of water system.

Materials and expenses:
    19. Producer gas transferred from coke oven plant to water gas plant 
for dilution purposes.
    20. Building service, communication service, transportation.
    21. First aid supplies and safety equipment.
    22. Office supplies, printing and station- ery.
    23. Meals, travelling and incidental expenses.
    24. Fuel for heating plant, water for fire protection or general 
use, and similar items.
    25. Lubricants, packing, waste, etc.
    26. Odorizing chemicals.
    27. Hand tools, drills, saw blades, files, etc.
    28. Fire protection supplies.
    29. Fogging oils, alcohol, etc.
    30. Chemicals, filter materials, etc., and payments to others for 
disposal of plant effluents and waste.
    31. Chemicals for water treatment.
    32. Research, development, and demonstration expenses.
736 Rents.
    This account shall include rents for property of others used, 
occupied or operated in connection with manufactured gas production 
operations. (See operating expense instruction 3.)
740 Maintenance supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of manufactured 
gas production facilities. Direct field supervision of specific jobs 
shall be charged to the appropriate maintenance accounts. (See operating 
expense instruction 1.)
741 Maintenance of structures and improvements.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures, the book cost of 
which is includible in account 305, Structures and Improvements. (See 
operating expense instruction 2.)
742 Maintenance of production equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment for the production of 
manufactured gas, the book cost of which is included in accounts 306 to 
320, inclusive, except such equipment as is used for the production of 
steam the maintenance of which is includible in accounts 707, 
Maintenance of Boiler Plant Equipment, and 708, Maintenance of Other 
Steam Production Plant. (See operating expense instruction 2.)
750 Operation supervision and engineering.
    A. This account shall include the cost of labor and expenses 
incurred in the general supervision and direction of the operation of 
production and gathering systems. Direct supervision of specific 
activities such as turning on and shutting off wells, operating 
measuring and regulating stations, etc., shall be charged to the 
appropriate account. (See operating expense instruction 1.)
    B. For Nonmajor companies, this account shall include the cost of 
supervision and labor in the operation of gas wells, lines, compressors 
and other equipment of the natural gas production and gathering system 
including miscellaneous labor such as care of grounds, building service, 
and general clerical and stenographic work at field offices.

                                  Items

    1. Supervision. (See operating expense instruction 1.)
    2. Gas depletion and gas reserve activities.
    3. Geological activities in connection with gas production.
    4. Rights-of-way office activities and supervision, not in 
connection with construction or retirement work, or storage.
751 Production maps and records.
    This account shall include the cost of labor, materials used and 
expenses incurred in the preparation and maintenance of production maps 
and records.

                                  Items

Labor:

With respect to production maps:
    1. Supervising.
    2. Preparing farm maps, field inventory maps, well location plats, 
and other maps used in connection with natural gas production and 
gathering operations.
    3. Posting changes and making corrections of maps.
    4. Maintaining files of maps and tracings.

[[Page 715]]

    5. Surveying deeds, leases, rights-of-way, well locations, etc., for 
map revisions.
    6. Reproducing maps (blueprints, photostats, etc.).

With respect to land records:
    7. Supervising.
    8. Abstracting titles to date for extension and renewal of leases.
    9. Adjusting land and well rentals.
    10. Checking free gas rights.
    11. Maintaining land and lease records.
    12. Delivering rental and royalty checks.
    13. Assigning, pooling, merging, renewing, and extending leases.
    14. Patrolling land.
    15. Preparing expiration calendars.
    16. Replacing leases (not involving additional consideration).
    17. Transferring payees.

Materials and expenses:
    18. Blueprints, photostats, etc.
    19. Drafting materials and supplies.
    20. Surveying materials and supplies.
    21. Employee transportation and travel expenses.
    22. Freight, express, parcel post, trucking, and other 
transportation.
    23. Janitor and washroom supplies, etc.
    24. Office supplies, stationery and printed forms.
    25. Utility services: light, water, and telephone.
752 Gas wells expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating producing gas wells.

                                  Items

Labor:
    1. Supervising.
    2. Testing, bailing, swabbing, blowing and gauging producing gas 
wells.
    3. Cleaning off old well locations.
    4. Painting signs, etc.
    5. Minor upkeep of well roads and fences, etc.
    6. Turning wells off and on.
    7. Pumping wells.

Materials and expenses:
    8. Gas, gasoline, and oil used in pumping, bailing, heating, and 
swabbing.
    9. Lumber, nails, and other materials used for upkeep of fences, 
making signs, etc.
    10. Materials for upkeep of well roads, etc.
    11. Well swabs.
    12. Employees' transportation and travel expenses.
    13. Freight, express, parcel post, trucking and other 
transportation.
    14. Transportation: company and rented vehicles.
753 Field lines expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating field lines.

                                  Items

Labor:
    1. Supervising.
    2. Walking or patrolling lines.
    3. Attending valves, lubricating valves and other equipment, blowing 
and cleaning lines and drips, draining water from lines, operating and 
cleaning scrubbers, thawing freezes.
    4. Taking line pressures, changing pressure charts, operating alarm 
gauges.
    5. Building and repairing gate boxes, foot bridges, stiles, tool 
boxes, etc., used in line operations, erecting line markers and warning 
signs, repairing old line roads.
    6. Cleaning debris, cutting grass and weeds on rights-of-way.
    7. Inspecting and testing not specifically to determine necessity 
for repairs.
    8. Protecting utility property during work by others.
    9. Standby time of emergency crews, responding to fire calls, etc.
    10. Locating valve boxes or drip riser boxes.
    11. Cleaning and repairing tools used in mains operations, making 
tool boxes, etc.
    12. Cleaning structures and equipment.
    13. Driving trucks.

Materials and expenses:
    14. Line markers and warning signs.
    15. Lumber, nails, etc., used in building and repairing gate boxes, 
foot bridges, stiles, tool boxes, etc.
    16. Charts.
    17. Scrubber oil.
    18. Hand tools.
    19. Lubricants, wiping rags, waste, etc.
    20. Freight, express, parcel post, trucking and other transportation 
charges.
    21. Employees' transportation and travel expenses.
    22. Janitor and washroom supplies.
    23. Utility services: light, water, telephone.
    24. Gas used in field line operations.
754 Field compressor station expenses.
    This account shall include the cost of labor, materials used, except 
fuel, and expenses incurred in operating field compressor stations.

                                  Items

Labor:
    1. Supervising.
    2. Operating and checking engines, equipment valves, machinery, 
gauges, and other instruments, including cleaning, wiping, polishing, 
and lubricating.

[[Page 716]]

    3. Operating boilers and boiler accessory equipment, including fuel 
handling and ash disposal, recording fuel used, and unloading and 
storing coal and oil.
    4. Repacking valves and replacing gauge glasses, etc.
    5. Recording pressures, replacing charts, keeping logs, and 
preparing reports of station operations.
    6. Inspecting and testing equipment when not specifically to 
determine necessity for repairs or replacement of parts.
    7. Pumping drips at the station.
    8. Taking dew point readings.
    9. Testing water.
    10. Cleaning structures, cutting grass and weeds, and minor grading 
around station.
    11. Cleaning and repairing hand tools used in operations.
    12. Driving trucks.
    13. Watching during shut downs.
    14. Clerical work at station.

Materials and expenses:
    15. Scrubber oil.
    16. Lubricants, wiping rags, and waste.
    17. Charts and printed forms, etc.
    18. Gauge glasses.
    19. Chemicals to test waters.
    20. Water tests and treatment by other than employees.
    21. Janitor and washroom supplies, first aid supplies, landscaping 
supplies, etc.
    22. Employees' transportation and travel expenses.
    23. Freight, express, parcel post, trucking, and other 
transportation.
    24. Utility services: light, water, telephone.
755 Field compressor station fuel and power.
    A. This account shall include the cost of gas, coal, oil, or other 
fuel, or electricity, used for the operation of field compressor 
stations, including applicable amounts of fuel stock expenses.
    B. Records shall be maintained to show the quantity of each type of 
fuel consumed or electricity used at each compressor station, and the 
cost of such fuel or power. Respective amounts of fuel stock and fuel 
stock expenses shall be readily available.

    Note: The cost of fuel, except gas, and related fuel stock expenses 
shall be charged initially to appropriate fuel accounts carried in 
accounts 151, Fuel Stock, and 152, Fuel Stock Expenses Undistributed, 
and cleared to this account on the basis of fuel used. See accounts 151 
and 152 for the basis of fuel costs and includible fuel stock expenses.
756 Field measuring and regulating station expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating field measuring and regulating stations.

                                  Items

Labor:
    1. Supervising.
    2. Recording pressures and changing charts, reading meters, etc.
    3. Estimating lost meter registrations, etc., except gas purchases 
and sales.
    4. Calculating gas volumes from meter charts, except for gas 
purchases and sales.
    5. Adjusting and calibrating measuring equipment, changing meters, 
orifice plates, gauges, clocks, etc., not in connection with maintenance 
or construction.
    6. Testing gas samples, inspecting and testing gas sample tanks and 
other meter engineer's equipment, determining specific gravity and Btu 
content of gas.
    7. Inspecting and testing equipment not specifically to determine 
necessity for repairs including pulsation tests.
    8. Cleaning and lubricating equipment.
    9. Keeping log and other operating records, preparing reports of 
operations, etc.
    10. Attending boilers and operating other accessory equipment.
    11. Installing and removing district gauges for pressure survey.
    12. Thawing freeze in gauge pipes.
    13. Inspecting and pumping drips, dewatering manholes and pits, 
inspecting sumps, cleaning pits, etc., blowing meter drips.
    14. Moving equipment, minor structures, etc., not in connection with 
construction, retirement, or maintenance work.

Materials and expenses:
    15. Charts and printed forms, stationery and office supplies, etc.
    16. Lubricants, wiping rags, waste.
    17. Employees' transportation and travel expense.
    18. Freight, express, parcel post, trucking and other 
transportation.
    19. Utility services: light, water, telephone.
757 Purification expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating equipment used for purifying, 
dehydrating, and conditioning of natural gas.

                                  Items

Labor:
    1. Supervising.
    2. Changing charts on fuel meters.

[[Page 717]]

    3. Emptying, cleaning and refilling purifier boxes.
    4. Oiling dip sheets of purifier covers.
    5. Removing spent oxide to refuse piles.
    6. Revivifying oxide.
    7. Taking readings of inlet and outlet pressures and temperature.
    8. Unloading and storing glycol.
    9. Watching station and equipment.
    10. Cutting grass and weeds, and minor grading around equipment and 
stations.
    11. Hauling operating employees, materials, supplies and tools, etc.
    12. Inspecting and testing equipment, not specifically to determine 
necessity for repairs or replacement of parts.
    13. Lubricating equipment, valves, etc.
    14. Operating and checking equipment, valves, instruments, etc.

Materials and expenses:
    15. Liquid purifying supplies.
    16. Iron oxide.
    17. Odorizing materials.
    18. Charts, printed forms, etc.
    19. Employees' transportation and travel expenses.
    20. Freight, express, parcel post, trucking, and other 
transportation.
    21. Gas used in operations.
    22. Janitor, washroom, and landscaping supplies.
    23. Lubricants, wiping rags, waste, etc.
    24. Utility services: light, water, telephone.

    Note: Inclusion of dehydration expenses in this account shall be 
consistent with the functional classification of dehydration plant as to 
which, see the note to account 336, Purification Plant, relating to 
cases where dehydrators may be located some distance from the production 
sources of gas.
758 Gas well royalties.
    A. This account shall include royalties paid for natural gas 
produced by the utility from wells on land owned by others.
    B. Records supporting the entries to this account shall be so kept 
that the utility can furnish the name of the parties to each contract 
involving royalties, the terms of each contract, the location of the 
property involved, the method of determining the royalties, and the 
amounts payable.
759 Other expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in producing and gathering natural gas and not 
includible in any of the foregoing accounts.

                                  Items

Labor:
    1. Moving cleaning tools between locations.
    2. Operating communications system.
    3. Reading limited and unlimited free gas meters.

Materials and expenses:
    4. Miscellaneous small tools, etc.
    5. Research, development, and demonstration expenses.
760 Rents.
    This account shall include rents for property of others used, 
occupied or operated in connection with the production and gathering of 
natural gas, other than rentals on land and land rights held for the 
supply of natural gas. (See operating expense instruction 3.)

    Note: See account 795, Delay Rentals, for rentals paid on lands held 
for the purpose of obtaining a supply of gas in the future.
761 Maintenance supervision and engineering.
    This account shall include the cost of labor, materials used and 
expenses incurred in the general supervision and direction of 
maintenance of the production and gathering facilities as a whole. 
Direct field supervision of specific jobs shall be charged to the 
appropriate maintenance account. (See operating expense instruction 1.)
762 Maintenance of structures and improvements.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures and improvements, the 
book cost of which is includible in accounts 326, Gas Well Structures, 
327, Field Compressor Station Structures, 328, Field Measuring and 
Regulating Station Structures, and 329, Other Structures. (See operating 
expense instruction 2.)
763 Maintenance of producing gas wells.
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of gas wells and equipment includible 
in accounts 330. Producing Gas Wells--Well Construction, and 331, 
Producing Gas Wells--Well Equipment. (See operating expense instruction 
2.)

[[Page 718]]

764 Maintenance of field lines.
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of field lines the book cost of which 
is includible in account 332, Field Lines. (See operating expense 
instruction 2.)

                                  Items

    1. Electrolysis and leak inspections (not routine).
    2. Installing and removing temporary lines, when necessitated by 
maintenance.
    3. Lamping and watching while making repairs.
    4. Lowering and changing location of portion of lines, when the same 
pipe is used.
    5. Protecting lines from fires, floods, land slides, etc.
    6. Rocking creek crossings.
765 Maintenance of field compressor station equipment.
    This account shall include the cost of labor and expenses incurred 
in the maintenance of field compressor station equipment includible in 
account 333, Field Compressor Station Equipment. (See operating expense 
instruction 2.)
766 Maintenance of field measuring and regulating station equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of field measuring and regulating 
station equipment includible in account 334, Field Measuring and 
Regulating Station Equipment. (See operating expense instruction 2.)
767 Maintenance of purification equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of purification equipment 
includible in account 336, Purification Equipment. (See operating 
expense instruction 2.)

    Note: Inclusion of dehydration maintenance expenses in this account 
shall be consistent with the functional classification of dehydration 
plant as to which see the note to account 336, Purification Equipment, 
relating to cases where dehydrators may be located some distance from 
the production sources of gas.
768 Maintenance of drilling and cleaning equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of drilling and cleaning equipment 
includible in account 335, Drilling and Cleaning Equipment, except such 
costs of maintaining drilling tools or other equipment which are 
assignable to the cost of drilling wells. (See operating expense 
instruction 2.)
769 Maintenance of other equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of other production and gathering 
equipment includible in account 337, Other Equipment. (See operating 
expense instruction 2.)
770 Operation supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of products extraction and 
refining operations, except supervision of marketing and selling 
operations which shall be charged to account 779, Marketing Expenses. 
Direct supervision of specific extraction and refining activities shall 
be charged to the appropriate account. (See operating expense 
instruction 1.)
771 Operation labor.
    This account shall include the cost of labor used in the operation 
of facilities for the extraction of gasoline, butane, propane, or other 
salable products from natural gas and for refining such products.

                                  Items

Labor:
    1. Supervising.
    2. Operating, checking, lubricating, wiping, polishing, and cleaning 
engines, equipment, valves, machinery, gauges, and other instruments, 
etc.
    3. Inspecting and testing equipment and instruments, not 
specifically to determine necessity for repairs or replacement of parts.
    4. Reading meters, gauges, and other instruments, changing charts, 
preparing operating reports, etc.
    5. Testing gasoline samples, water, etc.
    6. Cleaning structures housing equipment, cutting grass and weeds 
and doing minor grading work around equipment and structures, etc.

[[Page 719]]

    7. Driving trucks used in products extraction operations.
    8. Cleaning and repairing hand tools used in operations, etc.
    9. Watching plant during shut-down periods.
    10. Making electricity or steam.
772 Gas shrinkage.
    A. This account shall include the cost of gas lost or absorbed in 
the process of extraction of salable products from natural gas, 
exclusive of gas used as fuel, the cost of which shall be included in 
account 773, Fuel.
    B. Concurrent credits offsetting charges to this account shall be 
made to account 811, Gas Used for Products Extraction--Credit.
773 Fuel.
    A. This account shall include the cost of natural gas or other fuel 
used in extracting gasoline, butane, propane and other salable products 
from natural gas, including fuel used for generation of electricity or 
making steam.
    B. Concurrent Credits offsetting charges to this account shall be 
made to account 811, Gas Used for Products Extraction--Credit.
774 Power.
    This account shall include the cost of electricity purchased for 
operation of facilities used in the extraction of gasoline, butane, 
propane, or other salable products from natural gas.
775 Materials.
    This account shall include the cost of materials used in extracting 
salable products from natural gas and blending and refining such 
products.

                                  Items

    1. Absorption oil.
    2. Charcoal.
    3. Water (payments to others for water).
    4. Steam (payments to others for steam).
    5. Blending agents.
    6. Natural gasoline removed from inventory for blending and refining 
purposes.
    7. Tetraethyl lead.
776 Operation supplies and expenses.
    This account shall include supplies used and expenses incurred in 
the operation of facilities for recovering salable products from natural 
gas and blending and refining such products, not provided for elsewhere.

                                  Items

    1. Employee transportation and travel expenses.
    2. Freight, express, parcel post, trucking and other transportation.
    3. Utility services: light, water, telephone.
    4. Charts, gas measurement, etc.
    5. Janitor, washroom and landscaping supplies.
    6. Lubricants: oil and grease, wiping rags and waste, etc.
    7. Testing equipment, hand tools, etc., of a portable nature and 
relatively minor cost or of short life.
    8. Research, development, and demonstration expenses.
777 Gas processed by others.
    A. This account shall include the cost of gas shrinkage, gas 
consumed for fuel, royalties, and other expenses in connection with the 
processing of gas of the utility by others for extraction of salable 
products, for which the related revenues are includible in account 491, 
Revenues from Natural Gas Processed by Others.
    B. Concurrent credits offsetting charges to this account for the 
difference between gas delivered to others for processing and gas 
returned after processing, such as shrinkage in the processing 
operations and gas of the utility used for fuel, shall be made to 
account 811, Gas Used for Products Extraction of Credit.
    C. Records supporting this account shall be so maintained that full 
information will be readily available concerning gas shrinkage, gas used 
for fuel, royalties, and other expenses assumed or paid by the utility 
with regard to each processor of gas of the utility. (See paragraph B of 
account 491, Revenues from Natural Gas Processed by Others.)

                                  Items

    1. Gas shrinkage, being cost of the reduction in gas from products 
extraction operations of gas of the utility processed by others.
    2. Gas for fuel, being cost of gas of the utility used for fuel in 
connection with the products extraction processing of the utility's gas 
by others.
    3. Royalties, being payments of fractional interests of royalty 
holders in products extracted by others from gas of the utility.

[[Page 720]]

778 Royalties on products extracted.
    This account shall include royalties paid by the utility to others 
for the right to extract salable products from natural gas.
779 Marketing expenses.
    A. This account shall include the cost of labor, materials used and 
expenses incurred in the marketing of products extracted from natural 
gas and of similar products purchased for resale.
    B. The records supporting this account shall be so maintained that 
summaries of the various types of expenses shall be readily available.

                                  Items

Labor:
    1. Salaries of persons directly engaged in marketing operations.

Materials and expenses:
    2. Employee transportation and travel expenses.
    3. Tank car rentals.
    4. Freight and hauling charges for products shipped.
    5. Miscellaneous marketing expenses.
    6. Building service charges for space occupied by marketing 
personnel.
    7. Uncollectible accounts for extracted products sold.
780 Products purchased for resale.
    A. This account shall include the cost of gasoline, butane, propane, 
or other salable products purchased from others for resale.
    B. The records supporting this account shall be so maintained that 
the kind, quantity, and cost of products purchased from each vendor are 
readily available.
781 Variation in products inventory.
    This account shall include credits for increases, and debits for 
decreases in the inventories of salable products extracted from natural 
gas or purchased for resale. The net debit or credit in this account 
shall equal the difference between the inventory at the beginning of the 
accounting year and the end of the accounting month.
782 Extracted products used by the utility--Credit.
    This account shall include concurrent credits for charges which are 
made of operating expenses or other accounts of the gas department for 
gasoline or other extracted products which are used from stocks 
recovered in the natural gas extraction process or purchased for resale, 
and for such products used for blending and refining processes, the 
contra debit for which is account 775, Materials.
783 Rents.
    This account shall include all rents for the property of others 
used, occupied, or operated in connection with the extraction of salable 
products from natural gas, exclusive of tank car rentals and other 
similar rentals includible in account 779, Marketing Expenses. (See 
operating expense instruction 3.)
784 Maintenance supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of facilities 
used in the extraction and refining of salable products from natural 
gas. Direct field supervision of specific jobs shall be charged to the 
appropriate maintenance account. (See operating expense instruction 1.)
785 Maintenance of structures and improvements.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures, the book cost of 
which is includible in account 341, Structures and Improvements. (See 
operating expense instruction 2.)
786 Maintenance of extraction and refining equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 342, Extraction and Refining Equipment. 
(See operating expense instruction 2.)

[[Page 721]]

787 Maintenance of pipe lines.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 343, Pipe Lines. (See operating expense 
instruction 2.)
788 Maintenance of extracted products storage equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 344, Extracted Products Storage 
Equipment. (See operating expense instruction 2.)
789 Maintenance of compressor equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 345, Compressor Equipment. (See operating 
expense instruction 2.)
790 Maintenance of gas measuring and regulating equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 346, Gas Measuring and Regulating 
Equipment. (See operating expense instruction 2.)
791 Maintenance of other equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 347, Other Equipment. (See operating 
expense instruction 2.)
795 Delay rentals.
    A. This account shall be charged with the amount of rents paid 
periodically on natural gas lands acquired by lease before October 8, 
1969, in order to hold natural gas land and land rights for the purpose 
of obtaining a supply of gas in the future.
    B. Include also in this account, the cost of obtaining natural gas 
leases for a period of 1 year or less when such leases were acquired 
before October 8, 1969.
    C. Records supporting this account shall be so kept that the utility 
can furnish complete details of the charges made for each natural gas 
leasehold. (See note to gas plant instruction 7G.)

    Note: Rents paid periodically on natural gas lands acquired by lease 
after October 7, 1969, shall be charged to account 105.1, Production 
Properties Held for Future Use.
796 Nonproductive well drilling.
    This account shall include the net cost of drilling wells on natural 
gas leases acquired before October 8, 1969, which prove to be 
nonproductive.

    Note A: Records in support of the charges to this account shall 
conform, as appropriate, to Note B of General Instruction 12, Records 
for Each Plant.
    Note B: The net cost of drilling wells on natural gas leases 
acquired after October 7, 1969, which prove to be nonproductive, shall 
be charged to account 338, Unsuccessful Exploration and Development 
Costs.
797 Abandoned leases.
    A. This account shall be charged with amounts credited to account 
111, Accumulated Provision for Amortization and Depletion of Gas Utility 
Plant, to cover the probable loss on abandonment of natural gas leases 
acquired before October 8, 1969, included in account 105, Gas Plant Held 
for Future Use, which has never been productive. (See account 182.1.)
    B. When natural gas leaseholds which were acquired before October 8, 
1969, and which have never been productive are abandoned, and the 
amounts provided in account 111, Accumulated Provision for Amortization 
and Depletion of Gas Utility Plant, are not sufficient to cover the cost 
thereof, the deficiency shall be charged to this account unless 
otherwise authorized or directed by the Commission. (See account 182.1.)

    Note: Losses on abandonment of natural gas leases acquired after 
October 7, 1969, shall be charged to account 338, Unsuccessful 
Exploration and Development Costs.
798 Other exploration.
    This account shall be charged with the cost of abandoned projects 
involving natural gas leases acquired before October 8, 1969, on which 
preliminary

[[Page 722]]

expenditures were made for the purpose of determining the feasibility of 
acquiring acreage to provide a future supply of natural gas (see account 
183.1, Preliminary Natural Gas Survey and Investigation Charges).

    Note: Preliminary expenditures on abandoned projects involving 
natural gas leases acquired after October 7, 1969, shall be charged to 
account 338, Unsuccessful Exploration and Development Costs.
800 Natural gas well head purchases.
    A. This account shall include the cost at well head of natural gas 
purchased from producers in gas fields or production areas where only 
the utility's facilities are used in bringing the gas from the well head 
into the utility's natural gas system.
    B. The records supporting this account shall be so maintained that 
there shall be readily available for each vendor and well head the 
quantity of gas, basis of charges, and amount paid for the gas.

    Note: If gas purchases are made under one contract covering both 
well head and field line purchases and such amounts are not readily 
separable, the utility may classify such purchases according to 
predominant source or according to a reasonable estimate.
800.1 Natural gas well-head purchases; intracompany transfers.
    A. This account shall include, for informational purposes only, the 
amount recorded for gas supplied by the production division when the 
price is not determined by a cost-of-service rate proceeding.
    B. The records supporting this account shall be so maintained that 
there will be readily available for each well-head, the quantity of gas, 
the basis of intracompany charges, and the amount of intracompany 
charges for gas.
801 Natural gas field line purchases.
    A. This account shall include the cost, at point of receipt by the 
utility, of natural gas purchased in gas fields or production areas at 
points along gathering lines, and at points along the utility's 
transmission lines within field or production areas, exclusive of 
purchases at outlets of gasoline plants includible in account 802, where 
facilities of the vendor or others are used in bringing the gas from the 
well head to the point of entry into the utility's natural gas system.
    B. The records supporting this account shall be so maintained that 
there shall be readily available for each vendor and each point of 
receipt, the quantity of gas, basis of charges, and amount paid for the 
gas.

    Note: If gas purchases are made under one contract covering both 
well head and field line purchases and such amounts are not readily 
separable, the utility may classify such purchases according to 
predominant source or according to a reasonable estimate.
802 Natural gas gasoline plant outlet purchases.
    A. This account shall include the cost, at point of receipt by the 
utility, of natural gas purchased at the outlet side of vendor's natural 
gas products extraction plants.
    B. The records supporting this account shall be so maintained that 
there shall be readily available for each vendor and for each products 
extraction plant, the quantity of gas, basis of the charges, and the 
amount paid for the gas.
803 Natural gas transmission line purchases.
    A. This account shall include the cost, at point of receipt by the 
utility, of natural gas purchased at points along the utility's 
transmission lines not within gas fields or production areas, excluding 
purchases at the outlets of products extraction plants includible in 
account 802.
    B. The records supporting this account shall be so maintained that 
there shall be readily available for each vendor and each point of 
receipt, the quantity of gas, basis of charges, and the amount paid for 
the gas.
804 Natural gas city gate purchases.
    A. This account shall include the cost, at point of receipt by the 
utility, of natural gas purchased which is received at the entrance to 
the distribution system of the utility.
    B. The records supporting this account shall be so maintained that 
there

[[Page 723]]

shall be readily available for each vendor and each point of receipt, 
the quantity of gas, basis of the charges, and the amount paid for the 
gas.

    Note: Do not credit this account for gas used in reforming for which 
the cost is charged to manufactured gas production expenses. Credits for 
such gas should be made to account 812, Gas Used for Other Utility 
Operations--Credit.
804.1 Liquefied natural gas purchases.
    A. This account shall include the cost, including transportation, at 
point of receipt by the utility, of liquefied natural gas purchased for 
the purpose of vaporization and injection into the utility's 
transmission or distribution system for resale.
    B. The records supporting this account shall be so maintained that 
there shall be readily available for each vendor and point of receipt, 
the quantity of liquefied natural gas purchased, basis of charges, the 
amount paid for the liquefied gas, and transportation charges incurred 
up to the point of receipt of the liquefied gas.
805 Other gas purchases.
    A. This account shall include the cost, at point of receipt by the 
utility, of manufactured gas, refinery gas, or any gas other than 
natural gas, or other than any mixed gas in which the natural gas is an 
important proportion of the mixture.
    B. The records supporting this account shall be so maintained that 
there shall be readily available for each vendor and each point of 
receipt, the kind and quantity of gas, Btu content, basis of the 
charges, and the amount paid for the gas.
    C. Utilities recognizing revenue for shipper-supplied gas must 
include the current market price of such gas in this account. Current 
market price is the delivered spot price of gas in the utility's supply 
area, as published in a recognized industry journal. The publication 
used must be the same one identified in the pipeline's tariff for use in 
its cash-out provision, if it has one. If it has no cash-out provision, 
the utility must use one publication consistently. Contra entries to 
those recorded herein must be made to the appropriate transportation 
revenue account (Account 489.1 through Account 489.4). Records are to be 
maintained and readily available that include the name of shipper, 
quantity of gas, and the publication and price used to value shipper-
supplied gas.
    D. The value of gas received from shippers under tariff allowances 
that is not consumed in operations nor returnable to customers through 
rate tracking mechanisms must be credited to Account 495, Other Gas 
Revenues and charged to this account. Utilities must simultaneously 
charge Accounts 117.3 or 117.4 as appropriate, with contra credits to 
Account 808.2, Gas Delivered to Storage--Credit. Records are to be 
maintained and readily available that include the name of shipper, 
quantity of gas, and the publication and price used to value shipper-
supplied gas.
805.1 Purchased gas cost adjustments.
    A. This account shall be debited or credited with decreases or 
increases in purchased gas costs related to Commission approved 
purchased gas adjustment clauses when such costs are not included in the 
utility's rate schedules on file with the Commission.
    B. This account shall be debited or credited with amounts amortized 
from Account 191, Unrecovered Purchased Gas Costs.
806 Exchange gas.
    This account includes debits or credits for the cost of gas in 
unbalanced transactions where gas is received from or delivered to 
another party in exchange, load balancing, or no-notice transportation 
transactions. The costs are to be determined consistent with the 
accounting method adopted by the utility for its system gas. If the 
utility has adopted the inventory method of accounting, the amounts to 
be recorded in Account 806 must be based on the historical cost of the 
gas. If the utility has adopted the fixed asset method of accounting, 
the amounts to be recorded in Account 806 must be based on the current 
market price of gas at the time gas is tendered for transportation. (See 
the Special Instructions to Accounts 117.1, 117.2, and 117.3 for a 
description of the inventory and fixed asset methods and the definition 
of the current market price of gas.) Contra entries to

[[Page 724]]

those in this account are to be made to account 174, Miscellaneous 
Current and Accrued Assets, for gas receivable and to account 242, 
Miscellaneous Current and Accrued Liabilities, for gas deliverable under 
such transactions. Such entries must be reversed and appropriate contra 
entries made to this account when gas is received or delivered in 
satisfaction of the amounts receivable or deliverable.
807 Purchased gas expenses.
    A. This account shall include expenses incurred directly in 
connection with the purchase of gas for resale.
    B. The utility shall not include as purchased gas expense, 
segregated or apportioned expenses of operating and maintaining 
gathering system plant whether such plant is devoted solely or partially 
to purchases of gas, except that the utility shall include the cost of 
turning on and off purchase gas wells and operating measuring stations 
devoted exclusively to measuring purchased gas.
    C. In general, it is intended that this account include only the 
expenses directly related to purchased gas, including the expenses of 
computing volumes of gas purchased, and special items directly related 
to gas purchases which are not includible in other accounts.
    D. This account shall be subdivided as follows:

807.1 Well expenses--Purchased gas.
807.2 Operation of purchased gas measuring stations.
807.3 Maintenance of purchased gas measuring stations.
807.4 Purchased gas calculations expenses.
807.5 Other purchased gas expenses.
808.1 Gas withdrawn from storage-Debit.
    A. This account shall include debits for the cost of gas withdrawn 
from storage during the year. Contra credits for entries to this account 
shall be made to accounts 117.1 through 117.4, or account 164.2, 
Liquefied Natural Gas Stored, as appropriate. (See the Special 
Instructions to accounts 117.1, 117.2, and 117.3).
    B. Withdrawal of gas from storage shall not be netted against 
deliveries to storage. (See account 808.2.)

    Note: Adjustments for gas inventory losses due to cumulative 
inaccuracies in gas measurement, or from other causes, shall be entered 
in account 823, Gas Losses. If, however, any adjustment is substantial, 
the utility may, with approval of the Commission, amortize the amount of 
the adjustment to account 823 over future operating periods.
808.2 Gas delivered to storage-Credit.
    A. This account shall include credits for the cost of gas delivered 
to storage during the year. Contra debits for entries to this account 
shall be made to accounts 117.1 through 117.4, or account 164.2, 
Liquefied Natural Gas Stored, as appropriate. (See the Special 
Instructions to accounts 117.1, 117.2, and 117.3).
809.1 Withdrawals of liquefied natural gas held for processing--Debit.
    A. This account shall include debits for the cost of liquefied gas 
withdrawn during the year. Contra credits for entries to this account 
shall be made to account 164.3, Liquefied Natural Gas Held for 
Processing.
    B. Withdrawals of liquefied natural gas held for processing shall 
not be netted against deliveries. (See account 809.2).

    Note: Adjustments for gas inventory losses due to cumulative 
inaccuracies in gas measurement, or from other causes, shall be entered 
in account 846.1, Gas Losses, in the month determined, if, however, any 
adjustment is substantial, the utility may, with approval of the 
Commission, amortize the amount of the adjustment to account 846.1 over 
future operating periods.
809.2 Deliveries of natural gas for processing--Credit.
    A. This account shall include credits for the cost of gas delivered 
for processing during the year. Contra debits for entries to this 
account shall be made to account 164.3, Liquefied Natural Gas Held for 
Processing.
    B. Deliveries of natural gas for processing shall not be netted 
against withdrawals from processing. (See account 809.1).
810 Gas used for compressor station fuel--Credit.
    This account shall include concurrent credits for charges which are 
made to operating expenses for gas consumed

[[Page 725]]

for compressor station fuel from the common system gas supply.
811 Gas used for products extraction--Credit.
    This account shall include concurrent credits for charges which are 
made to products extraction expenses for gas shrinkage and gas used for 
fuel in products extraction operations of the utility and for similar 
uses of gas of the utility by others processing gas of the utility for 
extraction of salable products.
812 Gas used for other utility operations--Credit.
    This account shall include concurrent credits for charges which are 
made to operating expenses or other accounts of the gas department for 
gas consumed from the common system supply for operating and utility 
purposes other than uses for which credits are includible in any of the 
foregoing accounts. (See account 484, Interdepartmental Sales, for gas 
supplied to departments other than the gas utility department.)
813 Other gas supply expenses.
    A. This account shall include the cost of labor, materials used and 
expenses incurred in connection with gas supply functions not provided 
for in any of the above accounts, including, research and development 
expenses.

These accounts are to be used by both transmission and distribution 
companies to account for natural gas storage expenses. If the utility 
operates both transmission and distribution systems, subaccounts shall 
be maintained classifying the expenses to the transmission or 
distribution function.
    B. Include in separate subaccounts: (1) losses on settlements of 
imbalance receivables and payables (See Account 174 and 242) and losses 
on replacement of encroachment volumes (See the Special Instructions to 
Accounts 117.1, 117.2 and 117.3); (2) revaluations of storage 
encroachments; and (3) system gas losses not associated with storage. 
Appropriate records must be maintained and readily available that 
include the amount of losses and associated volumes in Dth.
814 Operation supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of underground storage 
operations. Direct supervision of specific activities such as turning on 
and shutting off storage wells, compressor station operations, etc., 
shall be charged to the appropriate account. (See operating expense 
instruction 1.)
815 Maps and records.
    This account shall include the cost of labor, materials used and 
expenses incurred in the preparation and maintenance of storage maps and 
land records.

                                  Items

Labor:
    With respect to land records:
    1. Supervising.
    2. Abstracting titles to date for extension and renewal of leases.
    3. Adjusting land and well rentals.
    4. Renewing and extending leases or replacing leases not involving 
additional consideration.
    5. Transferring, assigning, pooling, and merging leases.
    6. Delivering rental checks.
    7. Clerical work in maintaining storage land and lease records.
    8. Preparing and maintaining lease expiration calendars.

    With respect to maps:
    9. Supervising.
    10. Preparing maps, well location plats, etc.
    11. Reproducing maps (blueprints or photostats).
    12. Posting and revising maps.
    13. Surveying deeds, leases, rights-of-way, well locations, etc., 
for map revisions.
    14. Maintaining files of maps and tracings.
    15. Field checking boundaries, markers, etc. in connection with 
preparation of maps.

Materials and expenses (general):
    16. Reproduction of land and lease records and maps (blueprints, 
photostats, etc.).
    17. Drafting materials and supplies.
    18. Surveying materials and supplies.
    19. Employees' transportation and travel expenses.
816 Wells expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating storage gas wells.

[[Page 726]]

                                  Items

Labor:
    1. Supervising.
    2. Testing, bailing, swabbing, blowing, and gauging storage wells.
    3. Painting signs, etc.
    4. Minor upkeep of well roads, fences, etc.
    5. Turning storage wells on and off.
    6. Moving cleaning out tools between locations.
    7. Driving trucks.

Materials and expenses:
    8. Gas, gasoline, and oil used in pumping, bailing, heating, and 
swabbing.
    9. Lumber, nails, and other materials used for repairing old well 
roads and fences.
    10. Well swabs.
    11. Employees' transportation and travel expenses.
    12. Freight, express, parcel post, trucking, and other 
transportation.
817 Lines expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating underground storage lines.

                                  Items

Labor:
    1. Supervising.
    2. Walking or patrolling lines.
    3. Attending valves, lubricating valves and other equipment, blowing 
and cleaning lines and drips, draining water from lines, operating and 
cleaning scrubbers, thawing freezes.
    4. Taking line pressures, changing pressure charts, operating alarm 
gauges.
    5. Building and repairing gate boxes, foot bridges, stiles, tool 
boxes, etc., used in line operations, erecting line markers and warning 
signs, repairing old line roads.
    6. Cleaning debris, cutting grass and weeds on rights-of-way.
    7. Inspecting and testing not specifically to determine necessity 
for repairs.
    8. Protecting utility property during work by others.
    9. Standby time of emergency crews, responding to fire calls, etc.
    10. Locating valve boxes or drip riser boxes.
    11. Cleaning and repairing tools used in storage lines operations.
    12. Cleaning structures and equipment.
    13. Driving trucks.

Materials and expenses:
    14. Line markers and warning signs.
    15. Lumber, nails, etc., used in building and repairing gate boxes, 
foot bridges, stiles, etc.
    16. Charts.
    17. Scrubber oil.
    18. Hand tools.
    19. Lubricants, wiping rags, waste, etc.
    20. Freight, express, parcel post, trucking and other 
transportation.
    21. Employees' transportation and travel expenses.
    22. Janitor and washroom supplies.
    23. Utility services: light, water, telephone.
    24. Gas used in operations.
818 Compressor station expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating underground storage compressor stations.

                                  Items

Labor:
    1. Supervising.
    2. Operating and checking engines, equipment, valves, machinery, 
gauges, and other instruments, including cleaning, wiping, polishing, 
and lubricating.
    3. Operating boilers and boiler accessory equipment, including fuel 
handling and ash disposal, recording fuel used, and unloading and 
storing coal and oil.
    4. Repacking valves and replacing gauge glasses, etc.
    5. Recording pressures, replacing charts, keeping logs, and 
preparing reports of station operations.
    6. Inspecting and testing equipment when not specifically to 
determine necessity for repairs or replacement of parts.
    7. Pumping drips at the station.
    8. Taking dew point readings.
    9. Testing water.
    10. Cleaning structures housing equipment, cutting grass and weeds, 
and minor grading around station.
    11. Cleaning and repairing hand tools used in operations.
    12. Driving trucks
    13. Watching during shut downs.
    14. Clerical work at station.

Materials and expenses:
    15. Scrubber oil.
    16. Lubricants, wiping rags, and waste.
    17. Charts and printed forms, etc.
    18. Gauge glasses.
    19. Chemicals to test water.
    20. Water tests and treatment by other than employees.
    21. Janitor and washroom supplies, first aid supplies, landscaping 
supplies, etc.
    22. Employees' transportation and travel expenses.
    23. Freight, express, parcel post, trucking, and other 
transportation.
    24. Utility services: light, water, telephone.
819 Compressor station fuel and power.
    A. This account shall include the cost of gas, coal, oil, or other 
fuel, or electricity, used for the operation of

[[Page 727]]

underground storage compressor stations, including applicable amounts of 
fuel stock expenses.
    B. Records shall be maintained to show the quantity of each type of 
fuel consumed or electricity used at each compressor station, and the 
cost of such fuel or power. Respective amounts of fuel stock and fuel 
stock expenses shall be readily available.

    Note: The cost of fuel, except gas, and related fuel stock expenses 
shall be charged initially to appropriate fuel accounts carried in 
accounts 151, Fuel Stock, and 152, Fuel Stock Expenses Undistributed, 
and cleared to this account on the basis of fuel used. See accounts 151 
and 152 for the basis of fuel costs and includible fuel stock expenses.
820 Measuring and regulating station expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating underground storage measuring and 
regulating stations.

                                  Items

Labor:
    1. Supervising.
    2. Recording pressures and changing charts, reading meters, etc.
    3. Estimating lost meter registrations, etc. except gas purchases 
and sales.
    4. Calculating gas volumes from meter charts except gas purchases 
and sales.
    5. Adjusting and calibrating measuring equipment, changing meters, 
orifice plates, gauges, clocks, etc., not in connection with 
construction or maintenance.
    6. Testing gas samples, inspecting and testing gas sample tanks and 
other meter engineers equipment, determining specific gravity and Btu 
content of gas.
    7. Inspecting and testing equipment not specifically to determine 
necessity for repairs, including pulsation tests.
    8. Cleaning and lubricating equipment.
    9. Keeping log and other operating records, preparing reports of 
operation, etc.
    10. Attending boilers and operating other accessory equipment.
    11. Installing and removing district gauges for pressure survey.
    12. Thawing freeze in gauge pipe.
    13. Inspecting and pumping drips, dewatering manholes and pits, 
inspecting sumps, cleaning pits, etc., blowing meter drips.
    14. Moving equipment, minor structures, etc., not in connection with 
maintenance or construction.

Materials and expenses:
    15. Charts and printed forms, stationery and office supplies, etc.
    16. Lubricants, wiping rags, waste.
    17. Employees' transportation and travel expense.
    18. Freight, express, parcel post, trucking and other 
transportation.
    19. Utility services: light, water, telephone.
821 Purification expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating equipment used for purifying, 
dehydrating, and conditioning of natural gas in connection with 
underground storage operations.

                                  Items

Labor:
    1. Supervising.
    2. Changing charts on fuel meters.
    3. Emptying, cleaning and refilling purifier boxes.
    4. Oiling dip sheets of purifier covers.
    5. Removing spent oxide to refuse piles.
    6. Revivifying oxide.
    7. Taking readings of inlet and outlet pressures and temperature.
    8. Unloading and storing glycol.
    9. Watching station and equipment.
    10. Cutting grass and weeds, and minor grading around equipment and 
stations.
    11. Hauling operating employees, materials, supplies and tools, etc.
    12. Inspecting and testing equipment, not specifically to determine 
necessity for repairs or replacement of parts.
    13. Lubricating equipment, valves, etc.
    14. Operating and checking equipment, valves, instruments, etc.

Materials and expenses:
    15. Liquid purifying supplies.
    16. Iron oxide.
    17. Odorizing materials.
    18. Charts, printed forms, etc.
    19. Employees' transportation and travel expenses in connection with 
purification and dehydration operations.
    20. Freight, express, parcel post, trucking and other 
transportation.
    21. Gas used in operations.
    22. Janitor, washroom and landscaping supplies.
    23. Lubricants, wiping rags, waste, etc.
    24. Utility services: light, water, telephone.
822 Exploration and development.
    This account shall include expenses of investigation, exploration, 
and development of underground storage projects under consideration 
which prove not feasible. There also shall be included in this account 
the net cost of drilling nonoperative wells within an existing storage 
project. (For Major

[[Page 728]]

companies see account 183.2, Other Preliminary Survey and Investigation 
Charges.)

    Note: Include in account 352, Wells, the cost of wells which may be 
drilled within a storage project for purposes of pressure observation 
rather than for injection or withdrawal of gas.
823 Gas losses.
    This account shall include the amounts of inventory adjustments 
representing the cost of gas lost or unaccounted for in underground 
storage operations due to cumulative inaccuracies of gas measurements or 
other causes. (See the Special Instructions to Accounts 117.1, 117.2 and 
117.3). If however, any adjustment is substantial, the utility may, with 
approval of the Commission, amortize the amount of the adjustment to 
this account over future operating periods.
824 Other expenses.
    This account shall include the cost of labor, material used and 
expenses incurred in operating underground storage plant, and other 
underground storage operating expenses, not includible in any of the 
foregoing accounts, including research, development, and demonstration 
expenses.
825 Storage well royalties.
    A. This account shall include royalties, rents, and other payments 
includible in operating expenses for gas wells and gas land acreage 
located within and comprising underground storage projects of the 
utility. (See operating expense instruction 3.)
    B. The records supporting this account shall be so maintained that 
information will be readily available for each storage project, of the 
parties to each contract, basis of the charges, and location of wells to 
which the royalties or rents of each contract relate.
826 Rents.
    This account shall include rents for property of others used in 
connection with the storage of gas underground, other than rents and 
royalties paid with respect to storage wells and gas lands utilized for 
the holding of gas in underground storage. (See operating expense 
instruction 3.)
830 Maintenance supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of underground 
storage facilities. Direct field supervision of specific jobs shall be 
charged to the appropriate maintenance account. (See operating expense 
instruction 1.)
831 Maintenance of structures and improvements.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures, the book cost of 
which is includible in account 351, Structures and Improvements. (See 
operating expense instruction 2.)
832 Maintenance of reservoirs and wells.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of storage wells, the book cost of 
which is included in account 352, Wells, and the maintenance of 
reservoirs, the book cost of which is included in account 352.2, 
Reservoirs. (See operating expense instruction 2.)
833 Maintenance of lines.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of underground storage lines, the 
book cost of which is includible in account 353, Lines. (See operating 
expense instruction 2.)
834 Maintenance of compressor station equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 354, Compressor Station Equipment. (See 
operating expense instruction 2.)

[[Page 729]]

835 Maintenance of measuring and regulating station equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 355, Measuring and Regulating Equipment. 
(See operating expense instruction 2.)
836 Maintenance of purification equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of purification equipment, the book 
cost of which is includible in account 356, Purification Equipment. (See 
operating expense instruction 2.)
837 Maintenance of other equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 357, Other Equipment. (See operating 
expense instruction 2.)
840 Operation supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of the operation of other 
storage facilities. Direct supervision of specific activities such as 
operation of gas holders shall be charged to the appropriate account. 
(See operating expense instruction 1.)
841 Operation labor and expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating storage holders and other storage 
equipment.

                                  Items

Labor:
    1. Supervising.
    2. Operating, checking, lubricating, cleaning, and polishing 
equipment, machinery, valves, instruments, and other local storage 
equipment.
    3. Reading meters, gauges and other instruments, changing charts, 
preparing operating reports, etc.
    4. Pumping inlet and outlet holder drips.
    5. Inspecting and testing equipment when not specifically for 
repairs or replacement of parts.
    6. Cleaning structures and housing equipment, cutting grass and 
weeds, and doing minor grading work around structures and equipment.
    7. Cleaning and repairing hand tools used for operations, etc.
    8. Operating steam lines for heating storage facilities.

Materials and expenses:
    9. Charts for pressure gauges and meters, printed forms, etc.
    10. Lubricants, wiping rags, waste, etc.
    11. Janitor and washroom supplies, landscaping supplies, etc.
    12. Employee travel and transportation expenses.
    13. Freight, express, parcel post, trucking, and other 
transportation.
    14. Utility services: light, water, and telephone.
    15. Chemicals.
    16. Refrigerants.
    17. Research, development, and demonstration expenses.
842 Rents.
    This account shall include rents for property of others used or 
operated in connection with other storage operations. (See operating 
expense instruction 3.)
842.1 Fuel.
    A. This account shall include the cost of natural gas or other fuel 
used in the operation of other storage plant.
    B. Concurrent credits offsetting charges to this account for natural 
gas used for fuel shall be made to account 812, Gas Used for Other 
Utility Operations--Credit.
842.2 Power.
    This account shall include the cost of electricity consumed for 
operation of facilities used in the operation of other storage plant.
842.3 Gas Losses.
    This account shall include the amounts of inventory adjustments 
representing the cost of gas lost or unaccounted for in other storage 
operations due to shrinkage or other causes.

[[Page 730]]

843.1 Maintenance supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of other storage 
facilities. Direct field supervision of specific jobs shall be charged 
to the appropriate maintenance account. (See operating expense 
instruction 1.)
843.2 Maintenance of structures and improvements.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures, the book cost of 
which is includible in account 361, Structures and Improvements. (See 
operating expense instruction 2.)
843.3 Maintenance of gas holders.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of gas holders, the book cost of 
which is includible in account 362, Gas Holders. (See operating expense 
instruction 2.)
843.4 Maintenance of purification equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of purification equipment, the book 
cost of which is includible in account 363, Purification Equipment. (See 
operating expense instruction 2.)
843.5 Maintenance of liquefaction equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of liquefaction equipment, the book 
cost of which is includible in account 363.1, Liquefaction Equipment. 
(See operating expense instruction 2.)
843.6 Maintenance of vaporizing equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of vaporizing equipment, the book 
cost of which is includible in account 363.2, Vaporizing Equipment. (See 
operating expense instruction 2.)
843.7 Maintenance of compressor equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of compressor equipment, the book 
cost of which is includible in account 363.3, Compressor Equipment. (See 
operating expense instruction 2.)
843.8 Maintenance of measuring and regulating equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of measuring and regulating 
equipment, the book cost of which is includible in account 363.4, 
Measuring and Regulating Equipment. (See operating expense instruction 
2.)
843.9 Maintenance of other equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment the book cost of which 
is includible in account 363.5, Other Equipment. (See operating expense 
instruction 2.)
844.1 Operations supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of operations of liquefied 
natural gas facilities. Direct supervision of specific activities shall 
be charged to the appropriate operations accounts.
844.2 LNG processing terminal labor and expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating liquefied natural gas processing 
equipment.

                                  Items

Labor

    1. Supervising.
    2. Operating, checking, lubricating, cleaning, and polishing 
equipment, machinery, valves, instruments, and other processing 
equipment.
    3. Reading meters, gauges and other instruments, changing charts, 
preparing operating reports, etc.
    4. Inspecting and testing equipment when not specifically for 
repairs or replacement of parts.

[[Page 731]]

    5. Cleaning structures housing equipment, cutting grass and weeds, 
and doing minor grading work around structures and equipment.
    6. Cleaning and repairing hand tools used for operations, etc.
    7. Operating offshore facilities such as piers, docks, loading and 
unloading arms, water craft, etc.

Materials and expenses

    8. Charts for pressure gauges and meters, printed forms, office 
supplies, etc.
    9. Lubricants, wiping rags, cleaning materials, etc.
    10. Janitor and washroom supplies, landscaping supplies, etc.
    11. Employee travel and transportation expenses.
    12. Freight, express, parcel post, trucking, and other 
transportation.
    13. Utility services: light, water, and telephone.
    14. Chemicals.
    15. Refrigerants.
    16. Small hand tools.
844.3 Liquefaction processing labor and expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating natural gas liquefaction equipment.

                                  Items

Labor

    1. Supervising.
    2. Operating, checking, lubricating, cleaning, and polishing 
equipment, machinery, valves, instruments, and other processing 
equipment.
    3. Reading meters, gauges and other instruments, changing charts, 
preparing operating reports, etc.
    4. Inspecting and testing equipment when not specifically for 
repairs or replacement of parts.
    5. Cleaning structures housing equipment, cutting grass and weeds, 
and doing minor grading work around structures and equipment.
    6. Cleaning and repairing hand tools used for operations, etc.
    7. Operating offshore facilities such as piers, docks, loading and 
unloading arms, water craft, etc.

Materials and expenses

    8. Charts for pressure gauges and meters, printed forms, office 
supplies, etc.
    9. Lubricants, wiping rags, cleaning materials, etc.
    10. Janitor and washroom supplies, landscaping supplies, etc.
    11. Employee travel and transportation expenses.
    12. Freight, express, parcel post, trucking, and other 
transportation.
    13. Utility services: light, water, and telephone.
    14. Chemicals.
    15. Refrigerants.
    16. Small hand tools.
844.4 LNG transportation labor and expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating LNG transportation equipment.

                                  Items

Labor
    1. Supervision.
    2. Operating LNG maritime tankers, LNG barges, LNG tank trucks and 
other LNG transportation equipment.
    3. Cleaning and lubricating equipment.
    4. Inspecting and testing equipment.

Materials and expenses

    5. Charts, printed forms, office supplies, etc.
    6. Dry dock charges.
    7. Lubricants, wiping rags, cleaning materials, etc.
    8. Employee's transportation travel and temporary housing expenses.
844.5 Measuring and regulating labor and expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating, measuring and regulating stations in 
connection with liquefied natural gas operations.

                                  Items

Labor

    1. Supervising.
    2. Recording pressures and changing charts, reading meters, etc.
    3. Estimating lost meter registrations, etc., except gas purchases 
and sales.
    4. Calculating gas volumes from meter charts, except gas purchases 
and sales.
    5. Adjusting and calibrating measuring equipment, changing meters, 
orifice plates, gauges, clocks, etc., not in connection with 
construction or maintenance.
    6. Testing gas samples, determining specific gravity and Btu content 
of gas.
    7. Inspecting and testing equipment not specifically to determine 
necessity for repairs including pulsation tests.
    8. Cleaning and lubricating equipment.
    9. Keeping log and other operating records, preparing records of 
operations, etc.
    10. Attending boilers and operating other accessory equipment.

[[Page 732]]

    11. Installing and removing district gauges for pressure survey.
    12. Thawing freeze in gauge pipe.
    13. Inspecting and pumping drips, dewatering manholes and pits, 
inspecting sumps, cleaning pits, blowing meter drips, etc.
    14. Moving equipment, minor structures, etc., not in connection with 
maintenance or construction.

Materials and expenses

    15. Charts and printed forms.
    16. Lubricants, wiping rags, waste.
    17. Employees' transportation and travel expense.
    18. Freight, express, parcel post, trucking and other 
transportation.
    19. Utility services: light, water, telephone.
844.6 Compressor station labor and expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred, including fuel and power, in operating compressor 
stations in connection with liquefied natural gas operations.

                                  Items

Labor
    1. Supervising.
    2. Operating and checking engines, equipment valves, machinery, 
gauges, and other instruments, including cleaning, wiping, polishing, 
and lubricating.
    3. Operating boilers and boiler accessory equipment, including fuel 
handling, recording fuel used, etc.
    4. Repacking valves and replacing gauge glasses, etc.
    5. Recording pressures, replacing charts, keeping logs, and 
preparing reports of station operations.
    6. Pumping drips at the station.
    7. Taking dew point readings.
    8. Testing water.
    9. Cleaning structures housing equipment, cutting grass and weeds, 
and minor grading around station.
    10. Cleaning and repairing hand tools used in operations.
    11. Driving trucks.
    12. Watching during shutdowns.
    13. Clerical work at station.

Materials and expenses

    14. Scrubber oil.
    15. Lubricants, wiping rags, waste.
    16. Charts and printed forms, etc.
    17. Gauge glasses.
    18. Chemicals to treat water.
    19. Water tests and treatment by other than employees.
    20. Janitor and washroom supplies, first aid supplies, landscaping 
supplies, etc.
    21. Employees' transportation and travel expenses.
    22. Freight, express, parcel post, trucking, and other 
transportation.
    23. Utility services: light, water, telephone.
844.7 Communication system expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in connection with the operation of liquefied natural 
gas communications facilities, such as radio, telephone, microwave and 
other communication systems, including payments to others for 
communications services.

                                  Items

Labor

    1. Supervising.
    2. Operating switchboards, radio equipment, power generators, 
microwave equipment, etc. (except general office switchboards).
    3. Tagging telephone poles.
    4. Testing and replacing telephone batteries, radio tubes, etc.
    5. Cutting weeds and grass along telephone rights-of-way and around 
structures and equipment.
    6. Changing radio frequencies.
    7. Securing FCC authorization to change frequencies.
    8. Taking FCC radio operator tests.
    9. Transferring mobile radios between vehicles and/or vessels.
    10. Changing locations of telephones and other communications 
equipment not in connection with maintenance or construction.
    11. Inspecting and testing not specifically to determine necessity 
for repairs.
    12. Cleaning and lubricating equipment.
    13. Cleaning structures housing equipment.

Materials and expenses

    14. Payments to others for communications services.
    15. Telephone batteries, radio tubes and other electronic 
components.
    16. Radio crystals and other materials used in changing radio 
frequencies.
    17. Lubricants, wiping rags, and waste.
    18. Employees' transportation and travel expenses.
    19. Freight, express, parcel post, trucking and other 
transportation.
844.8 System control and load dispatching.
    This account shall include the cost of labor and expenses incurred 
in dispatching and controlling the supply and flow of liquefied gas and 
vaporized

[[Page 733]]

gas prior to introduction of such vaporized gas into the utility's 
transmission or distribution system.

                                  Items

Labor

    1. Supervising.
    2. Analysis of pressures for irregularities, as received.
    3. Collecting pressures by telephone and radio.
    4. Controlling mixture of various gases to maintain proper Btu 
content.
    5. Correspondence and records, typing and maintaining files.
    6. Controlling inputs and withdrawals of liquefied gas for 
processing.
    7. Instructing field men to increase or decrease pressures at 
regulators.
    8. Maintaining pressures at compressor stations, key line junctions 
and regulating stations to divide the available gas during heavy demand 
periods.
    9. Maintaining pressure log sheets.
    10. Maintaining proper compression ratios at compressor stations, 
consistent with economical operations.
    11. Maintaining lowest necessary line pressures consistent with 
satisfactory service.
    12. Requesting pressure changes at compressor stations, regulating 
stations, and key line junctions.
    13. Rerouting gas during emergencies and planned shutdowns.

Materials and expenses

    14. Consultants' fees and expenses.
    15. Meals, traveling and incidental expenses in connection with 
system load dispatching.
    16. Office supplies, stationery and printed forms.
    17. Transportation: company and rental vehicles.
    18. Utility services: light, water, telephone.
845.1 Fuel.
    A. This account shall include the cost of gas or other fuel used for 
the operation of liquefied natural gas terminaling and processing 
facilities, except compressor station fuel.
    B. Concurrent credits offsetting charges to this account for natural 
gas used for fuel shall be made to account 812, Gas Used for Other 
Utility Operations--Credit.
845.2 Power.
    This account shall include the cost of purchased power used in 
operation of liquefied natural gas processing facilities, except 
compressor station power.
845.3 Rents.
    This account shall include rents for property of others used, 
occupied or operated in connection with liquefied natural gas processing 
operations. (See operating expense instruction 3.)
845.4 Demurrage charges.
    This account shall include demurrage charges incurred by the utility 
relative to LNG shipments received or processed by the utility.
845.5 Wharfage receipts--Credit.
    This account shall include wharfage receipts received or receivable 
from LNG shippers or other parties relative to LNG shipments received or 
processed by the utility.
845.6 Processing of liquefied or vaporized gas by others.
    A. This account shall include amounts paid to others for the 
processing of liquefied or vaporized gas of the utility.
    B. Records supporting this account shall be so maintained that there 
shall be readily available for each agreement, the name of the other 
party, Dth of gas delivered to the other party for processing and the 
Dth, of gas received back by the utility after processing, points of 
delivery to and receipt of gas from the other party, amount and basis of 
charges for the processing service.

    Note: If in connection with any gas delivered to another for 
processing such other party also processes the gas for extraction of 
gasoline or other salable products, credits attributable to the products 
so extracted shall be made to account 491, Revenues from Natural Gas 
Processed by Others, to the end that amounts recorded in this account 
shall only be charges for processing other than for extraction of 
salable products.
846.1 Gas losses.
    This account shall include the amounts of inventory adjustments 
representing the cost of gas lost or unaccounted for in liquefied 
natural gas operations due to cumulative inaccuracies of gas 
measurements or other causes. (See paragraph E of account 164.3, 
Liquefied Natural Gas Held for Processing.) If, however, any adjustment 
is substantial, the utility may,

[[Page 734]]

with approval of the Commission, amortize the amount of the adjustment 
to this account over future operating periods.
846.2 Other expenses.
    This account shall include the cost of labor, materials used, and 
expenses incurred in operating liquefied natural gas plant not 
includible elsewhere.
847.1 Maintenance supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of liquefied 
natural gas terminaling and processing facilities. Direct field 
supervision of specific jobs shall be charged to the appropriate 
maintenance accounts. (See operating expense instruction 1.)
847.2 Maintenance of structures and improvements.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures and improvements, the 
book cost of which is included in account 364.2, Structures and 
Improvements. (See operating expense instruction 2.)
847.3 Maintenance of LNG processing terminal equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of LNG terminal processing 
equipment, the book cost of which is included in account 364.3, LNG 
Processing Terminal Equipment. (See operating expense instruction 2.)
847.4 Maintenance of LNG transportation equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of transportation equipment, the 
book cost of which is included in account 364.4, LNG Transportation 
Equipment. (See operating expense instruction 2.)
847.5 Maintenance of measuring and regulating equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of measuring and regulating 
equipment, the book cost of which is included in account 364.5, 
Measuring and Regulating Equipment. (See operating expense instruction 
2.)
847.6 Maintenance of compressor station equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of compressor station equipment, 
the book cost of which is included in account 364.6, Compressor Station 
Equipment. (See operating expense instruction 2.)
847.7 Maintenance of communication equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment, the 
book cost of which is included in account 364.7, Communication 
Equipment. (See operating expense instruction 2.)
847.8 Maintenance of other equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is included in account 364.8, Other Equipment. (See operating 
expense instruction 2.)
850 Operation supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of the operation of 
transmission facilities. Direct supervision of specific activities such 
as operation of transmission lines, compressor stations, etc. shall be 
charged to the appropriate account. (See operating expense instruction 
1.)
851 System control and load dispatching.
    This account shall include the cost of labor and expenses incurred 
in dispatching and controlling the supply and flow of gas through the 
system.

                                  Items

Labor:
    1. Supervising.
    2. Analyses of pressures for irregularities, as received.

[[Page 735]]

    3. Collecting pressures by telephone and radio.
    4. Controlling mixture of various gases to maintain proper Btu 
content.
    5. Correspondence and records, typing and maintaining files.
    6. Controlling production and storage inputs and withdrawals.
    7. Instructing field men to increase or decrease pressures at 
regulators.
    8. Maintaining pressures at compressor stations, key line junctions 
and regulating stations to divide the available gas during heavy demand 
periods.
    9. Maintaining pressure log sheets.
    10. Maintaining proper compression ratios at compressor stations, 
consistent with economical operations.
    11. Maintaining lowest necessary line pressures consistent with 
satisfactory service.
    12. Maintaining well operation record by well classification.
    13. Requesting pressure changes at compressor stations, regulating 
stations, and key line junctions.
    14. Rerouting gas during emergencies and planned shut downs.

Materials and expenses:
    15. Consultants' fees and expenses.
    16. Meals, traveling, and incidental expenses in connection with 
system load dispatching.
    17. Office supplies, stationery and printed forms.
    18. Transportation: company and rental vehicles.
    19. Utility services: light, water, telephone.
852 Communication system expenses.
    A. This account shall include the cost of labor, materials used and 
expenses incurred in connection with the operation of transmission 
communications facilities, such as radio and telephone communications 
systems, including payments to others for communications services for 
transmission and load dispatching operations.
    B. Credits shall be made to this account and charges made to 
production, distribution and other gas utility functions and to other 
utility departments for equitable portions of transmission 
communications expenses attributable to use of transmission 
communications facilities other than in connection with gas transmission 
and load dispatching operation.

                                  Items

Labor:
    1. Supervising.
    2. Operating switchboards, radio equipment, power generators, 
microwave equipment, etc. (except general office switchboards.)
    3. Tagging telephone poles.
    4. Testing and replacing telephone batteries, radio tubes, etc.
    5. Cutting weeds and grass along telephone rights-of-way and around 
structures and equipment.
    6. Changing radio frequencies.
    7. Securing FCC authorization to change frequencies.
    8. Taking FCC radio operator tests.
    9. Transferring mobile radios between vehicles.
    10. Changing locations of telephones and other communications 
equipment not in connection with maintenance or construction.
    11. Inspecting and testing not specifically to determine necessity 
for repairs.
    12. Cleaning and lubricating equipment.
    13. Cleaning structures housing equipment.

Materials and expenses:
    14. Payments to others for communications services.
    15. Telephone batteries, radio tubes, etc.
    16. Radio crystals and other materials used in changing radio 
frequencies.
    17. Lubricants, wiping rags, and waste.
    18. Employees' transportation and travel expenses.
    19. Freight, express, parcel post, trucking, and other 
transportation.
853 Compressor station labor and expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred (other than fuel and power) in operating transmission 
compressor stations.

                                  Items

Labor:
    1. Supervising.
    2. Operating and checking engines, equipment valves, machinery, 
gauges, and other instruments, including cleaning, wiping, polishing, 
and lubricating.
    3. Operating boilers and boiler accessory equipment, including fuel 
handling and ash disposal, recording fuel used, and unloading and 
storing coal and oil.
    4. Repacking valves and replacing gauge glasses, etc.
    5. Recording pressures, replacing charts, keeping logs, and 
preparing reports of station operations.
    6. Inspecting and testing equipment not specifically to determine 
necessity for repairs.
    7. Pumping drips at the station.
    8. Taking dew point readings.
    9. Testing water.

[[Page 736]]

    10. Cleaning structures housing equipment, cutting grass and weeds, 
and minor grading around station.
    11. Cleaning and repairing hand tools used in operations.
    12. Driving trucks.
    13. Watching during shut downs.
    14. Clerical work at station.

Materials and expenses:
    15. Scrubber oil.
    16. Lubricants, wiping rags, and waste.
    17. Charts and printed forms, etc.
    18. Gauge glasses.
    19. Chemicals to treat water.
    20. Water tests and treatment by other than employees.
    21. Janitor and washroom supplies, first aid supplies, landscaping 
supplies, etc.
    22. Employees' transportation and travel expenses.
    23. Freight, express, parcel post, trucking, and other 
transportation.
    24. Utility services: light, water, telephone.
854 Gas for compressor station fuel.
    A. This account shall include the cost of gas used for the operation 
of transmission compressor stations.
    B. Records shall be maintained to show the Dth of gas consumed at 
each compressor station, and the cost of such gas.
855 Other fuel and power for compressor stations.
    A. This account shall include the cost of coal, oil, and other fuel, 
or electricity, used for the operation of transmission compressor 
stations, including applicable amounts of fuel stock expenses.
    B. Records shall be maintained to show the quantity of each type of 
fuel consumed or electricity used at each compressor station, and the 
cost of such fuel or power. Respective amounts of fuel stock and fuel 
stock expenses shall be readily available.

    Note: The cost of fuel, includible in this account, and related fuel 
stock expenses shall be charged initially to appropriate fuel accounts 
carried in accounts 151, Fuel Stock, and 152, Fuel Stock Expenses 
Undistributed, and cleared to this account on the basis of fuel used. 
See accounts 151 and 152 for the basis of fuel costs and includible fuel 
stock expenses.
856 Mains expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating transmission mains.

                                  Items

Labor:
    1. Supervising.
    2. Walking or patrolling lines.
    3. Attending valves, lubricating valves and other equipment, blowing 
and cleaning lines and drips, draining water from lines, operating and 
cleaning scrubbers, thawing freezes.
    4. Taking line pressures, changing pressure charts, operating alarm 
gauges.
    5. Building and repairing gate boxes, foot bridges, stiles, etc., 
used in line operations, erecting line markers and warning signs, 
repairing old line roads.
    6. Cleaning debris, cutting grass and weeds on rights-of-way.
    7. Inspecting and testing not specifically to determine necessity 
for repairs.
    8. Protecting utility property during work by others.
    9. Standby time of emergency crews, responding to fire calls, etc.
    10. Locating valve boxes or drip riser boxes.
    11. Cleaning and repairing tools used in mains operations, making 
tool chests, etc.
    12. Cleaning structures and equipment.
    13. Driving trucks.

Materials and expenses:
    14. Line markers and warning signs.
    15. Lumber, nails, etc., used in building and repairing gate boxes, 
foot bridges, stiles, etc.
    16. Charts.
    17. Scrubber oil.
    18. Hand tools.
    19. Lubricants, wiping rags, waste, etc.
    20. Freight, express, parcel post, trucking and other 
transportation.
    21. Employees' transportation and travel expenses.
    22. Janitor and washroom supplies.
    23. Utility services: light, water, telephone.
    24. Gas used in mains operations.
857 Measuring and regulating station expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating transmission measuring and regulating 
stations.

                                  Items

Labor:
    1. Supervising.
    2. Recording pressures and changing charts, reading meters, etc.
    3. Estimating lost meter registrations, etc., except gas purchases 
and sales.
    4. Calculating gas volumes from meter charts, except gas purchases 
and sales.

[[Page 737]]

    5. Adjusting and calibrating measuring equipment, changing meters, 
orifice plates, gauges, clocks, etc. not in connection with construction 
or maintenance.
    6. Testing gas samples, inspecting and testing gas sample tanks and 
other meter engineers' equipment, determining specific gravity and Btu 
content of gas.
    7. Inspecting and testing equipment not specifically to determine 
necessity for repairs including pulsation tests.
    8. Cleaning and lubricating equipment.
    9. Keeping log and other operating records, preparing reports of 
operations, etc.
    10. Attending boilers and operating other accessory equipment.
    11. Installing and removing district gauges for pressure survey.
    12. Thawing freeze in gauge pipe.
    13. Inspecting and pumping drips, dewatering manholes and pits, 
inspecting sumps, cleaning pits, etc., blowing meter drips.
    14. Moving equipment, minor structures, etc., not in connection with 
maintenance or construction.

Materials and expenses:
    15. Charts and printed forms.
    16. Lubricants, wiping rags, waste.
    17. Employees' transportation and travel expense.
    18. Freight, express, parcel post, trucking and other 
transportation.
    19. Utility services: light, water, telephone.
858 Transmission and compression of gas by others.
    A. This account shall include amounts paid to others for the 
transmission and compression of gas of the utility.
    B. Records supporting this account shall be so maintained that there 
shall be readily available for each agreement, name of other party, Dth 
of gas delivered to the other party for transmission or compression and 
the Dth of gas received back by the utility after transmission or 
compression, points of delivery to and receipt of gas from other party, 
amount and basis of charges for the transmission or compression service.

    Note: If in connection with any gas delivered to another for 
transmission or compression such other party also processes the gas for 
extraction of gasoline or other salable products, credits attributable 
to the products so extracted shall be made to account 491, Revenues from 
Natural Gas Processed by Others, to the end that amounts recorded in 
this account shall only be charges for transportation or compression 
service.
859 Other expenses.
    This account shall include the cost of labor, material used and 
expenses incurred in operating transmission system equipment and other 
transmission system expenses not includible in any of the foregoing 
accounts, including research, development, and demonstration expenses.
860 Rents.
    This account shall include rents for property of others used, 
occupied or operated in connection with the operation of the 
transmission system. Include herein rentals paid for regulator sites, 
railroad crossings, rights-of-way, annual payments to governmental 
bodies and others for use of public or private lands, and reservations 
for rights-of-way. (See operating expense instruction 3.)
861 Maintenance supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of transmission 
system facilities. Direct field supervision of specific jobs shall be 
charged to the appropriate maintenance accounts. (See operating expense 
instruction 1.)
862 Maintenance of structures and improvements.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures, the book cost of 
which is includible in account 366, Structures and Improvements. (See 
operating expense instruction 2.)
863 Maintenance of mains.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of mains, the book cost of which is 
includible in account 367, Mains. (See operating expense instruction 2.)

                                  Items

    1. Supervising.
    2. Electrolysis and leak inspection.
    3. Installing and removing temporary lines, when necessitated by 
maintenance.
    4. Lamping and watching while making repairs.

[[Page 738]]

    5. Lowering and changing location of lines, when the same pipe is 
used.
    6. Protecting lines from fires, floods, landslides, etc.
    7. Rocking creek crossings.
864 Maintenance of compressor station equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 368, Compressor Station Equipment. (See 
operating expense instruction 2.)
865 Maintenance of measuring and regulating station equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 369, Measuring and Regulating Station 
Equipment. (See operating expense instruction 2.)
866 Maintenance of communication equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 370, Communication Equipment. (See 
operating expense instruction 2.)
867 Maintenance of other equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 371, Other Equipment. (See operating 
expense instruction 2.)
870 Operation supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of distribution system 
operations. Direct supervision of specific activities such as load 
dispatching, mains operation, removing and resetting meters, etc., shall 
be charged to the appropriate account. (See operating expense 
instruction 1.)
871 Distribution load dispatching.
    This account shall include the cost of labor, materials used and 
expenses incurred in dispatching and controlling the supply and flow of 
gas through the distribution system.

                                  Items

Labor:
    1. Supervising.
    2. Analyzing pressures for irregularities.
    3. Collecting pressures by telephone and radio.
    4. Controlling mixture of various gases to maintain proper Btu 
content.
    5. Correspondence and records, typing and maintaining files.
    6. Controlling gas-make and inputs to distribution system.
    7. Maintaining pressures at key points to divide the available gas 
during heavy demand periods.
    8. Maintaining pressure log sheets.
    9. Maintaining lowest necessary line pressures consistent with 
satisfactory service.
    10. Rerouting gas during emergencies and planned shut downs.

Materials and expenses:
    11. Consultants' fees and expenses.
    12. Meals, traveling, and incidental expenses.
    13. Office supplies, stationery and printed forms.
    14. Transportation: company and rented vehicles.
    15. Utility services: light, water, telephone.
872 Compressor station labor and expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating distribution compressor stations.

                                  Items

Labor:
    1. Supervising.
    2. Operating and checking engines, equipment valves, machinery, 
gauges, and other instruments, including cleaning, wiping, polishing, 
and lubricating.
    3. Operating boilers and boiler accessory equipment, including fuel 
handling and ash disposal, recording fuel used, and unloading and 
storing coal and oil.
    4. Repacking valves and replacing gauge glasses, etc.
    5. Recording pressures, replacing charts, keeping logs, and 
preparing reports of station operations.
    6. Inspecting and testing equipment and instruments when not 
specifically to determine necessity for repairs or replacement of parts.

[[Page 739]]

    7. Pumping drips at the station.
    8. Taking dew point readings.
    9. Testing water.
    10. Cleaning structures housing equipment, cutting grass and weeds, 
and doing minor grading around station.
    11. Cleaning and repairing hand tools used in operations.
    12. Driving trucks.
    13. Watching during shut downs.
    14. Clerical work at station.

Materials and expenses:
    15. Scrubber oil.
    16. Lubricants, wiping rags, and waste.
    17. Charts and printed forms, etc.
    18. Gauge glasses.
    19. Chemicals to test water.
    20. Water tests and treatment by other than employees.
    21. Janitor and washroom supplies, first aid supplies, landscaping 
supplies, etc.
    22. Employees' transportation and travel expenses.
    23. Freight, express, parcel post, trucking, and other 
transportation.
    24. Utility services: light, water, telephone.
873 Compressor station fuel and power (Major only).
    A. This account shall include the cost of gas, coal, oil, or other 
fuel, or electricity, used for the operation of distribution compressor 
stations, including applicable amounts of fuel stock expenses.
    B. Records shall be maintained to show the quantity of each type of 
fuel consumed or electricity used at each compressor station, and the 
cost of such fuel or power. Respective amounts of fuel stock and fuel 
stock expenses shall be readily available.

    Note: The cost of fuel, except gas, and related fuel stock expenses 
shall be charged initially to appropriate fuel accounts carried in 
accounts 151, Fuel Stock, and 152, Fuel Stock Expenses Undistributed, 
and cleared to this account on the basis of fuel used. See accounts 151 
and 152 for the basis of fuel costs and includible fuel stock expenses.
874 Mains and services expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating distribution system mains and services.

                                  Items

Labor:
    1. Supervising.
    2. Walking or patrolling lines.
    3. Attending valves, lubricating valves and other equipment, blowing 
and cleaning lines and drips, draining water from lines, thawing 
freezes.
    4. Taking line pressures, changing pressure charts, operating alarm 
gauges.
    5. Building and repairing gate boxes, foot bridges, stiles, etc. 
used in distribution mains operations, erecting line markers and warning 
signs, etc.
    6. Cleaning debris, cutting grass and weeds on rights-of-way.
    7. Inspecting and testing equipment not specifically to determine 
necessity for repairs.
    8. Protecting utility property during work by others.
    9. Standby time of emergency crews, responding to fire calls, etc.
    10. Locating and inspecting valve boxes or drip riser boxes, service 
lines, mains, etc.
    11. Cleaning and repairing tools used in mains operations, making 
tool boxes, etc.
    12. Cleaning structures and equipment.
    13. Driving trucks used in mains and service operations.
    14. Making routine leak survey.
    15. Oil fogging.

Materials and Expenses:
    1. Line markers and warning signs.
    2. Lumber, nails, etc., used in building and repairing gate boxes 
(foot bridges, stiles, tool boxes, etc.).
    3. Charts and printed forms.
    4. Scrubber oils.
    5. Hand tools.
    6. Lubricants, wiping rags, waste, etc.
    7. Freight, express, parcel post, trucking and other transportation.
    8. Uniforms.
    9. Employee transportation and travel expenses.
    10. Janitor and washroom supplies.
    11. Utility services: light, water, telephone.
    12. Gas used in mains operation.
    13. Oil for fogging.
875 Measuring and regulating station expenses--General.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating general distribution measuring and 
regulating stations.

                                  Items

Labor:
    1. Supervising.
    2. Recording pressures and changing charts, reading meters, etc.
    3. Estimating lost meter registrations, etc. except purchases and 
sales.
    4. Calculating gas volumes from meter charts, except gas purchases 
and sales.
    5. Adjusting and calibrating measuring equipment, changing meters, 
orifice plates, gauges, clocks, etc.

[[Page 740]]

    6. Taking and testing gas samples, inspecting and testing valves, 
regulators, gas sample tanks and other meter engineers' equipment, 
determining specific gravity and Btu content of gas.
    7. Inspecting and testing equipment and instruments not specially to 
determine necessity for repairs, including pulsation tests.
    8. Cleaning and lubricating equipment.
    9. Keeping log and other operating records.
    10. Attending boilers and operating other accessory equipment.
    11. Installing and removing district gauges for pressure survey.
    12. Thawing freeze in gauge pipe.
    13. Inspecting and pumping drips, dewatering manholes and pits, 
inspecting sumps, cleaning pits, blowing meter drips, etc.
    14. Moving equipment, minor structures, etc., not in connection with 
maintenance or construction.

Materials and expenses:
    15. Charts and printed forms, stationery and office supplies, etc.
    16. Lubricants, wiping rags, waste.
    17. Uniforms.
    18. Employee transportation and travel expenses.
    19. Freight, express, parcel post, trucking and other 
transportation.
    20. Utility services: light, water, telephone.
876 Measuring and regulating station expenses--Industrial.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating large measuring and regulating stations 
located on local distribution systems to serve specific commercial and 
industrial customers.

                                  Items

    (See account 875 for items.)
877 Measuring and regulating station expenses--City gate check stations.
    This account shall include the cost of labor, materials used and 
expenses incurred in operating measuring and regulating stations used to 
measure and regulate the receipt of gas at entry points to distribution 
systems.

    Note: Pipe line companies shall include in the transmission 
functional classification city gate and main line industrial measuring 
and regulating stations, except that where pipe line companies measure 
deliveries of gas at entry points to their own distribution systems, 
they shall have the option, if consistently observed, of including such 
stations either in the transmission or distribution function for 
accounting purposes.

                                  Items

    (See account 875 for items.)
878 Meter and house regulator expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in connection with removing, resetting, changing, 
testing, and servicing customer meters and house regulators.

                                  Items

Labor:
    (a) Removing, reinstalling, and changing or exchanging customer 
meters and house regulators:
    1. Initiating or terminating service, including incidental meter 
reading.
    2. Periodic replacement of meters and house regulators because of 
age.
    3. Changing or exchanging meters and house regulators because of 
complaints or removal for inspection.
    4. Resetting meters on existing connections.
    5. Handling meters and house regulators to and from customer 
premises and meter shop.
    6. Listing, tagging, and placing meter labels, etc., for removed and 
reset meters.
    7. Changing position of meters or house regulators on the same 
premises.
    8. Installing or removing blank linings.
    9. Unproductive calls, etc.

    (b) Turning on and turning off meters, except for failures of 
customers to pay bills:
    10. Turning on meters, including necessary time to insure that gas 
lines are proper to use and that appliances are in usable condition.
    11. Turning off meters including time to make safety precautions.

    (c) Other:
    12. Supervising.
    13. Clerical work on meter history and associated equipment record 
cards, test cards, and reports.
    14. Handling and recording meters for stock.
    15. Inspecting and testing meters and house regulators.
    16. Inspecting and adjusting meter testing equipment.
    17. Driving trucks used in meter operations.

Materials and expenses:
    18. Meter locks and seals.
    19. Lubricants, wiping rags, waste, etc.
    20. Uniforms.
    21. Freight, express, parcel post, trucking, and other 
transportation.

[[Page 741]]

    22. Utility services: light, water, telephone, heating.
    23. Office supplies, stationery and printing.
    24. Employees' transportation expenses.
    25. Janitor, washroom, first aid supplies, etc.

    Note: The cost of the first setting of a meter or house regulator 
shall be charged to account 382, Meter Installations, or account 384, 
House Regulator Installations, as appropriate.
879 Customer installations expenses.
    A. This account shall include the cost of labor, materials used and 
expenses incurred in work on customer premises other than expenses 
includible in account 878, Meter and House Regulator Expenses, including 
the cost of servicing customer-owned appliances when the cost of such 
work is borne by the utility.
    B. Damage to customer equipment by employees of the utility whether 
incidental to the work or the result of negligence, shall be charged to 
the job on which the employee was engaged at the time of damage.

                                  Items

Labor:
    1. Supervising.
    2. Altering customer-owned service extensions or meter connections.
    3. Investigating and correcting pressure difficulties or stoppages 
in customer-owned piping.
    4. Adjusting and repairing burner pilots because of impurities in 
the gas or failure of the distribution system.
    5. Oiling or spraying noisy customer meters.
    6. Investigating and stopping gas leaks on customers' premises 
caused by defective meter, customer-owned piping, or customer 
appliances.
    7. Inspecting new installations to determine that the customers' 
equipment and piping are properly installed and connected.
    8. Consolidating meter installations, without change of size, due to 
elimination of separate meters for different service classifications.
    9. Investigating and adjusting complaints of service on customers' 
premises.
    10. Gas load surveys including the incidental preparations and 
replacement of meters.
    11. Unproductive calls.
    12. Stenographic and clerical work.
    13. Janitorial services, etc.
    14. Installing demand or test meters.
    15. Inspecting, cleaning, repairing and adjusting customer-owned 
appliances for domestic, industrial, or commercial use, including house 
heating furnaces and other space heating appliances, hotel and 
restaurant appliances.
    16. Replacing defective parts in customer-owned appliances and 
salvaging reusable appliance parts.
Materials and expenses:
    17. Lubricants, wiping rags, waste, etc.
    18. Uniforms.
    19. Replacement parts for appliances.
    20. Office supplies, printing and station- ery.
    21. Janitor, washroom, first aid supplies, etc.
    22. Employees' transportation and travel expenses.
    23. Utility services: light, water, telephone.

    Note: Amounts billed customers for any work, the cost of which is 
charged to this account, shall be credited to this account. Any excess 
over costs resulting therefrom shall be transferred to account 488, 
Miscellaneous Service Revenues.
880 Other expenses.
    This account shall include the cost of distribution maps and 
records, distribution office expenses, and the cost of labor and 
materials used and expenses incurred in distribution systems operations 
not provided for elsewhere, including the expenses of operating street 
lighting systems and research, development, and demonstration expenses.
881 Rents.
    This account shall include rents for property of others used, 
occupied or operated in connection with the operation of the 
distribution system. Include herein rentals paid for regulator sites, 
railroad crossings, rights-of-way, annual payments to governmental 
bodies and others for use of public or private lands, and reservations 
for rights-of-way. (See operating expense instruction 3.)
885 Maintenance supervision and engineering.
    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of distribution 
system facilities. Direct field supervision of specific jobs shall be 
charged to the appropriate maintenance accounts. (See operating expense 
instruction 1.)

[[Page 742]]

886 Maintenance of structures and improvements.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of structures, the book cost of 
which is includible in account 375, Structures and Improvements. (See 
operating expense instruction 2.)
887 Maintenance of mains.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of distribution mains, the book 
cost of which is includible in account 376, Mains. (See operating 
expense instruction 2.)

                                  Items

    1. Supervising.
    2. Trenching, backfilling, and breaking and restoring pavement in 
connection with the installation of leak or reinforcing clamps.
    3. Work performed as the result of municipal improvements, such as 
street widening, sewers, etc., where the gas mains are not retired.
    4. Municipal inspections relating to maintenance work.
    5. Other work of the following character:
    a. Locating leaks incident to maintenance.
    b. Cutting off mains without replacement. (Minor cuts not retired.)
    c. Repairing leaking joints.
    d. Repairing broken mains.
    e. Repairing leaks on main drip riser or valve test pipe.
    f. Bringing main valve box, main drip riser box, valve test pipe 
box, or pressure pipe roadway box up to grade.
    g. Cleaning, repainting, coating, and wrapping exposed mains.
    h. Repacking main valves.
    i. Locating and clearing gas main faults.
    j. Lowering and changing location of mains.
    k. Trenching, backfilling, cutting-in or removal of pipe not retired 
in connection with the installation of leak clamps, valves, or drips.
    l. Watching and lamping open cuts associated with maintenance.
    m. Restoration of permanent pavement in connection with work 
chargeable to maintenance.
    n. Emergency stand-by time associated with maintenance.
    o. Repairing sewers, drains, walls, etc., when damaged by 
maintenance work.
    p. Making electrolysis tests to maintain life of plant.
    q. Repairing property of others damaged by maintenance work.
888 Maintenance of compressor station equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 377, Compressor Station Equipment. (See 
operating expense instruction 2.)
889 Maintenance of measuring and regulating station equipment--General.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 378, Measuring and Regulating Station 
Equipment--General. (See operating expense instruction 2.)
890 Maintenance of measuring and regulating station equipment--
Industrial.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 385, Industrial Measuring and Regulating 
Station Equipment. (See operating expense instruction 2.)
891 Maintenance of measuring and regulating station equipment--City gate 
check stations.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of equipment, the book cost of 
which is includible in account 379, Measuring and Regulating Station 
Equipment--City Gate Check Stations. (See operating expense instruction 
2.)
892 Maintenance of services.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of services, the book cost of which 
is includible in account 380, Services. (See operating expense 
instruction 2.)

                                  Items

    1. Supervising.
    2. Testing pipe for leaks and condition of wrapping.
    3. Testing for, locating, and clearing trouble on company maintained 
services.

[[Page 743]]

    4. Inspecting and testing after repairs have been made.
    5. Reporting on the condition of gas services to determine the need 
for repairs.
    6. Making minor repairs and changes.
    7. Rearranging and changing the location of services not retired.
    8. Repairing service valves for reuse.
    9. Stopping leaks on service pipes and drip risers.
    10. Lowering and raising curb boxes to grade.
    11. Replacing less than a complete service when not retired.
    12. Installing fittings, valves, drips, frost protection devices, or 
replacing similar items on existing services.
    13. Cutting and replacing pavement, pavement base and sidewalks in 
connection with maintenance work.
    14. Restoring condition of services damaged by fire, storm, leakage, 
flood, accident or other casualties.
    15. Repairing property of others damaged by maintenance work.
    16. Transferring services in connection with the installation of new 
mains.
    17. Installing, maintaining, and removing temporary facilities to 
prevent the interruption of service.
    18. Converting low pressure gas distribution service to medium or 
high pressure service.
    19. Relocating and rerouting gas service temporarily during 
alterations of buildings.
    20. Performing work resulting from municipal improvements, such as 
street widening, sewers, etc.
    21. Replacing service valve box or drip riser box.
    22. Installing, removing or replacing service valve, drip pot, or 
drip riser.
    23. Repacking service valve.
893 Maintenance of meters and house regulators.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of meters and house regulators, the 
book cost of which is includible in accounts 381, Meters, and 383, House 
Regulators. (See operating expense instruction 2.)

                                  Items

    1. Inspecting and testing meters and house regulators on customers' 
premises or in shops in connection with repairs.
    2. Cleaning, repairing, and painting meters, house regulators, and 
accessories and equipment.
    3. Repairing testing equipment.
    4. Rebuilding and overhauling meters without changing their rated 
capacities.
    5. Resealing house regulators with mercury, replacing diaphragms, 
springs and other defective or worn parts.
    6. Replacing or adding any item not constituting a retirement unit.
894 Maintenance of other equipment.
    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of street lighting equipment and 
all other distribution system equipment not provided for elsewhere, the 
book cost of which is includible in accounts 386, Other Property on 
Customers' Premises, and 387, Other Equipment. (See operating expense 
instruction 2.)
901 Supervision.
    This account shall include the cost of labor and expenses incurred 
in the general direction and supervision of customer accounting and 
collecting activities. Direct supervision of a specific activity shall 
be charged to account 902, Meter Reading Expenses, or account 903, 
Customer Records and Collection Expenses, as appropriate. (See operating 
expense instruction 1.)
902 Meter reading expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in reading customer meters, and determining 
consumption when performed by employees engaged in reading meters.

                                  Items

Labor:
    1. Addressing forms for obtaining meter readings by mail.
    2. Changing and collecting meter charts used for billing purposes.
    3. Inspecting time clocks, checking seals, etc., when performed by 
meter readers and the work represents a minor activity incidental to 
regular meter reading routine.
    4. Meter reading--small consumption, and obtaining load information 
for billing purposes. (Exclude and charge to account 878, Meter and 
House Regulator Expenses, or to account 903, Customer Records and 
Collection Expenses, as applicable, the cost of obtaining meter 
readings, first and final, if incidental to the operation of removing or 
resetting, sealing or locking, and disconnecting, or reconnecting 
meters.)

[[Page 744]]

    5. Measuring gas--large consumption, including reading meters, 
changing charts, calculating charts, estimating lost meter 
registrations, determining specific gravity, etc., for billing purposes.
    6. Computing consumption from meter reader's book or from reports by 
mail when done by employees engaged in reading meters.
    7. Collecting from prepayment meters when incidental to meter 
reading.
    8. Maintaining record of customers' keys.
    9. Computing estimated or average consumption when performed by 
employees engaged in reading meters.

Materials and expenses:
    10. Badges, lamps, and uniforms.
    11. Demand charts, meter books and binders and forms for recording 
readings, but not the cost of preparation.
    12. Postage and supplies used in obtaining meter readings by mail.
    13. Transportation, meals and incidental expenses.
903 Customer records and collection expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in work on customer applications, contracts, orders, 
credit investigations, billing and accounting, collections and 
complaints.

                                  Items

Labor:
    1. Receiving, preparing, recording and handling routine orders for 
service, disconnections, transfers or meter tests initiated by the 
customer, excluding the cost of carrying out such orders, which is 
chargeable to the account appropriate for the work called for by such 
orders.
    2. Investigations of customers' credit and keeping of records 
pertaining thereto, including records of uncollectible accounts written 
off.
    3. Receiving, refunding or applying customer deposits and 
maintaining customer deposit, line extension, and other miscellaneous 
records.
    4. Checking consumption shown by meter readers' reports where 
incidental to preparation of billing data.
    5. Preparing address plates and addressing bills and delinquent 
notices.
    6. Preparing billing data.
    7. Operating billing and bookkeeping machines.
    8. Verifying billing records with contracts or rate schedules.
    9. Preparing bills for delivery, and mailing or delivering bills.
    10. Collecting revenues, including collection from prepayment meters 
unless incidental to meter reading operations.
    11. Balancing collections, preparing collections for deposit, and 
preparing cash reports.
    12. Posting collections and other credits or charges to customer 
accounts and extending unpaid balances.
    13. Balancing customer accounts and controls.
    14. Preparing, mailing, or delivering delinquent notices and 
preparing reports of delinquent accounts.
    15. Final meter reading of delinquent accounts when done by 
collectors incidental to regular activities.
    16. Disconnecting and reconnecting services because of nonpayment of 
bills.
    17. Receiving, recording, and handling of inquiries, complaints, and 
requests for investigations from customers, including preparation of 
necessary orders, but excluding the cost of carrying out such orders, 
which is chargeable to the account appropriate for the work called for 
by such orders.
    18. Statistical and tabulating work on customer accounts and 
revenues, but not including special analyses for sales department, rate 
department, or other general purposes, unless incidental to regular 
customer accounting routines.
    19. Preparing and periodically rewriting meter reading sheets.
    20. Determining consumption and computing estimated or average 
consumption when performed by employees other than those engaged in 
reading meters.

Materials and expenses:
    21. Address plates and supplies.
    22. Cash overages and shortages.
    23. Commissions or fees to others for collecting.
    24. Payments to credit organizations for investigations and reports.
    25. Postage.
    26. Transportation expenses, including transportation of customer 
bills and meter books under centralized billing procedure.
    27. Transportation, meals, and incidental expenses.
    28. Bank charges, exchange, and other fees for cashing and 
depositing customers' checks.
    29. Forms for recording orders for services, removals, etc.
    30. Rent of mechanical equipment.

    Note: The cost of work on meter history and meter location records 
is chargeable to account 878, Meter and House Regulator Expenses.
904 Uncollectible accounts.
    This account shall be charged with amounts sufficient to provide for 
losses from uncollectible utility revenues.

[[Page 745]]

Concurrent credits shall be made to account 144, Accumulated Provision 
for Uncollectible Accounts--Credit. Losses from uncollectible accounts 
shall be charged to account 144.
905 Miscellaneous customer accounts expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred not provided for in other accounts.

                                  Items

Labor:
    1. General clerical and stenographic work.
    2. Miscellaneous labor.

Materials and expenses:
    3. Communication service.
    4. Miscellaneous office supplies and expenses and stationery and 
printing other than those specifically provided for in accounts 902 and 
903.
907 Supervision.
    This account shall include the cost of labor and expenses incurred 
in the general direction and supervision of customer service activities, 
the object of which is to encourage safe, efficient and economical use 
of the utility's service. Direct supervision of a specific activity 
within customer service and informational expense classification shall 
be charged to the account wherein the costs of such activity are 
included. (See operating expense instruction 1.)
908 Customer assistance expenses.
    This account shall include the cost of labor, materials used, and 
expenses incurred in providing instructions or assistance to customers, 
the object of which is to promote safe, efficient and economical use of 
the utility's service.

                                  Items

Labor:
    1. Direct supervision of department.
    2. Processing customer inquiries relating to the proper use of gas 
equipment, the replacement of such equipment and information related to 
such equipment.
    3. Advice directed to customers as to how they may achieve the most 
efficient and safest use of gas equipment.
    4. Demonstrations, exhibits, lectures, and other programs designed 
to instruct customers in the safe, economical or efficient use of gas 
service, and/or oriented toward conservation of energy.
    5. Engineering and technical advice to customers, the object of 
which is to promote safe, efficient and economical use of the utility's 
service.

Materials and expenses:
    6. Supplies and expenses pertaining to demonstrations, exhibits, 
lectures, and other programs.
    7. Loss in value on equipment and appliances used for customer 
assistance programs.
    8. Office supplies and expenses.
    9. Transportation, meals, and incidental expenses.

    Note: Do not include in this account expenses that are provided for 
elsewhere, such as accounts 416, Costs and Expenses of Merchandising, 
Jobbing and Contract Work, 879, Customer Installations Expenses, and 
912, Demonstrating and Selling Expenses.
909 Informational and instructional advertising expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in activities which primarily convey information as to 
what the utility urges or suggests customers should do in utilizing gas 
service to protect health and safety, to encourage environmental 
protection, to utilize their gas equipment safely and economically, or 
to conserve natural gas.

                                  Items

Labor:
    1. Direct supervision of informational activities.
    2. Preparing informational materials for newspapers, periodicals, 
billboards, etc., and preparing and conducting informational motion 
pictures, radio and television programs.
    3. Preparing informational booklets, bulletins, etc., used in direct 
mailings.
    4. Preparing informational window and other displays.
    5. Employing agencies, selecting media and conducting negotiations 
in connection with the placement and subject matter of information 
programs.

Materials and expenses:
    6. Use of newspapers, periodicals, billboards, radio, etc., for 
informational purposes.
    7. Postage on direct mailings to customers exclusive of postage 
related to billings.
    8. Printing of informational booklets, dodgers, bulletins, etc.
    9. Supplies and expenses in preparing informational materials by the 
utility.
    10. Office supplies and expenses.


[[Page 746]]


    Note A: Exclude from this account and charge to account 930.2, 
Miscellaneous General Expenses, the cost of publication of stockholder 
reports, dividend notices, bond redemption notices, financial 
statements, and other notices of a general corporate character. Exclude 
also all expenses of a promotional, institutional, goodwill or political 
nature, which are includible in such accounts as 913, Advertising 
Expenses, 930.1, General Advertising Expenses, and 426.4, Expenditures 
for Certain Civic, Political and Related Activities.
    Note B: Entries relating to informational advertising included in 
this account shall contain or refer to supporting documents which 
identify the specific advertising message. If references are used, 
copies of the advertising message shall be readily available.
910 Miscellaneous customer service and informational expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in connection with customer service and informational 
activities which are not includible in other customer information 
expense accounts.

                                  Items

Labor:
    1. General clerical and stenographic work not assigned to specific 
customer service and information programs.
    2. Miscellaneous labor.

Materials and expenses:
    3. Communication service.
    4. Printing, postage and office supplies expenses.
911 Supervision.
    This account shall include the cost of labor and expenses incurred 
in the general direction and supervision of sales activities, except 
merchandising. Direct supervision of a specific activity, such as 
demonstrating, selling, or advertising shall be charged to the account 
wherein the costs of such activity are included. (See operating expense 
instruction 1.)
912 Demonstrating and selling expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in promotional, demonstrating, and selling activities, 
except by merchandising, the object of which is to promote or retain the 
use of utility services by present and prospective customers.

                                  Items

Labor:
    1. Demonstrating uses of utility services.
    2. Conducting cooking schools, preparing recipes, and related home 
service activities.
    3. Exhibitions, displays, lectures, and other programs designed to 
promote use of utility services.
    4. Experimental and development work in connection with new and 
improved appliances and equipment, prior to general public acceptance.
    5. Solicitation of new customers or of additional business from old 
customers, including commissions paid employees.
    6. Engineering and technical advice to present or prospective 
customers in connection with promoting or retaining the use of utility 
services.
    7. Special customer canvasses when their primary purpose is the 
retention of business or the promotion of new business.

Materials and expenses:
    8. Supplies and expenses pertaining to demonstration, and 
experimental and development activities.
    9. Booth and temporary space rental.
    10. Loss in value on equipment and appliances used for demonstration 
purposes.
    11. Transportation, meals, and incidental expenses.
913 Advertising expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in advertising designed to promote or retain the use 
of utility service, except advertising the sale of merchandise by the 
utility.

                                  Items

Labor:
    1. Direct supervision of department.
    2. Preparing advertising material for newspapers, periodicals, 
billboards, etc., and preparing and conducting motion pictures, radio 
and television programs.
    3. Preparing booklets, bulletins, etc., used in direct mail 
advertising.
    4. Preparing window and other displays.
    5. Clerical and stenographic work.
    6. Investigating advertising agencies and media and conducting 
negotiations in connection with the placement and subject matter of 
sales advertising.

Materials and expenses:
    7. Advertising in newspapers, periodicals, billboards, radio, etc., 
for sales promotion purposes, but not including institutional or 
goodwill advertising includible in account 930.1, General Advertising 
Expenses.
    8. Materials and services given as prizes or otherwise in connection 
with canning, or cooking contests, bazaars, etc., in order to

[[Page 747]]

publicize and promote the use of utility services.
    9. Fees and expenses of advertising agencies and commercial artists.
    10. Novelties for general distribution.
    11. Postage on direct mail advertising.
    12. Premiums distributed generally, such as recipe books, etc., when 
not offered as inducement to purchase appliances.
    13. Printing booklets, dodgers, bulletins, etc.
    14. Supplies and expenses in preparing advertising material.
    15. Office supplies and expenses.

    Note A: The cost of advertisements which set forth the value or 
advantages of utility service without reference to specific appliances, 
or, if reference is made to appliances, invites the reader to purchase 
appliances from his dealer, or refer to appliances not carried for sale 
by the utility, shall be considered sales promotion advertising and 
charged to this account. However, advertisements which are limited to 
specific makes of appliances sold by the utility and prices, terms, 
etc., thereof, without referring to the value or advantages of utility 
service, shall be considered as merchandise advertising and the cost 
shall be charged to Costs and Expenses of Merchandising, Jobbing and 
Contract Work, accounts 416.
    Note B: Advertisements which substantially mention or refer to the 
value or advantages of utility service, together with specific reference 
to makes of appliances sold by the utility and the price, terms, etc., 
thereof, and designed for the joint purpose of increasing the use of 
utility service and the sales of appliances, shall be considered as a 
combination advertisement and the costs shall be distributed between 
this account and account 416 on the basis of space, time, or other 
proportional factors.
    Note C: Exclude from this account and charge to account 930.2, 
Miscellaneous General Expenses, the cost of publication of stockholder 
reports, dividend notices, bond redemption notices, financial 
statements, and other notices of a general corporate character. Exclude 
also all institutional or goodwill advertising. (See account 930.1, 
General Advertising Expenses.)
914-915 [Reserved]
916 Miscellaneous sales expenses.
    This account shall include the cost of labor, materials used and 
expenses incurred in connection with sales activities, except 
merchandising, which are not includible in other sales expense accounts.

                                  Items

Labor:
    1. General clerical and stenographic work not assigned to specific 
functions.
    2. Special analysis of customer accounts and other statistical work 
for sales purposes not a part of the regular customer accounting and 
billing routine.
    3. Miscellaneous labor.

Materials and expenses:
    4. Communication service.
    5. Printing, postage, and office supplies and expenses applicable to 
sales activities, except those chargeable to account 913, Advertising 
Expenses.
920 Administrative and general salaries.
    A. This account shall include the compensation (salaries, bonuses, 
and other consideration for services, but not including directors' fees) 
of officers, executives, and other employees of the utility properly 
chargeable to utility operations and not chargeable directly to a 
particular operating function.
    B. This account may be subdivided in accordance with a 
classification appropriate to the departmental or other functional 
organization of the utility.
921 Office supplies and expenses.
    A. This account shall include office supplies and expenses incurred 
in connection with the general administration of the utility's 
operations which are assignable to specific administrative or general 
departments and are not specifically provided for in other accounts. 
This includes the expenses of the various administrative and general 
departments, the salaries and wages of which are includible in account 
920.
    B. This account may be subdivided in accordance with a 
classification appropriate to the departmental or other functional 
organization of the utility.

    Note: Office expenses which are clearly applicable to any group of 
operating expenses other than the administrative and general group shall 
be included in the appropriate account in such group. Further, general 
expenses which apply to the utility as a whole rather than to a 
particular administrative function shall be included in account 930.2, 
Miscellaneous General Expenses.

                                  Items

    1. Automobile service, including charges through clearing account.
    2. Bank messenger and service charges.

[[Page 748]]

    3. Books, periodicals, bulletins and subscriptions to newspapers, 
newsletters, tax services, etc.
    4. Building service expenses for customer accounts, sales, and 
administrative and general purposes.
    5. Communication service expenses.
    6. Cost of individual items of office equipment used by general 
departments which are of small value or short life.
    7. Membership fees and dues in trade, technical, and professional 
associations paid by a utility for employees. (Company memberships are 
includible in account 930.2.)
    8. Office supplies and expenses.
    9. Payment of court costs, witness fees, and other expenses of legal 
department.
    10. Postage, printing and stationery.
    11. Meals, traveling and incidental expenses.
922 Administrative expenses transferred--Credit.
    This account shall be credited with administrative expenses recorded 
in accounts 920 and 921 which are transferred to construction costs or 
to nonutility accounts. (See gas plant instruction 4.)
923 Outside services employed.
    A. This account shall include the fees and expenses of professional 
consultants and others for general services which are not applicable to 
a particular operating function or to other accounts. It shall include 
also the pay and expenses of persons engaged for a special or temporary 
administrative or general purpose in circumstances where the person so 
engaged is not considered as an employee of the utility.
    B. This account shall be so maintained as to permit ready 
summarization according to the nature of service and the person 
furnishing the same.

                                  Items

    1. Fees, pay and expenses of accountants and auditors, actuaries, 
appraisers, attorneys, engineering consultants, management consultants, 
negotiators, public relations counsel, tax consultants, etc.
    2. Supervision fees and expenses paid under contracts for general 
management services.

    Note: Do not include inspection and brokerage fees and commissions 
chargeable to other accounts or fees and expenses in connection with 
security issues which are includible in the expenses of issuing 
securities.
924 Property insurance.
    A. This account shall include the cost of insurance or reserve 
accruals to protect the utility against losses and damages to owned or 
leased property used in its utility operations. It shall include also 
the cost of labor and related supplies and expenses incurred in property 
insurance activities.
    B. Recoveries from insurance companies or others for property 
damages shall be credited to the account charged with the cost of the 
damage. If the damaged property has been retired, the credit shall be to 
the appropriate account for accumulated provision for depreciation.
    C. Records shall be kept so as to show the amount of coverage for 
each class of insurance carried, the property covered, and the 
applicable premiums. Any dividends distributed by mutual insurance 
companies shall be credited to the accounts to which the insurance 
premiums were charged.

                                  Items

    1. Premiums payable to insurance companies for fire, storm, 
burglary, boiler explosion, lightning, fidelity, riot, and similar 
insurance.
    2. Amounts credited to account 228.1, Accumulated Provision for 
Property Insurance; for similar protection.
    3. Special costs incurred in procuring insurance.
    4. Insurance inspection service.
    5. Insurance counsel, brokerage fees, and expenses.

    Note A: The cost of insurance or reserve accruals capitalized shall 
be charged to construction either directly or by transfer to 
construction work orders from this account.
    Note B: The cost of insurance or reserve accruals for the following 
classes of property shall be charged as indicated.

    (1) Materials and supplies and stores equipment, to account 163, 
Stores Expense Undistributed or appropriate materials account.
    (2) Transportation and other general equipment to appropriate 
clearing accounts that may be maintained.
    (3) Gas plant leased to others, to account 413, Expenses of Gas 
Plant Leased to Others.
    (4) Nonutility property, to the appropriate nonutility income 
account.
    (5) Merchandise and jobbing property, to account 416, Costs and 
Expenses of Merchandising, Jobbing and Contract Work.

    Note C: The cost of labor and related supplies and expenses of 
administrative and general employees, who are only incidentally

[[Page 749]]

engaged in property insurance work, may be included in accounts 920 and 
921, as appropriate.
925 Injuries and damages.
    A. This account shall include the cost of insurance or reserve 
accruals to protect the utility against injuries and damages claims of 
employees or others, losses of such character not covered by insurance, 
and expenses incurred in settlement of injuries and damages claims. It 
shall also include the cost of labor and related supplies and expenses 
incurred in injuries and damages activities.
    B. Reimbursements from insurance companies or others for expenses 
charged hereto on account of injuries and damages and insurance 
dividends or refunds shall be credited to this account.

                                  Items

    1. Premiums payable to insurance companies for protection against 
claims from injuries and damages by employees or others, such as public 
liability, property damages, casualty, employee liability, etc., and 
amounts credited to account 228.2, Accumulated Provision for Injuries 
and Damages; for similar protection.
    2. Losses not covered by insurance or reserve accruals on account of 
injuries or deaths to employees or others and damages to the property of 
others.
    3. Fees and expenses of claim investigators.
    4. Payment of awards to claimants for court costs and attorneys' 
services.
    5. Medical and hospital service and expenses for employees as the 
result of occupational injuries, or resulting from claims of others.
    6. Compensation payments under workmen's compensation laws.
    7. Compensation paid while incapacitated as the result of 
occupational injuries. (See Note A.)
    8. Cost of safety, accident prevention and similar educational 
activities.

    Note A: Payments to or in behalf of employees for accident or death 
benefits, hospital expenses, medical supplies or for salaries while 
incapacitated for service or on leave of absence beyond periods normally 
allowed, when not the result of occupational injuries, shall be charged 
to account 926, Employee Pensions and Benefits. (See also Note B of 
account 926.)
    Note B: The cost of injuries and damages or reserve accruals 
capitalized shall be charged to construction directly or by transfer to 
construction work orders from this account.
    Note C: Exclude herefrom the time and expenses of employees (except 
those engaged in injuries and damages activities) spent in attendance at 
safety and accident prevention educational meetings, if occurring during 
the regular work period.
    Note D: The cost of labor and related supplies and expenses of 
administrative and general employees, who are only incidentally engaged 
in injuries and damages activities, may be included in accounts 920 and 
921, as appropriate.
926 Employee pensions and benefits.
    A. This account shall include pensions paid to or on behalf of 
retired employees, or accruals to provide for pensions, or payments for 
the purchase of annuities for this purpose, when the utility has 
definitely, by contract, committed itself to a pension plan under which 
the pension funds are irrevocably devoted to pension purposes, and 
payments for employee accident, sickness, hospital, and death benefits, 
or insurance therefor. Include, also, expenses incurred in medical, 
educational or recreational activities for the benefit of employees, and 
administrative expenses in connection with employee pensions and 
benefits.
    B. The utility shall maintain a complete record of accruals or 
payments for pensions and be prepared to furnish full information to the 
Commission of the plan under which it has created or proposes to create 
a pension fund and a copy of the declaration of trust or resolution 
under which the pension plan is established.
    C. There shall be credited to this account the portion of pensions 
and benefits expenses which is applicable to nonutility operations or 
which is charged to construction unless such amounts are distributed 
directly to the accounts involved and are not included herein in the 
first instance.
    D. Records in support of this account shall be so kept that the 
total pensions expense, the total benefits expense, the administrative 
expenses included herein, and the amounts of pensions and benefits 
expenses transferred to construction or other accounts will be readily 
available.

                                  Items

    1. Payment of pensions under a nonaccrual or nonfunded basis.

[[Page 750]]

    2. Accruals for or payments to pension funds or to insurance 
companies for pension purposes.
    3. Group and life insurance premiums (credit dividends received).
    4. Payments for medical and hospital services and expenses of 
employees when not the result of occupational injuries.
    5. Payments for accident, sickness, hospital, and death benefits or 
insurance.
    6. Payments to employees incapacitated for service or on leave of 
absence beyond periods normally allowed, when not the result of 
occupational injuries, or in excess of statutory awards.
    7. Expenses in connection with educational and recreational 
activities for the benefit of employees.

    Note A: The cost of labor and related supplies and expenses of 
administrative and general employees who are only incidentally engaged 
in employee pension and benefit activities, may be included in accounts 
920 and 921, as appropriate.
    Note B: Salaries paid to employees during periods of nonoccupational 
sickness may be charged to the appropriate labor account rather than to 
employee benefits.
927 Franchise requirements.
    A. This account shall include payments to municipal or other 
governmental authorities, and the cost of materials, supplies and 
services furnished such authorities without reimbursement in compliance 
with franchise, ordinance, or similar requirements; provided, however, 
that the utility may charge to this account at regular tariff rates, 
instead of cost, utility service furnished without charge under 
provisions of franchises.
    B. When no direct outlay is involved, concurrent credit for such 
charges shall be made to account 929, Duplicate Charges--Cr.
    C. The account shall be maintained so as to readily reflect the 
amounts of cash outlays, utility service supplied without charge, and 
other items furnished without charge.

    Note A: Franchise taxes shall not be charged to this account but to 
account 408.1, Taxes Other Than Income Taxes, Utility Operating Income.
    Note B: Any amount paid as initial consideration for a franchise 
running for more than one year shall be charged to account 302, 
Franchises and Consents.
928 Regulatory commission expenses.
    A. This account shall include all expenses (except pay of regular 
employees only incidentally engaged in such work) properly includible in 
utility operating expenses, incurred by the utility in connection with 
formal cases before regulatory commissions, or other regulatory bodies, 
or cases in which such a body is a party, including payments made to a 
regulatory commission for fees assessed against the utility for pay and 
expenses of such commission, its officers, agents, and employees.
    B. Amounts of regulatory commission expenses which by approval or 
direction of the Commission are to be spread over future periods shall 
be charged to account 186, Miscellaneous Deferred Debits, and amortized 
by charges to this account.
    C. The utility shall be prepared to show the cost of each formal 
case.

                                  Items

    1. Salaries, fees, retainers, and expenses of counsel, solicitors, 
attorneys, accountants, engineers, clerks, attendants, witnesses, and 
others engaged in the prosecution of, or defense against petitions or 
complaints presented to regulatory bodies, or in the valuation of 
property owned or used by the utility in connection with such cases.
    2. Office supplies and expenses, payments to public service or other 
regulatory commissions, stationery and printing, traveling expenses, and 
other expenses incurred directly in connection with formal cases before 
regulatory commissions.
    3. All application fees except those involving construction 
certificate applications which have been approved. (See Gas Plant 
Instruction 16.)

    Note A: Exclude from this account and include in other appropriate 
operating expense accounts, expenses incurred in the improvement of 
service, additional inspection, or rendering reports, which are made 
necessary by the rules and regulations, or orders, of regulatory bodies.
    Note B: Do not include in this account amounts includible in account 
302, Franchises and Consents, account 181, Unamortized Debt Expense, or 
account 214, Capital Stock Expense.
929 Duplicate charges--Credit.
    This account shall include concurrent credits for charges which may 
be made to operating expenses or to other accounts for the use of 
utility service

[[Page 751]]

from its own supply. Include, also, offsetting credits for any other 
charges made to operating expenses for which there is no direct money 
outlay.
930.1 General advertising expenses.
    This account shall include the cost of labor, materials used, and 
expenses incurred in advertising and related activities, the cost of 
which by their content and purpose are not provided for elsewhere.

                                  Items

Labor:
    1. Supervision.
    2. Preparing advertising material for newspapers, periodicals, 
billboards, etc., and preparing or conducting motion pictures, radio and 
television programs.
    3. Preparing booklets, bulletins, etc., used in direct mail 
advertising.
    4. Preparing window and other displays.
    5. Clerical and stenographic work.
    6. Investigating and employing advertising agencies, selecting media 
and conducting negotiations in connection with the placement and subject 
matter of advertising.

Materials and expenses:
    7. Advertising in newspapers, periodicals, billboards, radio, etc.
    8. Advertising matter such as posters, bulletins, booklets and 
related items.
    9. Fees and expenses of advertising agencies and commercial artists.
    10. Postage and direct mail advertising.
    11. Printing of booklets, dodgers, bulletins, etc.
    12. Supplies and expenses in preparing advertising materials.
    13. Office supplies and expenses.

    Note A: Properly includible in this account is the cost of 
advertising activities on a local or national basis of a goodwill or 
institutional nature, which is primarily designed to improve the image 
of the utility or the industry, including advertisements which inform 
the public concerning matters affecting the company's operations, such 
as, the cost of providing service, the company's efforts to improve the 
quality of service, the company's efforts to improve and protect the 
environment, etc. Entries relating to advertising included in this 
account shall contain or refer to supporting documents which identify 
the specific advertising message. If references are used, copies of the 
advertising message shall be readily available.
    Note B: Exclude from this account and include in account 426.4. 
Expenditures for Certain Civic, Political and Related Activities, 
expenses for advertising activities, which are designed to solicit 
public support or the support of public officials in matters of a 
political nature.

                  930.2 Miscellaneous general expenses.

    This account shall include the cost of labor and expenses incurred 
in connection with the general management of the utility not provided 
for elsewhere.

                                  Items

Labor:
    1. Miscellaneous labor not elsewhere provided for:

Expenses:
    2. Industry Association dues for company memberships.
    3. Contributions for conventions and meetings of the industry.
    4. Research, development, and demonstration expenses not charged to 
other operation and maintenance expense accounts on a functional basis.
    5. Communication service not chargeable to other accounts.
    6. Trustee, registrar, and transfer agent fees and expenses.
    7. Stockholders meeting expenses.
    8. Dividend and other financial notices.
    9. Printing and mailing dividend checks.
    10. Directors' fees and expenses.
    11. Publishing and distributing annual reports to stockholders.
    12. Public notices of financial, operating, and other data required 
by regulatory statutes, not including, however, notices required in 
connection with security issues or acquisitions of property.
931 Rents.
    This account shall include rents properly includible in utility 
operating expenses for the property of others used, occupied, or 
operated in connection with the customer accounts, customer service and 
informational, sales, and general and administrative functions of the 
utility. (See operating expense instruction 3.)
932 Maintenance of general plant.
    A. This account shall include the cost assignable to customer 
accounts, sales and administrative and general functions of labor, 
materials used and expenses incurred in the maintenance of property, the 
book cost of which is includible in account 390, Structures and 
Improvements, account 391, Office Furniture and Equipment, account 397, 
Communication Equipment, and account 398, Miscellaneous Equipment. (See 
operating expense instruction 2.)

[[Page 752]]

    B. Maintenance expenses on office furniture and equipment used 
elsewhere than in general, commercial and sales offices shall be charged 
to the following accounts:

Manufactured Gas Production, accounts 708, 742
Natural Gas Production and Gathering, account 769
Natural Gas Production
Extraction, account 791
Underground Storage, account 837
Local Storage, account 846.2
Transmission Expenses, account 867
Distribution Expenses, account 894
Merchandising and Jobbing, account 416
Garage, Shops, etc.--appropriate clearing account, if used.

    Note: Maintenance of plant included in other general plant equipment 
accounts shall be included herein unless charged to clearing accounts or 
to a particular functional maintenance expense indicated by the use of 
the equipment.

                           PART 204 [RESERVED]

    Note: For the Uniform System of Accounts for Natural Gas Companies 
subject to the Natural Gas Act, see part 201 of this subchapter. (Order 
390, 49 FR 32526, Aug. 14, 1984; 50 FR 5745, Feb. 12, 1985)



PART 225_PRESERVATION OF RECORDS OF NATURAL GAS COMPANIES--Table of Contents



Sec.
225.1 Promulgation.
225.2 General instructions.
225.3 Schedule of records and periods of retention.

    Authority: 15 U.S.C. 717-717w, 3301-3432; 16 U.S.C. 792-828c; 42 
U.S.C. 7101-7352; E.O. 12009, 3 CFR 1978 Comp. p. 142.



Sec. 225.1  Promulgation.

    This part is prescribed and promulgated as the regulations governing 
the preservation of records by natural gas companies subject to the 
jurisdiction of the Commission, to the extent and in the manner set 
forth therein.

[Order 617, 65 FR 48160, Aug. 7, 2000]



Sec. 225.2  General instructions.

    (a) Scope of this part. (1) The regulations in this part must apply 
to all books of account and other records prepared by or on behalf of 
the natural gas company. See item 40 of the schedule for those records 
that come into possession of the natural gas company in connection with 
the acquisition of property, such as purchases, consolidation, merger, 
etc.
    (2) The regulations in this part should not be construed as excusing 
compliance with other lawful requirements of any other governmental 
body, Federal or State, prescribing other record keeping requirements, 
or for preservation of records for periods longer than those prescribed 
in this part.
    (3) To the extent that any Commission regulations may provide for a 
different retention period, the records should be retained for the 
longer of the retention periods.
    (4) Records other than those listed in the schedule may be destroyed 
at the option of the natural gas company: Provided, however, That 
records which are used in lieu of those listed shall be preserved for 
the periods prescribed for the records used for substantially similar 
purposes. And, provided further, That retention of records pertaining to 
added services, functions, plant, etc., the establishment of which 
cannot be presently foreseen, shall conform to the principles embodied 
herein.
    (5) Notwithstanding the provisions of the Records Retention 
Schedule, the Commission may, upon the request of the company, authorize 
a shorter period of retention for any record listed therein upon a 
showing by the company that preservation of such record for a longer 
period is not necessary or appropriate in the public interest or for the 
protection of investors or consumers.
    (b) Designation of supervisory official. Each natural gas company 
subject to the regulations in this part shall designate one or more 
persons with official responsibility to supervise the natural gas 
company's program for preservation and the authorized destruction of its 
records.
    (c) Protection and storage of records. The natural gas company shall 
provide reasonable protection for records subject to the regulations in 
this part from damage by fires, floods, and other hazards and, in the 
selection of storage

[[Page 753]]

spaces, safeguard the records from unnecessary exposure to deterioration 
from excessive humidity, dryness, or lack of proper ventilation.
    (d) Record storage media. Each natural gas company has the 
flexibility to select its own storage media subject to the following 
conditions.
    (1) The storage media must have a life expectancy at least equal to 
the applicable record retention period provided in Sec. 225.3 unless 
there is a quality transfer from one media to another with no loss of 
data.
    (2) Each natural gas company is required to implement internal 
control procedures that assure the reliability of and ready access to 
data stored on machine readable media. Internal control procedures must 
be documented by a responsible supervisory official.
    (3) Each transfer of data from one media to another must be verified 
for accuracy and documented. Software and hardware required to produce 
readable records must be retained for the same period the media format 
is used.
    (e) Destruction of records. At the expiration of the records 
retention period, natural gas companies may use any appropriate method 
to destroy records.
    (f) Premature destruction or loss of records. When records are 
destroyed or lost before the expiration of the prescribed period of 
retention, a certified statement listing, as far as may be determined, 
the records destroyed and describing the circumstances of accidental or 
other premature destruction or loss must be filed with the Commission 
within ninety (90) days from the date of discovery of the destruction.
    (g) Schedule of records and periods of retention. (1) Records 
related to plant in service must be retained until the facilities are 
permanently removed from service, all removal and restoration activities 
are completed, and all costs are retired from the accounting records 
unless accounting adjustments resulting from reclassification and 
original costs studies have been approved by the regulatory commission 
having jurisdiction. If the plant is sold, the associated records or 
copies thereof, must be transferred to the new owners.
    (2) Records related to additions, retirements, and betterments 
thereto must be retained until the Commission has determined the actual 
legitimate original cost of the facilities.
    (h) Retention periods designated ``Destroy at option''. ``Destroy at 
option'' constitutes authorization for destruction of records at 
managements' discretion if it does not conflict with other legal 
retention requirements or usefulness of such records in satisfying 
pending regulatory actions or directives.
    (i) Records of services performed by associated companies. The 
natural gas companies must assure the availability of records of 
services performed by associated or affiliated companies with supporting 
cost information for the periods indicated in Sec. 225.3 as necessary 
to be able to readily furnish detailed information as to the nature of 
the transaction, the amounts involved, and the accounts used to record 
the transactions.
    (j) Index of records. Natural gas companies must arrange, file, and 
index records so they may be readily identified and made available to 
Commission representatives.
    (k) Rate case. Notwithstanding the minimum retention periods 
provided in these regulations, if a natural gas company intends to 
reflect costs in a current, pending, or future rate case, or if a 
natural gas company has abandoned or retired a plant subsequent to the 
test period of its last rate case, it must retain all relevant records.
    (l) Pending complaint litigation or governmental proceeding. 
Notwithstanding the minimum requirements, if a natural gas company is 
involved in pending litigation, complaint procedures, proceedings 
remanded by the court, or governmental proceedings, it must retain all 
relevant records.
    (m) Life or mortality study data. Life or mortality study data for 
depreciation purposes must be retained for 25 years or for 10 years 
after plant is retired whichever is longer.

[Order 450, 37 FR 6304, Mar. 28, 1972, as amended by Order 258, 47 FR 
42724, 42725, Sept. 29, 1982; Order 335, 48 FR 44483, Sept. 29, 1983; 
Order 617, 65 FR 48160, Aug. 7, 2000]



Sec. 225.3  Schedule of records and periods of retention.



[[Page 754]]

                            Table of Contents

                          Corporate and General

1. Reports to stockholders.
2. Organizational documents.
3. Contracts including amendments and agreements.
4. Accountants' and auditors' reports.

                    Information Technology Management

5. Automatic data processing records.

                       General Accounting Records

6. General and subsidiary ledgers.
7. Journals: General and subsidiary.
8. Journal vouchers and journal entries.
9. Cash books.
10. Voucher registers.
11. Vouchers.

                                Insurance

12. Insurance records.

                       Operations and Maintenance

13. Production--Gas.
14. Transmission and distribution--Gas.
14.1. Underground storage of natural gas.
15. Maintenance work orders and job orders.

                         Plant and Depreciation

16. Plant ledgers.
17. Construction work in progress ledgers.
18. Retirement work in progress ledgers.
19. Summary sheets.
20. Appraisals and valuations.
21. Engineering records.
22. Contracts relating to natural gas.
23. Reclassification of natural gas plant account records.
24. Accumulated depreciation and depletion of natural gas plant account 
          records.

                           Purchase and Stores

25. Procurement.
26. Material ledgers.
27. Materials and supplies received and issued.
28. Records of sales of scrap and materials and supplies.

                    Revenue Accounting and Collection

29. Customers' service applications and contracts.
30. Rate schedules.
31. Maximum demand and demand meter record cards.
32. Miscellaneous billing data.
33. Revenue summaries.

                                   Tax

34. Tax records.

                                Treasury

35. Statements of funds and deposits.
36. Records of deposits with banks and others.
37. Records of receipts and disbursements.

                              Miscellaneous

38. Statistics.
39. Budgets and other forecasts.
40. Records of predecessors companies.
41. Reports to Federal and State regulatory commissions.
42. Advertising.


              Schedule of Records and Periods of Retention
------------------------------------------------------------------------
        Item No. and description                 Retention period
------------------------------------------------------------------------
         Corporate and General
 
1. Reports to stockholders: Annual       5 years.
 reports or statements to stockholders.
2. Organizational documents:
    (a) Minute books of stockholders',   5 years or termination of the
     directors', and directors'           corporation's existence,
     committee meetings.                  whichever occurs first.
    (b) Titles, franchises, and          6 years after final non-
     licenses: Copies of formal orders    appealable order.
     of regulatory commissions served
     upon the natural gas company.
3. Contracts including amendments and
 agreements (except contracts provided
 for elsewhere):
    (a) Service contracts, such as for   All contracts, related
     management, accounting, and          memoranda, and revisions
     financial services.                  should be retained for 4 years
                                          after expiration or until the
                                          conclusion of any contract
                                          disputes pertaining to such
                                          contracts, whichever is later.
    (b) Contracts with others for        All contracts, related
     transportation or for the            memoranda, and revisions
     purchase, sale or interchange of     should be retained for 4 years
     product.                             after expiration or until the
                                          conclusion of any contract
                                          disputes or governmental
                                          proceedings pertaining to such
                                          contracts, whichever is later.
    (c) Memoranda essential to           For the same periods as
     clarifying or explaining             contracts to which they
     provisions of contracts listed       relate.
     above, including requests for
     discounts.

[[Page 755]]

 
    (d) Card or book records of          For the same periods as
     contracts, leases, and agreements    contracts to which they
     made that show dates of              relate.
     expirations, renewals, memoranda
     of receipts, and payments under
     such contracts.
4. Accountants' and auditors' reports:
    (a) Reports of examinations and      5 years after the date of the
     audits by accountants and auditors   report.
     not in the regular employ of the
     natural gas company (such as
     reports of public accounting firms
     and Commission accountants).
    (b) Internal audit reports and       5 years after the date of the
     working papers.                      report.
 
   Information Technology Management
 
5. Automatic data processing records     Retain as long as it represents
 (retain original source data used as     an active viable program or
 input for data processing and data       for periods prescribed for
 processing report printouts for the      related output data, whichever
 applicable periods prescribed            is shorter.
 elsewhere in the schedule): Software
 program documentation and revisions
 thereto.
 
       General Accounting Records
 
6. General and subsidiary ledgers:
    (a) Ledgers:
        (1) General ledgers............  10 years.
        (2) Ledgers subsidiary or        10 years.
         auxiliary to general ledgers
         except ledgers provided for
         elsewhere.
    (b) Indexes:
        (1) Indexes to general ledgers.  10 years.
        (2) Indexes to subsidiary        10 years.
         ledgers except ledgers
         provided for elsewhere.
    (c) Trial balance sheets of general  2 years.
     and subsidiary ledgers.
7. Journals: General and subsidiary....  10 years.
8. Journal vouchers and journal entries
 including supporting detail:
    (a) Journal vouchers and journal     10 years.
     entries.
    (b) Analyses, summarizations,
     distributions, and other
     computations which support journal
     vouchers and journal entries:
        (1) Charging plant accounts....  25 years. See Sec.  225.2(g).
        (2) Charging all other accounts  6 years.
9. Cash books: General and subsidiary    5 years after close of fiscal
 or auxiliary books.                      year.
10. Voucher registers: Voucher           5 years. See Sec.  225.2(g).
 registers or similar records when used
 as a source document.
11. Vouchers:
    (a) Paid and canceled vouchers (1    5 years. See Sec.  225.2(g).
     copy-analysis sheets showing
     detailed distribution of charges
     on individual vouchers and other
     supporting papers).
    (b) Original bills and invoices for  5 years. See Sec.  225.2(g).
     materials, services, etc., paid by
     vouchers.
    (c) Paid checks and receipts for     5 years.
     payments of specific vouchers.
    (d) Authorization for the payment    5 years. See Sec.  225.2(g).
     of specific vouchers.
    (e) Lists of unaudited bills         Destroy at option.
     (accounts payable), list of
     vouchers transmitted, and
     memoranda regarding changes in
     audited bills.
    (f) Voucher indexes................  Destroy at option.
 
               Insurance
 
12. Insurance records:
    (a) Records of insurance policies    Destroy at option after
     in force, showing coverage,          expiration.
     premiums paid, and expiration
     dates.
    (b) Records of amounts recovered     6 years. See Sec.  225.2(g).
     from insurance companies in
     connection with losses and of
     claims against insurance
     companies, including reports of
     losses, and supporting papers.
 
       Operations and Maintenance
 
13. Production--Gas:
    (a) Recording instrument charts      If the measurement data have
     such as pressure (static and/or      not been disputed or adjusted,
     differential), temperature,          destroy after 1 year.
     specific gravity, heating value,
     etc.
    (b) Test of heating value at         If the measurement data have
     stations and outlying points.        not been disputed or adjusted,
                                          destroy after 1 year.

[[Page 756]]

 
    (c) Records of gas produced, out,    If the measurement data have
     and holder stock.                    not been disputed or adjusted,
                                          destroy after 1 year.
    (d) Analysis of (gas produced)       If the measurement data have
     B.T.U. and sulphur content.          not been disputed or adjusted,
                                          destroy after 1 year.
    (e) Well records, including          1 year after field or relevant
     clearing, bailing, shooting etc.,    production area abandoned
     records; rock pressure; open flow;
     production, gas analysts' reports
     etc.
    (f) Gas measuring records..........  If the measurement data have
                                          not been disputed or adjusted,
                                          destroy after 1 year.
14. Transmission and distribution--Gas:
    (a) Substation and transmission      If the measurement data have
     line log.                            not been disputed or adjusted,
                                          destroy after 1 year.
    (b) System operator's daily logs     If the measurement data have
     and reports of operation.            not been disputed or adjusted,
                                          destroy after 1 year.
    (c) Gas measuring records..........  If the measurement data have
                                          not been disputed or adjusted,
                                          destroy after 1 year.
    (d) Transmission line operating      If the measurement data have
     reports.                             not been disputed or adjusted,
                                          destroy after 1 year.
    (e) Compression operation and        If the measurement data have
     reports.                             not been disputed or adjusted,
                                          destroy after 1 year.
    (f) Recording instrument charts      If the measurement data have
     such as pressure (static and/or      not been disputed or adjusted,
     differential), temperature,          destroy after 1 year.
     specific heating value, etc.
14.1 Underground storage of natural
 gas:
    (a) Well records, reports, and logs  1 year after reservoir, field,
     which include data relating to       or relevant storage area is
     pressures, injected volumes,         abandoned.
     withdrawn volumes, core analysis,
     daily volumes of gas injected into
     and withdrawn from reservoir,
     cushion, and working gas volumes
     for each reservoir.
    (b) Records containing information   1 year after reservoir, field,
     relating to reservoir gas leakage,   or relevant storage area is
     showing the total gas leakage, and   abandoned.
     recycled gas.
    (c) Records on back pressure tests   1 year or until superseded.
     field data.
    (d) Records on back pressure test    1 year or until superseded.
     results, gas analysis.
15. Maintenance work orders and job
 orders:
    (a) Authorizations for expenditures  5 years.
     for maintenance work to be covered
     by work orders, including
     memoranda showing the estimates of
     costs to be incurred.
    (b) Work order sheets to which are   5 years.
     posted in detail the entries for
     labor, material, and other charges
     in connection with maintenance,
     and other work pertaining to
     natural gas company operations.
    (c) Summaries of expenditures on     5 years.
     maintenance and job orders and
     clearances to operating other
     accounts (exclusive of plant
     accounts).
         Plant and Depreciation
 
16. Plant ledgers:
    (a) Ledgers of natural gas           25 years. See Sec.  225.2(g).
     company's plant accounts including
     land and other detailed ledgers
     showing the cost of plant by class.
    (b) Continuing plant inventory       25 years. See Sec.  225.2(g).
     ledger, book or card records
     showing description, location,
     quantities, cost, etc., of
     physical units (or items) of
     natural gas plant owned.
17. Construction work in progress
 ledgers:
    (a) Construction work in progress    5 years after clearance to the
     ledgers.                             plant account, provided
                                          continuing plant inventory
                                          records are maintained;
                                          otherwise 5 years after plant
                                          is retired.
    (b) Work order sheets to which are   5 years after clearance to the
     posted in summary form or in         plant account, provided
     detail the entries for labor,        continuing plant inventory
     materials, and other charges for     records are maintained;
     natural gas company's plant          otherwise 5 years after plant
     additions and the entries closing    is retired.
     the work orders to plant in
     service at completion.
    (c) Authorizations for expenditures  5 years after clearance to the
     for additions to natural gas         plant account, provided
     company plant, including memoranda   continuing plant inventory
     showing the detailed estimates of    records are maintained;
     cost, and the bases therefor         otherwise 5 years after plant
     (including original and revised or   is retired.
     subsequent authorizations).

[[Page 757]]

 
    (d) Requisitions and registers of    5 years after clearance to the
     authorizations for natural gas       plant account, provided
     company plant expenditures.          continuing plant inventory
                                          records are maintained;
                                          otherwise 5 years after plant
                                          is retired.
    (e) Completion or performance        5 years after clearance to the
     reports showing comparison between   plant account, provided
     authorized estimates and actual      continuing plant inventory
     expenditures for natural gas         records are maintained;
     company plant additions.             otherwise 5 years after plant
                                          is retired.
    (f) Analysis or cost reports         5 years after clearance to the
     showing quantities of materials      plant account, provided
     used, unit costs, number of man-     continuing plant inventory
     hours etc., in connection with       records are maintained;
     completed construction project.      otherwise 5 years after plant
                                          is retired.
    (g) Records and reports pertaining   Destroy at option.
     to progress of construction work,
     the order in which jobs are to be
     completed, and similar records
     which do not form a basis of
     entries to the accounts.
    (h) Well-drilling logs and well      1 year after field or well is
     construction records.                abandoned.
18. Retirement work in progress
 ledgers, work orders, and supplemental
 records:
    (a) Work order sheets to which are   5 years after plant is retired.
     posted the entries for removal
     costs, materials recovered, and
     credits to natural gas company
     plant accounts for cost of plant
     retirement.
    (b) Authorizations for retirement    5 years after plant is retired.
     of natural gas company plant,
     including memoranda showing the
     basis for determination of cost of
     plant to be retired, and estimates
     of salvage and removal costs.
    (c) Registers of retirement work...  5 years.
19. Summary sheets, distribution         5 years.
 sheets, reports, statements, and
 papers directly supporting debits and
 credits to natural gas company plant
 accounts not covered by construction
 or retirement work orders and their
 supporting records.
20. Appraisals and valuations:
    (a) Appraisals and valuations made   3 years after appraisal.
     by the company of its properties
     or investments or of the
     properties or investments of any
     associated companies. Includes all
     records essential thereto.
    (b) Determinations of amounts by
     which properties or investments of
     the company or any of its
     associated companies will be
     either written up or written down
     as a result of:
        (1) Mergers or acquisitions....  10 years after completion of
                                          transaction or as ordered by
                                          the Commission.
        (2) Asset impairments..........  10 years after recognition of
                                          asset impairment.
        (3) Other bases................  10 years after the asset was
                                          written up or down.
21. The original or reproduction of      Retained until retired or
 engineering records, drawings, and       abandoned.
 other supporting data for proposed or
 as-constructed gas facilities: Maps,
 diagrams, profiles, photographs, field
 survey notes, plot plan, detail
 drawings, records of engineering
 studies, and similar records showing
 the location of proposed or as-
 constructed facilities.
22. Contracts relating to natural gas
 plant:
    (a) Contracts relating to            6 years after plant is retired
     acquisition or sale of plant.        or sold.
    (b) The primary records of gas       6 years after plant is retired
     acreage owned, leased or optioned    or sold.
     excluding deeds and leases but
     including such records as lease
     sheets, leasehold cards, and
     option agreements.
23. Records pertaining to                6 years.
 reclassification of natural gas plant
 accounts to conform to prescribed
 systems of accounts including
 supporting papers showing the bases
 for such reclassifications.
24. Records of accumulated provisions
 for depreciation and depletion of gas
 plant and supporting computation of
 expense:
    (a) Detailed records or analysis     25 years.
     sheets segregating the accumulated
     depreciation according to
     functional classification of plant.
    (b) Records reflecting the service   25 years.
     life of property and the
     percentage of salvage and cost of
     removal for property retired from
     each account for depreciable
     natural gas plant.
 
          Purchases and Stores
 
25. Procurement:

[[Page 758]]

 
    (a) Agreements entered into for the
     acquisition of goods or the
     performance of services. Includes
     all forms of agreements not
     specifically set forth in
     Subsection 7 such as but not
     limited to: Letters of intent,
     exchange of correspondence, master
     agreements, term contracts, rental
     agreements, and the various types
     of purchase orders:
        (1) For goods or services        6 years. See Sec.  225.2(g).
         relating to plant construction.
        (2) For other goods or services  6 years.
    (b) Supporting documents including   6 years. See Sec.  225.2(g).
     accepted and unaccepted bids or
     proposals (summaries of unaccepted
     bids or proposals may be kept in
     lieu of originals) evidencing all
     relevant elements of the
     procurement.
26. Material ledgers: Ledger sheets of   6 years after the date records/
 materials and supplies received,         ledgers were created.
 issued, and on hand.
27. Materials and supplies received and  6 years. See Sec.  225.2(g).
 issued: Records showing the detailed
 distribution of materials and supplies
 issued during accounting periods.
28. Records of sales of scrap and
 materials and supplies:
    (a) Authorization for sale of scrap  3 years.
     and materials and supplies.
    (b) Contracts for sale of scrap and  3 years.
     materials and supplies.
   Revenue Accounting and Collection
 
29. Customers' service applications and  4 years after expiration.
 contracts: Contracts, including
 amendments for extensions of service,
 for which contributions are made by
 customers and others.
30. Rate schedules: General files of     6 years after published rate
 published rate sheets and schedules of   sheets and schedules are
 natural gas company service (including   superseded or no longer used
 schedules suspended or superseded).      to charge for services.
31. Maximum demand, pressure,            If the measurement data have
 temperature, and specific gravity        not been disputed or adjusted,
 charts and demand meter record card.     destroy after 1 year.
32. Miscellaneous billing data: Billing  Destroy at option.
 department's copies of contracts with
 customers (other than contracts in
 general files).
33. Revenue summaries: Summaries of      5 years.
 monthly operating revenues according
 to classes of service. Including
 summaries of forfeited discounts and
 penalties.
 
                  Tax
 
34. Tax records:
    (a) Copies of tax returns and
     supporting schedules filed with
     taxing authorities, supporting
     working papers, records of appeals
     of tax bills, and receipts for
     payment. See Subsection 11(b) for
     vouchers evidencing disbursements:
        (1) Income tax returns.........  2 years after final tax
                                          liability is determined.
        (2) Property tax returns.......  2 years after final tax
                                          liability is determined.
        (3) Sales and other use taxes..  2 years.
        (4) Other taxes................  2 years after final tax
                                          liability is determined.
        (5) Agreements between           2 years after final tax
         associate companies as to        liability is determined.
         allocation of consolidated
         income taxes.
        (6) Schedule of allocation of    2 years after final tax
         consolidated Federal income      liability is determined.
         taxes among associate
         companies.
    (b) Filings with taxing authorities  5 years after discontinuance of
     to qualify employee benefit plans.   plan.
        (c) Information returns and      3 years after final tax
         reports to taxing authorities.   liability is determined.
 
                Treasury
 
35. Statements of funds and deposits:
    (a) Statements of periodic deposits  Retain records for the most
     with fund administrators or          recent 3 years.
     trustees.
    (b) Statements of periodic           Retain records for the most
     withdrawals from fund.               recent 3 years.
    (c) Statements prepared by fund      Retain records until the fund
     administrator or trustees of fund    is dissolved or terminated.
     activity including:.
        (1) Beginning of the year fund
         balance
        (2) Deposits with the fund;

[[Page 759]]

 
        (3) Acquisition of investments
         held by the fund;
        (4) Disposition of investments
         held by the fund;
        (5) Disbursements from the
         fund, including party to whom
         disbursement was made; and,
        (6) End of year fund balance.
36. Records of deposits with banks and
 others:
    (a) Statements from depositories     Destroy at option after
     showing the details of funds         completion of audit by
     received, disbursed, transferred,    independent accountants.
     and balances on deposit.
    (b) Check stubs, registers, or       3 years.
     other records of checks issued.
37. Records of receipts and
 disbursements:
    (a) Daily or other periodic          Destroy at option after
     statements of fund receipts or       completion of annual audit by
     disbursements.                       independent accountants.
    (b) Records or periodic statements   Destroy at option after
     of outstanding vouchers, checks,     completion of annual audit by
     drafts, etc., issued and not         independent accountants.
     presented.
    (c) Reports of associates showing    Destroy at option after
     working fund transactions and        completion of annual audit by
     summaries thereof.                   independent accountants.
    (d) Reports of revenue collections   Destroy at option after
     by field cashiers, pay stations,     completion of annual audit by
     etc.                                 independent accountants.
 
             Miscellaneous
 
38. Statistics: Financial, operating,    5 years.
 and statistical reports used for
 internal administrative or operating
 purposes.
39. Budgets and other forecasts          3 years.
 (prepared for internal administrative
 or operating purposes) of estimated
 future income, receipts, and
 expenditures in connection with
 financing, construction and
 operations, including acquisitions and
 disposals of properties or investments.
40. Records of predecessor companies     Retain consistent with the
                                          requirements for the same
                                          types of records of the
                                          natural gas company.
41. Reports to Federal and State         5 years.
 regulatory commissions including
 annual financial, operating, and
 statistical reports.
42. Advertising: Copies of               2 years.
 advertisements by or for the company
 on behalf of itself or any associate
 company in newspapers, magazines, and
 other publications, including costs
 and other records relevant thereto
 (excluding advertising of appliances,
 employment opportunities, routine
 notices, and invitations for bids all
 of which may be destroyed at option).
------------------------------------------------------------------------


[Order 617, 65 FR 48161, Aug. 7, 2000; 65 FR 50638, Aug. 21, 2000]


[[Page 760]]



              SUBCHAPTER G_APPROVED FORMS, NATURAL GAS ACT



PART 250_FORMS--Table of Contents



Sec.
250.1-250.5 [Reserved]
250.6 Form of application to be filed by distributor under section 7(a), 
          seeking gas service of not more than 2,000 Mcf per day (3d 
          year of operation) for a single community (see Sec. 156.3(d) 
          of this chapter).
250.7-250.15 [Reserved]
250.16 Format of compliance plan for transportation services and 
          affiliate transactions.

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.



Sec. Sec. 250.1-250.5  [Reserved]



Sec. 250.6  Form of application to be filed by distributor under section 7(a), 

seeking gas service of not more than 2,000 Mcf per day (3d year of operation) 

for a single community (see Sec. 156.3(d) of this chapter).

    1. Name of applicant (indicate whether individual, corporation or 
municipality).
    2. Address.
    3. Name, title, mailing address, and telephone number of person to 
be contacted concerning the application.
    4. Name of natural gas company from whom service is desired.
    5. Are you now rendering gas service? If so, briefly describe 
operations.
    6. Nature of service sought, giving a brief description of proposal, 
including location of community, population, number of residences and 
kind of service sought and to be rendered, showing:
    (a) Is this an initial connection with the pipe line, or is it an 
extension or improvement of existing facilities?
    (b) Estimate of maximum day requirements for residential, commercial 
and industrial customers for each of the first three years of proposed 
operations (Mcf at 14.73 psia), and how the estimates were derived;
    (c) Estimate of annual requirements for residential, commercial and 
industrial customers for each of the first three years of proposed 
operations (Mcf at 14.73 psia), and how the estimates were derived.
    7. Do you have or do you need a franchise to render the proposed 
service? If you have filed an application for such a franchise, with 
whom was it filed and what action has been taken on it?
    8. Do you have or do you need a state certificate approving the 
proposed distribution system project? If you have filed an application 
for such a certificate, with whom was it filed and what action has been 
taken on it?
    9. When do you propose to start construction and when do you 
estimate it will be completed? When do you propose to start selling gas?
    10. How much are the facilities expected to cost? Show separately 
the estimated cost of the distribution system, the connecting supply 
lines, legal fees, financing fees and engineering fees, and briefly 
state how the estimates were derived.
    11. Have you used the services of an engineering consultant? If so, 
the consultant should state his experience in the design of distribution 
systems, cost data of systems now in service compared with his initial 
estimates, and the actual rate at which new customers were attached in 
the new distribution systems.
    12. How do you propose to finance the proposed facilities? Submit 
evidence that the money will be available. (This evidence need not be 
submitted if you have a state certificate for your project.)
    13. For each of the first three years of operation of the proposed 
facilities, show (a) the estimated gross annual revenues for the natural 
gas estimated to be sold to residential, commercial and industrial 
customers as shown in item 6(c) and the rates you propose to charge, and 
(b) the cost of gas purchased by you (state the rate to be paid to the 
pipeline supplier and the pipeline's rate schedule under which you will 
purchase said gas), other operating and maintenance expenses and 
operating revenue deductions, and (c) the net operating revenues. If you 
have received a certificate of public convenience and necessity issued 
by a local regulatory commission, it may be submitted in lieu of this 
requirement.
    14. Municipalities should submit a bond amortization and interest 
schedule for the life of the bond issue related to the project and 
computation of the average debt service coverage ratio over the life of 
the issue. State briefly how all estimates were derived. Exhibits to be 
furnished:
    Exhibit A. A geographical map showing clearly all of the 
transmission facilities proposed to be installed and operated by you 
between your distribution system and the transmission pipeline system of 
the proposed supplier, including:
    (a) Location, length and size of your transmission lines;
    (b) Location and size (related horsepower) of your transmission 
compressor stations (if any);
    (c) Location and designation of each point of connection of your 
proposed transmission facilities with proposed pipeline supplier;

[[Page 761]]

    (d) And if known, location, length and size of facilities to be 
installed by the proposed supplier.
    Exhibit B. A flow diagram showing the maximum daily capacity of the 
proposed connecting pipeline to carry gas from the supplier to the 
community to be served. The diagram should show expected operating 
pressures on the connecting pipeline at the point of connection with the 
supplier and at the other terminal of the connecting pipeline flow of 
gas through the connecting pipeline in Mcf per day; length of the 
connecting pipeline and its inside and outside diameter.

[Order 280, 29 FR 4879, Apr. 7, 1964]



Sec. Sec. 250.7-250.15  [Reserved]



Sec. 250.16  Format of compliance plan for transportation services and 

affiliate transactions.

    (a) Who must comply. An interstate natural gas pipeline that 
transports natural gas for others pursuant to Subparts B or G of Part 
284 of this chapter and is affiliated, as that term is defined in Sec. 
358.3 of this chapter, in any way with a natural gas marketing or 
brokering entity and conducts transportation transactions with its 
marketing or brokering affiliate must comply with the requirements of 
this section. The requirements of this section also apply to pipeline 
sales operating units to the extent provided in Sec. 284.286 of this 
chapter.
    (b) Tariff requirements. An interstate pipeline must maintain tariff 
provisions containing the following:
    (1) The procedures used to address and resolve complaints by 
shippers and potential shippers including a provision that the pipeline 
will respond within 48 hours and in writing within 30 days to such 
complaints.
    (2) [Reserved]
    (c) Log of data used to allocate capacity. (1) An interstate 
pipeline that relies upon contract information or other data to allocate 
capacity must maintain a log showing, for each transportation contract 
(both for marketing affiliates and non-affiliates) on its system: the 
shipper's name (including a designation whether the shipper is a local 
distribution company, an interstate pipeline, an intrastate pipeline, an 
end-user, a producer, a marketer, or a pipeline sales operating unit); 
the shipper's affiliation with the pipeline; the contract number; and 
the applicable dates or other information used to allocate capacity 
under its tariff. The log data relating to each contract must be 
maintained as long as the contract is used to allocate capacity and for 
three years after the contract data is no longer used for capacity 
allocation.
    (2) The current log of allocation data for marketing affiliates must 
be posted on the pipeline's Internet Web site, operated pursuant to 
Sec. 284.12 of this chapter. The posting must conform with the 
requirements of Sec. 284.12 of this chapter and the pipeline's tariff 
requirements relating to Internet Web sites. Access to the information 
must be provided using the same protocols and procedures used for the 
pipeline's Internet Web site.
    (3) The log of affiliate and non-affiliate information must be 
provided to the Commission upon request and must be made available to 
the public under Subpart D of Part 385 of this chapter. When requested 
by the Commission, the information must be provided, within a reasonable 
time, according to the specifications and format contained in Form No. 
592, which can be obtained at the Federal Energy Regulatory Commission, 
Public Reference and Files Maintenance Branch, Washington, DC 20426.
    (d) Transportation Discount Information. (1) A pipeline that 
provides transportation service at a discounted rate must maintain, for 
each billing period, the following information: the name of the shipper 
being provided the discount; the affiliate's role in the transportation 
transaction (i.e., shipper, marketer, supplier, seller); the duration of 
the discount; the maximum rate or fee; the rate or fee actually charged 
during the billing period; and the quantity of gas scheduled at the 
discounted rate during the billing period for each delivery point. The 
discount information with respect to each transaction must be maintained 
for three years from the date the transaction commences.
    (2) The discount information must be made available to the 
Commission upon request and to the public under Subpart D of Part 385 of 
this chapter. When requested by the Commission, the information must be 
provided, within a reasonable time, according to

[[Page 762]]

the specifications and format contained in Form No. 592, which can be 
obtained at the Federal Energy Regulatory Commission, Public Reference 
and Files Maintenance Branch, Washington, DC 20426.
    (e) Penalty for failure to comply. (1) Any person who transports gas 
for others pursuant to Subparts B or G of Part 284 of this chapter and 
who knowingly violates the requirements of Sec. Sec. 358.4 and 358.5, 
Sec. 250.16, or Sec. 284.13 of this chapter will be subject, pursuant 
to sections 311(c), 501, and 504(b)(6) of the Natural Gas Policy Act of 
1978, to a civil penalty, which the Commission may assess, of not more 
than $5,000 for any one violation.
    (2) For purposes of this paragraph, in the case of a continuing 
violation, each day of the violation will constitute a separate 
violation.

[Order 566, 59 FR 32898, June 27, 1994, as amended by Order 566-A, 59 FR 
52904, Oct. 20, 1994; Order 581, 60 FR 53071, Oct. 11, 1996; 61 FR 
39068, July 26, 1996; Order 637, 65 FR 10220, Feb. 25, 2000; Order 2004, 
68 FR 69157, Dec. 11, 2003]



PART 260_STATEMENTS AND REPORTS (SCHEDULES)--Table of Contents



Sec.
260.1 FERC Form No. 2, Annual report for Major natural gas companies.
260.2 FERC Form No. 2-A, Annual report for Nonmajor natural gas 
          companies.
260.4-260.7 [Reserved]
260.8 System flow diagrams: Format No. FERC 567.
260.9 Reports by natural gas pipeline companies on service interruptions 
          and damage to facilities.
260.11-260.15 [Reserved]
260.200 Original cost statement of utility property.
260.300 FERC Form No. 3-Q, Quarterly financial report of electric 
          utilities, licensees, and natural gas companies.
260.400 Cash management programs.
260.401 FERC Form No. 552, Annual Report of Natural Gas Transactions.

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352.

    Editorial Note: For Federal Register citations affecting forms 
listed in part 260, please consult the List of CFR Sections Affected, 
which appears in the Finding Aids section of the printed volume and at 
www.fdsys.gov.



Sec. 260.1  FERC Form No. 2, Annual report for Major natural gas companies.

    (a) Prescription. The form of Annual Report of Natural Gas Companies 
(Class A and Class B), designated herein as FERC Form No. 2, is 
prescribed.
    (b) Filing requirements. Each natural gas company, as defined by the 
Natural Gas Act (15 U.S.C. 717, et seq.) which is a major company (a 
natural gas company whose combined gas transported or stored for a fee 
exceed 50 million Dth in each of the three previous calendar years) must 
prepare and file with the Commission, as follows:
    (1) The annual report for the year ending December 2004 must be 
filed on April 25, 2005.
    (2) The annual report for each year thereafter must be filed on 
April 18 of the subsequent year.
    (3) Newly established entities must use projected data to determine 
whether FERC Form No. 2 must be filed.
    (4) The form must be filed in electronic format only, as indicated 
in the general instructions set out in that form. The format for the 
electronic filing can be obtained at the Federal Energy Regulatory 
Commission, Division of Information Services, Public Reference and Files 
Maintenance Branch, Washington, DC 20426. One copy of the report must be 
retained by the respondent in its files.

[Order 121, 46 FR 6887, Jan. 22, 1981, as amended by Order 390, 49 FR 
32527, Aug. 14, 1984; Order 493, 53 FR 15030, Apr. 27, 1988; Order 581, 
60 FR 53071, Oct. 11, 1995; Order 628, 68 FR 269, Jan. 3, 2003; 69 FR 
9044, Feb. 26, 2004]



Sec. 260.2  FERC Form No. 2-A, Annual report for Nonmajor natural gas 

companies.

    (a) Prescription. The form of Annual Report for Nonmajor Natural Gas 
Companies, designated herein as FERC Form No. 2--A, is prescribed.
    (b) Filing requirements. Each natural gas company, as defined by the 
Natural Gas Act, not meeting the filing threshold for FERC Form No. 2, 
but having total gas sales or volume transactions exceeding 200,000 Dth 
in each of the three previous calendar years, must prepare and file with 
the Commission, as follows:

[[Page 763]]

    (1) The annual report for the year ending December 2004 must be 
filed on April 25, 2005.
    (2) The annual report for each year thereafter must be filed on 
April 18 of the subsequent year.
    (3) Newly established entities must use projected data to determine 
whether FERC Form No. 2-A must be filed.
    (4) The form must be filed in electronic format only, as indicated 
in the General Instructions set out in that form. The format for the 
electronic filing can be obtained at the Federal Energy Regulatory 
Commission, Division of Information Services, Public Reference and Files 
Maintenance Branch, Washington, DC 20426. One copy of the report must be 
retained by the respondent in its files.

(Natural Gas Act, as amended, 15 U.S.C. 717-717w; Natural Gas Policy Act 
of 1978, 15 U.S.C. 3301-3432; Federal Power Act, as amended, 16 U.S.C. 
792-828c; Department of Energy Organization Act, 42 U.S.C. 7101-7352; 
E.O. 12009, 3 CFR part 142 (1978))

[Order 101, 45 FR 60900, Sept. 15, 1980, as amended by Order 390, 49 FR 
32527, Aug. 14, 1984; Order 493, 53 FR 15031, Apr. 27, 1988; Order 581, 
60 FR 53071, Oct. 11, 1995; Order 628, 68 FR 269, Jan. 3, 2003; 69 FR 
9044, Feb. 26, 2004]



Sec. Sec. 260.4-260.7  [Reserved]



Sec. 260.8  System flow diagrams: Format No. FERC 567.

    (a) Each Major natural gas pipeline company, having a system 
delivery capacity in excess of 100,000 Mcf per day (measured at 14.73 
p.s.i.a. and 60 [deg]F.), shall file with the Commission by June 1 of 
each year five (5) copies of a diagram or diagrams reflecting operating 
conditions on its main transmission system during the previous twelve 
months ended December 31. For purposes of system peak deliveries, the 
heating season overlapping the year's end shall be used. Facilities 
shall be those installed and in operation on December 31 of the 
reporting year. All volumes shall be reported on a uniform stated 
pressure and temperature base.
    (b) The diagram or diagrams shall include the following items of 
information:
    (1) Nominal diameter (inches) of each pipeline.
    (2) Miles of pipeline (to nearest 0.1 mile) between points of 
intake, delivery, river crossings, storage fields, crossovers, 
compressor stations and connections with other pipeline companies.
    (3) Direction of flow in the pipelines. If direction of flow can be 
reversed at compressor stations, so indicate.
    (4) Maximum permissible operating pressure for each pipeline at 
discharge side of each compressor station or other critical point, 
determined by the Department of Transportation's safety standards.
    (5) Total horsepower of compressor engines installed at each 
compressor station.
    (6) Designed suction pressure for each compressor station, p.s.i.g.
    (7) Designed discharge pressure for each station, p.s.i.g.
    (8) Maximum volume, Mcf per day that can be compressed at each 
compressor station under conditions of suction and discharge set forth 
in paragraphs (b) (6) and (7) of this section. If direction of flow 
affects these factors provide the information for each direction of 
flow.
    (9) The fuel requirement at each compressor station under conditions 
described in paragraph (b)(8) of this section.
    (10) Pressure in the pipeline at points of emergency interconnection 
with other pipeline companies which can normally be expected to exist, 
and the volume which could be delivered or received at such emergency 
interconnection points at such pressures. Give the name of the 
interconnecting company.
    (11) For each storage field, connected to the system and operated by 
the respondent pipeline company, the maximum dependable daily and 
seasonal withdrawal volumes available under normal conditions of 
operation.
    (12) Volumes delivered: (i) The average daily volumes delivered at 
each takeoff point, (ii) the volumes delivered at each takeoff point on 
the day of maximum coincidental delivery, and (iii) the maximum daily 
volumes (noncoincidental) delivered to each customer under rates subject 
to FERC jurisdiction.

[[Page 764]]

    (13) The average daily volume received at each intake point to the 
transmission pipeline system.
    (14) The volume received into the transmission pipeline system at 
each intake point on the day of maximum coincidental delivery.
    (15) The information required by paragraphs (b)(12), (13) and (14), 
of this section may be furnished in tabular form, or by reference to 
FERC Form No. 2, providing, that the information is suitably keyed to 
the diagram by appropriate identifying symbol or number.

[Order 303-A, 31 FR 7226, May 18, 1966, as amended by Order 345, 32 FR 
7332, May 17, 1967; Order 430, 36 FR 7052, Apr. 14, 1971; Order 215, 47 
FR 10203, Mar. 10, 1982; Order 390, 49 FR 32527, Aug. 14, 1984]



Sec. 260.9  Reports by natural gas pipeline companies on service interruptions 

and damage to facilities.

    (a)(1) Every natural gas company must report to the Director, 
Division of Pipeline Certificates, at the earliest feasible time:
    (i) Damage to any jurisdictional natural gas facilities other than 
liquefied natural gas facilities caused by a hurricane, earthquake or 
other natural disaster or terrorist activity that results in a loss of 
or reduction in pipeline throughput or storage deliverability; and
    (ii) Serious interruptions of service to any shipper involving 
jurisdictional natural gas facilities other than liquefied natural gas 
facilities. Such serious interruptions of service shall include 
interruptions of service to communities, major government installations 
and large industrial plants outside of communities or any other 
interruptions which are significant in the judgment of the pipeline 
company. Interruptible service interrupted in accordance with the 
provisions of filed tariffs, interruptions of service resulting from 
planned maintenance or construction and interruptions of service of less 
than three hours duration need not be reported.
    (2) In the event of damage to a natural gas company's jurisdictional 
natural gas facilities other than liquefied natural gas facilities by 
reason other than hurricane, earthquake or other natural disaster or 
terrorist activity, the natural gas company should report such damage 
if, in the natural gas company's judgment, such damage creates the 
potential for serious delivery problems on its own system or the 
pipeline grid.
    (b) Any report of damage to facilities required by paragraph 
(a)(1)(i) of this section, any report of service interruption required 
by paragraph (a)(1)(ii) of this section and any report made pursuant to 
paragraph (a)(2) of this section in a natural gas company's discretion 
must be submitted by the natural gas company by e-mail to 
[email protected] or by facsimile transmission to the Director, 
Division of Pipeline Certificates, Office of Energy Projects at FAX 
number (202) 208-2853.
    (1) Reports required by paragraph (a)(1)(i) or (ii) or made in a 
natural gas company's discretion pursuant to paragraph (a)(2) shall be 
made at the earliest feasible time and must state:
    (i) The location and cause of the service interruption or damage to 
natural gas pipeline or storage facilities;
    (ii) The nature of any damage to pipeline or storage facilities;
    (iii) Specific identification of any facilities damaged;
    (iv) The time the service interruption or damage to facilities 
occurred;
    (v) The customers affected by the interruption of service or damage 
to facilities;
    (vi) Emergency actions taken to maintain service; and
    (vii) Company contact and telephone number.
    (2) Following a report required by paragraph (a)(1)(i) of this 
section of damage to natural gas facilities resulting in loss of 
pipeline throughput or storage deliverability or a report pursuant to 
paragraph (a)(2) of this section in a natural gas company's discretion, 
the natural gas company shall report to the Director, Division of 
Pipeline Certificates, at the earliest feasible time when pipeline 
throughput or storage deliverability has been restored.
    (c) If so directed by the Commission or the Director, Division of 
Pipeline Certificates, the company must provide any supplemental 
information so as to

[[Page 765]]

provide a full report of the circumstances surrounding the occurrence.
    (d) In any instance in which an incident or damage report involving 
jurisdictional natural gas facilities is required by Department of 
Transportation reporting requirements under the Natural Gas Pipeline 
Safety Act of 1968, a copy of such report shall be submitted to the 
Director, Division of Pipeline Certificates, within 30 days of the 
reportable incident.
    (e) When a report of damage to facilities is required by paragraph 
(a)(1)(i) of this section or a report of service interruption is 
required by paragraph (a)(1)(ii) of this section, a copy of the e-mail 
or facsimile report required pursuant to paragraph (b) of this section 
must be sent to each State commissions for the States in which the 
reported service interruptions or damage has occurred.

[Order 401, 35 FR 7413, May 13, 1970, as amended by Order 508, 53 FR 
45901, Nov. 15, 1988; Order 581, 60 FR 53071, Oct. 11, 1995; Order 621, 
65 FR 80307, Dec. 21, 2000; Order 682, 71 FR 51104, Aug. 29, 2006]



Sec. Sec. 260.11-260.15  [Reserved]



Sec. 260.200  Original cost statement of utility property.

    Any natural gas company becoming subject to the jurisdiction of the 
Commission shall file, insofar as applicable, the following statements 
properly sworn to by the officer in responsible charge of their 
compilation:

                               Statement A

    Statement A showing the origin and development of the company, 
including, particularly, a description (giving names of parties and 
dates) of each consolidation and merger to which the company, or a 
predecessor, was a party and each acquisition of a gas operating unit or 
system. Any affiliation existing between the parties shall be stated.

                               Statement B

    Statement B showing for each acquisition of a gas operating unit or 
system by the reporting company or any of its predecessors: (1) The 
original cost (estimated only if not determinable from existing 
records), (2) the cost of the acquiring company, (3) the amount entered 
in the books as of the date of acquisition, (4) the difference between 
the original cost and the amount entered in the books, (5) a summary of 
all transactions affecting such difference, including retirements, 
between the date of each acquisition and the end of the calendar year 
prior to the year in which the filing is made, and (6) the amount of 
such difference remaining at the latter date.
    If the depreciation, retirement, or amortization reserve was 
adjusted as of the date of acquisition and in connection therewith, a 
full disclosure of the pertinent facts shall be made.
    The amount to be included in account 114, Gas Plant Acquisition 
Adjustments, shall be subdivided so as to show the amounts applicable to 
(a) gas plant in service, (b) gas plant leased to others, and (c) gas 
plant held for future use.
    The procedure followed in determining the original cost of the gas 
plant acquired as operating units or systems shall be described in 
sufficient detail so as to permit a clear understanding of the nature of 
the investigations and analyses which were made for that purpose.
    Where estimates are used in arriving at original cost or the amount 
to be included in account 114, a full disclosure of the method and 
underlying facts shall be given. The proportion of the original cost of 
each acquisition which has been determined from actual recorded costs 
and the proportion estimated shall be shown for each functional class of 
plant. In addition there shall be furnished in respect to each 
predecessor or vendor company for which complete construction costs are 
not available, a description of such plant records as are available, 
including the years covered thereby.

                               Statement C

    Statement C showing any amounts arrived at by appraisals in the gas 
plant accounts (and not eliminated) in lieu of cost to the reporting 
company. This statement should describe the appraisal and give the 
complete journal entry at the time the appraisal was originally 
recorded. If the entry had the effect of appreciating or writing up the 
gas plant account, the amount of the appreciation or writeup should be 
traced, by proper description and explanation of changes, from the date 
recorded through the end of the calendar year prior to the year in which 
the filing is made.

                               Statement D

    Statement D showing in detail gas plant as classified in the books 
of account immediately prior to reclassification in accordance with the 
Uniform System of Accounts, including, under appropriate descriptive 
headings, any unclassified amounts applicable jointly to the gas 
department and other departments of the utility.

[[Page 766]]

                               Statement E

    Statement E showing the adjustments necessary to state accounts 101, 
103-107, 114, and 116, and amount of common utility plant includible in 
account 118, as prescribed in the Uniform System of Accounts.

                               Statement F

    Statement F showing gas plant classified according to the accounts 
prescribed in the Uniform System of Accounts, and showing also the 
amount includible in account 116, Other Gas Plant Adjustments, and the 
amount of common utility plant includible in account 118, Other Utility 
Plant.

                               Statement G

    Statement G showing a comparative balance sheet reflecting the 
accounts and amounts appearing in the books before the adjusting entries 
have been made and after such entries shall have been made. The balance 
sheet shall be classified by the accounts set forth in the Uniform 
System of Accounts Prescribed for Natural Gas Companies.

                               Statement H

    Statement H giving a suggested plan for depreciating, amortizing, or 
otherwise disposing of, in whole or in part, the amounts includible in 
account 114, Gas Plant Acquisition Adjustments, and account 116, Other 
Gas Plant Adjustments.

                               Statement I

    Statement I furnishing the following statistical information 
relative to gas plant:

                            Production Plant

                            manufactured gas

    Show separately for each producing plant the name and location of 
plant, date of original construction, type of plant (whether coal gas, 
coke ovens, water gas, etc.), rated 24-hour capacity in Mcf of each unit 
and of the total plant, and date of installation of each unit installed 
after original construction. Show also the original cost according to 
the System of Accounts for each plant, by accounts 304 to 319, 
inclusive.

                               natural gas

    For each ``field'' includible in account 101, Gas Plant in Service, 
furnish the number of acres each of gas producing lands owned, of gas 
producing lands leased by the company, and of land on which gas rights 
only are owned, as included in accounts 325.1, 325.2, 325.3, 
respectively. The same information, classified by subaccounts, shall be 
furnished for producing and nonproducing acreage includible in account 
104, Gas Plant Leased to Others, and in account 105, Gas Plant Held for 
Future Use.
    For each ``field'' state number of feet of each size pipe used in 
field gathering lines.
    For each ``field'' state number of wells included in accounts 330 
and 331 segregated to show the number of wells on each type of producing 
lands classified under accounts 325.1, 325.2, 325.3.
    When pumping or compressing plants exist within the production 
plant, include the same information as that requested for compressor 
stations under transmission plant.
    State type and character of purification equipment and residual 
refining equipment included in accounts 336 and 337, respectively.
    Show the original cost according to the System of Accounts for 
natural gas production plant by each ``field'' and by accounts 325.1 to 
340.

                              Storage Plant

    Show separately for each location the name of plant, date of 
construction, type and total capacity (Mcf) of each gas holder. State 
also the original cost according to the System of Accounts for each 
location, by accounts 350.1 to 351, inclusive.
    If depleted gas fields are being repressured, the statements 
furnished shall reflect the number of acres involved and the original 
cost according to the System of Accounts (accounts 350.1 to 351, 
inclusive).

                           Transmission Plant

    State the number of feet of each size of main.
    State separately for each compressor boosting station the name of 
plant, location, date of original construction, rated capacity, type and 
character of power unit, and rated capacity and type of compressor 
units. Also state the capacity, type, and date of installation of each 
additional power or compressor unit. Show for each station the original 
cost according to the System of Accounts by accounts 365.1, 365.2, 366, 
368, and 369.

                           Distribution Plant

    State number of feet of each size of main and the number of active 
meters, house regulators, and services. Give a general description of 
the district regulators and number, by sizes.
    Where pumping or compressor stations exist within the distribution 
plant, include the same information requested for similar stations under 
transmission plant.

                              General Plant

    Describe the principal structures and improvements.
    State the number and type of transportation vehicles and appurtenant 
equipment.
    Give a description of store, shop, and laboratory equipment and 
miscellaneous equipment.

[[Page 767]]

    Furnish maps, drawn to scale, upon which indicate transmission 
mains, location of production plants (artificial and natural), producing 
and nonproducing leaseholds (indicating thereon producing wells, dry 
holes and depleted wells), gathering systems, booster and compressor 
stations, communities served (noting as to wholesale or retail), and 
large industrial consumers. Where gas is purchased from or sold to other 
gas utilities, indicate location of measuring stations or gates. If 
scale maps are not available, furnish sketch maps upon which should be 
indicated approximate distances between the locations above specified.

[Order 477, 38 FR 7215, Mar. 19, 1973]



Sec. 260.300  FERC Form No. 3-Q, Quarterly financial report of electric 

utilities, licensees, and natural gas companies.

    (a) Prescription. The quarterly report for electric utilities, 
licensees, and natural gas companies, designated herein as FERC Form No. 
3-Q, is prescribed for the reporting quarter ending March 31, 2004, and 
each quarter thereafter.
    (b) Filing requirements--(1) Who must file. Each natural gas 
company, (as defined in the Natural Gas Act (15 U.S.C. 717, et. seq.) 
must prepare and file with the Commission a FERC Form No. 3-Q pursuant 
to the General Instructions set out in that form.
    (2) Each Major natural gas company must file this quarterly 
financial report form as follows:
    (i) The quarterly financial report for the period January 1 through 
March 31, 2004, must be filed on or before July 9, 2004.
    (ii) The quarterly financial report for the period April 1 through 
June 30, 2004, must be filed on or before September 8, 2004.
    (iii) The quarterly financial report for the period July 1 through 
September 30, 2004, must be filed on or before December 9, 2004.
    (iv) The quarterly financial report for the period January 1 through 
March 31, 2005, must be filed on or before May 31, 2005.
    (v) The quarterly financial report for the period April 1 through 
June 30, 2005, must be filed on or before August 29, 2005.
    (vi) The quarterly financial report for the period July 1 through 
September 30, 2005 must be filed on or before November 29, 2005.
    (vii) Subsequent quarterly financial reports must be filed within 60 
days from the end of the reporting quarter.
    (3) Each Nonmajor natural gas company must file a quarterly 
financial report as follows:
    (i) The quarterly financial report for the period January 1 through 
March 31, 2004, must be filed on or before July 23, 2004.
    (ii) The quarterly financial report for the period April 1 through 
June 30, 2004, must be filed on or before September 22, 2004.
    (iii) The quarterly financial report for the period July 1 through 
September 30, 2004, must be filed on or before December 23, 2004.
    (iv) The quarterly financial report for the period January 1 through 
March 31, 2005, must be filed on or before June 13, 2005.
    (v) The quarterly financial report for the period April 1 through 
June 30, 2005, must be filed on or before September 12, 2005.
    (vi) The quarterly financial report for the period July 1 through 
September 30, 2005 must be filed on or before December 13, 2005.
    (vii) Subsequent quarterly financial reports must be filed within 70 
days from the end of the reporting quarter.
    (4) This report must be filed as prescribed in Sec. 385.2011 of 
this chapter as indicated in the General Instructions set out in the 
quarterly financial report form, and must be properly completed and 
verified. Filing on electronic media pursuant to Sec. 385.2011 of this 
chapter will be required commencing with the quarterly financial report 
ending March 31, 2004, due on or before July 9, 2004 for major natural 
gas companies, and due on or before July 23, 2004 for nonmajor natural 
gas companies. One copy of the report must be retained by the respondent 
in its files.

[69 FR 9044, Feb. 26, 2004, as amended by Order 646-A, 69 FR 32443, June 
10, 2004]



Sec. 260.400  Cash management programs.

    Natural gas companies subject to the provisions of the Commission's 
Uniform System of Accounts prescribed in part 201 and Sec. 260.1 or 
Sec. 260.2 of this title that participate in cash management programs 
must file these agreements

[[Page 768]]

with the Commission. The documentation establishing the cash management 
program and entry into the program must be filed within 10 days of the 
effective date of the rule or entry into the program. Subsequent changes 
to the cash management agreement must be filed with the Commission 
within 10 days of the change.

[Order 634-A, 68 FR 62003, Oct. 31, 2003, as amended at 69 FR 9044, Feb. 
26, 2004]



Sec. 260.401  FERC Form No. 552, Annual Report of Natural Gas Transactions.

    (a) Prescription. The annual report for natural gas market 
participants, designated as FERC Form No. 552, is prescribed for the 
calendar year ending December 31, 2008 and each calendar year 
thereafter.
    (b) Filing requirements--(1) Who must file. Unless otherwise 
exempted or granted a waiver by Commission rule or order, each natural 
gas market participant, i.e., any buyer or seller that engaged in 
physical natural gas transactions the previous calendar year, must 
prepare and file with the Commission a FERC Form No. 552 pursuant to the 
definitions and general instructions set forth in that form. However a 
de minimis exemption, a natural gas market participant is exempt from 
this filing requirement if:
    (i) It engages in reportable physical natural gas sales that amount 
to less than 2,200,000 MMBtus for the previous calendar year; and
    (ii) It engages in reportable physical natural gas purchases that 
amount to less than 2,200,000 MMBtus for the previous calendar year.
    (2) Form No. 552 must be filed as prescribed in Sec. 385.2011 of 
this chapter as indicated in the General Instructions set out in the 
annual reporting form, and must be properly completed and verified. Each 
market participant must file Form No. 552 by May 1, 2009 for calendar 
year 2008 and by May 1 of each year thereafter for the previous calendar 
year. Each report must be prepared in conformance with the Commission's 
software and guidance posted and available for downloading from the FERC 
Web site (http://www.ferc.gov). One copy of the report must be retained 
by the respondent in its files.

[73 FR 1031, January 4, 2008, as amended at 73 FR 55739, Sept. 26, 2008; 
Order 704-C, 75 FR 35643, June 23, 2010]

[[Page 769]]



SUBCHAPTER H_PROCEDURES GOVERNING DETERMINATIONS FOR TAX CREDIT PURPOSES



PART 270_DETERMINATION PROCEDURES--Table of Contents



                      Subpart A_General Definitions

Sec.
270.101 General definitions.

           Subpart B_Determinations by Jurisdictional Agencies

270.201 Applicability.
270.202 Definition of determination.
270.203 Determinations by jurisdictional agencies.
270.204 Notice to the Commission.

     Subpart C_Requirements for Filing with Jurisdictional Agencies

270.301 General requirements.
270.302 Occluded natural gas produced from coal seams.
270.303 Natural gas produced from Devonian shale.
270.304 Tight formation gas.
270.305 Determination of tight formation areas.
270.306 Devonian shale wells in Michigan.

  Subpart D_Identification of State and Federal Jurisdictional Agencies

270.401 Jurisdictional agency.

   Subpart E_Commission Review of Jurisdictional Agency Determinations

270.501 Publication of notice from jurisdictional agency.
270.502 Commission review of final determinations.
270.503 Protests to the Commission.
270.504 Contents of protests to the Commission.
270.505 Procedure for reopening determinations.
270.506 Confidentiality.

    Authority: 15 U.S.C. 717-717w, 3301 et. seq.; 42 U.S.C. 7101 et 
seq.; EO 12009, 3 CFR 1978 Comp., p. 142.

    Source: Order 616, 65 FR 45865, July 26, 2000, unless otherwise 
noted.



                      Subpart A_General Definitions



Sec. 270.101  General definitions.

    (a) NGPA definitions. Terms defined in the Natural Gas Policy Act of 
1978 (NGPA) will have the same meaning for purposes of this subchapter 
as they have under the NGPA, unless further defined in this subchapter.
    (b) Subchapter H definitions. For purposes of this part:
    (1) NGPA means the Natural Gas Policy Act of 1978.
    (2) Surface location means the point on the Earth's surface from 
which drilling of a well is commenced except that in the case of a well 
drilled in permanent surface waters, ``the Earth's surface'' means the 
mean elevation of the surface of the water.
    (3) Jurisdictional agency means the state or federal agency 
identified in Sec. 270.401.
    (4) Tight formation gas means natural gas that a jurisdictional 
agency has determined to be produced from a designated tight formation.
    (5) Designated tight formation means the portion of a natural gas 
bearing formation that was:
    (i) Designated as a tight formation by the Commission, pursuant to 
section 501 of the NGPA, or
    (ii) Determined to be a tight formation pursuant to section 503 of 
the NGPA.
    (6) Occluded natural gas produced from coal seams means naturally 
occurring natural gas released from entrapment from the fractures, pores 
and bedding planes of coal seams.
    (7) Natural gas produced from Devonian shale means natural gas 
produced from fractures, micropores and bedding planes of shales 
deposited during the Paleozoic Devonian Period.
    (8) Shales deposited during the Paleozoic Devonian Period can be 
defined as either:
    (i) The gross Devonian age stratigraphic interval encountered by a 
well bore, at least 95 percent of which has a gamma ray index of 0.7 or 
greater; or
    (ii) One continuous interval within the gross Devonian age 
stratigraphic interval, encountered by a well bore, as long as at least 
95 percent of the selected Devonian shale interval has a gamma ray index 
of 0.7 or greater (but if the interval selected is more than 200

[[Page 770]]

feet thick, the bottom and top 100 foot portions must meet the five 
percent test independently).
    (9) Gamma ray index means when measuring the Devonian age 
stratigraphic interval, the gamma ray index at any point is to be 
calculated by dividing the gamma ray log value at that point by the 
gamma log value at the shale base line established over the entire 
Devonian age interval penetrated by the well bore.
    (10) Mcf means one thousand cubic feet of natural gas at 60 degrees 
Fahrenheit under a pressure equivalent to that of 30.00 inches of 
mercury at 32 degrees Fahrenheit, under standard gravitational force 
(980.665 centimeters per second squared).
    (11) Data well means a well for which permeability and/or pre-
stimulation production rate data are available for a pay section in the 
formation for which a tight formation designation is being sought.



           Subpart B_Determinations by Jurisdictional Agencies



Sec. 270.201  Applicability.

    (a) This part applies to determinations of jurisdictional agencies 
for tight formation gas, occluded natural gas produced from coal seams, 
and natural gas produced from Devonian shale that is produced through:
    (1) A well the surface drilling of which began after December 31, 
1979, but before January 1, 1993;
    (2) A recompletion commenced after January 1, 1993, in a well the 
surface drilling of which began after December 31, 1979, but before 
January 1, 1993; or
    (3) A recompletion commenced after December 31, 1979, but before 
January 1, 1993, where such gas could not have been produced from any 
completion location in existence in the well bore before January 1, 
1980.
    (b) This part also applies to determinations of jurisdictional 
agencies that designate a formation, or portion thereof, as a tight 
formation.



Sec. 270.202  Definition of determination.

    For purposes of this subpart, a determination has been made by a 
jurisdictional agency when such determination is administratively final 
before such agency.



Sec. 270.203  Determinations by jurisdictional agencies.

    A jurisdictional agency must make determinations to which this part 
applies in accordance with procedures applicable to it under the law of 
its jurisdiction for making such determinations or for making comparable 
determinations.



Sec. 270.204  Notice to the Commission.

    Within 15 days after making a determination under this part, the 
jurisdictional agency must give written notice of the determination to 
the Commission. The notice must include the following:
    (a) A list of all participants in the proceeding as well as any 
persons who submitted or who sought an opportunity to submit written 
comments (whether or not such persons participated in the proceeding);
    (b) A statement indicating whether the matter was opposed before the 
jurisdictional agency;
    (c) A copy of the application together with a copy or description of 
all other materials upon which the jurisdictional agency relied in the 
course of making the determination, together with any information which 
may be inconsistent with the determination.
    (d) An explanatory statement, including appropriate factual findings 
and references, which is sufficient to enable a person examining the 
notice to ascertain the basis for the determination without reference to 
information or data not contained in the notice.



     Subpart C_Requirements for Filings With Jurisdictional Agencies



Sec. 270.301  General requirements.

    (a) An application for determination may be filed with the 
jurisdictional agency and signed by any person the jurisdictional agency 
designates as eligible to make filings with respect to the well for 
which the application is made.
    (b) The documents required by this subpart are the minimum required 
in

[[Page 771]]

support of a request for a determination. The jurisdictional agency may 
require additional support as it deems appropriate, and may more 
specifically identify the documents indicated as the minimum required.
    (c) Each applicant must pay the fee prescribed in Sec. 381.401 of 
this chapter. The applicant will be billed annually by the Commission 
for each jurisdictional agency determination received by the Commission. 
The applicant must submit the fee, or petition for waiver pursuant to 
Sec. 381.106 of this chapter, within 30 days following the billing 
date.



Sec. 270.302  Occluded natural gas produced from coal seams.

    A person seeking a determination that natural gas is occluded 
natural gas produced from coal seams must file an application with the 
jurisdictional agency which contains the following items:
    (a) FERC Form No. 121;
    (b) All well completion reports.
    (c) A radioactivity, electric or other log which will define the 
coal seams.
    (d) Evidence to establish that the natural gas was produced from a 
coal seam;
    (e) A statement by the applicant, under oath, that gas is produced 
from a coal seam through:
    (1)(i) A well the surface drilling of which began after December 31, 
1979, but before January 1, 1993;
    (ii) A recompletion commenced after January 1, 1993, in a well the 
surface drilling of which began after December 31, 1979, but before 
January 1, 1993; or
    (iii) A recompletion that was commenced after December 31, 1979 but 
before January 1, 1993, where such gas could not have been produced from 
any completion location in existence in the well bore before January 1, 
1980; and
    (2) The applicant has no knowledge of any information not described 
in the application which is inconsistent with his conclusion.



Sec. 270.303  Natural gas produced from Devonian shale.

    A person seeking a determination that natural gas is produced from 
Devonian shale shall file an application with the jurisdictional agency 
which contains the following items:
    (a) FERC Form No. 121;
    (b) All well completion reports;
    (c) A gamma ray log with superimposed indications of the shale base 
line and the gamma ray index of 0.7 over the Devonian age stratigraphic 
section designated pursuant to Sec. 270.101(b)(8);
    (d) A reference to a standard stratigraphic chart or text 
establishing that the producing interval is a shale of Devonian age; and
    (e) A sworn statement:
    (1) Calculating the percentage of footage of the producing interval 
which is not Devonian shale as indicated by a Gamma ray index of less 
than 0.7;
    (2) Demonstrating that the percentage of potentially disqualifying 
non-shale footage for the stratigraphic section selected is equal to or 
less than 5 percent of the Devonian stratigraphic age interval 
designated pursuant to Sec. 270.101(b)(7);
    (3) Attesting that the natural gas is being produced from Devonian 
shale through:
    (i) A well the surface drilling of which began after December 31, 
1979, but before January 1, 1993;
    (ii) A recompletion commenced after January 1, 1993, in a well the 
surface drilling of which began after December 31, 1979, but before 
January 1, 1993; or
    (iii) A recompletion that was commenced after December 31, 1979 but 
before January 1, 1993, where such gas could not have been produced from 
any completion location in existence in the well bore before January 1, 
1980; and
    (4) Attesting that the applicant has no knowledge of any information 
not described in the application which is inconsistent with his 
conclusion.



Sec. 270.304  Tight formation gas.

    A person seeking a determination that natural gas is tight formation 
gas must file with the jurisdictional agency an application which 
contains the following items:
    (a) FERC Form No. 121;
    (b) All well completion reports;
    (c) A map that identifies the surface location of the well and the 
completion location in the well in the designated

[[Page 772]]

tight formation, along with the geographic boundaries of the designated 
tight formation, or a location plat identifying the surface location of 
the well and the completion location in the designated tight formation, 
along with a list of the tract (or tracts) of land that comprise the 
designated tight formation;
    (d) A complete copy of the well log, including the log heading 
identifying the designated tight formation stratigraphically; and
    (e) A statement by the applicant, under oath, that:
    (1) The natural gas is being produced from a designated tight 
formation through:
    (i) A well the surface drilling of which began after December 31, 
1979, but before January 1, 1993;
    (ii) A recompletion commenced after January 1, 1993, in a well the 
surface drilling of which began after December 31, 1979, but before 
January 1, 1993; or
    (iii) Through a recompletion that was commenced after December 31, 
1979 but before January 1, 1993, where such gas could not have been 
produced from any completion location in existence in the well bore 
before January 1, 1980; and
    (2) The applicant has no knowledge of any information not described 
in the application which is inconsistent with his conclusion.



Sec. 270.305  Determination of tight formation areas.

    (a) General requirement. A jurisdictional agency determination 
designating a portion of a formation as a tight formation must be made 
in the form and manner prescribed in this subpart.
    (b) Guidelines for designating tight formations. A jurisdictional 
agency determination designating a portion of a formation as a tight 
formation must be made in accordance with the following guidelines:
    (1) Within the geographic boundaries of the portion of the formation 
being recommended for tight formation designation, the estimated in situ 
gas permeability, throughout the pay section, is expected to be 0.1 
millidarcy (md) or less. The expected in situ permeability is to be 
determined through an arithmetic mean averaging of the known 
permeabilities obtained from the wells that penetrate, and have a pay 
section in, such portion of such formation.
    (2) Within the geographic boundaries of the portion of the formation 
being recommended for tight formation designation, the stabilized 
production rate of natural gas, against atmospheric pressure, of wells 
completed for production in such portion of such formation, without 
stimulation, is not expected to exceed the production rate determined in 
accordance with the table in this paragraph (b)(2). Such expected 
stabilized, pre-stimulation production rate is to be determined through 
an arithmetic mean averaging of the known stabilized, pre-stimulation 
production rates obtained from the wells that penetrate, and have a pay 
section in, such portion of such formation.

------------------------------------------------------------------------
If the average depth to the top of the formation (in      The maximum
                        feet)                              allowable
----------------------------------------------------- production rate of
                                                        natural gas (in
                                       but does not      Mcf per day)
              exceeds--                  exceed--    -------------------
                                                       may not exceed--
------------------------------------------------------------------------
0...................................           1,000                  44
1,000...............................           1,500                  51
1,500...............................           2,000                  59
2,000...............................           2,500                  68
2,500...............................           3,000                  79
3,000...............................           3,500                  91
3,500...............................           4,000                 105
4,000...............................           4,500                 122
4,500...............................           5,000                 141
5,000...............................           5,500                 163
5,500...............................           6,000                 188
6,000...............................           6,500                 217
6,500...............................           7,000                 251
7,000...............................           7,500                 290
7,500...............................           8,000                 336
8,000...............................           8,500                 388
8,500...............................           9,000                 449
9,000...............................           9,500                 519
9,500...............................          10,000                 600
10,000..............................          10,500                 693
10,500..............................          11,000                 802
11,000..............................          11,500                 927
11,500..............................          12,000               1,071
12,000..............................          12,500               1,238
12,500..............................          13,000               1,432
13,000..............................          13,500               1,655
13,500..............................          14,000               1,913
14,000..............................          14,500               2,212
14,500..............................          15,000               2,557
------------------------------------------------------------------------

    (c) Notice to the Commission. Any jurisdictional agency making a 
determination that a formation, or portion thereof, qualifies as a tight 
formation will provide timely notice, in writing,

[[Page 773]]

of such determination, to the Commission. Such notice shall include the 
following to substantiate the jurisdictional agency's findings:
    (1) Geological and geographical descriptions of the formation, or 
portion thereof, which is determined to qualify as a tight formation; 
and
    (2) Geological and engineering data to support the determination, 
including (but not limited to):
    (i) A map of the area for which a tight formation determination is 
being sought that clearly locates and identifies all data wells and all 
dry holes that penetrate the subject formation and all wells that are 
currently producing from the subject formation.
    (ii) A well-by-well table of each in situ permeability value (in 
millidarcies), pre-stimulation stabilized production rate (in Mcf per 
day), and depth to the top of the formation (in feet) for each well, and 
the arithmetic mean of each set of data.
    (iii) For any data that the jurisdictional agency excludes from the 
above calculations, a statement explaining why the data was excluded.
    (iv) The underlying well test, well logs, cross-sections, or other 
data sources, and all calculations performed to derive the formation 
tops, permeability values, and pre-stimulation stabilized production 
rates shown in the well-by-well table.
    (v) Any other information that the jurisdictional agency deems 
relevant and/or that the jurisdictional agency relied upon in making its 
determination.



Sec. 270.306  Devonian shale wells in Michigan.

    A person seeking a determination that natural gas is being produced 
from the Devonian Age Antrim shale in Michigan shall file an application 
that contains the following items:
    (a) FERC Form No. 121;
    (b) All well completion reports;
    (c) A gamma ray log from the closest available well bore (producing 
or dry hole) that is within a one mile radius of the well for which a 
determination is sought, with superimposed indications of:
    (1) The shale base line and the gamma ray index of 0.7 over the 
Devonian age stratigraphic section penetrated by the well bore; and
    (2) The boundary between the Antrim shale and the overlying 
formation (Berea Sandstone, Ellsworth, Bedford, or Sunbury shales, or 
their equivalents);
    (d) A location plat showing the well for which the determination is 
sought and the well for which a gamma ray log has been filed;
    (e) A mud log from the well for which the determination is sought, 
with a detailed description of samples taken from 10-foot, or less, 
intervals through-out the Devonian age stratigraphic section penetrated 
by the well bore;
    (f) A driller's log, or similar report, from the well for which the 
determination is sought, indicating the general characteristics of the 
strata penetrated and the corresponding depths at which they are 
encountered throughout the Devonian age stratigraphic section penetrated 
by the well bore;
    (g) A reference to a standard stratigraphic chart or text 
establishing that the producing interval is a shale of Devonian age; and
    (h) A sworn statement:
    (1) Calculating the percentage of footage of the producing interval 
(or the Antrim Shale in the event the well is a dry hole) in the well 
for which a gamma ray log was submitted which is not Devonian shall as 
indicated by a gamma ray index of less than 0.7;
    (2) Demonstrating that the percentage of potentially disqualifying 
non-shale footage for the Devonian age stratigraphic section penetrated 
by the well bore for which the submitted gamma ray log is equal to or 
less than 5 percent;
    (3) Attesting that the natural gas is being produced from the 
Devonian Age Antrim shale through:
    (i) A well the surface drilling of which began after December 31, 
1979, but before January 1, 1993;
    (ii) A recompletion commenced after January 1, 1993, in a well the 
surface drilling of which began after December 31, 1979, but before 
January 1, 1993; or
    (iii) A recompletion that was commenced after December 31, 1979 but 
before January 1, 1993, where such gas could not have been produced from 
any

[[Page 774]]

completion location in existence in the well bore before January 1, 1980 
and
    (4) Attesting the applicant has no knowledge of any information not 
described in the application which is inconsistent with his conclusion.



  Subpart D_Identification of State and Federal Jurisdictional Agencies



Sec. 270.401  Jurisdictional agency.

    (a) Definition. With respect to a well the surface location of which 
is on lands within the boundaries of a State (including Federal lands 
and offshore State lands), ``jurisdictional agency'' means the Federal 
or State agency having regulatory jurisdiction with respect to the 
production of natural gas.
    (b) The jurisdictional agency for wells located on Federal lands in 
each state are:
    (1) Alabama--Chief, Branch of Resources, Planning & Protection, 
Bureau of Land Management, Eastern States Office (931), 7450 Boston 
Boulevard, Springfield, VA 22153.
    (2)(i) Alaska, Anchorage Field Office--Assistant District Manager 
for Mineral Resources, Bureau of Land Management, 6881 Abbott Loop Road, 
Anchorage, AK 99507.
    (ii) Alaska, Northern Field Office--Assistant District Manager for 
Mineral Resources, Bureau of Land Management, 1150 University Avenue, 
Fairbanks, AK 99709.
    (3)(i) Arizona, except for the Navaho and Hopi Indian Reservations--
Deputy State Director for Mineral Resources, Bureau of Land Management, 
PO Box 555, Phoenix, AZ 85000-0555.
    (ii) Arizona, Navaho and Hopi Indian Reservations--District Manager, 
Bureau of Land Management, Albuquerque District Office (NGPA), 435 
Montano Road, NE., Albuquerque, NM 87107.
    (4) Arkansas--Chief, Branch of Resources, Planning & Protection, 
Bureau of Land Management, Eastern States Office (931), 7450 Boston 
Boulevard, Springfield, VA 22153.
    (5) California, except Naval Petroleum Reserve No. 1 (Elk Hills) and 
No. 2 (Buena Vista)--Chief, Branch of Fluid and Solid Minerals, Bureau 
of Land Management, Division of Mineral Resources (C-920), 2800 Cottage 
Way, Suite W-1834, Sacramento, CA 95825.
    (6) Colorado--Deputy State Director for Resource Services, Bureau of 
Land Management, Colorado State Office (CO-930), 2850 Youngfield Street, 
Lakewood, CO 80215.
    (7) Florida and Georgia--Chief, Branch of Resources, Planning & 
Protection, Bureau of Land Management, Eastern States Office (931), 7450 
Boston Boulevard, Springfield, VA 22153.
    (8) Idaho--Deputy State Director Resources and Science, Bureau of 
Land Management, Idaho State Office (931), 1387 Vinnell Way, Boise, ID 
83709.
    (9) Illinois, Indiana, and Iowa--Chief, Branch of Resources, 
Planning & Protection, Bureau of Land Management, Eastern States Office 
(931), 7450 Boston Boulevard, Springfield, VA 22153.
    (10) Kansas--Deputy State Director for Resource Services, Bureau of 
Land Management, Colorado State Office (CO-931), 2850 Youngfield Street, 
Lakewood, CO 80215.
    (11) Kentucky, Louisiana, Maryland, Michigan, Mississippi, and 
Missouri--Chief, Branch of Resources, Planning & Protection, Bureau of 
Land Management, Eastern States Office (931), 7450 Boston Boulevard, 
Springfield, VA 22153.
    (12) Montana--Chief, Branch of Fluid and Solid Minerals, Bureau of 
Land Management, Division of Mineral Resources, PO Box 36800, Billings, 
MT 59107.
    (13) Nebraska--Chief, Branch of Resources, Planning & Protection, 
Bureau of Land Management, Eastern States Office (931), 7450 Boston 
Boulevard, Springfield, VA 22153.
    (14) Nevada--State Director, Bureau of Land Management, Nevada State 
Office (NV-92000), PO Box 12000, Reno, NV 89520.
    (15)(i) New Mexico, Northern New Mexico--Field Office Manager, 
Bureau of Land Management, Albuquerque Field Office (NGPA), 435 Montano 
Road, NE., Albuquerque, NM 87107.
    (ii) New Mexico, Southern New Mexico--Field Office Manager, Bureau 
of Land Management, Roswell Field Office (NGPA), 2909 West Second 
Street, Roswell, NM 88201.
    (16) New York and North Carolina--Chief, Branch of Resources, 
Planning &

[[Page 775]]

Protection, Bureau of Land Management, Eastern States Office (931), 7450 
Boston Boulevard, Springfield, VA 22153.
    (17) North Dakota--Chief, Branch of Fluid Minerals, Bureau of Land 
Management, Division of Mineral Resources, PO Box 36800, Billings, MT 
59107.
    (18) Ohio--Chief, Branch of Resources, Planning & Protection, Bureau 
of Land Management, Eastern States Office (931), 7450 Boston Boulevard, 
Springfield, VA 22153.
    (19)(i) Oklahoma, except the Osage Reservation--Field Office 
Manager, Bureau of Land Management, Tulsa Field Office (NGPA), 7906 East 
33rd Street, Suite 101, Tulsa, OK 74145.
    (ii) Oklahoma, the Osage Reservation only--Superintendent, Osage 
Indian Agency, Bureau of Indian Affairs, U. S. Department of the 
Interior, Pawhuska, OK 74056.
    (20) Oregon--Deputy State Director, Planning, Use, and Protection, 
Bureau of Land Management, Oregon State Office, PO Box 2965, Portland, 
OR 97208.
    (21) Pennsylvania and South Carolina--Chief, Branch of Resources, 
Planning & Protection, Bureau of Land Management, Eastern States Office 
(931), 7450 Boston Boulevard, Springfield, VA 22153.
    (22) South Dakota--Chief, Branch of Fluid Minerals, Bureau of Land 
Management, Division of Mineral Resources, PO Box 36800 Billings, MT 
59107.
    (23) Tennessee--Chief, Branch of Resources, Planning & Protection, 
Bureau of Land Management, Eastern States Office (931), 7450 Boston 
Boulevard, Springfield, VA 22153.
    (24) (i) Texas, east of the 100th Meridian--Field Office Manager, 
Bureau of Land Management, Tulsa Field Office (NGPA), 7906 East 33rd 
Street, Suite 101, Tulsa, OK 74145.
    (ii) Texas, west of the 100th Meridian--Field Office Manager, Bureau 
of Land Management, Roswell Field Office (NGPA), 2909 West Second 
Street, Roswell, NM 88201.
    (25) (i) Utah, except for the Navajo and Hopi Indian Reservations--
Deputy State Director for Natural Resources, Bureau of Land Management, 
Utah State Office (U-930), 324 South State Street, Suite 301, Salt Lake 
City, UT 84111.
    (ii) Utah, the Navajo and Hopi Indian Reservations only--Field 
Office Manager, Bureau of Land Management, Albuquerque Field Office 
(NGPA), 435 Montano Road, NE., Albuquerque, NM 87107.
    (26) Virginia--Chief, Branch of Resources, Planning & Protection, 
Bureau of Land Management, Eastern States Office (931), 7450 Boston 
Boulevard, Springfield, VA 22153.
    (27) Washington--Deputy State Director for Mineral Resources, Bureau 
of Land Management, Oregon State Office, PO Box 2965, Portland, OR 
97208.
    (28) West Virginia--Chief, Branch of Resources, Planning & 
Protection, Bureau of Land Management, Eastern States Office (931), 7450 
Boston Boulevard, Springfield, VA 22153.
    (29) (i) Wyoming, excluding Naval Petroleum Reserve No. 3 (Teapot 
Dome) Casper Field Office--Field Office Manager, Bureau of Land 
Management, 1701 East E Street, Casper, WY 82601.
    (ii) Rawlins Field Office--Field Office Manager, Bureau of Land 
Management, PO Box 2407, Rawlins, WY 82301.
    (iii) Rock Springs Field Office--Field Office Manager, Bureau of 
Land Management, 280 Highway 191 North, Rock Springs, WY 82901.
    (iv) Worland Field Office--Field Office Manager, Bureau of Land 
Management, PO Box 119, Worland, WY 82401.
    (c) The jurisdictional agency for wells located on Other lands in 
each state are:
    (1) Alabama--State Oil and Gas Board, 420 Hackberry Lane, P O Box 
869999, Tuscaloosa, AL 35486-9780.
    (2) Alaska--Department of Natural Resources, Oil & Gas Division, 550 
West 7th Avenue, Anchorage, AK 99501.
    (3) Arizona--Oil and Gas Conservation Commission, 416 West Congress 
Street, Suite 100, Tucson, AZ 85701
    (4) Arkansas--Oil & Gas Commission, PO Box 1472, El Dorado, AR 
71730-1472.
    (5) California--Department of Conservation, Division of Oil & Gas, 
801 K Street, MS24-01, Sacramento, CA 95814.
    (6) Colorado--Oil & Gas Conservation Commission, 1120 Lincoln, Suite 
801, Denver, CO 80203.
    (7) Florida--Administrator Oil and Gas, Bureau of Geology, 
Department of

[[Page 776]]

Natural Resources, 903 West Tennessee Street, Tallahassee, FL 32304.
    (8) Georgia--Department of Natural Resources, Geologic & Water 
Resources Division, 19 Martin Luther King Drive, SW, Atlanta, GA 30334.
    (9) Idaho--Idaho Public Utilities Commission, Statehouse Mail, 
Boise, ID 83720.
    (10) Illinois--Department of Natural Resources, Oil & Gas Division, 
524 South 2nd Street, Springfield, IL 62701.
    (11) Indiana--Department of Natural Resources, Oil & Gas Division, 
402 West Washington Street, Room 256 Indianapolis, IN 46204.
    (12) Kansas--Kansas Corporation Commission, Finney State Office 
Building, 130 South Market, Room 2078, Wichita, KS 67202-3802.
    (13) Kentucky--Public Service Commission, 211 Sower Blvd., PO Box 
6615, Frankfort, KY 40602-0615.
    (14) Louisiana--Department of Natural Resources, Office of 
Conservation, PO Box 94275, Baton Rouge, LA 70804.
    (15) Maryland--Department of Natural Resources, Tawes State Office 
Building., Annapolis, MD 21404.
    (16) Michigan--Department of Environmental Quality, Geological 
Survey Division, Hollister Building, PO Box 30473, Lansing MI 48909.
    (17) Mississippi--State Oil & Gas Board, 500 Graymont Avenue, Suite 
E, Jackson, MS 39202.
    (18) Missouri--Department of Natural Resources Geology and Survey 
Division, PO Box 250, 111 Fairgrounds Road, Rolla, MO 65402.
    (19) Montana--Department of Natural Resources and Oil and Gas 
Conservation Division, 2535 St. John's Avenue, Billings, MT 59102.
    (20) Nebraska--Oil & Gas Conservation Commission, Box 399, Sidney, 
NE 69162.
    (21) Nevada--Department of Conservation and Natural Resources, 
Division of Mineral Resources, Capitol Complex, 201 S. Fall Street, 
Carson City, NV 89710.
    (22) New Mexico--Department of Energy and Minerals and Natural 
Resources, Oil Conservation Division, 2040 S. Pacheco Street, Sante Fe, 
NM 87505.
    (23) New York--New York State Department of Environmental 
Conservation, Division of Mineral Resources, Bureau of Oil and Gas 
Regulation, 50 Wolf Road, Albany, NY 12233-6500.
    (24) North Carolina--Department of Natural Resources and Community 
Development, 512 North Salisbury Street, Raleigh, NC 27611.
    (25) North Dakota--Industrial Commission, State Capitol, 600 East 
Boulevard Avenue, Department 405, Bismarck, ND 58505.
    (26) Ohio--Department of Natural Resources, Division of Oil and Gas 
4383 Fountain Square Drive, Columbus, OH 43224-1362.
    (27) Oklahoma---Corporation Commission, 300 Jim Thorpe Building, PO 
Box 52000-2000, Oklahoma City, OK 73152-2000.
    (28) Oregon--Department of Geology & Mineral Industries, 800 N.E. 
Oregon Street, 28 Portland, OR 972332.
    (29) Pennsylvania `` Department of Conservation and Natural 
Resources, PO Box 8767, Harrisburg, PA 17105-8767.
    (30) South Carolina--South Carolina Public Service Commission, PO 
Drawer 11649, Columbia, SC 29211.
    (31) South Dakota--Oil and Gas Supervisor, Department of Environment 
and Natural Resources, 2050 West Main, Suite 1, Rapid City, SD 57702.
    (32) Tennessee--Office of Conservation, Division of Geology, 401 
Church Street, Nashville, TN 37243.
    (33) Texas--Railroad Commission Oil and Gas Division, 1701 North 
Congress Avenue, PO Box 12967, Austin, TX 78711-2967.
    (34) Utah---Department of Natural Resources, Division of Oil, Gas 
and Mining, PO Box 145801 West North Temple, Suite 1210, Salt Lake City, 
UT 84114-5801.
    (35) Virginia--Department of Mines, Minerals & Energy, Division of 
Gas and Oil, PO Box 1416, Abingdon, VA 24210.
    (36) Washington--Department of Natural Resources, Geology and Earth 
Resources Division, PO Box 47001, Olympia, WA 98504.
    (37) West Virginia---Division of Environmental Protection, Office of 
Oil and Gas, 10 McJunkin Road, Nitro, WV 25143-2506.
    (d) Federal lands. For purposes of this section, Federal lands 
means:
    (1) All lands leased under:
    (i) The Mineral Lands Leasing Act, as amended, 30 U.S.C. 181 et 
seq.; and

[[Page 777]]

    (ii) The Mineral Leasing Act for Acquired Lands, as amended, 30 
U.S.C. 351 et seq.; and
    (2) All Indian lands which are under the supervision of the United 
States Geological Survey or any successor federal agency (30 CFR part 
221); and
    (3) All Indian lands which are under the supervision of the Osage 
Indian Agency, Bureau of Indian Affairs, U.S. Department of the 
Interior.
    (e) Divided-interest leases. Unless an agreement under this 
paragraph provides otherwise, where a well is located on a divided-
interest lease involving Federal (or Indian) and private (or State) 
ownership:
    (1) The Federal jurisdictional agency will make the determination 
where the majority lease interest is Federal (or Indian);
    (2) The State jurisdictional agency will make the determination 
where the majority lease interest is private (or State); and
    (3) The State jurisdictional agency will make the determination 
where the lease is divided equally.
    (f) Drilling units. Unless an agreement under paragraph (e) of this 
section provides otherwise, where a drilling unit is drained by two or 
more wells, the Federal jurisdictional agency will make the 
determination if the completion location of the well in question is 
located on a Federal (or Indian) lease, and the State jurisdictional 
agency will make the determination if the completion location of the 
well in question is located on a private (or State) lease.
    (g) Agreements. If a jurisdictional agency that has jurisdiction 
over Federal lands enters into an agreement with a jurisdictional agency 
that has jurisdiction over State lands that either authorizes the State 
jurisdictional agency to make determinations for wells located on 
Federal lands or the Federal agency to make determinations for wells 
located on State lands, such agreement shall be filed with the 
Commission. Upon the filing of such an agreement, the agency so 
authorized will be considered to be the jurisdictional agency for wells 
on the lands subject to the agreement.



   Subpart E_Commission Review of Jurisdictional Agency Determinations



Sec. 270.501  Publication of notice from jurisdictional agency.

    (a) Upon receipt of a notice of determination by a jurisdictional 
agency under Sec. 270.204, the Commission will send an acknowledgment 
to the applicant and will post acknowledgment in the Commission's Public 
Reference Room and on the Commission's web site. Another source of the 
information is the Commission's copy contractor, RVJ International, Inc. 
RVJ International, Inc. is located in the Public Reference Room at 888 
First Street, NE., Washington, DC 20426.
    (b) The acknowledgment will contain the following:
    (1) The date on which the jurisdictional agency notice was received;
    (2) Certain information contained in FERC Form No. 121;
    (3) A statement that the application and a copy or description of 
other materials in the record on which such determination was made is 
available for inspection, except to the extent the material is treated 
as confidential under Sec. 270.506, at the offices of the Commission; 
and
    (4) A statement that persons objecting to the final determination 
may, in accordance with this subpart, file a protest with the Commission 
within 20 days after the date that notice of receipt of a determination 
is issued by the Commission pursuant to this section.



Sec. 270.502  Commission review of final determinations.

    (a) Review by Commission. Except as provided in paragraphs (b), (c) 
and (d) of this section, a determination submitted to the Commission by 
a jurisdictional agency will become final 45 days after the date on 
which the Commission received notice of the determination, unless within 
the 45 day period, the Commission:
    (1) Makes a preliminary finding that:
    (i) The determination is not supported by substantial evidence in 
the record on which the determination was made; or

[[Page 778]]

    (ii) The determination is not consistent with information which is 
contained in the public records of the Commission and which was not part 
of the record on which the jurisdictional agency made the determination, 
and
    (2) Issues written notice of such preliminary finding, including the 
reasons therefor. Copies of the written notice will be sent to the 
jurisdictional agency that made the determination, to the persons 
identified in the notice under Sec. 270.204 of such determination, and 
to any persons who have filed a protest.
    (b) Incomplete notice. Notwithstanding the provisions of paragraph 
(a) of this section, the 45-day period for Commission review of a 
determination will not begin if:
    (1) The notice forwarded to the Commission pursuant to Sec. 270.204 
does not contain all the material specified therein; and
    (2) The Commission notifies the jurisdictional agency, within 45 
days after the date on which the Commission receives notice of the 
determination, that the notice is incomplete.
    (c) Withdrawal of notice. (1) The jurisdictional agency may withdraw 
a notice of determination by giving notice as specified in paragraph 
(c)(2) of this section at any time prior to the issuance of a final 
order with respect to such determination under paragraphs (g)(1) and 
(g)(2) of this section, or at any time prior to the date such 
determination becomes final under paragraph (a) or (g)(4) of this 
section. Such notice must include the jurisdictional agency's reasons 
for the withdrawal.
    (2) Withdrawal of a notice of determination will take effect at such 
time as the jurisdictional agency has notified the Commission, and the 
parties to the proceeding before the agency, of such withdrawal.
    (3) Withdrawal of a notice of determination shall nullify such 
notice of determination.
    (d) Withdrawal of application. (1) An applicant may withdraw an 
application for a determination which is before the Commission by giving 
notice as specified in paragraph (d)(2) of this section at any time 
prior to the issuance of a final order with respect to such 
determination under paragraphs (g)(1) and (g)(2) of this section, or at 
any time prior to the date such determination becomes final under 
paragraph (a) or (g)(4) of this section.
    (2) Withdrawal of an application will take effect at such time as 
the applicant has notified the Commission and the jurisdictional agency.
    (3) Withdrawal of an application will nullify such application and 
the notice of determination on such application.
    (e) Public notice. The Commission will publish notice of the 
preliminary finding in the Federal Register and will post the notice in 
its Public Reference Room. The notice will set forth the reasons for the 
preliminary finding.
    (f) Procedures following notice of preliminary finding. Any state or 
federal agency or any person may submit, within 30 days after issuance 
of the preliminary finding, written comments, and request an informal 
conference with the Commission staff. Any jurisdictional agency, any 
state agency and any person receiving notice under paragraph (a)(2) of 
this section may request an informal conference with the Commission 
staff. All timely requests for conferences will be granted. Notice of, 
and permission to attend, such conferences will be given to persons 
identified in paragraph (a)(2) of this section and to state or federal 
agencies or persons who submitted comments under this paragraph.
    (g) Final orders. (1) In any case in which a protest was filed with 
the Commission and a preliminary finding was issued, the Commission will 
issue a final order within 120 days after issuance of the preliminary 
finding.
    (2) In any case in which no protest was filed with the Commission 
and a preliminary finding was issued, the Commission may issue a final 
order within 120 days after issuance of the preliminary finding.
    (3) A final order issued under paragraph (g)(1) or (g)(2) of this 
section will either affirm, reverse, or remand the determination of the 
jurisdictional agency. Such order will state the specific basis for the 
Commission's action. Notice of the issuance of such order will be given 
to the jurisdictional agency, to participants in the proceeding before 
the jurisdictional agency, and to participants in the proceeding before

[[Page 779]]

the Commission under paragraph (d) of this section and under Sec. 
270.503.
    (4) In the event that the Commission fails to issue a final order 
within 120 days after issuance of the preliminary finding, the 
determination of the jurisdictional agency shall become final.



Sec. 270.503  Protests to the Commission.

    (a) Who may file. Any person may file a protest with the Commission 
with respect to a determination of a jurisdictional agency within 20 
days after the date that notice of receipt of a determination is issued 
by the Commission pursuant to Sec. 270.204.
    (b) Grounds. Protests may be based only on the grounds the final 
determination is:
    (1) Not supported by substantial evidence;
    (2) Not consistent with information which is contained in the public 
records of the Commission and which was not part of the record on which 
the determination was made;
    (3) Not consistent with information submitted with the protests for 
inclusion in the public records of the Commission, which information was 
not part of the record on which the determination was made; or
    (4) Not based on an application which complied with the filing 
requirements set forth in this part.



Sec. 270.504  Contents of protests to the Commission.

    Each protest must include:
    (a) An identification of the determination protested;
    (b) The name and address of the person filing the protest;
    (c) A statement of whether or not the person filing the protest 
participated in the proceeding before the jurisdictional agency, and if 
not, the reason for the nonparticipation;
    (d) A statement of the effect the determination will have on the 
protestor;
    (e) A statement of the precise grounds under Sec. 270.503(f) for 
the protest, and all supporting documents or references to any 
information relied on which is in the record on which the determination 
is based or is in or to be inserted in the public files of the 
Commission; and
    (f) A statement that the protestor has served, in accordance with 
Sec. 385.2010 of this chapter, a copy of the protest together with all 
supporting documents on the jurisdictional agency and all persons listed 
in the notice of determination filed pursuant to Sec. 270.204.



Sec. 270.505  Procedure for reopening determinations.

    (a) Grounds. At any time subsequent to the time a determination 
becomes final pursuant to this subpart, the Commission, on its own 
motion, or in response to a petition filed by any person aggrieved or 
adversely affected by the determination, may reopen the determination if 
it appears that:
    (1) In making the determination, the Commission or the 
jurisdictional agency relied on any untrue statement of material fact; 
or
    (2) There was omitted a statement of material fact necessary in 
order to make the statements made not misleading, in light of the 
circumstances under which they were made to the jurisdictional agency or 
the Commission.
    (b) Contents of petition. A petition to reopen the determination 
proceedings must contain the following information, under oath:
    (1) The name and address of the person filing the petition;
    (2) The interest of the petitioner in the outcome of the 
determination proceeding;
    (3) The statement of material fact that is alleged to be untrue or 
omitted;
    (4) A statement explaining why the outcome of the determination 
proceeding would have been different had the statement or omission not 
occurred; and
    (5) Copies of all documents relied on by the petitioner, or 
references to such documents if they are contained in the public files 
of the Commission.
    (c) Procedures after reopening. In the event the Commission reopens 
a determination pursuant to this section it will:
    (1) Give notice to the jurisdictional agency and all persons who 
participated before both that agency and the Commission in the 
proceedings resulting in the determination in question;

[[Page 780]]

    (2) Permit the jurisdictional agency and other persons receiving 
notice pursuant to paragraph (c)(1) of this section to submit whatever 
documentary evidence such agency or persons deem relevant; and
    (3) Take such other action or hold or cause to be held such 
proceedings as it deems necessary or appropriate for a full disclosure 
of the facts.
    (d) Final order of Commission. Within 150 days after issuance of the 
notice under paragraph (c)(1) of this section, the Commission shall 
issue a final order. If the Commission finds that the grounds referred 
to in paragraph (a) of this section exist, it will vacate the 
determination.



Sec. 270.506  Confidentiality.

    (a) Except as provided in paragraph (b) of this section, the 
Commission will accord confidential protection to, and not disclose to 
the public, any information submitted by a jurisdictional agency under 
Sec. 270.204, if:
    (1) The jurisdictional agency, on its own motion or on request of 
the applicant, afforded such information confidential treatment before 
the jurisdictional agency; and
    (2) The agency order or the applicant's request stated grounds for 
confidential treatment which fall within one of the exemptions described 
in paragraphs (1) through (9) of 5 U.S.C. 552(b).
    (b) Upon receipt of a request for disclosure of information treated 
as confidential under paragraph (a) of this section, the Commission will 
determine in accordance with 5 U.S.C. 552 whether the information is 
exempt. 5 U.S.C. 552(b). If it determines the information is not exempt, 
the information will be made public. If it determines the information is 
exempt, the Commission will not make it public unless determines that 
its conduct of the proceeding to review the jurisdictional agency 
determination requires making such information available to the public 
or to particular parties, subject to conditions (including a protective 
order) as the Commission may prescribe. Before making any information 
public under this paragraph, the Commission will provide at least 5 days 
notice to the person who submitted the information.

[[Page 781]]



SUBCHAPTER I_OTHER REGULATIONS UNDER THE NATURAL GAS POLICY ACT OF 1978 

                         AND RELATED AUTHORITIES


PART 280_GENERAL PROVISIONS APPLICABLE TO SUBCHAPTER I--Table of Contents



    Authority: Natural Gas Policy Act of 1978, Pub. L. 95-621; 92 Stat. 
3350, 15 U.S.C. 3301-3432; Outer Continental Shelf Lands Act Amendment 
of 1978, Pub. L. 95-372, 43 U.S.C. 1862.



Sec. 280.101  Definitions.

    (a) NGPA definitions. Terms defined in the NGPA shall have the same 
meaning for purposes of this subchapter as they have under the NGPA, 
unless further defined in this subpart.
    (b) Other definitions. For purposes of this subchapter:
    (1) NGPA means the Natural Gas Policy Act of 1978.
    (2) OCS means the Outer Continental Shelf as defined in section 
2(35) of the NGPA.

[44 FR 12409, Mar. 7, 1979, as amended by Order 92, 45 FR 49252, July 
24, 1980]



PART 281_NATURAL GAS CURTAILMENT UNDER THE NATURAL GAS POLICY ACT OF 1978--

Table of Contents



Subpart A [Reserved]

                  Subpart B_Permanent Curtailment Rule

Sec.
281.201 Purpose.
281.202 Applicability.
281.203 Definitions and cross references.
281.204 Tariff filing requirements.
281.205 General rules.
281.206 Priority 1 reclassification.
281.207 Priority 2 classification.
281.208 Calculation of essential agricultural requirements and 
          attributable priority 2 entitlements.
281.209 Attribution.
281.210 Conflicting data.
281.211 Filing and documentation.
281.212 Draft tariff and index of entitlements.
281.213 Data Verification Committee.
281.214 Notice, complaint and remedy.
281.215 Additional relief.

                Subpart C_Alternative Fuel Determination

281.301 Purpose.
281.302 Applicability.
281.303 Definitions.
281.304 Computation of alternative fuel volume.
281.305 General rule.

Appendix A to Part 281--Comparison of Selected Fuel Price Data, FPC Form 
          No. 423 Versus Monthly Energy Review, 1976--January 1980

    Authority: 15 U.S.C. 717-717w, 3301-3432; 16 U.S.C. 2601-2645; 42 
U.S.C. 7101-7352.

    Source: Order 10-B, 44 FR 13470, Mar. 12, 1979, unless otherwise 
noted.

Subpart A [Reserved]



                  Subpart B_Permanent Curtailment Rule



Sec. 281.201  Purpose.

    The purpose of this subpart is to implement section 401 of the NGPA 
in order to provide that effective November 1, 1979, the curtailment 
plans of interstate pipelines protect, to the maximum extent 
practicable, deliveries of natural gas for essential agricultural uses 
and for high-priority uses in accordance with the provisions of this 
subpart.

[44 FR 26862, May 8, 1979]



Sec. 281.202  Applicability.

    This subpart applies to the following interstate pipe lines:

Alabama-Tennessee Pipeline Company.
Algonquin Gas Transmission Company.
Arkansas Louisiana Natural Gas Company.
Cities Service Gas Company.
Colorado Interstate Gas Company.
Columbia Gas Transmission Corporation.
Consolidated Gas Supply Corporation.
East Tennessee Natural Gas Company.
Eastern Shore Natural Gas Company.
El Paso Natural Gas Company.
Florida Gas Transmission Company.
Great Lakes Gas Transmission Company.
Inter-City Minnesota Pipelines, Ltd., Inc.
Kansas-Nebraska Natural Gas Company, Inc.
Lawrenceburg Gas Transmission Company.
Michigan-Wisconsin Pipeline Company.
Mid-Louisiana Gas Company.
Midwestern Gas Transmission Company.
Mississippi River Transmission Company.
Montana Dakota Utilities Company.
National Fuel Gas Supply Company.
North Penn Gas Company.

[[Page 782]]

Northern Natural Gas Company.
Northwest Pipeline Corporation.
Panhandle Eastern Pipeline Company.
South Georgia Natural Gas Company.
Southern Natural Gas Company.
Southwest Gas Corporation.
Tennessee Gas Pipeline Company, a Division of Tenneco, Inc.
Tennessee Natural Gas Lines.
Texas Eastern Transmission Corporation.
Texas Gas Transmission Corporation.
The Inland Gas Company.
Transwestern Pipeline Company.
Trunkline Gas Company.
United Gas Pipe Line Company.
Western Gas Interstate Company.

[44 FR 26862, May 8, 1979, as amended at 44 FR 48184, Aug. 17, 1979]



Sec. 281.203  Definitions and cross references.

    (a) Definitions. For purposes of this subpart:
    (1) Direct sale customer means an essential agricultural user of 
high priority use which purchases natural gas directly from an 
interstate pipeline and consumes such natural gas for a high-priority 
use or an essential agricultural use.
    (2) Essential agricultural use means any use of natural gas which is 
certified by the Secretary of Agriculture as an ``essential agricultural 
use'' under section 401(c) of the NGPA, as identified in 7 CFR part 
2900, et seq.
    (3) Essential agricultural user means a person who uses natural gas 
for an essential agricultural use.
    (4) High-priority use means any use of natural gas which qualifies 
the user as a high-priority user.
    (5) High-priority user means any person who uses natural gas:
    (i) In a residence;
    (ii) In a small commercial establishment;
    (iii) In a school or a hospital; or
    (iv) For police protection, for fire protection, in a sanitation 
facility or a correctional facility.
    (6) End-use curtailment plan means a provision in the tariff of an 
interstate pipeline that requires that under circumstances of supply 
shortage natural gas deliveries will be curtailed based at least in part 
upon factors which consider the end-use of the natural gas.
    (7) Indirect sale customer of an interstate pipeline means an 
essential agricultural end-user served by a local distribution company 
which is served directly by the interstate pipeline.
    (8) Residence means a dwelling using natural gas predominantly for 
residential purposes such as space heating, air conditioning, hot water 
heating, cooking, clothes drying, and other residential uses and 
includes apartment buildings and other multi-unit buildings.
    (9) Small commercial establishment means any establishment 
(including institutions and local, state and Federal Government 
agencies) engaged primarily in the sale of goods or services where 
natural gas is used:
    (i) In amounts of less than 50 Mcf on a peak day; and
    (ii) For purposes other than those involving manufacturing or 
electric power generation.
    (10) Hospital means a facility, the primary function of which is 
delivering medical care to patients who remain at the facility including 
nursing and convalescent homes. Outpatient clinics or doctors' offices 
are not included in this definition.
    (11) School means a facility, the primary function of which is to 
deliver instruction to regularly enrolled students in attendance at such 
facility. Facilities used for both educational and noneducational 
activities are not included under this definition unless the latter 
activities are merely incidental to the delivery of instruction.
    (12) Local distribution company means a local distribution company 
served directly by an interstate pipeline.
    (13) Rolling base period means a time period in which entitlements 
of the customers of an interstate pipeline are established pursuant to 
the pipeline's currently effective curtailment plan and which is 
periodically updated to reflect recent gas requirements of such 
customers.
    (14) Entitlements of a direct sale customer or a local distribution 
company customer with respect to a particular interstate pipeline means 
the amount of natural gas that customer is permitted to receive under 
the interstate pipeline's currently effective curtailment plan.
    (15) Interstate pipeline purchaser means an interstate pipeline 
which received deliveries of natural gas from another interstate 
pipeline.

[[Page 783]]

    (16) Alternative fuel means alternative fuel as it is defined in 
Subpart C of this part.
    (b) Cross references. (1) Essential agricultural requirements are 
calculated in accordance with Sec. 281.208.
    (2) Index of entitlements is that index of entitlements prepared in 
accordance in Sec. 281.204(b).

[44 FR 26862, May 8, 1979, as amended by Order 29-C, 44 FR 61344, Oct. 
25, 1979; Order 55-B, 45 FR 54739, July 18, 1980]



Sec. 281.204  Tariff filing requirements.

    (a) General rule. Each interstate pipeline listed in Sec. 281.202 
shall file tariff sheets, in accordance with Sec. 154.4 of this 
chapter, including an index of entitlements, which provides that if the 
interstate pipeline is in curtailment, natural gas will be delivered in 
accordance with the provisions of this subpart. If the interstate 
pipeline has curtailment provisions in its currently effective tariff, 
the tariff sheets or sections shall amend the existing curtailment 
provisions. If the interstate pipeline has no curtailment plan in its 
currently effective tariff, when it files tariff sheets or sections to 
amend its currently effective tariff to include a curtailment plan such 
curtailment plan shall comply with the requirements of this subpart. The 
tariff sheets or sections shall be filed no later than October 1, 1979, 
with a proposed effective date of November 1, 1979. The Data 
Verification Committee report prepared in accordance with Sec. 281.213 
shall be filed with the tariff sheets.
    (b) Index of entitlements. (1) The index of entitlements for an 
interstate pipeline shall identify the natural gas entitlements in 
priority of service categories 1 and 2 (established in accordance with 
Sec. 281.205(a)) for each direct sale customer, each local distribution 
company customer and each interstate pipeline purchaser on a daily, 
monthly, seasonal or other periodic basis used in the currently 
effective curtailment plan.
    (2) Periodic update. Each interstate pipeline shall update its index 
of entitlements annually to reflect changes in Priority 2 entitlements. 
The new index of requirements shall be filed on September 15 of each 
year with a proposed effective date of November 1, except that if the 
interstate pipeline uses a rolling base period in its currently 
effective curtailment plan it shall file its new index of entitlements 
on the date upon which other end-uses of the customers of the interstate 
pipeline are updated in accordance with the currently effective tariff.
    (3) Alternative fuel determination. The index of entitlements shall 
not include the volumes of natural gas for which volumes the essential 
agricultural user has the ability to use an alternative fuel, as 
determined under Subpart C of this part. Each interstate pipeline shall 
amend its index of entitlements pursuant to paragraph (b)(2) of this 
section to remove from the priority 2 entitlements and place in an 
appropriate priority of service category any such volumes or natural gas 
included in any index of entitlements that is effective on or after 
October 31, 1979.
    (c) Other tariff provisions. (1) Every tariff filed under this 
subpart shall contain provisions that will require the interstate 
pipeline:
    (i) To provide for deliveries of sufficient volumes of natural gas 
to respond to emergency situations (including environmental emergencies) 
during periods of curtailment where additional supplies are required to 
forestall irreparable injury to life or to property; and
    (ii) To provide for deliveries of sufficient volumes of natural gas 
to provide for minimum plant protection when the plant is shut down.
    (2) Volumetric delivery requirements. Notwithstanding any other 
provisions of this subpart, an interstate pipeline which is delivering 
natural gas in accordance with this subpart shall not be required to 
deliver to any customer volumes of natural gas on a daily, monthly, 
seasonal or other periodic basis which exceed the volumes of natural gas 
that the interstate pipeline may deliver to such customer without 
causing the interstate pipeline to violate any daily, monthly, seasonal 
or other periodic volumetric limitations

[[Page 784]]

established in the contract between the interstate pipeline and such 
customer.

(Natural Gas Policy Act of 1978, 15 U.S.C. 3301-3432; Department of 
Energy Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 42 FR 46267; 
Administrative Procedure Act, 5 U.S.C. 551 et seq.)

[44 FR 26862, May 8, 1979, as amended at 44 FR 45923, Aug. 6, 1979; 44 
FR 62490, Oct. 31, 1979; Order 55-B, 45 FR 54739, July 18, 1980; Order 
145, 46 FR 27913, May 22, 1981; Order 714, 73 FR 57535, Oct. 3, 2008]



Sec. 281.205  General rules.

    (a) Priority of service categories--1) Priority 1. Each interstate 
pipeline shall establish a new high-priority use category of service 
designated priority one (1) which shall include all the high-priority 
entitlements calculated in accordance with Sec. 281.206 and those 
storage injection volumes calculated in accordance with paragraph (c)(2) 
of this section.
    (2) Priority 2. Each interstate pipeline shall establish a new 
priority of service category designated priority two (2) which shall 
include all the essential agricultural use requirements calculated in 
accordance with Sec. 281.207 and those storage injection volumes 
calculated in accordance with paragraph (c)(2) of this section.
    (3) Other priority of service categories. Each interstate pipeline 
may retain the priority of service categories in its currently effective 
tariff, but such categories shall be placed at priorities below the new 
priorities 1 and 2. Each interstate pipeline shall reduce the 
entitlements in all other existing categories of service to the extent 
such entitlements have been placed into the new priority of service 
categories 1 or 2.
    (b) Method of curtailment. All deliveries to all customers of the 
interstate pipeline for all volumes of natural gas not included in 
priorities 1 and 2 shall be fully curtailed by the interstate pipeline 
before priorities 1 and 2 entitlements are curtailed. Deliveries for 
priority 2 entitlements shall be fully curtailed by the interstate 
pipelines (in accordance with the currently effective curtailment plan) 
before priority 1 entitlements are curtailed by the interstate 
pipelines. Nothing in this paragraph is intended to alter the operation 
of any ``small customer'' or ``small distributor'' exemption or waiver 
(as defined in an interstate pipeline's currently effective curtailment 
plan).
    (c) Storage--1) General rule. Interstate pipelines shall classify 
customer storage injection volumes in the same manner as that used in 
the currently effective curtailment plan.
    (2) Storage sprinkling. Interstate pipelines which classify customer 
storage injection volumes on the basis of the actual end-use of the 
natural gas shall recalculate storage injection volumes placed in each 
priority of service category based upon the index of entitlements to be 
filed on September 15.
    (3) Other treatment of storage. Except as provided in paragraph 
(c)(2) of this section, no interstate pipeline shall recalculate or 
reclassify any customer storage injection volumes, and no customer 
storage injection volumes shall be included as priority 1 or 2 
entitlements.

[44 FR 26862, May 8, 1979, as amended by Order 29-C, 44 FR 61344, Oct. 
25, 1979; Order 145, 46 FR 27913, May 22, 1981]



Sec. 281.206  Priority 1 reclassification.

    (a) Definitions. For purposes of this section ``high-priority 
entitlements'' means, with respect to a particular interstate pipeline.
    (1) In the case of a direct sale customer, the volume of natural gas 
such direct sale customer is entitled to receive for high-priority uses 
(as defined in Sec. 281.203) under the currently effective curtailment 
plan of the interstate pipeline;
    (2) In the case of a local distribution company, the volume of 
natural gas which such local distribution company is entitled to receive 
on account of the high-priority uses (as defined in Sec. 281.203) of 
its high-priority user customers under the currently effective 
curtailment plan of the interstate pipeline;
    (3) In the case of an interstate pipeline purchaser the volume of 
natural gas such interstate pipeline purchaser is entitled to receive 
from an interstate pipeline supplier for the high-priority entitlements 
of its direct sale customers, local distribution company customers and 
interstate pipeline customers.

[[Page 785]]

    (b) Direct sale customer and local distribution company customers. 
(1)(i) Subject to paragraph (b)(2) of this section, and Sec. 281.211 
each direct sale customer may request each of its direct interstate 
pipeline suppliers to reclassify its high-priority entitlements in its 
currently effective curtailment plan as priority 1 entitlements.
    (ii) Subject to paragraph (b)(2) of this section, and Sec. 281.211 
each local distribution company must request each of its direct 
interstate pipeline suppliers to reclassify its high priority 
entitlements in its currently effective curtailment plan as priority 1 
entitlements.
    (2) The direct sale customer or local distribution company customer 
shall designate the entitlements in each priority of service category in 
the currently effective curtailment plan for which priority 1 
reclassification is requested. It shall request that those entitlements 
for which priority 1 reclassification is requested be excluded from the 
category of service in which they are included in the currently 
effective plan.
    (3) Subject to Sec. 281.210, the interstate pipeline shall 
reclassify all such high-priority entitlements as priority 1 
entitlements and shall reduce by an equal amount the entitlements in 
such other priority of service categories as designated by the direct 
sale customer or local distribution company customer, (in accordance 
with paragraph (b)(2) of this section).
    (c) Interstate pipeline. (1) Subject to paragraph (b)(2) of this 
section, and Sec. 281.211 an interstate pipeline purchaser may request 
each of its direct interstate pipeline suppliers to reclassify its high-
priority entitlements in its currently effective curtailment plan (equal 
to the attributed priority 1 entitlements calculated in accordance with 
Sec. 281.209) as priority 1 entitlements in the currently effective 
curtailment plan of the interstate pipeline supplier.
    (2) The interstate pipeline purchaser shall designate the 
entitlements in each priority of service category in the currently 
effective curtailment plan for which priority 1 reclassification is 
requested. It shall request that those entitlements for which priority 1 
classification is requested be excluded from the category of service in 
which they are included in the currently effective plan.
    (3) Subject to Sec. 281.210, the interstate pipeline supplier shall 
reclassify all such high-priority entitlements as priority 1 
entitlements and shall reduce the high-priority entitlements in other 
priority of service categories as designated by the interstate pipeline 
customer, (in accordance with paragraph (c)(2) of this section).

[44 FR 26862, May 8, 1979]



Sec. 281.207  Priority 2 classification.

    (a) Direct sale customer. (1) Subject to paragraph (a)(2) of this 
section, and Sec. 281.211 a direct sale customer may request each of 
its direct interstate pipeline suppliers to classify its essential 
agricultural requirements (calculated in accordance with Sec. 281.208) 
as priority 2 entitlements.
    (2) The essential agricultural user shall designate the entitlements 
in each priority of service category in the currently effective 
curtailment plan which reflect the essential agricultural requirements. 
It shall request that entitlements which are reflected in priority of 
service categories in the currently effective curtailment plan are 
removed from such priority of service categories.
    (3) Subject to Sec. 281.210, the interstate pipeline shall classify 
all such essential agricultural requirements as priority 2 entitlements 
and reduce the entitlements in such other priority of service categories 
as designated by the direct sale customer, (in accordance with paragraph 
(b)(2) of this section).
    (b) Indirect sale customer. Subject to Sec. 281.211 an indirect 
sale customer which is an essential agricultural user may ask each of 
its local distribution company direct suppliers to request each 
interstate pipeline supplier to classify the indirect essential 
agricultural requirements as priority 2 entitlements.
    (c) Local distribution companies. (1) The local distribution company 
shall attribute (in accordance with Sec. 281.209) the indirect 
essential agricultural requirements for which reclassification is sought 
under paragraph (b) of this section to its direct interstate pipeline 
suppliers. Subject to paragraph (b)(2) of

[[Page 786]]

this section, and Sec. 281.211 the local distribution company shall 
request each of its direct interstate pipeline suppliers to classify the 
attributed indirect essential agricultural requirements as priority 2 
entitlements.
    (2) The local distribution company shall designate the entitlements 
in each priority of service in the currently effective curtailment plan 
which reflect the attributed indirect essential agricultural 
requirements. It shall request that those entitlements which are 
reflected in each category in the currently effective curtailment plan 
are removed from such priority of service category.
    (3) Subject to Sec. 281.210, the interstate pipeline shall classify 
all such attributed indirect essential agricultural requirements as 
priority 2 entitlements and shall reduce the entitlements of the local 
distribution company in such other priority of service categories as 
designated by the local distribution company, (in accordance with 
paragraph (b)(2) of this section).
    (d) Interstate pipeline. (1) Subject to paragraph (d)(2) of this 
section, and Sec. 281.211 an interstate pipeline purchaser may request 
each of its direct interstate pipeline suppliers to classify the 
attributed priority 2 entitlements (calculated under Sec. 281.209) as 
priority 2 entitlements in the currently effective curtailment plan of 
the interstate pipeline supplier.
    (2) The interstate pipeline purchaser shall designate the 
entitlements in each priority of service category in the currently 
effective curtailment plan of the interstate pipeline supplier which 
reflects the attributed priority 2 entitlements and request that those 
entitlements which are reflected in such priority of service categories 
in the currently effective curtailment plan are removed from such 
priority of service category.
    (3) Subject to Sec. 281.210, the interstate pipeline supplier shall 
classify the attributed priority 2 entitlements as priority 2 
entitlements and shall reduce the entitlements of the interstate 
pipeline purchaser in such other priority of service categories as 
designated by the interstate pipeline purchaser, (in accordance with 
paragraph (d)(2) of this section).

[44 FR 26862, May 8, 1979]



Sec. 281.208  Calculation of essential agricultural requirements and 

attributable priority 2 entitlements.

    (a) Scope. This section sets forth the method by which:
    (1) An essential agricultural user calculates total essential 
agricultural requirements, direct essential agricultural requirements, 
and indirect essential agricultural requirements;
    (2) A local distribution company calculates attributable indirect 
essential agricultural requirements for its essential agricultural user 
customers; and
    (3) An interstate pipeline purchaser calculates it attributable 
priority 2 entitlements.
    (b) Calculation by an essential agricultural user--(1) Total 
essential agricultural requirements--(i) General Rule. (A) The essential 
agricultural requirements of an essential agricultural user are those 
volumes (expressed in daily, monthly, seasonal or other appropriate 
periodic volumes) designated by the Secretary of Agriculture and 
calculated in accordance with 7 CFR 2900.4; less
    (B) Alternative fuel volumes (determined under Sec. 281.304).
    (ii) Definitions. Current requirements as used in 7 CFR part 2900 
means the lesser of
    (A) The energy consumption from the most recent 12 month period for 
which actual data is available, with necessary adjustments; or
    (B) The maximum volume of natural gas for which the essential 
agricultural user has installed capability to use for essential 
agricultural uses.
    (2) Attribution of total essential agricultural requirement and 
indirect essential agricultural requirements. (i) The essential 
agricultural user shall attribute its total essential agricultural 
requirements among all its sources of supply of natural gas in 
accordance with Sec. 281.209.
    (ii) The direct essential agricultural requirement with respect to a 
particular interstate pipeline supplier is that part of the total 
essential agricultural requirements attributed under

[[Page 787]]

Sec. 281.209 to the direct interstate pipeline supplier. The indirect 
essential agricultural requirement with respect to a particular local 
distribution company supplier is that part of the total essential 
agricultural requirements attributed under Sec. 281.209 to a direct 
local distribution company supplier.
    (c) Calculation by local distribution companies. (1) A local 
distribution company shall attribute under Sec. 281.209 the indirect 
essential agricultural requirements of each of its essential 
agricultural user customers (calculated under paragraph (b)(2) of this 
section) among all the interstate pipelines which are direct suppliers 
of the local distribution company.
    (2) That part of the indirect essential agricultural requirements 
which the local distribution company attributes to a particular 
interstate pipeline supplier is the attributed indirect essential 
agricultural requirements attributed to that interstate pipeline.
    (d) Interstate pipelines. (1) An interstate pipeline purchaser may 
attribute under Sec. 281.209 the priority 2 entitlements it includes in 
its index of entitlements among its direct interstate pipeline 
suppliers.
    (2) The attributable priority 2 entitlements attributed to a 
particular interstate pipeline supplier is that part of the priority 2 
entitlements of the interstate pipeline purchaser which it attributes to 
a particular interstate pipeline supplier.

[44 FR 26862, May 8, 1979, as amended at 44 FR 62490, Oct. 31, 1979]



Sec. 281.209  Attribution.

    (a) Applicability. (1) This section sets forth the rules for 
attributing total essential agricultural requirements by an essential 
agricultural user, indirect essential agricultural requirements of an 
essential agricultural user by its local distribution company supplier 
and priority 1 and 2 entitlements by an interstate pipeline purchaser.
    (2) This section does not apply to an essential agricultural user or 
local distribution company which receives all its natural gas supplies 
from a single source, or an interstate pipeline purchaser which does not 
receive natural gas from any other interstate pipeline.
    (b) Natural gas supplies included for purposes of attribution. (1) 
For purposes of attribution in accordance with this section, natural gas 
from all direct sources, including but not limited to pipeline 
production, production by independent producers, production by 
affiliates, SNG facilities and natural gas purchased from local 
distribution companies, and interstate pipelines shall be included.
    (2)(i) An essential agricultural user, which attributes under 
paragraph (d) a portion of the volumes which are its total essential 
agricultural requirements to a direct source of natural gas other than a 
direct supplier may not seek classification to priority 2 under Sec. 
281.207 for such portion of its total essential agricultural 
requirements.
    (ii) A local distribution company which attributes under paragraph 
(e) a portion of the volumes which are its indirect essential 
agricultural requirements to a direct source of natural gas other than a 
direct supplier may not seek classification to priority 2 under Sec. 
281.207 for such portion of its indirect essential agricultural 
requirements.
    (iii) An interstate pipeline purchaser which attributes under 
paragraph (f) a portion of the volumes of its priority 1 or 2 
entitlements to a direct source of natural gas other than a direct 
supplier may not seek reclassification to priority 1 or classification 
to priority 2, respectively, for such portion of its priority 1 and 2 
entitlements.
    (c) Definitions. For purposes of this section:
    (1) Direct supplier means, with respect to an essential agricultural 
user, an interstate pipeline or local distribution company which 
directly supplies such essential agricultural user, with respect to a 
local distribution company, an interstate pipeline which directly 
supplies such local distribution company and, with respect to an 
interstate pipeline purchaser, and interstate pipeline which directly 
supplies the interstate pipeline purchaser.
    (2) Base period of a direct supplier means the fixed historical 
period in which entitlements of the customer of the direct supplier were 
established for purposes of the currently effective curtailment plan of 
such direct supplier.

[[Page 788]]

    (3) Annual quantity entitlements with respect to a particular direct 
supplier means the total entitlements an essential agricultural user, 
local distribution company or interstate pipeline is entitled to 
purchase from that direct supplier in a calendar year under the 
currently effective curtailment plan.
    (d) Essential agricultural user. (1) An essential agricultural user 
shall calculate its attributable essential agricultural requirements 
attributable to a particular direct supplier by multiplying its total 
essential agricultural requirements by the Annual Quantity Entitlements 
from such direct supplier and dividing the product (numerator) by the 
sum of all Annual Quantity Entitlements and all volumes received from 
sources not providing an Annual Quantity Entitlement to such user 
(denominator).
    (2) If an essential agricultural user does not have annual quantity 
entitlements only with respect to one of its direct suppliers, the 
attributable essential agricultural requirements attributable to such 
direct supplier shall be that part of the total essential agricultural 
requirements not attributed under paragraph (d)(1) of this section.
    (3) If an essential agricultural user does not have Annual Quantity 
Entitlements with respect to more than one of its direct suppliers, the 
attributable essential agricultural requirements attributable to a 
particular direct supplier shall be calculated by multiplying its total 
essential agricultural requirements by the total volume of natural gas 
received from such supplier in 1972 and dividing the product (numerator) 
by the total supplies of natural gas received from all sources in 1972 
(denominator).
    (e) Local distribution company. A local distribution company shall 
calculate its attributable indirect essential agricultural requirements 
among its direct suppliers in the same manner as it attributed its 
supplies to its direct suppliers for purposes of establishing 
entitlements in the currently effective curtailment plans of such direct 
supplier.
    (f) Interstate pipelines. An interstate pipeline shall attribute 
Priority 1 and 2 entitlements respectively among its direct pipeline 
suppliers in the same manner as it attributed its supplies to its direct 
pipeline suppliers for purposes of establishing entitlements in the 
currently effective curtailment plans of such direct suppliers.

[44 FR 26862, May 8, 1979, as amended by Order 29-C, 44 FR 61344, Oct. 
25, 1979]



Sec. 281.210  Conflicting data.

    (a) Interstate pipelines. Notwithstanding any other provision of 
this subpart, if the records of an interstate pipeline contain 
information which directly conflicts with a request for reclassification 
of priority 1 entitlements under Sec. 281.206, or classification of 
priority 2 entitlements under Sec. 281.207, the interstate pipeline may 
not include such volumes in priority 1 or 2 of its index of 
entitlements.
    (b) Local distribution companies. Notwithstanding the provisions of 
Sec. 281.207(c), if the records of a local distribution company contain 
information which directly conflicts with a request from an essential 
agricultural user to have the local distribution company to seek 
classification of volumes in priority 2, the local distribution company 
may not seek classification for such volumes.

[44 FR 26862, May 8, 1979]



Sec. 281.211  Filing and documentation.

    (a) Priority 1--1) Direct sales customers and local distribution 
companies. (i) Each request of a direct sale customer and local 
distribution company customer for reclassification of high-priority 
entitlements (as defined in Sec. 281.206) to priority 1 entitlements 
shall be made in writing no later than July 31, 1979, and shall be 
accompanied by the data described in paragraph (a)(1)(ii) of this 
section.
    (ii)(A) A table indicating high-priority entitlements (as defined in 
Sec. 281.206) and the end-use of the natural gas in each priority of 
service category in the currently effective curtailment plan for which 
priority 1 reclassification is requested.
    (B) A copy of the end-use data used to establish the high-priority 
requirements and designated end-use of the natural gas.
    (2) Interstate pipelines. (i) Each interstate pipeline purchaser 
which reclassifies high-priority requirements of its

[[Page 789]]

customers as priority 1 entitlements may request that its high-priority 
requirements in the currently effective curtailment plan of its 
interstate pipeline suppliers (equal to the attributable priority 1 
entitlements) be reclassified as priority 1 entitlements. Such requests 
shall be made in writing no later than August 31, 1979 and shall be 
accompanied by the data described in paragraph (a)(2)(ii) of this 
section.
    (ii)(A) A table indicating high-priority entitlements (as defined in 
Sec. 281.206) and end-use of the natural gas in each priority of 
service category in the currently effective curtailment plan of the 
interstate pipeline supplier for which priority 1 reclassification is 
requested.
    (B) A copy of the end-use data used to establish the high-priority 
requirements and designated end-use of the natural gas.
    (C) A table indicating the volumes and priority of service 
categories for which each of direct sale customers and local 
distribution company customers sought reclassification to priority 1.
    (b) Priority 2--1) Essential agricultural users. (i) Each request 
for classification of essential agricultural requirements as priority 2 
entitlements shall be made in writing to the local distribution company 
supplier or the direct interstate pipeline supplier, as appropriate, no 
later than June 15 of each year, and shall set forth all calculations 
made in accordance with this subpart.
    (ii) The request shall be accompanied by a statement that;
    (A) Indicates the intended end-use(s) and volume(s) of the natural 
gas for which priority 2 entitlements are requested.
    (B) Indicates the SIC Code activities of the essential agricultural 
user which qualifies it as an essential agricultural user in accordance 
with 7 CFR 2900.3.
    (C) Includes the data and calculations used to determine essential 
agricultural requirements under 7 CFR 2900.4.
    (D) Includes with respect to any essential agricultural user to 
which Subpart C applies the data and calculations necessary to determine 
alternative fuel volumes under Sec. 281.304.
    (iii) The statement under paragraph (b)(1)(ii) shall be signed by a 
responsible official of the essential agricultural user. Such official 
shall swear or affirm that the statements are true to the best of his 
information, knowledge and belief.
    (2) Local distribution companies. Each request for classification of 
essential agricultural requirements as priority 2 requirements shall be 
made in writing to the direct interstate pipeline supplier no later than 
June 30 of each year, and shall set forth all calculations made in 
accordance with this subpart and all copies of all requests received 
from its essential agricultural uses under paragraph (b)(1) of this 
section.
    (3) Interstate pipelines. Each request of an interstate pipeline 
purchaser for classification of attributable priority 2 entitlements as 
priority 2 entitlements shall be made in writing to the direct 
interstate pipeline supplier no later than July 15 of each year, and 
shall set forth all calculations made in accordance with this subpart 
and shall include copies of all requests of essential agricultural users 
and local distribution companies under paragraphs (b)(1) and (2) of this 
section.
    (4) Subsequent request. (i) For 1979, changes in priority 2 
entitlements for essential agricultural use establishments that have the 
ability to use an alternative fuel shall be filed under Subpart C of 
this part.
    (ii) For years subsequent to 1979, the data required by this 
paragraph must be filed only to the extent that there has been a change 
in essential agricultural requirements.

(Natural Gas Policy Act of 1978, 15 U.S.C. 3301-3432; Department of 
Energy Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 42 FR 46267; 
Administrative Procedure Act, 5 U.S.C. 551 et seq.)

[44 FR 26862, May 8, 1979, as amended at 44 FR 45923, Aug. 6, 1979; 44 
FR 62490, Oct. 31, 1979; Order 55-B, 45 FR 54740, July 18, 1980; Order 
145, 46 FR 27913, May 22, 1981]



Sec. 281.212  Draft tariff and index of entitlements.

    (a) Each interstate pipeline shall prepare draft tariff sheets or 
sections and a draft index of entitlements in accordance with this 
subpart.

[[Page 790]]

    (b) The draft tariff sheets or sections and index of entitlements 
shall be served on all customers of the interstate pipeline no later 
than August 1 of each year.
    (c) Copies of all documents received by the interstate pipeline 
under Sec. 281.210, the draft tariff sheets or sections and the draft 
index of entitlements shall be served on the Data Verification Committee 
no later than August 1 of each year.

(Natural Gas Policy Act of 1978, Pub. L. 95-621. Department of Energy 
Organization Act, 42 U.S.C. 7107 et seq.: E.O. 12009, 42 FR 46267; 
Administrative Procedure Act, 5 U.S.C. 551 et seq.)

[44 FR 26862, May 8, 1979, as amended at 44 FR 45923, Aug. 6, 1979; 
Order 145, 46 FR 27913, May 22, 1981; Order 714, 73 FR 57535, Oct. 3, 
2008]



Sec. 281.213  Data Verification Committee.

    (a) Each interstate pipeline shall establish a Data Verification 
Committee no later than August 1, 1979. It shall include, at a minimum, 
a representative of the interstate pipeline, Commission staff, a large 
and small local distribution company, and an essential agricultural 
user. The appropriate state and local regulatory bodies, and a 
representative of the United States Department of Agriculture may, at 
their option, be members.
    (b) The Data Verification Committee shall review all calculations 
behind the draft tariff sheets or sections and the proposed index of 
entitlements. The Data Verification Committee may request, and the 
interstate pipeline shall immediately supply, any information requested 
by the Data Verification Committee.
    (c) Any interested person may file a written protest concerning the 
index of entitlements. Such protests shall be filed with the Data 
Verification Committee no later than August 15 of each year.
    (d) The Data Verification Committee shall review the draft tariff 
sheets or sections and index of entitlements and shall review the 
underlying data for uniformity in preparation.
    (e) The Data Verification Committee shall prepare a report 
concerning the proposed index of requirements and the draft tariff 
sheets or sections for the interstate pipeline. It shall, at a minimum, 
specify all arithmetic errors and contain an evaluation of all protests. 
It may contain a proposed settlement of contested draft tariff sheets or 
sections. The report shall be submitted to the interstate pipeline no 
later than September 1 of each year.

(Natural Gas Act. 15 U.S.C. 717-717w; Natural Gas Policy Act of 1978, 15 
U.S.C. 3301-3432; Department of Energy Organization Act, 42 U.S.C. 7101-
7352; E.O. 12009, 42 FR 46267; Administrative Procedure Act, 5 U.S.C. 
551 et seq.)

[44 FR 26862, May 8, 1979, as amended at 44 FR 45923, Aug. 6, 1979; 
Order 29-C, 44 FR 61345, Oct. 25, 1979; Order 145, 46 FR 27913, May 22, 
1981; Order 714, 73 FR 57535, Oct. 3, 2008]



Sec. 281.214  Notice, complaint and remedy.

    (a) Complaint. Any interested person may file a complaint concerning 
an alleged violation of this subpart under Sec. 385.206 of this 
chapter.
    (b) Remedy. If the Commission determines that a violation of this 
subpart has occurred, it shall take whatever action it deems appropriate 
in the circumstances. Such action may include payback, in kind or in 
dollars, by the person benefitting from the violation.

[44 FR 26862, May 8, 1979, as amended at 44 FR 61345, Oct. 25, 1979; 
Order 225, 47 FR 19058, May 3, 1982]



Sec. 281.215  Additional relief.

    If an interstate pipeline rejects (under Sec. 281.210 or otherwise) 
a request for reclassification under Sec. 281.206 or classification 
under Sec. 281.207 or if a local distribution company does not request 
(for any reason including the provisions of Sec. 281.210) 
classification under Sec. 281.206 on behalf of its high priority uses 
or reclassification on behalf of its essential agricultural users, the 
person aggrieved by such action may file a request for relief from 
curtailment under Sec. 385.206 of this chapter. The request shall 
contain the information required in Sec. 2.78(b) of the Commission 
Regulations.

[44 FR 26862, May 8, 1979, as amended by Order 225, 47 FR 19058, May 3, 
1982]

[[Page 791]]



                Subpart C_Alternative Fuel Determination

    Authority: Natural Gas Policy Act of 1978, 15 U.S.C. 3301-3432; 
Department of Energy Organization Act, 42 U.S.C. 7101-7352; E.O. 12009, 
42 FR 46267.

    Source: Order 55, 44 FR 62490, Oct. 31, 1979, unless otherwise 
noted.



Sec. 281.301  Purpose.

    The purpose of this subpart is to determine the economic 
practicability and reasonable availability of alternative fuels, as 
prescribed in section 401(b) of the Natural Gas Policy Act of 1978 for 
use by essential agricultural use establishments that seek priority 2 
entitlements for natural gas.



Sec. 281.302  Applicability.

    This subpart applies to--
    (a) Any essential agricultural use establishment for which an 
essential agricultural user:
    (1) Has requested that natural gas be classified as priority 2 
entitlements by an interstate pipeline under Sec. 281.207; and
    (2) Which has requested from any direct supplier priority 2 
entitlements in excess of 300 Mcf per day; and
    (b) Any essential agricultural use establishment with a new boiler, 
other than a diesel engine or turbine designed to use distillate fuels 
as the only alternative to natural gas, that:
    (1) Has a capacity in excess of 300 Mcf of natural gas per day; and
    (2) Is put into service for the first time after August 29, 1979.



Sec. 281.303  Definitions.

    For purposes of this subpart--
    (a) Ability to use a particular alternative fuel means that an 
essential agricultural use establishment had, on August 29, 1979, or 
thereafter acquired the installed physical capability to use the 
alternative fuel and has used that alternative fuel, in any amount, at 
any time after 1973, for an essential agricultural use.
    (b) Alternative fuel means coal or residual fuel oil.
    (c) Boiler means any fuel burning device that is used for generating 
steam or electricity or producing hot water for space heating or 
manufacturing processes.
    (d) Capacity means the volumes of natural gas used if the boiler is 
operated at nameplate rated capacity for a continuous 16-hour period.
    (e) Coal means lignite or any rank of bituminous coal or anthracite 
coal.
    (f) Direct supplier means, with respect to an essential agricultural 
use establishment, an interstate pipeline or local distribution company 
which directly supplies such essential agricultural use establishment; 
with respect to a local distribution company, an interstate pipeline 
which directly supplies such local distribution company; and, with 
respect to an interstate pipeline purchaser, an interstate pipeline 
which directly supplies the interstate pipeline purchaser.
    (g) Distillate fuel means Nos. 1 and 2 heating oils, diesel fuel, 
and No. 4 fuel oil, as defined in the standard specification for fuel 
oils published by the American Society for Testing and Materials, ASTM, 
D396 and D975.
    (h) Essential agricultural requirements means volumes of natural gas 
certified by the Secretary of Agriculture and calculated in accordance 
with 7 CFR 2900.4 and Sec. 281.208(b) of this part.
    (i) Essential agricultural use means any use of natural gas, as 
defined in Sec. 281.203(a)(2) of this chapter and 7 CFR 2900.3.
    (j) Essential agricultural user means an essential agricultural user 
as defined in Sec. 281.203(b)(3).
    (k) Essential agricultural use establishment is used as defined in 7 
CFR 2900.2.
    (l) Local distribution company means a local distribution company 
served directly by an interstate pipeline.
    (m) Priority 2 entitlements means the essential agricultural 
requirements of an essential agricultural use establishment which 
requirements are classified by an interstate pipeline as priority 2 in 
its curtailment plan under Subpart B.
    (n) Residual fuel oil means Nos. 5 and 6 oil, Bunker C, and Navy 
Special as defined in the standard specification for fuel oils published 
by the American Society for Testing and Materials, ASTM, D396.

[44 FR 62490, Oct. 31, 1979, as amended by Order 55-B, 45 FR 54740, July 
18, 1980]

[[Page 792]]



Sec. 281.304  Computation of alternative fuel volume.

    (a) General rule. For purposes of Sec. 281.208(b)(1)(i)(B), and 
Sec. 281.305:
    (1) Alternative fuel volume of an essential agricultural user is 
equal to the sum of the alternative fuel volumes for each agricultural 
use establishment for which such user has requested from any direct 
supplier priority 2 entitlements in excess of 300 Mcf.
    (2) Alternative fuel volume for an agricultural use establishment is 
that portion of such establishment's natural gas requirements for which 
such establishment has requested priority 2 curtailment and for which 
the establishment had on August 29, 1979, or thereafter, the ability to 
use alternative fuel.
    (b) New boilers. For purposes of Sec. 281.208(b)(1)(i)(B) and Sec. 
281.305: any new boiler of an essential agricultural use establishment 
shall be deemed to have alternative fuel volumes, if the boiler:
    (1) Has a capacity in excess of 300 Mcf of natural gas per day;
    (2) Is put into service for the first time after August 29, 1979; 
and
    (3) Is not a diesel engine or turbine designed to use distillate 
fuels as the only substitute for natural gas.

[44 FR 62490, Oct. 31, 1979, as amended by Order 55-B, 45 FR 54740, July 
18, 1980]



Sec. 281.305  General rule.

    Any essential agricultural user subject to this subpart that has 
requested from any direct supplier priority 2 classification for volumes 
for any essential agricultural use establishment shall reduce its 
essential agricultural requirements calculated under Sec. 281.208 to 
reflect the exclusion of volumes of natural gas for which its essential 
agricultural establishment has alternative fuel volumes under Sec. 
281.304.



Sec. Appendix A \1\ to Part 281--Comparison of Selected Fuel Price Data, 

    FPC Form No. 423 Versus Monthly Energy Review, 1976--January 1980

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      FPC form No. 423 price data \1\            Monthly energy review price data \2\
                                                               -----------------------------------------------------------------------------------------
                         Type of fuel                                                               January                                      January
                                                                  1976     1977     1978     1979     1980     1976     1977     1978     1979     1980
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Cents per MMBtu
                                                               -----------------------------------------------------------------------------------------
Fuel Oil:
  No. 2.......................................................    235.1    264.3    271.9    402.1    564.4    226.4    257.3    268.2    403.1    537.2
  Low Sulfur No. 6............................................    207.1    229.1    225.1    320.2    453.3    193.6    221.3    216.8    322.4    466.5
  High Sulfur No. 6...........................................    168.7    199.9    186.7    264.7    361.4    165.9    195.2    186.1    261.5    349.6
  All No. 6...................................................    195.9    220.4    212.3    299.7    423.5    182.8    210.4    202.7    297.0    417.7
  Coal: All Grades............................................     84.8     94.7    111.6    122.4    128.7    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)
  Natural Gas.................................................    103.4    130.0    143.8    175.4    194.8     97.2    131.9    154.1    201.8    237.3
                                                               -----------------------------------------------------------------------------------------
                                                                             Actual price difference (fuel oil and coal versus natural gas)
                                                               -----------------------------------------------------------------------------------------
Fuel Oil:
  No. 2.......................................................    131.7    134.3    128.1    226.7    369.6    129.2    125.4    114.1    201.3    299.9
  Low Sulfur No. 6............................................    103.7     99.1     81.3    144.8    258.5     96.4     89.4     62.7    120.6    229.2
  High Sulfur No. 6...........................................     65.3     69.1     42.9     89.3    166.6     68.7     66.3     32.0     59.7    112.3
  All No. 6...................................................     92.5     90.4     68.5    124.3    228.7     85.6     78.5     48.6     95.2    180.4
  Coal: All Grades............................................   (18.6)   (35.3)   (32.2)   (53.0)   (66.1)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)
                                                               -----------------------------------------------------------------------------------------
                                                                        Price difference ratio \4\ (fuel oil and coal versus natural gas)--ratio
                                                               -----------------------------------------------------------------------------------------
Fuel Oil:
  No. 2.......................................................    1.274    1.033     .891    1.292    1.897    1.329     .951     .740     .998    1.264
  Low Sulfur No. 6............................................    1.003     .762     .565     .826    1.327     .992     .678     .407     .598     .966
  High Sulfur No. 6...........................................     .632     .538     .298     .509     .855     .707     .480     .208     .296     .473
  All No. 6...................................................     .895     .695     .476     .709    1.174     .881     .595     .315     .472     .760
  Coal: All Grades............................................   (.180)   (.272)   (.224)   (.302)   (.339)    (\3\)    (\3\)    (\3\)    (\3\)    (\3\)
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ As reported in DOE/EIA Energy Data Report entitled Cost and Quality of Fuels for Electric Utility Plants (Annual summary data 1976-1979) and Monthly
  Report for January 1980). Note: All prices are delivered prices to steam electric plants. Prices paid for No. 6 fuel oil include prices paid for minor
  amounts of No. 4 and No. 5 fuel oil, crude and topped crude.
\2\ Fuel oil prices are reported on FEA Form P302-M-1, ``Petroleum Industry Monthly Report for Product Prices.'' Natural Gas Prices are those paid by
  industrial customers of major interstate pipeline companies as reported on FPC Form No. 11, ``Natural Gas Pipeline Company Monthly Statement.''
\3\ The price data for coal is the same as shown under FPC Form No. 423 price data.

[[Page 793]]

 
\4\ Mathematically the price difference ratio is P2--P1/P1; Where P2=the price of fuel oil or coal and P1=the price of natural gas. The ratio indicates
  the percent difference between natural gas and alternate fuel prices. For example in January 1980 electric utilities reported that in that month they
  paid 1.897 times more (189.7 percent) for No. 2 fuel oil than they paid for natural gas.
As determined in Docket No. RM79-40 NOPR issued June 3, 1980, corrected for clerical/typographical error.


[Order 55-B, 45 FR 54740, Aug. 18, 1980]



PART 284_CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS UNDER THE NATURAL GAS 

POLICY ACT OF 1978 AND RELATED AUTHORITIES--Table of Contents



               Subpart A_General Provisions and Conditions

Sec.
284.1 Definitions.
284.2 Refunds and interest.
284.3 Jurisdiction under the Natural Gas Act.
284.4 Reporting.
284.5 Further terms and conditions.
284.6 Rate interpretations.
284.7 Firm transportation service.
284.8 Release of firm capacity on interstate pipelines.
284.9 Interruptible transportation service.
284.10 Rates.
284.11 Environmental compliance.
284.12 Standards for pipeline business operations and communications.
284.13 Reporting requirements for interstate pipelines.
284.14 Posting requirements of major non-interstate pipelines.
284.15 Bidding by affiliates in open seasons for pipeline capacity.

        Subpart B_Certain Transportation by Interstate Pipelines

284.101 Applicability.
284.102 Transportation by interstate pipelines.
284.103-284.106 [Reserved]

        Subpart C_Certain Transportation by Intrastate Pipelines

284.121 Applicability.
284.122 Transportation by intrastate pipelines.
284.123 Rates and charges.
284.124 Terms and conditions.
284.125 [Reserved]
284.126 Reporting requirements.

             Subpart D_Certain Sales by Intrastate Pipelines

284.141 Applicability.
284.142 Sales by intrastate pipelines.
284.143-284.148 [Reserved]

Subparts E-F [Reserved]

  Subpart G_Blanket Certificates Authorizing Certain Transportation by 
     Interstate Pipelines on Behalf of Others and Services by Local 
                         Distribution Companies

284.221 General rule; transportation by interstate pipelines on behalf 
          of others.
284.222 [Reserved]
284.223 Transportation by interstate pipelines on behalf of shippers.
284.224 Certain transportation and sales by local distribution 
          companies.
284.225-284.226 [Reserved]
284.227 Certain transportation by intrastate pipelines.

Subpart H [Reserved]

   Subpart I_Emergency Natural Gas Sale, Transportation, and Exchange 
                              Transactions

284.261 Purpose.
284.262 Definitions.
284.263 Exemption from section 7 of Natural Gas Act and certain 
          regulatory conditions.
284.264 Terms and conditions.
284.265 Cost recovery by interstate pipeline.
284.266 Rates and charges for interstate pipelines.
284.267 Intrastate pipeline emergency transportation rates.
284.268 Local distribution company emergency transportation rates.
284.269 Intrastate pipeline and local distribution company emergency 
          sales rates.
284.270 Reporting requirements.
284.271 Waiver.

Subpart J_Blanket Certificates Authorizing Certain Natural Gas Sales by 
                          Interstate Pipelines

284.281 Applicability.
284.282 Definitions.
284.283 Point of unbundling.
284.284 Blanket certificates for unbundled sales services.
284.285 Pregrant of abandonment of unbundled sales services.
284.286 Standards of conduct for unbundled sales service.
284.287 Implementation and effective date.

[[Page 794]]

284.288 Code of conduct for unbundled sales service.

 Subpart K_Transportation of Natural Gas on the Outer Continental Shelf 
         by Interstate Natural Gas Pipelines on Behalf of Others

284.301 Applicability.
284.302 Definitions.
284.303 OCS blanket certificates.

     Subpart L_Certain Sales for Resale by Non-interstate Pipelines

284.401 Definitions.
284.402 Blanket marketing certificates.
284.403 Code of conduct for persons holding blanket marketing 
          certificates.

        Subpart M_Applications for Market-Based Rates for Storage

284.501 Applicability.
284.502 Procedures for applying for market-based rates.
284.503 Market-power determination.
284.504 Standard requirements for market-power authorizations.
284.505 Market-based rates for storage providers without a market-power 
          determination.

    Authority: 15 U.S.C. 717-717z, 3301-3432; 42 U.S.C. 7101-7352; 43 
U.S.C. 1331-1356.

    Source: Order 46, 44 FR 52184, Sept. 7, 1979, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 284 appear at 65 FR 
10222, Feb. 25, 2000.



               Subpart A_General Provisions and Conditions



Sec. 284.1  Definitions.

    (a) Transportation includes storage, exchange, backhaul, 
displacement, or other methods of transportation.
    (b) Appropriate state regulatory agency means a state agency which 
regulates intrastate pipelines and local distribution companies within 
such state. When used in reference to rates and charges, the term 
includes only those agencies which set rates and charges on a cost-of-
service basis.
    (c) Market center means an area where gas purchases and sales occur 
at the intersection of different pipelines.
    (d) Major non-interstate pipeline means a pipeline that fits the 
following criteria:
    (1) It is not a ``natural gas company'' under section 1 of the 
Natural Gas Act, or is a ``natural gas company'' and has obtained a 
service area determination under section 7(f) of the Natural Gas Act 
from the Commission;
    (2) It delivers annually more than fifty (50) million MMBtu (million 
British thermal units) of natural gas measured in average deliveries for 
the previous three calendar years; or, if the pipeline has been 
operational for less than three years, its design capacity permits 
deliveries of more than fifty (50) million MMBtu of natural gas 
annually.

[44 FR 52184, Sept. 7, 1989, as amended by Order 636, 57 FR 13315, Apr. 
16, 1992; Order 720, 73 FR 73517, Dec. 2, 2008; Order 720-A, 75 FR 5201, 
Feb. 1, 2010]



Sec. 284.2  Refunds and interest.

    (a) Refunds. Any rate or charge collected for any sale, 
transportation, or assignment conducted pursuant to this part which 
exceeds the rates or charges authorized by this part shall be refunded.
    (b) Interest. All refunds made pursuant to this section must include 
interest at an amount determined in accordance with Sec. 154.501(d) of 
this chapter.

[44 FR 52184, Sept. 7, 1979, as amended at 44 FR 53505, Sept. 14, 1979; 
Order 273, 48 FR 1288; Jan. 12, 1983; Order 581, 60 FR 53072, Oct. 11, 
1995]



Sec. 284.3  Jurisdiction under the Natural Gas Act.

    (a) For purposes of section 1(b) of the Natural Gas Act, the 
provisions of such Act and the jurisdiction of the Commission under such 
Act shall not apply to any transportation or sale in interstate commerce 
of natural gas if such a transaction is authorized pursuant to section 
311 or 312 of the NGPA.
    (b) For purposes of the Natural Gas Act, the term ``natural gas 
company'' (as defined by section 2(6) of such Act) shall not include any 
person by reason of, or with respect to, any transaction involving 
natural gas if the provisions of the Natural Gas Act do not apply to 
such transaction by reason of paragraph (a) of this section.
    (c) The Natural Gas Act shall not apply to facilities utilized 
solely for

[[Page 795]]

transportation authorized by section 311(a) of the NGPA.

[44 FR 52184, Sept. 7, 1979, as amended by Order 581, 60 FR 53072, Oct. 
11, 1995]



Sec. 284.4  Reporting.

    (a) Reports in MMBtu. All reports filed pursuant to this part must 
indicate quantities of natural gas in MMBtu's. An MMBtu means a million 
British thermal units. A British thermal unit or Btu means the quantity 
of heat required to raise the temperature of one pound avoirdupois of 
pure water from 58.5 degrees to 59.5 degrees Fahrenheit, determined in 
accordance with paragraphs (b) and (c) of this section.
    (b) Measurement. The Btu content of one cubic foot of natural gas 
under the standard conditions specified in paragraph (c) of this section 
is the number of Btu's produced by the complete combustion of such cubic 
foot of gas, at constant pressure with air of the same temperature and 
pressure as the gas, when the products of combustion are cooled to the 
initial temperature of the gas and air and when the water formed by such 
combustion is condensed to a liquid state.
    (c) Standard conditions. The standard conditions for purposes of 
paragraph (b) of this section are as follows: The gas is saturated with 
water vapor at 60 degrees Fahrenheit under a pressure equivalent to that 
of 30.00 inches of mercury at 32 degrees Fahrenheit, under standard 
gravitational force (980.665 centimeters per second squared).

[Order 581, 60 FR 53072, Oct. 11, 1995]



Sec. 284.5  Further terms and conditions.

    The Commission may prospectively, by rule or order, impose such 
further terms and conditions as it deems appropriate on transactions 
authorized by this part.



Sec. 284.6  Rate interpretations.

    (a) Procedure. A pipeline may obtain an interpretation pursuant to 
subpart L of part 385 of this chapter concerning whether particular 
rates and charges comply with the requirements of this part.
    (b) Address. Requests for interpretations should be addressed to: 
FERC Part 284 Interpretations, Office of General Counsel, Federal Energy 
Regulatory Commission, Washington, DC 20426.

[44 FR 66791, Nov. 21, 1979; 44 FR 75383, Dec. 20, 1979, as amended by 
Order 225, 47 FR 19058, May 3, 1982; Order 581, 60 FR 53072, Oct. 11, 
1995]



Sec. 284.7  Firm transportation service.

    (a) Firm transportation availability. (1) An interstate pipeline 
that provides transportation service under subpart B or G or this part 
must offer such transportation service on a firm basis and separately 
from any sales service.
    (2) An intrastate pipeline that provides transportation service 
under Subpart C may offer such transportation service on a firm basis.
    (3) Service on a firm basis means that the service is not subject to 
a prior claim by another customer or another class of service and 
receives the same priority as any other class of firm service.
    (4) An interstate pipeline that provided a firm sales service on May 
18, 1992, and that offers transportation service on a firm basis under 
subpart B or G of this part, must offer a firm transportation service 
under which firm shippers may receive delivery up to their firm 
entitlements on a daily basis without penalty.
    (b) Non-discriminatory access. (1) An interstate pipeline or 
intrastate pipeline that offers transportation service on a firm basis 
under subpart B, C or G must provide such service without undue 
discrimination, or preference, including undue discrimination or 
preference in the quality of service provided, the duration of service, 
the categories, prices, or volumes of natural gas to be transported, 
customer classification, or undue discrimination or preference of any 
kind.
    (2) An interstate pipeline that offers transportation service on a 
firm basis under subpart B or G of this part must provide each service 
on a basis that is equal in quality for all gas supplies transported 
under that service, whether purchased from the pipeline or another 
seller.
    (3) An interstate pipeline that offers transportation service on a 
firm basis under subpart B or G of this part may

[[Page 796]]

not include in its tariff any provision that inhibits the development of 
market centers.
    (c) Reasonable operational conditions. Consistent with paragraph (b) 
of this section, a pipeline may impose reasonable operational conditions 
on any service provided under this part. Such conditions must be filed 
by the pipeline as part of its transportation tariff.
    (d) Segmentation. An interstate pipeline that offers transportation 
service under subpart B or G of this part must permit a shipper to make 
use of the firm capacity for which it has contracted by segmenting that 
capacity into separate parts for its own use or for the purpose of 
releasing that capacity to replacement shippers to the extent such 
segmentation is operationally feasible.
    (e) Reservation fee. Where the customer purchases firm service, a 
pipeline may impose a reservation fee or charge on a shipper as a 
condition for providing such service. Except for pipelines subject to 
subpart C of this part, if a reservation fee is charged, it must recover 
all fixed costs attributable to the firm transportation service, unless 
the Commission permits the pipeline to recover some of the fixed costs 
in the volumetric portion of a two-part rate. A reservation fee may not 
recover any variable costs or fixed costs not attributable to the firm 
transportation service. Except as provided in this paragraph, the 
pipeline may not include in a rate for any transportation provided under 
subpart B, C or G of this part any minimum bill or minimum take 
provision, or any other provision that has the effect of guaranteeing 
revenue.
    (f) Limitation. A person providing service under Subpart B, C or G 
of this part is not required to provide any requested transportation 
service for which capacity is not available or that would require the 
construction or acquisition of any new facilities.

[Order 436, 50 FR 42493, Oct. 18, 1985]

    Editorial Note: For Federal Register citations affecting Sec. 
284.7, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 284.8  Release of firm capacity on interstate pipelines.

    (a) An interstate pipeline that offers transportation service on a 
firm basis under subpart B or G of this part must include in its tariff 
a mechanism for firm shippers to release firm capacity to the pipeline 
for resale by the pipeline on a firm basis under this section.
    (b)(1) Firm shippers must be permitted to release their capacity, in 
whole or in part, on a permanent or short-term basis, without 
restriction on the terms or conditions of the release. A firm shipper 
may arrange for a replacement shipper to obtain its released capacity 
from the pipeline. A replacement shipper is any shipper that obtains 
released capacity.
    (2) The rate charged the replacement shipper for a release of 
capacity may not exceed the applicable maximum rate, except that no rate 
limitation applies to the release of capacity for a period of one year 
or less if the release is to take effect on or before one year from the 
date on which the pipeline is notified of the release. Payments or other 
consideration exchanged between the releasing and replacement shippers 
in a release to an asset manager as defined in paragraph (h)(3) of this 
section are not subject to the maximum rate.
    (c) Except as provided in paragraph (h) of this section, a firm 
shipper that wants to release any or all of its firm capacity must 
notify the pipeline of the terms and conditions under which the shipper 
will release its capacity. The firm shipper must also notify the 
pipeline of any replacement shipper designated to obtain the released 
capacity under the terms and conditions specified by the firm shipper.
    (d) The pipeline must provide notice of offers to release or to 
purchase capacity, the terms and conditions of such offers, and the name 
of any replacement shipper designated in paragraph (b) of this section, 
on an Internet web site, for a reasonable period.
    (e) The pipeline must allocate released capacity to the person 
offering the highest rate and offering to meet any other terms and 
conditions of the release. If more than one person offers the highest 
rate and meets the terms and conditions of the release, the released 
capacity may be allocated on a

[[Page 797]]

basis provided in the pipeline's tariff, provided however, if the 
replacement shipper designated in paragraph (b) of this section offers 
the highest rate, the capacity must be allocated to the designated 
replacement shipper.
    (f) Unless otherwise agreed by the pipeline, the contract of the 
shipper releasing capacity will remain in full force and effect, with 
the net proceeds from any resale to a replacement shipper credited to 
the releasing shipper's reservation charge.
    (g) To the extent necessary, a firm shipper on an interstate 
pipeline that offers transportation service on a firm basis under 
subpart B or G of this part is granted a limited-jurisdiction blanket 
certificate of public convenience and necessity pursuant to section 7 of 
the Natural Gas Act solely for the purpose of releasing firm capacity 
pursuant to this section.
    (h)(1) The following releases need not comply with the bidding 
requirements of paragraphs (c) through (e) of this section:
    (i) A release of capacity to an asset manager as defined in 
paragraph (h)(3) of this section;
    (ii) A release of capacity to a marketer participating in a state-
regulated retail access program as defined in paragraph (h)(4) of this 
section;
    (iii) A release for more than one year at the maximum tariff rate; 
and
    (iv) A release for any period of 31 days or less.
    (v) If a release is exempt from bidding under paragraph (h)(1) of 
this section, notice of the release must be provided on the pipeline's 
Internet Web site as soon as possible, but not later than the first 
nomination, after the release transaction commences.
    (2) When a release of capacity is exempt from bidding under 
paragraph (h)(1)(iv) of this section, a firm shipper may not roll over, 
extend or in any way continue the release to the same replacement 
shipper using the 31 days or less bidding exemption until 28 days after 
the first release period has ended. The 28-day hiatus does not apply to 
any re-release to the same replacement shipper that is posted for 
bidding or that qualifies for any of the other exemptions from bidding 
in paragraph (h)(1) of this section.
    (3) A release to an asset manager exempt from bidding requirements 
under paragraph (h)(1)(i) of this section is any pre-arranged release 
that contains a condition that the releasing shipper may call upon the 
replacement shipper to deliver to, or purchase from, the releasing 
shipper a volume of gas up to 100 percent of the daily contract demand 
of the released transportation or storage capacity, as provided in 
paragraphs (h)(3)(i) through (h)(3)(iii) of this paragraph.
    (i) If the capacity release is for a period of one year or less, the 
asset manager's delivery or purchase obligation must apply on any day 
during a minimum period of the lesser of five months (or 155 days) or 
the term of the release.
    (ii) If the capacity release is for a period of more than one year, 
the asset manager's delivery or purchase obligation must apply on any 
day during a minimum period of five months (or 155 days) of each twelve-
month period of the release, and on five-twelfths of the days of any 
additional period of the release not equal to twelve months.
    (iii) If the capacity release is a release of storage capacity, the 
asset manager's delivery or purchase obligation need only be up to 100 
percent of the daily contract demand under the release for storage 
withdrawals or injections, as applicable.
    (4) A release to a marketer participating in a state-regulated 
retail access program exempt from bidding requirements under paragraph 
(h)(1)(ii) of this section is any prearranged capacity release that will 
be utilized by the replacement shipper to provide the gas supply 
requirement of retail consumers pursuant to a retail access program 
approved by the state agency with jurisdiction over the local 
distribution company that provides delivery service to such retail 
consumers.

[Order 636, 57 FR 13318, Apr. 16, 1992, as amended by Order 636-A, 57 FR 
36217, Aug. 12, 1992; Order 577, 60 FR 16983, Apr. 4, 1995; Order 577-A, 
60 FR 30187, June 8, 1995. Redesignated and amended by Order 637, 65 FR 
10220, Feb. 25, 2000; Order 637-A, 65 FR 35765, June 5, 2000; Order 712, 
73 FR 37092, June 30, 2008; Order 712-A, 73 FR 72714, Dec. 1, 2008; 73 
FR 79628, Dec. 30, 2008]

[[Page 798]]



Sec. 284.9  Interruptible transportation service.

    (a) Interruptible transportation availability. (1) An interstate 
pipeline that provides firm transportation service under subpart B or G 
of this part must also offer transportation service on an interruptible 
basis under that subpart or subparts and separately from any sales 
service.
    (2) An intrastate pipeline that provides transportation service 
under Subpart C may offer such transportation service on an 
interruptible basis.
    (3) Service on an interruptible basis means that the capacity used 
to provide the service is subject to a prior claim by another customer 
or another class of service and receives a lower priority than such 
other classes of service.
    (b) The provisions regarding non-discriminatory access, reasonable 
operational conditions, and limitations contained in Sec. 284.7 (b), 
(c), and (f) apply to pipelines providing interruptible service under 
this section.
    (c) Reservation fee. No reservation fee may be imposed for 
interruptible service. A pipeline's rate for any transportation service 
provided under this section may not include any minimum bill provision, 
minimum take provision, or any other provision that has the effect of 
guaranteeing revenue.

[Order 436, 50 FR 42494, Oct. 18, 1985]

    Editorial Note: For Federal Register citations affecting Sec. 
284.9, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 284.10  Rates.

    (a) Applicability. Any rate charged for transportation service under 
subparts B and G of this part must be established under a rate schedule 
that is filed with the Commission prior to commencement of such service 
and that conforms to the requirements of this section.
    (b) Rate objectives. Maximum rates for both peak and offpeak periods 
must be designed to achieve the following three objectives:
    (1) Rates for service during peak periods should ration capacity;
    (2) Rates for firm service during off-peak periods and for 
interruptible service during all periods should maximize throughput; and
    (3) The pipeline's revenue requirement allocated to firm and 
interruptible services should be attained by providing the projected 
units of service in peak and off-peak periods at the maximum rate for 
each service.
    (c) Rate design--(1) Volumetric rates. Except as provided in Sec. 
284.7(e), any rate filed for service subject to this section must be a 
one-part rate that recovers the costs allocated to the service to the 
extent that the projected units of that service are actually purchased 
and may not include a demand charge, a minimum bill or minimum take 
provision or any other provision that has the effect of guaranteeing 
revenue. Such rate must separately identify cost components attributable 
to transportation, storage, and gathering costs.
    (2) Based on projected units of service. Any rate filed for service 
subject to this section must be designed to recover costs on the basis 
of projected units of service. The fixed costs allocated to capacity 
reservations, as determined in accordance with Sec. 284.7(e), should be 
used along with the projected nominations accepted by the pipeline to 
compute the unit reservation fee. The remaining fixed costs and all 
variable costs should be used to determine the volumetric rate computed 
on the basis of projected volumes to be transported. The units projected 
for the service in rates filed under this section may be changed only in 
a subsequent rate filing under section 4 of the Natural Gas Act.
    (3) Differentiation due to time and distance. Any rate filed for 
service subject to this section must reasonably reflect any material 
variation in the cost of providing the service due to:
    (i) Whether the service is provided during a peak or an off-peak 
period; and
    (ii) The distance over which the transportation is provided.
    (4) Cost basis for rates. (i) Any maximum rate filed under this 
section must be designed to recover on a unit basis, solely those costs 
which are

[[Page 799]]

properly allocated to the service to which the rate applies.
    (ii) Any minimum rate filed under this section must be based on the 
average variable costs which are properly allocated to the service to 
which the rate applies.
    (5) Rate flexibility. (i) Any rate schedule filed under this section 
must state a maximum rate and a minimum rate.
    (ii)(A) Except as provided in paragraph (d)(5)(ii)(B) of this 
section the pipeline may charge an individual customer any rate that is 
neither greater than the maximum rate nor less than the minimum rate on 
file for that service.
    (B) If a pipeline does not hold a blanket certificate under Subpart 
G of this part, it may not charge, in a transaction involving its 
marketing affiliate, a rate that is lower than the highest rate it 
charges in any transaction not involving its marketing affiliate.
    (iii) The pipeline may not file a revised or new rate designed to 
recover costs not recovered under rates previously in effect.

[Order 436, 50 FR 42493, Oct. 18, 1985, as amended at 50 FR 52274, Dec. 
23, 1985; 53 FR 22163, June 14, 1988; Order 522, 55 FR 12169, Apr. 2, 
1990; Order 581, 60 FR 53072, Oct. 11, 1995. Redesignated and amended by 
Order 637, 65 FR 10220, Feb. 25, 2000]



Sec. 284.11  Environmental compliance.

    (a) Any activity involving the construction of, or the abandonment 
with removal of, facilities that is authorized pursuant to Sec. 
284.3(c) and subpart B or C of this part is subject to the terms and 
conditions of Sec. 157.206(b) of this chapter.
    (b) Advance notification--(1) General rule. Except as provided in 
paragraph (b)(2) of this section, at least 30 days prior to commencing 
construction a company must file notification with the Commission of any 
activity described in paragraph (a) of this section.
    (2) Exception. The advance notification described in paragraph 
(b)(1) of this section is not required if the cost of the project does 
not exceed the cost limit specified in Column 1 of Table I of Sec. 
157.208(d) of this chapter.
    (c) Contents of advance notification. The advance notification 
described in paragraph (b)(1) of this section must include the following 
information:
    (1) A brief description of the facilities to be constructed or 
abandoned with removal of facilities (including pipeline size and 
length, compression horsepower, design capacity, and cost of 
construction);
    (2) Evidence of having complied with each provision of Sec. 
157.206(b) of this chapter;
    (3) Current U.S. Geological Survey 7.5-minute series topographical 
maps showing the location of the facilities; and
    (4) A description of the procedures to be used for erosion control, 
revegetation and maintenance, and stream and wetland crossings.
    (d) Reporting requirements. On or before May 1 of each year, a 
company must file (on electronic media pursuant to Sec. 385.2011 of 
this chapter, accompanied by 7 paper copies) an annual report that lists 
for the previous calendar year each activity that is described in 
paragraph (a) of this section, and which was completed during the 
previous calendar year and exempt from the advance notification 
requirement pursuant to paragraph (b)(2) of this section. For each such 
activity, the company must include all of the information described in 
paragraph (c) of this section.

[Order 544, 57 FR 46495, Oct. 9, 1992, as amended by Order 581, 60 FR 
53072, Oct. 11, 1995; Order 603-A, 64 FR 54537, Oct. 7, 1999]



Sec. 284.12  Standards for pipeline business operations and communications.

    (a) Incorporation by reference of NAESB standards. (1) An interstate 
pipeline that transports gas under subparts B or G of this part must 
comply with the following business practice and electronic communication 
standards promulgated by the North American Energy Standards Board, 
which are incorporated herein by reference:
    (i) Additional Standards (General Standards, Creditworthiness
    Standards and Gas/Electric Operational Communications Standards) 
(Version 1.9, September 30, 2009);
    (ii) Nominations Related Standards (Version 1.9, September 30, 
2009);
    (iii) Flowing Gas Related Standards (Version 1.9, September 30, 
2009);

[[Page 800]]

    (iv) Invoicing Related Standards (Version 1.9, September 30, 2009);
    (v) Quadrant Electronic Delivery Mechanism Related Standards 
(Version 1.9, September 30, 2009) with the exception of Standard 4.3.4;
    (vi) Capacity Release Related Standards (Version 1.9, September 30, 
2009); and
    (vii) Internet Electronic Transport Related Standards (Version 1.9, 
September 30, 2009) with the exception of Standard 10.3.2.
    (2) This incorporation by reference was approved by the Director of 
the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 
51. Copies of these standards may be obtained from the North American 
Energy Standards Board, 801 Travis Street, Suite 1675, Houston, TX 
77002, Phone: (713) 356-0060. NAESB's Web site is at http://
www.naesb.org/. Copies may be inspected at the Federal Energy Regulatory 
Commission, Public Reference and Files Maintenance Branch, 888 First 
Street, NE., Washington, DC 20426, Phone: (202) 502-8371, http://
www.ferc.gov, or at the National Archives and Records Administration 
(NARA). For information on the availability of this material at NARA, 
call 202-741-6030, or go to: http://www.archives.gov/Federal--register/
code--of--Federal--regulations/ibr--locations.html.
    (b) Business practices and electronic communication requirements. An 
interstate pipeline that transports gas under subparts B or G of this 
part must comply with the following requirements. The regulations in 
this paragraph adopt the abbreviations and definitions contained in the 
North American Energy Standards Board Wholesale Gas Quadrant standards 
incorporated by reference in paragraph (a)(1) of this section.
    (1) Nominations.
    (i) Intra-day nominations.
    (A) A pipeline must give scheduling priority to an intra-day 
nomination submitted by a firm shipper over nominated and scheduled 
volumes for interruptible shippers. When an interruptible shipper's 
scheduled volumes are to be reduced as a result of an intra-day 
nomination by a firm shipper, the interruptible shipper must be provided 
with advance notice of such reduction and must be notified whether 
penalties will apply on the day its volumes are reduced.
    (B) An intra-day nomination submitted on the day prior to gas flow 
will take effect at the start of the gas day at 9 a.m. CCT.
    (ii) Capacity release scheduling. (A) Pipelines must permit shippers 
acquiring released capacity to submit a nomination at the earliest 
available nomination opportunity after the acquisition of capacity. If 
the pipeline requires the replacement shipper to enter into a contract, 
the contract must be issued within one hour after the pipeline has been 
notified of the release, but the requirement for contracting must not 
inhibit the ability of the replacement shipper to submit a nomination at 
the earliest available nomination opportunity.
    (B) A pipeline must permit releasing shippers, as a condition of a 
capacity release, to recall released capacity and renominate such 
recalled capacity at each nomination opportunity. Each replacement 
shipper must be provided with advance notice of such recall and must be 
notified whether penalties will apply on the day its volumes are 
reduced.
    (2) Flowing gas. (i) Operational balancing agreements. A pipeline 
must enter into Operational Balancing Agreements at all points of 
interconnection between its system and the system of another interstate 
or intrastate pipeline.
    (ii) Netting and trading of imbalances. A pipeline must establish 
provisions permitting shippers and their agents to offset imbalances 
accruing on different contracts held by the shipper with the pipeline 
and to trade imbalances with other shippers where such imbalances have 
similar operational impact on the pipeline's system.
    (iii) Imbalance management. A pipeline with imbalance penalty 
provisions in its tariff must provide, to the extent operationally 
practicable, parking and lending or other services that facilitate the 
ability of its shippers to manage transportation imbalances. A pipeline 
also must provide its shippers the opportunity to obtain similar 
imbalance

[[Page 801]]

management services from other providers and shall provide those 
shippers using other providers access to transportation and other 
pipeline services without undue discrimination or preference.
    (iv) Operational flow orders. A pipeline must take all reasonable 
actions to minimize the issuance and adverse impacts of operational flow 
orders (OFOs) or other measures taken to respond to adverse operational 
events on its system. A pipeline must set forth in its tariff clear 
standards for when such measures will begin and end and must provide 
timely information that will enable shippers to minimize the adverse 
impacts of these measures.
    (v) Penalties. A pipeline may include in its tariff transportation 
penalties only to the extent necessary to prevent the impairment of 
reliable service. Pipelines may not retain net penalty revenues, but 
must credit them to shippers in a manner to be prescribed in the 
pipeline's tariff. A pipeline with penalty provisions in its tariff must 
provide to shippers, on a timely basis, as much information as possible 
about the imbalance and overrun status of each shipper and the imbalance 
of the pipeline's system.
    (3) Communication protocols. (i)(A) All electronic information 
provided and electronic transactions conducted by a pipeline must be 
provided on the public Internet. A pipeline must provide, upon request, 
private network connections using internet tools, internet directory 
services, and internet communication protocols and must provide these 
networks with non-discriminatory access to all electronic information. A 
pipeline may charge a reasonable fee to recover the costs of providing 
such an interconnection.
    (B) A pipeline must implement this requirement no later than June 1, 
2000.
    (ii) A pipeline must comply with the following requirements for 
documents constituting public information posted on the pipeline web 
site:
    (A) The documents must be accessible to the public over the public 
Internet using commercially available web browsers, without imposition 
of a password or other access requirement;
    (B) Users must be able to search an entire document online for 
selected words, and must be able to copy selected portions of the 
documents; and
    (C) Documents on the web site should be directly downloadable 
without the need for users to first view the documents on the web site.
    (iii) If a pipeline uses a numeric or other designation to represent 
information, an electronic cross-reference table between the numeric or 
other designation and the information represented must be available to 
users, at a cost not to exceed reasonable shipping and handling.
    (iv) A pipeline must provide the same content for all information 
regardless of the electronic format in which it is provided.
    (v) A pipeline must maintain, for a period of three years, all 
information displayed and transactions conducted electronically under 
this section and be able to recover and regenerate all such electronic 
information and documents. The pipeline must make this archived 
information available in electronic form for a reasonable fee.
    (vi) A pipeline must post notices of operational flow orders, 
critical periods, and other critical notices on its Internet web site 
and must notify affected parties of such notices in either of the 
following ways to be chosen by the affected party: Internet E-Mail or 
direct notification to the party's Internet URL address.

[Order 587, 61 FR 39068, July 26, 1996]

    Editorial Note: For Federal Register citations affecting Sec. 
284.12, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 284.13  Reporting requirements for interstate pipelines.

    An interstate pipeline that provides transportation service under 
subparts B or G of this part must comply with the following reporting 
requirements.
    (a) Cross references. The pipeline must comply with the requirements 
in Part 358, Part 250, and Part 260 of this chapter, where applicable.
    (b) Reports on firm and interruptible services. An interstate 
pipeline must post the following information on its Internet web site, 
and provide the information in downloadable file formats, in conformity 
with Sec. 284.12 of this

[[Page 802]]

part, and must maintain access to that information for a period not less 
than 90 days from the date of posting.
    (1) For pipeline firm service and for release transactions under 
Sec. 284.8, the pipeline must post with respect to each contract, or 
revision of a contract for service, the following information no later 
than the first nomination under a transaction:
    (i) The full legal name of the shipper, and identification number, 
of the shipper receiving service under the contract, and the full legal 
name, and identification number, of the releasing shipper if a capacity 
release is involved or an indication that the pipeline is the seller of 
transportation capacity;
    (ii) The contract number for the shipper receiving service under the 
contract, and, in addition, for released transactions, the contract 
number of the releasing shipper's contract;
    (iii) The rate charged under each contract;
    (iv) The maximum rate, and for capacity release transactions not 
subject to a maximum rate, the maximum rate that would be applicable to 
a comparable sale of pipeline services;
    (v) The duration of the contract;
    (vi) The receipt and delivery points and zones or segments covered 
by the contract, including the industry common code for each point, 
zone, or segment;
    (vii) The contract quantity or the volumetric quantity under a 
volumetric release;
    (viii) Special terms and conditions applicable to a capacity release 
transaction, including all aspects in which the contract deviates from 
the pipeline's tariff, and special details pertaining to a pipeline 
transportation contract, including whether the contract is a negotiated 
rate contract, conditions applicable to a discounted transportation 
contract, and all aspects in which the contract deviates from the 
pipeline's tariff.
    (ix) Whether there is an affiliate relationship between the pipeline 
and the shipper or between the releasing and replacement shipper.
    (x) Whether a capacity release is a release to an asset manager as 
defined in Sec. 284.8(h)(3) and the asset manager's obligation to 
deliver gas to, or purchase gas from, the releasing shipper.
    (xi) Whether a capacity release is a release to a marketer 
participating in a state-regulated retail access program as defined in 
Sec. 284.8(h)(4).
    (2) For pipeline interruptible service, the pipeline must post on a 
daily basis no later than the first nomination for service under an 
interruptible agreement, the following information:
    (i) The full legal name, and identification number, of the shipper 
receiving service;
    (ii) The rate charged;
    (iii) The maximum rate;
    (iv) The receipt and delivery points covered between which the 
shipper is entitled to transport gas at the rate charged, including the 
industry common code for each point, zone, or segment;
    (v) The quantity of gas the shipper is entitled to transport;
    (vi) Special details pertaining to the agreement, including 
conditions applicable to a discounted transportation contract and all 
aspects in which the agreement deviates from the pipeline's tariff.
    (vii) Whether the shipper is affiliated with the pipeline.
    (c) Index of customers. (1) On the first business day of each 
calendar quarter, an interstate pipeline must file with the Commission 
an index of all its firm transportation and storage customers under 
contract as of the first day of the calendar quarter that complies with 
the requirements set forth by the Commission. The Commission will 
establish the requirements and format for such filing. The index of 
customers must also posted on the pipeline's Internet web, in accordance 
with standards adopted in Sec. 284.12 of this part, and made available 
from the Internet web site in a downloadable format complying with the 
specifications established by the Commission. The information posted on 
the pipeline's Internet web site must be made available until the next 
quarterly index is posted.
    (2) For each shipper receiving firm transportation or storage 
service, the index must include the following information:

[[Page 803]]

    (i) The full legal name, and identification number, of the shipper;
    (ii) The applicable rate schedule number under which the service is 
being provided;
    (iii) The contract number;
    (iv) The effective and expiration dates of the contract;
    (v) For transportation service, the maximum daily contract quantity 
(specify unit of measurement), and for storage service, the maximum 
storage quantity (specify unit of measurement);
    (vi) The receipt and delivery points and the zones or segments 
covered by the contract in which the capacity is held, including the 
industry common code for each point, zone, or segment;
    (vii) An indication as to whether the contract includes negotiated 
rates;
    (viii) The name of any agent or asset manager managing a shipper's 
transportation service; and
    (ix) Any affiliate relationship between the pipeline and a shipper 
or between the pipeline and a shipper's asset manager or agent.
    (3) The requirements of this section do not apply to contracts which 
relate solely to the release of capacity under Sec. 284.8, unless the 
release is permanent.
    (4) Pipelines that are not required to comply with the index of 
customers posting and filing requirements of this section must comply 
with the index of customer requirements applicable to transportation and 
sales under Part 157 as set forth under Sec. 154.111(b) and (c) of this 
chapter.
    (5) The requirements for the electronic index can be obtained from 
the Federal Energy Regulatory Commission, Division of Information 
Services, Public Reference and Files Maintenance Branch, Washington, DC 
20426.
    (d) Capacity and flow information. (1) An interstate pipeline must 
provide on its Internet web site and in downloadable file formats, in 
conformity with Sec. 284.12 of this part, equal and timely access to 
information relevant to the availability of all transportation services 
whenever capacity is scheduled, including, but not limited to, the 
availability of capacity at receipt points, on the mainline, at delivery 
points, and in storage fields, whether the capacity is available 
directly from the pipeline or through capacity release, the total design 
capacity of each point or segment on the system, the amount scheduled at 
each point or segment whenever capacity is scheduled, and all planned 
and actual service outages or reductions in service capacity. An 
interstate pipeline must also provide information about the volumes of 
no-notice transportation provided pursuant to Sec. 284.7(a)(4). This 
information must be posted at each receipt and delivery point before 
11:30 a.m. central clock time three days after the day of gas flow and 
must reflect the pipeline's best estimate. Updated information must be 
posted at each receipt and delivery point as necessary within ten 
business days after the month of gas flow.
    (2) An interstate pipeline must make an annual filing by March 1 of 
each year showing the estimated peak day capacity of the pipeline's 
system, and the estimated storage capacity and maximum daily delivery 
capability of storage facilities under reasonably representative 
operating assumptions and the respective assignments of that capacity to 
the various firm services provided by the pipeline.
    (e) Notice of bypass. An interstate pipeline that provides 
transportation (except storage) to a customer that is located in the 
service area of a local distribution company and will not be delivering 
the customer's gas to that local distribution company, must file with 
the Commission, within thirty days after commencing such transportation, 
a statement that the interstate pipeline has notified the local 
distribution company and the local distribution company's appropriate 
regulatory agency in writing of the proposed transportation prior to 
commencement.

[Order 637, 65 FR 10221, Feb. 25, 2000, as amended by Order 637-A, 65 FR 
35765, June 5, 2000; Order 2004, 68 FR 69157, Dec. 11, 2003; Order 712, 
73 FR 37092, June 30, 2008; Order 720, 73 FR 73517, Dec. 2, 2008; Order 
720-B, 75 FR 44900, July 30, 2010; Order 757, 77 FR 4224, Jan. 27, 2012]



Sec. 284.14  Posting requirements of major non-interstate pipelines.

    (a) Daily posting requirement. A major non-interstate pipeline must 
post on a

[[Page 804]]

daily basis on a publicly-accessible Internet Web site and in 
downloadable file format equal and timely access to information 
regarding receipt or delivery points, including non-physical scheduling 
points.
    (1) A major non-interstate pipeline must post data for each receipt 
or delivery point, or for any point that operates as both a delivery and 
receipt point for the major non-interstate pipeline, to which natural 
gas transportation is scheduled:
    (i) With a physically metered design capacity equal to or greater 
than 15,000 MMBtu (million British thermal units)/day; or
    (ii) If a physically metered design capacity is not known or does 
not exist for such a point, with a maximum volume scheduled to such a 
point equal to or greater than 15,000 MMBtu on any day within the prior 
three calendar years.
    (2) Notwithstanding the requirements of subsection 284.14(a)(1), a 
receipt point is not subject to the posting requirements of this section 
if the maximum scheduled volume at the receipt point was less than 5,000 
MMBtu on every day within the prior three calendar years. If a point has 
operated as both a receipt and delivery point any time within the prior 
three calendar years, subsection 284.14(a)(2) shall not apply to that 
point.
    (3) A major non-interstate pipeline that must post data for a 
receipt or delivery point shall do so within 45 days of the date that 
the point becomes eligible for posting.
    (4) For each delivery or receipt point that must be posted, a major 
non-interstate pipeline must provide the following information by 10:00 
p.m. central clock time the day prior to scheduled natural gas flow: 
Transportation Service Provider Name, Posting Date, Posting Time, 
Nomination Cycle, Location Name, Additional Location Information if 
Needed to Distinguish Between Points, Location Purpose Description 
(Receipt, Delivery, Bilateral, or Non-physical Scheduling Point), Posted 
Capacity (physically metered design capacity or maximum flow within the 
last three years), Method of Determining Posted Capacity (Capacity or 
Maximum Volume), Scheduled Volume, Available Capacity (Calculated as 
Posted Capacity minus Scheduled Capacity), and Measurement Unit (Dth, 
MMBtu, or MCf). For receipt or delivery points with bi-directional 
scheduled flows, the Scheduled Volume for scheduled flow in each 
direction must be posted. The information in this subsection must remain 
posted for at least a period of one year.
    (5) Newly constructed major non-interstate pipelines, which commence 
service after the effective date of this section, must comply with the 
requirements of this section upon their in-service date. Except for 
newly constructed major non-interstate pipelines, a major non-interstate 
pipeline that becomes subject to the requirements of this section in any 
year after the effective date of this section has until June 1 of that 
year to comply with the requirements of this section.
    (b) Exemptions to daily posting requirement. The following 
categories of major non-interstate pipelines are exempt from the posting 
requirement of Sec. 284.14(a):
    (1) Those that are located upstream of a processing, treatment or 
dehydration plant;
    (2) Those that deliver more than ninety-five percent (95%) of the 
natural gas volumes they flow directly to end-users or on-system storage 
as measured in average deliveries for the previous three calendar years;
    (3) Storage providers;
    (4) Those that deliver the entirety of their transported natural gas 
directly to an end-user that owns or operates the major non-interstate 
pipeline.

[Order 720-A, 75 FR 5201, Feb. 1, 2010, as amended by Order 720-B, 75 FR 
44900, July 30, 2010]



Sec. 284.15  Bidding by affiliates in open seasons for pipeline capacity.

    (a) Multiple affiliates of the same entity may not participate in an 
open season for pipeline capacity conducted by any interstate pipeline 
providing service under subparts B and G of this part, in which the 
pipeline may allocate capacity on a pro rata basis, unless each 
affiliate has an independent business reason for submitting a bid.
    (b) For purposes of this section, an affiliate is any person that 
satisfies the

[[Page 805]]

definition of affiliate in Sec. 358.3(a)(1) and (3) of this chapter 
with respect to another entity participating in an open season subject 
to paragraph (a) of this section.

[Order 894, 76 FR 72306, Nov. 23, 2011]



        Subpart B_Certain Transportation by Interstate Pipelines



Sec. 284.101  Applicability.

    This subpart implements section 311(a)(1) of the NGPA and applies to 
the transportation of natural gas by any interstate pipeline on behalf 
of:
    (a) Any intrastate pipeline; or
    (b) Any local distribution company.



Sec. 284.102  Transportation by interstate pipelines.

    (a) Subject to paragraphs (d) and (e) of this section, other 
provisions of this subpart, and the conditions of subpart A of this 
part, any interstate pipeline is authorized without prior Commission 
approval, to transport natural gas on behalf of:
    (1) Any intrastate pipeline; or
    (2) Any local distribution company.
    (b) Any rates charged for transportation under this subpart may not 
exceed the just and reasonable rates established under subpart A of this 
part.
    (c) An interstate pipeline that engages in transportation 
arrangements under this subpart must file reports in accordance with 
Sec. 284.13 of this chapter.
    (d) Transportation of natural gas is not on behalf of an intrastate 
pipeline or local distribution company or authorized under this section 
unless:
    (1) The intrastate pipeline or local distribution company has 
physical custody of and transports the natural gas at some point; or
    (2) The intrastate pipeline or local distribution company holds 
title to the natural gas at some point, which may occur prior to, 
during, or after the time that the gas is being transported by the 
interstate pipeline, for a purpose related to its status and functions 
as an intrastate pipeline or its status and functions as a local 
distribution company; or
    (3) The gas is delivered at some point to a customer that either is 
located in a local distribution company's service area or is physically 
able to receive direct deliveries of gas from an intrastate pipeline, 
and that local distribution company or intrastate pipeline certifies 
that it is on its behalf that the interstate pipeline is providing 
transportation service.
    (e) An interstate pipeline must obtain from its shippers 
certifications including sufficient information to verify that their 
services qualify under this section. Prior to commencing transportation 
service described in paragraph (d)(3) of this section, an interstate 
pipeline must receive the certification required from a local 
distribution company or an intrastate pipeline pursuant to paragraph 
(d)(3) of this section.

[Order 436, 50 FR 42495, Oct. 18, 1985, as amended by Order 526, 55 FR 
33011, Aug. 13, 1990; Order 537, 56 FR 50245, Oct. 4, 1991; Order 581, 
60 FR 53072, Oct. 11, 1995; Order 637, 65 FR 10222, Feb. 25, 2000; Order 
756, 77 FR 4894, Feb. 1, 2012]



Sec. Sec. 284.103-284.106  [Reserved]



        Subpart C_Certain Transportation by Intrastate Pipelines



Sec. 284.121  Applicability.

    This subpart implements section 311(a)(2) of the NGPA and applies to 
the transportation of natural gas by any intrastate pipeline on behalf 
of:
    (a) Any interstate pipeline, or
    (b) Any local distribution company served by any interstate 
pipeline.



Sec. 284.122  Transportation by intrastate pipelines.

    (a) Subject to paragraph (d) of this section, other provisions of 
this subpart, and the applicable conditions of Subpart A of this part, 
any intrastate pipeline may, without prior Commission approval, 
transport natural gas on behalf of:
    (1) Any interstate pipeline; or
    (2) Any local distribution company served by an interstate pipeline.
    (b) No rate charged for transportation authorized under this subpart 
may exceed a fair and equitable rate under Sec. 284.123.
    (c) Any intrastate pipeline engaged in transportation arrangements 
authorized under this section must file reports as required by Sec. 
284.126.

[[Page 806]]

    (d) Transportation of natural gas is not on behalf of an interstate 
pipeline or local distribution company served by an interstate pipeline 
or authorized under this section unless:
    (1) The interstate pipeline or local distribution company has 
physical custody of and transports the natural gas at some point; or
    (2) The interstate pipeline or local distribution company holds 
title to the natural gas at some point, which may occur prior to, 
during, or after the time that the gas is being transported by the 
intrastate pipeline, for a purpose related to its status and functions 
as an interstate pipeline or its status and functions as a local 
distribution company.

[Order 436, 50 FR 42495, Oct. 18, 1985, as amended by Order 537, 56 FR 
50245, Oct. 4, 1991; Order 537-A, 57 FR 46501, Oct. 9, 1992; Order 581, 
60 FR 53073, Oct. 11, 1995; Order 756, 77 FR 4894, Feb. 1, 2012]



Sec. 284.123  Rates and charges.

    (a) General rule. Rates and charges for transportation of natural 
gas authorized under Sec. 284.122(a) shall be fair and equitable as 
determined in accordance with paragraph (b) of this section.
    (b) Election of rates. (1) Subject to the conditions in Sec. Sec. 
284.7 and 284.9 of this chapter, an intrastate pipeline may elect to:
    (i) Base its rates upon the methodology used:
    (A) In designing rates to recover the cost of gathering, treatment, 
processing, transportation, delivery or similar service (including 
storage service) included in one of its then effective firm sales rate 
schedules for city-gate service on file with the appropriate state 
regulatory agency; or
    (B) In determining the allowance permitted by the appropriate state 
regulatory agency to be included in a natural gas distributor's rates 
for city-gate natural gas service; or
    (ii) To use the rates contained in one of its then effective 
transportation rate schedules for intrastate service on file with the 
appropriate state regulatory agency which the intrastate pipeline 
determines covers service comparable to service under this subpart.
    (2)(i) If an intrastate pipeline does not choose to make any 
election under paragraph (b)(1) of this section, it shall apply for 
Commission approval, by order, of the proposed rates and charges by 
filing with the Commission the proposed rates and charges, and 
information showing the proposed rates and charges are fair and 
equitable. Each petition for approval filed under this paragraph must be 
accompanied by the fee set forth in Sec. 381.403 or by a petition for 
waiver pursuant to Sec. 384.106 of this chapter. Upon filing the 
petition for approval, the intrastate pipeline may commence the 
transportation service and charge and collect the proposed rate, subject 
to refund.
    (ii) 150 days after the date on which the Commission received an 
application filed pursuant to paragraph (b)(2)(i) of this section, the 
rate proposed in the application will be deemed to be fair and equitable 
and not in excess of an amount which interstate pipelines would be 
permitted to charge for providing similar transportation service, unless 
within the 150 day period, the Commission either extends the time for 
action, or institutes a proceeding in which all interested parties will 
be afforded an opportunity for written comments and for the oral 
presentation of views, data and arguments. In such proceeding, the 
Commission either will approve the rate or disapprove the rate and order 
refund, with interest, of any amount which has been determined to be in 
excess of those shown to be fair and equitable or in excess of the rates 
and charges which interstate pipelines would be permitted to charge for 
providing similar transportation service.
    (iii) A Commission order approving or disapproving a transportation 
rate under this paragraph supersedes a rate determined in accordance 
with paragraph (b)(1) of this section.
    (c) Treatment of revenues. The Commission presumes that all revenues 
received by an intrastate pipeline in connection with transportation 
authorized under Sec. 284.122(a) and computed in accordance with 
paragraph (b)(1) of this section have been or will be taken into account 
by the appropriate state regulatory agency for purposes of establishing 
transportation charges by the intrastate pipeline for service to 
intrastate customers.

[[Page 807]]

    (d) Presumptions. If the intrastate pipeline is charging a rate 
computed pursuant to Sec. 284.123(b)(1), the rate charged is presumed 
to be:
    (1) Fair and equitable; and
    (2) Not in excess of the rates and charges which interstate 
pipelines would be permitted to charge for providing similar 
transportation service.
    (e) Filing requirements. Within 30 days of commencement of new 
service, any intrastate pipeline that engages in transportation 
arrangements under this subpart must file with the Commission a 
statement that includes the pipeline's interstate rates, the rate 
election made pursuant to paragraph (b) of this section, and a 
description of how the pipeline will engage in these transportation 
arrangements, including operating conditions, such as quality standards 
and financial viability of the shipper. If the pipeline changes its 
operations, rates, or rate election under this subpart, it must amend 
the statement and file such amendments not later than 30 days after 
commencement of the change in operations or the change in rate election.
    (f) Electronic filing of statements, and related materials--(1) 
General rule. All filings made in proceedings initiated under this part 
must be made electronically, including rates and charges, or parts 
thereof, and material related thereto, statements, and all workpapers.
    (2) Requirements for signature. All filings must be signed in 
compliance with the following:
    (i) The signature on a filing constitutes a certification that the 
contents are true to the best knowledge and belief of the signer, and 
that the signer possesses full power and authority to sign the filing.
    (ii) A filing must be signed by one of the following:
    (A) The person on behalf of whom the filing is made;
    (B) An officer, agent, or employee of the company, governmental 
authority, agency, or instrumentality on behalf of which the filing is 
made; or,
    (C) A representative qualified to practice before the Commission 
under Sec. 385.2101 of this chapter who possesses authority to sign.
    (iii) All signatures on the filing or any document included in the 
filing must comply, where applicable, with the requirements in Sec. 
385.2005 of this chapter with respect to sworn declarations or 
statements and electronic signatures.
    (3) Format requirements for electronic filing. The requirements and 
formats for electronic filing are listed in instructions for electronic 
filing and for each form. These formats are available on the Internet at 
http://www.ferc.gov and can be obtained at the Federal Energy Regulatory 
Commission, Public Reference Room, 888 First Street, NE., Washington, DC 
20426.

[44 FR 52184, Sept. 7, 1979, as amended at 44 FR 66791, Nov. 21, 1979; 
Order 394, 49 FR 35364, Sept. 7, 1984; Order 436, 50 FR 42496, Oct. 18, 
1985; 50 FR 52276, Dec. 23, 1985; Order 581, 60 FR 53073, Oct. 11, 1995; 
Order 714, 73 FR 57535, Oct. 3, 2008]



Sec. 284.124  Terms and conditions.

    Contracts for the transportation of natural gas authorized under 
this subpart shall provide that the transportation arrangement is 
subject to the provisions of this subpart.



Sec. 284.125  [Reserved]



Sec. 284.126  Reporting requirements.

    (a) Notice of bypass. An intrastate pipeline that provides 
transportation (except storage) under Sec. 284.122 to a customer that 
is located in the service area of a local distribution company and will 
not be delivering the customer's gas to that local distribution company, 
must file with the Commission within thirty days after commencing such 
transportation, a statement that the interstate pipeline has notified 
the local distribution and the local distribution company's appropriate 
state regulatory agency in writing of the proposed transportation prior 
to commencement.
    (b) Form No. 549D, Quarterly Transportation and Storage Report of 
Intrastate Natural Gas and Hinshaw Pipelines.
    (1) Each intrastate pipeline must use Form No. 549D to file a 
quarterly report with the Commission and the appropriate state 
regulatory agency that contains, for each transportation and storage 
service provided during the

[[Page 808]]

preceding calendar quarter under Sec. 284.122, the following 
information on each transaction, aggregated by contract:
    (i) The full legal name, and identification number, of the shipper 
receiving the service, including whether there is an affiliate 
relationship between the pipeline and the shipper;
    (ii) The type of service performed (i.e., firm or interruptible 
transportation, storage, or other service);
    (iii) The rate charged under each contract, specifying the rate 
schedule/name of service and docket where the rates were approved. The 
report should separately state each rate component set forth in the 
contract (i.e., reservation, usage, and any other charges);
    (iv) The primary receipt and delivery points covered by the 
contract, identified by the list of points that the pipeline has 
published with the Commission, which shall include the industry common 
code for each point where one has already been established;
    (v) The quantity of natural gas the shipper is entitled to 
transport, store, or deliver under each contract;
    (vi) The duration of the contract, specifying the beginning and (for 
firm contracts only) ending month and year of the current agreement;
    (vii) Total volumes transported, stored, injected or withdrawn for 
the shipper; and
    (viii) Annual revenues received for each shipper, excluding revenues 
from storage services. The report should separately state revenues 
received under each component, and need only be reported every fourth 
quarter.
    (2) The quarterly Form No. 549D report for the period January 1 
through March 31 must be filed on or before June 1. The quarterly report 
for the period April 1 through June 30 must be filed on or before 
September 1. The quarterly report for the period July 1 through 
September 30 must be filed on or before December 1. The quarterly report 
for the period October 1 through December 31 must be filed on or before 
March 1.
    (3) Each Form No. 549D report must be filed as prescribed in Sec. 
385.2011 of this chapter as indicated in the General Instructions and 
Data Dictionary set out in the quarterly reporting form. Each report 
must be prepared and filed in conformance with the Commission's software 
or XML Schema, eTariff filing structure, and reporting guidance, so as 
to be posted and available for downloading from the FERC Web site 
(http://www.ferc.gov). One copy of the report must be retained by the 
respondent in its files.
    (4) Intrastate pipelines filing Form No. 549D are no longer required 
to file Form No. 549--Intrastate Pipeline Annual Transportation Report 
after their March 31, 2011 filing.

[Order 436, 50 FR 42496, Oct. 18, 1985, as amended at 50 FR 52276, Dec. 
23, 1985; Order 636, 57 FR 13317, Apr. 16, 1992; Order 581, 60 FR 53073, 
Oct. 11, 1995; 71 FR 38066, July 5, 2006; 75 FR 29419, May 26, 2010; 75 
FR 80697, Dec. 23, 2010; Order 757, 77 FR 4224, Jan. 27, 2012]



             Subpart D_Certain Sales by Intrastate Pipelines

    Source: 44 FR 12409, Mar. 7, 1979, unless otherwise noted. 
Redesignated at 44 FR 52184, Sept. 7, 1979.



Sec. 284.141  Applicability.

    This subpart implements section 311(b) of the NGPA and applies to 
certain sales of natural gas by intrastate pipelines to:
    (a) Interstate pipelines; and
    (b) Local distribution companies served by interstate pipelines.



Sec. 284.142  Sales by intrastate pipelines.

    Any intrastate pipeline may, without prior Commission approval, sell 
natural gas to any interstate pipeline or any local distribution company 
served by an interstate pipeline. The rates charged by an intrastate 
pipeline pursuant to this subpart may not exceed the price for gas as 
negotiated in the contract, plus a fair and equitable transportation 
rate as determined in accordance with Sec. 284.123.

[Order 581, 60 FR 53073, Oct. 11, 1995]



Sec. Sec. 284.143-284.148  [Reserved]

Subparts E-F [Reserved]

[[Page 809]]



  Subpart G_Blanket Certificates Authorizing Certain Transportation by 

     Interstate Pipelines on Behalf of Others and Services by Local 

                         Distribution Companies



Sec. 284.221  General rule; transportation by interstate pipelines on behalf 

of others.

    (a) Blanket certificate. Any interstate pipeline may apply under 
this section for a single blanket certificate authorizing the 
transportation of natural gas on behalf of others in accordance with 
this subpart. A certificate of public convenience and necessity under 
this section is granted pursuant to section 7 of the Natural Gas Act.
    (b) Application procedure. (1) An application for a blanket 
certificate under this section must be filed electronically. The format 
for the electronic application filing can be obtained at the Federal 
Energy Regulatory Commission, Division of Information Services, Public 
Reference and Files Maintenance Branch, Washington, DC 20426, and must 
include:
    (i) The name of the interstate pipeline; and
    (ii) A statement by the interstate pipeline that it will comply with 
the conditions in paragraph (c) of this section.
    (2) Upon receipt of an application under this section, the 
Commission will conduct a hearing pursuant to section 7(c) of the 
Natural Gas Act and Sec. 157.11 of this chapter and, if required by the 
public convenience and necessity, will issue to the interstate pipeline 
a blanket certificate authorizing such pipeline company to transport 
natural gas, as provided under this subpart.
    (c) General conditions. Any blanket certificate under this subpart 
is subject to the conditions of subpart A of this part.
    (d) Pre-grant of abandonment. (1) Except as provided in paragraph 
(d)(2) of this section, abandonment of transportation services is 
authorized pursuant to section 7(b) of the Natural Gas Act upon the 
expiration of the contractual term or upon termination of each 
individual transportation arrangement authorized under a certificate 
granted under this section.
    (2) Paragraph (d)(1) of this section does not apply if the 
individual transportation arrangement is for firm transportation under a 
contract with a term of one year or more, and the firm shipper:
    (i) Exercises any contractual right to continue such service; or
    (ii) Gives notice that it wants to continue its transportation 
arrangement and will match the longest term and highest rate for its 
firm service, up to the applicable maximum rate under Sec. 284.10, 
offered to the pipeline during the period established in the pipeline's 
tariff for receiving such offers by any other person desiring firm 
capacity, and executes a contract matching the terms of any such offer. 
To be eligible to exercise this right of first refusal, the firm 
shipper's contract must be for service for twelve consecutive months or 
more at the applicable maximum rate for that service, except that a 
contract for more than one year, for a service which is not available 
for 12 consecutive months, would be subject to the right of first 
refusal.
    (e) Availability of regular certificates. This subpart does not 
preclude an interstate pipeline from applying for an individual 
certificate of public convenience and necessity for any particular 
transportation service.
    (f) Cross references. (1) Any local distribution company served by 
an interstate pipeline may apply for a blanket certificate to perform 
certain services under Sec. 284.224 of this chapter.
    (2) Any interstate pipeline may apply under subpart F of part 157 of 
this chapter for a blanket certificate to construct or acquire and 
operate certain natural gas facilities that are necessary to provide 
transportation under Sec. 284.223.
    (3) Section 157.208 of this chapter provides automatic authorization 
for the construction, acquisition, operation, replacement, and 
miscellaneous rearrangement of certain eligible facilities, as defined 
in Sec. 157.202 of this chapter, subject to limits specified in Sec. 
157.208(d) of this chapter and Sec. 284.11.
    (4) Authorization for delivery points is subject to the automatic 
authorization under Sec. 157.211(a)(1) and the prior

[[Page 810]]

notice procedures under Sec. 157.211(a)(2) and Sec. 157.205.
    (g) Flexible receipt point authority. (1) An interstate pipeline 
authorized to transport gas under a certificate granted under this 
section may, at the request of the shipper and without prior notice:
    (i) Reduce or discontinue receipts of natural gas at a particular 
receipt point from a supplier; and
    (ii) Commence or increase receipts at a particular receipt point 
from that supplier or any other supplier.
    (2) The total natural gas volumes received by the interstate 
pipeline following any such reassignment under this paragraph must not 
exceed the total volume of natural gas that the interstate pipeline may 
transport on behalf of the shipper under a certificate granted under 
this section.
    (3) The receipt points to which natural gas volumes may be 
reassigned under this paragraph include eligible facilities under Sec. 
157.208 which are authorized to be constructed and operated pursuant to 
a certificate issued under subpart F of part 157 of this chapter.
    (h) Flexible delivery point authority. (1) An interstate pipeline 
authorized to transport gas under a certificate issued pursuant to this 
section may at the request of the shipper and without prior notice:
    (i) Reduce or discontinue deliveries of natural gas to a particular 
delivery point; and
    (ii) Commence or increase deliveries at a particular delivery point.
    (2) The total natural gas volumes delivered by the interstate 
pipeline following any such reassignment must not exceed the total 
amount of natural gas that the interstate pipeline is authorized under a 
certificate issued pursuant to this section to transport on behalf of 
the shipper.
    (3) The delivery points to which natural gas volumes may be 
reassigned under this paragraph include facilities authorized to be 
constructed and operated only under Sec. 157.211 and the prior notice 
conditions of Sec. 157.205 of this chapter.

[Order 436, 50 FR 42496, Oct. 18, 1985, as amended by Order 433-A, 51 FR 
43607, Dec. 3, 1986; Order 636, 57 FR 13317, Apr. 16, 1992; Order 636-A, 
57 FR 36217, Aug. 12, 1992; Order 581, 60 FR 53073, Oct. 11, 1995; Order 
603, 64 FR 26610, May 14, 1999; Order 637, 65 FR 10222, Feb. 25, 2000; 
Order 637-A, 65 FR 35765, June 5, 2000]



Sec. 284.222  [Reserved]



Sec. 284.223  Transportation by interstate pipelines on behalf of shippers.

    Subject to the provisions of this subpart and the conditions of 
Subpart A of this part, any interstate pipeline issued a certificate 
under Sec. 284.221 is authorized, without prior notice to or approval 
by the Commission, to transport natural gas for any duration for any 
shipper for any end-use by that shipper or any other person.

[Order 436, 50 FR 42497, Oct. 18, 1985; 50 FR 45908, Nov. 5, 1985, as 
amended at 50 FR 52276, Dec. 23, 1985; Order 537, 56 FR 50245, Oct. 4, 
1991; Order 581, 60 FR 53074, Oct. 11, 1995; Order 637, 65 FR 10222, 
Feb. 25, 2000]



Sec. 284.224  Certain transportation and sales by local distribution 

companies.

    (a) Applicability. This section applies to local distribution 
companies served by interstate pipelines, including persons who are not 
subject to the jurisdiction of the Commission, by reason of section 1(c) 
of the Natural Gas Act.
    (b) Blanket certificate--(1) Any local distribution company served 
by an interstate pipeline or any Hinshaw pipeline may apply for a 
blanket certificate under this section.
    (2) Upon application for a certificate under this section, a hearing 
will be conducted under section 7(c) of the Natural Gas Act, Sec. 
157.11 of this chapter, and subpart H of part 385 of this chapter.
    (3) The Commission will grant a blanket certificate to such local 
distribution company or Hinshaw pipeline under this section, if required 
by the present or future public convenience and necessity. Such 
certificate will authorize the local distribution company to engage in 
the sale or transportation of natural gas that is subject to the 
Commission's jurisdiction under the

[[Page 811]]

Natural Gas Act, to the same extent that and in the same manner that 
intrastate pipelines are authorized to engage in such activities by 
subparts C and D of this part, except as otherwise provided in paragraph 
(e)(2) of this section.
    (c) Application procedure. Applications for blanket certificates 
must be accompanied by the fee prescribed in Sec. 381.207 of this 
chapter or a petition for waiver pursuant to Sec. 381.106 of this 
chapter, and shall state:
    (1) The exact legal name of applicant; its principal place of 
business; whether an individual, partnership, corporation or otherwise; 
the state under the laws of which it is organized or authorized; the 
agency having jurisdiction over rates and tariffs; and the name, title, 
and mailing address of the person or persons to whom communications 
concerning the application are to be addressed;
    (2) The volumes of natural gas which:
    (i) Were received during the most recent 12-month period by the 
applicant within or at the boundary of a state, and
    (ii) Were exempt from the Natural Gas Act jurisdiction of the 
Commission by reason of section 1(c) of the Natural Gas Act, if any;
    (3) The total volume of natural gas received by the applicant from 
all sources during the same time period;
    (4) Citation to all currently valid declarations of exemption issued 
by the Commission under section 1(c) of the Natural Gas Act if any;
    (5) A statement that the applicant will comply with the conditions 
in paragraph (e) of this section;
    (6) A form of notice suitable for publication in the Federal 
Register, as contemplated by Sec. 157.9 of this chapter, which will 
briefly summarize the facts contained in the application in such way as 
to acquaint the public with its scope and purpose; and
    (7) A statement of the methodology to be used in calculating rates 
for services to be rendered, setting forth any elections under Sec. 
284.123 or paragraph (e)(2) of this section and a sample calculation 
employing the methodology using current data. If a rate election is made 
under paragraph (e)(2) of this section, this statement shall contain the 
following items (reflecting the 12-month period used to justify costs in 
the most recently approved rate case conducted by an appropriate state 
regulatory agency):
    (i) Total operating revenues,
    (ii) Purchase gas costs,
    (iii) Distribution costs (which include that portion of the common 
costs allocated to the distribution function),
    (iv) The volume throughput of the system categorized by sales, 
transportation and exchange service, and
    (v) A study which determines transportation costs on a unit revenue 
basis in accordance with paragraph (e)(2) of this section, including any 
supporting work papers.
    (d) Effect of certificate. (1) Any certificate granted under this 
section will authorize the certificate holder to engage in transactions 
of the type authorized by subparts C and D of this part.
    (2) Acceptance of a certificate or conduct of an activity authorized 
thereunder will:
    (i) Not impair the continued validity of any exclusion under section 
1(c) of the Natural Gas Act which may be applicable to the certificate 
holder, and
    (ii) Not subject the certificate holder to the Natural Gas Act 
jurisdiction to the Commission except to the extent necessary to enforce 
the terms and conditions of the certificate.
    (e) General conditions. (1) Except as provided in paragraph (e)(2) 
of this section, any transaction authorized under a blanket certificate 
is subject to the same rates and charges, terms and conditions, and 
reporting requirements that apply to a transaction authorized for an 
intrastate pipeline under subparts C and D of this part.
    (2) Rate election. If the certificate holder does not have any 
existing rates on file with the appropriate state regulatory agency for 
city-gate service, the certificate holder may make the rate election 
specified in Sec. 284.123(b)(1) only if:
    (i) The certificate holder's existing rates are approved by an 
appropriate state regulatory agency,
    (ii) The rates and charges for any transportation are computed by 
using the portion of the certificate holder weighted average annual unit 
revenue (per MMBtu) generated by existing

[[Page 812]]

rates which is attributable to the cost of gathering, treatment, 
processing, transportation, delivery or similar service (including 
storage service), and
    (iii) The Commission has approved the method for computing rates and 
charges specified in paragraph (e)(2)(ii) of this section.
    (3) Volumetric test. The volumes of natural gas sold or assigned 
under the blanket certificate may not exceed the volumes obtained from 
sources other than interstate supplies.
    (4) Filings. Any filings made with the Commission that report 
individual transactions shall reference the docket number of the 
proceeding in which the blanket certificate was granted.
    (5) Filing Requirements. Filings under this section must comply with 
the requirements of Sec. 284.123 (f) of this part. The tariff filing 
requirements of Part 154 of this chapter shall not apply to transactions 
authorized by the blanket certificate.
    (f) Pregrant of abandonment. Abandonment of transportation services 
or sales, pursuant to section 7(b) of the Natural Gas Act, is authorized 
upon the expiration of the contractual term of each individual 
arrangement authorized by a blanket certificate under this section.
    (g) Hinshaw pipeline without blanket certificate. A Hinshaw pipeline 
that does not obtain a blanket certificate under this section is not 
authorized to sell or transport natural gas as an intrastate pipeline 
under subparts C and D of this part.
    (h) Definitions. For the purposes of this section:
    (1) A Hinshaw pipeline means any person engaged in the 
transportation of natural gas which is not subject to the jurisdiction 
of the Commission under the Natural Gas Act solely by reason of section 
1(c) of the Natural Gas Act.
    (2) Interstate supplies means any natural gas obtained, either 
directly or indirectly, from:
    (i) The system supplies of an interstate pipeline, or
    (ii) Natural gas reserves which were committed or dedicated to 
interstate commerce on November 8, 1978.

[45 FR 1875, Jan. 9, 1980, as amended by Order 319, 48 FR 34891, Aug. 1, 
1983; 48 FR 35635, Aug. 5, 1983; Order 433, 50 FR 40346, Oct. 3, 1985. 
Redesignated and amended by Order 436, 50 FR 42497, 42498, Oct. 18, 
1985; Order 478, 52 FR 28467, July 30, 1987; Order 581, 60 FR 53074, 
Oct. 11, 1995; Order 714, 73 FR 57535, Oct. 3, 2008]



Sec. Sec. 284.225-284.226  [Reserved]



Sec. 284.227  Certain transportation by intrastate pipelines.

    (a) Blanket certificate. A blanket certificate shall issue under 
this section to any intrastate pipeline that receives natural gas 
produced in adjacent Federal waters or onshore or offshore in an 
adjacent state, provided that:
    (1) The gas must be received by the intrastate pipeline from a 
gatherer or other intrastate pipeline;
    (2) The intrastate pipeline delivers the gas in the intrastate 
pipeline's state of operation to an end user or another intrastate 
pipeline; and
    (3) The gas ultimately used by an end user in the same state.
    (b) Effective date. If an intrastate pipeline is providing a 
transportation service described in paragraph (a) of this section as of 
February 1, 1992, and the service is not a qualifying service under 
Sec. 284.122 of subpart C of this part, a blanket certificate shall 
issue under paragraph (a) of this section and become effective as of 
February 1, 1992. If an intrastate pipeline is not providing a 
transportation service described in paragraph (a) of this section as of 
February 1, 1992 the blanket certificate shall issue and become 
effective on the date that the intrastate pipeline commences such a 
service that is not a qualifying service under Sec. 284.122 of subpart 
C of this part.
    (c) Acceptance of certificate. An intrastate pipeline shall be 
deemed to have accepted a blanket certificate under this section if it 
continues after February 1, 1992, a service described in paragraph (a) 
of this section that is not a qualifying service under Sec. 284.122 of 
subpart C or commences such a service after November 4, 1991.
    (d) Terms and conditions. An intrastate pipeline's blanket 
certificate

[[Page 813]]

transportation authority under this section is subject to its compliance 
with all terms and conditions of subpart C of this part, except that 
service under this section does not have to be on behalf of an 
interstate pipeline or local distribution company served by an 
interstate pipeline.
    (e) Pregrant of abandonment. Abandonment of transportation services, 
pursuant to section 7(b) of the Natural Gas Act, is authorized upon the 
expiration of the contractual term of each individual arrangement 
authorized by a blanket certificate under this section.
    (f) Effect of certificate. Acceptance of a certificate issued under 
this section or conduct of activity authorized under this section will 
not subject the certificate holder to the Natural Gas Act jurisdiction 
of the Commission except to the extent necessary to enforce the terms 
and conditions of the certificate.

[Order 537, 56 FR 50246, Oct. 4, 1991, as amended by Order 544, 57 FR 
46501, Oct. 9, 1992; Order 581, 60 FR 53074, Oct. 11, 1995]

Subpart H [Reserved]



   Subpart I_Emergency Natural Gas Sale, Transportation, and Exchange 

                              Transactions

    Source: Order 449, 51 FR 9187, Mar. 18, 1986, unless otherwise 
noted.



Sec. 284.261  Purpose.

    This subpart exempts a person who engages in an emergency natural 
gas transaction, as defined for purposes of this subpart, in interstate 
commerce from the certificate requirements of section 7 of the Natural 
Gas Act and from the conditions of Sec. 284.10, except as provided in 
Sec. 284.266, and Sec. Sec. 284.7-284.9 and Sec. Sec. 284.11-284.13 
of subpart A of this chapter.



Sec. 284.262  Definitions.

    For purposes of this subpart:
    Emergency means:
    (1) Any situation in which an actual or expected shortage of gas 
supply or capacity would require an interstate pipeline company, 
intrastate pipeline, local distribution company, or Hinshaw pipeline to 
curtail deliveries of gas or provide less than the projected level of 
service to any pipeline customer, including any situation in which 
additional supplies or capacity are necessary to ensure a pipeline's 
contracted level of service to any customer, but not including any 
situation in which additional supplies or capacity are needed to 
increase the contracted level of service to an existing customer or to 
provide service to a new customer; or
    (2) A sudden unanticipated loss of natural gas supply or capacity; 
or
    (3) An anticipated loss of natural gas supply or capacity due to a 
foreseeable facility outage resulting from a landslide or riverbed 
erosion or other natural forces beyond the participant's control. 
Participants may seek a temporary certificate under Sec. Sec. 157.17 of 
this chapter if the facilities to remedy the emergency cannot be 
constructed automatically under Sec. 2.55(b) or Sec. 157.208(a) of 
this chapter.
    (4) A situation in which the participant, in good faith, determines 
that immediate action is required or is reasonably anticipated to be 
required for protection of life or health or for maintenance of physical 
property.
    Emergency does not mean any situation resulting from a failure by 
any person to transport natural gas under subpart B, C, or G of this 
part.
    Projected level of service means the level of gas volumes to be 
delivered by the company for each customer and additional gas volumes 
needed by a customer due solely to a weather-induced increase in 
requirements.
    Emergency natural gas means natural gas sold, transported, or 
exchanged in an emergency natural gas transaction.
    Emergency natural gas transaction means the sale, transportation, or 
exchange of natural gas (including the construction and operation of 
necessary facilities) conducted pursuant to this subpart, that is:
    (1) Necessary to alleviate an emergency; and
    (2) Not anticipated to extend for more than 60 days in duration.
    Emergency facilities means any facilities necessary to alleviate the 
emergency within the time frame established in Sec. 284.264(b). 
Participants can seek permanent authority to operate the emergency 
facilities either under the temporary certificate provisions of

[[Page 814]]

Sec. 157.17 of this chapter or the prior notice provisions of Sec. 
157.208(b) of this chapter.
    Participant means any first seller, interstate pipeline, intrastate 
pipeline, local distribution company or Hinshaw pipeline that 
participates in an emergency natural gas transaction under this subpart.
    Recipient means:
    (1) In the case of a sale of emergency natural gas, the purchaser of 
such gas; or
    (2) In the case of a transportation or exchange of natural gas when 
there is no sale of emergency natural gas under this subpart, the 
participant who receives the gas.
    Hinshaw pipeline means a pipeline that is exempt from the Natural 
Gas Act jurisdiction of the Commission by reason of section 1(c) of the 
Natural Gas Act.

[Order 603, 64 FR 26610, May 14, 1999]



Sec. 284.263  Exemption from section 7 of Natural Gas Act and certain 

regulatory conditions.

    Any participant that engages in an emergency natural gas transaction 
conducted in accordance with this subpart is exempt from the 
requirements of section 7 of the Natural Gas Act and the conditions of 
Sec. 284.10, except as provided in Sec. 284.266, and from the 
requirements of Sec. Sec. 284.7-284.9 and Sec. Sec. 284.11-284.13 of 
subpart A of this part. Participation in any emergency natural gas 
transaction will not subject any participant to the jurisdiction of the 
Commission under section 7 of the Natural Gas Act except to the extent 
such transaction is provided for in this subpart.



Sec. 284.264  Terms and conditions.

    (a) General conditions. (1) A participant must make every reasonable 
attempt to minimize use of emergency natural gas transactions.
    (2) Before deliveries of emergency natural gas commence, a 
responsible official of the recipient must provide any participants in 
the emergency natural gas transaction sufficient information to enable 
the participants to form a good faith belief that an emergency exists or 
is imminent.
    (3) No participant may engage in an emergency natural gas 
transaction if its participation will adversely affect service to its 
existing customers.
    (4) A participant may not sell emergency natural gas if, during the 
term of the sale, it is also purchasing emergency natural gas under this 
subpart, except when natural gas is being sold to relieve an emergency 
on another, separate segment of the participant's system.
    (5) An interstate pipeline, acting in an emergency gas transaction 
as a broker or agent on behalf of another participant or any other 
person, may not receive compensation for such brokerage or agency 
service.
    (6) A recipient of emergency natural gas that directly benefits from 
the service must:
    (i) Provide line loss and the fuel volumes required to transport the 
emergency natural gas; and
    (ii) Pay for the facilities required to be constructed to conduct 
the emergency natural gas transaction.
    (b) Duration--1) Emergency sale or transportation. An emergency 
natural gas transaction is limited to 60 consecutive calendar days, 
except that such transaction may be continued for an additional 60 
consecutive days if:
    (i) Fifteen days prior to the end of the initial 60-day period, the 
recipient of emergency natural gas files a petition that:
    (A) Describes fully the continued emergency,
    (B) Requests a waiver of the initial 60-day limitation and 
permission for an extension of the transaction for an additional 60 
days; and
    (ii) Within the 15-day period, the Commission does not, by order, 
prohibit continuation of the emergency natural gas transaction for the 
additional 60-day period.
    (2) Redelivery in emergency exchange. The redelivery of emergency 
natural gas received under an exchange arrangement must occur within 180 
consecutive days following the termination of deliveries of the 
emergency natural gas.



Sec. 284.265  Cost recovery by interstate pipeline.

    (a) Except as provided in paragraph (b), an interstate pipeine that 
provides emergency natural gas, whether from

[[Page 815]]

its system supply or by special purchase, must directly assign the 
emergency gas costs to the recipient.
    (b) If an interstate pipeline cannot identify individual recipients, 
the interstate pipeline must roll the emergency gas costs into its 
general system supply costs.



Sec. 284.266  Rates and charges for interstate pipelines.

    (a) Transportation rates--1) Rate on file. If an interstate pipeline 
has on file with the Commission an effective transportation rate 
schedule that conforms to Sec. 284.10, it must use volumetric rates 
based upon fully-allocated costs and adjusted only for time and 
distance.
    (2) Rate not on file. If an interstate pipeline does not have on 
file with the Commission a transportation rate schedule that conforms to 
Sec. 284.10, it may:
    (i) Base its rates upon the methodology used in designing rates to 
recover the transmission and related storage costs included in one of 
its then-effective sales rates schedules; or
    (ii) Use the rates contained in one of its transportation rate 
schedules on file with the Commission which the interstate pipeline 
determines covers service comparable to transportation service 
authorized under this subpart.
    (b) Interstate pipeline costs excluded from rate base. An interstate 
pipeline may not include in its jurisdictional rate base any cost 
associated with facilities installed and operated in connection with an 
emergency natural gas transaction unless a certificate of public 
convenience and necessity has been issued authorizing the costs. Absent 
a certificate, such facilities may only be used to conduct emergency 
natural gas transactions or transactions authorized under section 311 of 
the NGPA.

[Order 449, 51 FR 9187, Mar. 18, 1986, as amended by Order 581, 60 FR 
53074, Oct. 11, 1995]



Sec. 284.267  Intrastate pipeline emergency transportation rates.

    General rule. Rates and charges for transportation of emergency gas 
by intrastate pipelines authorized under this subpart must be determined 
in accordance with Sec. 284.123 of this chapter.



Sec. 284.268  Local distribution company emergency transportation rates.

    (a) Rate on file. A local distribution company that has a rate on 
file with an appropriate state regulatory agency for city-gate 
transportation services must determine its rates and charges for 
transportation of emergency natural gas in accordance with Sec. 284.123 
of this chapter.
    (b) Rate not on file. A local distribution company that does not 
have a rate on file with an appropriate state regulatory agency for 
city-gate transportation services must determine its rates and charges 
for transportation of emergency natural gas (per unit volume of 
emergency natural gas transported) in accordance with Sec. 
284.224(e)(2)(ii) of this chapter.



Sec. 284.269  Intrastate pipeline and local distribution company emergency 

sales rates.

    An intrastate pipeline or local distribution company must determine 
its rates for sales of emergency natural gas under this subpart in 
accordance with Sec. 284.142.

[Order 449, 51 FR 9187, Mar. 18, 1986, as amended by Order 581, 60 FR 
53074, Oct. 11, 1995]



Sec. 284.270  Reporting requirements.

    (a) Forty-eight hour report for sales transactions. Within 48 hours 
after deliveries of emergency natural gas commence, the purchasing 
participant must notify the Commission by email, facsimile or other 
written report of the sale, stating, in the following sequences:
    (1) That the report is submitted pursuant to Sec. 284.270 for an 
emergency natural gas transaction;
    (2) The date deliveries commenced;
    (3) The specific nature of the situation, explained in sufficient 
detail to demonstrate how the situation qualifies as an emergency under 
Sec. 284.262 and under the conditions of Sec. 284.264, and anticipated 
duration of the emergency;
    (4) The estimated total amount and average daily amount of emergency 
natural gas to be purchased during the term of the transaction;
    (5) The purchase price of the emergency natural gas;
    (6) The transportation rate; and

[[Page 816]]

    (7) The identity of all participants involved in the transaction, 
including any customers to whom the emergency natural gas is to be 
assigned.
    (b) Forty-eight hour report for transportation (excluding 
exchanges). Within 48 hours after deliveries commence in an emergency 
natural gas transaction which does not involve the sale of emergency 
natural gas, the recipient of emergency natural gas shall notify the 
Commission by email, facsimile or other written report of the 
transportation, stating, in the following sequence:
    (1) That the report is submitted pursuant to Sec. 284.270 for an 
emergency transaction;
    (2) The date deliveries commenced;
    (3) The specific nature of the situation, explained in sufficient 
detail to demonstrate how the situation qualifies as an emergency under 
Sec. 284.262 and under the conditions of Sec. 284.264, and anticipated 
duration of the emergency;
    (4) The estimated total amount and average daily amount of emergency 
natural gas to be transported during the term of the transaction;
    (5) The transportation rate; and
    (6) The identity of all the participants involved in the 
transaction.
    (c) Forty-eight hour report for exchanges. Within 48 hours after an 
exchange transaction for emergency natural gas commences, the initial 
recipient of the exchange volumes must notify the Commission by email, 
facsimile or other written report of the exchange, stating, in the 
following sequence:
    (1) That the report is for and submitted pursuant to Sec. 284.270 
for an emergency transaction;
    (2) The date the exchange commenced;
    (3) The specific nature of the situation, explained in sufficient 
detail to clearly demonstrate how the situation qualifies as an 
emergency under Sec. 284.262 and under the conditions of Sec. 284.264, 
and anticipated duration of the emergency;
    (4) The estimated total amount and average daily amount of emergency 
natural gas to be exchanged during the term of the transaction;
    (5) The identity of all participants involved in the transaction;
    (6) Whether the exchange is simultaneous or deferred, or any 
imbalances in the volumes;
    (7) Whether the exchange is on a thermal or volumetric basis; and
    (8) The rates or charges, if any, for the exchange service.
    (d) Termination report. Within thirty days after the emergency 
natural gas transaction ends, the participant that received the 
emergency natural gas shall file with the Commission a sworn statement 
and two conformed copies thereof, which must include the following 
information in the following sequence:
    (1) A description of the emergency natural gas transaction, 
including sufficient information to clearly demonstrate how the 
situation qualifies as an emergency under Sec. 284.262 and under the 
conditions of Sec. 284.264; the commencement and termination dates; the 
date of the 48-hour report, and the method of resolving the emergency;
    (2) Any corrections to the 48-hour report information supplied to 
the Commission under paragraphs (a) through (c) of this section or a 
statement that the information was correct;
    (3) The volumes of the emergency natural gas delivered during the 
transaction;
    (4) The total compensation received by the seller for the emergency 
sale;
    (5) The total compensation paid for the emergency natural gas 
transportation or exchange service, if any;
    (6) The methods by which such compensation was derived;
    (7) The total volumes of natural gas whose cost was assigned to 
specific customers, and the total volumes whose cost was included in 
system supply;
    (8) The information supplied to any other participant pursuant to 
Sec. 284.264(a)(2); and
    (9) A statement that the emergency natural gas transaction was 
carried out in accordance with this subpart, and that identifies the 
circumstances demonstrating an emergency existed or was imminent so as 
to require an emergency natural gas transaction.

[Order 46, 44 FR 52184, Sept. 7, 1979, as amended by Order 756, 77 FR 
4894, Feb. 1, 2012]

[[Page 817]]



Sec. 284.271  Waiver.

    The Commission may, by order, waive the requirements of this subpart 
in connection with any emergency natural gas transaction to the extent 
required by the public interest.



Subpart J_Blanket Certificates Authorizing Certain Natural Gas Sales by 

                          Interstate Pipelines

    Source: Order 636, 57 FR 13318, Apr. 16, 1992, unless otherwise 
noted.



Sec. 284.281  Applicability.

    This subpart applies to any interstate pipeline that offers 
transportation service under subpart B or G of this part.



Sec. 284.282  Definitions.

    (a) Bundled sales service is gas sales service that is not sold 
separately from transportation service.
    (b) Sales service includes firm or interruptible gas sales.
    (c) Unbundled sales service is gas sales service that is sold 
separately from transportation service.
    (d) Small customer is a customer that purchases gas from a pipeline 
under the pipeline's one-part imputed load factor rate schedule on the 
effective date of the blanket certificate.

[Order 636, 57 FR 13318, Apr. 16, 1992, as amended by Order 636-A, 57 FR 
36218, Aug. 12, 1992]



Sec. 284.283  Point of unbundling.

    A sales service is unbundled when gas is sold at a point before it 
enters a mainline system, at an entry point to a mainline system from a 
production area, or at an intersection with another pipeline system.



Sec. 284.284  Blanket certificates for unbundled sales services.

    (a) Authorization. An interstate pipeline that offers transportation 
service under subpart B or G of this part is granted a blanket 
certificate of public convenience and necessity pursuant to section 7 of 
the Natural Gas Act authorizing it to provide unbundled firm or 
interruptible sales in accordance with the provisions of this section.
    (b) Conversion to unbundled firm sales service and firm 
transportation service. On the effective date of the pipeline's blanket 
certificate for unbundled sales services under paragraph (a) of this 
section, firm sales entitlements under any firm sales service agreement 
for a bundled sales service are converted to an equivalent amount of 
unbundled firm sales service and an equivalent amount of unbundled firm 
transportation service.
    (c) Conversion to unbundled interruptible sales service and 
interruptible transportation service. On the effective date of the 
pipeline's blanket certificate for unbundled sales services under 
paragraph (a) of this section, interruptible sales volumes under any 
interruptible sales service agreement for a bundled sales service are 
converted to an equivalent amount of unbundled sales service and an 
equivalent amount of unbundled interruptible transportation service.
    (d) A pipeline that provides unbundled sales service under this 
section may serve as an agent of the sales customer to arrange for any 
pipeline-provided service necessary to deliver gas to the customer.
    (e) Small customer cost-based rate. A pipeline that provided bundled 
sales service to a small customer before the effective date of the 
blanket certificate granted in paragraph (a) of this section is required 
to offer a sales service to that customer at a cost-based rate for one 
year from the effective date of the certificate. The obligation to sell 
at the cost-based rate expires one year after the effective date of the 
certificate.

[Order 636, 57 FR 13318, Apr. 16, 1992, as amended by Order 636-A, 57 FR 
36218, Aug. 12, 1992; Order 581, 60 FR 53074, Oct. 11, 1995]



Sec. 284.285  Pregrant of abandonment of unbundled sales services.

    Abandonment of unbundled sales services is authorized pursuant to 
section 7(b) of the Natural Gas Act upon the expiration of the 
contractual term or upon termination of each individual sales 
arrangement authorized under Sec. 284.284.

[[Page 818]]



Sec. 284.286  Standards of conduct for unbundled sales service.

    (a) To the maximum extent practicable, the pipeline must organize 
its unbundled sales and transportation operating employees so that they 
function independently of each other.
    (b) The pipeline must conduct its business to conform to the 
requirements set forth in Sec. 284.7(b)(2) and Sec. 284.9(b)(2) with 
respect to the equality of service by not giving shippers of gas sold by 
the pipeline any preference over shippers of gas sold by any other 
merchant in matters relating to part 284 transportation.
    (c) The pipeline must comply with part 358 by considering its 
unbundled sales operating employees as an operational unit which is the 
functional equivalent of a marketing affiliate.
    (d) The pipeline must comply with Sec. 250.16 of this chapter by 
considering its unbundled sales operating employees as an operational 
unit which is the functional equivalent of a marketing affiliate.
    (e) A pipeline that provides unbundled sales service under Sec. 
284.284 must have tariff provisions on file with the Commission 
indicating how the pipeline is complying with the standards of this 
section.

[Order 636, 57 FR 13318, Apr. 16, 1992, as amended by Order 566, 59 FR 
32899, June 27, 1994; Order 581, 60 FR 53074, Oct. 11, 1995; Order 2004, 
68 FR 69157, Dec. 11, 2003]



Sec. 284.287  Implementation and effective date.

    (a) Prior to offering any sales service under this subpart J, a 
pipeline must file revised tariff sheets incorporating the provisions of 
this subpart J.
    (b) A blanket certificate issued under Sec. 284.284 will be 
effective on the effective date (as approved by the Commission) of the 
tariff sheets implementing service under that certificate.

[Order 581, 60 FR 53074, Oct. 11, 1995]



Sec. 284.288  Code of conduct for unbundled sales service.

    (a) To the extent Seller engages in reporting of transactions to 
publishers of electricity or natural gas indices, Seller must provide 
accurate and factual information, and not knowingly submit false or 
misleading information or omit material information to any such 
publisher, by reporting its transactions in a manner consistent with the 
procedures set forth in the Policy Statement on Natural Gas and Electric 
Price Indices, issued by the Commission in Docket No. PL03-3-000 and any 
clarifications thereto. Seller must notify the Commission as part of its 
FERC Form No. 552 annual reporting requirement in Sec. 260.401 of this 
chapter whether it reports its transactions to publishers of electricity 
and natural gas indices. In addition, Seller must adhere to any other 
standards and requirements for price reporting as the Commission may 
order.
    (b) A pipeline that provides unbundled natural gas sales service 
under Sec. 284.284 shall retain, for a period of five years, all data 
and information upon which it billed the prices it charged for natural 
gas it sold pursuant to its market based sales certificate or the prices 
it reported for use in price indices.

[Order 644, 68 FR 66336, Nov. 26, 2003, as amended by Order 673, 71 FR 
9716, Feb. 27, 2006; Order 677, 71 FR 30287, May 26, 2006; 73 FR 1032, 
Jan. 4, 2008]



 Subpart K_Transportation of Natural Gas on the Outer Continental Shelf 

         by Interstate Natural Gas Pipelines on Behalf of Others

    Source: Order 509, 53 FR 50938, Dec. 19, 1988, unless otherwise 
noted.



Sec. 284.301  Applicability.

    This subpart implements section 5 of the Outer Continental Shelf 
Land Act (OCSLA) and applies to any jurisdictional interstate natural 
gas pipeline that holds a certificate under section 7 of the Natural Gas 
Act (NGA) authorizing the construction and operation of facilities on 
the Outer Continental Shelf (OCS).



Sec. 284.302  Definitions.

    For the purposes of this subpart, the term:
    (a) Outer Continental Shelf (OCS) has the same meaning as found in 
section

[[Page 819]]

2(a) of the OCSLA (43 U.S.C. 1331(a)); and
    (b) OCS pipeline means an interstate natural gas pipeline that holds 
a certificate under section 7 of the NGA authorizing the construction 
and operation of facilities on the OCS, and includes all of the OCS 
pipeline's facilities that fall within the scope of the Commission's 
jurisdiction under section 7 of the NGA to the full extent that such 
facilities are used or necessary to transport natural gas on or across 
the OCS between:
    (1) Any locations on the OCS (if the pipeline does not have an 
interconnection off the OCS), or
    (2) The OCS and the first point of interconnection on the shoreward 
side of the OCS where the pipeline delivers or receives natural gas to 
or from either:
    (i) A natural gas conditioning or processing facility, or
    (ii) Another pipeline, or
    (iii) A distributor or end user of natural gas.

[Order 509, 53 FR 50938, Dec. 19, 1988, as amended by Order 509-A, 54 FR 
8313, Feb. 28, 1989]



Sec. 284.303  OCS blanket certificates.

    Every OCS pipeline [as that term is defined in Sec. 284.302(b)] is 
required to provide open-access, nondiscriminatory transportation 
service pursuant to a blanket transportation certificate issued under 
subpart G of this part.

[Order 559, 58 FR 52663, Oct. 12, 1993]



     Subpart L_Certain Sales for Resale by Non-interstate Pipelines



Sec. 284.401  Definitions.

    Affiliated marketer. For purposes of this subpart, an ``affiliated 
marketer'' is a person engaged in the ``marketing'' of natural gas that 
is an ``affiliate'' of an interstate pipeline as those terms are defined 
in Sec. 161.2 of this chapter.

[Order 547, 57 FR 57959, Dec. 8, 1992]



Sec. 284.402  Blanket marketing certificates.

    (a) Authorization. Any person who is not an interstate pipeline is 
granted a blanket certificate of public convenience and necessity 
pursuant to section 7 of the Natural Gas Act authorizing the certificate 
holder to make sales for resale at negotiated rates in interstate 
commerce of any category of gas that is subject to the Commission's 
Natural Gas Act jurisdiction. A blanket certificate issued under Subpart 
L is a certificate of limited jurisdiction which will not subject the 
certificate holder to any other regulation under the Natural Gas Act 
jurisdiction of the Commission, other than that set forth in this 
Subpart L, by virtue of the transactions under this certificate.
    (b) The authorization granted in paragraph (a) of this section will 
become effective on January 7, 1993 except as otherwise provided in 
paragraph (c) of this section.
    (c)(1) The authorization granted in paragraph (a) of this section 
will become effective for an affiliated marketer with respect to 
transactions involving affiliated pipelines when an affiliated pipeline 
receives its blanket certificate pursuant to Sec. 284.284.
    (2) Should a marketer be affiliated with more than one pipeline, the 
authorization granted in paragraph (a) of this section will not be 
effective for transactions involving other affiliated interstate 
pipelines until such other pipelines' meet the criterion set forth in 
paragraph (c)(1) of this section. The authorization granted in paragraph 
(a) of this section is not extended to affiliates of persons who 
transport gas in interstate commerce and who do not have a tariff on 
file with the Commission under part 284 of this subchapter with respect 
to transactions involving that person.
    (d) Abandonment of the sales service authorized in paragraph (a) of 
this section is authorized pursuant to section 7(b) of the Natural Gas 
Act upon the expiration of the contractual term or upon termination of 
each individual sales arrangement.

[Order 547, 57 FR 57959, Dec. 8, 1992, as amended by Order 581, 60 FR 
53074, Oct. 11, 1995; Order 644, 68 FR 66337, Nov. 26, 2003]



Sec. 284.403  Code of conduct for persons holding blanket marketing 

certificates.

    (a) To the extent Seller engages in reporting of transactions to 
publishers of electricity or natural gas indices,

[[Page 820]]

Seller must provide accurate and factual information, and not knowingly 
submit false or misleading information or omit material information to 
any such publisher, by reporting its transactions in a manner consistent 
with the procedures set forth in the Policy Statement on Natural Gas and 
Electric Price Indices, issued by the Commission in Docket No. PL03-3-
000 and any clarifications thereto. Seller must notify the Commission as 
part of its FERC Form No. 552 annual reporting requirement in Sec. 
260.401 of this chapter whether it reports its transactions to 
publishers of electricity and natural gas indices. In addition, Seller 
shall adhere to any other standards and requirements for price reporting 
as the Commission may order.
    (b) A blanket marketing certificate holder shall retain, for a 
period of five years, all data and information upon which it billed the 
prices it charged for the natural gas sold pursuant to its market based 
sales certificate or the prices it reported for use in price indices.

[Order 644, 68 FR 66337, Nov. 26, 2003, as amended by Order 673, 71 FR 
9716, Feb. 27, 2006; Order 677, 71 FR 30287, May 26, 2006; 73 FR 1032, 
Jan. 4, 2008; 73 FR 55739, Sept. 26, 2008]



        Subpart M_Applications for Market-Based Rates for Storage

    Source: Order 678, 71 FR 36636, July 27, 2006, unless otherwise 
noted.



Sec. 284.501  Applicability.

    Any pipeline or storage service provider that provides or will 
provide service under subparts B, C, or G of this part, and that wishes 
to provide storage and storage-related services at market-based rates 
must conform to the requirements in subpart M.



Sec. 284.502  Procedures for applying for market-based rates.

    (a) Applications for market-based rates may be filed with 
certificate applications. Service, notice, intervention, and protest 
procedures for such filings will conform with those applicable to the 
certificate application.
    (b) With respect to applications not filed as part of certificate 
applications,
    (1) Applicants providing service under subpart B or subpart G of 
this part must file a request for declaratory order and comply with the 
service and filing requirements of part 154 of this chapter. 
Interventions and protests to applications for market-based rates must 
be filed within 30 days of the application unless the notice issued by 
the Commission provides otherwise. An applicant providing service under 
subpart B or subpart G of this part cannot charge market-based rates 
under this subpart of this part until its application has been accepted 
by the Commission. Once accepted, the applicant can make the appropriate 
filing necessary to set its market-based rates into effect.
    (2) Applicants providing service under subpart C of this part must 
file in accordance with the requirements of that subpart.



Sec. 284.503  Market-power determination.

    An applicant may apply for market-based rates by filing a request 
for a market-power determination that complies with the following:
    (a) The applicant must set forth its specific request and adequately 
demonstrate that it lacks market power in the market to be served, and 
must include an executive summary of its statement of position and a 
statement of material facts in addition to its complete statement of 
position. The statement of material facts must include citation to the 
supporting statements, exhibits, affidavits, and prepared testimony.
    (b) The applicant must include with its application the following 
information:
    (1) Statement A--geographic market. This statement must describe the 
geographic markets for storage services in which the applicant seeks to 
establish that it lacks significant market power. It must include the 
market related to the service for which it proposes to charge market-
based rates. The statement must explain why the applicant's method for 
selecting the geographic markets is appropriate.
    (2) Statement B--product market. This statement must identify the 
product market or markets for which the applicant seeks to establish 
that it lacks

[[Page 821]]

significant market power. The statement must explain why the particular 
product definition is appropriate.
    (3) Statement C--the applicant's facilities and services. This 
statement must describe the applicant's own facilities and services, and 
those of all parent, subsidiary, or affiliated companies, in the 
relevant markets identified in Statements A and B in paragraphs (b)(1) 
and (2) of this section. The statement must include all pertinent data 
about the storage facilities and services.
    (4) Statement D--competitive alternatives. This statement must 
describe available alternatives in competition with the applicant in the 
relevant markets and other competition constraining the applicant's 
rates in those markets. Such proposed alternatives may include an 
appropriate combination of other storage, local gas supply, LNG, 
financial instruments and pipeline capacity. These alternatives must be 
shown to be reasonably available as a substitute in the area to be 
served soon enough, at a price low enough, and with a quality high 
enough to be a reasonable alternative to the applicant's services. 
Capacity (transportation, storage, LNG, or production) owned or 
controlled by the applicant and affiliates of the applicant in the 
relevant market shall be clearly and fully identified and may not be 
considered as alternatives competing with the applicant. Rather, the 
capacity of an applicant's affiliates is to be included in the market 
share calculated for the applicant. To the extent available, the 
statement must include all pertinent data about storage or other 
alternatives and other constraining competition.
    (5) Statement E--potential competition. This statement must describe 
potential competition in the relevant markets. To the extent available, 
the statement must include data about the potential competitors, 
including their costs, and their distance in miles from the applicant's 
facilities and major consuming markets. This statement must also 
describe any relevant barriers to entry and the applicant's assessment 
of whether ease of entry is an effective counter to attempts to exercise 
market power in the relevant markets.
    (6) Statement F--maps. This statement must consist of maps showing 
the applicant's principal facilities, pipelines to which the applicant 
intends to interconnect and other pipelines within the area to be 
served, the direction of flow of each line, the location of the 
alternatives to the applicant's service offerings, including their 
distance in miles from the applicant's facility. The statement must 
include a general system map and maps by geographic markets. The 
information required by this statement may be on separate pages.
    (7) Statement G--market-power measures. This statement must set 
forth the calculation of the market concentration of the relevant 
markets using the Herfindahl-Hirschman Index. The statement must also 
set forth the applicant's market share, inclusive of affiliated service 
offerings, in the markets to be served. The statement must also set 
forth the calculation of other market-power measures relied on by the 
applicant. The statement must include complete particulars about the 
applicant's calculations.
    (8) Statement H--other factors. This statement must describe any 
other factors that bear on the issue of whether the applicant lacks 
significant market power in the relevant markets. The description must 
explain why those other factors are pertinent.
    (9) Statement I--prepared testimony. This statement must include the 
proposed testimony in support of the application and will serve as the 
applicant's case-in-chief, if the Commission sets the application for 
hearing. The proposed witness must subscribe to the testimony and swear 
that all statements of fact contained in the proposed testimony are true 
and correct to the best of his or her knowledge, information, and 
belief.



Sec. 284.504  Standard requirements for market-power authorizations.

    (a) Applicants granted the authority to charge market-based rates 
under Sec. 284.503 that provide cost-based service(s) must separately 
account for all costs and revenues associated with facilities used to 
provide the market-based services. When it files to change its cost-
based rates, applicant must provide a summary of the costs and

[[Page 822]]

revenues associated with market-based rates with applicable cross 
references to Sec. Sec. 154.312 and 154.313 of this chapter. The 
summary statement must provide the formulae and explain the bases used 
in the allocation of common costs between the applicant's cost-based 
services and its market-based services.
    (b) A storage service provider granted the authority to charge 
market-based rates under Sec. 284.503 is required to notify the 
Commission within 10 days of acquiring knowledge of significant changes 
occurring in its market power status. Such notification should include a 
detailed description of the new facilities/services and their 
relationship to the storage service provider. Significant changes 
include, but are not limited to:
    (1) The storage provider expanding its storage capacity beyond the 
amount authorized in this proceeding;
    (2) The storage provider acquiring transportation facilities or 
additional storage capacity;
    (3) An affiliate providing storage or transportation services in the 
same market area; and
    (4) The storage provider or an affiliate acquiring an interest in or 
is acquired by an interstate pipeline.



Sec. 284.505  Market-based rates for storage providers without a market-power 

determination.

    (a) Any storage service provider seeking market-based rates for 
storage capacity, pursuant to the authority of section 4(f) of the 
Natural Gas Act, related to a specific facility put into service after 
August 8, 2005, may apply for market-based rates by complying with the 
following requirements:
    (1) The storage service provider must demonstrate that market-based 
rates are in the public interest and necessary to encourage the 
construction of the storage capacity in the area needing storage 
services; and
    (2) The storage service provider must provide a means of protecting 
customers from the potential exercise of market power.
    (b) Any storage service provider seeking market-based rates for 
storage capacity pursuant to this section will be presumed by the 
Commission to have market power.



PART 286_ACCOUNTS, RECORDS, MEMORANDA AND DISPOSITION OF CONTESTED AUDIT 

FINDINGS AND PROPOSED REMEDIES--Table of Contents



Sec.
286.101 Application for stay.
286.102 Application for rehearing.

      Disposition of Contested Audit Findings and Proposed Remedies

286.103 Notice to audited person.
286.104 Response to notification.
286.105 Shortened procedure.
286.106 Form and style.
286.107 Verification.
286.108 Determination.
286.109 Assignment for oral hearing.

    Authority: 5 U.S.C. 551 et seq.; 15 U.S.C. 717-717w, 3301-3432; 42 
U.S.C. 7102-7352.



Sec. 286.101  Application for stay.

    (a) General rule. Any person who believes that any provision of a 
final or interim regulation issued under the Natural Gas Policy Act of 
1978 is unlawful as applied to such person may file an application for 
stay.
    (b) Content of application. The application shall state, clearly and 
concisely:
    (1) The provision of the regulation, by section, paragraph, 
subparagraph and clause, as appropriate, which applicant seeks to have 
stayed;
    (2) The conditions which the applicant believes require the stay, 
including the irreparable injury which the applicant believes will 
result if the stay is not granted; and
    (3) The factual and legal basis for applicant's contention that the 
final or interim regulation is unlawful.
    (c) Filing requirements. The application shall be under oath. An 
original and three conformed copies shall be filed with the Secretary of 
the Commission.
    (d) Commission action. The Commission may grant the application, in 
whole or in part, by issuing an order specifying the scope of the stay 
granted and the effective dates of the stay.

[43 FR 57599, Dec. 8, 1978, as amended at 44 FR 13473, Mar. 12, 1979]



Sec. 286.102  Application for rehearing.

    (a) General rule. Any person aggrieved by any order or regulation or 
any

[[Page 823]]

amendment to a regulation issued under the NGPA and subject to judicial 
review under section 506(a) or (b) thereof shall file a petition for 
rehearing within 30 days after the order or regulation is issued by the 
Commission or February 3, 1979, whichever is later. There has not been 
an exhaustion of administrative remedies until a petition for rehearing 
has been filed under this section and the proceeding is complete by the 
denial of the request, or if rehearing is granted, an order affirming, 
modifying or revoking the challenged order or regulation is issued.
    (b) Specifications of error. The application for rehearing shall 
state clearly and concisely with respect to the challenged order or 
regulation:
    (1) The provision of the order or the regulation, by section, and 
where appropriate, by paragraph;
    (2) Applicant's interest in the particular provision; and
    (3) The facts and legal analysis upon which the request for 
rehearing is based.
    (c) Procedural requirements. Except as otherwise provided in this 
section, the procedures for rehearing in Sec. 385.713 of this chapter 
shall apply.
    (d) Commission action upon the application. (1) The Commission may 
grant the request for rehearing, in whole or in part, by issuing an 
order specifying the scope of rehearing. If, and to the extent that 
rehearing is granted, the Commission may request Staff, applicant or any 
other party to file briefs. In every case where rehearing is granted, 
the Commission will issue an order affirming, modifying or revoking the 
challenged order or regulation.
    (2) The Commission may modify the original order or regulation 
without further hearing.
    (3) Unless the Commission acts upon the application within 30 days 
after it is filed, such application shall be considered to have been 
denied. If the Commission grants rehearing in part, any part of the 
application outside the scope of the order granting rehearing shall be 
considered to have been denied.

[44 FR 2383, Jan. 11, 1979, as amended by Order 225, 47 FR 19058, May 3, 
1982]

      Disposition of Contested Audit Findings and Proposed Remedies

    Source: Order 675, 71 FR 9707, Feb. 27, 2006, unless otherwise 
noted.



Sec. 286.103  Notice to audited person.

    An audit conducted by the Commission's staff under authority of the 
Natural Gas Policy Act may result in a notice of deficiency or audit 
report or similar document containing a finding or findings that the 
audited person has not complied with a requirement of the Commission 
with respect to, but not limited to, the following: A filed tariff or 
tariffs, contracts, data, records, accounts, books, communications or 
papers relevant to the audit of the audited person; matters under the 
Standards of Conduct or the Code of Conduct; and the activities or 
operations of the audited person. The notice of deficiency, audit report 
or similar document may also contain one or more proposed remedies that 
address findings of noncompliance. Where such findings, with or without 
proposed remedies, appear in a notice of deficiency, audit report or 
similar document, such document shall be provided to the audited person, 
and the finding or findings, and any proposed remedies, shall be noted 
and explained. The audited person shall timely indicate in a written 
response any and all findings or proposed remedies, or both, in any 
combination, with which the audited person disagrees. The audited person 
shall have 15 days from the date it is sent the notice of deficiency, 
audit report or similar document to provide a written response to the 
audit staff indicating any and all findings or proposed remedies, or 
both, in any combination, with which the audited person disagrees, and 
such further time as the audit staff may provide in writing to the 
audited person at the time the document is sent to the audited person. 
The audited person may move the Commission for additional time to 
provide a written response to the audit staff and such motion shall be 
granted for good cause shown. Any initial order that the Commission 
subsequently may issue with respect to the notice of deficiency, audit 
report or similar document shall note, but not address on the

[[Page 824]]

merits, the finding or findings, or the proposed remedy or remedies, or 
both, in any combination, with which the audited person disagreed. The 
Commission shall provide the audited person 30 days to respond to the 
initial Commission order concerning a notice of deficiency, audit report 
or similar document with respect to the finding or findings or any 
proposed remedy or remedies, or both, in any combination, with which it 
disagreed.

[Order 675-A, 71 FR 29785, May 24, 2006]



Sec. 286.104  Response to notification.

    Upon issuance of a Commission order that notes a finding or 
findings, with or without proposed remedies, with which the audited 
person has disagreed, the audited person may: Acquiesce in the findings 
and proposed remedies by not timely responding to the Commission order, 
in which case the Commission may issue an order approving them or taking 
other action; or challenge the finding or findings and any proposed 
remedies with which it disagreed by timely notifying the Commission in 
writing that it requests Commission review by means of a shortened 
procedure, or, if there are material facts in dispute which require 
cross-examination, a trial-type hearing.



Sec. 286.105  Shortened procedure.

    If the audited person subject to a Commission order described in 
Sec. 286.103 notifies the Commission that it seeks to challenge one or 
more audit findings, or proposed remedies, or both, in any combination, 
by the shortened procedure, the Commission shall thereupon issue a 
notice setting a schedule for the filing of memoranda. The person 
electing the use of the shortened procedure, and any other interested 
entities, including the Commission staff, shall file, within 45 days of 
the notice, an initial memorandum that addresses the relevant facts and 
applicable law that support the position or positions taken regarding 
the matters at issue. Reply memoranda shall be filed within 20 days of 
the date by which the initial memoranda are due to be filed. Only 
participants who filed initial memoranda may file reply memoranda. 
Subpart T of part 385 of this chapter shall apply to all filings. Within 
20 days after the last date that reply memoranda under the shortened 
procedure may be timely filed, the audited person who elected the 
shortened procedure may file a motion with the Commission requesting a 
trial-type hearing if new issues are raised by a party. To prevail in 
such a motion, the audited person must show that a party to the 
shortened procedure raised one or more new issues of material fact 
relevant to resolution of a matter in the shortened procedure such that 
fundamental fairness requires a trial-type hearing to resolve the new 
issue or issues so raised. Parties to the shortened procedure and the 
Commission staff may file responses to the motion. In ruling upon the 
motion, the Commission may determine that some or all of the issues be 
litigated in a trial-type hearing.



Sec. 286.106  Form and style.

    Each copy of such memorandum must be complete in itself. All 
pertinent data should be set forth fully, and each memorandum should set 
out the facts and argument as prescribed for briefs in Sec. 385.706 of 
this chapter.



Sec. 286.107  Verification.

    The facts stated in the memorandum must be sworn to by persons 
having knowledge thereof, which latter fact must affirmatively appear in 
the affidavit. Except under unusual circumstances, such persons should 
be those who would appear as witnesses if hearing were had to testify as 
to the facts stated in the memorandum.



Sec. 286.108  Determination.

    If no formal hearing is had the matter in issue will be determined 
by the Commission on the basis of the facts and arguments submitted.



Sec. 286.109  Assignment for oral hearing.

    Except when there are no material facts in dispute, when a person 
does not consent to the shortened procedure, the Commission will assign 
the proceeding for hearing as provided by subpart E of part 385 of this 
chapter. Notwithstanding a person's not giving consent to the shortened 
procedure, and instead seeking assignment for hearing as provided for by 
subpart E of

[[Page 825]]

part 385 of this chapter, the Commission will not assign the proceeding 
for a hearing when no material facts are in dispute. The Commission may 
also, in its discretion, at any stage in the proceeding, set the 
proceeding for hearing.

[[Page 826]]



 SUBCHAPTER J_REGULATIONS UNDER THE POWERPLANT AND INDUSTRIAL FUEL USE 

                               ACT OF 1978



PART 287_RULES GENERALLY APPLICABLE TO POWERPLANT AND INDUSTRIAL FUEL USE--

Table of Contents



    Authority: Department of Energy Organization Act, 42 U.S.C. 7107 et 
seq.; Powerplant and Industrial Fuel Use Act of 1978, Pub. L. 95-620.



Sec. 287.101  Determination of powerplant design capacity.

    For the purpose of section 103 of the Powerplant and Industrial Fuel 
Use Act of 1978, a powerplant's design capacity shall be determined as 
follows:
    (a) Steam-electric generating unit. The design capacity of a steam-
electric generating unit shall be maximum generator nameplate rating 
measured in kilowatts or, if the nameplate does not have a rating 
measured in kilowatts, the product of the generator's kilovolt-amperes 
nameplate rating and power factor nameplate rating.
    (b) Combustion turbine. The design capacity of a combustion turbine 
shall be its nameplate rating measured in kilowatts, adjusted for 
peaking service at an ambient temperature of 59 degrees Fahrenheit (15 
degrees Celsius) and at the unit's site elevation.
    (c) Combined cycle unit. The design capacity of a combined cycle 
shall be the sum of its combustion turbine nameplate rating measured in 
kilowatts, based on baseload operation adjusted for site elevation, and 
the maximum generator nameplate rating measured in kilowatts of the 
steam turbine portion of the unit.
    (d) Internal combustion engine. The design capacity of an internal 
combustion engine shall be the generator's nameplate rating measured in 
kilowatts.

[44 FR 38839, July 3, 1979]

[[Page 827]]



 SUBCHAPTER K_REGULATIONS UNDER THE PUBLIC UTILITY REGULATORY POLICIES 

                               ACT OF 1978



PART 290_COLLECTION OF COST OF SERVICE INFORMATION UNDER SECTION 133 OF THE 

PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978--Table of Contents



             Subpart A_Coverage, Compliance and Definitions

Sec.
290.101 Applicability and exemptions.
290.102 Information gathering and filing.
290.103 Time of filing and reporting period.

Appendix A to Part 290--Nonexempt Electric Utilities

    Authority: 16 U.S.C. 791a-828c, 2601-2645; 42 U.S.C. 7101-7352.

    Source: Order 48, 44 FR 58697, Oct. 11, 1979, unless otherwise 
noted.



             Subpart A_Coverage, Compliance and Definitions



Sec. 290.101  Applicability and exemptions.

    (a) Except as provided in paragraph (b), this part shall apply to 
each electric utility, in any calendar year, if the total sales of 
electric energy by such utility for purposes other than resale exceed 
500 million kilowatt-hours during any calendar year beginning after 
December 31, 1975, and before the immediately preceding calendar year.
    (b) The Commission exempts from compliance with this part any 
utility:
    (1) Listed by name in Appendix A to this part; or
    (2) That has total sales of electric energy for purposes other than 
resale of less than 2 billion kilowatt-hours per year.

[Order 353, 48 FR 55449, Dec. 13, 1983, as amended at 49 FR 4939, Feb. 
9, 1984]



Sec. 290.102  Information gathering and filing.

    All nonexempt electric utilities must file the data required by 
section 133(a) of the Public Utility Regulatory Policies Act of 1978, 16 
U.S.C. Sec. 2643, with their state regulatory authorities. All 
nonexempt, nonregulated electric utilities shall, to the extent the data 
are collected and compiled, make these data publicly available. All 
nonexempt electric utilities shall file an affidavit with the Commission 
certifying that the requisite state filing was made. All nonexempt, 
nonregulated electric utilities shall file an affidavit with the 
Commission certifying that the data were made publicly available.

[Order 545, 57 FR 53991, Nov. 16, 1992]



Sec. 290.103  Time of filing and reporting period.

    All nonexempt electric utilities must file with any state regulatory 
authority having ratemaking authority for such utilities the information 
gathered pursuant to Sec. 290.102, and all nonexempt, nonregulated 
electric utilities must make such information available to the public as 
follows:
    (a) Biennial filing. Information required to be filed under Sec. 
290.102 must be filed biennially in even-numbered years on or before 
June 30 of that year.
    (b) Reporting period. The reporting period is the calendar year 
immediately preceding the filing year. Information for previous years 
and projected information for future years must be reported on a 
calendar year basis.
    (c) Alternate reporting period. Use of an alternate reporting period 
is permitted as follows:
    (1) Except as provided in paragraph (c)(2) of this section, if a 
nonexempt electric utility has gathered all of the information specified 
in Sec. 290.102 and has filed such information, based on a recent 12-
month reporting period, either with its state regulatory authority or 
governing authority in connection with a retail rate proceeding, the 
nonexempt electric utility may substitute such information for the 
equivalent information required by this part in fulfillment of the 
biennial filing requirements.
    (2) If a nonexempt electric utility not subject to the jurisdiction 
of a state regulatory authority maintains accounting records other than 
on a calendar year basis, such utility may use such other basis as the 
reporting period

[[Page 828]]

for purposes of compliance with this part, provided such reporting 
period is a 12-month period.

(Public Utility Regulatory Policies Act of 1978, 16 U.S.C. 2601-2645; 
Energy Supply and Environmental Coordination Act, 15 U.S.C. 791-798; 
Federal Power Act, as amended, 16 U.S.C. 792-828C; Department of Energy 
Organization Act, 42 U.S.C. 7101-7352, E.O. 12009, 42 FR 46267)

[Order 48, 44 FR 58697, Oct. 11, 1979, as amended by Order 353, 48 FR 
55449, Dec. 13, 1983; Order 545, 57 FR 53991, Nov. 16, 1992]



        Sec. Appendix A to Part 290--Nonexempt Electric Utilities

    Electric utilities that are not exempt from part 290, as of the date 
of publication of the Commission's Order No. 545 are as follows:

Department of Water and Power of the City of Los Angeles, California.
Pacific Gas & Electric Co.
San Diego Gas and Electric Co.
Southern California Edison Co.
Western Area Power Administration.

[Order 545, 57 FR 53991, Nov. 16, 1992]



PART 292_REGULATIONS UNDER SECTIONS 201 AND 210 OF THE PUBLIC UTILITY 

REGULATORY POLICIES ACT OF 1978 WITH REGARD TO SMALL POWER PRODUCTION AND 

COGENERATION--Table of Contents



                      Subpart A_General Provisions

Sec.
292.101 Definitions.

 Subpart B_Qualifying Cogeneration and Small Power Production Facilities

292.201 Scope.
292.202 Definitions.
292.203 General requirements for qualification.
292.204 Criteria for qualifying small power production facilities.
292.205 Criteria for qualifying cogeneration facilities.
292.207 Procedures for obtaining qualifying status.
292.208 Special requirements for hydroelectric small power production 
          facilities located at a new dam or diversion.
292.209 Exceptions from requirements for hydroelectric small power 
          production facilities located at a new dam or diversion.
292.210 Petition alleging commitment of substantial monetary resources 
          before October 16, 1986.
292.211 Petition for initial determination on whether a project has a 
          substantial adverse effect on the environment (AEE petition).

    Subpart C_Arrangements Between Electric Utilities and Qualifying 
Cogeneration and Small Power Production Facilities Under Section 210 of 
           the Public Utility Regulatory Policies Act of 1978

292.301 Scope.
292.302 Availability of electric utility system cost data.
292.303 Electric utility obligations under this subpart.
292.304 Rates for purchases.
292.305 Rates for sales.
292.306 Interconnection costs.
292.307 System emergencies.
292.308 Standards for operating reliability.
292.309 Termination of obligation to purchase from qualifying 
          facilities.
292.310 Procedures for utilities requesting termination of obligation to 
          purchase from qualifying facilities.
292.311 Reinstatement of obligation to purchase.
292.312 Termination of obligation to sell to qualifying facilities.
292.313 Reinstatement of obligation to sell.
292.314 Existing rights and remedies.

                        Subpart D_Implementation

292.401 Implementation of certain reporting requirements.
292.402 Waivers.

Subpart E [Reserved]

Subpart F_Exemption of Qualifying Small Power Production Facilities and 
    Cogeneration Facilities from Certain Federal and State Laws and 
                               Regulations

292.601 Exemption to qualifying facilities from the Federal Power Act.
292.602 Exemption to qualifying facilities from the Public Utility 
          Holding Company Act of 2005 and certain State laws and 
          regulations.

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 
7101-7352.



                      Subpart A_General Provisions



Sec. 292.101  Definitions.

    (a) General rule. Terms defined in the Public Utility Regulatory 
Policies Act of 1978 (PURPA) shall have the same meaning for purposes of 
this part as they have under PURPA, unless further defined in this part.

[[Page 829]]

    (b) Definitions. The following definitions apply for purposes of 
this part.
    (1) Qualifying facility means a cogeneration facility or a small 
power production facility that is a qualifying facility under Subpart B 
of this part.
    (i) A qualifying facility may include transmission lines and other 
equipment used for interconnection purposes (including transformers and 
switchyard equipment), if:
    (A) Such lines and equipment are used to supply power output to 
directly and indirectly interconnected electric utilities, and to end 
users, including thermal hosts, in accordance with state law; or
    (B) Such lines and equipment are used to transmit supplementary, 
standby, maintenance and backup power to the qualifying facility, 
including its thermal host meeting the criteria set forth in Union 
Carbide Corporation, 48 FERC ] 61,130, reh'g denied, 49 FERC ] 61,209 
(1989), aff'd sub nom., Gulf States Utilities Company v. FERC, 922 F.2d 
873 (D.C. Cir. 1991); or
    (C) If such lines and equipment are used to transmit power from 
other qualifying facilities or to transmit standby, maintenance, 
supplementary and backup power to other qualifying facilities.
    (ii) The construction and ownership of such lines and equipment 
shall be subject to any applicable Federal, state, and local siting and 
environmental requirements.
    (2) Purchase means the purchase of electric energy or capacity or 
both from a qualifying facility by an electric utility.
    (3) Sale means the sale of electric energy or capacity or both by an 
electric utility to a qualifying facility.
    (4) System emergency means a condition on a utility's system which 
is likely to result in imminent significant disruption of service to 
customers or is imminently likely to endanger life or property.
    (5) Rate means any price, rate, charge, or classification made, 
demanded, observed or received with respect to the sale or purchase of 
electric energy or capacity, or any rule, regulation, or practice 
respecting any such rate, charge, or classification, and any contract 
pertaining to the sale or purchase of electric energy or capacity.
    (6) Avoided costs means the incremental costs to an electric utility 
of electric energy or capacity or both which, but for the purchase from 
the qualifying facility or qualifying facilities, such utility would 
generate itself or purchase from another source.
    (7) Interconnection costs means the reasonable costs of connection, 
switching, metering, transmission, distribution, safety provisions and 
administrative costs incurred by the electric utility directly related 
to the installation and maintenance of the physical facilities necessary 
to permit interconnected operations with a qualifying facility, to the 
extent such costs are in excess of the corresponding costs which the 
electric utility would have incurred if it had not engaged in 
interconnected operations, but instead generated an equivalent amount of 
electric energy itself or purchased an equivalent amount of electric 
energy or capacity from other sources. Interconnection costs do not 
include any costs included in the calculation of avoided costs.
    (8) Supplementary power means electric energy or capacity supplied 
by an electric utility, regularly used by a qualifying facility in 
addition to that which the facility generates itself.
    (9) Back-up power means electric energy or capacity supplied by an 
electric utility to replace energy ordinarily generated by a facility's 
own generation equipment during an unscheduled outage of the facility.
    (10) Interruptible power means electric energy or capacity supplied 
by an electric utility subject to interruption by the electric utility 
under specified conditions.
    (11) Maintenance power means electric energy or capacity supplied by 
an electric utility during scheduled outages of the qualifying facility.

(Public Utility Regulatory Policies Act of 1978, 16 U.S.C. 2601 et seq., 
Energy Supply and Environmental Coordination Act, 15 U.S.C. 791 et seq. 
Federal Power Act, 16 U.S.C. 792 et seq., Department of Energy 
Organization Act, 42 U.S.C. 7101 et seq., E.O. 12009, 42 FR 46267)

[45 FR 12233, Feb. 25, 1980, as amended by Order 575, 60 FR 4856, Jan. 
25, 1995]

[[Page 830]]



 Subpart B_Qualifying Cogeneration and Small Power Production Facilities

    Authority: Public Utility Regulatory Policies Act of 1978, (16 
U.S.C. 2601, et seq.), Energy Supply and Environmental Coordination Act, 
(15 U.S.C. 791 et seq.), Federal Power Act, as amended, (16 U.S.C. 792, 
et seq.), Department of Energy Organization Act, (42 U.S.C. 7101 et 
seq.), E.O. 12009, 42 FR 46267, Natural Gas Policy Act of 1978, (15 
U.S.C. 3301, et seq.).



Sec. 292.201  Scope.

    This subpart applies to the criteria for and manner of becoming a 
qualifying small power production facility and a qualifying cogeneration 
facility under sections 3(17)(C) and 3(18)(B), respectively, of the 
Federal Power Act, as amended by section 201 of the Public Utility 
Regulatory Policies Act of 1978 (PURPA).

[45 FR 17972, Mar. 20, 1980]



Sec. 292.202  Definitions.

    For purposes of this subpart:
    (a) Biomass means any organic material not derived from fossil 
fuels;
    (b) Waste means an energy input that is listed below in this 
subsection, or any energy input that has little or no current commercial 
value and exists in the absence of the qualifying facility industry. 
Should a waste energy input acquire commercial value after a facility is 
qualified by way of Commission certification pursuant to Sec. 
292.207(b), or self-certification pursuant to Sec. 292.207(a), the 
facility will not lose its qualifying status for that reason. Waste 
includes, but is not limited to, the following materials that the 
Commission previously has approved as waste:
    (1) Anthracite culm produced prior to July 23, 1985;
    (2) Anthracite refuse that has an average heat content of 6,000 Btu 
or less per pound and has an average ash content of 45 percent or more;
    (3) Bituminous coal refuse that has an average heat content of 9,500 
Btu per pound or less and has an average ash content of 25 percent or 
more;
    (4) Top or bottom subbituminous coal produced on Federal lands or on 
Indian lands that has been determined to be waste by the United States 
Department of the Interior's Bureau of Land Management (BLM) or that is 
located on non-Federal or non-Indian lands outside of BLM's 
jurisdiction, provided that the applicant shows that the latter coal is 
an extension of that determined by BLM to be waste.
    (5) Coal refuse produced on Federal lands or on Indian lands that 
has been determined to be waste by the BLM or that is located on non-
Federal or non-Indian lands outside of BLM's jurisdiction, provided that 
applicant shows that the latter is an extension of that determined by 
BLM to be waste.
    (6) Lignite produced in association with the production of montan 
wax and lignite that becomes exposed as a result of such a mining 
operation;
    (7) Gaseous fuels, except:
    (i) Synthetic gas from coal; and
    (ii) Natural gas from gas and oil wells unless the natural gas meets 
the requirements of Sec. 2.400 of this chapter;
    (8) Petroleum coke;
    (9) Materials that a government agency has certified for disposal by 
combustion;
    (10) Residual heat;
    (11) Heat from exothermic reactions;
    (12) Used rubber tires;
    (13) Plastic materials; and
    (14) Refinery off-gas.
    (c) Cogeneration facility means equipment used to produce electric 
energy and forms of useful thermal energy (such as heat or steam), used 
for industrial, commercial, heating, or cooling purposes, through the 
sequential use of energy;
    (d) Topping-cycle cogeneration facility means a cogeneration 
facility in which the energy input to the facility is first used to 
produce useful power output, and at least some of the reject heat from 
the power production process is then used to provide useful thermal 
energy;
    (e) Bottoming-cycle cogeneration facility means a cogeneration 
facility in which the energy input to the system is first applied to a 
useful thermal energy application or process, and at least some of the 
reject heat emerging from the application or process is then used for 
power production;
    (f) Supplementary firing means an energy input to the cogeneration 
facility used only in the thermal process of a

[[Page 831]]

topping-cycle cogeneration facility, or only in the electric generating 
process of a bottoming-cycle cogeneration facility;
    (g) Useful power output of a cogeneration facility means the 
electric or mechanical energy made available for use, exclusive of any 
such energy used in the power production process;
    (h) Useful thermal energy output of a topping-cycle cogeneration 
facility means the thermal energy:
    (1) That is made available to an industrial or commercial process 
(net of any heat contained in condensate return and/or makeup water);
    (2) That is used in a heating application (e.g., space heating, 
domestic hot water heating); or
    (3) That is used in a space cooling application (i.e., thermal 
energy used by an absorption chiller).
    (i) Total energy output of a topping-cycle cogeneration facility is 
the sum of the useful power output and useful thermal energy output;
    (j) Total energy input means the total energy of all forms supplied 
from external sources;
    (k) Natural gas means either natural gas unmixed, or any mixture of 
natural gas and artificial gas;
    (l) Oil means crude oil, residual fuel oil, natural gas liquids, or 
any refined petroleum products; and
    (m) Energy input in the case of energy in the form of natural gas or 
oil is to be measured by the lower heating value of the natural gas or 
oil.
    (n) Electric utility holding company means a holding company, as 
defined in section 2(a)(7) of the Public Utility Holding Company Act of 
1935, 15 U.S.C. 79b(a)(7) which owns one or more electric utilities, as 
defined in section 2(a)(3) of that Act, 15 U.S.C. 79b(a)(3), but does 
not include any holding company which is exempt by rule or order adopted 
or issued pursuant to sections 3(a)(3) or 3(a)(5) of the Public Utility 
Holding Company Act of 1935, 15 U.S.C. 79c(a)(3) or 79c(a)(5).
    (o) Utility geothermal small power production facility means a small 
power production facility which uses geothermal energy as the primary 
energy resource and of which more than 50 percent is owned either:
    (1) By an electric utility or utilities, electric utility holding 
company or companies, or any combination thereof.
    (2) By any company 50 percent or more of the outstanding voting 
securities of which of which are directly or indirectly owned, 
controlled, or held with power to vote by an electric utility, electric 
utility holding company, or any combination thereof.
    (p) New dam or diversion means a dam or diversion which requires, 
for the purposes of installing any hydroelectric power project, any 
construction, or enlargement of any impoundment or diversion structure 
(other than repairs or reconstruction or the addition of flashboards of 
similar adjustable devices);
    (q) Substantial adverse effect on the environment means a 
substantial alteration in the existing or potential use of, or a loss 
of, natural features, existing habitat, recreational uses, water 
quality, or other environmental resources. Substantial alteration of 
particular resource includes a change in the environment that 
substantially reduces the quality of the affected resources; and
    (r) Commitment of substantial monetary resources means the 
expenditure of, or commitment to expend, at least 50 percent of the 
total cost of preparing an application for license or exemption for a 
hydroelectric project that is accepted for filing by the Commission 
pursuant to Sec. 4.32(e) of this chapter. The total cost includes (but 
is not limited to) the cost of agency consultation, environmental 
studies, and engineering studies conducted pursuant to Sec. 4.38 of 
this chapter, and the Commission's requirements for filing an 
application for license exemption.
    (s) Sequential use of energy means:
    (1) For a topping-cycle cogeneration facility, the use of reject 
heat from a power production process in sufficient amounts in a thermal 
application or process to conform to the requirements of the operating 
standard; or
    (2) For a bottoming-cycle cogeneration facility, the use of reject 
heat from a thermal application or process,

[[Page 832]]

at least some of which is then used for power production.

(Energy Security Act, Pub. L. 96-294, 94 Stat. 611 (1980) Public Utility 
Regulatory Policies Act of 1978, 16 U.S.C. 2601, et seq., Energy Supply 
and Environmental Coordination Act, 15 U.S.C. 791 et seq., Federal Power 
Act, as amended, 16 U.S.C. 792 et seq., Department of Energy 
Organization Act, 42 U.S.C. 7101 et seq., E.O. 12009, 42 FR 46267)

[45 FR 17972, Mar. 20, 1980, as amended at 45 FR 33958, May 21, 1980; 45 
FR 66789, Oct. 8, 1980; Order 135, 46 FR 19231, Mar. 30, 1981; 46 FR 
32239, June 22, 1981; Order 499, 53 FR 27002, July 18, 1988; Order 575, 
60 FR 4857, Jan. 25, 1995]



Sec. 292.203  General requirements for qualification.

    (a) Small power production facilities. Except as provided in 
paragraph (c) of this section, a small power production facility is a 
qualifying facility if it:
    (1) Meets the maximum size criteria specified in Sec. 292.204(a);
    (2) Meets the fuel use criteria specified in Sec. 292.204(b); and
    (3) Unless exempted by paragraph (d), has filed with the Commission 
a notice of self-certification, pursuant to Sec. 292.207(a); or has 
filed with the Commission an application for Commission certification, 
pursuant to Sec. 292.207(b)(1), that has been granted.
    (b) Cogeneration facilities. A cogeneration facility, including any 
diesel and dual-fuel cogeneration facility, is a qualifying facility if 
it:
    (1) Meets any applicable standards and criteria specified in 
Sec. Sec. 292.205(a), (b) and (d); and
    (2) Unless exempted by paragraph (d), has filed with the Commission 
a notice of self-certification, pursuant to Sec. 292.207(a); or has 
filed with the Commission an application for Commission certification, 
pursuant to Sec. 292.207(b)(1), that has been granted.
    (c) Hydroelectric small power production facilities located at a new 
dam or diversion. (1) A hydroelectric small power production facility 
that impounds or diverts the water of a natural watercourse by means of 
a new dam or diversion (as that term is defined in Sec. 292.202(p)) is 
a qualifying facility if it meets the requirements of:
    (i) Paragraph (a) of this section; and
    (ii) Section 292.208.
    (2) [Reserved]
    (d) Exemptions and waivers from filing requirement. (1) Any facility 
with a net power production capacity of 1 MW or less is exempt from the 
filing requirements of paragraphs (a)(3) and (b)(2) of this section.
    (2) The Commission may waive the requirement of paragraphs (a)(3) 
and (b)(2) of this section for good cause. Any applicant seeking waiver 
of paragraphs (a)(3) and (b)(2) of this section must file a petition for 
declaratory order describing in detail the reasons waiver is being 
sought.

[Order 732, 75 FR 15965, Mar. 30, 2010]



Sec. 292.204  Criteria for qualifying small power production facilities.

    (a) Size of the facility--(1) Maximum size. Except as provided in 
paragraph (a)(4) of this section, the power production capacity of a 
facility for which qualification is sought, together with the power 
production capacity of any other small power production facilities that 
use the same energy resource, are owned by the same person(s) or its 
affiliates, and are located at the same site, may not exceed 80 
megawatts.
    (2) Method of calculation. (i) For purposes of this paragraph, 
facilities are considered to be located at the same site as the facility 
for which qualification is sought if they are located within one mile of 
the facility for which qualification is sought and, for hydroelectric 
facilities, if they use water from the same impoundment for power 
generation.
    (ii) For purposes of making the determination in clause (i), the 
distance between facilities shall be measured from the electrical 
generating equipment of a facility.
    (3) Waiver. The Commission may modify the application of paragraph 
(a)(2) of this section, for good cause.
    (4) Exception. Facilities meeting the criteria in section 3(17)(E) 
of the Federal Power Act (16 U.S.C. 796(17)(E)) have no maximum size, 
and the power production capacity of such facilities shall be excluded 
from consideration when determining the maximum size of other small 
power production facilities within one mile of such facilities.
    (b) Fuel use. (1)(i) The primary energy source of the facility must 
be biomass, waste, renewable resources, geothermal

[[Page 833]]

resources, or any combination thereof, and 75 percent or more of the 
total energy input must be from these sources.
    (ii) Any primary energy source which, on the basis of its energy 
content, is 50 percent or more biomass shall be considered biomass.
    (2) Use of oil, natural gas and coal by a facility, under section 
3(17)(B) of the Federal Power Act, is limited to the minimum amounts of 
fuel required for ignition, startup, testing, flame stabilization, and 
control uses, and the minimum amounts of fuel required to alleviate or 
prevent unanticipated equipment outages, and emergencies, directly 
affecting the public health, safety, or welfare, which would result from 
electric power outages. Such fuel use may not, in the aggregate, exceed 
25 percent of the total energy input of the facility during the 12-month 
period beginning with the date the facility first produces electric 
energy and any calendar year subsequent to the year in which the 
facility first produces electric energy.

(Energy Security Act, Pub. L. 96-294, 94 Stat. 611 (1980) Public Utility 
Regulatory Policies Act of 1978, 16 U.S.C. 2601, et seq., Energy Supply 
and Environmental Coordination Act, 15, U.S.C. 791, et seq., Federal 
Power Act, as amended, 16 U.S.C. 792 et seq., Department of Energy 
Organization Act, 42 U.S.C. 7101, et seq.; E.O. 12009, 42 FR 46267)

[45 FR 17972, Mar. 20, 1980, as amended by Order 135, 46 FR 19231, Mar. 
30, 1981; Order 575, 60 FR 4857, Jan. 25, 1995; Order 732, 75 FR 15966, 
Mar. 30, 2010]



Sec. 292.205  Criteria for qualifying cogeneration facilities.

    (a) Operating and efficiency standards for topping-cycle 
facilities--(1) Operating standard. For any topping-cycle cogeneration 
facility, the useful thermal energy output of the facility must be no 
less than 5 percent of the total energy output during the 12-month 
period beginning with the date the facility first produces electric 
energy, and any calendar year subsequent to the year in which the 
facility first produces electric energy.
    (2) Efficiency standard. (i) For any topping-cycle cogeneration 
facility for which any of the energy input is natural gas or oil, and 
the installation of which began on or after March 13, 1980, the useful 
power output of the facility plus one-half the useful thermal energy 
output, during the 12-month period beginning with the date the facility 
first produces electric energy, and any calendar year subsequent to the 
year in which the facility first produces electric energy, must:
    (A) Subject to paragraph (a)(2)(i)(B) of this section be no less 
than 42.5 percent of the total energy input of natural gas and oil to 
the facility; or
    (B) If the useful thermal energy output is less than 15 percent of 
the total energy output of the facility, be no less than 45 percent of 
the total energy input of natural gas and oil to the facility.
    (ii) For any topping-cycle cogeneration facility not subject to 
paragraph (a)(2)(i) of this section there is no efficiency standard.
    (b) Efficiency standards for bottoming-cycle facilities. (1) For any 
bottoming-cycle cogeneration facility for which any of the energy input 
as supplementary firing is natural gas or oil, and the installation of 
which began on or after March 13, 1980, the useful power output of the 
facility during the 12-month period beginning with the date the facility 
first produces electric energy, and any calendar year subsequent to the 
year in which the facility first produces electric energy must be no 
less than 45 percent of the energy input of natural gas and oil for 
supplementary firing.
    (2) For any bottoming-cycle cogeneration facility not covered by 
paragraph (b)(1) of this section, there is no efficiency standard.
    (c) Waiver. The Commission may waive any of the requirements of 
paragraphs (a) and (b) of this section upon a showing that the facility 
will produce significant energy savings.
    (d) Criteria for new cogeneration facilities. Notwithstanding 
paragraphs (a) and (b) of this section, any cogeneration facility that 
was either not a qualifying cogeneration facility on or before August 8, 
2005, or that had not filed a notice of self-certification or an 
application for Commission certification as a qualifying cogeneration 
facility under Sec. 292.207 of this chapter prior to February 2, 2006, 
and which is seeking to sell electric energy pursuant

[[Page 834]]

to section 210 of the Public Utility Regulatory Policies Act of 1978, 16 
U.S.C. 824a-1, must also show:
    (1) The thermal energy output of the cogeneration facility is used 
in a productive and beneficial manner; and
    (2) The electrical, thermal, chemical and mechanical output of the 
cogeneration facility is used fundamentally for industrial, commercial, 
residential or institutional purposes and is not intended fundamentality 
for sale to an electric utility, taking into account technological, 
efficiency, economic, and variable thermal energy requirements, as well 
as state laws applicable to sales of electric energy from a qualifying 
facility to its host facility.
    (3) Fundamental use test. For the purpose of satisfying paragraph 
(d)(2) of this section, the electrical, thermal, chemical and mechanical 
output of the cogeneration facility will be considered used 
fundamentally for industrial, commercial, or institutional purposes, and 
not intended fundamentally for sale to an electric utility if at least 
50 percent of the aggregate of such output, on an annual basis, is used 
for industrial, commercial, residential or institutional purposes. In 
addition, applicants for facilities that do not meet this safe harbor 
standard may present evidence to the Commission that the facilities 
should nevertheless be certified given state laws applicable to sales of 
electric energy or unique technological, efficiency, economic, and 
variable thermal energy requirements.
    (4) For purposes of paragraphs (d)(1) and (2) of this section, a new 
cogeneration facility of 5 MW or smaller will be presumed to satisfy the 
requirements of those paragraphs.
    (5) For purposes of paragraph (d)(1) of this section, where a 
thermal host existed prior to the development of a new cogeneration 
facility whose thermal output will supplant the thermal source 
previously in use by the thermal host, the thermal output of such new 
cogeneration facility will be presumed to satisfy the requirements of 
paragraph (d)(1).

[45 FR 17972, Mar. 20, 1980, as amended by Order 478, 52 FR 28467, July 
30, 1987; Order 575, 60 FR 4857, Jan. 25, 1995; Order 671, 71 FR 7868, 
Feb. 15, 2006; Order 732, 75 FR 15966, Mar. 30, 2010; 76 FR 50663, Aug. 
16, 2011]



Sec. 292.207  Procedures for obtaining qualifying status.

    (a) Self-certification. The qualifying facility status of an 
existing or a proposed facility that meets the requirements of Sec. 
292.203 may be self-certified by the owner or operator of the facility 
or its representative by properly completing a Form No. 556 and filing 
that form with the Commission, pursuant to Sec. 131.80 of this chapter, 
and complying with paragraph (c) of this section.
    (b) Optional procedure--(1) Application for Commission 
certification. In lieu of the self-certification procedures in paragraph 
(a) of this section, an owner or operator of an existing or a proposed 
facility, or its representative, may file with the Commission an 
application for Commission certification that the facility is a 
qualifying facility. The application must be accompanied by the fee 
prescribed by part 381 of this chapter, and the applicant for Commission 
certification must comply with paragraph (c) of this section.
    (2) General contents of application. The application must include a 
properly completed Form No. 556 pursuant to Sec. 131.80 of this 
chapter.
    (3) Commission action. (i) Within 90 days of the later of the filing 
of an application or the filing of a supplement, amendment or other 
change to the application, the Commission will either: Inform the 
applicant that the application is deficient; or issue an order granting 
or denying the application; or toll the time for issuance of an order. 
Any order denying certification shall identify the specific requirements 
which were not met. If the Commission does not act within 90 days of the 
date of the latest filing, the application shall be deemed to have been 
granted.
    (ii) For purposes of paragraph (b) of this section, the date an 
application is filed is the date by which the Office of the Secretary 
has received all of the information and the appropriate filing fee 
necessary to comply with the requirements of this Part.
    (c) Notice requirements--(1) General. An applicant filing a self-
certification, self-recertification, application for Commission 
certification or application for Commission recertification of the 
qualifying status of its facility must concurrently serve a copy of such

[[Page 835]]

filing on each electric utility with which it expects to interconnect, 
transmit or sell electric energy to, or purchase supplementary, standby, 
back-up or maintenance power from, and the State regulatory authority of 
each state where the facility and each affected electric utility is 
located. The Commission will publish a notice in the Federal Register 
for each application for Commission certification and for each self-
certification of a cogeneration facility that is subject to the 
requirements of Sec. 292.205(d).
    (2) Facilities of 500 kW or more. An electric utility is not 
required to purchase electric energy from a facility with a net power 
production capacity of 500 kW or more until 90 days after the facility 
notifies the facility that it is a qualifying facility or 90 days after 
the utility meets the notice requirements in paragraph (c)(1) of this 
section.
    (d) Revocation of qualifying status. (1)(i) If a qualifying facility 
fails to conform with any material facts or representations presented by 
the cogenerator or small power producer in its submittals to the 
Commission, the notice of self-certification or Commission order 
certifying the qualifying status of the facility may no longer be relied 
upon. At that point, if the facility continues to conform to the 
Commission's qualifying criteria under this part, the cogenerator or 
small power producer may file either a notice of self-recertification of 
qualifying status pursuant to the requirements of paragraph (a) of this 
section, or an application for Commission recertification pursuant to 
the requirements of paragraph (b) of this section, as appropriate.
    (ii) The Commission may, on its own motion or on the motion of any 
person, revoke the qualifying status of a facility that has been 
certified under paragraph (b) of this section, if the facility fails to 
conform to any of the Commission's qualifying facility criteria under 
this part.
    (iii) The Commission may, on its own motion or on the motion of any 
person, revoke the qualifying status of a self-certified or self-
recertified qualifying facility if it finds that the self-certified or 
self-recertified qualifying facility does not meet the applicable 
requirements for qualifying facilities.
    (2) Prior to undertaking any substantial alteration or modification 
of a qualifying facility which has been certified under paragraph (b) of 
this section, a small power producer or cogenerator may apply to the 
Commission for a determination that the proposed alteration or 
modification will not result in a revocation of qualifying status. This 
application for Commission recertification of qualifying status should 
be submitted in accordance with paragraph (b) of this section.

[45 FR 17972, Mar. 20, 1980]

    Editorial Note: For Federal Register citations affecting Sec. 
292.207, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 292.208  Special requirements for hydroelectric small power production 

facilities located at a new dam or diversion.

    (a) A hydroelectric small power production facility that impounds or 
diverts the water of a natural watercourse by means of a new dam or 
diversion (as that term is defined in Sec. 292.202(p)) is a qualifying 
facility only if it meets the requirements of:
    (1) Paragraph (b) of this section;
    (2) Section 292.203(c); and
    (3) Part 4 of this chapter.
    (b) A hydroelectric small power production described in paragraph 
(a) is a qualifying facility only if:
    (1) The Commission finds, at the time it issues the license or 
exemption, that the project will not have a substantial adverse effect 
on the environment (as that term is defined in Sec. 292.202(q)), 
including recreation and water quality;
    (2) The Commission finds, at the time the application for the 
license or exemption is accepted for filing under Sec. 4.32 of this 
chapter, that the project is not located on any segment of a natural 
watercourse which:
    (i) Is included, or designated for potential inclusion in, a State 
or National wild and scenic river system; or
    (ii) The State has determined, in accordance with applicable State 
law, to possess unique natural, recreational, cultural or scenic 
attributes which

[[Page 836]]

would be adversely affected by hydroelectric development; and
    (3) The project meets the terms and conditions set by the 
appropriate fish and wildlife agencies under the same procedures as 
provided for under section 30(c) of the Federal Power Act.
    (c) For the Commission to make the findings in paragraph (b) of this 
section an applicant must:
    (1) Comply with the applicable hydroelectric licensing requirements 
in Part 4 of this chapter, including:
    (i) Completing the pre-filing consultation process under Sec. 4.38 
of this chapter, including performing any environmental studies which 
may be required under Sec. Sec. 4.38(b)(2)(i)(D) through (F) of this 
chapter; and
    (ii) Submitting with its application an environmental report that 
meets the requirements of Sec. 4.41(f) of this chapter, regardless of 
project size;
    (2) State whether the project is located on any segment of a natural 
watercourse which:
    (i) Is included in or designated for potential inclusion in:
    (A) The National Wild and Scenic River System (28 U.S.C. 1271-1278 
(1982)); or
    (B) A State wild and scenic river system;
    (ii) Crosses an area designated or recommended for designation under 
the Wilderness Act (16 U.S.C. 1132) as:
    (A) A wilderness area; or
    (B) Wilderness study area; or
    (iii) The State, either by or pursuant to an act of the State 
legislature, has determined to possess unique, natural, recreational, 
cultural, or scenic attributes that would be adversely affected by 
hydroelectric development.
    (d) If the project is located on any segment of a natural 
watercourse that meets any of the conditions in paragraph (c)(2) of this 
section, the applicant must provide the following information in its 
application:
    (1) The date on which the natural watercourse was protected;
    (2) The statutory authority under which the natural watercourse was 
protected; and
    (3) The Federal or state agency, or political subdivision of the 
state, that is in charge of administering the natural watercourse.

[Order 499, 53 FR 27003, July 18, 1988]



Sec. 292.209  Exceptions from requirements for hydroelectric small power 

production facilities located at a new dam or diversion.

    (a) The requirements in Sec. Sec. 292.208(b)(1) through (3) do not 
apply if:
    (1) An application for license or exemption is filed for a project 
located at a Government dam, as defined in section 3(10) of the Federal 
Power Act, at which non-Federal hydroelectric development is 
permissible; or
    (2) An application for license or exemption was filed and accepted 
before October 16, 1986.
    (b) The requirements in Sec. Sec. 292.208(b) (1) and (3) do not 
apply if an application for license or exemption was filed before 
October 16, 1986, and is accepted for filing by the Commission before 
October 16, 1989.
    (c) The requirements in Sec. 292.208(b)(3) do not apply to an 
applicant for license or exemption if:
    (1) The applicant files a petition pursuant to Sec. 292.210; and
    (2) The Commission grants the petition.
    (d) Any application covered by paragraph (a), (b), or (c) of this 
section is excepted from the moratorium imposed by section 8(e) of the 
Electric Consumers Protection Act of 1986, Pub. L. No. 99-495.

[Order 499, 53 FR 27003, July 18, 1988]



Sec. 292.210  Petition alleging commitment of substantial monetary resources 

before October 16, 1986.

    (a) An applicant covered by Sec. 292.203(c) whose application for 
license or exemption was filed on or after October 16, 1986, but before 
April 16, 1988, may file a petition for exception from the requirement 
in Sec. 292.208(b)(3) and the moratorium described in Sec. 
292.203(c)(2). The petition must show that prior to October 16, 1986, 
the applicant committed substantial monetary resources (as that term is 
defined in Sec. 292.202(r)) to the development of the project.
    (b) Subject to rebuttal under paragraph (d)(7)(ii) of this section, 
a showing of the commitment of substantial

[[Page 837]]

monetary resources will be presumed if the applicant held a preliminary 
permit for the project and had completed environmental consultations 
pursuant to Sec. 4.38 of this chapter before October 16, 1986.
    (c) Time of filing petition--(1) General rule. Except as provided in 
paragraph (c)(2) of this section, the applicant must:
    (i) File the petition with the application for license or exemption; 
or
    (ii) Submit with the application for license or exemption a request 
for an extension of time, not to exceed 90 days or April 16, 1988, 
whichever occurs first, in which to file the petition.
    (2) Exception. If the application for license or exemption was filed 
on or after October 16, 1986, but before March 23, 1987, the petition 
must have been filed by June 22, 1987.
    (d) Filing requirements. A petition filed under this section must 
include the following information or refer to the pages in the 
application for license or exemption where it can be found:
    (1) A certificate of service, conforming to the requirements set out 
in Sec. 385.2010(h) of this chapter, certifying that the applicant has 
served the petition on the Federal and State agencies required to be 
consulted by the applicant pursuant to Sec. 4.38 of this chapter;
    (2) Documentation of any issued preliminary permits for the project;
    (3) An itemized statement of the total costs expended on the 
application;
    (4) An itemized schedule of costs the applicant expended, or 
committed to be expended, before October 16, 1986, on the application, 
accompanied by supporting documentation including but not limited to:
    (i) Dated invoices for maps, surveys, supplies, geophysical and 
geotechnical services, engineering services, legal services, document 
reproduction, and other items related to the preparation of the 
application, and
    (ii) Written contracts and other written documentation demonstrating 
a commitment made before October 16, 1986, to expend monetary resources 
on the preparation of the application, together with evidence that those 
monetary resources were actually expended; and
    (5) Correspondence or other documentation to support the items 
listed in paragraphs (d)(3) and (d)(4) of this section to show that the 
expenses presented were directly related to the preparation of the 
application.
    (6) The applicant must include in its total cost statement and in 
its schedule of the costs expended or committed to be expended before 
October 16, 1986, the value of services that were performed by the 
applicant itself instead of contracted out.
    (7)(i) If the applicant held a preliminary permit for the project 
and had completed pre-filing consultation pursuant to Sec. 4.38 of this 
chapter prior to October 16, 1986, the applicant may, instead of 
submitting the information listed in paragraphs (d)(3), (d)(4), and 
(d)(5) of this section, submit a statement identifying the preliminary 
permit by project number.
    (ii) If any interested person objects (pursuant to Sec. 385.211 of 
this chapter) to the presumption in paragraph (b) of this section, the 
applicant must supply the information listed in paragraphs (d)(3), 
(d)(4), and (d)(5) of this section.
    (8) If the application is deficient pursuant to Sec. 4.32(e) of 
this chapter, the applicant must include with the information correcting 
those deficiencies a statement of the costs expended to make the 
corrections.
    (e) Processing of petition. (1) The Commission will issue a notice 
of the petition filed under this section and publish the notice in the 
Federal Register. The petition will be available for inspection and 
copying during regular business hours in the Public Reference Room 
maintained by the Division of Public Information.
    (2) Comments on the petition. The Commission will provide the public 
45 days from the date the notice of the petition is issued to submit 
comments. The applicant for license or exemption has 15 days after the 
expiration of the public comment period to respond to the comments filed 
with the Commission.
    (3) Commission action on petition. The Director of the Office of 
Energy Projects will determine whether or not the applicant for license 
or exemption

[[Page 838]]

has made the showing required under this section.

[Order 499, 53 FR 27003, July 18, 1988, as amended by Order 699, 72 FR 
45325, Aug. 14, 2007]



Sec. 292.211  Petition for initial determination on whether a project has a 

substantial adverse effect on the environment (AEE petition).

    (a) An applicant that has filed a petition under Sec. 292.210 may 
also file an AEE petition with the Commission for an initial 
determination on whether the project satisfies the requirement that it 
has no substantial adverse effect on the environment as specified in 
Sec. 292.208(b)(1).
    (b) The filing of the AEE petition does not relieve the applicant of 
the filing requirements of Sec. 292.208(c).
    (c) The Commission will act on the AEE petition only if the 
Commission has granted the applicant's commitment of resources petition 
under Sec. 292.210.
    (d) Time of filing petition. The applicant may file the AEE petition 
with the application for license or exemption or at any time before the 
Commission issues the license or exemption.
    (e) Contents of petition. The AEE petition must identify the project 
and request that the Commission make an initial determination on the 
adverse environmental effects requirements in Sec. 292.208(b)(1).
    (f) The Director of the Office of Energy Projects will make the 
initial determination on the AEE petition. In making this determination, 
the Director will consider the following:
    (1) Any proposed mitigative measures;
    (2) The consistency of the proposal with local, regional, and 
national resource plans and programs;
    (3) The mandatory terms and conditions of fish and wildlife agencies 
under section 210(j) of PURPA, or section 30(c) of the Federal Power 
Act; or the recommended terms and conditions of fish a wildlife agencies 
under Section 10(j) of the Federal Power Act, whichever is appropriate; 
and
    (4) Any other information which the Director believes is relevant to 
consider.
    (g) Initial finding on the petition. The Director of the Office of 
Energy Projects will make the initial determination on the AEE petition 
after the close of the public notice period for the accepted 
application. If the Director's initial determination finds:
    (1) No substantial adverse effect on the environment, the Commission 
must wait at least 45 days before making a final determination that the 
project satisfies the requirements of Sec. 292.208(b)(1).
    (2) A substantial adverse effect on the environment, the applicant 
may file, within 90 days of the initial finding that the project does 
not satisfy the requirements in Sec. 292.208(b)(1), proposed measures 
to mitigate the adverse environmental effects found.
    (3)(i) The Commission will provide written notice of the Director's 
initial finding on the petition to the applicant, to the federal and 
state agencies that the applicant must consult under Sec. 4.38 of this 
chapter and to any intervenors in the proceeding.
    (ii) The Commission will publish notice of the Director's initial 
finding in the Federal Register.
    (h) Notice and comment on the mitigative measures. (1) The 
Commission will issue notice of the mitigative measures filed by an 
applicant under paragraph (g)(2) of this section and will publish the 
notice in the Federal Register. The mitigative measures will be on file 
and available for inspection or copying during regular business hours in 
the Public Reference Room maintained by the Division of Public 
Information;
    (2) The Commission will provide the State and interested persons 
within 90 days from the date the notice is issued to review and submit 
comments on the mitigative measures. The applicant for license or 
exemption has 15 days after the expiration of the public comment period 
to respond to the comments filed with the Commission.
    (i) Material amendments to application. The proposed mitigative 
measures filed under paragraph (g)(2) of this section will not be 
considered a material amendment to the application unless the Commission 
finds that the proposed measures are unnecessary to, or

[[Page 839]]

exceed the scope of, mitigating substantial adverse effects. If the 
Commission finds the proposed mitigative measures constitute a material 
amendment, the application will be considered filed with the Commission 
on the date on which the applicant filed the proposed mitigative 
measures, and all other provisions of Sec. 4.35(a) of this chapter will 
apply.
    (j) Final determination on the petition. The Commission will make a 
final determination on the petition at the time the Commission issues a 
license or exemption for the project.
    (k) Presumption. (1) If, between the Commission's initial and final 
findings on the AEE petition, the State does not take any action under 
Sec. 292.208(b)(2), the failure to take action can be the basis for a 
presumption that there is not substantial adverse effect on the 
environment (as that term is defined in Sec. 292.202(q)).
    (2) If the presumption in paragraph (k)(1) of this section comes 
into effect, it:
    (i) Is only available for those adverse effects related to the 
natural, recreational, cultural, or scenic attributes of the 
environment;
    (ii) Can only operate during the time between the Commission's 
initial and final findings on the AEE petition; and
    (iii) Has no affect on the Commission's independent obligation to 
find that the project will not have a substantial adverse effect on the 
environment under Sec. 292.208(b)(1).
    (3) The presumption in paragraph (k)(1) of this section does not 
take effect if the State, the Commission or an interested person 
demonstrates that the State has acted to protect the natural watercourse 
under Sec. 292.208(b)(2).
    (4) The presumption in paragraph (k)(1) of this section can be 
rebutted if:
    (i) The Commission determines that the project will have a 
substantial adverse effect on the environment related to the 
environmental attributes listed in paragraph (k)(2)(i) of this section; 
or
    (ii) Any interested person, including a State, demonstrates that the 
project will have a substantial adverse effect on the environment 
related to the environmental attributes listed in paragraph (k)(2)(i) of 
this section.

[Order 499, 53 FR 27004, July 18, 1988, as amended by Order 499-A, 53 FR 
40724, Oct. 18, 1988; Order 699, 72 FR 45325, Aug. 14, 2007]



    Subpart C_Arrangements Between Electric Utilities and Qualifying 

Cogeneration and Small Power Production Facilities Under Section 210 of 

           the Public Utility Regulatory Policies Act of 1978

    Authority: Public Utility Regulatory Policies Act of 1978, 16 U.S.C. 
2601 et seq., Energy Supply and Environmental Coordination Act, 15 
U.S.C. 791 et seq. Federal Power Act, 16 U.S.C. 792 et seq., Department 
of Energy Organization Act, 42 U.S.C. 7101 et seq., E.O. 12009, 42 FR 
46267.

    Source: Order 69, 45 FR 12234, Feb. 25, 1980, unless otherwise 
noted.



Sec. 292.301  Scope.

    (a) Applicability. This subpart applies to the regulation of sales 
and purchases between qualifying facilities and electric utilities.
    (b) Negotiated rates or terms. Nothing in this subpart:
    (1) Limits the authority of any electric utility or any qualifying 
facility to agree to a rate for any purchase, or terms or conditions 
relating to any purchase, which differ from the rate or terms or 
conditions which would otherwise be required by this subpart; or
    (2) Affects the validity of any contract entered into between a 
qualifying facility and an electric utility for any purchase.



Sec. 292.302  Availability of electric utility system cost data.

    (a) Applicability. (1) Except as provided in paragraph (a)(2) of 
this section, paragraph (b) applies to each electric utility, in any 
calendar year, if the total sales of electric energy by such utility for 
purposes other than resale exceeded 500 million kilowatt-hours during 
any calendar year beginning after December 31, 1975, and before the 
immediately preceding calendar year.
    (2) Each utility having total sales of electric energy for purposes 
other than resale of less than one billion kilowatt-

[[Page 840]]

hours during any calendar year beginning after December 31, 1975, and 
before the immediately preceding year, shall not be subject to the 
provisions of this section until June 30, 1982.
    (b) General rule. To make available data from which avoided costs 
may be derived, not later than November 1, 1980, June 30, 1982, and not 
less often than every two years thereafter, each regulated electric 
utility described in paragraph (a) of this section shall provide to its 
State regulatory authority, and shall maintain for public inspection, 
and each nonregulated electric utility described in paragraph (a) of 
this section shall maintain for public inspection, the following data:
    (1) The estimated avoided cost on the electric utility's system, 
solely with respect to the energy component, for various levels of 
purchases from qualifying facilities. Such levels of purchases shall be 
stated in blocks of not more than 100 megawatts for systems with peak 
demand of 1000 megawatts or more, and in blocks equivalent to not more 
than 10 percent of the system peak demand for systems of less than 1000 
megawatts. The avoided costs shall be stated on a cents per kilowatt-
hour basis, during daily and seasonal peak and off-peak periods, by 
year, for the current calendar year and each of the next 5 years;
    (2) The electric utility's plan for the addition of capacity by 
amount and type, for purchases of firm energy and capacity, and for 
capacity retirements for each year during the succeeding 10 years; and
    (3) The estimated capacity costs at completion of the planned 
capacity additions and planned capacity firm purchases, on the basis of 
dollars per kilowatt, and the associated energy costs of each unit, 
expressed in cents per kilowatt hour. These costs shall be expressed in 
terms of individual generating units and of individual planned firm 
purchases.
    (c) Special rule for small electric utilities. (1) Each electric 
utility (other than any electric utility to which paragraph (b) of this 
section applies) shall, upon request:
    (i) Provide comparable data to that required under paragraph (b) of 
this section to enable qualifying facilities to estimate the electric 
utility's avoided costs for periods described in paragraph (b) of this 
section; or
    (ii) With regard to an electric utility which is legally obligated 
to obtain all its requirements for electric energy and capacity from 
another electric utility, provide the data of its supplying utility and 
the rates at which it currently purchases such energy and capacity.
    (2) If any such electric utility fails to provide such information 
on request, the qualifying facility may apply to the State regulatory 
authority (which has ratemaking authority over the electric utility) or 
the Commission for an order requiring that the information be provided.
    (d) Substitution of alternative method. (1) After public notice in 
the area served by the electric utility, and after opportunity for 
public comment, any State regulatory authority may require (with respect 
to any electric utility over which it has ratemaking authority), or any 
non-regulated electric utility may provide, data different than those 
which are otherwise required by this section if it determines that 
avoided costs can be derived from such data.
    (2) Any State regulatory authority (with respect to any electric 
utility over which it has ratemaking authority) or nonregulated utility 
which requires such different data shall notify the Commission within 30 
days of making such determination.
    (e) State Review. (1) Any data submitted by an electric utility 
under this section shall be subject to review by the State regulatory 
authority which has ratemaking authority over such electric utility.
    (2) In any such review, the electric utility has the burden of 
coming forward with justification for its data.

[45 FR 12234, Feb. 25, 1980; 45 FR 24126, Apr. 9, 1980]



Sec. 292.303  Electric utility obligations under this subpart.

    (a) Obligation to purchase from qualifying facilities. Each electric 
utility shall purchase, in accordance with Sec. 292.304, unless 
exempted by Sec. 292.309 and Sec. 292.310, any energy and capacity

[[Page 841]]

which is made available from a qualifying facility:
    (1) Directly to the electric utility; or
    (2) Indirectly to the electric utility in accordance with paragraph 
(d) of this section.
    (b) Obligation to sell to qualifying facilities. Each electric 
utility shall sell to any qualifying facility, in accordance with Sec. 
292.305, unless exempted by Sec. 292.312, energy and capacity requested 
by the qualifying facility.
    (c) Obligation to interconnect. (1) Subject to paragraph (c)(2) of 
this section, any electric utility shall make such interconnection costs 
with any qualifying facility as may be necessary to accomplish purchases 
or sales under this subpart. The obligation to pay for any 
interconnection shall be determined in accordance with Sec. 292.306.
    (2) No electric utility is required to interconnect with any 
qualifying facility if, solely by reason of purchases or sales over the 
interconnection, the electric utility would become subject to regulation 
as a public utility under part II of the Federal Power Act.
    (d) Transmission to other electric utilities. If a qualifying 
facility agrees, an electric utility which would otherwise be obligated 
to purchase energy or capacity from such qualifying facility may 
transmit the energy or capacity to any other electric utility. Any 
electric utility to which such energy or capacity is transmitted shall 
purchase such energy or capacity under this subpart as if the qualifying 
facility were supplying energy or capacity directly to such electric 
utility. The rate for purchase by the electric utility to which such 
energy is transmitted shall be adjusted up or down to reflect line 
losses pursuant to Sec. 292.304(e)(4) and shall not include any charges 
for transmission.
    (e) Parallel operation. Each electric utility shall offer to operate 
in parallel with a qualifying facility, provided that the qualifying 
facility complies with any applicable standards established in 
accordance with Sec. 292.308.

[Order 688, 71 FR 64372, Nov. 1, 2006; 71 FR 75662, Dec. 18, 2006]



Sec. 292.304  Rates for purchases.

    (a) Rates for purchases. (1) Rates for purchases shall:
    (i) Be just and reasonable to the electric consumer of the electric 
utility and in the public interest; and
    (ii) Not discriminate against qualifying cogeneration and small 
power production facilities.
    (2) Nothing in this subpart requires any electric utility to pay 
more than the avoided costs for purchases.
    (b) Relationship to avoided costs. (1) For purposes of this 
paragraph, ``new capacity'' means any purchase from capacity of a 
qualifying facility, construction of which was commenced on or after 
November 9, 1978.
    (2) Subject to paragraph (b)(3) of this section, a rate for 
purchases satisfies the requirements of paragraph (a) of this section if 
the rate equals the avoided costs determined after consideration of the 
factors set forth in paragraph (e) of this section
    (3) A rate for purchases (other than from new capacity) may be less 
than the avoided cost if the State regulatory authority (with respect to 
any electric utility over which it has ratemaking authority) or the 
nonregulated electric utility determines that a lower rate is consistent 
with paragraph (a) of this section, and is sufficient to encourage 
cogeneration and small power production.
    (4) Rates for purchases from new capacity shall be in accordance 
with paragraph (b)(2) of this section, regardless of whether the 
electric utility making such purchases is simultaneously making sales to 
the qualifying facility.
    (5) In the case in which the rates for purchases are based upon 
estimates of avoided costs over the specific term of the contract or 
other legally enforceable obligation, the rates for such purchases do 
not violate this subpart if the rates for such purchases differ from 
avoided costs at the time of delivery.
    (c) Standard rates for purchases. (1) There shall be put into effect 
(with respect to each electric utility) standard rates for purchases 
from qualifying facilities with a design capacity of 100 kilowatts or 
less.
    (2) There may be put into effect standard rates for purchases from 
qualifying facilities with a design capacity of more than 100 kilowatts.

[[Page 842]]

    (3) The standard rates for purchases under this paragraph:
    (i) Shall be consistent with paragraphs (a) and (e) of this section; 
and
    (ii) May differentiate among qualifying facilities using various 
technologies on the basis of the supply characteristics of the different 
technologies.
    (d) Purchases ``as available'' or pursuant to a legally enforceable 
obligation. Each qualifying facility shall have the option either:
    (1) To provide energy as the qualifying facility determines such 
energy to be available for such purchases, in which case the rates for 
such purchases shall be based on the purchasing utility's avoided costs 
calculated at the time of delivery; or
    (2) To provide energy or capacity pursuant to a legally enforceable 
obligation for the delivery of energy or capacity over a specified term, 
in which case the rates for such purchases shall, at the option of the 
qualifying facility exercised prior to the beginning of the specified 
term, be based on either:
    (i) The avoided costs calculated at the time of delivery; or
    (ii) The avoided costs calculated at the time the obligation is 
incurred.
    (e) Factors affecting rates for purchases. In determining avoided 
costs, the following factors shall, to the extent practicable, be taken 
into account:
    (1) The data provided pursuant to Sec. 292.302(b), (c), or (d), 
including State review of any such data;
    (2) The availability of capacity or energy from a qualifying 
facility during the system daily and seasonal peak periods, including:
    (i) The ability of the utility to dispatch the qualifying facility;
    (ii) The expected or demonstrated reliability of the qualifying 
facility;
    (iii) The terms of any contract or other legally enforceable 
obligation, including the duration of the obligation, termination notice 
requirement and sanctions for non-compliance;
    (iv) The extent to which scheduled outages of the qualifying 
facility can be usefully coordinated with scheduled outages of the 
utility's facilities;
    (v) The usefulness of energy and capacity supplied from a qualifying 
facility during system emergencies, including its ability to separate 
its load from its generation;
    (vi) The individual and aggregate value of energy and capacity from 
qualifying facilities on the electric utility's system; and
    (vii) The smaller capacity increments and the shorter lead times 
available with additions of capacity from qualifying facilities; and
    (3) The relationship of the availability of energy or capacity from 
the qualifying facility as derived in paragraph (e)(2) of this section, 
to the ability of the electric utility to avoid costs, including the 
deferral of capacity additions and the reduction of fossil fuel use; and
    (4) The costs or savings resulting from variations in line losses 
from those that would have existed in the absence of purchases from a 
qualifying facility, if the purchasing electric utility generated an 
equivalent amount of energy itself or purchased an equivalent amount of 
electric energy or capacity.
    (f) Periods during which purchases not required. (1) Any electric 
utility which gives notice pursuant to paragraph (f)(2) of this section 
will not be required to purchase electric energy or capacity during any 
period during which, due to operational circumstances, purchases from 
qualifying facilities will result in costs greater than those which the 
utility would incur if it did not make such purchases, but instead 
generated an equivalent amount of energy itself.
    (2) Any electric utility seeking to invoke paragraph (f)(1) of this 
section must notify, in accordance with applicable State law or 
regulation, each affected qualifying facility in time for the qualifying 
facility to cease the delivery of energy or capacity to the electric 
utility.
    (3) Any electric utility which fails to comply with the provisions 
of paragraph (f)(2) of this section will be required to pay the same 
rate for such purchase of energy or capacity as would be required had 
the period described in paragraph (f)(1) of this section not occurred.
    (4) A claim by an electric utility that such a period has occurred 
or will

[[Page 843]]

occur is subject to such verification by its State regulatory authority 
as the State regulatory authority determines necessary or appropriate, 
either before or after the occurrence.



Sec. 292.305  Rates for sales.

    (a) General rules. (1) Rates for sales:
    (i) Shall be just and reasonable and in the public interest; and
    (ii) Shall not discriminate against any qualifying facility in 
comparison to rates for sales to other customers served by the electric 
utility.
    (2) Rates for sales which are based on accurate data and consistent 
systemwide costing principles shall not be considered to discriminate 
against any qualifying facility to the extent that such rates apply to 
the utility's other customers with similar load or other cost-related 
characteristics.
    (b) Additional services to be provided to qualifying facilities. (1) 
Upon request of a qualifying facility, each electric utility shall 
provide:
    (i) Supplementary power;
    (ii) Back-up power;
    (iii) Maintenance power; and
    (iv) Interruptible power.
    (2) The State regulatory authority (with respect to any electric 
utility over which it has ratemaking authority) and the Commission (with 
respect to any nonregulated electric utility) may waive any requirement 
of paragraph (b)(1) of this section if, after notice in the area served 
by the electric utility and after opportunity for public comment, the 
electric utility demonstrates and the State regulatory authority or the 
Commission, as the case may be, finds that compliance with such 
requirement will:
    (i) Impair the electric utility's ability to render adequate service 
to its customers; or
    (ii) Place an undue burden on the electric utility.
    (c) Rates for sales of back-up and maintenance power. The rate for 
sales of back-up power or maintenance power:
    (1) Shall not be based upon an assumption (unless supported by 
factual data) that forced outages or other reductions in electric output 
by all qualifying facilities on an electric utility's system will occur 
simultaneously, or during the system peak, or both; and
    (2) Shall take into account the extent to which scheduled outages of 
the qualifying facilities can be usefully coordinated with scheduled 
outages of the utility's facilities.



Sec. 292.306  Interconnection costs.

    (a) Obligation to pay. Each qualifying facility shall be obligated 
to pay any interconnection costs which the State regulatory authority 
(with respect to any electric utility over which it has ratemaking 
authority) or nonregulated electric utility may assess against the 
qualifying facility on a nondiscriminatory basis with respect to other 
customers with similar load characteristics.
    (b) Reimbursement of interconnection costs. Each State regulatory 
authority (with respect to any electric utility over which it has 
ratemaking authority) and nonregulated utility shall determine the 
manner for payments of interconnection costs, which may include 
reimbursement over a reasonable period of time.



Sec. 292.307  System emergencies.

    (a) Qualifying facility obligation to provide power during system 
emergencies. A qualifying facility shall be required to provide energy 
or capacity to an electric utility during a system emergency only to the 
extent:
    (1) Provided by agreement between such qualifying facility and 
electric utility; or
    (2) Ordered under section 202(c) of the Federal Power Act.
    (b) Discontinuance of purchases and sales during system emergencies. 
During any system emergency, an electric utility may discontinue:
    (1) Purchases from a qualifying facility if such purchases would 
contribute to such emergency; and
    (2) Sales to a qualifying facility, provided that such 
discontinuance is on a nondiscriminatory basis.



Sec. 292.308  Standards for operating reliability.

    Any State regulatory authority (with respect to any electric utility 
over which it has ratemaking authority) or nonregulated electric utility 
may establish reasonable standards to ensure

[[Page 844]]

system safety and reliability of interconnected operations. Such 
standards may be recommended by any electric utility, any qualifying 
facility, or any other person. If any State regulatory authority (with 
respect to any electric utility over which it has ratemaking authority) 
or nonregulated electric utility establishes such standards, it shall 
specify the need for such standards on the basis of system safety and 
reliability.



Sec. 292.309  Termination of obligation to purchase from qualifying 

facilities.

    (a) After August 8, 2005, an electric utility shall not be required, 
under this part, to enter into a new contract or obligation to purchase 
electric energy from a qualifying cogeneration facility or a qualifying 
small power production facility if the Commission finds that the 
qualifying cogeneration facility or qualifying small power facility 
production has nondiscriminatory access to:
    (1)(i) Independently administered, auction-based day ahead and real 
time wholesale markets for the sale of electric energy; and
    (ii) Wholesale markets for long-term sales of capacity and electric 
energy; or
    (2)(i) Transmission and interconnection services that are provided 
by a Commission-approved regional transmission entity and administered 
pursuant to an open access transmission tariff that affords 
nondiscriminatory treatment to all customers; and
    (ii) Competitive wholesale markets that provide a meaningful 
opportunity to sell capacity, including long-term and short-term sales, 
and electric energy, including long-term, short-term and real-time 
sales, to buyers other than the utility to which the qualifying facility 
is interconnected. In determining whether a meaningful opportunity to 
sell exists, the Commission shall consider, among other factors, 
evidence of transactions within the relevant market; or
    (3) Wholesale markets for the sale of capacity and electric energy 
that are, at a minimum, of comparable competitive quality as markets 
described in paragraphs (a)(1) and (a)(2) of this section.
    (b) For purposes of Sec. 292.309(a), a renewal of a contract that 
expires by its own terms is a ``new contract or obligation'' without a 
continuing obligation to purchase under an expired contract.
    (c) For purposes of Sec. 292.309(a)(1), (2) and (3), with the 
exception of paragraph (d) of this section, there is a rebuttable 
presumption that a qualifying facility has nondiscriminatory access to 
the market if it is eligible for service under a Commission-approved 
open access transmission tariff or Commission-filed reciprocity tariff, 
and Commission-approved interconnection rules. If the Commission 
determines that a market meets the criteria of Sec. 292.309(a)(1), (2) 
or (3), and if a qualifying facility in the relevant market is eligible 
for service under a Commission-approved open access transmission tariff 
or Commission-filed reciprocity tariff, a qualifying facility may seek 
to rebut the presumption of access to the market by demonstrating, inter 
alia, that it does not have access to the market because of operational 
characteristics or transmission constraints.
    (d)(1) For purposes of Sec. 292.309(a)(1), (2), and (3), there is a 
rebuttable presumption that a qualifying facility with a capacity at or 
below 20 megawatts does not have nondiscriminatory access to the market.
    (2) For purposes of implementing paragraph (d)(1) of this section, 
the Commission will not be bound by the one-mile standard set forth in 
Sec. 292.204(a)(2).
    (e) Midwest Independent Transmission System Operator (Midwest ISO), 
PJM Interconnection, L.L.C. (PJM), ISO New England, Inc. (ISO-NE), and 
New York Independent System Operator (NYISO) qualify as markets 
described in Sec. 292.309(a)(1)(i) and (ii), and there is a rebuttable 
presumption that qualifying facilities with a capacity greater than 20 
megawatts have nondiscriminatory access to those markets through 
Commission-approved open access transmission tariffs and interconnection 
rules, and that electric utilities that are members of such regional 
transmission organizations or independent system operators (RTO/ISOs) 
should be relieved of the obligation to purchase electric energy from

[[Page 845]]

the qualifying facilities. A qualifying facility may seek to rebut this 
presumption by demonstrating, inter alia, that:
    (1) The qualifying facility has certain operational characteristics 
that effectively prevent the qualifying facility's participation in a 
market; or
    (2) The qualifying facility lacks access to markets due to 
transmission constraints. The qualifying facility may show that it is 
located in an area where persistent transmission constraints in effect 
cause the qualifying facility not to have access to markets outside a 
persistently congested area to sell the qualifying facility output or 
capacity.
    (f) The Electric Reliability Council of Texas (ERCOT) qualifies as a 
market described in Sec. 292.309(a)(3), and there is a rebuttable 
presumption that qualifying facilities with a capacity greater than 20 
megawatts have nondiscriminatory access to that market through Public 
Utility Commission of Texas (PUCT) approved open access protocols, and 
that electric utilities that operate within ERCOT should be relieved of 
the obligation to purchase electric energy from the qualifying 
facilities. A qualifying facility may seek to rebut this presumption by 
demonstrating, inter alia, that:
    (1) The qualifying facility has certain operational characteristics 
that effectively prevent the qualifying facility's participation in a 
market; or
    (2) The qualifying facility lacks access to markets due to 
transmission constraints. The qualifying facility may show that it is 
located in an area where persistent transmission constraints in effect 
cause the qualifying facility not to have access to markets outside a 
persistently congested area to sell the qualifying facility output or 
capacity.
    (g) The California Independent System Operator and Southwest Power 
Pool, Inc. satisfy the criteria of Sec. 292.309(a)(2)(i).
    (h) No electric utility shall be required, under this part, to enter 
into a new contract or obligation to purchase from or sell electric 
energy to a facility that is not an existing qualifying cogeneration 
facility unless the facility meets the criteria for new qualifying 
cogeneration facilities established by the Commission in Sec. 292.205.
    (i) For purposes of Sec. 292.309(h), an ``existing qualifying 
cogeneration facility'' is a facility that:
    (1) Was a qualifying cogeneration facility on or before August 8, 
2005; or
    (2) Had filed with the Commission a notice of self-certification or 
self-recertification, or an application for Commission certification, 
under Sec. 292.207 prior to February 2, 2006.
    (j) For purposes of Sec. 292.309(h), a ``new qualifying 
cogeneration facility'' is a facility that satisfies the criteria for 
qualifying cogeneration facilities pursuant to Sec. 292.205.

[Order 688, 71 FR 64372, Nov. 1, 2006; 71 FR 75662, Dec. 18, 2006]



Sec. 292.310  Procedures for utilities requesting termination of obligation to 

purchase from qualifying facilities.

    (a) An electric utility may file an application with the Commission 
for relief from the mandatory purchase requirement under Sec. 
292.303(a) pursuant to this section on a service territory-wide basis. 
Such application shall set forth the factual basis upon which relief is 
requested and describe why the conditions set forth in Sec. 
292.309(a)(1), (2) or (3) have been met. After notice, including 
sufficient notice to potentially affected qualifying cogeneration 
facilities and qualifying small power production facilities, and an 
opportunity for comment, the Commission shall make a final determination 
within 90 days of such application regarding whether the conditions set 
forth in Sec. 292.309(a)(1), (2) or (3) have been met.
    (b) Sufficient notice shall mean that an electric utility must 
identify with names and addresses all potentially affected qualifying 
facilities in an application filed pursuant to paragraph (a).
    (c) An electric utility must submit with its application for each 
potentially affected qualifying facility: The docket number assigned if 
the qualifying facility filed for self-certification or an application 
for Commission certification of qualifying facility status; the net 
capacity of the qualifying facility; the location of the qualifying 
facility depicted by state and county, and

[[Page 846]]

the name and location of the substation where the qualifying facility is 
interconnected; the interconnection status of each potentially affected 
qualifying facility including whether the qualifying facility is 
interconnected as an energy or a network resource; and the expiration 
date of the energy and/or capacity agreement between the applicant 
utility and each potentially affected qualifying facility. All 
potentially affected qualifying facilities shall include:
    (1) Those qualifying facilities that have existing power purchase 
contracts with the applicant;
    (2) Other qualifying facilities that sell their output to the 
applicant or that have pending self-certification or Commission 
certification with the Commission for qualifying facility status whereby 
the applicant will be the purchaser of the qualifying facility's output;
    (3) Any developer of generating facilities with whom the applicant 
has agreed to enter into power purchase contracts, as of the date of the 
application filed pursuant to this section, or are in discussion, as of 
the date of the application filed pursuant to this section, with regard 
to power purchase contacts;
    (4) The developers of facilities that have pending state avoided 
cost proceedings, as of the date of the application filed pursuant to 
this section; and
    (5) Any other qualifying facilities that the applicant reasonably 
believes to be affected by its application filed pursuant to paragraph 
(a) of this section.
    (d) The following information must be filed with an application:
    (1) Identify whether applicant seeks a finding under the provisions 
of Sec. 292.309(a)(1), (2), or (3).
    (2) A narrative setting forth the factual basis upon which relief is 
requested and describing why the conditions set forth in Sec. 
292.309(a)(1), (2), or (3) have been met. Applicant should also state in 
its application whether it is relying on the findings or rebuttable 
presumptions contained in Sec. 292.309(e), (f) or (g). To the extent 
applicant seeks relief from the purchase obligation with respect to a 
qualifying facility 20 megawatts or smaller, and thus seeks to rebut the 
presumption in Sec. 292.309(d), applicant must also set forth, and 
submit evidence of, the factual basis supporting its contention that the 
qualifying facility has nondiscriminatory access to the wholesale 
markets which are the basis for the applicant's filing.
    (3) Transmission Studies and related information, including:
    (i) The applicant's long-term transmission plan, conducted by 
applicant, or the RTO, ISO or other relevant entity;
    (ii) Transmission constraints by path, element or other level of 
comparable detail that have occurred and/or are known and expected to 
occur, and any proposed mitigation including transmission construction 
plans;
    (iii) Levels of congestion, if available;
    (iv) Relevant system impact studies for the generation 
interconnections, already completed;
    (v) Other information pertinent to showing whether transfer 
capability is available; and
    (vi) The appropriate link to applicant's OASIS, if any, from which a 
qualifying facility may obtain applicant's available transfer capability 
(ATC) information.
    (4) Describe the process, procedures and practices that qualifying 
facilities interconnected to the applicant's system must follow to 
arrange for the transmission service to transfer power to purchasers 
other than the applicant. This description must include the process, 
procedures and practices of all distribution, transmission and regional 
transmission facilities necessary for qualifying facility access to the 
market.
    (5) If qualifying facilities will be required to execute new 
interconnection agreements, or renegotiate existing agreements so that 
they can effectuate wholesale sales to third-party purchasers, explain 
the requirements, charges and the process to be followed. Also, explain 
any differences in these requirements as they apply to qualifying 
facilities compared to other generators, or to applicant-owned 
generation.
    (6) Applicants seeking a Commission finding pursuant to Sec. 
292.309(a)(2) or (3), except those applicants located in

[[Page 847]]

ERCOT, also must provide evidence of competitive wholesale markets that 
provide a meaningful opportunity to sell capacity, including long-term 
and short-term sales, and electric energy, including long-term, short-
term and real-time sales, to buyers other than the utility to which the 
qualifying facility is interconnected. In demonstrating that a 
meaningful opportunity to sell exists, provide evidence of transactions 
within the relevant market. Applicants must include a list of known or 
potential purchasers, e.g., jurisdictional and non-jurisdictional 
utilities as well as retail energy service providers.
    (7) Signature of authorized individual evidencing the accuracy and 
authenticity of information provided by applicant.
    (8) Person(s) to whom communications regarding the filed information 
may be addressed, including name, title, telephone number, and mailing 
address.

[Order 688, 71 FR 64372, Nov. 1, 2006, as amended by Order 688-A, 72 FR 
35892, June 29, 2007]



Sec. 292.311  Reinstatement of obligation to purchase.

    At any time after the Commission makes a finding under Sec. Sec. 
292.309 and 292.310 relieving an electric utility of its obligation to 
purchase electric energy, a qualifying cogeneration facility, a 
qualifying small power production facility, a State agency, or any other 
affected person may apply to the Commission for an order reinstating the 
electric utility's obligation to purchase electric energy under this 
section. Such application shall set forth the factual basis upon which 
the application is based and describe why the conditions set forth in 
Sec. 292.309(a), (b) or (c) are no longer met. After notice, including 
sufficient notice to potentially affected electric utilities, and 
opportunity for comment, the Commission shall issue an order within 90 
days of such application reinstating the electric utility's obligation 
to purchase electric energy under this section if the Commission finds 
that the conditions set forth in Sec. 292.309(a), (b), or (c) which 
relieved the obligation to purchase, are no longer met.

[Order 688, 71 FR 64372, Nov. 1, 2006]



Sec. 292.312  Termination of obligation to sell to qualifying facilities.

    (a) Any electric utility may file an application with the Commission 
for relief from the mandatory obligation to sell under this section on a 
service territory-wide basis or a single qualifying facility basis. Such 
application shall set forth the factual basis upon which relief is 
requested and describe why the conditions set forth in paragraphs (b)(1) 
and (b)(2) of this section have been met. After notice, including 
sufficient notice to potentially affected qualifying facilities, and an 
opportunity for comment, the Commission shall make a final determination 
within 90 days of such application regarding whether the conditions set 
forth in paragraphs (b)(1) and (b)(2) of this section have been met.
    (b) After August 8, 2005, an electric utility shall not be required 
to enter into a new contract or obligation to sell electric energy to a 
qualifying small power production facility, an existing qualifying 
cogeneration facility, or a new qualifying cogeneration facility if the 
Commission has found that;
    (1) Competing retail electric suppliers are willing and able to sell 
and deliver electric energy to the qualifying cogeneration facility or 
qualifying small power production facility; and
    (2) The electric utility is not required by State law to sell 
electric energy in its service territory.

[Order 688, 71 FR 64372, Nov. 1, 2006; 71 FR 75662, Dec. 18, 2006]



Sec. 292.313  Reinstatement of obligation to sell.

    At any time after the Commission makes a finding under Sec. 292.312 
relieving an electric utility of its obligation to sell electric energy, 
a qualifying cogeneration facility, a qualifying small power production 
facility, a State agency, or any other affected person may apply to the 
Commission for an order reinstating the electric utility's obligation to 
purchase electric energy under this section. Such application

[[Page 848]]

shall set forth the factual basis upon which the application is based 
and describe why the conditions set forth in Paragraph (b)(1) and (b)(2) 
of this section are no longer met. After notice, including sufficient 
notice to potentially affected utilities, and opportunity for comment, 
the Commission shall issue an order within 90 days of such application 
reinstating the electric utility's obligation to sell electric energy 
under this section if the Commission finds that the conditions set forth 
in paragraphs (b)(1) and (b)(2) of this section are no longer met.

[Order 688, 71 FR 64372, Nov. 1, 2006]



Sec. 292.314  Existing rights and remedies.

    Nothing in this section affects the rights or remedies of any party 
under any contract or obligation, in effect or pending approval before 
the appropriate State regulatory authority or non-regulated electric 
utility on or before August 8, 2005, to purchase electric energy or 
capacity from or to sell electric energy or capacity to a qualifying 
cogeneration facility or qualifying small power production facility 
under this Act (including the right to recover costs of purchasing 
electric energy or capacity).

[Order 688, 71 FR 64372, Nov. 1, 2006]



                        Subpart D_Implementation

    Authority: Public Utility Regulatory Policies Act of 1978, 16 U.S.C. 
2601 et seq., Energy Supply and Environmental Coordination Act, 15 
U.S.C. 791 et seq., Federal Power Act, 16 U.S.C. 792 et seq., Department 
of Energy Organization Act, 42 U.S.C. 7101 et seq., E.O. 12009, 42 FR 
46267.

    Source: Order 69, 45 FR 12236, Feb. 25, 1980, unless otherwise 
noted.



Sec. 292.401  Implementation of certain reporting requirements.

    Any electric utility which fails to comply with the requirements of 
Sec. 292.302(b) shall be subject to the same penalties to which it may 
be subjected for failure to comply with the requirements of the 
Commission's regulations issued under section 133 of PURPA.

[45 FR 12236, Feb. 25, 1980. Redesignated by Order 541, 57 FR 21734, May 
22, 1992]



Sec. 292.402  Waivers.

    (a) State regulatory authority and nonregulated electric utility 
waivers. Any State regulatory authority (with respect to any electric 
utility over which it has ratemaking authority) or nonregulated electric 
utility may, after public notice in the area served by the electric 
utility, apply for a waiver from the application of any of the 
requirements of subpart C (other than Sec. 292.302 thereof).
    (b) Commission action. The Commission will grant such a wavier only 
if an applicant under paragraph (a) of this section demonstrates that 
compliance with any of the requirements of subpart C is not necessary to 
encourage cogeneration and small power production and is not otherwise 
required under section 210 of PURPA.

[45 FR 12236, Feb. 25, 1980. Redesignated by Order 541, 57 FR 21734, May 
22, 1992]

Subpart E [Reserved]



Subpart F_Exemption of Qualifying Small Power Production Facilities and 

    Cogeneration Facilities from Certain Federal and State Laws and 

                               Regulations



Sec. 292.601  Exemption to qualifying facilities from the Federal Power Act.

    (a) Applicability. This section applies to qualifying facilities, 
other than those described in paragraph (b) of this section. This 
section also applies to qualifying facilities that meet the criteria of 
section 3(17)(E) of the Federal Power Act (16 U.S.C. 796(17)(E)), 
notwithstanding paragraph (b).
    (b) Exclusion. This section does not apply to a qualifying small 
power production facility with a power production capacity which exceeds 
30 megawatts, if such facility uses any primary energy source other than 
geothermal resources.
    (c) General rule. Any qualifying facility described in paragraph (a) 
of this section shall be exempt from all sections of the Federal Power 
Act, except:
    (1) Sections 205 and 206; however, sales of energy or capacity made 
by qualifying facilities 20 MW or smaller,

[[Page 849]]

or made pursuant to a contract executed on or before March 17, 2006 or 
made pursuant to a state regulatory authority's implementation of 
section 210 the Public Utility Regulatory Policies Act of 1978, 16 
U.S.C. 824a-1, shall be exempt from scrutiny under sections 205 and 206;
    (2) Section 1-18, and 21-30;
    (3) Sections 202(c), 210, 211, 212, 213, 214, 215, 220, 221 and 222;
    (4) Sections 305(c); and
    (5) Any necessary enforcement provision of part III of the Federal 
Power Act (including but not limited to sections 306, 307, 308, 309, 
314, 315, 316 and 316A) with regard to the sections listed in paragraphs 
(c)(1), (2), (3) and (4) of this section.

(Energy Security Act, Pub. L. 96-294, 94 Stat. 611 (1980) Public Utility 
Regulatory Policies Act of 1978, 16 U.S.C. 2601, et seq., Energy Supply 
and Environmental Coordination Act, 15 U.S.C. 791, et seq., Federal 
Power Act, as amended, 16 U.S.C. 792 et seq., Department of Energy 
Organization Act, 42 U.S.C. 7101, et seq.; E.O. 12009, 42 FR 46267)

[Order 135, 46 FR 19232, Mar. 30, 1981, as amended by Order 569, 59 FR 
40470, Aug. 9, 1994; Order 671, 71 FR 7868, Feb. 15, 2006; 72 FR 29063, 
May 24, 2007; Order 732, 75 FR 15966, Mar. 30, 2010]



Sec. 292.602  Exemption to qualifying facilities from the Public Utility 

Holding Company Act of 2005 and certain State laws and regulations.

    (a) Applicability. This section applies to any qualifying facility 
described in Sec. 292.601(a), and to any qualifying small power 
production facility with a power production capacity over 30 megawatts 
if such facility produces electric energy solely by the use of biomass 
as a primary energy source.
    (b) Exemption from the Public Utility Holding Company Act of 2005. A 
qualifying facility described in paragraph (a) of this section or a 
utility geothermal small power production facility shall be exempt from 
the Public Utility Holding Company Act of 2005, 42 U.S.C. 16,451-63.
    (c) Exemption from certain State laws and regulations. (1) Any 
qualifying facility described in paragraph (a) of this section shall be 
exempted (except as provided in paragraph (c)(2) of this section) from 
State laws or regulations respecting:
    (i) The rates of electric utilities; and
    (ii) The financial and organizational regulation of electric 
utilities.
    (2) A qualifying facility may not be exempted from State laws and 
regulations implementing subpart C.
    (3) Upon request of a state regulatory authority or nonregulated 
electric utility, the Commission may consider a limitation on the 
exemptions specified in paragraph (b)(1) of this section.
    (4) Upon request of any person, the Commission may determine whether 
a qualifying facility is exempt from a particular State law or 
regulation.

(Energy Security Act, Pub. L. 96-294, 94 Stat. 611 (1980) Public Utility 
Regulatory Policies Act of 1978, 16 U.S.C. 2601, et seq., Energy Supply 
and Environmental Coordination Act, 15 U.S.C. 791, et seq., Federal 
Power Act, as amended, 16 U.S.C. 792 et seq., Department of Energy 
Organization Act, 42 U.S.C. 7101, et seq.; E.O. 12009, 42 FR 46267)

[45 FR 12237, Feb. 25, 1980, as amended by Order 135, 46 FR 19232, Mar. 
30, 1981; Order 671, 71 FR 7869, Feb. 15, 2006; Order 671-A, 71 FR 
30589, May 30, 2006; Order 732, 75 FR 15966, Mar. 30, 2010; 77 FR 9842, 
Feb. 21, 2012]



PART 294_PROCEDURES FOR SHORTAGES OF ELECTRIC ENERGY AND CAPACITY UNDER 

SECTION 206 OF THE PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978--Table of 

Contents



    Authority: 5 U.S.C. 553; 16 U.S.C. 791a-825r; 42 U.S.C. 7107-7352.



Sec. 294.101  Shortages of electric energy and capacity.

    (a) Definition of shortages of electric energy and capacity. For 
purposes of this section, the term anticipated shortages of electric or 
energy means:
    (1) Any situation anticipated to occur in which the generating and 
bulk purchased power capability of a public utility will not be 
sufficient to meet its anticipated demand plus appropriate reserve 
margins and this shortage would affect the utility's capability 
adequately to supply electric services to its firm power wholesale 
customers; or

[[Page 850]]

    (2) Any situation anticipated to occur in which the energy supply 
capability of a public utility is not sufficient to meet its customers' 
energy requirements and this shortage would affect the utility's 
capability adequately to supply electric services to its firm power 
wholesale customers.
    (b) Accommodation of shortages. (1) Each public utility now serving 
firm power wholesale customers, shall submit a brief statement 
indicating how it would accommodate any shortages of electric energy or 
capacity affecting its firm power wholesale customers.
    (2) This statement shall:
    (i) Describe how the utility would assure that direct and indirect 
customers are treated without undue prejudice or disadvantage; and
    (ii) It shall also identify any agreement, law, or regulation which 
might impair the utility's ability to accommodate such a shortage.
    (3) Each utility shall file a copy of its statement with any 
appropriate State regulatory agency and all firm power wholesale 
customers.
    (4) If a plan for accommodating any shortages of electric energy or 
capacity affecting its firm power wholesale customers as described in 
the brief statement submitted pursuant to paragraph (b)(1) of this 
section is modified, the utility must submit to the Commission and the 
persons described in paragraph (b)(3) of this section within 15 days of 
any such modification, a supplemental statement informing the Commission 
of those modifications.
    (5) Notwithstanding any other provision of this section, a public 
utility need not file the statement with the Commission if the public 
utility provides in its rate schedules to firm power wholesale customers 
that:
    (i) During electric energy and capacity shortages it will treat 
without undue discrimination or preference, prejudice, or disadvantage 
firm power wholesale customers; and
    (ii) It will report any modifications to its contingency plans for 
accommodating shortages within 15 days to:
    (A) The appropriate State regulatory agency and
    (B) To the affected wholesale customers.
    (c) Reporting requirements. Each public utility shall immediately 
report to the Commission, to any State regulatory authority and to firm 
power wholesale customers, any anticipated shortage of electric energy 
or capacity. The report shall include the following information:
    (1) The nature and projected duration of the anticipated capacity or 
energy supply shortage;
    (2) A list showing all firm power wholesale customers affected or 
likely to be affected by the anticipated shortage;
    (3) Procedures for accommodating the shortage, if different from 
those described in paragraph (b) of this section;
    (4) An estimate of the effects (reduced power and energy usage) of 
use of these procedures upon the utility's wholesale and retail 
customers; and
    (5) The name, title, address and telephone number of an officer or 
employee of the utility who may be contacted for further information 
regarding the shortage and planned actions of the utility.
    (d) Reports to other government entities. Any report filed with 
another governmental entity that contains the information that must be 
reported under this part may be filed to comply with this part.
    (e) Reporting Procedure. Any public utility that reports under this 
part must provide an electronic filing to this Commission at 
[email protected] and one copy to any state regulatory authority and 
firm power wholesale customers, unless otherwise required by the 
Commission.
    (f) Report of anticipated shortage. Notwithstanding any other 
provision of this part, if a public utility provides in its rate 
schedule that it will make such reports to the appropriate state 
regulatory agency and to its firm power wholesale requirements 
customers, then it need only report to the Commission the nature and 
projected duration of the anticipated capacity or energy supply shortage 
and supply a list of the firm power wholesale customers affected or 
likely to be affected by the shortage. Upon receiving the public 
utility's report of anticipated shortage of electric energy or capacity, 
the

[[Page 851]]

Commission will decide what further reports, if any, to require.

[44 FR 37502, June 27, 1979, as amended at 47 FR 20297, May 12, 1982; 
Order 401, 49 FR 39538, Oct. 9, 1984; Order 401-A, 54 FR 41087, Oct. 5, 
1989; Order 575, 60 FR 4859, Jan. 25, 1995; Order 659, 70 FR 35028, June 
16, 2005]

[[Page 852]]



  SUBCHAPTER L_REGULATIONS FOR FEDERAL POWER MARKETING ADMINISTRATIONS



PART 300_CONFIRMATION AND APPROVAL OF THE RATES OF FEDERAL POWER MARKETING 

ADMINISTRATIONS--Table of Contents



                      Subpart A_General Provisions

Sec.
300.1 Applicability and definitions.
300.2 Informal conference.

                      Subpart B_Filing Requirements

300.10 Application for confirmation and approval.
300.11 Technical support for the rate schedule.
300.12 Analysis of supporting data.
300.13 Waiver of filing requirements.
300.14 Filings under section 7(k).

              Subpart C_Commission Rate Review and Approval

300.20 Interim acceptance and review of Bonneville Power Administration 
          rates.
300.21 Final confirmation and approval.

    Authority: 16 U.S.C. 825s, 832-8321, 838-838k, 839-839h; 42 U.S.C. 
7101-7352; 43 U.S.C. 485-485k.

    Source: Order 382, 49 FR 25235, June 20, 1984, unless otherwise 
noted.



                      Subpart A_General Provisions



Sec. 300.1  Applicability and definitions.

    (a) Applicability. This part sets forth procedures governing the 
filing, review and disposition of the rate schedules for the sale or 
transmission of power and energy established by the Alaska, Bonneville, 
Southeastern, Southwestern and Western Area Power Administrations. 
Except as otherwise provided by rule or order, the Commission's general 
rules of practice and procedure (part 385 of this chapter) will apply to 
any filings, hearings or other procedures under this part, as 
applicable.
    (b) Definitions. For purposes of this part, the following 
definitions apply:
    (1) Administrator means the administrator of a power marketing 
administration.
    (2) Electric service means any transmission or sale of electric 
power and energy, including capacity sales, energy sales, firm power 
sales, transmission services, or any combination of these services, and 
the utilization, by means of ownership, contractual arrangements, 
leasing, or other arrangements, of any facility to provide such sales or 
services.
    (3) Historic period means the period commencing with the date of 
first commercial operation of a powerplant or transmission facility and 
ending on the last day of the latest year for which actual cost data are 
available, provided that the period does not end more than 18 months 
before the date on which the Administrator tenders the rate schedule for 
filing with the Commission, or such longer period requested by the 
Deputy Secretary of Energy or Administrator and granted by the 
Commission.
    (4) Initial capital investment means the cost of acquisition or 
construction of a power facility or non-power facility which has been 
assigned to be repaid from the power revenues, including but not limited 
to any cost of planning, design, land acquisition, construction, 
interest during construction, and testing incurred before the date on 
which the facility becomes operational or revenue-producing.
    (5) Power repayment study or PRS means a study of the annual 
repayment of production and transmission investments and other costs 
through the application of revenues during the repayment period.
    (6) Proposed rate approval period means the period for which 
confirmation and approval of the rate schedules is requested. This 
period must not exceed five years.
    (7) Rate schedule means a statement describing:
    (i) Type of service to which the rate is to be applied;
    (ii) Rates and charges for, or in connection with, electric service; 
and
    (iii) Classifications and other provisions which directly affect 
such rates and charges.

[[Page 853]]

    (8) Rate test or cost evaluation period means a period, commencing 
with the end of the historic period, as defined in paragraph (b)(3) of 
this section, and continuing through the proposed rate approval period 
as defined in paragraph (b)(6) of this section, during which future 
estimates of costs and revenues should be modified by the Administrator 
to reflect changing conditions.
    (9) Replacement means any substitution of a unit of property with 
another unit of like character.

[Order 382, 49 FR 25235, June 20, 1984, as amended by Order 323-B, 52 FR 
20709, June 3, 1987]



Sec. 300.2  Informal conference.

    The Administrator or a designee may confer with Commission staff 
prior to submitting an application under subpart B, with respect to the 
appropriate form and content of such application.



                      Subpart B_Filing Requirements



Sec. 300.10  Application for confirmation and approval.

    (a) General provisions--(1) Contents of filing. Any application 
under this subpart for confirmation and approval of rate schedules must 
include, as described in this section a letter of request for rate 
approval, a form of notice suitable for publication in the Federal 
Register in accordance with the specifications in Sec. 385.203(d) of 
this chapter, the rate schedule, a statement of revenue and related 
costs, the order, if any, placing the rates into effect on an interim 
basis, the Administrator's Record of Decision or explanation of the rate 
development process, supporting documents, a certification, and 
technical supporting information and analysis. The form of notice shall 
be on electronic media as specified by the Secretary.
    (2) Incorporation of information by reference. Any information 
required under this subpart that has previously been submitted to the 
Commission in substantially the same form as specified in this section 
may be incorporated by reference only.
    (3) Time of filing. (i) Rate schedules put into effect on an interim 
basis by the Secretary of the Department of Energy, or a designee, and 
filed for final Commission approval must be filed not later than five 
days after interim approval is granted.
    (ii) Rate schedules of the Bonneville Power Administration for which 
interim approval by the Commission is requested must be filed not later 
than 60 days in advance of the proposed effective date.
    (iii) Rate schedules for which interim approval is not requested 
must be filed not later than 180 days in advance of the proposed 
effective date.
    (4) Electronic filing. All material must be filed electronically in 
accordance with the requirements of Sec. 35.7 of this chapter.
    (b) Letter of request for rate approval. A letter of request for 
rate approval must contain the following information:
    (1) A description of the period for which Commission approval is 
requested, delineated by an effective date and an expiration date, and, 
for the Bonneville Power Administration, a request, if any, for interim 
approval of the rates;
    (2) A brief description of the proposed rates and charges under 
existing and proposed rate schedules and the expected changes, if any, 
in annual revenues; and
    (3) A description of how the filed rate differs in rate level or 
rate structure from the rate schedule currently effective.
    (c) Notice of filing. The notice of filing, suitable for publication 
in the Federal Register, must contain the following information:
    (1) The identification number or description of the rate schedule or 
contract;
    (2) If the rate schedule includes changes in rates, the dollar 
amount and percent increase or decrease in rates;
    (3) If the rate schedule includes changes other than rates, a brief 
description of the changes;
    (4) A brief explanation of the reasons for any proposed change in 
the rate schedule;
    (5) A statement whether interim approval of Bonneville Power 
Administration rates is requested;
    (6) The proposed effective date of the rate schedule; and

[[Page 854]]

    (7) The proposed rate approval period.
    (d) Rate schedules. A filed rate schedule, as defined in Sec. 
300.1(b)(7), must describe the following, as appropriate:
    (1) The class of service to which each rate schedule will apply and 
service areas or zones which will be affected by the filed rate;
    (2) The rate to be applied to capacity and energy services or other 
services;
    (3) Special provisions, such as discounts, penalties, power factor 
adjustments, service interruptions, unauthorized overruns and other 
similar provisions which may affect the rate and charges; and
    (4) The period during which the rates will be effective.
    (e) Statement of revenue and related costs. Each filing shall 
include a statement which includes cost (if available) and revenue data 
for each class of service as specified in each rate schedule for the 
proposed period.
    (f) Explanation of rate development process and supporting 
documents. (1) The Administrator must file the entire record on which 
the final decision establishing a rate scheduled is based.
    (2) The Administrator must file a Record of Decision, if one is 
made, or an explanation of the rate development process, if a Record of 
Decision is not made. The Record of Decision or the explanation of the 
rate development process must include:
    (i) A discussion of issues raised by customers or the public and how 
such issues were resolved;
    (ii) A discussion of all statutory, regulatory, or other 
requirements which governed the Administrator's decision;
    (iii) A description of any methodology used for determining revenue 
requirements and for developing appropriate rate structures;
    (iv) A list identifying all documents submitted for Commission 
consideration; and
    (g) Certification. The Administrator must file a statement 
certifying that the rate is consistent with applicable laws and that it 
is the lowest possible rate consistent with sound business principles.
    (h) Additional filing requirements. (1) The Administrator must file 
with the Commission any other information relevant to the Commission's 
ratemaking decision.
    (2) The Administrator must file any other information requested by 
the Office of Energy Market Regulation as needed for Commission analysis 
of the rate filing.

[Order 382, 49 FR 25235, June 20, 1984, as amended by Order 541, 57 FR 
21734, May 22, 1992; Order 593, 62 FR 1284, Jan. 9, 1997; Order 647, 69 
FR 32439, June 10, 2004; Order 699, 72 FR 45325, Aug. 14, 2007; Order 
701, 72 FR 61054, Oct. 29, 2007; Order 714, 73 FR 57536, Oct. 3, 2008]



Sec. 300.11  Technical support for the rate schedule.

    (a) Filing requirement. The Administrator must submit, in 
conjunction with any application under Sec. 300.10, the technical 
support data described under paragraph (b) of this section and the 
analysis of data described under Sec. 300.12 of this subpart.
    (b) Data--(1) Statement A--Sales and Revenues. Statement A must 
include:
    (i) Sales and revenues for each rate schedule for the last five 
years of the historic period, as defined in section 300.1(b)(3);
    (ii) For the rate test period, the estimated annual sales and 
revenues for the existing and each proposed rate schedule, including a 
separate aggregation of any revenues from sources not covered by the 
rate schedule according to general classifications of such revenues; and
    (iii) Brief explanations of how sales and revenue estimates are 
prepared and explanations of any changes in sales or revenues during the 
last five years of the historic period.
    (2) Statement B--Power Resources. Statement B must contain a list of 
the capacity and energy resources for the last five years of the 
historic period and for the rate test period, used to support the sales 
and revenues figures contained in Statement A. The statement should 
identify resources according to the powerplant and any purchase or 
exchange agreement.
    (3) Statement C--Capitalized investments or costs. (i) Statement C 
must account for all capitalized investments to be repaid from power 
revenues.
    (ii) The statement shall include a listing, by year, of the 
following:

[[Page 855]]

    (A) All initial investments and additions to plant, including 
interest during construction, that produced revenue during the historic 
period or are expected to produce revenue during the rate test period;
    (B) Capitalized deferred expenses; and
    (C) Replacements made during the historic period and replacements 
projected to be made during the balance of the repayment period.
    (iii) For each such investment, the statement shall specify:
    (A) Whether the investment is an initial investment, an addition, a 
replacement, or a capitalized deferred annual expense;
    (B) The date the investment was made;
    (C) The year in which repayment is due to be completed;
    (D) Whether the investment was financed through the issuance of 
revenue bonds, the appropriate interest rate, and the terms and 
conditions for such bonds; and
    (E) The authority or administrative procedure used for the adoption 
of such interest rate.
    (iv) If available, the amount repaid on each investment to date must 
be stated, except that if repayment on individual investments is not 
recorded, the amount repaid to date on each group of investments having 
common interest rates should be stated.
    (v) For each year, the sum of unpaid individual investments or the 
unpaid portion of interest groups shown above must equal the unamortized 
investment shown in the power repayment study for that year.
    (vi) The statement must describe the methods used to forecast 
replacements and the price level used to estimate replacement costs.
    (4) Statement D--Interest Expenses; Repayment of Investments and 
Debt Capital. (i) For each capitalized investment and cost listed in 
Statement C, Statement D must describe, by interest group:
    (A) The total unpaid balance outstanding at the end of the historic 
period;
    (B) Payments made on principal and interest during each of the last 
five years of the historic period; and
    (C) Annual payments expected to be made through the cost evaluation 
period.
    (ii) The statement must describe how the interest expense was 
determined for each type of investment and include examples of such 
computations.
    (5) Statement E--Operation, Maintenance and Other Annual Expenses. 
Statement E must contain, for the last five years of the historic period 
and for the rate test period, as appropriate, a tabulation of actual and 
projected operation and maintenance, administrative and general, 
purchased power, wheeling, and any other expenses, other than interest. 
Statement E must:
    (i) List expenses for each individual source, if purchased power and 
other similar expenses are derived from more than one source;
    (ii) Explain any significant deviations from trends in expenses or 
any extraordinary expenses; and
    (iii) Explain the price level used for estimating expenses.
    (6) Statement F--Cost Allocations. (i) Statement F must contain, for 
each multiple-purpose reservoir project, unit, division, or system, a 
table or other summary showing total investment costs, the total annual 
operation and maintenance costs, and the allocation of all such costs 
among the various authorized purposes.
    (ii) The statement must show the amount of power costs suballocated 
to irrigation functions, any changes from previous allocations, and the 
procedure used in allocating such costs. Currently valid allocations 
previously submitted to the Commission need not be furnished, if 
referenced.



Sec. 300.12  Analysis of supporting data.

    (a) An analysis of the data provided under Sec. 300.11 must be 
supported by an appropriate methodology developed by the Administrator.
    (b) Revenue recovery study. (1) A study must be provided which 
supports the filed rate and charges, including a narrative statement 
that explains how the rates and charges meet the objective of recovering 
the revenue necessary to repay the Federal investment and other costs in 
a reasonable period of time.

[[Page 856]]

    (2) Any Power Repayment Study (PRS) submitted for this purpose must 
be developed using currently approved rates for estimating future 
revenues. If the filed rates differ from the current rates, the 
Administrator must provide a PRS which uses the level of revenues 
produced by the proposed rates. Unless otherwise required by statute, a 
PRS must contain only those investments in plant which will be in 
commercial operation during the proposed rate approval period, except 
replacements. Forecasts of costs beyond the rate test period must be 
based on conditions prevailing during the period, unless unusual 
circumstances warrant otherwise.
    (3) A PRS must include, but need not be limited to, those items 
listed below:
    (i) Operating revenues;
    (ii) Operating expenses;
    (iii) Interest expense;
    (iv) Investment placed in service (using totals if the supporting 
statement annually shows a breakdown into the appropriate subcategories 
under each major heading), including the initial project, additions, 
replacements, and the total investment;
    (v) Investment amortized;
    (vi) Remaining unamortized investment;
    (vii) Allowable unamortized investment (using totals if the 
supporting statement annually shows a breakdown into the appropriate 
subcategories under each major heading), including initial project, 
additions, replacements, and total investment;
    (viii) Irrigation investment assigned to be repaid from power 
revenues (using totals if the supporting statement annually shows a 
breakdown into the appropriate subcategories under each major heading), 
including irrigation investment assigned to power, investment repaid, 
remaining unpaid investment, and allowable unpaid investment; and
    (ix) Cumulative status of repayment.
    (c) Cost of service study. For any project or system which provides 
more than one class of service for which differing rates are proposed, a 
cost of service study, if available, must be provided which shows how 
the costs of providing each service have been determined. If rates and 
charges have not been formulated on a cost related basis, the basis for 
each rate or charge should be explained.



Sec. 300.13  Waiver of filing requirements.

    The Administrator must request waiver of any requirement of this 
subpart if an application that does not fully comply with that 
requirement is not to be considered deficient. The request must state 
the Administrator's reasons for such noncompliance and show good cause 
for any waiver.



Sec. 300.14  Filings under section 7(k).

    Any application for Commission review and approval of a rate or rate 
schedules established by the Administrator of the Bonneville Power 
Administration pursuant to section 7(k) of the Pacific Northwest 
Electric Power Planning and Conservation Act must be filed in compliance 
with the provisions of Sec. 35.13(a)(2) of part 35 of this chapter and 
with the provisions of this part, and must include the classifications, 
practices, rules and regulations affecting the rate and charges and all 
contracts which in any manner affect or relate to such rate, charges, 
classifications, services, rules, regulations, or practices. However, 
such classifications, practices, rules, regulations or contracts which 
may affect or relate to rates will not be subject to Commission approval 
unless they are determined to be rates or rate schedules.

[Order 323-B, 52 FR 20709, June 3, 1987]



              Subpart C_Commission Rate Review and Approval



Sec. 300.20  Interim acceptance and review of Bonneville Power Administration 

rates.

    (a) Opportunity to comment. The Commission will publish in the 
Federal Register notice of any filing made under this part, for which 
interim approval is requested. This notice will give interested persons 
an opportunity to submit written comments on whether interim approval 
should be granted.
    (b) Action on request for interim rate acceptance--1) Deficient 
applications. Upon receipt of an application that does not comply with 
the requirements of this part, the Commission may:

[[Page 857]]

    (i) Accept the application and order the rate schedule into effect 
on an interim basis, effective on the date requested by the 
Administrator or at such time as the Commission may otherwise order, on 
the condition that any deficiencies in the filing are corrected by the 
Administrator to the satisfaction of and within such time specified by 
the Director of the Office of Energy Market Regulation; or
    (ii) Deny the Administrator's interim rate request and reject the 
application, if the Commission determines that the Administrator's 
application:
    (A) Is patently deficient with respect to the filing requirements of 
this part; or
    (B) Fails to comply with the applicable provisions of the Northwest 
Power Act or such other Acts as may be applicable.
    (2) Applications that are in compliance. Upon receipt of an 
application that complies with the requirements of this part, the 
Commission may:
    (i) Order the rate schedule into effect on an interim basis, 
effective on the date requested by the Administrator or at such time as 
the Commission may otherwise order; or
    (ii) Deny the Administrator's interim rate request and review the 
application for final confirmation and approval of the rate schedule 
pursuant to the provisions of this part.
    (c) Condition of acceptance. Any rate schedule the Commission allows 
to become effective on an interim basis under paragraph (b) of this 
section is subject to refund with interest.
    (d) Notice of action on interim approval. The Commission will 
publish in the Federal Register a notice of any action taken under 
paragraph (b) of this section and will mail notice to any person on the 
Commission's service list.

[Order 382, 49 FR 25235, June 20, 1984, as amended by Order 699, 72 FR 
45326, Aug. 14, 2007; Order 701, 72 FR 61054, Oct. 29, 2007]



Sec. 300.21  Final confirmation and approval.

    (a) Opportunity to comment and intervene. (1) The Commission will 
publish notice in the Federal Register giving interested persons an 
opportunity:
    (i) To submit initial and reply comments on any filing made under 
subpart B; and
    (ii) To intervene in any proceeding held on such filing.
    (2) With respect to the Bonneville Power Administration:
    (i) Such notice will also give interested persons an opportunity to 
comment on whether it is necessary to hold a hearing on non-regional 
rates under section 7(k) of the Northwest Power Act and the issues to be 
resolved at such hearing.
    (ii) This notice may be part of any Commission order granting 
interim approval under Sec. 300.20 of this part.
    (b) Proceedings under section 7(k). For the Bonneville Power 
Administration, the Commission will publish a separate order if it 
determines that a hearing is necessary under section 7(k) of the 
Northwest Power Act. This order will, if appropriate, delineate the 
issues to be resolved at such hearing. Such hearing will be held in 
accordance with the procedures established for ratemaking by the 
Commission pursuant to the Federal Power Act.
    (c) Standards of review for the Bonneville Power Administration--(1) 
Rates under section 7(a). The Commission will review any rate 
established by the Administrator under section 7(a) of the Northwest 
Power Act for compliance with the following standards:
    (i) The rates must be sufficient to ensure repayment of the Federal 
investment in the Federal Columbia River Power System over a reasonable 
number of years after first meeting the Administrator's other costs.
    (ii) The rates must be based upon the Administrator's total system 
costs.
    (iii) With respect to transmission rates, the rates must equitably 
allocate the costs of the Federal transmission system between Federal 
and non-federal power utilizing such system.
    (2) Rates under section 7(k). The Commission will review any rate 
established by the Administrator under section 7(k) of the Pacific 
Northwest Electric Power Planning and Conservation Act for compliance 
with the requirements of the Bonneville Project Act, the Flood Control 
Act of 1944, and the

[[Page 858]]

Federal Columbia River Transmission System Act.
    (d) Standards of review for other power marketing administrations. 
The Commission will review the rates of the Alaska, Southeastern, 
Southwestern, and Western Area Power Marketing Administrations in 
accordance with the terms of any delegation made by the Secretary of 
Energy.
    (e) Action on request for final confirmation and approval of rates. 
Filed rates will be considered for final confirmation and approval if 
the relevant filing complies with the filing requirements of subpart B 
of these regulations. The Commission may take any of the following 
actions:
    (1) Confirm and approve the rate schedules for the period beginning 
with the date such rates where placed in effect on an interim basis or 
the effective date requested in the application to the expiration date 
requested in the application but not to exceed a five-year period, or 
for such lesser period, as the Commission deems appropriate;
    (2) Remand the filing for further development of the record to 
support the filed rate schedules;
    (3) Order an evidentiary hearing if there are questions of fact 
which can not be resolved from the record or through staff evaluation;
    (4) Disapprove the filed rates; or
    (5) Take such other action that the Commission considers 
appropriate.
    (f) Procedures upon disapproval. If the Commission disapproves the 
rates, the Administrator will be provided a 120-day period, or other 
period as the Commission may deem appropriate, to prepare substitute 
rates that resolve the Commission's concerns. If the filed rates have 
been approved on an interim basis, the rates will continue in effect on 
an interim basis until the Commission takes final action.
    (g) Refund and interest--(1) Refund. If a rate collected by any 
power marketing administration on an interim basis exceeds the rate 
which is confirmed and approved by the Commission as a final rate, the 
Administrator, pursuant to any conditions established by the Commission, 
must refund with interest any portion of the rate increase collected 
during the interim period which exceeds the final rate. The 
Administrator may make refunds by means of a net energy billing which 
reflects the value of any overcharge or other appropriate methods.
    (2) Interest. Except as otherwise provided by the Commission, the 
Administrator must compute any amount of interest based on the revenues 
collected subject to refund and required to be refunded under this 
paragraph by using:
    (i) With respect to the rates of the Bonneville Power 
Administration, the rate of interest or a weighted average of all rates 
of interest charged to the Bonneville Power Administration by the U.S. 
Treasury during the period for which the computation is made;
    (ii) With respect to the rates of other Power Marketing 
Administrations, the rates of interest computed in accordance with the 
formula contained in DOE Order No. RA 6120.2, available from the 
Department of Energy (Office of Power Marketing Coordination) and the 
Power Marketing Administrations.
    (h) Notice of action on final approval. The Commission's Secretary 
will publish in the Federal Register a notice of any action taken under 
paragraph (e) of this section and will mail the notice to the persons on 
the Commission's service list.

[Order 382, 49 FR 25235, June 20, 1984, as amended by Order 323-B, 52 FR 
20709, June 3, 1987]



PART 301_AVERAGE SYSTEM COST METHODOLOGY FOR SALES FROM UTILITIES TO 

BONNEVILLE POWER ADMINISTRATION UNDER NORTHWEST POWER ACT--Table of Contents



Sec.
301.1 Applicability.
301.2 Definitions.
301.3 Filing procedures.
301.4 Exchange Period Average System Cost determination.
301.5 Changes in Average System Cost methodology.
301.6 Appendix 1 instructions.
301.7 Average System Cost methodology functionalization.

Table 1 to Part 301--Functionalization and Escalation Codes
Appendix 1 to Part 301--ASC Utility Filing Template

    Authority: 16 U.S.C. 839-839h.

[[Page 859]]


    Source: Order 726, 74 FR 47059, Sept. 15, 2009, unless otherwise 
noted.



Sec. 301.1  Applicability.

    The regulations in this part apply to the sales of electric power by 
any Utility to the Bonneville Power Administration (Bonneville) under 
section 5(c) of the Pacific Northwest Electric Power Planning and 
Conservation Act (Northwest Power Act). 16 U.S.C. 839c(c).



Sec. 301.2  Definitions.

    For purposes of this section, the following definitions apply:
    Account(s). The Accounts prescribed in the Commission's Uniform 
System of Accounts in part 101 of this chapter.
    Appendix 1. Appendix 1 is the electronic form on which a Utility 
reports its Contract System Cost, Contract System Load, and other 
necessary data to Bonneville for the calculation of the Utility's 
Average System Cost.
    Average System Cost (ASC). The rate charged by a Utility to 
Bonneville for the agency's purchase of power from the Utility under 
section 5(c) of the Northwest Power Act for each Exchange Period, and 
the quotient obtained by dividing Contract System Cost by Contract 
System Load. 16 U.S.C. 839c(c).
    Average System Cost delta (ASC delta). The change in a Utility's ASC 
during the Exchange Period resulting from the inclusion in the Average 
System Cost forecast model of costs, loads, revenues, and other 
information related to the commercial operation of a major resource 
addition or reduction that was identified in the Utility's ASC filing.
    Average System Cost forecast model (ASC forecast model). The model 
Bonneville uses to escalate a Utility's costs, revenues, and other 
information contained in the Appendix 1 to calculate the Exchange Period 
ASC.
    Average System Cost review process (ASC review process). The 
administrative proceeding conducted before Bonneville under Bonneville's 
ASC review procedures in which a Utility's ASC is determined.
    Base Period. The calendar year of the most recent Form 1 data.
    Base Period ASC. The ASC determined in the Review Period using the 
Utility's Base Period data and additional specified data.
    Contract High Water Mark (CHWM). The average MW amount used to 
define access to Tier 1 Priced-Power. CHWM is equal to the adjusted 
historical load for each customer proportionately scaled to Tier 1 
System Resources and adjusted for conservation achieved. The CHWM is 
specified in each eligible customer's CHWM Contract.
    Commission. Federal Energy Regulatory Commission.
    Consumer-owned Utility. A public body or cooperative that is 
eligible to purchase preference power from Bonneville under section 5(b) 
of the Northwest Power Act. 16 U.S.C. 839c(b).
    Contract System Cost. The Utility's costs for production and 
transmission resources, including power purchases and conservation 
measures, which costs are includable in, and subject to, the provision 
of Appendix 1. Under no circumstances will Contract System Cost include 
costs excluded from ASC by section 5(c)(7) of the Northwest Power Act. 
16 U.S.C. 839c(c)(7).
    Contract System Load. The total regional retail load included in the 
most recently filed FERC Form 1 or, for a Consumer-owned Utility, the 
total retail load from the most recent annual audited financial 
statement, as adjusted pursuant to the ASC methodology.
    Direct Analysis. An analysis, including supporting documentation, 
prepared by the Utility that assigns the costs, debits, credits, and 
revenues in an Account to the Production, Transmission, and/or 
Distribution/Other functions of the Utility.
    Escalator. A factor used to adjust an Account in the Base Period ASC 
filing to the value for the period of the Exchange Period ASC.
    Exchange Load. All residential, apartment, seasonal dwelling and 
farm electrical loads eligible for the Residential Exchange Program 
under the terms of a Utility's Residential Purchase and Sales Agreement.
    Exchange Period(s). The period during which a Utility's Bonneville-
approved ASC is effective for the calculation of the Utility's 
Residential Exchange Program benefits. The initial Exchange Period under 
this ASC methodology is

[[Page 860]]

from October 1, 2008, through September 30, 2009. Subsequent Exchange 
Periods will be the period of time concurrent with Bonneville's 
wholesale power rate periods beginning October 1 or, if not beginning 
October 1, then beginning on the effective date of Bonneville's 
subsequent wholesale power rate periods.
    Exchange Period ASC. The Base Period ASC escalated to a year(s) 
consistent with the Exchange Period.
    FERC Form 1. The annual filing submitted to the Federal Energy 
Regulatory Commission, required by 18 CFR 141.1.
    Functionalization. The process of assigning a Utility's costs, 
debits, credits, and revenues in an Account to the Production, 
Transmission, and/or Distribution/Other functions of the Utility.
    Global Insight. The company that provides the escalation factors 
identified in Sec. 301.4(a)(3) that are used in the ASC forecasting 
model, or the successor or replacement of that company, as determined by 
Bonneville.
    Jurisdiction. The service territory of the Utility within which a 
particular regulatory body has authority to approve the Utility's retail 
rates. Jurisdictions must be within the Pacific Northwest region as 
defined in section 3(14) of the Northwest Power Act. 16 U.S.C. 839a(14).
    Labor Ratios. The ratios that assign costs on a pro rata basis using 
salary and wage data for Production, Transmission, and Distribution/
Other functions included in the Utility's most recently filed FERC Form 
1. For Consumer-owned Utilities, comparable data will be utilized based 
on the cost-of-service study used as the basis for retail rates at the 
time of review.
    Net Requirements. The amount of Federal power that a Consumer-owned 
Utility is entitled to purchase from Bonneville under section 5(b) of 
the Northwest Power Act. 16 U.S.C. 839c(b).
    New Large Single Load. That load defined in section 3(13) of the 
Northwest Power Act, and determined by Bonneville as specified in power 
sales contracts and Residential Purchase and Sales Agreements with its 
Regional Power Sales Customers. 16 U.S.C. 839a(13).
    Priority Firm Power. Priority Firm Power is electric power (capacity 
and energy) that Bonneville will make continuously available for direct 
consumption or resale to public bodies, cooperatives, and Federal 
Agencies (under the Priority Firm Preference rate) and to Utilities 
participating in the Residential Exchange Program (under the Priority 
Firm Exchange rate). Utilities participating in the Residential Exchange 
Program under section 5(c) of the Northwest Power Act may purchase 
Priority Firm Power under their Residential Purchase and Sales 
Agreements with Bonneville. Priority Firm Power is not available to 
serve New Large Single Loads. Deliveries of Priority Firm Power may be 
reduced or interrupted as permitted by the terms of the Utilities' power 
sales contracts and/or Residential Purchase and Sales Agreements with 
Bonneville.
    Public Purpose Charge. Any charge based on a Utility's total retail 
sales in a Jurisdiction that is provided to independent entities or 
agencies of state and local governments for the purpose of funding 
within the Utility's service territory one or both of the following:
    (a) Conservation programs in lieu of Utility conservation programs; 
or
    (b) Acquisition of renewable resources.
    Rate Period. The period during which Bonneville's wholesale power 
rates are effective. The period is coincident with the Exchange Period.
    Rate Period High Water Mark (RHWM). The amount used to define each 
customer's eligibility to purchase Tier 1 Priced Power for the relevant 
Rate Period, subject to the customer's Net Requirement expressed in 
average megawatts (aMW). RHWM is equal to the customer's CHWM as 
adjusted for changes in Tier 1 System Resources. The RHWM is determined 
for each eligible customer in the RHWM Process preceding each Bonneville 
wholesale power rate case.
    Rate Period High Water Mark Process (RHWM Process). The process or 
processes where each eligible Consumer-owned Utility RHWM is determined.
    Regional Power Sales Customer. Any entity that contracts directly 
with Bonneville for the purchase of power under sections 5(b) (16 U.S.C. 
839c(b)),

[[Page 861]]

5(c) (16 U.S.C. 839c(c)), or 5(d) (16 U.S.C. 839c(d)) of the Northwest 
Power Act for delivery in the Pacific Northwest region as defined by 
section 3(14) of the Northwest Power Act. 16 U.S.C. 839a(14).
    Residential Purchase and Sales Agreement. The contract under section 
5(c) of the Northwest Power Act between Bonneville and a Utility that 
defines and implements the power purchase and sale under the Residential 
Exchange Program.
    Review Period. The period of time during which a Utility's Appendix 
1 is under review by Bonneville. The Review Period begins on or about 
June 1, and ends on or about November 15 of the fiscal year prior to the 
fiscal year Bonneville implements a change in wholesale power rates.
    Regulatory Body. A state commission, Consumer-owned Utility 
governing body, or other entity authorized to establish retail electric 
rates in a Jurisdiction.
    RHWM Exchange Load. The Exchange Load as determined in section 20 of 
the Residential Purchase and Sales Agreement.
    RHWM System Resources. The Rate Period High Water Mark (RHWM) as 
calculated in section 4.2.1 of the Tiered Rates Methodology plus the 
resource amounts used in calculating a customer's Contract High Water 
Mark (CHWM).
    Tier 1 Priced-Power. Priority Firm Power as defined in Bonneville's 
Tiered Rates Methodology.
    Tier 1 System Resources. Resources as defined in Bonneville's Tiered 
Rates Methodology.
    Tiered Rates Methodology. The long-term methodology established by 
Bonneville for the determination of tiered wholesale power rates.
    Utility. A Regional Power Sales Customer that has executed a 
Residential Purchase and Sales Agreement.



Sec. 301.3  Filing procedures.

    (a) Bonneville's ASC review procedures. The procedures established 
by Bonneville's Administrator provide the filing requirements for all 
Utilities that file an Appendix 1 with Bonneville. Utilities must file 
Appendix 1s, ASC forecast models, and other required documents with 
Bonneville in compliance with Bonneville's ASC review procedures.
    (b) Exchange Period. The Exchange Period will be equal to the term 
of Bonneville's Rate Period. ASCs will change during the Exchange Period 
only for the reasons provided in Sec. 301.4.



Sec. 301.4  Exchange Period Average System Cost determination.

    (a) Escalation to Exchange Period.
    (1) This section describes the method Bonneville will use to 
escalate the Base Period ASC to and through the Exchange Period to 
calculate the Exchange Period ASC.
    (2) Bonneville will escalate the Bonneville-approved Base Period ASC 
to the midpoint of the fiscal year for a one-year Rate Period/Exchange 
Period, and to the midpoint of the two-year period for a two-year Rate 
Period/Exchange Period to calculate Exchange Period ASCs.
    (3) For purposes of the escalation referenced in paragraph (a)(2) of 
this section, Bonneville will use the following codes in the ASC 
forecast model to calculate the Exchange Period ASCs:
    (i) A&G--Administrative and General.
    (ii) CACNT--Customer Account.
    (iii) CD--Construction, Distribution Plant.
    (iv) CONSTANT--Constant.
    (v) CSALES--Customer Sales.
    (vi) CSERVE--Customer Service.
    (vii) COAL--Coal.
    (viii) DMN--Distribution Maintenance.
    (ix) DOPS--Distribution Operations
    (x) HMN--Hydro Maintenance.
    (xi) HOPS--Hydro Operations.
    (xii) INF--Inflation.
    (xiii) NATGAS--Natural Gas.
    (xiv) NFUEL--Nuclear Fuel.
    (xv) NMN--Nuclear Maintenance.
    (xvi) NOPS--Nuclear Operations.
    (xvii) OMN--Other Production Maintenance.
    (xviii) OOPS--Other Production Operations.
    (xix) SNM--Steam Maintenance.
    (xx) SOPS--Steam Operations.
    (xxi) TMN--Transmission Maintenance.
    (xxii) TOPS--Transmission Operations.

[[Page 862]]

    (xxiii) WAGES--Wages.
    (4) Table 1 identifies which codes from paragraph (a)(3) of this 
section apply to the line items and associated FERC Accounts in the 
Appendix 1. Bonneville will use Global Insight as the source of data for 
the escalation codes identified in paragraph (a)(3) of this section, 
except for the NATGAS and CONSTANT codes. For the NATGAS code identified 
in paragraph (a)(3)(xiii) of this section, Bonneville will calculate the 
escalation rate using Bonneville's most current forecast of natural gas 
prices. The code CONSTANT in paragraph (a)(3)(iv) of this section 
indicates that no escalation to the Account will be made.
    (5) Bonneville will base the costs of power products purchased from 
Bonneville on Bonneville's forecast of prices for its products.
    (6) Bonneville will escalate the Public Purpose Charge forward to 
the midpoint of the Exchange Period by the same rate of growth as total 
Contract System Load.
    (7) If any of the escalators specified in paragraph (a) of this 
section are no longer available, Bonneville will designate a replacement 
source of such escalator(s) that, as near as possible, replicates the 
results produced by the prior escalator. If a replacement source is not 
available, Bonneville will use the INF escalation code identified in 
paragraph (a)(3)(xii) of this section as the replacement escalator.
    (b) Calculation of sales for resale and power purchases--(1) Long-
term and intermediate-term sales for resale and power purchases. 
Bonneville will use the INF escalation code identified in paragraph 
(a)(3)(xii) of this section to escalate long-term and intermediate-term 
(as defined by the Commission) firm purchased power costs and long-term 
and intermediate-term sales for resale revenues.
    (2) Short-term sales for resale and power purchases. (i) The short-
term purchases and short-term sales for resale for the Base Period will 
be used as the starting values. A Utility will be allowed to include new 
plant additions, and to use a utility-specific forecast for the price of 
purchased power and for the price of sales for resale in order to value 
purchased power expenses and sales for resale revenue to be included in 
the Exchange Period ASC.
    (ii) Bonneville will use the following method to determine separate 
market prices to forecast short-term purchased power expenses and sales 
for resale revenues to calculate Exchange Period ASCs:
    (A) The Utility's average short-term purchased power price and 
short-term sales for resale price will be calculated for each year for 
the most recent three years of actual data (Base Period and prior two 
years).
    (B) The midpoint between the Utility's average short-term purchased 
power price and the average short-term sales for resale price will be 
calculated for each of the years in paragraph (b)(2)(ii)(A) of this 
section.
    (C) The percentage spread around the Utility's midpoint between the 
average short-term purchase power price and short-term sales for resale 
price will be calculated for each of the years identified in paragraph 
(b)(2)(ii)(A) of this section.
    (D) A weighted average spread for the Utility's most recent three 
years of actual data (Base Period and prior two years) will be 
calculated. The following weighting scale will be used:
    (1) Three (3) times Base Period spread.
    (2) Two (2) times (Base Period minus 1) spread.
    (3) One (1) time (Base Period minus 2) spread.
    (E) The Base Period midpoint calculated in paragraph (b)(2)(ii)(B) 
of this section will be escalated at the same rate as Bonneville's 
electric market price forecast.
    (F) The weighted average spread calculated in paragraph 
(b)(2)(ii)(D) of this section will be applied to the escalated midpoint 
price calculated in paragraph (b)(2)(ii)(E) of this section to determine 
the purchased power price and sales for resale price to value purchased 
power expenses and sales for resale revenues to be included in the 
Exchange Period ASC.
    (iii) The method described in paragraph (b)(2)(ii) of this section 
will be used to forecast the electric market price for power purchases 
needed to meet load growth not met by major resource additions, and to 
forecast the

[[Page 863]]

electric market price for any additional surplus power sales resulting 
from major resource additions.
    (c) Major resource additions and reductions and materiality 
thresholds. (1) During the Exchange Period, Bonneville will allow 
changes to a Utility's ASC to account for major resource additions or 
reductions that are used to meet a Utility's retail load. These changes, 
however, must meet the requirements of paragraph (c)(3) of this section 
and the materiality threshold described in paragraph (c)(4) of this 
section in order for Bonneville to allow an ASC to change. The ASC 
reflecting the major resource addition or reduction will be determined 
by Bonneville in the ASC review process during the Review Period.
    (2) For major resource additions, the change to ASC will become 
effective when the resource begins commercial operation, or power is 
received under the purchased power contract. For major resource 
reductions, the change to ASC will become effective when the resource is 
sold, retired, or transferred.
    (3) A major resource addition or reduction must be related to one or 
more of the following categories to be eligible for consideration as a 
major resource:
    (i) Production or generating resource investments;
    (ii) Transmission investments;
    (iii) Long-term generating contracts;
    (iv) Pollution control and environmental compliance investments 
relating to generating resources;
    (v) Long-term transmission contracts;
    (vi) Hydroelectric relicensing costs and fees; and
    (vii) Plant rehabilitation investments.
    (4) Major resource additions or reductions that meet the criteria 
identified in paragraph (c)(3) of this section will be allowed to change 
a Utility's ASC within an Exchange Period provided that the major 
resource addition or reduction results in a 2.5 percent or greater 
change in a Utility's Base Period ASC. Bonneville will allow a Utility 
to submit stacks of individual resources that, when combined, meet the 
2.5 percent or greater materiality threshold, provided, however, that 
each resource in the stack must result in a change to the Utility's Base 
Period ASC of 0.5 percent or more.
    (5) At the time the Utility submits its Appendix 1 filing, the 
Utility will provide its forecast of major resource additions or 
reductions and all associated costs. The forecast will cover the period 
from the end of the Base Period to the end of the Exchange Period.
    (6) Bonneville will calculate new transmission wheeling revenues 
associated with new transmission investment using the following formula:

TTWR = WR (before additions) * [(NTP (before additions) + NTA)/NTP 
    (before additions)]

Where:

TTWR = total transmission wheeling revenues
WR (before additions) = wheeling revenues (before additions)
NTA = new transmission additions
NTP (before additions) = Net Transmission Plant (before additions)

    (7) The forecast of major resource additions or reduction costs to 
be included in the Utility's Exchange Period ASC will be reviewed by 
Bonneville in the ASC review process that is conducted during the Review 
Period.
    (8) All major resources included in an ASC calculation prior to the 
start of the Exchange Period will be projected forward to the midpoint 
of the Exchange Period.
    (9) For each major resource addition or reduction that is forecasted 
to occur during the Exchange Period, Bonneville will calculate the 
difference in ASC between the ASC without the major resource addition or 
reduction and the ASC with the major resource addition or reduction (ASC 
delta) at the midpoint of the Exchange Period.
    (10) Once the major resource addition or reduction becomes 
effective, as determined by paragraph (c)(2) of this section, Bonneville 
will add the ASC delta to the Utility's existing ASC to determine its 
new ASC.
    (11) For purposes of calculating ratios with Distribution Plant, 
Bonneville will escalate the Base Period average per-MWh cost of 
Distribution Plant forward to the midpoint of the Exchange Period, and 
use the escalated

[[Page 864]]

average cost to determine the distribution-related cost of meeting load 
growth since the Base Period.
    (12) Bonneville will escalate the cost of General Plant, Accounts 
389 through 399.1, forward to the midpoint of the Exchange Period by 
calculating the ratio of each Account's value in the Base Period to the 
sum of Production, Transmission, and Distribution plant values in the 
Base Period, and then multiplying the Base Period ratio times the 
forecasted value for Production, Transmission, and Distribution plant.
    (13) Bonneville will issue procedural rules to ensure the 
confidentiality of information provided by Utilities regarding any major 
resource additions or reductions as part of its review process. 
Bonneville will provide parties with an opportunity to comment on the 
rules prior to their implementation in the review process. Failure to 
provide needed information may result in exclusion of the related costs 
from the Utility's ASC. However, load growth will be assumed to be met 
with purchases in the wholesale market, as described in paragraph (e) of 
this section. If the Utility fails to supply confidential resource data, 
it loses the difference between the cost of the resource and the price 
of electricity in the wholesale market.
    (d) Forecasted Contract System Load and Exchange Load. All Utilities 
are required to provide a forecast of their Contract System Load and 
associated Exchange Load, as well as a current distribution loss 
analysis as described in Endnote e of Appendix 1, with their Appendix 1 
filings. The load forecast for Contract System Load and Exchange Load 
will start with the Base Period and extend through four (4) years after 
the Exchange Period. The load forecast for Contract System Load and 
Exchange Load will be provided on a monthly basis for the Exchange 
Period.
    (e) Load growth not met by major resource additions. All forecast 
load growth not met by major resource additions will be met by purchased 
power at the forecasted utility-specific, short-term purchased power 
price.
    (1) The Utility's forecast Load Growth will be met with electric 
market purchases priced at the Utility's forecast short-term purchased 
power price as determined in paragraph (b) of this section unless the 
Utility forecasts major resource additions.
    (2) In the event of major resource additions, forecast Load Growth 
will be met by the major resource(s). If the major resource is less than 
total forecast load growth, the unmet Load Growth will be met with 
electric market purchases priced at the Utility's forecast short-term 
purchased power price.
    (3) In the event the power provided by a major resource exceeds the 
Utility's forecast Load Growth, the excess power will be used to reduce 
the Utility's short-term purchases. If short-term power purchases are 
reduced to zero, any remaining power will be sold as surplus power at 
the short-term sales for resale price as determined in paragraph (b) of 
this section.
    (f) Changes to service territory. In the event a Utility forecasts 
that it will acquire a new service territory, or lose a portion of its 
existing service territory, and the gain or loss of that territory 
results in a 2.5 percent or greater change to the Utility's Base Period 
ASC, the Utility must file two Appendix 1 filings with Bonneville as 
follows:
    (1) First, a Base Period ASC that does not reflect the acquisition 
or loss of service territory; and
    (2) Second, a Base Period ASC that incorporates the following 
changes:
    (i) A forecast of the increase or reduction in Contract System Load 
associated with the acquisition or reduction in service territory.
    (ii) A forecast of the increase or reduction in Contract System Cost 
associated with the acquisition or reduction of the service territory.
    (iii) A forecast of capital and operating cost increases or 
reductions associated with the change in service territory.
    (iv) A forecast of the changes in purchased power expenses, sales 
for resale revenues, and other debits or credits based on the changes in 
the service territory.
    (3) Because the date of the actual change to the Utility's service 
territory could differ from the forecast date used to determine the ASC 
during the

[[Page 865]]

Review Period, Bonneville will not adjust the Utility's ASC until the 
change in service territory takes place.
    (g) ASC determination for Consumer-owned Utilities that elect to 
execute Regional Dialogue High Water Mark contracts. For Consumer-owned 
Utilities that elect to execute Regional Dialogue CHWM contracts, 
Bonneville will use the following approach:
    (1) Use the RHWM System Resources as determined in the Tiered Rates 
Methodology (TRM) process.
    (2) Determine the RHWM Exchange Load.
    (3) Calculate the Utility's Contract System Cost as described in the 
ASC Methodology.
    (4) Determine the fully allocated cost of resources used to meet 
Contract System Load that is not met by:
    (i) The lesser of the Utility's RHWM or Forecast New Requirement, 
plus
    (ii) Existing Resources for CHWM (as defined in the Tiered Rates 
Methodology).
    (5) RHWM Contract System Cost = Contract System Cost minus fully 
allocated cost of resources (from paragraph (g)(4) of this section).
    (6) RHWM Average System Cost = RHWM Contract System Cost (from 
paragraph (g)(5) of this section)/RHWM System Resource (from paragraph 
(g)(1) of this section).
    (h) Filing of Appendix 1. Utilities must file an Appendix 1, 
including ASC information, by June 1 of each year, as required in Sec. 
301.3, for Bonneville's review and determination of a Base Period ASC. 
Utilities will file multiple, contingent, Base Period ASC filings to 
reflect changes to service territories as required in paragraph (f) of 
this section.



Sec. 301.5  Changes in Average System Cost methodology.

    (a) The Administrator, at his or her discretion, or upon written 
request from three-quarters of the utilities that are parties to 
contracts authorized by section 5(c) of the Northwest Power Act, or from 
three-quarters of Bonneville's preference customers, or from three-
quarters of Bonneville's direct-service industrial customers may 
initiate a consultation process as provided in section 5(c) of the 
Northwest Power Act. After completion of this process, Bonneville's 
Administrator may file the new ASC methodology with the Commission.
    (b) The Administrator will not initiate any consultation process 
until one year of experience has been gained under the then-existing ASC 
methodology, that is, one year after the then-existing ASC methodology 
is adopted by Bonneville and approved by the Commission, through interim 
or final approval, whichever occurs first.
    (c) The Administrator may, from time to time, issue interpretations 
of the ASC methodology. The Administrator also may modify the 
functionalization code of any Account to comply with the limitations 
identified in sections 5(c)(7)(A)-(C) of the Northwest Power Act or to 
conform to Commission revisions to the Uniform System of Accounts.



Sec. 301.6  Appendix 1 instructions.

    (a) Appendix 1 is the form on which a Utility reports its Contract 
System Cost, Contract System Load, and other necessary data for the 
calculation of ASC. Appendix 1 is an electronic template consisting of 
seven schedules and several supporting files that must be completed by 
the Utility in accordance with these instructions and with the 
provisions of the endnotes following the schedules.
    (b) Appendix 1 filings must be accompanied by an attestation 
statement of the Chief Financial Officer of the Utility or other 
responsible official who possesses the financial and accounting 
knowledge necessary to complete the attestation statement.
    (c) The primary source of data for the Investor-owned Utilities' 
Appendix 1 filings is the Utility's prior year FERC Form 1 filings with 
the Commission. Any items not applicable to the Utility must be 
identified.
    (d) For Consumer-owned Utilities that do not follow the Commission's 
Uniform System of Accounts, filings must include reconciliation between 
Utility Accounts and the items allowed as Contract System Cost. In 
addition, the cost-of-service report must be reviewed by an independent 
accounting

[[Page 866]]

or consulting firm, and must be accompanied by a report from that 
independent accounting or consulting firm that outlines the review work 
that was performed in preparing the cost-of-service report along with an 
assurance statement that the information contained in the cost-of-
service report is presented fairly in all material respects.
    (e) The Appendix 1 template is available electronically at http://
www.bpa.gov/corporate/finance/ascm/. The primary schedules are:
    (1) Schedule 1: Plant Investment/Rate Base
    (2) Schedule 1A: Cash Working Capital
    (3) Schedule 2: Capital Structure and Rate of Return
    (4) Schedule 3: Expenses
    (5) Schedule 3A: Taxes
    (6) Schedule 3B: Other Included Items
    (7) Schedule 4: Average System Cost
    (f) The filing Utility must reference and attach work papers, 
documentation and other required information that support costs and 
loads, including details of allocation and functionalization. All 
references to the Commission's Accounts are to the Commission's Uniform 
System of Accounts, as amended by subsequent Commission actions. The 
costs includable in the attached schedules are those includable by 
reason of the definitions in the Commission's Accounts. If the 
Commission's Accounts are later revised or renumbered, any changes will 
be incorporated into the Appendix 1 by reference, except to the extent 
Bonneville determines that a particular change results in a change in 
the type of costs allowable for Residential Exchange Program purposes. 
In that event, Bonneville will address the changes, including escalation 
rules, in its review process for the following Exchange Period.
    (g) Bonneville may require a Utility to account for all transactions 
with affiliated entities as though the affiliated entities were owned in 
whole or in part by the Utility, if necessary, to properly determine 
and/or functionalize the Utility's costs.
    (h) A Utility operating in more than one Pacific Northwest 
Jurisdiction must file one Appendix 1.
    (i)(1) A Utility operating in a Jurisdiction within the Pacific 
Northwest and within Jurisdictions outside the Pacific Northwest must 
allocate its total system costs among its Jurisdictions within the 
Pacific Northwest and outside the Pacific Northwest in accord with the 
same allocation methods and procedures used by the Regulatory Body(ies) 
to establish Jurisdictional costs and resulting revenue requirements. 
The Utility's Appendix filing must include details of the allocation.
    (2) The allocation must exclude all costs of additional resources 
used to meet loads outside the Pacific Northwest, as required by section 
5(c)(7) of the Northwest Power Act. All schedule entries and supporting 
data must be in accord with Generally Accepted Accounting Principles and 
Practices as these principles and practices apply to the electric 
utility industry.
    (j) A Utility must file an attestation statement with each Appendix 
1 filing and supporting documentation for each Review Period.



Sec. 301.7  Average System Cost methodology functionalization.

    (a) Functionalization of each Account included in a Utility's ASC 
must be according to the functionalization prescribed in Table 1, 
Functionalization and Escalation Codes. Direct analysis on an Account 
may be performed only if Table 1 states specifically that a Utility may 
perform a direct analysis on the Account, with the exception of 
conservation costs. Utilities will be able to functionalize all 
conservation-related costs to Production, regardless of the Account in 
which they are recorded. The direct analysis must be consistent with the 
directions provided in this section.
    (b) Functionalization codes.
    (1) DIRECT--Direct Analysis.
    (2) PROD--Production.
    (3) TRANS--Transmission.
    (4) DIST--Distribution/Other.
    (5) PTD--Production, Transmission, Distribution/Other Ratio.
    (6) TD--Transmission, Distribution/Other Ratio.
    (7) GP--General Plant Ratio.
    (8) GPM--General Plant Maintenance Ratio.

[[Page 867]]

    (9) PTDG--Production, Transmission, Distribution/Other, General 
Plant Ratio.
    (10) LABOR--Labor Ratio.
    (c) Functionalization requirements.
    (1) Functionalization of certain Accounts may be based on Direct 
Analysis or with a default ratio associated with that specific Account 
as shown in Table 1. Once a Utility uses a specific functionalization 
method for an Account, the Utility may not change the functionalization 
method for that Account without prior written approval from Bonneville.
    (2) The Utility must submit with its Appendix 1 all work papers, 
documents, or other materials that demonstrate that the 
functionalization under its Direct Analysis assigns costs, revenues, 
debits or credits based upon the actual and/or intended functional use 
of those items. Failure to submit the documentation will result in the 
entire account being functionalized to Distribution/Other, or 
Production, or Transmission, as appropriate.
    (d) Functionalization methods. (1) Direct analysis, if allowed or 
required by Table 1, assigns costs, revenues, debits and credits to the 
Production, Transmission, and/or Distribution/Other function of the 
Utility. The only exception to this requirement is for Accounts that 
include conservation-related costs. Subject to the provisions of 
paragraph (d)(4) of this section, a Utility may conduct a Direct 
Analysis on any Account that contains conservation-related costs. The 
Direct Analysis performed by a Utility is subject to Bonneville review 
and approval.
    (2) Bonneville will not allow a Utility to use a combination of 
Direct Analysis and a prescribed functionalization method for the same 
Account. The Utility can develop and use a functionalization ratio, or 
use a prescribed functionalization method, if the Utility, through 
Direct Analysis, can justify how the ratio reflects the functional 
nature of the costs, revenues, debits, or credits included in any 
Account.
    (3) A Utility that wishes to include advertising and promotion costs 
related to conservation will use Direct Analysis.
    (4) If a Utility records conservation costs in an Account that is 
functionalized to Distribution/Other, the Utility will identify and 
document the conservation-related costs included in the Account, and the 
balance of the costs will be functionalized to Distribution/Other. The 
presence of conservation-related costs in an Account does not authorize 
the Utility to perform a Direct Analysis on the entire Account. This 
option allows a Utility to assign conservation costs in the specified 
Account to Production based on analysis and support from the Utility 
that demonstrates the cost assignment is appropriate. The Utility must 
submit with its ASC filing all work papers, documents, and other 
materials that demonstrate the functionalization contained in its Direct 
Analysis and assign costs based upon the actual and/or intended 
functional use of those items. Failure to submit the documentation will 
result in the entire Account being functionalized to Distribution/Other 
for all schedules with the exception of items included in Schedule 3B, 
Other Included Items, where certain Accounts must be functionalized to 
Production as appropriate.

[[Page 868]]



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        Sec. Appendix 1 to Part 301--ASC Utility Filing Template

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                       SUBCHAPTERS M-O [RESERVED]



       SUBCHAPTER P_REGULATIONS UNDER THE INTERSTATE COMMERCE ACT



PART 340_RATE SCHEDULES AND TARIFFS--Table of Contents



    Authority: Department of Energy Organization Act, 42 U.S.C. 7101-
7352; E.O. 12009, 43 CFR 142; Interstate Commerce Act, 49 U.S.C. 1, et 
seq.; Natural Gas Act, 15 U.S.C. 717-717w.



Sec. 340.1  Suspended rate schedules; procedure; refund requirement; 

administered by the Federal Energy Regulatory Commission.

    (a) Effectiveness of suspended rate schedules. If a rate suspension 
proceeding initiated under section 15(7) of the Interstate Commerce Act 
has not been concluded and an order has not been issued by the 
Commission at the expiration of the suspension period, the proposed 
rate, charge, classification, or service shall go into in effect so long 
as the pipeline company complies with all of the requirements of this 
section.
    (b) Recordkeeping. Any pipeline company whose proposed rates or 
charges were suspended and have gone into effect pending final order of 
the Commission pursuant to section 15(7) of the Interstate Commerce Act 
shall keep accurate accounts in detail of all amounts received by reason 
of the rates or charges made effective as provided in the Commission's 
order, for each billing period, including the following information by 
billing period, and by shipper:
    (1) The monthly billing determinants of petroleum or petroleum by-
products transported to each consignee under the suspended tariffs;
    (2) The revenues which would result from such transportation 
services if they were computed under the rates in effect immediately 
prior to the date the proposed change became effective, if applicable;
    (3) The revenues resulting from such transportation services as 
computed under the proposed increased rates or charges that became 
effective after the suspension period; and
    (4) The difference between the revenues computed in paragraphs 
(b)(2) and (3) of this section, if applicable.
    (c) Refunds. (1) Any pipeline company that collects charges pursuant 
to this section shall refund at such time, in such amounts, and in such 
manner as may be required by final order of the Commission, the portion 
of any rates and charges found by the Commission in that proceeding not 
to be justified, together with interest as required in paragraph (c)(2) 
of this section.
    (2) Interest shall be computed from the date of collection until the 
date refunds are made as follows:
    (i) At an average prime rate for each calendar quarter on amounts 
held on or after February 11, 1983. The applicable average prime rate 
for each calendar quarter shall be the arithmetic mean, to the nearest 
one-hundredth of one percent, of the prime rate values published in the 
Federal Reserve Bulletin, or in the Federal Reserve's ``Selected 
Interest Rates'' (Statistical Release G. 13) for the most recent three 
months preceding the beginning of the calendar quarter; and
    (ii) The interest required to be paid under paragraph (c)(2)(i) of 
this section shall be compounded quarterly.
    (3) Any pipeline company required to make refunds pursuant to this 
section shall bear all costs of such refunding.
    (4) If any rate or charge described in paragraph (a) of this section 
that is found not to be justified by the Commission is shared between 
two or more pipeline companies, each pipeline company which shared in 
the unjustified rates or charges is required to refund to the pipeline 
company that published the tariff, not less than five days prior to the 
refund date ordered by the Commission under paragraph (c)(1) of this 
section,
    (i) That portion of the unjustified rates or charges shared, and
    (ii) The appropriate interest as required in paragraph (c)(2) of 
this section for the period during which the refundable amounts were 
held.

[[Page 901]]


The pipeline company that published the tariff shall, on the date set by 
the Commission in its final order, make refunds with interest to the 
appropriate shipper for the full period during which the refundable 
amounts were held.

[Order 273, 48 FR 1289; Jan. 12, 1983]



PART 341_OIL PIPELINE TARIFFS: OIL PIPELINE COMPANIES SUBJECT TO SECTION 6 OF 

THE INTERSTATE COMMERCE ACT--Table of Contents



Sec.
341.0 Definitions; application.
341.1 Electronic filing of tariffs and related materials.
341.2 Filing requirements.
341.3 Form of tariff.
341.4 Filing requirements for amendments to tariffs.
341.5 Cancellation of tariffs.
341.6 Adoption rule.
341.7 Concurrences.
341.8 Terminal and other services.
341.9 Index of tariffs.
341.10 Application of rates to intermediate points.
341.11 Rejection of tariff publications and other filed materials.
341.12 Informal submissions.
341.13 Withdrawal of proposed tariff publications.
341.14 Special permission.
341.15 Long and short haul or aggregate of intermediate rates.

    Authority: 42 U.S.C. 7101-7352; 49 U.S.C. 1-27.

    Source: Order 561, 58 FR 58773, Nov. 4, 1993, unless otherwise 
noted.



Sec. 341.0  Definitions; application.

    (a) Definitions. (1) Carrier means an oil pipeline subject to the 
Commission's jurisdiction under the Interstate Commerce Act.
    (2) Concurrence means the agreement of a carrier to participate in 
the joint rates or regulations published by another carrier.
    (3) Local rate means a rate for service over the lines or routes of 
only one carrier.
    (4) Local tariffs means tariffs which contain only local rates.
    (5) Joint rate means a rate that applies for service over the lines 
or routes of two or more carriers made by an agreement between the 
carriers, effected by a concurrence or power of attorney.
    (6) Joint tariffs means tariffs which contain only joint rates.
    (7) Posting or post means making a copy of a carrier's tariff 
available during regular business hours for public inspection in a 
convenient form and place at the carrier's principal office and other 
offices of the carrier where business is conducted with affected 
shippers, or placing a copy on the Internet in a form accessible by the 
public.
    (8) Proportional rates means rates published to apply only to 
traffic having a prior transportation movement, a subsequent 
transportation movement, or both.
    (9) Rule means any regulation or condition of service stated in the 
tariff which affects any rate or service provided by the carrier.
    (10) Subscriber means a shipper or a person who regularly is 
furnished a copy of a particular tariff publication (including reissues 
and amendments) by the publishing carrier or agent.
    (11) Tariff publication means all parts of a filed tariff, including 
revised pages, supplements and sections.
    (12) Through rates means the total rates from point of origin to 
destination. They may be local rates, joint rates, or a combination of 
separately established rates.
    (13) Section means an individual portion of a tariff that is tracked 
and accorded appropriate legal status (proposed, suspended, effective). 
A section is the smallest portion of a tariff that can be submitted as 
part of a tariff filing.
    (b) General application. (1) Each carrier must publish, post, and 
file with the Commission tariff publications which contain in clear, 
complete, and specific form all the rules and regulations governing the 
rates and charges for services performed in accordance with the tariff. 
Tariffs must be published in a format that ensures the tariffs are 
readable and that their terms and conditions are easy to understand and 
apply.
    (2) The Commission may reject, or may require modification, 
correction, or reissuance of, any tariff publication

[[Page 902]]

or other document not in compliance with the law.
    (3) All tariffs filed on or after December 6, 1993 must conform to 
the regulations of this part. Tariffs which are on file as of that date 
will not have to be reissued solely to conform to this part.
    (4) Each carrier must post and maintain a complete and current set 
of all proposed, current, and suspended tariff publications which it has 
issued or to which it is a party. The carrier must identify in its 
posted tariff files any tariff publication under suspension and 
investigation. Each carrier must afford inquirers reasonable opportunity 
to examine its posted tariff files.

[58 FR 58773, Nov. 4, 1993, as amended by Order 606, 64 FR 44404, Aug. 
16, 1999; Order 714, 73 FR 57536, Oct. 3, 2008]



Sec. 341.1  Electronic filing of tariffs and related materials.

    (a) General rule. Filings of tariff publications and related 
materials must be made electronically.
    (b) Requirement for signature. All filings must be signed in 
compliance with the following:
    (1) The signature on a filing constitutes a certification that the 
contents are true to the best knowledge and belief of the signer, and 
that the signer possesses full power and authority to sign the filing.
    (2) A filing must be signed by one of the following:
    (i) The person on behalf of whom the filing is made;
    (ii) An officer, agent, or employee of the company, governmental 
authority, agency, or instrumentality on behalf of which the filing is 
made; or,
    (iii) A representative qualified to practice before the Commission 
under Sec. 385.2101 of this chapter who possesses authority to sign.
    (3) All signatures on the filing or any document included in the 
filing must comply, where applicable, with the requirements in Sec. 
385.2005 of this chapter with respect to sworn declarations or 
statements and electronic signatures.
    (c) Format requirements for electronic filing. The requirements and 
formats for electronic filing are listed in instructions for electronic 
filing and for each form. These formats are available on the Internet at 
http://www.ferc.gov and can be obtained at the Federal Energy Regulatory 
Commission, Public Reference Room, 888 First Street, NE., Washington, DC 
20426.

[Order 714, 73 FR 57536, Oct. 3, 2008]



Sec. 341.2  Filing requirements.

    (a) Service of filings. (1) Carriers must serve tariff publications 
and justifications to each shipper and subscriber. The company may 
choose to effect service either electronically or by paper. Such service 
shall be made in accordance with the requirements of Part 385 of this 
chapter.
    (2) Unless it seeks a waiver of electronic service, each customer or 
party entitled to service under this paragraph (a) must notify the 
company of the e-mail address to which service should be directed. A 
customer or party may seek a waiver of electronic service by filing a 
waiver request under Part 390 of this chapter providing good cause for 
its inability to accept electronic service.
    (b) Notice period. All tariff publications (except for suspension 
supplements, adoption notices, adoption supplements, and tariff indexes) 
must be filed with the Commission and posted not less than 30, nor more 
than 60, days prior to the proposed effective date, unless a different 
notice period is authorized by the Commission. The notice period shall 
begin the first full day after the tariff publication is filed with the 
Commission and shall end on the last day prior to the tariff publication 
effective date.
    (c) Transmittal letter--(1) Contents. Letters of transmittal must 
describe the filing and explain any changes to the carrier's rates, 
rules, terms or conditions of service; state if a waiver is being 
requested, and specify the statute, section, regulation, policy or order 
requested to be waived; and identify the tariffs supplemental numbers, 
or tariff sections and the proposed effective date of the tariff 
publication. Carriers must provide to the Commission, in the letter of 
transmittal accompanying the filing of a tariff publication containing a 
joint carrier, the address, phone number, and a contact for each joint 
carrier listed in the tariff publication.

[[Page 903]]

    (2) Certification. Letters of transmittal must certify that the 
filing has been sent to each subscriber of the tariff publication 
pursuant to paragraph (a) of this section. For service made on paper, 
the letters of transmittal must certify that the filing has been sent to 
each customer or party by first class mail or other agreed-upon means. 
If there are no subscribers, letters of transmittal must so certify.

[58 FR 58773, Nov. 4, 1993, as amended by Order 606, 64 FR 44404, Aug. 
16, 1999; Order 714, 73 FR 57536, Oct. 3, 2008]



Sec. 341.3  Form of tariff.

    (a) Tariffs may be filed either by dividing the tariff into 
individual loose-leaf tariff sheets or tariff sections, or as an entire 
document.
    (b) Contents of tariff. All tariff publications must contain the 
following information in the following order:
    (1) Title page. The title page of each tariff must contain the 
following information:
    (i) The FERC tariff number designation, in the upper right hand 
corner, numbered consecutively, and the FERC tariff number designation 
of the tariff that is canceled, if any, under it;
    (ii) The corporate name of the carrier;
    (iii) The type of rates, e.g., local, joint, or proportional, and 
the commodity to which the tariff applies, e.g., crude, petroleum 
product, or jet fuel;
    (iv) Governing tariffs, e.g., separate ``rules and regulations'' 
tariffs, if any;
    (v) The specific Commission order pursuant to which the tariff is 
issued;
    (vi) The issue date, which must be shown on the lower left side, and 
the effective date, which must be shown on the lower right side;
    (vii) The expiration date, if applicable;
    (viii) The name of the issuing officer or duly appointed official 
issuing the tariff, the complete street and mailing address of the 
carrier, and the name and phone number of the individual responsible for 
compiling the tariff publication.
    (2) Table of contents. Tariffs of more than nine pages in length 
must contain a table of contents. A table of contents is optional for 
tariffs which are less than 10 pages in length.
    (3) A list of carriers participating in joint tariffs.
    (4) Index of Commodities.
    (5) Explanatory statements. These statements must explain the proper 
application of rates and rules.
    (6) Rules governing tariff publications. (i) All rules affecting the 
rates or the services provided for in the tariff publication must be 
included. A special rule affecting a particular item or rate must be 
referred to specifically in that item or in connection with that rate.
    (ii) Each rule must be given a separate item number, (e.g., Item No. 
1), and the title of each rule must be distinctive.
    (iii) Except as provided in Sec. 341.10, tariffs may not include 
any rules that substitute for any rates named in the tariff or found in 
any other tariff. Rules may not provide that traffic of any nature will 
be ``transported only by special agreement'' or any other provision of 
similar meaning.
    (iv) Rules may be separately published in a general rules tariff 
when it is not desirable or practicable to include the governing rules 
in the rate tariff. Rate tariffs that do not contain rules must make 
specific reference, by FERC Tariff number, to the governing general 
rules tariff.
    (v) When joint rate tariffs refer to a separate governing rules 
tariff, such separate tariff must be concurred in by all joint carriers.
    (7) Statement of rates. Rates must be stated explicitly in cents, or 
in dollars and cents, per barrel or other specified unit. The names or 
designations of the places from and to which the rates apply must be 
arranged in a simple and systematic manner. Any related services 
performed by the carrier in connection with the rates must be clearly 
identified and explained. Duplicative or conflicting rates for the same 
service are prohibited.
    (8) Routing. Routing over which the rates apply must be stated so 
that the actual routes may be ascertained. This may be accomplished by 
stating that the rates apply via all routes of the carrier except as 
otherwise specifically stated in the tariff.
    (9) Explanation of abbreviations and reference marks. Reference 
marks, abbreviations, and note references must

[[Page 904]]

be explained at the end of each tariff publication. U.S. Postal Service 
state abbreviations and other commonly used abbreviations need not be 
explained.
    (10) Changes to be indicated in tariff or supplement.
    (i) All tariff publications must identify where changes have been 
made in existing rates or charges, rules, regulations or practices, or 
classifications. One of the following letter designations or uniform 
symbols may be used to indicate the change, and insertions, other than 
to tables and rates, must be indicated by either highlight, background 
shading, bold, or underline, with deleted text indicated by strike-
through:

------------------------------------------------------------------------
              Description                   Option 1         Option 2
------------------------------------------------------------------------
Increase..............................        [I]
Decrease..............................  <                [D]
Change in wording only................  [caret]          [W]
Cancel................................  /                [C]
Reissued Item.........................                   [R]
Unchanged Rate........................  =                [U]
New...................................  +                [N]
------------------------------------------------------------------------

    (ii) Reissued items must include in the square or brackets the 
number of the tariff supplement where the item was first issued or 
amended. If the letter designation is used, the number of the supplement 
must be shown together with the letter. The references must be explained 
at the end of the tariff. For example: ``[R2] Reissued from Supplement 
No. 2, effective [specify date].''
    (iii) The symbols and letter designations contained in paragraph 
(b)(10)(i) of this section must not be used for any other purpose.
    (iv) When the same change is made in all or in substantially all 
rates in a tariff, a tariff supplement, or a tariff or tariff supplement 
page, that fact and the nature of the change must be indicated in 
distinctive type at the top of the title page of the issue, or at the 
top of each page, as appropriate. For example: ``All rates in this issue 
are increased,'' or ``All rates on this page are reduced unless 
otherwise indicated.''
    (v) When a tariff publication that cancels a previous tariff 
publication does not include points of origin or destination, or rates, 
rules, or routes that were contained in the prior tariff publication, 
the new tariff publication must indicate the cancellation. If such 
omissions effect changes in charges or services, that fact must be 
indicated by the use of the symbols prescribed in paragraph (b)(10)(i) 
of this section.
    (vi) Only revisions to tariff provisions identified in the filing 
constitute the tariff filing. Revisions to unidentified portions of the 
rate schedule or tariff are not considered part of the filing nor will 
any acceptance of the filing by the Commission constitute acceptance of 
such unmarked changes.
    (11) Tariff publications must be consecutively numbered.
    (c) Loose-leaf tariffs. (1) Pages of loose-leaf tariffs must be 
consecutively numbered. Each page must show at the top of the page the 
name of the issuing carrier, the page number, and the FERC tariff 
number. Each page must show at the bottom of the page the issue date, 
the effective date, the name of the issuing officer or duly appointed 
official issuing the tariff, the complete street and mailing address of 
the carrier, and the name and phone number of the individual responsible 
for compiling the tariff publication.
    (2) Changes and additions to loose-leaf tariffs must be made by 
reprinting the page upon which the change or addition is made, and 
designating the changed page as a revised page. For example: ``First 
revised page 1 cancels Original page 1,'' or ``Second revised page 2 
cancels First revised page 2.'' When a revised title page is issued, the 
following notation must be shown:

    Original tariff effective [specify date].

    (3) When changes and additions require additional pages, the 
additional pages must be given the same number with a letter suffix. For 
example: ``Original page 4-A,'' or ``Original page 4-B.'' When, for 
example, ``Original page 4-A'' is changed, it must be done by issuing 
``First revised page 4-A,'' which must cancel ``Original page 4-A.''
    (4) When a revised page is issued which omits rates or rules 
published on the page which it cancels, and such rates or rules are 
published on another page, the revised page must refer to the page on 
which the rates or rules will be found. Subsequently revised pages of

[[Page 905]]

the same number must omit the reference insofar as that particular 
matter is concerned.
    (5) Additional pages to a loose-leaf tariff must be numbered 
beginning with the next successive page number after the last page and 
must be designated as ``Original page --.''
    (6) The loose-leaf tariff page that follows the title page is known 
as a ``check sheet'' and must be designated as ``Original page 1.'' When 
the original tariff is filed, the check sheet must show the number of 
pages contained in the tariff. For example: ``Pages 1 to 150, inclusive, 
of this tariff are effective as of the date shown.'' When pages are 
revised or added to the tariff, or when supplements are issued, the 
check sheet must be revised to list all currently effective revised 
pages and supplements. The list in numerical order of all added original 
and revised pages must follow the statement: ``Original and revised 
pages and supplements as named below contain all changes from the 
original tariff that are in effect on the date hereof.'' For example:

------------------------------------------------------------------------
                                            Number of revision except as
                   Page                              indicated.
------------------------------------------------------------------------
3.........................................  5th.
5A........................................  Original.
10........................................  8th.
151.......................................  Original.
------------------------------------------------------------------------

    (7) The only loose-leaf tariff supplements that may be issued are 
adoption supplements, suspension supplements, and cancellation 
supplements.

[Order 561, 58 FR 58773, Nov. 4, 1993, as amended by Order 714, 73 FR 
57536, Oct. 3, 2008]



Sec. 341.4  Filing requirements for amendments to tariffs.

    (a) Supplements to tariffs. (1) Supplements are limited to one 
effective supplement per tariff, except for cancellation, postponement, 
adoption, correction, and suspension supplements.
    (2) Item numbers that are canceled or amended must be identified and 
brought forward with the item title in the current supplement. Reissued 
items from prior supplements must be brought forward in the current 
supplement and referenced with the symbols in Sec. 341.3(b)(10)(i). 
Cancellation of an item by supplement must be made by bringing forward 
the item number with an added capital letter suffix in alphabetical 
sequence. For example: ``Item 445-A cancels Item 445.'' If a canceled, 
withdrawn, or expired item is subsequently reissued, it must be 
republished under the same item number with the next letter suffix.
    (b) Cancellation supplements. Cancellation supplements must be filed 
when tariffs are canceled without reissue.
    (c) [Reserved]
    (d) Adoption supplements. A supplement adopting the tariff of 
another carrier must be filed to provide the notice required in Sec. 
341.6.
    (e) Correction supplements. Correction supplements must be filed to 
correct typographical or clerical errors. Three correction supplements 
are permitted per tariff.
    (f) Suspension supplements. A suspension supplement must be filed 
for each suspended tariff or suspended part of a tariff within 30 days 
of the issuance of a suspension order. The suspension supplement must be 
served on all subscribers. The supplement must include the date it is 
issued, a reproduction of the ordering paragraphs of the suspension 
order, a statement that the tariff or portion of the tariff was 
suspended until the date stated in the suspension order, a reference to 
the docket number under which the suspension order was issued, and a 
statement that the previous tariff publication remains in effect.

[58 FR 58773, Nov. 4, 1993, as amended by Order 561-A, 59 FR 40256, Aug. 
8, 1994; Order 714, 73 FR 57537, Oct. 3, 2008]



Sec. 341.5  Cancellation of tariffs.

    Carriers must cancel prior tariffs when the tariffs are reissued. 
When a tariff is canceled in whole or in part by a supplement, the 
supplement must show where the rates will be found thereafter or what 
rates will thereafter apply. If the service in connection with the 
tariff is no longer in interstate commerce, the tariff publication must 
so state.



Sec. 341.6  Adoption rule.

    (a) Change in name of carrier or ownership of property. The carrier 
must notify the Commission when there is:

[[Page 906]]

    (1) A change in the legal name of the carrier;
    (2) A transfer of all of the carrier's properties; or
    (3) A change in ownership of only a portion of the carrier's 
property.
    (b) Notification. The carrier must provide notice of these 
occurrences by tariff publication, filed as soon as possible but no 
later than 30 days following such occurrence. The filing of adoption 
notices and adoption supplements requires no notice period.
    (c) Complete adoption. (1) When a carrier changes its legal name, or 
when ownership of all a carrier's properties is transferred, the 
adopting carrier must file and post an adoption notice, numbered in its 
own FERC Tariff series, reading as follows:

    The [legal name of adopting carrier] hereby adopts and makes its own 
all tariff publications of [name of adopted carrier], effective [date].

    (2) The adopting carrier must concurrently file a consecutively 
numbered supplement to each of the adopted carrier's tariffs covered by 
the adoption notice, reading as follows:

    Effective [date shown on adoption notice] this tariff publication 
became the tariff of the [legal name of adopting carrier] as per its 
adoption notice FERC No. [number].

    (3) The supplements issued under this section may contain no other 
matter, and must refer to Sec. 341.6.
    (4) The adopting carrier must transfer into its FERC Tariff series 
the rates applying locally on the adopted lines. The transfer must be 
made within 30 days of the filing of the adoption notices and 
supplements. The adopting carrier must give 30 days notice as provided 
for in Sec. 341.2(b).
    (d) Partial adoption. (1) When the ownership of a portion of a 
carrier's properties is transferred to another carrier the adopting 
carrier must file and post an adoption notice, numbered in its own FERC 
Tariff series, containing the statement as follows:

    The [legal name of adopting carrier] hereby adopts and makes its 
own, the tariffs of [legal name of former owner] for transportation 
movements [describe by FERC tariff number, origin, and destination 
points], effective [date of adoption].

    (2) When a point on the transferred portion of a carrier's 
properties will continue to remain a point on the former owner's line, a 
reference must be provided in connection with the name of that point, 
explaining the common junction point.
    (3) The former owner must immediately file a consecutively numbered 
supplement to each of its tariffs covered by the adoption notice, 
reading as follows:

    Effective [date of adoption notice] this tariff became the tariff of 
[legal name of adopting carrier] for transportation movements [identify 
origin and destination points], as per its adoption notice FERC No. 
[number].

    (4) The adoption supplements issued under this section may contain 
no other matter, and must refer to Sec. 341.6.
    (5) Rates applying locally on the transferred portion must be 
transferred into the FERC Tariff series of the adopting carrier within 
30 days of the filing of the adoption notices and supplements. The 
adopting carrier must file and post its tariff publication as provided 
for in Sec. 341.2(b). Where rates are transferred from tariffs of the 
former owner to tariffs of the adopting carrier, the adopting carrier 
must establish the rates in its tariffs and the former owner must cancel 
the corresponding rates in its tariffs effective on the same date. The 
former owner must reference the FERC Tariff number of the adopting 
carrier for rates applying thereafter.

[58 FR 58773, Nov. 4, 1993, as amended by Order 606, 64 FR 44404, Aug. 
16, 1999]



Sec. 341.7  Concurrences.

    Concurrences must be maintained at carriers' offices and produced 
upon request. Cancellations or changes to concurrences affecting FERC 
tariffs must be shown in those tariffs.



Sec. 341.8  Terminal and other services.

    Carriers must publish in their tariffs rules governing such matters 
as prorationing of capacity, demurrage, odorization, carrier liability, 
quality bank, reconsignment, in-transit transfers, storage, loading and 
unloading, gathering, terminalling, batching, blending, commingling, and 
connection policy, and all other charges, services,

[[Page 907]]

allowances, absorptions and rules which in any way increase or decrease 
the amount to be paid on any shipment or which increase or decrease the 
value of service to the shipper.



Sec. 341.9  Index of tariffs.

    (a) In general. Each carrier must publish as a separate tariff 
publication under its FERC Tariff numbering system, a complete index of 
all effective tariffs to which it is a party, either as initial, 
intermediate, or delivering carrier. The index must be arranged in 
sections as indicated in paragraphs (b), (c), and (d) of this section 
and must show as to each tariff:
    (1) The FERC Tariff number;
    (2) The full name of the issuing carrier or agent;
    (3) The type of tariff or description of the traffic to which it 
applies, including origin and destination points; and
    (4) Whether the tariff contains rates for transportation by mode 
other than pipeline.
    (b) The first section. The first section of a tariff index must 
contain a list of all tariffs in which the carrier is an initial 
carrier. The list must be arranged alphabetically and organized within 
the following categories, in order:
    (1) Specific commodity tariffs;
    (2) General commodity tariffs; and
    (3) Miscellaneous tariffs, such as rules and services.
    (c) The second section. The second section of a tariff index must 
contain a list of all tariffs in which the carrier is a delivering 
carrier, arranged in the manner described in the first section of the 
tariff index. This section must also include those tariffs in which the 
carrier is an intermediate carrier.
    (d) The third section. The third section of a tariff index must 
contain a complete list of the FERC Tariff numbers of the carrier's own 
effective tariffs arranged in numerical order.
    (e) Supplements. The index must be kept current by supplements 
numbered consecutively. The supplements may be issued quarterly. At a 
minimum, the index must be reissued every four years.
    (f) Title page. The title page of each index and supplement must 
contain the issue date.



Sec. 341.10  Application of rates to intermediate points.

    (a) Applicability. (1) A carrier may provide in its tariff that 
existing rates between points named in the tariff will be applied to 
transportation movements from intermediate origin points not named in 
the tariff to named destination points, and from named origin points to 
intermediate destination points not named in the tariff.
    (2) A carrier must file a tariff publication applicable to the 
transportation movements within 30 days of the start of the service if 
the intermediate point is to be used on a continuous basis for more than 
30 days.
    (b) Intermediate point commodity rate regulations--(1) Intermediate 
origin points. The rate for service provided to a published destination 
point from an origin point not specifically named in the tariff, but 
located intermediate to published origin and destination points, must be 
the same as the published rate from the next more distant origin point. 
Application of this provision is subject to the following:
    (i) If branch or diverging lines create two or more ``next more 
distant'' points, the carrier must apply the rate which results in the 
lowest charge.
    (ii) If the intermediate point is located between two published 
origin points, the carrier must apply the rate which results in the 
higher charge.
    (iii) If the intermediate point is between more than two published 
origin points due to branch or diverging lines, the carrier must 
eliminate all such points except that from which the lowest charge is 
applicable.
    (iv) If there is in any other tariff a commodity rate from the 
proposed intermediate origin point that is applicable to the same 
movement, the carrier should not apply this rule from such intermediate 
point.
    (2) Intermediate destination points. The rate for service provided 
from a published origin point to a destination point not specifically 
named in the tariff, but located intermediate to published origin and 
destination points, must be the same as the published rate to the next 
more distant destination point. Application of this provision is subject 
to the following:

[[Page 908]]

    (i) If branch or diverging lines create two or more ``next more 
distant'' points, the carrier must apply the rate which results in the 
lowest charge.
    (ii) If the intermediate point is located between two published 
destination points, the carrier must apply the rate which results in the 
higher charge.
    (iii) If the intermediate point is between more than two published 
destination points due to branch or diverging lines, the carrier must 
eliminate all such points except that from which the lowest charge is 
applicable.
    (iv) If there is in any other tariff a commodity rate to the 
proposed intermediate destination point that is applicable to the same 
movement, the carrier should not apply the provisions of this rule to 
such intermediate point.
    (3) Intermediate origin and destination points. Both paragraphs 
(b)(1) and (b)(2) of this section may apply in connection with the same 
rate. In this instance, both regulations should be used to establish 
rates from intermediate points of origin to intermediate points of 
destination.



Sec. 341.11  Rejection of tariff publications and other filed materials.

    (a) Basis for rejection. The Commission may reject tariff 
publications or any other material submitted for filing that fail to 
comply with the requirements set forth in this part or violate any 
statute, or any regulation, policy or order of the Commission.
    (b) Numbering and notating tariff publications. The FERC Tariff 
number assigned to a tariff publication that has been rejected may not 
be used again. The tariff publication filed in its place must bear the 
following notation:

    Issued in lieu of [identify the rejected tariff publication], 
rejected by the Commission.



Sec. 341.12  Informal submissions.

    Carriers may informally submit tariff publications or related 
material for suggestions of Staff prior to the filing of the tariff 
publications with the Commission.



Sec. 341.13  Withdrawal of proposed tariff publications.

    (a) Proposed tariff publications. A proposed tariff publication 
which is not yet effective may be withdrawn at any time by filing a 
notice with the Commission with a certification that all subscribers 
have been notified by copy of such withdrawal.
    (b) Tariff publications that are subject to investigation. A tariff 
publication that has been permitted to become effective subject to 
investigation may be withdrawn at any time by filing a notice with the 
Commission, which includes a transmittal letter, a certification that 
all subscribers have been notified of the withdrawal, and the previous 
tariff provisions that are to be reinstated upon withdrawal of the 
tariff publication under investigation. Such withdrawal shall be 
effective immediately upon the submission of the notice, unless a 
specific effective date is set forth in the notice, and must have the 
following effects:
    (1) Any proceeding with respect to such tariff publication shall be 
terminated;
    (2) The previous tariff rate shall be reinstated; and
    (3) Any amounts collected under the withdrawn tariff publication 
which are in excess of the previous tariff rate shall be refunded within 
30 days of the withdrawal with interest as calculated by Sec. 340.1 of 
this chapter.
    (c) Numbering and notating tariff publications. The FERC Tariff 
number assigned to a tariff publication which has been withdrawn may not 
be used again. The tariff publication filed in its place must bear the 
following notation:

    Issued in lieu of [identify the withdrawn tariff publication] which 
was withdrawn.

[Order 561, 58 FR 58773, Nov. 4, 1993, as amended by Order 714, 73 FR 
57537, Oct. 3, 2008]



Sec. 341.14  Special permission.

    (a) Procedure. Applications for waiver of the notice and tariff 
requirements of section 6(3) of the interstate Commerce Act must be 
filed by the carrier concurrently with the tariff publication being 
proposed. The letter of transmittal must identify the filing as 
requesting a waiver under section 6(3) of

[[Page 909]]

the Interstate Commerce Act. The application must state in detail any 
unusual circumstance or emergency situation that supports the requested 
waiver. If the application requests permission to make changes in joint 
tariffs, it must state that it is made on behalf of all carriers party 
to the proposed change. Tariff publications issued on short notice must 
contain the following statement on the Title Pages:

    Issued on [insert number] days notice under authority of 18 CFR 
341.14. This tariff publication is conditionally accepted subject to 
refund pending a 30 day review period.

    (b) Conditional acceptance subject to refund. To permit short-notice 
filings to become effective as requested, the tariff publications filed 
concurrently with special permission requests for short (less than 30 
days) notice will be deemed conditionally accepted for filing, subject 
to refund, until the Commission has had a full 30-day review period in 
which to process the filing. Refunds will be collected with interest as 
calculated according to Sec. 340.1 of this chapter. The refund 
obligation will automatically terminate with no refunds due at the end 
of the full 30-day notice period absent an order to the contrary issued 
by the Commission.
    (c) Granting automatic permission. The special permission requested 
will be deemed automatically granted at the end of the full 30-day 
notice period absent an order denying such request.



Sec. 341.15  Long and short haul or aggregate of intermediate rates.

    (a) Requests for relief from section 4. Carriers may file requests 
for relief from the provisions of section 4 of the Interstate Commerce 
Act in order to charge a greater amount for a shorter distance over the 
same line or route in the same direction, or to charge greater 
compensation as a through rate than the aggregate of the intermediate 
rates. Such request will be deemed granted unless the Commission denies 
the request within 30 days of the filing.
    (b) Information required to be filed. A request for section 4 relief 
must contain the following information:
    (1) The names of the carriers for which the relief is being 
requested.
    (2) The FERC tariff numbers which contain the rates or charges 
referred to in the application, and identification of all the particular 
and related rates in question delineating origin and destination points.
    (3) An accurate and complete statement giving the basis and 
reasoning why section 4 relief is necessary.
    (4) A statement that the lower rates for longer than for shorter 
hauls over the same line or route are reasonably compensatory.
    (5) A map showing the pipelines and origin and destination points in 
question and other pertinent information.
    (c) Filing tariff publications concurrent with application. 
Applications for section 4 relief must be filed concurrently with the 
tariff publication filing establishing those rates. The transmittal 
letter must identify the filing as requesting section 4 relief.
    (d) Tariff statement. Tariff publications filed containing such 
rates shall plainly state on the title page of the tariff publication 
that the rates contained therein contravene section 4 of the Interstate 
Commerce Act.
    (e) Rounding through rates. When a carrier aggregates intermediate 
rates to make up through rates, it may round the resulting through rate 
to the nearest 0.5 whole cent.



PART 342_OIL PIPELINE RATE METHODOLOGIES AND PROCEDURES--Table of Contents



Sec.
342.0 Applicability.
342.1 General rule.
342.2 Establishing initial rates.
342.3 Indexing.
342.4 Other rate changing methodologies.

    Authority: 5 U.S.C. 571-83; 42 U.S.C. 7101-7532; 49 U.S.C. 60502; 49 
App. U.S.C. 1-85.

    Source: Order 561, 58 FR 58779, Nov. 4, 1993, unless otherwise 
noted.



Sec. 342.0  Applicability.

    (a) Except as provided in paragraph (b) of this section, rate 
changes by oil pipelines shall be governed by this part.
    (b) Exception for the Trans-Alaska Pipeline. This part shall not 
apply to the Trans-Alaska Pipeline authorized by the Trans-Alaska 
Pipeline Authorization Act (43 U.S.C. 1651, et seq.) or to any pipeline 
delivering oil directly or

[[Page 910]]

indirectly to the Trans-Alaska Pipeline.



Sec. 342.1  General rule.

    Each carrier subject to the jurisdiction of the Commission under the 
Interstate Commerce Act:
    (a) Must establish its initial rates subject to such Act pursuant to 
Sec. 342.2; and
    (b) Must make any change in existing rates pursuant to Sec. 342.3 
or Sec. 342.4, whichever is applicable, unless directed otherwise by 
the Commission.



Sec. 342.2  Establishing initial rates.

    A carrier must justify an initial rate for new service by:
    (a) Filing cost, revenue, and throughput data supporting such rate 
as required by part 346 of this chapter; or
    (b) Filing a sworn affidavit that the rate is agreed to by at least 
one non-affiliated person who intends to use the service in question, 
provided that if a protest to the initial rate is filed, the carrier 
must comply with paragraph (a) of this section.

[Order 561, 58 FR 58779, Nov. 4, 1993, as amended at 59 FR 59146, Nov. 
16, 1994]



Sec. 342.3  Indexing.

    (a) Rate changes. A rate charged by a carrier may be changed, at any 
time, to a level which does not exceed the ceiling level established by 
paragraph (d) of this section, upon compliance with the applicable 
filing and notice requirements and with paragraph (b) of this section. A 
filing under this section proposing to change a rate that is under 
investigation and subject to refund, must take effect subject to refund.
    (b) Information required to be filed with rate changes. The carrier 
must comply with Part 341 of this title. Carriers must specify in their 
letters of transmittal required in Sec. 341.2(c) of this chapter the 
rate schedule to be changed, the proposed new rate, the prior rate, the 
prior ceiling level, and the applicable ceiling level for the movement. 
No other rate information is required to accompany the proposed rate 
change.
    (c) Index year. The index year is the period from July 1 to June 30.
    (d) Derivation of the ceiling level. (1) A carrier must compute the 
ceiling level for each index year by multiplying the previous index 
year's ceiling level by the most recent index published by the 
Commission. The index will be published by the Commission prior to June 
1 of each year.
    (2) The index published by the Commission will be based on the 
change in the final Producer Price Index for Finished Goods (PPI-FG), 
seasonally adjusted, as published by the U.S. Department of Labor, 
Bureau of Labor Statistics, for the two calendar years immediately 
preceding the index year. The index will be calculated by dividing the 
PPI-FG for the calendar year immediately preceding the index year, by 
the previous calendar year's PPI-FG.
    (3) A carrier must compute the ceiling level each index year without 
regard to the actual rates filed pursuant to this section. All carriers 
must round their ceiling levels each index year to the nearest hundredth 
of a cent.
    (4) For purposes of computing the ceiling level for the period 
January 1, 1995 through June 30, 1995, a carrier must use the rate in 
effect on December 31, 1994 as the previous index year's ceiling level 
in the computation in paragraph (d)(1) of this section. If the rate in 
effect on December 31, 1994 is subsequently lowered by Commission order 
pursuant to the Interstate Commerce Act, the ceiling level based on such 
rate must be recomputed, in accordance with paragraph (d)(1) of this 
section, using the rate established by such Commission order in lieu of 
the rate in effect on December 31, 1994.
    (5) When an initial rate, or rate changed by a method other than 
indexing, takes effect during the index year, such rate will constitute 
the applicable ceiling level for that index year. If such rate is 
subsequently lowered by Commission order pursuant to the Interstate 
Commerce Act, the ceiling level based on such rate must be recomputed, 
in accordance with paragraph (d)(1) of this section, using the rate 
established by such Commission order as the ceiling level for the index 
year which includes the effective date of the rate established by such 
Commission order.

[[Page 911]]

    (e) Rate decreases. If the ceiling level computed pursuant to Sec. 
342.3(d) is below the filed rate of a carrier, that rate must be reduced 
to bring it into compliance with the new ceiling level; provided, 
however, that a carrier is not required to reduce a rate below the level 
deemed just and reasonable under section 1803(a) of the Energy Policy 
Act of 1992, if such section applies to such rate or to any prior rate. 
The rate decrease must be accomplished by filing a revised tariff 
publication with the Commission to be effective July 1 of the index year 
to which the reduced ceiling level applies.

[Order 561, 58 FR 58779, Nov. 4, 1993, as amended by Order 561-A, 59 FR 
40256, Aug. 8, 1994; 59 FR 59146, Nov. 16, 1994; Order 606, 64 FR 44405, 
Aug. 16, 1999; Order 650, 69 FR 53801, Sept. 3, 2004]



Sec. 342.4  Other rate changing methodologies.

    (a) Cost-of-service rates. A carrier may change a rate pursuant to 
this section if it shows that there is a substantial divergence between 
the actual costs experienced by the carrier and the rate resulting from 
application of the index such that the rate at the ceiling level would 
preclude the carrier from being able to charge a just and reasonable 
rate within the meaning of the Interstate Commerce Act. A carrier must 
substantiate the costs incurred by filing the data required by part 346 
of this chapter. A carrier that makes such a showing may change the rate 
in question, based upon the cost of providing the service covered by the 
rate, without regard to the applicable ceiling level under Sec. 342.3.
    (b) Market-based rates. A carrier may attempt to show that it lacks 
significant market power in the market in which it proposes to charge 
market-based rates. Until the carrier establishes that it lacks market 
power, these rates will be subject to the applicable ceiling level under 
Sec. 342.3.
    (c) Settlement rates. A carrier may change a rate without regard to 
the ceiling level under Sec. 342.3 if the proposed change has been 
agreed to, in writing, by each person who, on the day of the filing of 
the proposed rate change, is using the service covered by the rate. A 
filing pursuant to this section must contain a verified statement by the 
carrier that the proposed rate change has been agreed to by all current 
shippers.

[Order 561, 58 FR 58779, Nov. 4, 1993, as amended at 59 FR 59146, Nov. 
16, 1994]



PART 343_PROCEDURAL RULES APPLICABLE TO OIL PIPELINE PROCEEDINGS--Table of 

Contents



Sec.
343.0 Applicability.
343.1 Definitions.
343.2 Requirements for filing interventions, protests and complaints.
343.3 Filing of protests and responses.
343.4 Procedure on complaints.
343.5 Required negotiations.

    Authority: 5 U.S.C. 571-583; 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 
49 App. U.S.C. 1-85.

    Source: Order 561, 58 FR 58780, Nov. 4, 1993, unless otherwise 
noted.



Sec. 343.0  Applicability.

    (a) General rule. The Commission's Rules of Practice and Procedure 
in part 385 of this chapter will govern procedural matters in oil 
pipeline proceedings under part 342 of this chapter and under the 
Interstate Commerce Act, except to the extent specified in this part.



Sec. 343.1  Definitions.

    For purposes of this part, the following definitions apply:
    (a) Complaint means a filing challenging an existing rate or 
practice under section 13(1) of the Interstate Commerce Act.
    (b) Protest means a filing, under section 15(7) of the Interstate 
Commerce Act, challenging a tariff publication.

[Order 561, 58 FR 58780, Nov. 4, 1993, as amended by Order 578, 60 FR 
19505, Apr. 19, 1995]



Sec. 343.2  Requirements for filing interventions, protests and complaints.

    (a) Interventions. Section 385.214 of this chapter applies to oil 
pipeline proceedings.
    (b) Standing to file protest. Only persons with a substantial 
economic interest in the tariff filing may file a protest to a tariff 
filing pursuant to the Interstate Commerce Act. Along with

[[Page 912]]

the protest, a verified statement that the protestor has a substantial 
economic interest in the tariff filing in question must be filed.
    (c) Other requirements for filing protests or complaints--(1) Rates 
established under Sec. 342.3 of this chapter. A protest or complaint 
filed against a rate proposed or established pursuant to Sec. 342.3 of 
this chapter must allege reasonable grounds for asserting that the rate 
violates the applicable ceiling level, or that the rate increase is so 
substantially in excess of the actual cost increases incurred by the 
carrier that the rate is unjust and unreasonable, or that the rate 
decrease is so substantially less than the actual cost decrease incurred 
by the carrier that the rate is unjust and unreasonable. In addition to 
meeting the requirements of the section, a complaint must also comply 
with all the requirements of Sec. 385.206, except Sec. 385.206(b)(1) 
and (2).
    (2) Rates established under Sec. 342.4(c) of this chapter. A 
protest or complaint filed against a rate proposed or established under 
Sec. 342.4(c) of this chapter must allege reasonable grounds for 
asserting that the rate is so substantially in excess of the actual cost 
increases incurred by the carrier that the rate is unjust and 
unreasonable. In addition to meeting the requirements of the section, a 
complaint must also comply with all the requirements of Sec. 385.206, 
except Sec. 385.206(b)(1) and (2).
    (3) Non-rate matters. A protest or complaint filed against a 
carrier's operations or practices, other than rates, must allege 
reasonable grounds for asserting that the operations or practices 
violate a provision of the Interstate Commerce Act, or of the 
Commission's regulations. In addition to meeting the requirements of 
this section, a complaint must also comply with the requirements of 
Sec. 385.206.
    (4) A protest or complaint that does not meet the requirements of 
paragraphs (c)(1), (c)(2), or (c)(3) of this section, whichever is 
applicable, will be dismissed.

[Order 561, 58 FR 58780, Nov. 4, 1993, as amended by Order 602, 64 FR 
17097, Apr. 8, 1999; Order 606, 64 FR 44405, Aug. 16, 1999]



Sec. 343.3  Filing of protests and responses.

    (a) Protests. Any protest pursuant to section 15(7) of the 
Interstate Commerce Act must be filed not later than 15 days after the 
filing of a tariff publication. If the carrier submits a separate letter 
with the filing, providing a telefax number and contact person, and 
requesting all protests to be telefaxed to the carrier by a protestant, 
any protest must be so telefaxed to the pipeline at the time the protest 
is filed with the Commission. Only persons with a substantial economic 
interest in the tariff filing may file a protest to a tariff filing 
pursuant to the Interstate Commerce Act. Along with the protest, the 
protestant must file a verified statement which must contain a 
reasonably detailed description of the nature and substance of the 
protestant's substantial economic interest in the tariff filing.
    (b) Responses. The carrier may file a response to a protest no later 
than 5 days from the filing of the protest.
    (c) Commission action. Commission action, including any hearings or 
other proceedings, on a protest will be limited to the issues raised in 
such protest. If a filing is protested, before the effective date of the 
tariff publication or within 30 days of the tariff filing, whichever is 
later, the Commission will determine whether to suspend the tariff and 
initiate a formal investigation.
    (d) Termination of investigation. Withdrawal of the protest, or 
protests, that caused the initiation of an investigation automatically 
terminates the investigation.

[Order 561, 58 FR 58780, Nov. 4, 1993, as amended by Order 561-A, 59 FR 
40256, Aug. 8, 1994]



Sec. 343.4  Procedure on complaints.

    (a) Responses. The carrier must file an answer to a complaint filed 
pursuant to section 13(1) of the Interstate Commerce Act within 20 days 
after the filing of the complaint in accordance with Rule 206.
    (b) Commission action. Commission action, including any hearings or 
other proceedings, on a complaint will be

[[Page 913]]

limited to the issues raised in the complaint.

[Order 561, 58 FR 58780, Nov. 4, 1993, as amended by Order 602, 64 FR 
17097, Apr. 8, 1999]



Sec. 343.5  Required negotiations.

    The Commission or other decisional authority may require parties to 
enter into good faith negotiations to settle oil pipeline rate matters. 
The Commission will refer all protested rate filings to a settlement 
judge pursuant to Sec. 385.603 of this chapter for recommended 
resolution. Failure to participate in such negotiations in good faith is 
a ground for decision against the party so failing to participate on any 
issue that is the subject of negotiation by other parties.

[Order 578, 60 FR 19505, Apr. 19, 1995]



PART 344_FILING QUOTATIONS FOR U.S. GOVERNMENT SHIPMENTS AT REDUCED RATES--

Table of Contents



Sec.
344.1 Applicability.
344.2 Manner of submitting quotations.

    Authority: 42 U.S. 7101-7352; 49 U.S.C. 1-27.



Sec. 344.1  Applicability.

    The provisions of this part will apply to quotations or tenders made 
by all pipeline common carriers to the United States Government, or any 
agency or department thereof, for the transportation, storage, or 
handling of petroleum and petroleum products at reduced rates as 
permitted by section 22 of the Interstate Commerce Act. Excepted are 
filings which involve information, the disclosure of which would 
endanger the national security.

[Order 561, 58 FR 58778, Nov. 4, 1993]



Sec. 344.2  Manner of submitting quotations.

    (a) The quotation or tender must be submitted to the Commission 
concurrently with the submittal of the quotation or tender to the 
Federal department or agency for whose account the quotation or tender 
is offered or the proposed services are to be rendered.
    (b) [Reserved]
    (c) Filing procedure. (1) The quotation must be filed with a letter 
of transmittal that prominently indicates that the filing is in 
accordance with section 22 of the Interstate Commerce Act.
    (2) All filings pursuant to this part must be filed electronically 
consistent with Sec. Sec. 341.1 and 341.2 of this chapter.
    (d) Numbering. The copies of quotations or tenders which are filed 
with the Commission by each carrier must be numbered consecutively.
    (e) Supersession of a quotation or tender. A quotation or tender 
which supersedes a prior quotation or tender must, by a statement shown 
immediately under the number of the new document, cancel the prior 
document number.

[Order 561, 58 FR 58778, Nov. 4, 1993, as amended by Order 714, 73 FR 
57537, Oct. 3, 2008]



PART 346_OIL PIPELINE COST-OF-SERVICE FILING REQUIREMENTS--Table of Contents



Sec.
346.1 Content of filing for cost-of-service rates.
346.2 Material in support of initial rates or change in rates.
346.3 Asset retirement obligations.

    Authority: 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C. 1-
85.



Sec. 346.1  Content of filing for cost-of-service rates.

    A carrier that seeks to establish rates pursuant to Sec. 342.2(a) 
of this chapter, or a carrier that seeks to change rates pursuant to 
Sec. 342.4(a) of this chapter, or a carrier described in Sec. 342.0(b) 
of this chapter that seeks to establish or change rates by filing cost, 
revenue, and throughput data supporting such rates, other than pursuant 
to a Commission-approved settlement, must file, consistent with the 
requirements of Sec. Sec. 341.1 and 341.2 of this chapter:
    (a) A letter of transmittal which conforms to Sec. Sec. 341.2(c) 
and 342.4(a) of this chapter;
    (b) The proposed tariff; and
    (c) The statements and supporting workpapers set forth in Sec. 
346.2.

[59 FR 59146, Nov. 16, 1994, as amended by Order 588, 61 FR 38569, July 
25, 1996; Order 714, 73 FR 57537, Oct. 3, 2008]

[[Page 914]]



Sec. 346.2  Material in support of initial rates or change in rates.

    A carrier that files for rates pursuant to Sec. 342.2(a) or Sec. 
342.4(a) of this chapter, or a carrier described in Sec. 342.0(b) that 
files to establish or change rates by filing cost, revenue, and 
throughput data supporting such rates, other than pursuant to a 
Commission-approved settlement, must file the following statements, 
schedules, and supporting workpapers. The statement, schedules, and 
workpapers must be based upon an appropriate test period.
    (a) Base and test periods defined. (1) For a carrier which has been 
in operation for at least 12 months:
    (i) A base period must consist of 12 consecutive months of actual 
experience. The 12 months of experience must be adjusted to eliminate 
nonrecurring items (except minor accounts). The filing carrier may 
include appropriate normalizing adjustments in lieu of nonrecurring 
items.
    (ii) A test period must consist of a base period adjusted for 
changes in revenues and costs which are known and are measurable with 
reasonable accuracy at the time of filing and which will become 
effective within nine months after the last month of available actual 
experience utilized in the filing. For good cause shown, the Commission 
may allow reasonable deviation from the prescribed test period.
    (2) For a carrier which has less than 12 months' experience, the 
test period may consist of 12 consecutive months ending not more than 
one year from the filing date. For good cause shown, the Commission may 
allow reasonable deviation from the prescribed test period.
    (3) For a carrier which is establishing rates for new service, the 
test period will be based on a 12-month projection of costs and 
revenues.
    (b) Cost-of-service summary schedule. This schedule must contain the 
following information:
    (1) Total carrier cost of service for the test period.
    (2) Throughput for the test period in both barrels and barrel-miles.
    (3) For filings pursuant to Sec. 342.4(a) of this chapter, the 
schedule must include the proposed rates, the rates which would be 
permitted under Sec. 342.3 of this chapter, and the revenues to be 
realized from both sets of rates.
    (c) Content of statements. Any cost-of-service rate filing must 
include supporting statements containing the following information for 
the test period.
    (1) Statement A--total cost of service. This statement must 
summarize the total cost of service for a carrier (operating and 
maintenance expense, depreciation and amortization, return, and taxes) 
developed from Statements B through G described in paragraphs (c) (2) 
through (7) of this section.
    (2) Statement B--operation and maintenance expense. This statement 
must set forth the operation, maintenance, administration and general, 
and depreciation expenses for the test period. Items used in the 
computations or derived on this statement must consist of operations, 
including salaries and wages, supplies and expenses, outside services, 
operating fuel and power, and oil losses and shortages; maintenance, 
including salaries and wages, supplies and expenses, outside services, 
and maintenance and materials; administrative and general, including 
salaries and wages, supplies and expenses, outside services, rentals, 
pensions and benefits, insurance, casualty and other losses, and 
pipeline taxes; and depreciation and amortization.
    (3) Statement C--overall return on rate base. This statement must 
set forth the rate base for return purposes from Statement E in 
paragraph (c)(5) of this section and must also state the claimed rate of 
return and the application of the claimed rate of return to the overall 
rate base. The claimed rate of return must consist of a weighted cost of 
capital, combining the rate of return on debt capital and the real rate 
of return on equity capital. Items used in the computations or derived 
on this statement must include deferred earnings, equity ratio, debt 
ratio, weighted cost of capital, and costs of debt and equity.
    (4) Statement D--income taxes. This statement must set forth the 
income tax computation. Items used in the computations or derived on 
this statement must show: return allowance, interest expense, equity 
return, annual

[[Page 915]]

amortization of deferred earnings, depreciation on equity AFUDC, 
underfunded or overfunded ADIT amortization amount, taxable income, tax 
factor, and income tax allowance.
    (5) Statement E--rate base. This statement must set forth the return 
rate base. Items used in the computations or derived on this statement 
must include beginning balances of the rate base at December 31, 1983, 
working capital (including materials and supplies, prepayments, and oil 
inventory), accrued depreciation on carrier plant, accrued depreciation 
on rights of way, and accumulated deferred income taxes; and adjustments 
and end balances for original cost of retirements, interest during 
construction, AFUDC adjustments, original cost of net additions and 
retirements from land, original cost of net additions and retirements 
from rights of way, original cost of plant additions, original cost 
accruals for depreciation, AFUDC accrued depreciation adjustment, 
original cost depreciation accruals added to rights of way, net charge 
for retirements from accrued depreciation, accumulated deferred income 
taxes, changes in working capital (including materials and supplies, 
prepayments, and oil inventory), accrued deferred earnings, annual 
amortization of accrued deferred earnings, and amortization of starting 
rate base write-up.
    (6) Statement F--allowance for funds used during construction. This 
statement must set forth the computation of allowances for funds used 
during construction (AFUDC) including the AFUDC for each year commencing 
in 1984 and a summary of AFUDC and AFUDC depreciation for the years 1984 
through the test year.
    (7) Statement G--revenues. This statement must set forth the gross 
revenues for the actual 12 months of experience as computed under both 
the presently effective rates and the proposed rates. If the presently 
effective rates are not at the maximum ceiling rate established under 
Sec. 342.3 of this chapter, then gross revenues must also be computed 
and set forth as if the ceiling rates were effective for the 12 month 
period.

[59 FR 59146, Nov. 16, 1994, as amended by Order 588, 61 FR 38569, July 
25, 1996; Order 606, 64 FR 44405, Aug. 16, 1999]



Sec. 346.3  Asset retirement obligations.

    (a) A carrier that files material in support of initial rates or 
change in rates under Sec. 346.2 and has recorded asset retirement 
obligations on its books must provide a schedule, as part of the 
supporting workpapers, identifying all cost components related to the 
asset retirement obligations that are included in the book balances of 
all accounts reflected in the cost of service computation supporting the 
proposed rates. However, all cost components related to asset retirement 
obligations that would impact the calculation of rate base, such as 
carrier property and related accumulated depreciation and accumulated 
deferred income taxes, may not be reflected in rates and must be removed 
from the rate base calculation through a single adjustment.
    (b) A carrier seeking to recover nonrate base costs related to asset 
retirement costs in rates must provide, with its filing under Sec. 
346.2 of this part, a detailed study supporting the amounts proposed to 
be collected in rates.
    (c) A carrier who has recorded asset retirement obligations on its 
books but is not seeking recovery of the asset retirement costs in 
rates, must remove all asset retirement obligations related cost 
components from the cost of service supporting its proposed rates.

[Order 631, 68 FR 19625, Apr. 21, 2003]



PART 347_OIL PIPELINE DEPRECIATION STUDIES--Table of Contents



    Authority: 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C. 1-
85.



Sec. 347.1  Material to support request for newly established or changed 

property account depreciation studies.

    (a) Means of filing. Filing of a request for new or changed property 
account depreciation rates must be made with the Secretary of the 
Commission.
    (b) All filings under this Part must be made electronically pursuant 
to the requirements of Sec. Sec. 341.1 and 341.2 of this chapter.
    (c) Transmittal letter. Letters of transmittal must give a general 
description of the change in depreciation rates

[[Page 916]]

being proposed in the filing. Letters of transmittal must also certify 
that the letter of transmittal (not including the information to be 
provided, as identified in paragraphs (d) and (e) of this section) has 
been sent to each shipper and to each subscriber. If there are no 
subscribers, letters of transmittal must so state.
    (d) Effectiveness of property account depreciation rates. (1) The 
proposed depreciation rates being established in the first instance must 
be used until they are either accepted or modified by the Commission. 
Rates in effect at the time of the proposed revision must continue to be 
used until the proposed revised rates are approved or modified by the 
Commission.
    (2) When filing for approval of either new or changed property 
account depreciation rates, a carrier must provide information in 
sufficient detail to fully explain and justify its proposed rates.
    (e) Information to be provided. The information in paragraphs (e)(1) 
through (5) of this section must be provided as justification for 
depreciation changes. Modifications, additions, and deletions to these 
data elements should be made to reflect the individual circumstances of 
the carrier's properties and operations. Any information in paragraphs 
(e)(1) through (5) of this section, the release of which would violate 
section 15(13) of the Interstate Commerce Act, must be provided in a 
format that will protect individual shippers.
    (1) A brief summary relating to the general principles on which the 
proposed depreciation rates are based (e.g., why the economic life of 
the pipeline section is less then the physical life).
    (2) An explanation of the organization, ownership, and operation of 
the pipeline.
    (3) A table of the proposed depreciation rates by account.
    (4) An explanation of the average remaining life on a physical basis 
and on an economic basis.
    (5) The following specific background data must be submitted at the 
time of and concurrently with any request for the establishment of, or 
modification to, depreciation rates for carriers. If the information 
listed is not applicable, it may be omitted from the filing:
    (i) Up-to-date engineering maps of the pipeline including the 
location of all gathering facilities, trunkline facilities, terminals, 
interconnections with other pipeline systems, and interconnections with 
refineries/plants. Maps must indicate the direction of flow.
    (ii) A brief description of the carrier's operations and an estimate 
of any major near-term additions or retirements including the estimated 
costs, location, reason, and probable year of transaction.
    (iii) The present depreciation rates being used by account.
    (iv) For the most current year available and for the two prior 
years, a breakdown of the throughput (by type of product, if applicable) 
received with source (e.g. name of well, pipeline company) at each 
receipt point and throughput delivered at each delivery point.
    (v) The daily average capacity (in barrels per day) and the actual 
average capacity (in barrels per day) for the most current year, by line 
section.
    (vi) A list of shipments and their associated receipt points, 
delivery points, and volumes (in barrels) by type of product (where 
applicable) for the most current year.
    (vii) For each primary carrier account, the latest month's book 
balances for gross plant and for accumulated reserve for depreciation.
    (viii) An estimate of the remaining life of the system (both 
gathering and trunk lines) including the basis for the estimate.
    (ix) For crude oil, a list of the fields or areas from which crude 
oil is obtained.
    (x) If the proposed depreciation rate adjustment is based on the 
remaining physical life of the properties, a complete, or updated, if 
applicable, Service Life Data Form (FERC Form No. 73) through the most 
current year.
    (xi) Estimated salvage value of properties by account.

[59 FR 59147, Nov. 16, 1994, as amended at 60 FR 358, Jan. 4, 1995; 
Order 714, 73 FR 57537, Oct. 3, 2008]

[[Page 917]]



PART 348_OIL PIPELINE APPLICATIONS FOR MARKET POWER DETERMINATIONS--Table of 

Contents



Sec.
348.1 Content of application for a market power determination.
348.2 Procedures.

    Authority: 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C. 1-
85.



Sec. 348.1  Content of application for a market power determination.

    (a) If, under Sec. 342.4(b) of this chapter, a carrier seeks to 
establish that it lacks significant market power in the market in which 
it proposes to charge market-based rates, it must file and provide an 
application for such a determination. An application must include a 
statement of position and the information required by paragraph (c) of 
this section.
    (b) The carrier's statement of position required by paragraph (a) of 
this section must include an executive summary of its statement of 
position and a statement of material facts in addition to its complete 
statement of position. The statement of material facts must include 
citation to the supporting statements, exhibits, affidavits, and 
prepared testimony.
    (c) The carrier must include with its application the following 
information:
    (1) Statement A--geographic market. This statement must describe the 
geographic markets in which the carrier seeks to establish that it lacks 
significant market power. The carrier must include the origin market and 
the destination market related to the service for which it proposes to 
charge market-based rates. The statement must explain why the carrier's 
method for selecting the geographic markets is appropriate.
    (2) Statement B--product market. This statement must identify the 
product market or markets for which the carrier seeks to establish that 
it lacks significant market power. The statement must explain why the 
particular product definition is appropriate.
    (3) Statement C--the carrier's facilities and services. This 
statement must describe the carrier's own facilities and services in the 
relevant markets identified in statements A and B in paragraphs (c) (1) 
and (2) of this section. The statement must include all pertinent data 
about the pipeline's facilities and services.
    (4) Statement D--competitive alternatives. This statement must 
describe available transportation alternatives in competition with the 
carrier in the relevant markets and other competition constraining the 
carrier's rates in those markets. To the extent available, the statement 
must include all pertinent data about transportation alternatives and 
other constraining competition.
    (5) Statement E--potential competition. This statement must describe 
potential competition in the relevant markets. To the extent available, 
the statement must include data about the potential competitors, 
including their costs, and their distance in miles from the carrier's 
terminals and major consuming markets.
    (6) Statement F--maps. This statement must consist of maps showing 
the carrier's principal transportation facilities, the points at which 
service is rendered under its tariff, the direction of flow of each 
line, the location of each of its terminals, the location of each of its 
major consuming markets, and the location of the alternatives to the 
carrier, including their distance in miles from the carrier's terminals 
and major consuming markets. The statement must include a general system 
map and maps by geographic markets. The information required by this 
statement may be on separate pages.
    (7) Statement G--market power measures. This statement must set 
forth the calculation of the market concentration of the relevant 
markets using the Herfindahl-Hirschman Index. The statement must also 
set forth the carrier's market share based on receipts in its origin 
markets and deliveries in its destination markets, if the Herfindahl-
Hirschman Index is not based on those factors. The statement must also 
set forth the calculation of other market power measures relied on by 
the carrier. The statement must include complete particulars about the 
carrier's calculations.
    (8) Statement H--other factors. This statement must describe any 
other factors that bear on the issue of whether

[[Page 918]]

the carrier lacks significant market power in the relevant markets. The 
description must explain why those other factors are pertinent.
    (9) Statement I--prepared testimony. This statement must include the 
proposed testimony in support of the application and will serve as the 
carrier's case-in-chief, if the Commission sets the application for 
hearing. The proposed witness must subscribe to the testimony and swear 
that all statements of fact contained in the proposed testimony are true 
and correct to the best of his or her knowledge, information, and 
belief.

[59 FR 59160, Nov. 16, 1994]



Sec. 348.2  Procedures.

    (a) All filings under this Part must be made electronically pursuant 
to the requirements of Sec. Sec. 341.1 and 341.2 of this chapter. A 
carrier must submit with its application any request for privileged 
treatment of documents and information under Sec. 388.112 of this 
chapter and a proposed form of protective agreement.
    (b) A carrier must provide a copy of its letter of transmittal and 
its proposed form of protective agreement to each shipper and subscriber 
on or before the day the material is transmitted to the Commission for 
filing.
    (c) A letter of transmittal must describe the market-based rate 
filing, including an identification of each rate that would be market-
based, and the pertinent tariffs, state if a waiver is being requested 
and specify the statute, section, subsection, regulation, policy or 
order requested to be waived. Letters of transmittal must be certified 
pursuant to Sec. 341.1(b) of this chapter.
    (d) An interested person must make a written request to the carrier 
for a copy of the carrier's complete application within 20 days after 
the filing of the application. The request must include an executed copy 
of the protective agreement. Any objection to the proposed form of 
protective agreement must be filed under Sec. 385.212 of this chapter.
    (e) A carrier must provide a copy of the complete application to the 
requesting person within seven days after receipt of the written request 
and an executed copy of the protective agreement.
    (f) A carrier must provide copies as required by paragraphs (b) and 
(e) of this section by first-class mail or by other means of 
transmission agreed upon in writing.
    (g) Any intervention or protest to the application must be filed 
within 60 days after the filing of the application and must be filed 
pursuant to Sec. Sec. 343.2 (a) and (b) of this chapter. A protest must 
also be telefaxed if required by Sec. 343.3(a) of this chapter.
    (h) A protest filed against an application for a market power 
determination must set forth in detail the grounds for opposing the 
carrier's application, including responding to its position and 
information and, if desired, presenting information pursuant to Sec. 
348.1(c).
    (i) After expiration of the date for filing protests, the Commission 
will issue an order in which it will summarily rule on the application 
or, if appropriate, establish additional procedures and the scope of the 
investigation.

[59 FR 59160, Nov. 16, 1994, as amended by Order 714, 73 FR 57537, Oct. 
3, 2008]



PART 349_DISPOSITION OF CONTESTED AUDIT FINDINGS AND PROPOSED REMEDIES--Table 

of Contents



Sec.
349.1 Notice to audited person.
349.2 Response to notification.
349.3 Shortened procedure.
349.4 Form and style.
349.5 Verification.
349.6 Determination.
349.7 Assignment for oral hearing.

    Authority: 42 U.S.C. 7101-7352; 49 U.S.C. 1, et seq.

    Source: Order 675, 71 FR 9708, Feb. 27, 2006, unless otherwise 
noted.



Sec. 349.1  Notice to audited person.

    An audit conducted by the Commission or its staff under authority of 
the Interstate Commerce Act may result in a notice of deficiency or 
audit report or similar document containing a finding or findings that 
the audited person has not complied with a requirement of the Commission 
with respect to, but not limited to, the following: A filed tariff

[[Page 919]]

or tariffs, contracts, data, records, accounts, books, communications or 
papers relevant to the audit of the audited person; and the activities 
or operations of the audited person. The notice of deficiency, audit 
report or similar document may also contain one or more proposed 
remedies that address findings of noncompliance. Where such findings, 
with or without proposed remedies, appear in a notice of deficiency, 
audit report or similar document, such document shall be provided to the 
audited person, and the finding or findings, and any proposed remedies, 
shall be noted and explained. The audited person shall timely indicate 
in a written response any and all findings or proposed remedies, or 
both, in any combination, with which the audited person disagrees. The 
audited person shall have 15 days from the date it is sent the notice of 
deficiency, audit report or similar document to provide a written 
response to the audit staff indicating any and all findings or proposed 
remedies, or both, in any combination, with which the audited person 
disagrees, and such further time as the audit staff may provide in 
writing to the audited person at the time the document is sent to the 
audited person. The audited person may move the Commission for 
additional time to provide a written response to the audit staff and 
such motion shall be granted for good cause shown. Any initial order 
that the Commission subsequently may issue with respect to the notice of 
deficiency, audit report or similar document shall note, but not address 
on the merits, the finding or findings, or the proposed remedy or 
remedies, or both, in any combination, with which the audited person 
disagreed. The Commission shall provide the audited person 30 days to 
respond to the initial Commission order concerning a notice of 
deficiency, audit report or similar document with respect to the finding 
or findings or any proposed remedy or remedies, or both, in any 
combination, with which it disagreed.

[Order 675-A, 71 FR 29785, May 24, 2006]



Sec. 349.2  Response to notification.

    Upon issuance of a Commission order that notes a finding or 
findings, or proposed remedy or remedies, or both, in any combination, 
with which the audited person has disagreed, the audited person may: 
Acquiesce in the findings and/or proposed remedies by not timely 
responding to the Commission order, in which case the Commission may 
issue an order approving them or taking other action; or challenge the 
finding or findings and/or any proposed remedies with which it disagreed 
by timely notifying the Commission in writing that it requests 
Commission review by means of a shortened procedure, or, if there are 
material facts in dispute which require cross-examination, a trial-type 
hearing.



Sec. 349.3  Shortened procedure.

    If the audited person subject to a Commission order described in 
Sec. 349.1 notifies the Commission that it seeks to challenge one or 
more audit findings, or proposed remedy or remedies, or both, in any 
combination, by the shortened procedure, the Commission shall thereupon 
issue a notice setting a schedule for the filing of memoranda. The 
person electing the use of the shortened procedure, and any other 
interested entities, including the Commission staff, shall file, within 
45 days of the notice, an initial memorandum that addresses the relevant 
facts and applicable law that support the position or positions taken 
regarding the matters at issue. Reply memoranda shall be filed within 20 
days of the date by which the initial memoranda are due to be filed. 
Only participants who filed initial memoranda may file reply memoranda. 
Subpart T of part 385 of this chapter shall apply to all filings. Within 
20 days after the last date that reply memoranda under the shortened 
procedure may be timely filed, the audited person who elected the 
shortened procedure may file a motion with the Commission requesting a 
trial-type hearing if new issues are raised by a party. To prevail in 
such a motion, the audited person must show that a party to the 
shortened procedure raised one or more new issues of material fact 
relevant to resolution of a matter in the shortened procedure such that 
fundamental fairness requires a trial-type hearing to resolve the new 
issue or issues so raised. Parties to the shortened procedure and the 
Commission

[[Page 920]]

staff may file responses to the motion. In ruling upon the motion, the 
Commission may determine that some or all of the issues be litigated in 
a trial-type hearing.



Sec. 349.4  Form and style.

    Each copy of such memorandum must be complete in itself. All 
pertinent data should be set forth fully, and each memorandum should set 
out the facts and argument as prescribed for briefs in Sec. 385.706 of 
this chapter.



Sec. 349.5  Verification.

    The facts stated in the memorandum must be sworn to by persons 
having knowledge thereof, which latter fact must affirmatively appear in 
the affidavit. Except under unusual circumstances, such persons should 
be those who would appear as witnesses if hearing were had to testify as 
to the facts stated in the memorandum.



Sec. 349.6  Determination.

    If no formal hearing is had the matter in issue will be determined 
by the Commission on the basis of the facts and arguments submitted.



Sec. 349.7  Assignment for oral hearing.

    Except when there are no material facts in dispute, when a person 
does not consent to the shortened procedure, the Commission will assign 
the proceeding for hearing as provided by subpart E of part 385 of this 
chapter. Notwithstanding a person's not giving consent to the shortened 
procedure, and instead seeking assignment for hearing as provided for by 
subpart E of part 385 of this chapter, the Commission will not assign 
the proceeding for a hearing when no material facts are in dispute. The 
Commission may also, in its discretion, at any stage in the proceeding, 
set the proceeding for hearing.

[[Page 921]]



         SUBCHAPTER Q_ACCOUNTS UNDER THE INTERSTATE COMMERCE ACT



PART 351_FINANCIAL STATEMENTS RELEASED BY CARRIERS--Table of Contents



    Authority: Department of Energy Organization Act, (42 U.S.C. 7101 et 
seq.) E.O. 12009, 42 FR 46267, Interstate Commerce Act, as amended, (49 
U.S.C. 1 et seq).



Sec. 351.1  Financial statements released by carriers.

    Carriers desiring to do so may prepare and publish financial 
statements in reports to stockholders and others, except in reports to 
this Commission, based on generally accepted accounting principles for 
which there is authoritative support, provided that any variance from 
this Commission's prescribed accounting rules contained in such 
statements is clearly disclosed in footnotes to the statements.

[Order 119, 46 FR 9044, Jan. 28, 1981]



PART 352_UNIFORM SYSTEMS OF ACCOUNTS PRESCRIBED FOR OIL PIPELINE COMPANIES 

SUBJECT TO THE PROVISIONS OF THE INTERSTATE COMMERCE ACT--Table of Contents



                    List of Instructions and Accounts

Definitions.

                          General Instructions

Sec.
1-1 Classification of accounts.
1-2 Records.
1-3 Accounting period.
1-4 Accounting method.
1-5 Delayed items.
1-6 Extraordinary, unusual or infrequent items, prior period 
          adjustments, discontinued operations and accounting changes.
1-7 Items in texts of accounts.
1-8 Depreciation accounting--Carrier property.
1-9 Depreciation accounting--Noncarrier property.
1-10 Amortization of intangibles.
1-11 Interpretation of rules.
1-12 Accounting for income taxes.
1-13 Transactions with affiliated companies.
1-14 Charges to be just and reasonable.
1-15 Accounting for marketable equity securities owned.
1-16 Accounting for inaccurate reporting of income taxes on income from 
          continuing operations which occurred prior to reporting year 
          1979.

                 Instructions for Balance Sheet Accounts

2-1 Current assets.
2-2 Investments and special funds.
2-3 Tangible property.
2-4 Other assets and deferred charges.
2-5 Current liabilities.
2-6 Noncurrent liabilities.
2-7 Contingent assets and liabilities.

               Instructions for Carrier Property Accounts

3-1 Property acquired.
3-2 [Reserved]
3-3 Cost of property constructed.
3-4 Additions.
3-5 Improvements.
3-6 Replacements.
3-7 Retirements.
3-8 Salvage.
3-9 Relocation of line.
3-10 Property contributed.
3-11 Acquisition by merger, consolidation or purchase.
3-12 Reorganizations.
3-13 Disposition of former Account 193, Acquisition Adjustment.

       Instructions for Operating Revenues and Operating Expenses

4-1 Detail of accounts.
4-2 Operating revenues.
4-3 Operating expenses.
4-4 Expense classification.
4-5 Expense distribution.

                         Balance Sheet Accounts

10 Cash.
10-5 Special deposits.
11 Temporary investments.
12 Notes receivable.
13 Receivables from affiliated companies.
14 Accounts receivable.
14-5 Accumulated provision for uncollectible accounts.
15 Interest and dividends receivable.
16 Oil inventory.
17 Material and supplies.
18 Prepayments.
19 Other current assets.
19-5 Deferred income tax assets.
20 Investments in affiliated companies.
21 Other investments.
22 Sinking and other funds.
23 Reductions in security values--Credit.

[[Page 922]]

24 Allowance for net unrealized loss on noncurrent marketable equity 
          securities--Credit.
30 Carrier property.
31 Accrued depreciation--Carrier property.
32 Accrued amortization--Carrier property.
33 Operating oil supply.
34 Noncarrier property.
35 Accrued depreciation--Noncarrier property.
40 Organization costs and other intangibles.
41 Accrued amortization of intangibles.
43 Miscellaneous other assets.
44 Other deferred charges.
45 Accumulated deferred income tax assets.
50 Notes payable.
51 Payables to affiliated companies.
52 Accounts payable.
53 Salaries and wages payable.
54 Interest payable.
55 Dividends payable.
56 Taxes payable.
57 Long-term debt payable within one year.
58 Other current liabilities.
59 Deferred income tax liabilities.
60 Long-term debt payable after one year.
61 Unamortized premium on long-term debt.
62 Unamortized discount and interest on long-term debt.
63 Other noncurrent liabilities.
64 Accumulated deferred income tax liabilities.
70 Capital stock.
71 Premiums on capital stock.
72 Capital stock subscriptions.
73 Additional paid-in capital.
74 Appropriated retained income.
75 Unappropriated retained income.
75.5 Net unrealized loss on noncurrent marketable equity securities.
76 Treasury stock.

                        Carrier Property Accounts

101, 151, 171 Land.
102, 152 Right of way.
103, 153 Line pipe.
104, 154 Line pipe fittings.
105, 155 Pipeline construction.
106, 156, 176 Buildings.
107, 157 Boilers.
108, 158 Pumping equipment.
109, 159, 179 Machine tools and machinery.
110, 160 Other station equipment.
111, 161 Oil tanks.
112, 162 Delivery facilities.
113, 163, 183 Communication systems.
114, 164, 184 Office furniture and equipment.
115, 165, 185 Vehicles and other work equipment.
116, 166, 186 Other property.
187 Construction work in progress.

                           Operating Revenues

200 Gathering revenues.
210 Trunk revenues.
220 Delivery revenues.
230 Allowance oil revenue.
240 Storage and demurrage revenue.
250 Rental revenue.
260 Incidental revenue.

                           Operating Expenses

                       Operations and Maintenance

300 Salaries and wages.
310 Materials and supplies.
320 Outside services.
330 Operating fuel and power.
340 Oil losses and shortages.
350 Rentals.
390 Other expenses.

                                 General

500 Salaries and wages.
510 Materials and supplies.
520 Outside services.
530 Rentals.
540 Depreciation and amortization.
550 Employee benefits.
560 Insurance.
570 Casualty and other losses.
580 Pipeline taxes.
590 Other expenses.

                             Income Accounts

                             Ordinary Items

                                 Credit

600 Operating revenues.
620 Income (net) from noncarrier property.
630 Interest and dividend income.
640 Miscellaneous income.
645 Unusual or infrequent items (credit).

                                  Debit

610 Operating expenses.
650 Interest expense.
660 Miscellaneous income charges.
665 Unusual or infrequent items (debit).
670 Income taxes on income from continuing operations.
671 Provision for deferred taxes.

                         Discontinued Operations

675 Income (loss) from operations of discontinued segments.
676 Gain (loss) on disposal of discontinued segments.

               Extraordinary Items and Accounting Changes

680 Extraordinary items (net).
695 Income taxes on extraordinary items.
696 Provision for deferred taxes--extraordinary items.
697 Cumulative effect on changes in accounting principles.

                        Retained Income Accounts

700 Net balance transferred from income.

[[Page 923]]

705 Prior period adjustments to beginning retained income account.
710 Other credits to retained income.
720 Other debits to retained income.
740 Appropriations of retained income.
750 Dividend appropriations of retained income.
797 Form of balance sheet statement.
798 Form of income statement.
799 Form of unappropriated retained income statement.

    Authority: 49 U.S.C. 60502; 49 App. U.S.C. 1-85 (1988).

    Source: 32 FR 20241, Dec. 20, 1967, unless otherwise noted. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981.

                    List of Instructions and Accounts

    Definitions. Definitions of terms used in this system of accounts:
    1. Accounts means the accounts prescribed in this system of 
accounts.
    2. Actually issued, as applied to securities issued or assumed by 
the carrier, means those which have been sold to bona fide purchasers or 
holders for a valuable consideration, those issued in exchange for other 
securities or other property, and those issued as dividends on stock; 
and the purchasers or holders secured them free from control by the 
carrier.
    3. Actually outstanding, as applied to securities issued or assumed 
by the carrier, means those which have been actually issued and are 
neither retired nor held by or for the carrier.
    4. Additions means facilities, equipment, and structures added to 
existing property exclusive of replacements.
    5. Affiliated companies means companies or persons that directly, or 
indirectly through one or more intermediairies, control, or are 
controlled by, or are under common control with, the accounting carrier.
    6. Amortization means the gradual extinguishment of an amount in an 
account by distributing such amount over a fixed period, over the life 
of the asset or liability to which it applies, or over the period during 
which it is anticipated the benefit will be realized.
    7. Book cost means the amount at which assets are recorded in the 
accounts without deduction of related provisions for accrued 
depreciation, amortization, or for other purposes.
    8. Carrier means a common carrier by pipeline subject to the 
Interstate Commerce Act.
    9. Commission means the Federal Energy Regulatory Commission.
    10. Control (including the terms controlling, controlled by, and 
under common control with) means the possession, directly or indirectly, 
of the power to direct or cause the direction of the management and 
policies of a company, whether such power is exercised through one or 
more intermediary companies, or alone, or in conjunction with, or 
pursuant to an agreement, and whether such power is established through 
a majority or minority ownership or voting of securities, common 
directors, officers or stockholders, voting trusts, holding trusts, 
associated companies, contract or any other direct or indirect means. 
When there is doubt about an existence of control in any particular 
situation, the carrier shall report all pertinent facts to the 
Commission for determination.
    11. Cost means the amount of money actually paid for property or 
services or the current cash value of the consideration given when it is 
other than money.
    12. Cost of removal means cost of demolishing, dismantling, tearing 
down, or otherwise removing property including costs of handling and 
transportation. It does not include the cost of removal activities 
associated with asset retirement obligations that are capitalized as 
part of the tangible long-lived assets that give rise to the obligation. 
(See General Instruction 1-19).
    13. Date of retirement means the date that property is withdrawn 
from service.
    14. Debt expense means all expense in connection with the issuance 
and sale of evidences of debt, such as fees for drafting mortgages and 
trusts; fees and taxes for issuing or recording evidences of debt; cost 
of engraving and printing bonds, certificates of indebtedness, and other 
evidences of debt; fees paid to trustees; specific costs of obtaining 
governmental authority; fees for legal services; fees and commissions 
paid underwriters, brokers, and salesmen for marketing evidences of 
debt; fees and expenses of listing on exchanges; and other like costs.

[[Page 924]]

    15. Depreciation means the loss in service value not restored by 
current maintenance and incurred in connection with the consumption or 
prospective retirement of property in the course of service from causes 
against which the carrier is not protected by insurance, and the effect 
of which can be forecast with a reasonable approach to accuracy.
    16. Discount, as applied to securities issued or assumed by the 
carrier, means the excess of the par or face value of the securities 
plus interest or dividends accrued at the date of the sale over the cash 
value of the consideration received from their sale.
    17. Group plan means the plan under which depreciation charges are 
computed on the book cost of all property included in each depreciable 
account by application of a composite rate of depreciation based on the 
weighted average service lives of such property.
    18. Improvements means alterations or changes in structural design 
of property which result in increased service life or efficiency.
    19. Minor items of property means the associated parts or items of 
which units of property are composed.
    20. Net salvage value means salvage value of property retired less 
the cost of removal.
    21. Nominally issued, as applied to securities issued or assumed by 
the carrier, means those which have been signed, certified, or otherwise 
executed, and placed with the proper officer for sale and delivery, or 
pledged, or otherwise placed in some special fund of the accounting 
company.
    22. Nominally outstanding, as applied to securities issued or 
assumed by the carrier, means those which, after being actually issued, 
have been reacquired by or for the accounting company under such 
circumstances which require them to be considered as held alive and not 
retired and canceled.
    23. Premium, as applied to securities issued or assumed by the 
carrier, means the excess of the cash value of the consideration 
received from their sale over the sum of their par (stated value of no-
par stocks) or face value and interest or dividends accrued at the date 
of sale.
    24. Property retired means units of property which have been 
removed, sold, abandoned, destroyed, or which for any cause have been 
withdrawn from service; also, minor items of property not replaced.
    25. Replacement means the substitution of a part or of a complete 
unit of property with a new part or unit.
    26. Salvage value means the amount received or estimated to be 
received for property retired less any expenses incurred in connection 
with the sale or preparing the property for sale; or, if retained, the 
value at which the recovered material is chargeable to the material and 
supplies account or other appropriate account.
    27. Service life means the period between the date that property is 
placed in service and the date of its retirement.
    28. Service value means the book cost less the actual or estimated 
net salvage value of property.
    29. Straight-line method, as applied to depreciation and 
amortization accounting, means the plan under which the service value of 
property is charged to expense and credited to the related accrued 
depreciation or amortization account through equal monthly charges 
during the service life of the property.
    30. (a) Income taxes means taxes based on income determined under 
provisions of the United States Internal Revenue Code and foreign, state 
and other taxes (including franchise taxes) based on income.
    (b) Income tax expense means the amount of income taxes (whether or 
not currently payable or refundable) allocable to a period in the 
determination of net income.
    (c) Pretax accounting income means income or loss for a period, 
exclusive of related income tax expense.
    (d) Taxable income means the excess of revenues over deductions or 
the excess of deductions over revenues to be reported for income tax 
purposes for a period.
    (e) ``Temporary difference'' means a difference between the tax 
basis of an asset or liability and its reported amount in the financial 
statements that will result in taxable or deductible

[[Page 925]]

amounts in future years when the reported amount of the asset or 
liability is recovered or settled, respectively. Some events recognized 
in financial statements do not have tax consequences. Certain revenues 
are exempt from taxation and certain expenses are not deductible. Events 
that do not have tax consequences do not give rise to temporary 
differences.
    (f) ``Deductible temporary difference'' means temporary differences 
that result in deductible amounts in future years when the related asset 
or liability is recovered or settled, respectively.
    (g) ``Deferred tax asset'' means the deferred tax consequences 
attributable to deductible temporary differences and carryforwards. A 
deferred tax asset is measured using the applicable enacted tax rate and 
provisions of the enacted tax law. A valuation allowance should be 
recognized if it is more likely than not (a likelihood of more than 50 
percent) that some portion or all of the deferred tax asset will not be 
realized.
    (h) ``Deferred tax liability'' means the deferred tax consequences 
attributable to taxable temporary differences. A deferred tax liability 
is measured using the applicable enacted tax rate and provisions of the 
enacted tax law.
    (i) Interperiod tax allocation means the process of apportioning 
income taxes among periods.
    (j) ``Tax allocation within a period'' means the process of 
allocating income tax expense applicable to a given period among 
continuing operations, discontinued operations, extraordinary items, and 
items charged or credited directly to shareholders' equity.
    31. (a) Investor means a business entity that holds an investment in 
voting stock of another company.
    (b) Investee means a corporation that issued voting stock held by an 
investor.
    (c) Corporate joint venture is a company owned and operated by a 
small group of businesses as a separate and specific business or project 
for the mutual benefit of the members of the group.
    (d) Dividends, unless otherwise specified, means dividends paid or 
payable in cash, other assets, or another class of stock and does not 
include stock dividends or stock splits.
    (e) Earnings or losses of an investee and financial position of an 
investee refer to net income (or net loss) and financial position of an 
investee determined in accordance with generally accepted accounting 
principles.
    (f) Undistributed earnings of an investee means net income less 
dividends declared whether received or not.
    (g) Date of acquisition is the date on which the investor assumes 
the rights of ownership. Ordinarily this is the date assets are received 
and other assets are given or securities issued.
    32. (a) Segment of a business refers to a component of an entity 
whose activities represent a separate major line of business or class of 
customer. A segment may be in the form of a subsidiary, a division, or a 
department, and in some cases a joint venture or other nonsubsidiary 
investee, provided that its assets, results of operations, and 
activities can be clearly distinguished, physically and operationally 
and for financial reporting purposes, from the other assets, results of 
operations, and activities of the entity. The fact that the results of 
operations of the segment being sold or abandoned cannot be separately 
identified strongly suggests that the transaction should not be 
classified as a segment of business.
    (b) Measurement date means the date on which the management having 
authority to approve the action commits itself to a formal plan to 
dispose of a segment of the business, whether by abandonment or sale. 
The measurement date for disposals requiring Commission approval shall 
be the service date of the Order authorizing the disposal.
    (c) Disposal date refers to the date of closing the sale if the 
disposal is by sale or the date that operations cease if the disposal is 
by abandonment.
    33. Compensating balance means the portion of any demand deposit (or 
any time deposit or certificate of deposit) maintained by a carrier (or 
by any person on behalf of the carrier) which constitutes support for 
existing borrowing arrangements of the carrier (or any person) with a 
lending institution.

[[Page 926]]

Such arrangements include both outstanding borrowings and the assurance 
of future credit availability. (The compensating balance requirement 
should be adjusted by the amount of float unless such adjustment would 
cause the compensating balance to be greater than the cash balance per 
carrier's books. The float adjustment is made by subtracting the float 
from the compensating balance requirement if the collected bank ledger 
balance exceeds the cash balance per carrier's books or by adding the 
float to the compensating balance requirement if the collected bank 
ledger balance is less than the cash balance per carrier's books.)
    34. Float means deposits and withdrawals in transit which constitute 
a difference between the collected bank ledger balance and the cash 
balance per carrier's books.
    35. (a) Equity security encompasses any instrument representing 
ownership shares (e.g., common, preferred, and other capital stock), or 
the right to acquire (e.g., warrants, rights, and call options) or 
dispose of (e.g., put options) ownership shares in an enterprise at 
fixed or determinable prices. The term does not encompass preferred 
stock that by its terms either must be redeemed by the issuing 
enterprise or is redeemable at the option of the investor, nor does it 
include treasury stock or convertible bonds.
    (b) Marketable, as applied to an equity security, means an equity 
security as to which sales prices or bid and ask prices are currently 
available on a national securities exchange (i.e., those registered with 
the Securities and Exchange Commission) or in the over-the-counter 
market. In the over-the-counter market, an equity security shall be 
considered marketable when a quotation is publicly reported by the 
National Association of Securities Dealers Automatic Quotations System 
or by the National Quotations Bureau, Inc. (Provided, in the later case, 
That quotations are available from at least three dealers.) Equity 
securities traded in foreign markets shall be considered marketable when 
such markets are of a breadth and scope comparable to those referred to 
above. This definition is not met by restricted stock (securities for 
which sale is restricted by a governmental or contractual requirement 
except where such requirement terminates within one year or where the 
holder has the power to cause the requirement to be met within one 
year). Any portion of the stock which can reasonably be expected to 
qualify for sale within one year, such as may be the case under Rule 144 
or similar rules of the Securities and Exchange Commission, is not 
considered restricted.
    (c) Market value refers to the aggregate of the market price of a 
single share or unit times the number of shares or units of each 
marketable equity security in the portfolio. When an entity has taken 
positions involving short sales, sales of calls, and purchases of puts 
for marketable equity securities and the same securities are included in 
the portfolio, those contracts shall be taken into consideration in the 
determination of market value of the marketable equity securities.
    (d) Cost, as applied to a marketable equity security, refers to the 
original cost as adjusted for unrealized holding gains and losses.

[32 FR 20241, Dec. 20, 1967, as amended at 37 FR 17713, Aug. 31, 1972; 
39 FR 33343, Sept. 17, 1974; 39 FR 34043, Sept. 23, 1974; 40 FR 53247, 
Nov. 17, 1975; 41 FR 9158, Mar. 3, 1976; 42 FR 33297, June 30, 1977. 
Redesignated and amended by Order 119, 46 FR 9044, Jan. 28, 1981; Order 
620, 65 FR 81342, Dec. 26, 2000; Order 627, 67 FR 67706, Nov. 6, 2002; 
Order 631, 68 FR 19625, Apr. 21, 2003]

                          General Instructions

    1-1 Classification of accounts. Accounts are prescribed to record 
the cost of property used in transportation and related operations and 
for revenues, expenses, taxes, rents, and other items of income for such 
operations. Separate accounts are prescribed for cost of property not 
used in transportation operations and for income and expenses pertaining 
thereto; for other investments and related income; for extraordinary and 
prior period items, including applicable income taxes; and for assets 
and liabilities.
    In addition, stockholders' equity accounts, designed to segregate 
directly contributed capital from appropriated and unappropriated 
retained income,

[[Page 927]]

are provided. Retained income accounts form the connecting link between 
the income account and the equity section of the balance sheet. They are 
provided to record the transfer of net income or loss for the year; 
certain capital transactions; and, when authorized by the Commission, 
other items.
    1-2 Records. (a) Carriers shall keep their accounts and records in 
accordance with the prescribed accounts. In addition, clearing accounts, 
temporary accounts, and subdivisions of any account may be kept provided 
the integrity of the prescribed accounts is not impaired. Each carrier 
shall keep its books of account, and all other books, records and 
memoranda 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.
    (b) The books and records referred to herein include not only 
accounting records in a limited technical sense, but all records, such 
as minute books, stock books, reports, correspondence, memorandums, 
etc., which may be useful in developing the history of or facts 
regarding any transaction.
    (c) No carrier shall destroy any books, records, memoranda, etc., 
which support entries to its accounts unless destruction is permitted by 
the regulations governing preservation of records, Part 356 of this 
chapter.
    (49 U.S.C. 5b, 304, 320, 904, 913, 917, 1003, 1012)

[32 FR 20241, Dec. 20, 1967, as amended at 40 FR 50384, Oct. 29, 1975. 
Redesignated and amended by Order 119, 46 FR 9044, Jan. 28, 1981]
    1-3 Accounting period. (a) Each carrier shall keep its books on a 
monthly basis so that all transactions, as nearly as may be ascertained, 
shall be entered in the accounts not later than 60 days after the last 
day of the period for which the accounts are stated, except that the 
time within which the final entries for the year ending December 31 
shall be made may be extended to such date in the following March as 
shall not interfere with the preparation and filing of the annual 
report.
    (b) Changes shall not be made in the accounts for periods covered by 
reports that have been filed with the Commission unless the changes have 
first been authorized by the Commission.
    1-4 Accounting method. (a) This system of accounts shall be kept by 
the accrual method of accounting. The basis used for accruing income and 
expense items each month shall be consistently applied and any change in 
such basis or any unusual accruals involving material amounts shall be 
promptly reported to the Commission.
    (b) When the amount of any transaction cannot be accurately 
determined in time for inclusion in the applicable month's accounts, an 
estimated amount shall be entered in the proper accounts. Appropriate 
adjustments shall be made as soon as the actual amounts become known or 
at the time a substantial change is indicated. Carriers are not required 
to anticipate minor items which do not appreciably affect the accounts.
    1-5 Delayed items. Ordinary delayed items and adjustments arising 
during the current year which are applicable to prior years shall be 
included in the same account which would have been charged or credited 
if the item had been taken up or the adjustments made in the year to 
which it pertained. When the amount of a delayed item or adjustment is 
relatively so large that its inclusion in net income for a single month 
would seriously distort the accounts for the month (but not for the 
year), such amount may be distributed in equal monthly charges or 
credits, as the case may be, to the remaining months of the calendar 
year. See instruction 1-6 for instructions covering extraordinary and 
prior period items of a nonrecurring nature.
    1-6 Extraordinary, unusual or infrequent items, prior period 
adjustments, discontinued operations and accounting changes. (a) 
Extraordinary Items. All items of profit and loss recognized during the 
year are includible in ordinary income unless evidence clearly supports 
their classification as extraordinary items. Extraordinary items are 
characterized by both their unusual nature and infrequent occurrence 
taking into account the environment in which

[[Page 928]]

the firm operates; they must also meet the materiality standard.
    Unusual means the event or transaction must possess a high degree of 
abnormality and be of a type clearly unrelated to, or only incidentally 
related to the ordinary and typical activities of the entity.
    Infrequent occurrence means the event or transaction shall be of a 
type not reasonably expected to recur in the foreseeable future.
    (b) Unusual or Infrequent Items. Material events unusual in nature 
or infrequent in occurrence but not both, thus not meeting both criteria 
for classification as extraordinary, shall be includible in the accounts 
provided as separate components of income/expense from continuing 
operations. Such items are not to be reported net of income taxes.
    (c) Discontinued Operations. The results of continuing operations 
shall be reported separately from discontinued operations and any gain 
or loss resulting from disposal of a segment of a business (see 
definition 32(a)) shall be reported in conjunction with the related 
results of discontinued operations and not as an extraordinary item. The 
disposal of a segment of a business shall be distinguished from other 
disposals of assets incident to the evolution of the entity's business, 
such as the disposal of part of a line of business, the shifting of 
production or marketing activities for a particular line of business 
from one location to another, the phasing out of a product line or class 
of service, and other changes occasioned by technological improvements. 
If a loss is expected from the proposed sale or abandonment of a 
segment, the estimated loss shall be provided for at the measurement 
date (see definition 32(b)). If a gain is expected, it shall be 
recognized when realized, which ordinarily is the disposal date (see 
definition 32(c)).
    (d) Prior Period Adjustments. The correction of an error in the 
financial statements of a prior period and adjustments that result from 
realization of income tax benefits of preacquisition loss carryforwards 
of purchased subsidiaries shall be accounted for as prior period 
adjustments and excluded from the determination of net income from the 
current year. All other revenues, expenses, gains, and losses recognized 
during a period shall be included in the net income of that period.
    (e) Accounting Changes. A change in accounting principle or 
accounting entity should be referred to this Commission for approval. 
The cumulative effect of a change in accounting principle should 
ordinarily be reflected in the account provided for in determining net 
income; in certain cases accounting changes may be reflected as prior 
period adjustments. Changes in accounting estimates should ordinarily be 
reflected prospectively.
    (f) Materiality. As a general standard an item shall be considered 
material when it exceeds 10 percent of annual income (loss) before 
extraordinary items. An item may also be considered in relation to the 
trend of annual earnings before extraordinary items or other appropriate 
criteria. Items shall be considered individually and not in the 
aggregate in determining materiality. However, the effects of a series 
of related transactions arising from a single specific and identifiable 
event or plan of action shall be aggregated to determine materiality.
    (g) Commission Approval and accountant's letter. Items shall be 
included in the accounts provided for extraordinary items, unusual or 
infrequent items, discontinued operations, prior period adjustments and 
cumulative effect of changes in accounting principles only upon approval 
of the Commission. If the carrier retains the service of an independent 
accountant, a request for using these accounts shall be accompanied by a 
letter from the independent accountant approving or otherwise commenting 
on the request.

    Note: The carrier may refer to generally accepted accounting 
principles for further guidance in applying instruction 1-6.

[40 FR 53248, Nov. 17, 1975. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981; Order 620, 65 FR 81342, Dec. 26, 2000]
    1-7 Items in texts of accounts. Items appearing in instructions and 
in the texts of various accounts are merely representative and are not 
intended to cover all of the items includible therein.

[[Page 929]]

    1-8 Depreciation accounting--Carrier property.
    (a) Method. Monthly depreciation charges shall be made by the 
straight-line method to operating expenses in conformity with the group 
plan of accounting applicable to all carrier property except property 
included in accounts 101, 151, 171, Land, and 187, Construction Work in 
Progress.
    (b) Rates. (1) Separate composite annual percentage rates will be 
prescribed for each depreciable account except that the Commission may 
authorize the use of component rates upon specific request from a 
carrier. Carriers becoming subject to this system of accounts and 
carriers acquiring property for which no rates have been previously 
prescribed shall file, within six months, composite annual percentage 
rates applicable to the book cost of each class of depreciable carrier 
property as will distribute the service value, by the straight-line 
method, in equal annual charges to operating expenses during the service 
life of the property. These rates shall be used by the carrier until the 
rates prescribed by the Commission become effective. Such rates shall, 
for each primary account comprised of more than one class of property, 
produce a depreciation charge equal to the sum of the amounts that would 
otherwise be chargeable for each of the various classes of property 
included in the account. Carriers shall base these percentage rates on 
estimated service values and service lives developed from engineering 
and other studies. The rates filed shall be accompanied by a statement 
showing the bases and the methods employed in the rate determination.
    (2) Carriers shall be prepared at any time upon the direction of the 
Commission to compute and submit revised percentage rate studies. When a 
carrier believes that any rate prescribed by the Commission is no longer 
applicable, it shall submit the rate which it believes should be 
established supported by full particulars for consideration by the 
Commission.
    (3) A carrier shall keep records of property and property 
retirements that will reflect the service life of property which has 
been retired, or will permit the determination of service life 
indications by mortality, turnover, or other appropriate methods; and 
also such records as will reflect the percentage of net salvage value 
for property retired from each class of depreciable carrier property.
    (c) Charges. In computing monthly charges, the annual percentage 
rates shall be applied to the depreciation base as of the first of each 
month and the result divided by twelve.
    (d) Retirements. Except as provided in paragraph (e) of this 
section, upon the retirement of depreciable property the service value 
shall be charged in its entirety to account 31, Accrued Depreciation--
Carrier Property. Any amounts of insurance recovered from casualty 
losses involving depreciable property retired shall be credited thereto.
    (e) Special accounting authority. (1) When circumstances indicate 
that newly acquired property should be subject to amortization, or that 
the prescribed depreciation rates based on the service lives of certain 
property are no longer applicable, because the source of traffic will be 
exhausted before the end of the physical service life, the carrier shall 
submit to the Commission for approval amortization or depreciation rates 
based on the estimated remaining service life of the property 
accompanied by full information justifying the request.
    (2) A carrier may request, or the Commission may direct, that 
special accounting be applied in situations causing undue inflation or 
deflation of depreciation reserves, such as premature or unusual 
retirements or sales of depreciable property, or related insurance 
recoveries. A carrier's request for special accounting shall contain 
full particulars concerning the situation, including the basis for its 
proposal. Alternative accounting techniques shall be applied to the 
extent approved or directed by the Commission.
    1-9 Depreciation accounting--Noncarrier property. Monthly 
depreciation charges for all depreciable property recorded in account 
34, Noncarrier Property, shall be made to account 620, Income from 
Noncarrier Property, with

[[Page 930]]

concurrent credits to account 35, Accrued Depreciation--Noncarrier 
Property. The depreciation charges shall be such as to distribute the 
service values equitably over the service life of the property.
    1-10 Amortization of intangibles. Monthly charges shall be made to 
account 540, Depreciation and Amortization, to amortize the cost of 
fixed life intangibles such as permits, patents and franchises which are 
directly related to pipeline operations. Monthly charges shall be made 
to account 660, Miscellaneous Income Charges, to amortize the cost of 
intangibles such as goodwill which are not directly associated with 
pipeline operations. The amortization charges shall be such as to 
distribute the cost by the straight-line method in equal annual charges 
over the life or expected period of benefit.
    1-11 Interpretation of rules. To maintain uniformity of accounting, 
carriers shall submit questions of doubtful interpretation to the 
Commission for consideration and decision.
    1-12 Accounting for income taxes. (a) The interperiod tax allocation 
method of accounting shall be applied to all material temporary 
differences (see definition 30(e)) between the tax basis of an asset or 
liability and its reported amount in the financial statements that will 
result in taxable or deductible amounts in future years. Carriers may 
elect, as provided by the Revenue Act of 1971, to account for the 
investment tax credit by either the flow through method or the deferred 
method of accounting. See paragraphs (d) and (e) below. All income taxes 
(Federal, State, and other) currently accruable for income tax return 
purposes shall be charged to account 670, Income taxes on income from 
continuing operations, and account 695, Income taxes on extraordinary 
items, as applicable.
    (b) Under the interperiod tax allocation method of accounting a 
deferred tax liability or asset is to be recognized for all temporary 
differences (see definition 30(e)) that result in taxable amounts in 
future years when the related asset or liability is recovered or 
settled. Deferred taxes are classified as current or noncurrent based on 
the classification of the related asset or liability. A carrier shall 
apply the applicable enacted tax rate in determining the amount of 
deferred taxes. The carrier shall adjust its deferred tax liabilities 
and assets for the effect of the change in tax law or rates in the 
period that the change is enacted. The adjustment shall be recorded in 
the proper deferred tax balance sheet accounts based on the nature of 
the temporary difference and the related classification requirements of 
the account.
    (c) An entity shall record the income tax effects of a net operating 
loss carryforward or a tax credit carryforward as a deferred tax asset 
in the year the loss occurs. In the event that it is more likely than 
not (a likelihood of more than 50 percent) that some portion of its 
deferred tax assets will not be realized, a carrier shall reduce the 
asset by a valuation allowance. The valuation allowance should be 
recorded in a separate subaccount of the deferred tax asset account. The 
carrier shall disclose full particulars as to the nature and amount of 
each type of operating loss and tax credit carryforward in the notes to 
its financial statements.
    (d) Carriers electing to account for the investment tax credit by 
the flow through method shall credit account 670, Income taxes on income 
from continuing operations, or account 695, Income taxes on 
extraordinary items, as applicable, and charge to account 56, Taxes 
payable, with the amount of investment tax credit utilized in the 
current accounting period. When the flow through method is followed for 
the investment tax credit, account 671, Provision for deferred taxes, 
shall reflect the difference between the tax payable (after recognition 
of allowable investment tax credit) based on taxable income and tax 
expense (with full recognition of investment tax credit that would be 
allowable based on accounting income) based on accounting income.
    (e) Carriers electing to account for the investment tax credit by 
the deferred method shall concurrently with making the entries 
prescribed in (d) above charge account 671, ``Provision for deferred 
taxes'' or account 696, ``Provision for deferred taxes--extraordinary 
items,'' as applicable, and shall

[[Page 931]]

credit account 64, Accumulated Deferred Income Tax Liabilities with the 
investment tax credit utilized as a reduction of the current year's tax 
liability but deferred for accounting purposes. The investment tax 
credit so deferred shall be amortized by credits to account 671, 
``Provision for deferred taxes''.

    Note A: Any change in practice of accounting for the investment tax 
credit shall be reported promptly to the Commission. Carriers desiring 
to clear deferred investment tax credits because of a change from the 
deferral method to the flow through method shall submit the proposed 
journal entry to the Commission for consideration and advice.
    Note B: The carrier shall follow generally accepted accounting 
principles where an interpretation of the accounting rules for income 
taxes is needed or obtain an interpretation from its public accountant 
or the Commission.

(Interstate Commerce Act, 49 U.S.C. 20 (1976), Department of Energy 
Organization Act, 42 U.S.C. 7155, 7172(b), 7295(a) (Supp. I 1977); E. O. 
12009, 42 FR 46267 (1977); Federal Energy Regulatory Commission, Order 
No. 1, 42 FR 55450 (1977))

[39 FR 33344, Sept. 17, 1974, as amended at 40 FR 53247, Nov. 17, 1975; 
44 FR 72161, Dec. 13, 1979. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981, as amended by Order 620, 65 FR 81342, Dec. 26, 2000]

    1-13 Transactions with affiliated companies. (a) The records and 
supporting data of all transactions with affiliated companies shall be 
maintained in a separate file. The types of transactions referred to in 
this paragraph are for management services or any other type of services 
rendered, sale or use of facilities or any other type of assets or 
property. The file shall be maintained so as to enable the carrier, to 
furnish accurate information with supporting documentation about 
particular transactions within 15 days of the request. We do not intend 
the file to include data relating to ordinary carrier operations (e.g. 
lawful tariff charges).
    (b) Each bill rendered by an affiliated company shall state 
specifically the basis used for determining charges, unless the file 
contains other information to support the specific basis for charges.
    (c) Punched cards, magnetic tapes, discs, or other machine-sensible 
device used for recording, consolidating, and summarizing accounting 
transactions and records with a carrier's electronic or automatic data 
processing system may constitute a file within the meaning of this 
instruction.
    (d) The carrier shall record, as the cost of assets or services 
received from an affiliated supplier, the invoice price (plus any 
incidental costs related to those transactions) in those cases where the 
invoice price can be determined from a prevailing price list of the 
affiliated supplier available to the general public in the normal course 
of business. If no such price list exists, the charges shall be recorded 
at the lower of their cost to the originating affiliated supplier (less 
all applicable valuation reserves in case of asset sales), or their 
estimated fair market value determined on the basis of a representative 
study of similar competitive and arm's-length or bargained transactions.
    Any difference between actual transaction price and the above, as 
well as charges that are not transportation related, shall be considered 
of a financing nature and shall be recorded, accordingly, as 
nonoperating charges or credits. (See Instruction 1-14).
    (e) Nothing contained herein shall be construed as restraining the 
carrier from subdividing accounts (see Instruction 1-2(a)) for the 
purpose of recording separately transactions with affiliated companies.

[40 FR 44562, Sept. 29, 1975. Redesignated by Order 119, 46 FR 9044, 
Jan. 28, 1981]
    1-14 Charges to be just and reasonable. All charges to the accounts 
prescribed in this system of accounts for carrier property, operating 
revenues, operating and maintenance expenses, and other carrier 
expenses, shall be just, reasonable and not exceed amounts necessary to 
the honest and efficient operations and management of carrier business. 
Payments shall not exceed the fair market value of goods and services 
acquired in an arm's-length transaction. Any payments in excess of such 
just and reasonable charges shall be included in account 660, 
Miscellaneous Income Charges.

[40 FR 44562, Sept. 29, 1975. Redesignated by Order 119, 46 FR 9044, 
Jan. 28, 1981]


[[Page 932]]


    1-15 Accounting for marketable securities owned.
    (a) Accounts 11 ``Temporary investments,'' 20 ``Investments in 
affiliated companies,'' and 21 ``Other investments'' shall be maintained 
in such a manner as to reflect the marketable equity portion (see 
definition 35) and other securities or investments.
    (b) For the purpose of determining net ledger value, the marketable 
equity securities in account 11 shall be considered the current 
portfolio and the marketable equity securities in accounts 20 and 21 
(combined) shall be considered the noncurrent portfolio.
    (c) Carriers will categorize their security investments as held-to-
maturity, trading, or available-for-sale. Unrealized holding gains and 
losses on trading type investment securities will be recorded in 
accounts 640, miscellaneous income, and 660, miscellaneous income 
charges, as appropriate. Unrealized holding gains and losses on 
available-for-sale type investment securities shall be recorded in 
account 77, accumulated other comprehensive income.

[42 FR 33297, June 30, 1977. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981, and amended by Order 627, 67 FR 67706, Nov. 6, 2002]

    1-16 Accounting for inaccurate reporting of income taxes on income 
from continuing operations which occurred prior to reporting year 1979. 
To the extent that any oil pipeline company, required to file annual 
reports with the Commission, did not correctly report State or other 
income taxes on continuing operations for the 1976, 1977, and 1978 
reporting years, such company is ordered to disclose the amount of the 
accounting change in the space for notes and remarks provided in its 
1979 Annual Report Form P, Schedule 300-A, of the Commission.

(Interstate Commerce Act, 49 U.S.C. 20 (1976), Department of Energy 
Organization Act, 42 U.S.C. 7155, 7172(b), 7295(a) (Supp. I 1977); E. O. 
12009, 42 FR 46267 (1977); Federal Energy Regulatory Commission, Order 
No. 1, 42 FR 55450 (1977))

[44 FR 72161, Dec. 13, 1979. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]
    1-17 Accounting for other comprehensive income.
    (a) Carriers shall record items of other comprehensive income in 
account 77, accumulated other comprehensive income. Amounts included in 
this account shall be maintained by each category of other comprehensive 
income. Examples of categories of other comprehensive income include, 
foreign currency items, minimum pension liability adjustments, 
unrealized gains and losses on available-for-sale type securities and 
cash flow hedge amounts. Supporting records shall be maintained for 
account 77 so that the company can readily identify the cumulative 
amount of other comprehensive income for each item included in this 
account.
    (b) When an item of other comprehensive income enters into the 
determination of net income in the current or subsequent periods, a 
reclassification adjustment shall be recorded in account 77 to avoid 
double counting of that amount.

[Order 627, 67 FR 67706, Nov. 6, 2002]
    1-18 Accounting for derivative instruments and hedging activities.
    (a) A carrier shall recognize derivative instruments as either 
assets or liabilities in the financial statements and measure those 
instruments at fair value, except those falling within recognized 
exceptions, the most common of which being the normal purchases and 
sales scope exception. Normal purchases or sales are contracts that 
provide for the purchase or sale of goods that will be delivered in 
quantities expected to be used or sold by the utility over a reasonable 
period in the normal course of business. A derivative instrument is a 
financial instrument or other contract with all three of the following 
characteristics:
    (1) It has one or more underlyings and a notional amount or payment 
provision. Those terms determine the amount of the settlement or 
settlements, and, in some cases, whether or not a settlement is 
required.
    (2) It requires no initial net investment or an initial net 
investment that is smaller than would be required for other types of 
contracts that would be expected to have similar response to changes in 
market factors.
    (3) Its terms require or permit net settlement, can readily be 
settled net

[[Page 933]]

by a means outside the contract, or provides for delivery of an asset 
that puts the recipient in a position not substantially different from 
net settlement.
    (b) The accounting for the changes in the fair value of derivative 
instruments depends upon its intended use and designation. Changes in 
the fair value of derivative instruments not designated as fair value or 
cash flow hedges shall be recorded in account 46, derivative instrument 
assets, or account 65, derivative instrument liabilities, as 
appropriate, with the gains recorded in account 640, miscellaneous 
income, and losses recorded in account 660, miscellaneous income 
charges.
    (c) A derivative instrument may be specifically designated as a fair 
value or cash flow hedge. A hedge may be used to manage risk to price, 
interest rates, or foreign currency transactions. An entity shall 
maintain documentation of the hedge relationship at the inception of the 
hedge that details the risk management objective and strategy for 
undertaking the hedge, the nature of the risk being hedged, and how 
hedge effectiveness will be determined.
    (d) If the carrier designates the derivative instrument as a fair 
value hedge against exposure to changes in the fair value of a 
recognized asset, liability, or a firm commitment, it shall record the 
change in fair value of the derivative instrument designated as a fair 
value hedge to account 47, derivative instrument assets-hedges, or 
account 66, derivative instrument liabilities-hedges, as appropriate, 
with a corresponding adjustment to the subaccount of the item being 
hedged. The ineffective portion of the hedge transaction shall be 
reflected in the same income or expense account that will be used when 
the hedged item enters into the determination of net income. In the case 
of a fair value hedge of a firm commitment, a new asset or liability is 
created. As a result of the hedge relationship, the new asset or 
liability will become part of the carrying amount of the item being 
hedged.
    (e) If the carrier designates the derivative instrument as a cash 
flow hedge against exposure to variable cash flows of a probable 
forecasted transaction, it shall record changes in the fair value of the 
derivative instrument in account 47, derivative instrument assets-
hedges, or account 66, derivative instrument liabilities-hedges, as 
appropriate, with a corresponding amount in account 77, accumulated 
other comprehensive income, for the effective portion of the hedge. The 
ineffective portion of the hedge transaction shall be reflected in the 
same income or expense account that will be used when the hedged item 
enters into the determination of net income. Amounts recorded in other 
comprehensive income shall be reclassified into earnings in the same 
period or periods that the hedged forecasted item enters into the 
determination of net income.

[Order 627, 67 FR 67706, Nov. 6, 2002]
    1-19 Accounting for asset retirement obligations.
    (a) An asset retirement obligation represents a liability for the 
legal obligation associated with the retirement of a tangible long-lived 
asset that a utility is required to settle as a result of an existing or 
enacted law, statute, ordinance, or written or oral contract or by legal 
construction of a contract under the doctrine of promissory estoppel. An 
asset retirement cost represents the amount capitalized when the 
liability is recognized for the long-lived asset that gives rise to the 
legal obligation. The amount recognized for the liability and an 
associated asset retirement cost shall be stated at the fair value of 
the asset retirement obligation in the period in which the obligation is 
incurred.
    (b) The carrier shall initially record a liability for an asset 
retirement obligation in account 67, Asset retirement obligations, and 
charge the associated asset retirement costs to account 30, Carrier 
property, and account 34, Noncarrier property, as appropriate, related 
to the property that gives rise to the legal obligation. The asset 
retirement cost shall be depreciated over the useful life of the related 
asset that gives rise to the obligations. For periods subsequent to the 
initial recording of the asset retirement obligation, a carrier shall 
recognize the period to period changes of the asset retirement 
obligation that result from the passage

[[Page 934]]

of time due to the accretion of the liability and any subsequent 
measurement revisions to the initial liability for the legal obligation 
recorded in account 67, Asset retirement obligations, as follows:
    (1) The carrier shall record the accretion of the liability by 
debiting account 591, Accretion expense, for carrier property, account 
620, Income (net) from noncarrier property, for noncarrier property and 
crediting account 67, Asset retirement obligations; and
    (2) The carrier shall recognize any subsequent measurement changes 
of the liability initially recorded in account 67, Asset retirement 
obligations, for each specific asset retirement obligation as an 
adjustment of that liability in account 67 with the corresponding 
adjustment to carrier property and noncarrier property accounts, as 
appropriate. The utility shall on a timely basis monitor any measurement 
changes of the asset retirement obligations.
    (c) Gains or losses resulting from the final settlement of asset 
retirement obligations for carrier plant resulting from the difference 
between the amount of the liability for the asset retirement obligation 
in account 67, Asset retirement obligations, and the actual amount to 
settle the obligation, shall be recorded in account 592, Gains or losses 
on asset retirement obligations.
    (d) Gains or losses resulting from the final settlement of asset 
retirement obligations for noncarrier plant resulting from the 
difference between the amount of the liability for the asset retirement 
obligation in account 67, Asset retirement obligations, and the actual 
amount to settle the obligation, shall be recorded in account 620, 
Income (net) from noncarrier property.
    (e) Separate subsidiary records shall be maintained for each asset 
retirement obligation showing the initial liability and associated asset 
retirement cost, any incremental amounts of the liability incurred in 
subsequent reporting periods for additional layers of the original 
liability and related asset retirement cost, the accretion of the 
liability, the subsequent measurement changes to the asset retirement 
obligation, the depreciation and amortization of the asset retirement 
costs and related accumulated depreciation, and the settlement date and 
actual amount paid to settle the obligation. For purposes of analyses a 
carrier shall maintain supporting documentation so as to be able to 
furnish accurately and expeditiously with respect to each asset 
retirement obligation the full details of the identity and nature of the 
legal obligation, the year incurred, the identity of the plant giving 
rise to the obligation, the full particulars relating to each component 
and supporting computations related to the measurement of the asset 
retirement obligation.

[Order 631, 68 FR 19625, Apr. 21, 2003]

                 Instructions for Balance Sheet Accounts

    2-1 Current assets. In the group of accounts designated as current 
assets shall be included cash and other assets or resources commonly 
identified as those which are reasonably expected to be realized in cash 
or sold or consumed within a one-year period. There shall not be 
included any amount the collection of which is not reasonably assured by 
the known financial condition of the debtor or otherwise. Items of 
current character but of doubtful value shall be written down or written 
off to account 510, Supplies and Expenses, or to account 660, 
Miscellaneous Income Charges, as appropriate.
    2-2 Investments and special funds. (a) This group of accounts shall 
include the cost of long-term investments in securities other than those 
of the accounting carrier, investment advances, sinking and other funds, 
cash value of life insurance policies, and other items of similar 
nature.
    (b) Investment in securities shall be recorded at cost at time of 
acquisition excluding amounts paid for accrued interest and dividends. 
When securities with a fixed maturity date are purchased at a discount 
or premium, such discount or premium shall be amortized over the 
remaining life of the securities by periodical debits or credits to the 
account in which the cost of the securities is recorded with 
corresponding credits or debits to interest income. If the amount of the 
discount or premium is minor, the investment

[[Page 935]]

may be maintained at actual cost without adjustment, and the amount of 
discount or premium recorded in the interest income account at the time 
the securities mature.
    (c)(1) For financial statement purposes the carrier shall follow the 
principles of equity accounting for (1) all investments in corporate 
joint ventures (see definition 31(c)), and (2) all investments in voting 
stock of affiliated companies giving the carrier the ability to 
significantly influence the operating and financial policies of an 
investee (see definition 31(b)). For purposes of this instruction an 
investment of 20 percent or more of the outstanding voting stock of an 
investee will indicate the ability to exercise significant influence 
over an investee in the absence of evidence to the contrary.
    (2) Since the equity method is not to be effected by entries in the 
books of accounts but is to apply only in financial reports to the 
Commission, the carrier shall establish worksheet or memorandum 
accounts. Three basic worksheet or memorandum accounts are needed:
    (a) An investment account to include (1) equity in the undistributed 
earnings or losses of the investee since the date of acquisition (see 
definition 31(g)); (2) accumulated amortization of the difference 
between cost and net assets at date of acquisition (see (c)(3) below); 
and other adjustments for disposition or writedown of investments.
    (b) An income account to include (1) the investor's share of the 
investee's undistributed profits or losses for each reporting period 
subsequent to acquisition of the investment except that in the year of 
acquisition such amount shall be determined from the date of 
acquisition; (2) amortization for the reporting period of the difference 
between cost and net assets at date of acquisition. This account shall 
be closed at year-end to the retained income memorandum account 
discussed in paragraph (c) below.
    (c) A retained income account to include (1) equity in the 
undistributed earnings or losses of the investee since the date of 
acquisition; (2) accumulated amortization of the difference between cost 
and net assets acquired at date of acquisition (see (c)(3) below).
    (d) Other memorandum accounts will be needed for such adjustments as 
gains and losses on disposition of investments, recognition of 
impairments in value, the investor's share of extraordinary and prior 
period items reported in the investee's financial statements (see 
instruction 1-6), and provision for deferred taxes where it is 
reasonable to assume that undistributed earnings of an investee will be 
transferred to the investor in a taxable distribution. These memorandum 
accounts shall be closed at year-end to the retained income memorandum 
account discussed in paragraph (c) above.
    (3) The carrier shall retain the following information for each 
investee in support of the worksheet or memorandum accounts:
    (a) Original cost of investment.
    (b) Equity in net assets of investee at date of acquisition.
    (c) Allocation of difference between cost and equity in net assets, 
namely, to specific assets of investee or to goodwill.
    (d) Accumulated amortization of difference between cost and equity 
in net assets.
    (e) Unamortized balance of difference between cost and equity in net 
assets.
    (f) Equity in undistributed earnings/losses for each year since date 
of acquisition.
    (g) Dividends received since date of acquisition if determinable.
    (h) Proceeds from sale of investments.
    (4) Any difference between the investor's cost and its share of the 
net assets of the investee at date of acquisition shall be allocated to 
specific assets of the investee to the extent the difference is 
attributable to them. When the difference is allocated to depreciable or 
amortizable assets, depreciation and amortization (through the 
investment and income memorandum accounts) should absorb the difference 
over the remaining life of the related assets. If the difference is not 
related to specific accounts, it should be considered goodwill and 
amortized over a reasonable period not to exceed 40 years. For 
investments made prior to

[[Page 936]]

November 1, 1970, amortization of goodwill is not required in the 
absence of evidence that the goodwill has a limited term of existence.
    (5) The financial statements of the investee that are used for 
equity accounting should be timely. If the accounting year of the 
investee differs from that of the investor then the most recent 
available financial statements may be used. The lag in reporting should 
be consistent from period to period.
    (6) Material profits or losses on transactions between the investor 
and investee shall be eliminated until realized by either company as if 
the two were consolidated.
    (7) A transaction of the investee of a capital nature that affects 
the investor's share of the investee's stockholder's equity should be 
reported in the financial statements as if the two were consolidated.
    (8) The investor shall deduct any dividends applicable to 
outstanding cumulative preferred stock whether or not declared, and any 
other dividends declared when computing its share of undistributed 
earnings or losses.
    (9) The investor shall suspend application of the equity method when 
the investment (including the investment memorandum account) together 
with any net advances made to the investee is reduced to zero. 
Additional losses shall not be provided for unless the investor has 
guaranteed obligations of the investee or is otherwise committed to 
provide further financial support for the investee. If the investee 
subsequently reports net income the investor shall resume applying the 
equity method at such time as its share of that net income equals the 
share of net losses not recognized during the period of suspension.
    (10) When the investor's voting stock interest falls below the level 
of ownership described in paragraph (c)(1) of this instruction, the 
investment no longer qualifies for the equity method. Should dividends 
received on the investment in subsequent periods exceed the investor's 
share of earnings for such periods, the investment memorandum and income 
memorandum accounts shall be reduced by the excess amount.
    (11) When the level of ownership of an investment increases to that 
described in paragraph (c)(1) of this instruction, the equity method 
shall be applied. The memorandum accounts for the investment, income 
(for current year's equity in undistributed earnings less amortization), 
and retained income (for prior years' equity in undistributed earnings 
less amortization) shall be adjusted retroactively on a step-by-step 
basis determining the equity in net assets at date of acquisition, 
amortization adjustment, and equity in undistributed earnings or losses 
at each level of ownership. Where small purchases are made over a period 
of time and then a purchase is made which qualifies the investment for 
the equity method, the date of latest purchase may be used as date of 
acquisition. In those situations where the information needed to apply 
the equity method is not determinable, the date of acquisition may be 
considered as January 1, 1974.
    (12) Information having significance with respect to the investor's 
ownership in investees shall be disclosed in notes to financial 
statements of annual reports filed with the Commission in accordance 
with generally accepted accounting principles.

    Note A: The carrier shall follow generally accepted accounting 
principles where an interpretation of the rules for equity accounting is 
needed or obtain an interpretation from its public accountant or the 
Commission.

[32 FR 20241, Dec. 20, 1967, as amended at 39 FR 34043, Sept. 23, 1974. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981]
    2-3 Tangible property. The cost of property owned that is devoted to 
transportation service shall be recorded in account 30, Carrier 
Property, and in account 33, Operating Oil Supply. This includes 
carrier's investment in jointly-owned transportation property in which 
it has an undivided ownership interest. The cost of other property not 
directly associated with pipeline operations shall be included in 
account 34, Noncarrier Property. Property used in both carrier and 
noncarrier services shall be classified in account 30 or account 34 
according to its dominant use.
    2-4 Other assets and deferred charges. Account 40, Organization 
Costs and

[[Page 937]]

Other Intangibles, is prescribed for organization costs and other 
intangible assets, such as patents and franchises. These intangible 
assets shall be recorded at cost. Accounts are also prescribed for 
assets not otherwise provided for and for charges applicable to future 
periods.
    2-5 Current liabilities. In this group of accounts shall be included 
obligations which are payable on demand or mature or become due within 
one year from the date of the balance sheet.
    2-6 Noncurrent liabilities. Includible under this category of 
account are those obligations which are not due to be liquidated within 
one year from the date of the balance sheet. Estimates of future fire 
losses or other contingencies shall not be accounted for as current 
expenses or recorded as liabilities. Such contingencies may be provided 
for by appropriations of retained income, the losses to be recognized in 
income when sustained.
    2-7 Contingent assets and liabilities.
    (a) A contingency is an existing condition, situation, or set of 
circumstances involving uncertainty as to possible gain or loss to a 
carrier that will ultimately be resolved when one or more future events 
occur or fail to occur. Resolution of the uncertainty may confirm the 
acquisition of an asset or the reduction of a liability or the loss or 
impairment of an asset or the incurrence of a liability.
    (b) An estimated loss from a contingent liability shall be charged 
to income if it is probable that an asset had been impaired or a 
liability had been incurred and the amount of the loss can be reasonably 
estimated. The carrier shall disclose in a footnote in its annual report 
any accrued contingent liabilities, along with any contingent 
liabilities not meeting both conditions for accrual if there is a 
reasonable possibility that a liability may have been incurred.
    (c) Contingent assets should not be reflected in the accounts. The 
carrier shall disclose in a footnote in its annual report any 
contingencies that might result in an asset.

[32 FR 20241, Dec. 20, 1967. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981, as amended by Order 620, 65 FR 81342, Dec. 26, 2000]

               Instructions for Carrier Property Accounts

    3-1 Property acquired. (a) In general the carrier property accounts 
shall be charged with the cost of property purchased or constructed and 
with the cost of additions and improvements. However, the acquisition of 
properties comprising a distinct operating system, or an integral 
portion thereof, when the purchase price exceeds $250,000, shall be 
accounted for in accordance with the provisions set forth in instruction 
3-11.
    (b) The cost of purchased property is the net price paid on a cash 
basis, or if other than money is given, the current value of that 
consideration. Cost includes the purchase price; sales, use, and excise 
taxes, and ad valorem taxes during periods of construction; 
transportation charges; insurance in transit; installation charges; and 
expenditures for testing and final preparation for use.
    (c) Property acquired from an affiliated company through purchase or 
transfer shall be recorded together with the related accrued 
depreciation and liabilities assumed, if any, in the appropriate 
property accounts at the same amount that it was recorded on the books 
of the affiliate. When the purchase price exceeds the net book value of 
the property acquired, the difference shall be charged to retained 
income. When the purchase price is less than the net book value, the 
difference shall be credited to account 73, Additional Paid-in Capital. 
This does not apply to small miscellaneous purchases or transfers.
    (d) The purchase of a proportionate share of a pipeline system or 
facility owned in undivided interests shall be recorded at the amount 
that the percentage of interest acquired bears to the whole. Any excess 
of deficiency of purchase price over the amount so recorded shall be 
debited to account 44, Other Deferred Charges, or credited to account 
63, Other Noncurrent Liabilities, as appropriate, and amortized in equal 
periodic amounts over the remaining service life of the system or 
facility through income.
    3-2 [Reserved]

[[Page 938]]

    3-3 Cost of property constructed. The cost of constructing property 
chargeable to the carrier property accounts shall include direct and 
other costs as described hereunder:
    (1) Cost of labor includes the amount paid for labor performed by 
the carrier's own employees and officers. This includes payroll taxes, 
vacation pay, pensions, holiday pay and traveling and other incidental 
expenses of employees. No charge shall be made to these accounts for pay 
and expenses of officers and employees who merely render services 
incidentally in connection with extensions, additions or replacements.
    (2) Cost of material and supplies includes the purchase price (less 
purchase and trade discounts) of material and supplies, including small 
tools, at the point of free delivery; costs of inspection and loading 
borne by the carrier; transportation charges; sales, use and excise 
taxes; and when applicable a proportionate share of stores expenses. In 
calculating the cost of material and supplies used, proper allowance 
shall be made for the value of unused portions and other salvage, for 
the value of the material recovered from temporary scaffolding, 
cofferdams and other temporary structures used in construction: and for 
the value of small tools recovered and used for other purposes.
    (3)(i) Cost of special machine service includes the cost of labor 
expended and of materials and supplies consumed in maintaining and 
operating vehicles, equipment, and other machines used in construction 
work; and rents paid for the use of such machines.
    (ii) When machines are purchased primarily for a construction 
project, their cost shall be charged to account 187, Construction Work 
in Progress. Upon completion of the construction project, account 187 
shall be credited with amounts received for machines sold or the book 
cost (less a fair allowance for depreciation during the construction 
period) of machines retained for use in carrier service. The net book 
cost shall be included in the appropriate carrier property accounts.
    (iii) The cost of repairs to vehicles and other work equipment and 
of machine tools and machinery which are used both in construction and 
maintenance work shall be apportioned equitably to the work in 
connection with which the equipment is used.
    (4) Cost of transportation includes the amounts paid to other 
companies or individuals for the transportation of employees, material 
and supplies, special machine outfits, appliances, and tools in 
connection with construction and also the cost of hauling performed by 
the carrier's own forces and facilities. The cost of the transportation 
of construction material to the point where material is received by the 
carrier shall be included, so far as practicable, as a part of the cost 
of such material.
    (5) Cost of contract work includes amounts paid for construction 
work performed under contract by other companies, firms, or individuals, 
and cost incident to the award of the contract.
    (6) Cost of protection includes expenditures for protection in 
connection with construction. This includes the cost of protection 
against fires, cost of detecting and prosecuting incendiaries, amounts 
paid to municipal corporations and others for fire protection, cost of 
protecting property of others from damages, and analogous items.
    (7) Cost of injuries and damages includes expenditures for injuries 
to persons or damage to property when incident to construction projects, 
and shall be included in the cost of the related construction work. It 
also includes that portion of premiums paid for insuring property prior 
to the completion or coming into service of the property insured. 
Insurance recovered for compensation paid for injuries to persons 
incident to construction shall be credited to the accounts to which such 
compensation is charged. Any insurance recovered for damages to property 
incident to construction shall be credited to the accounts chargeable 
with the expenditures necessary for restoring the damaged property. The 
cost of injuries and damages in connection with the removal of old 
structures which are encumbrances on newly acquired lands shall be 
included in the cost of land, or rights of way.
    (8) Cost of privileges and permits includes compensation for 
temporary privileges, such as the use of private or

[[Page 939]]

public property or of streets, in connection with construction work.
    (9) Taxes include taxes on property during construction and before 
the facilities are completed and ready for service. This includes taxes 
on land held under a definite plan for its use in pipeline service for 
the period prior to the completion of pipeline facilities thereon and 
other taxes separately assessed on property during construction, or 
assessed under conditions which permit separate identification or 
allocation of the amount chargeable to construction.
    (10) Rent includes payments for use of facilities, such as motor 
vehicles, special tools or machines, and quarters used for construction 
work.
    (11)(i) Interest during construction includes interest expense on 
bonds, notes and other interest bearing debt incurred in the 
construction of carrier property (less interest, if any, earned on funds 
temporarily invested) after such funds become available for use and 
before the receipt or the completion or coming into service of the 
property. The interest shall be included in the accounts charged with 
the cost of the property to which related.
    (ii) There shall be deducted from such interest charges a proportion 
of premium on securities sold. There shall be added a proportion of 
discount and expense on funded debt issued for the acquisition or 
construction of carrier property. The amount of premium and discount and 
expense thus related shall be determined by the ratio which the period 
between the date the proceeds from the securities issued become 
available and the receipt, completion, or coming into service of the 
property bears to the entire life of the securities issued.
    (iii) Interest during construction shall not be recognized on the 
asset retirement costs incurred during the construction of carrier and 
noncarrier property.
    (12) Cost of disposing of excavated material shall be included in 
the cost of construction except that when such material is used for 
filling, the cost of loading, hauling, and dumping shall be equitably 
apportioned between the work for which removal is made and the work for 
which the material is used.
    (13) Asset retirement costs that are recognized as a result of asset 
retirement obligations incurred during construction shall be included in 
the cost of construction costs.
    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.
    3-5 Improvements. Costs of improvements, shall be accounted for as 
follows:
    (a) The cost of items replaced shall be retired and the cost of the 
improvement shall be charged to the appropriate property account.
    (b) If the improvement does not involve a replacement, the cost of 
the improvement shall be charged to the appropriate property account.

[32 FR 20241, Dec. 20, 1967. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981, as amended by Order 620, 65 FR 81343, Dec. 26, 2000; Order 
631, 68 FR 19625, Apr. 21, 2003]
    3-6 Replacements. Replacements are substitutions of a part or of a 
complete unit of property with a new part or unit. Costs of replacements 
shall be accounted for as follows:
    (a) In replacing a complete unit of property, the old unit shall be 
retired and the cost of the replacement recorded in the appropriate 
primary property account.
    (b) In replacing a minor item without improvement, the cost of such 
replacement shall be charged to the maintenance expense account.
    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) Land. The book cost of land retired shall be removed from the 
property accounts. Gain or loss on the sale of land shall be recorded in 
account 640,

[[Page 940]]

Miscellaneous Income, or account 660, Miscellaneous Income Charges.
    (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.
    (2) In case of casualty loss, insurance proceeds recovered shall be 
credited to account 31, Accrued Depreciation--Carrier Property, in an 
amount not to exceed the book cost of the property involved. Any excess 
amount shall be credited to account 640, Miscellaneous Income.
    (3) Carrier property no longer used nor held for carrier operations 
but used or intended for use in noncarrier operations shall be 
transferred, along with the amount of past accrued depreciation, 
estimated if necessary, to noncarrier 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.

[32 FR 20241, Dec. 20, 1967, as amended at 40 FR 53248, Nov. 17, 1975. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981; Order 598, 63 FR 
6852, Feb. 11, 1998]

    3-8 Salvage. (a) When retired property is salvaged for material or 
parts which are to be reused by the carrier, the salvage shall be priced 
at current second-hand value, not to exceed original cost, and charged 
to account 17, Material and Supplies, or other appropriate account.
    (b) When retired property is held without being dismantled, the 
estimated value of the salvage less the estimated cost of salvaging 
shall be included in account 19, Other Current Assets, if to be 
recovered within a year, otherwise, in account 43, Miscellaneous Other 
Assets.
    3-9 Relocation of line. (a) If a line is relocated in the same 
gathering field serving the same lease or purpose, all of the relocating 
expenses whether or not a unit of property is involved shall be charged 
to maintenance expense, provided that the same size pipe is used in such 
relocation. Resulting increases or decreases in the length of the line 
shall be accounted for as additions or retirements of property.
    (b) In accounting for relocation of trunk lines involving units of 
property, the replaced property shall be retired and the cost of the new 
property included in the appropriate primary property accounts. When 
public improvement projects are involved, the cost of the new property 
shall be (1) the book cost less depreciation or amortization of the 
replaced property, less the net salvage value recovered, plus (2) costs 
incurred by the carrier, less any amounts contributed by governmental 
agencies or others.
    3-10 Property contributed. (a) The value of contributions or 
property received from others including governmental agencies shall not 
be recorded in the property accounts; however, memorandum entries should 
be made in the records of the carrier describing the property received, 
the value thereof, and all other pertinent information related thereto.
    (b) Property contributed by an affiliate shall be recorded in the 
property accounts together with the related accrued depreciation at the 
same amounts that were recorded on the books of the affiliate provided, 
however, that the amount of contribution made by non-carrier affiliates 
shall not exceed the fair value of the property received.
    3-11 Acquisition by merger, consolidation or purchase. Accounting 
for property acquired by business combination of two or more 
corporations, or the acquisition of properties comprising a distinct 
operating system, or integral portion thereof as specified in section 3-
1, shall depend on whether there has been (1) a merger or consolidation 
in a ``pooling of interests'' or (2) a ``purchase.'' A ``pooling of 
interests'' may

[[Page 941]]

exist when holders of all or substantially all of the ownership 
interests, usually common stock, in the constituent corporations or 
entities become the owners of a surviving corporation or a new 
corporation which owns the assets and business of the constituent 
corporations or entities directly or through one or more subsidiaries. 
However, when the stockholders of one of the constituent corporations 
obtain 90 percent or more of the voting interest in the combined 
enterprise; or when there is a plan or firm intention and understanding 
to retire a substantial part of the capital stock issued to the owners 
of one or more of the constituent corporations or substantial changes in 
ownership which occurred shortly before or planned to occur shortly 
after the combination, the combination may be considered a ``purchase.''
    (a) Accounting under a ``pooling in interest.'' (1) In accounting 
for a ``pooling of interests,'' no new basis of accountability arises. 
The assets and liabilities of the constituent companies or entities and 
the related accrued depreciation and amortization accounts along with 
the retained income or deficit accounts shall be carried forward, 
adjusted, if necessary, to conform with the accounting rules of the 
Commission.
    (2) When the total par value or stated value of no-par capital stock 
of the succeeding corporation is greater than that of the constituent 
corporations, the excess shall be charged first to the amount in account 
73, Additional Paid-in Capital, that is not otherwise restricted, and 
the Balance to account 75, Unappropriated Retained Income.
    (3) When the par value or stated value of no-par capital stock of 
the succeeding corporation is less than that of the constituent 
corporations, the difference shall be credited to account 73, Additional 
Paid-in Capital.
    (b) Accounting under a ``purchase.'' In accounting for a 
``purchase,'' the assets shall be recorded on the books of the acquiring 
carrier at cost as of the date of acquisition or, if other than money is 
given, at the fair value of such consideration. Liabilities assumed 
shall be recorded in the appropriate accounts according to the 
accounting rules of the Commission.
    (c) Approval of accounting. (1) Tentative journal entries recording 
the acquisition of pipeline properties shall be submitted to the 
Commission for consideration and approval. The entries shall give a 
complete description of the property purchased and the basis upon which 
the amounts of the entries have been determined. Any portion of the 
purchase price attributable to intangible property shall be separately 
recorded as hereinafter provided in account 40, Organization Costs and 
Other Intangibles.
    (2) When the costs of individual or groups of transportation 
property are not specified in the agreement or in supporting documents, 
or when separate costs are not provided for the physical property and 
the intangible property, the total purchase price shall be equitably 
apportioned among the appropriate property or other accounts, based on 
the percentage relationship between the purchase price and the original 
cost of property shown in the valuation records of the Commission or the 
fair market value of the properties. The portion of the total price 
assignable to the physical property shall be supported by independent 
appraisal or such other information as the Commission may consider 
appropriate. In no event shall amounts recorded for physical properties 
and other assets acquired exceed the total purchase price.
    (3)(a) Where the purchase price is in excess of amounts recorded for 
the net assets acquired, such excess shall be included in account 40, 
Organization Costs and Other Intangibles.
    (b) The excess of the purchase price over amounts includable in the 
primary carrier property accounts shall be amortized through account 
660, ``Miscellaneous income charges,'' or otherwise disposed of, as the 
Commission may approve or direct.

[32 FR 20241, Dec. 20, 1967, as amended by 35 FR 13992, Sept. 3, 1970; 
37 FR 17713, Aug. 31, 1972. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]

    3-12 Reorganizations. When a carrier is involved in receivership or 
bankruptcy so as to effect a reorganization, all accounting relating to 
the plan of

[[Page 942]]

reorganization shall be submitted to this Commission for consideration 
and approval.
    3-13 Disposition of former Account 193, Acquisition Adjustment. 
Amounts included in former account 193, Acquisition Adjustment, 
attributable to mergers, consolidations, reorganizations, and purchases 
of property shall be cleared from that account as the Commission may 
authorize or direct upon submission of proposal for distribution of the 
amounts therein.

[32 FR 20241, Dec. 20, 1967. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981 and amended by Order 598, 63 FR 6852, Feb. 11, 1998]

       Instructions for Operating Revenues and Operating Expenses

    4-1 Detail of accounts. The carrier shall keep the prescribed 
accounts with sufficient particularity to permit the reporting of 
operating revenues and expenses for crude oil lines and for product 
lines separately, and to permit the allocation of operating expenses by 
service functions (see 4-3 Operating Expenses).
    4-2 Operating revenues. The operating revenue accounts are designed 
to show the amount of money which the carrier becomes entitled to 
receive or which accrues to its benefit for transportation and services 
incidental thereto.
    4-3 Operating expenses. The operating expense accounts are designed 
to show the costs of pipeline operations by service functions. The 
expenses of pipeline operations are to be allocated to the following 
functions:
    (a) Gathering. This includes the gathering and collection of oil, 
oil products and other commodities from oil field, refinery, or other 
source (other than carrier's own terminal and delivery facilities), and 
transmission to point of connection to meters, working or storage tanks, 
or intake side of the manifold at the trunk line receiving site or 
station, or at a terminal.
    (b) Trunk. This includes the trunk line transportation of crude oil, 
oil products and other commodities from origin or receiving station to 
point of connection with other carriers, consignee facilities at 
destination, or to the discharge side of the manifold or connection to 
working or storage tanks at the destination station.
    (c) Delivery. This includes the receiving, storage, and delivering 
at terminal and delivery facilities of crude oil, oil products and other 
commodities from or to railroads, motor carriers, water carriers, and 
others prior or subsequent to movement by pipeline.
    4-4 Expense classification. The primary expense accounts are to be 
reported under the following classifications:
    (a) Operations and maintenance expense. This group of accounts 
includes all costs directly associated with the operation, repairs and 
maintenance of property devoted to pipeline operations including 
scheduling, dispatching, movement, and delivery of crude oil, oil 
products and other commodities.
    (b) General expense. This group of accounts includes general and 
administrative expense and all other expenses not directly allocable to 
operations and maintenance expenses.
    4-5 Expense distribution. The several classes of expenses shall be 
directly allocated to applicable service functions to the fullest 
possible extent. Expenses common to two or more functions and system 
expenses shall be equitably apportioned to the service functions. The 
basis for apportionment and the underlying records in support thereof 
shall be readily available for inspection by the Commission's examiners.

[32 FR 20241, Dec. 20, 1967. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981, as amended by Order 620, 65 FR 81343, Dec. 26, 2000]

                         Balance Sheet Accounts

10 Cash.
    This account shall include money, checks, sight drafts and sight 
bills of exchange, money in banks or in other depositories subject to 
withdrawal on demand, and other similar items. The amount of checks and 
sight drafts transmitted to payees which are unpaid at the close of the 
accounting period shall be credited to this account.

    Note: Compensating balances (see Definition 33) under an agreement 
which legally restricts the use of such funds shall not be included in 
this account. Such balances shall

[[Page 943]]

be included in account 10-5 ``Special deposits'' or account 22 ``Sinking 
and other funds.''

(49 U.S.C. 304, 913, 1012)

[32 FR 20241, Dec. 20, 1967, as amended at 41 FR 9158, Mar. 3, 1976. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981]
10-5 Special deposits.
    This account shall include cash deposits, either placed in hands of 
trustees or under the direct control of the reporting company, which are 
restricted for specific purposes. Examples are those deposits made for 
the payment of dividends and interest due within one year, the 
liquidation of other current liabilities, to guarantee fulfillment of 
current contract obligations, to meet specific operating requirements, 
or compensating balances (see Definition 33) under an agreement which 
legally restricts the use of such funds and which constitute support for 
short-term borrowing arrangements. Sub-accounts may be set up, if 
necessary to account for special deposits for specific purposes.

    Note: Deposits available for general company purposes shall be 
included in account 10 ``Cash.''

(49 U.S.C. 304, 913, 1012)

[41 FR 9158, Mar. 3, 1976. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]
11 Temporary investments.
    (a) This account shall include the cost of securities and other 
collectible obligations acquired for the purpose of temporarily 
investing cash, such as United States Treasury certificates, marketable 
securities, time drafts receivable, demand loans, time deposits with 
banks and trust companies, and other similar investments of a temporary 
character. This account shall also include unrealized holding gains and 
losses on trading and available-for-sale types of security investments.
    (b) This account shall be subdivided to reflect the marketable 
equity securities' portion and other temporary investments. (See 
Instruction 1-15).

[Order 627, 67 FR 67706, Nov. 6, 2002]
12 Notes receivable.
    This account shall include the book cost, not includible elsewhere, 
of all collectible obligations in the form of notes receivable, 
contracts receivable, and similar evidences (except interest coupons) of 
money receivable on demand or within a time not exceeding one year from 
date of the balance sheet. Notes receivable from affiliates shall be 
included in account 13, Receivables from Affiliated Companies.
13 Receivables from affiliated companies.
    (a) This account shall include amounts receivable due and accrued 
from affiliated companies subject to settlement within one year from 
date of the balance sheet. This includes receivables for items such as 
revenue for services rendered, material furnished, rent, interest and 
dividends, advances and notes.
    (b) An oil pipeline company participating in a cash management 
program must maintain supporting documentation for all deposits into, 
borrowings from, interest income from, and interest expense to such 
program. Cash management programs include all agreements in which funds 
in excess of the daily needs of the oil pipeline company along with the 
excess funds of the oil pipeline company's parent, affiliated and 
subsidiary companies are concentrated, consolidated, or otherwise made 
available for use by other entities within the corporate group. The 
written documentation must include the following information:
    (1) For deposits with and withdrawals from the cash management 
program: The date of the deposit or withdrawal, the amount of the 
deposit or withdrawal, and the maturity date, if any, of the deposit;
    (2) For borrowings from a cash management program: The date of the 
borrowing, the amount of the borrowing, and the maturity date, if any, 
of the borrowing;
    (3) The security, if any, provided by the cash management program 
for repayment of deposits into the cash management program and the 
security required, if any, by the cash management program in support of 
borrowings from the program; and
    (4) The monthly balance of the cash management program.

[[Page 944]]

    (c) The oil pipeline company must maintain current and up-to-date 
copies of the documents authorizing the establishment of the cash 
management program including the following:
    (1) The duties and responsibilities of the administrator and the oil 
pipeline company in the cash management program;
    (2) The restrictions on deposits or borrowings by oil pipeline 
companies in the cash management program;
    (3) The interest rate, including the method used to determine the 
interest earning rates and interest borrowing rates for deposits into 
and borrowings from the program; and
    (4) The method used to allocate interest income and expenses among 
oil pipeline companies in the program.

[32 FR 20241, Dec. 20, 1967, as amended by Order 634, 68 FR 40509, July 
8, 2003; Order 634-A, 68 FR 62004, Oct. 31, 2003]
14 Accounts receivable.
    This account shall include amounts receivable due and accrued from 
other than affiliates which are subject to settlement within one year 
from date of the balance sheet. This includes items such as revenue for 
services rendered, material furnished, rent, accounts of officers and 
employees, miscellaneous accounts with others.
14-5 Accumulated provision for uncollectible accounts.
    This account shall be credited with amounts provided for losses on 
notes and accounts receivable which may become uncollectible, and also 
with collections on accounts previously charged hereto. This account 
shall be charged with any amounts which have been found to be 
impractical of collection.

[Order 620, 65 FR 81343, Dec. 26, 2000]
15 Interest and dividends receivable.
    (a) This account shall include the amount of interest due and 
accrued as of the date of the balance sheet on all interest-bearing 
obligations held by the carrier. This account shall also include the 
amount of dividends declared on stocks owned.
    (b) Interest and dividends receivable from affiliated companies or 
on the carrier's own securities shall not be included in this account.
16 Oil inventory.
    (a) This account shall include the cost of oil purchased and the 
value of oil acquired through tariff allowances and operating gains. 
Amounts paid preceding carriers for transportation, customs duties, or 
similar charges shall be charged to account 230, Allowance Oil Revenue. 
Additions to inventory from tariff allowances shall be credited to 
revenue at current value. Additions resulting from operating gains shall 
be credited against operating oil losses and shortages.
    (b) The cost or value of oil owned by the carrier and used to 
maintain lines and working tanks in condition for transportation 
operations shall be included in account 33, Operating Oil Supply.
17 Material and supplies.
    (a) This account shall include the cost, including sales, use and 
excise taxes and transportation costs to point of delivery, less 
purchase and trade discounts, of all unapplied material and supplies, 
such as line pipe, line pipe fittings, fuel, tools, and other pipeline 
supplies. The value of items being manufactured by the carrier and the 
fair value of salvaged material shall also be included herein.
    (b) Carriers shall take annual inventories of material and supplies 
and shall make the adjustments necessary to reconcile the books to the 
inventory figures. To the extent practicable, adjustments shall be made 
directly to the same accounts to which such material and supplies were 
charged during the period. Differences that cannot be directly allocated 
shall be equitably apportioned among the accounts to which material was 
charged since the last inventory.
18 Prepayments.
    This account shall include the amount of expenses paid in advance of 
accrual such as insurance, rent, and taxes, the benefits of which are to 
be realized in subsequent periods. Monthly transfers shall be made to 
the appropriate expense or other accounts for

[[Page 945]]

the expired portion of the prepayments applicable to that month.
19 Other current assets.
    This account shall include such items as estimated tax refunds 
receivable, legally enforceable, balances due on subscriptions to 
capital stock, temporary guaranty and other deposits, and all other 
current assets due within one year which are not includible in the other 
current asset accounts.
19-5 Deferred income tax assets.
    (a) This account shall include the portion of deferred income tax 
assets and liabilities relating to current assets and liabilities, when 
the balance is a net debit.
    (b) A net credit balance shall be included in Account 59, Deferred 
income tax liabilities.

[Order 620, 65 FR 81343, Dec. 26, 2000]
20 Investments in affiliated companies.
    This account shall include the cost of investments in securities 
(other than securities held in special funds) and investment advances 
made to affiliated companies. Separate records shall be maintained to 
show the securities pledged and the following classes of investments in 
each affiliated company:
    (a) Stocks.
    (b) Bonds.
    (c) Other secured obligations.
    (d) Unsecured notes.
    (e) Investment advances.
21 Other investments.
    This account shall include the cost of investments in securities of 
(other than securities held in special funds) and advances made to other 
than affiliated companies. This account shall also include unrealized 
holding gains and losses on trading and available-for-sale types of 
security investments. Separate records shall be maintained to show the 
securities pledged and the following classes of investments in each 
nonaffiliated company:
    (a) Stocks.
    (b) Bonds.
    (c) Other secured obligations.
    (d) Unsecured notes.
    (e) Investment advances.

[Order 627, 67 FR 67706, Nov. 6, 2002]
22 Sinking and other funds.
    (a) This account shall include cash and cost of investments in 
securities and other assets, trusteed or otherwise restricted, that have 
been segregated in distinct funds for purposes of redeeming outstanding 
obligations; purchasing or replacing assets; paying pensions, relief, 
hospitalization, and other similar items. This account shall also 
include unrealized holding gains and losses on trading and available-
for-sale types of security investments. The cash value of life insurance 
policies on the lives of employees and officers to the extent that the 
carrier is the beneficiary of such policies shall also be included in 
this account. Separate subsidiary records shall be maintained for each 
distinct fund.
    (b) Securities issued or assumed by the accounting company shall be 
recorded at par or stated value.
    (c) This account shall include compensating balances (see Definition 
34) under an agreement which legally restricts the use of such funds and 
which constitute support for long-term borrowing arrangements.

(49 U.S.C. 304, 913, 1012)

[32 FR 20241, Dec. 20, 1967, as amended at 41 FR 9158, Mar. 3, 1976. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981, and amended by 
Order 627, 67 FR 67706, Nov. 6, 2002]
30 Carrier property.
    This account shall include the cost of tangible property used in 
carrier service, or held for such use within a reasonable time under a 
definite plan for pipeline operations. Separate primary accounts are 
prescribed for each class of carrier property.
31 Accrued depreciation--Carrier property.
    This account shall be credited with amounts charged to operating 
expenses or other accounts representing the loss in service value of 
depreciable carrier property. The service value of depreciable property 
retired shall be charged to this account. It shall also include other 
entries as may be authorized by the Commission. Detail of this account 
shall be maintained by primary property accounts. Separate subsidiary 
records shall be maintained for the

[[Page 946]]

amount of accrued cost of removal other than legal obligations for the 
retirement of property recorded in account 31, Accrued depreciation--
Carrier property.
32 Accrued amortization--Carrier property.
    This account shall be credited with amounts charged to operating 
expenses or other accounts representing the loss in service value of 
carrier property subject to amortization accounting as authorized by the 
Commission. Upon the retirement of property subject to amortization this 
account shall be charged with the amount included herein applicable to 
the specific property at the time the property is retired. Subsidiary 
records shall be maintained for each group of property items under a 
separate amortization authorization.
33 Operating oil supply.
    This account shall include the cost of oil purchased and the value 
of oil added through tariff allowances and operating gains which is used 
to maintain lines and tanks in working condition. Additions to operating 
supply from tariff allowances shall be credited to revenue at current 
value. Additions resulting from operating gains shall be credited 
against operating oil losses and shortages.
34 Noncarrier property.
    This account shall include the cost of tangible property not used in 
carrier pipeline operations. This account shall also include, amounts 
recorded for asset retirement costs associated with noncarrier property.

[32 FR 20241, Dec. 20, 1967. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981, and amended by Order 631, 68 FR 19626, Apr. 21, 2003]
35 Accrued depreciation--Noncarrier property.
    This account shall be credited with amounts charged to income, 
representing the loss in service value of depreciable noncarrier 
property.
40 Organization costs and other intangibles.
    This account shall include the cost of intangible assets such as 
organizing the carrier, patents, permits, franchises, and goodwill. 
Organization costs include the legal expense, taxes, fees, stationery 
and printing, original capital stock expense and costs of economic 
feasibility studies made prior to initial operation of the carrier. 
Separate subsidiary records shall be maintained for each class of 
intangible asset.
41 Accrued amortization of intangibles.
    This account shall be credited with the amounts charged to operating 
expenses or income representing the expired cost of intangible property. 
When the period of benefit of intangible property is fully expired, or 
assets are retired to which the intangible relates, this account shall 
be charged with the amount herein applicable to the specific property.
43 Miscellaneous other assets.
    This account shall include such items as accounts receivable, 
utility deposits, guaranty deposits and other similar assets which are 
not expected to be realized or returned to the carrier within one year 
from date of the balance sheet. The estimated net salvage value of 
retired carrier property held without being dismantled shall be included 
in this account.
44 Other deferred charges.
    This account shall include items that cannot be disposed of until 
further information is received and items of a deferred nature, not 
provided for elsewhere, to be amortized to expense or other accounts in 
future periods. This includes such items as engineering surveys and 
studies and debt expense.
45 Accumulated deferred income tax assets.
    This account shall include the amount of deferred taxes determined 
in accordance with instruction 1-12 and the text of Account 64, 
Accumulated deferred income tax liabilities, when the balance is a net 
debit.

[Order 620, 65 FR 81343, Dec. 26, 2000]

[[Page 947]]

46 Derivative instrument assets.
    This account shall include the amounts paid for derivative 
instruments, and the change in the fair value of all derivative 
instrument assets not designated as cash flow or fair value hedges. 
Account 640, miscellaneous income, shall be credited or debited as 
appropriate with the corresponding amount of the change in the fair 
value of the derivative instrument.

[Order 627, 67 FR 67706, Nov. 6, 2002]
47 Derivative instrument assets-Hedges.
    (a) This account shall include the amounts paid for derivative 
instruments, and the change in the fair value of derivative instrument 
assets, designated by the utility as cash flow or fair value hedges.
    (b) When a carrier designates a derivative instrument asset as a 
cash flow hedge, it will record the change in the fair value of the 
derivative instrument in this account with a concurrent charge to 
account 77, accumulated other comprehensive income, with the effective 
portion of the derivative gain or loss. The ineffective portion of the 
cash flow hedge shall be charged to the same income or expense account 
that will be used when the hedged item enters into the determination of 
net income.
    (c) When a carrier designates a derivative instrument as a fair 
value hedge, it shall record the change in the fair value of the 
derivative instrument in this account with a concurrent charge to a 
subaccount of the asset or liability that carries the item being hedged. 
The ineffective portion of the fair value hedge shall be charged to the 
same income or expense account that will be used when the hedged item 
enters into the determination of net income.

[Order 627, 67 FR 67706, Nov. 6, 2002]
50 Notes payable.
    This account shall include outstanding obligations in the form of 
notes, and other similar evidences of indebtedness payable on demand or 
within one year from the date of issue except those payable to 
affiliated companies.

    Note: This account shall not include obligations due within one year 
which are intended to be refinanced on a long-term basis. Long-term 
refinancing of short-term obligations means; (1) replacement with long-
term obligations or equity securities, or (2) renewal, extension, or 
replacement with short-term obligations for an uninterrupted period 
extending beyond one year from the balance sheet date.
    The intention to refinance on a long-term basis shall be supported 
by the ability to refinance. Evidence of this ability includes either; 
(1) the actual issuance of a long-term obligation or equity securities 
for the purpose of refinancing the short-term obligation, after the 
balance sheet date but before the balance sheet is issued, or (2) before 
the balance sheet is issued, the existence of a financing agreement 
which is long-term and based on terms readily determinable with no 
existing violations of its provisions, and with a lender which is 
financially capable of honoring the agreement.

(49 U.S.C. 304, 913, 1012)

[32 FR 20241, Dec. 20, 1967, as amended at 41 FR 9163, Mar. 3, 1976. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981]
51 Payables to affiliated companies.
    This account shall include amounts payable due and accrued to 
affiliated companies (except interest and dividends) subject to 
settlement within one year from date of the balance sheet, and for which 
arrangements for long-term refinancing have not been made (See Note 
following account 50, ``Notes Payable''). This includes payables for 
items such as services and material received, rent, advances and notes.

(49 U.S.C. 304, 913, 1012)

[41 FR 9163, Mar. 3, 1976. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]
52 Accounts payable.
    This account shall include amounts payable due and accrued (except 
those to affiliated companies) subject to settlement within one year 
from the date of the balance sheet. This includes payables for items 
such as joint revenue, material and supplies, services received, rents, 
claims, taxes collected from employees and others for account of taxing 
entities, and other similar items.

[[Page 948]]

53 Salaries and wages payable.
    This account shall include salaries and wages payable due and 
accrued including vacation pay and unclaimed salaries and wages as of 
the balance sheet date. Unclaimed salaries and wages outstanding for 
more than one year may be written off to income unless the amount 
unclaimed escheats to the state.
54 Interest payable.
    This account shall include interest accrued or payable on all 
obligations.
55 Dividends payable.
    This account shall include the amount of dividends (other than stock 
dividends) declared but unpaid as of the date of the balance sheet.
56 Taxes payable.
    This account shall include all Federal, state, and local taxes 
(except taxes withheld from employees) accrued and payable, estimated if 
necessary, as of the balance sheet date. Prepaid taxes shall be shown as 
current assets in account 18, Prepayments. Subsidiary records shall be 
maintained to allow analyses of this account by matured and unmatured 
taxes and by type of tax and taxing entity.
57 Long-term debt payable within one year.
    This account shall include the amount of long-term debt which will 
mature and become payable within one year from date of the balance sheet 
for which arrangements for long-term refinancing have not been made (See 
note following account 50, ``Notes Payable'').

(49 U.S.C. 304, 913, 1012)

[41 FR 9163, Mar. 3, 1976. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]
58 Other current liabilities.
    This account shall include all other current liabilities not 
provided for elsewhere that are payable within one year from date of 
balance sheet.
59 Deferred income tax liabilities.
    (a) This account shall include the portion of deferred income tax 
assets and liabilities relating to current assets and liabilities, when 
the balance is a net credit.
    (b) A net debit balance shall be included in Account 19-5, Deferred 
income tax assets.

[Order 620, 65 FR 81343, Dec. 26, 2000]
60 Long-term debt payable after one year.
    This account shall include the total par value of the carrier's 
outstanding obligations maturing more than one year from the date of the 
balance sheet, including obligations due within one year which are 
expected to be refinanced on a long-term basis (See note following 
account 52, ``Accounts payable''). This account shall be divided to show 
the face value of (1) debt issued and actually outstanding, and (2) debt 
``nominally issued'' and ``nominally outstanding''. These accounts shall 
be further divided by the following classes of debt: mortgage bonds, 
collateral trusts, income bonds, miscellaneous obligations and 
nonnegotiable debt to affiliated companies.

(49 U.S.C. 304, 913, 1012)

[41 FR 9163, Mar. 3, 1976. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]
61 Unamortized premium on long-term debt.
    This account shall include the premium received and not yet 
amortized on the issuance of long-term debt. The amount of premium 
received on each issue of bonds, mortgages, notes, and other long-term 
debt shall be amortized over the life of the debt by credit to interest 
expense.

    Note: Issue costs related to long-term debt (debt expense) shall be 
included in account 44. Other deferred charges, and amortized over the 
life of the debt by charge to account 660, Miscellaneous income charges.

[32 FR 20241, Dec. 20, 1967, as amended at 41 FR 52467, Nov. 30, 1976. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981]
62 Unamortized discount and interest on long-term debt.
    This account shall include the amount of discount on long-term debt, 
and the amount of interest expressly provided for and included in the 
face

[[Page 949]]

amount of obligations issued or assumed and not amortized as of the 
balance sheet date. The amount of discount or interest applicable to 
each issue of debt obligation shall be amortized over the life of the 
respective debt by charge to interest expense.

    Note: Issue costs related to long-term debt (debt expense) shall be 
included in account 44, Other deferred charges, and amortized over the 
life of the debt by charge to account 660, Miscellaneous income charges.

[41 FR 52467, Nov. 30, 1976. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]
63 Other noncurrent liabilities.
    (a) This account shall include such items as deferred revenue from 
rents or leases that will not be realizable as income within one year, 
and the liability for amounts contributed by employees or others for 
pensions, savings, and similar items. This account shall also include 
the amount accrued for pensions in which the employees have a vested 
right and which are administered by the carrier.

[32 FR 20241, Dec. 20, 1967, as amended at 39 FR 33344, Sept. 17, 1974. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981]
64 Accumulated deferred income tax liabilities.
    (a) This account shall be credited (charged) with amounts 
concurrently charged (credited) to account 671, Provision for deferred 
taxes and account 696, Provision for deferred taxes--extraordinary 
items, representing the net tax effect of changes in material temporary 
differences (see definition 30(e)) during the current accounting period.
    (b) This account shall be credited with the amount of investment tax 
credit utilized in the current year for income tax purposes but deferred 
for accounting purposes (see instruction 1-12).
    (c) This account shall be concurrently debited with amounts credited 
to account 671, Provision for deferred taxes representing amortization 
of amounts for investment tax credits deferred in prior accounting 
periods.
    (d) This account shall be maintained in such a manner as to show 
separately: (1) The balance of deferred income taxes and deferred 
investment tax credit separately as of the beginning and as of the end 
of each year entries are made affecting the account balance, (2) the 
current years net credit or charges applicable to temporary differences 
and deferred investment tax credits.

    Note A: The portion of deferred assets and liabilities relating to 
current assets and liabilities should likewise be classified as current 
and included in Account 19-5, Deferred Income Tax Assets, or Account 59, 
Deferred Income Tax Liabilities, as appropriate.
    Note B: This account shall include a net credit balance only. A net 
debit balance shall be recorded in Account 45, Accumulated deferred 
income tax assets.

[39 FR 33344, Sept. 17, 1974, as amended at 40 FR 53248, Nov. 17, 1975. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981, as amended by 
Order 620, 65 FR 81343, Dec. 26, 2000]
65 Derivative instrument liabilities.
    This account shall include the change in the fair value of all 
derivative instrument liabilities not designated as cash flow or fair 
value hedges. Account 660, miscellaneous income charges, shall be 
debited or credited as appropriate with the corresponding amount of the 
change in the fair value of the derivative instrument.

[Order 627, 67 FR 67706, Nov. 6, 2002]
66 Derivative instrument liabilities-Hedges.
    (a) This account shall include the change in the fair value of 
derivative instrument liabilities designated by the carrier as cash flow 
or fair value hedges.
    (b) A carrier shall record the change in the fair value of a 
derivative instrument liability related to a cash flow hedge in this 
account, with a concurrent charge to account 77, accumulated other 
comprehensive income, with the effective portion of the derivative gain 
or loss. The ineffective portion of the cash flow hedge shall be charged 
to the same income or expense account that will be used when the hedged 
item enters into the determination of net income.
    (c) A carrier shall record the change in the fair of a derivative 
instrument liability related to a fair value hedge in this account, with 
a concurrent charge to a subaccount of the asset or

[[Page 950]]

liability that carries the item being hedged. The ineffective portion of 
the fair value hedge shall be charged to the same income or expense 
account that will be used when the hedged item enters into the 
determination of net income.

[Order 627, 67 FR 67706, Nov. 6, 2002]
67 Asset retirement obligations.
    (a) This account shall include liabilities arising from the 
recognition of asset retirement obligations. The carrier shall credit 
account 67, Asset retirement obligations, for the liabilities for asset 
retirement obligations and charge the appropriate carrier property 
accounts or noncarrier property accounts to record the related asset 
retirement costs.
    (b) This account shall also include the period to period changes for 
the accretion of the liabilities in account 67, Asset retirement 
obligations. The carrier shall charge the accretion expense to account 
591, Accretion expense, for carrier property, and account 620, Income 
(net) from noncarrier property, for noncarrier property, as appropriate, 
and credit account 67, Asset retirement obligations.
    (c) This account shall be debited with amounts paid to settle the 
asset retirement obligations recorded herein.
    (d) The utility shall clear from this account any gains or losses 
resulting from the settlement of asset retirement obligations in 
accordance with the instructions prescribed in General Instruction 1-19.

[Order 631, 68 FR 19626, Apr. 21, 2003]
70 Capital stock.
    (a) This account shall include the par value of par value stock, 
stated value of no-par stock, and the amount received for no-par stock 
without stated value, which have been issued to bona fide purchasers and 
have not been reacquired and cancelled, also shares of stock nominally 
issued. When other than cash is received for no-par value stock, the 
fair market value of the consideration shall be entered in this account.
    (b) This account shall be divided so as to show separately each 
class of stock issued, subdivided between (1) issued and outstanding, 
and (2) nominally issued and nominally outstanding.
    (c) When an issue of capital stock or any part thereof is 
reacquired, either by purchase or donation, and is retired or cancelled, 
the par value shall be charged to this account. Any excess of 
reacquisition cost over par value shall be allocated between account 73, 
Additional Paid-in-Capital and 720, Other Debits to Retained Income. Any 
excess of par value over reacquisition cost shall be credited to account 
73, Additional Paid-in-Capital.
    (d) When an issue of capital stock or any part thereof is 
reacquired, either by purchase or donation, and is not retired or 
cancelled, nor properly includible in sinking or other funds, the 
reacquisition cost shall be charged to account 76, Treasury Stock.
    (e) When treasury stock is resold, account 76, Treasury Stock, shall 
be credited with the cost paid for it. Gains shall be credited to 
account 73, Additional Paid-in-Capital. Losses shall be charged to 
account 73, Additional Paid-in-Capital to the extent that previous net 
gains from sales or retirements of the same class of stock are included 
therein; otherwise, to account 720, Other Debits to Retained Income.

[40 FR 44562, Sept. 29, 1975. Redesignated by Order 119, 46 FR 9044, 
Jan. 28, 1981]
71 Premiums on capital stock.
    This account shall include the excess of the actual cash value of 
the consideration received at the time of the original sale over the par 
or stated value of the stock issued.
72 Capital stock subscriptions.
    This account shall include the full amount of the par value, stated 
value, or price agreed upon for no-par stock which has been subscribed 
under a legally binding purchase agreement. The difference between the 
par value or stated value, plus any premiums or the amount agreed upon 
for no-par stock, and the down payment or installments received, shall 
be recorded as a current asset in account 19, Other Current Assets. 
Appropriate subaccounts shall be kept to record separately the 
transactions for each class and series of stock involved.

[[Page 951]]

73 Additional paid-in capital.
    This account shall include gains from purchase and resale of 
reacquired stock. Credits attributable to reductions in the par or 
stated value of capital stock may be included in this account only when 
approved by the Commission. Separate subaccounts shall be maintained for 
each class and series of stock. Also include herein contributions to 
capital made by stockholders and others.
74 Appropriated retained income.
    This account shall include retained income which has been 
appropriated and set aside under contractual or legal requirements and 
for other specific purposes, such as the retirement of bonded 
indebtedness, contingencies, redemption of preferred capital stock; fire 
losses; plant replacement and additions; miscellaneous employee 
benefits; and similar items. Appropriations shall be released when their 
respective purposes have been served. Separate subaccounts shall be 
maintained for each specific purpose for which retained income is 
appropriated.
75 Unappropriated retained income.
    (a) This account shall include retained income which has not been 
appropriated or set aside for specific purposes. There shall be no 
transfers to or from account 73, Additional Paid-in Capital, to this 
account unless so authorized by the Commission.
    (b) The balance of accounts 700 to 750, inclusive, shall be closed 
to this account at the end of each calendar year.

[32 FR 20241, Dec. 20, 1967, as amended at 34 FR 15483, Oct. 4, 1969; 37 
FR 17714, Aug. 31, 1972. Redesignated by Order 119, 46 FR 9044, Jan. 28, 
1981]
76 Treasury stock.
    (a) This account shall include in subdivisions for each class the 
reacquisition cost of capital stock which has been actually issued or 
assumed by the carrier, then reacquired, and is neither retired nor 
cancelled, nor properly includible in sinking or other funds.
    (b) This account shall be maintained to reflect separately 
securities pledged or unpledged.
    (c) This account shall be shown on the Balance Sheet as a deduction 
in arriving at Stockholders' Equity.

    Note A: The accounting for the reacquisition of capital stock and 
resale thereof shall be in accordance with balance sheet account 70, 
paragraphs (c) through (e).

[40 FR 44562, Sept. 29, 1975. Redesignated by Order 119, 46 FR 9044, 
Jan. 28, 1981]
77 Accumulated other comprehensive income.
    (a) This account shall include revenues, expenses, gains, and losses 
that are properly includable in other comprehensive income during the 
period. Examples of other comprehensive income include foreign currency 
items, minimum pension liability adjustments, unrealized gains and 
losses on certain investments in debt and equity securities, and cash 
flow hedges. Records supporting the entries to this account shall be 
maintained so that the utility can furnish the amount of other 
comprehensive income for each item included in this account.
    (b) This account shall also be debited or credited, as appropriate, 
with amounts of accumulated other comprehensive income that have been 
included in the determination of net income during the period and in 
accumulated other comprehensive income in prior periods. Separate 
records for each category of items shall be maintained to identify the 
amount of the reclassification adjustments from accumulated other 
comprehensive income to earnings made during the period.

[Order 627, 67 FR 67706, Nov. 6, 2002]

                        Carrier Property Accounts

    The following table lists the prescribed primary property accounts 
and indicates those accounts which contain similar items of property for 
which a single text is provided. The accounts are to be kept separately 
for crude oil lines and for product lines.

------------------------------------------------------------------------
      Account number
---------------------------
Gathering   Trunk                           Account Title
  Lines     Lines  General
------------------------------------------------------------------------
     101      151      171  Land.
     102      152  .......  Right of Way.
     103      153  .......  Line Pipe.
     104      154  .......  Line Pipe Fittings.

[[Page 952]]

 
     105      155  .......  Pipeline Construction.
     106      156      176  Buildings.
     107      157  .......  Boilers.
     108      158  .......  Pumping Equipment.
     109      159      179  Machine Tools and Machinery.
     110      160  .......  Other Station Equipment.
     111      161  .......  Oil Tanks.
     112      162  .......  Delivery Facilities.
     113      163      183  Communication Systems.
     114      164      184  Office Furniture and Equipment.
     115      165      185  Vehicles and Other Work Equipment.
     116      166      186  Other Property.
           ......      187  Construction Work in Progress.
------------------------------------------------------------------------

101, 151, 171 Land.
    (a) This account shall include the cost of land held in fee and used 
in pipeline operations. Land not used in carrier service shall be 
recorded in account 34, Noncarrier Property. Irregular parcels of land 
without commercial value acquired with rights of way shall not be 
transferred to account 34 solely to make right of way boundaries 
regular.
    (b) The cost of land and buildings acquired together shall be 
equitably separated and recorded. When land is acquired with buildings, 
structures, or other encumbrances that must be removed before the land 
is usable, demolition cost, less salvage, shall be added to the book 
cost of the land. Net proceeds from the sale of timber, minerals and 
improvements which were part of the land cost when purchased by the 
carrier, shall be credited to this account up to the amount of the 
purchase price allocated as their cost. Any excess shall be credited to 
account 640, Miscellaneous Income.
    (c) Costs of filing, clearing, grading or leveling land, when such 
work is not directly associated with construction or a definite plan for 
construction, shall be charged to this account.
    (d) All direct or incidental costs associated with the acquisition 
of the land and any taxes and public assessments assumed at the time of 
purchase, shall be included in this account.
    (e) Special assessments for public improvements and also costs borne 
by the carrier for public improvements constructed by it shall be 
included in this account.

[32 FR 20241, Dec. 20, 1967, as amended at 40 FR 53248, Nov. 17, 1975. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981]
102, 152 Right of way.
    This account shall include the cost of obtaining rights of way used 
in pipeline operations. Periodic rents paid for the use of a right of 
way shall be charged to operating rents. Costs of filling, clearing, 
grading or leveling of a right of way when such work is not directly 
associated with construction or a definite plan for construction, shall 
be charged to this account.
103, 153 Line pipe.
    This account shall include the cost of all line pipe actually laid 
in pipe lines devoted to transportation service.
104, 154 Line pipe fittings.
    This account shall include the cost of the line pipe fittings, 
including manifolds, used in pipe lines devoted to transportation 
service.
105, 155 Pipeline construction.
    (a) This account shall include all the costs of constructing pipe 
lines except the cost of line pipe and fittings provided for in accounts 
103, 153, Line Pipe, and 104, 154, Line Pipe Fittings.
    (b) Includible shall be the cost of labor and materials such as 
casing and vent pipe, pipe coatings of all kinds, river weights, support 
structures, sand bags, valve boxes, cathodic protection devices, mile 
posts, right-of-way markers, excavating and backfilling, pipeline pits, 
and the cost of damages paid for the destruction of crops, timber, and 
other property during construction. The cost of reopening the trenches 
for repairs, or installation of casing, coating or cathodic protection, 
and the necessary backfilling shall be charged to maintenance expense.
106, 156, 176 Buildings.
    This account shall include the cost of all buildings including the 
foundations, fixtures, and appurtenances thereto. This includes such 
items as architects'

[[Page 953]]

fees, sidewalks, driveways, fences, permanent water rights, grading and 
preparing grounds before and after construction, utility lines and other 
service piping. Cost of restoring grounds after repair work shall be 
charged to maintenance expense.
107, 157 Boilers.
    This account shall include the cost of boilers, including 
accessories and attachments such as injectors, water gages, steam gages 
and fittings, and the cost of special boiler foundations and 
installations.
108, 158 Pumping equipment.
    This account shall include the cost of engines, motors, pumps, and 
all other pumping equipment, and the cost of special foundations and 
installation.
109, 159, 179 Machine tools and machinery.
    This account shall include the cost of machine tools and machinery, 
including the cost of their special foundations and installation.
110, 160 Other station equipment.
    This account shall include the cost of all station equipment not 
provided for elsewhere, such as electric light, gas, and refrigeration 
equipment, manifolds, and miscellaneous equipment and fittings. It shall 
also include the carrier's investment in tracks if located at and used 
in connection with a station.
111, 161 Oil tanks.
    This account shall include the cost of oil tanks, including grades, 
roofs, fire banks, steam coils, swing pipes, inlet valves, and outlet 
valves.
112, 162 Delivery facilities.
    This account shall include the cost of facilities for receiving or 
delivering oil and oil products from or to water carriers, railroads, 
motor carriers, and others, such as delivery racks, wharves (including 
buildings thereon), docks, and slips, including piling, pile protection, 
cribs, cofferdams, walls, and other necessary devices and apparatus for 
the operation or protection of such property. It shall also include the 
cost of engines, pumps, and boilers at loading racks and on wharves, the 
construction of oil-pipe lines between oil tanks and delivery 
facilities, and the carrier's investment in tracks if located at and 
used in connection with delivery facilities.
113, 163, 183 Communication systems.
    This account shall include the cost of telegraph, wireless, 
telephone, and radio equipment.
114, 164, 184 Office furniture and equipment.
    This account shall include the cost of all office furniture, 
equipment and fixtures, including such items as safes, desks, chairs, 
typewriters, accounting machines, cabinets, file cabinets, floor 
coverings, portable air conditioners, drinking fountains, and other 
similar items that are not an integral part of a building.
115, 165, 185 Vehicles and other work equipment.
    This account shall include the cost of motor and other vehicles, 
motor and other portable work equipment, garage equipment, and portable 
tools and machines such as drills, hoists, jacks, power mowers, stocks 
and dies, laying tongs, vises, air compressors, welding machines, valve 
reseating machines, pipe-cleaning machines, and concrete mixers, not 
specifically provided for in other accounts.
116, 166, 186 Other property.
    This account shall include the cost of property used in pipeline 
operations not provided for elsewhere.
117, 167, 186.1 Asset retirement costs.
    This account shall include asset retirement costs on plans included 
in carrier property.
187 Construction work in progress.
    This account shall include the cost of carrier property under 
construction and the cost of land acquired for such construction as of 
the date of the balance sheet. It includes interest and taxes during 
construction, material and supplies delivered to the construction site, 
and other expenditures that will eventually be part of the cost of

[[Page 954]]

the completed property. When construction work is completed, the cost 
included in this account shall be transferred to the appropriate primary 
property accounts. Subsidiary records shall be maintained for each 
construction project. When part of a project under construction is 
completed and put into service, the costs applicable to that portion 
shall be transferred to the appropriate property account.

                           Operating Revenues

200 Gathering revenues.
    This account shall include revenues on the basis of tariff charges 
for the gathering or collection of crude oil, oil products and other 
commodities.
210 Trunk revenues.
    This account shall include revenues on the basis of tariff charges 
for trunk line transportation of crude oil, oil products or other 
commodities.
220 Delivery revenues.
    This account shall include revenues on the basis of tariff charges 
for receiving, delivering, unloading and loading fees at carrier 
terminal and delivery facilities.
230 Allowance oil revenue.
    (a) This account shall include the current value of oil acquired 
through tariff allowances taken into inventory or retained in the line 
for operating oil supply, and the selling price of such oil sold not 
previously recorded in inventory or operating oil supply.
    (b) Profits and losses on sales of allowance oil from inventory or 
operating supply shall be included in this account.
240 Storage and demurrage revenue.
    This account shall include revenues on the basis of tariff charges 
for the storage of oil; also demurrage charges incident to failure of 
consignees to receive shipments promptly.
250 Rental revenue.
    This account shall include the revenues from renting or subrenting 
property, the cost of which is included in the accounts for investment 
in carrier property.
260 Incidental revenue.
    This account shall include revenues incidental to carrier operations 
and not includible in other revenue accounts.

                           Operating Expenses

                       Operations and Maintenance

300 Salaries and wages.
    This account shall include the salaries and wages (including pay for 
holidays, vacations, sick leave and similar payroll disbursements) of 
supervisory and other personnel directly engaged in transportation 
operations and the maintenance and repair of transportation property.

[Order 620, 65 FR 81343, Dec. 26, 2000]
310 Materials and supplies.
    This account shall include the cost of materials applied in the 
repair and maintenance of transportation property. The salvage value of 
materials recovered in maintenance work shall be credited to this 
account. This account shall also include the cost of supplies consumed 
and expended in operations and in support of the maintenance activity.

[Order 620, 65 FR 81343, Dec. 26, 2000]
320 Outside services.
    This account shall include the cost of operating and maintenance 
services provided by other than company forces under contract, 
agreement, and other arrangement. The cost of service performed by 
affiliated companies shall be segregated within the account.

[Order 620, 65 FR 81343, Dec. 26, 2000]
330 Operating fuel and power.
    This account shall include the cost of fuel and power consumed and 
expended in operations. The cost of normal utilities services shall be 
included herein when such costs are directly allocable to operations.
340 Oil losses and shortages.
    (a) This account shall include the cost of settlements with shippers 
for oil lost or undelivered due to operating

[[Page 955]]

causes during the course of transportation.
    (b) The value of oil gains from operations shall be credited to this 
account at current value at time of determination of gain and charged to 
oil inventory or operating supply.
350 Rentals.
    This account shall include the cost of renting property used in the 
operations and maintenance of carrier transportation service, such as 
complete pipeline or segment thereof, office space, land and buildings, 
and other equipment and facilities.

[Order 620, 65 FR 81343, Dec. 26, 2000]
390 Other expenses.
    This account shall include the expenses of aircraft, vehicles, and 
work equipment used in support of operations and maintenance activities; 
travel, lodging, meals, memberships, and other expenses of operating and 
maintenance employees; and other related operating and maintenance 
expenses that are not defined or classified in other accounts.

[Order 620, 65 FR 81343, Dec. 26, 2000]

                                 General

500 Salaries and wages.
    This account shall include the salaries and wages (including pay for 
holidays, vacations, sick leave, and similar payroll disbursements) of 
executives and general officers, general office personnel, and of other 
employees whose wages cannot be directly allocated to operations or 
maintenance.
510 Materials and supplies.
    This account shall include the cost of materials and supplies 
consumed and expended for administration and general services.

[Order 620, 65 FR 81343, Dec. 26, 2000]
520 Outside services.
    This account shall include the cost of management and general and 
administrative services provided by other than company forces under 
contract, agreement or other arrangement. The cost of services performed 
by affiliated companies shall be segregated within the account.
530 Rentals.
    This account shall include the cost of renting property used in the 
administration and general operations of carrier transportation service, 
such as complete pipeline or segment thereof, office space, land and 
buildings, and other equipment and facilities.

[Order 620, 65 FR 81343, Dec. 26, 2000]
540 Depreciation and amortization.
    This account shall include charges for the depreciation and 
amortization of transportation property. Charges for the amortization of 
fixed term intangibles relating to common carrier operations shall also 
be included herein.
541 Depreciation expense for asset retirement costs.
    This account shall include charges for the depreciation of asset 
retirement costs related to transportation property.

[Order 631, 68 FR 19626, Apr. 21, 2003]
550 Employee benefits.
    This account shall include the cost to the carrier of annuities, 
pensions, and benefits for active or retired employees, their 
beneficiaries or designees. Contributions to health or welfare funds or 
payment for similar benefits to or on behalf of employees shall be 
included herein. Premiums, to the extent borne by the carrier, for group 
life, health, accident and other beneficial insurance for employees 
shall also be included in this account.

[Order 620, 65 FR 81343, Dec. 26, 2000]
560 Insurance.
    (a) This account shall include the cost of commercial insurance to 
protect the carrier against losses and damages in its pipeline 
operations such as injuries to or deaths of employees and other persons, 
damages to or destruction of carrier property or the property of others, 
and other business risks and hazards pertaining to transportation 
operations.
    (b) The carrier shall not accrue amounts for the purpose of 
estimating

[[Page 956]]

risk of loss or damage to its property from fire, theft, or similar loss 
contingencies not covered by commercial insurance.

    Note: Insurance or other reimbursement for loss or damage shall be 
credited to the same account charged with the loss or expense.

(49 U.S.C. 304, 913, 1012)

[32 FR 20241, Dec. 20, 1967, as amended at 41 FR 32597, Aug. 4, 1976. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981]
570 Casualty and other losses.
    (a) This account shall include the amount of expense sustained by 
the carrier on account of loss or damage to oil or other commodity 
entrusted to it for transportation or storage resulting from fire, 
flood, or other casualty.
    (b) Expenses on account of damage and destruction to property of 
others from all causes; and the expense of repairing damages to 
transportation property caused by casualty shall also be included 
herein.
    (c) This account shall also include expenses incurred on account of 
injury to or death of employees or other persons including related 
medical, hospital and funeral expenses.

    Note: The cost of oil lost or undelivered through operating causes 
shall be charged to account 340, Oil Losses and Shortages.
580 Pipeline taxes.
    (a) This account shall include accruals for taxes of all kinds, 
excepting income taxes (see definition 30(a)), relating to carrier 
property, operations, privileges and licenses.
    (b) The detail of this account shall show separately the amounts 
levied by the Federal government and by each state.

[32 FR 20241, Dec. 20, 1967, as amended at 39 FR 33345, Sept. 17, 1974. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981]
590 Other expenses.
    This account shall include the cost of expenses expended for 
administrative and general services including, the expenses of aircraft, 
vehicles, and work equipment used for general purposes; travel, lodging, 
meals, memberships, and other expenses of general employees and 
officers; utilities services; and all other incidental general expenses 
not defined or classified in other accounts.

[Order 620, 65 FR 81344, Dec. 26, 2000]
591 Accretion expense.
    This account shall be charged for accretion expense on the 
liabilities associated with asset retirement obligations included in 
account 67, Asset retirement obligations. The carrier shall record in 
this account the settlement amounts for asset retirement obligations 
related to carrier property in accordance with the accounting prescribed 
in General Instruction 1-19.

[Order 631, 68 FR 19626, Apr. 21, 2003]
592 Gains or losses on asset retirement obligations.
    The carrier shall record in this account gains or losses resulting 
from the settlement amounts for asset retirement obligations related to 
carrier property plant. (See General Instruction 1-19).

[Order 631, 68 FR 19626, Apr. 21, 2003]

                             Income Accounts

                             Ordinary Items

                                 Credit

600 Operating revenues.
    This account shall include the total revenues included in the 
operating revenue accounts for the calendar year.
620 Income (net) from noncarrier property.
    (a) This account shall include all noncarrier revenues and expenses 
from property carried in account 34, Noncarrier Property.
    (b) All expenses related to noncarrier property, such as operation 
and maintenance expenses, depreciation, taxes (except Federal income 
taxes) and similar expenses, are includible herein.
630 Interest and dividend income.
    (a) This account shall include interest accruing to the carrier on 
securities of others, loans, notes and advances, deposits, and all other 
interest bearing assets. Also include the

[[Page 957]]

amount of amortized premium or discount related to such assets.
    (b) This account shall also include the amount of dividends declared 
on stocks of others owned by the carrier.
    (c) Income shall not be included in this account unless receipt 
thereof is reasonably assured.
640 Miscellaneous income.
    (a) This account shall include income not provided for elsewhere 
creditable to income accounts for the current year, such as unclaimed 
wages written off, profit on sales of land and noncarrier, property, 
profit on sales of investment securities, profit from company bonds 
reacquired, and decreases in the valuation allowance (contained within 
account 11) for the marketable equity securities included in current 
assets.
    (b) Gains from extinguishment of debt shall be aggregated and, if 
material, credited to account 680, Extraordinary Items, upon approval by 
the Commission.

[32 FR 20241, Dec. 20, 1967, as amended at 40 FR 53248, Nov. 17, 1975; 
42 FR 33298, June 30, 1977. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]
645 Unusual or infrequent items (credit).
    Included in this account shall be material items unusual in nature 
or infrequent in occurrence, but not both, accounted for in the current 
year in accordance with the text of instruction 1-6, upon approval by 
the Commission.

[40 FR 53248, Nov. 17, 1975. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]

                                  Debit

610 Operating expenses.
    This account shall include the total expenses included in the 
operating expense accounts for the calendar year.
650 Interest expense.
    This account shall include interest expense on all classes of debt 
except interest pertaining to construction of property. This account 
shall also include the amortization of long-term debt premium and 
discount. Charges for interest on carrier debt obligations previously 
issued and now held by or for the carrier shall not be recorded in this 
account.
660 Miscellaneous income charges.
    (a) This account shall include income charges not provided for 
elsewhere chargeable to income accounts for the current year, such as 
amortization of debt expense, losses on sale or disposition of land and 
noncarrier property, losses on sales or reductions in value of 
investment securities (including increases in the valuation allowance 
within account 11 for the marketable equity securities included in 
current assets), bad debts, losses on company bonds reacquired, taxes 
(other than Federal income taxes) on investment securities, trust 
management expenses, amortization of intangibles which are not 
restricted to a fixed term, and the difference between the premium and 
the added cash surrender value of life insurance on officers and 
employees when the carrier is beneficiary.
    (b) Losses from extinguishment of debt shall be aggregated and, if 
material, charged to account 680, Extraordinary Items, upon approval by 
the Commission.

[32 FR 20241, Dec. 20, 1967, as amended at 37 FR 17714, Aug. 31, 1972; 
40 FR 53248, Nov. 17, 1975; 42 FR 33298, June 30, 1977. Redesignated by 
Order 119, 46 FR 9044, Jan. 28, 1981]
665 Unusual or infrequent items (debit).
    Included in this account shall be material items unusual in nature 
or infrequent in occurrence, but not both, accounted for in the current 
year in accordance with the text of instruction 1-6, upon approval by 
the Commission.

[40 FR 53248, Nov. 17, 1975. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]
670 Income taxes on income from continuing operations.
    (a) This account shall be debited with the monthly accruals for all 
income taxes which are estimated to be payable and which are applicable 
to ordinary income (see instruction 1-12). See the texts of account 695, 
Income Taxes on Extraordinary Items, account 710, Other Credits to 
Retained Income, and account 720, Other Debits to Retained Income, for 
recording other income tax consequences.

[[Page 958]]

    (b) Details pertaining to the tax consequences of other unusual and 
significant items, and also cases where tax consequences are 
disproportionate to related amounts included in income accounts, shall 
be submitted to the Commission for consideration and decision as to 
proper accounting.

(Interstate Commerce Act, 49 U.S.C. 20 (1976), Department of Energy 
Organization Act, 42 U.S.C. 7155, 7172(b), 7295(a) (Supp. I 1977); E. O. 
12009, 42 FR 46267 (1977); Federal Energy Regulatory Commission, Order 
No. 1, 42 FR 55450 (1977))

[32 FR 20241, Dec. 20, 1967, as amended at 39 FR 33345, Sept. 17, 1974; 
40 FR 53248, Nov. 17, 1975; 44 FR 72161, Dec. 13, 1979. Redesignated by 
Order 119, 46 FR 9044, Jan. 28, 1981]
671 Provision for deferred taxes.
    (a) This account shall include the net tax effect of changes in 
material temporary timing differences (see definition 30(e)) during the 
current accounting period, and the future tax benefits of loss 
carryforwards recognized in accordance with instruction 1-12(c).
    (b) This account shall include credits for the amortization of the 
investment tax credit if the carrier elected to use the deferred method 
of accounting for the investment tax credit. (See instruction 1-12(d)).

[39 FR 33345, Sept. 17, 1974. Redesignated by Order 119, 46 FR 9044, 
Jan. 28, 1981, as amended by Order 620, 65 FR 81344, Dec. 26, 2000]

                         Discontinued Operations

675 Income (loss) from operations of discontinued segments.
    This account shall include the results of operations of a segment of 
a business (see definition 32(a)), after giving effect to income tax 
consequences that has been or will be discontinued in accordance with 
the text of instruction 1-6, upon approval by the Commission.

[40 FR 53249, Nov. 17, 1975. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]
676 Gain (loss) on disposal of discontinued segments.
    This account shall include the gain or loss from the disposal of a 
segment of a business, after giving effect to income tax consequences, 
in accordance with the text of instruction 1-6, upon approval by the 
Commission.

[40 FR 53249, Nov. 17, 1975. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]

               Extraordinary Items and Accounting Changes

680 Extraordinary items (net).
    (a) This account shall include extraordinary items accounted for 
during the current accounting year in accordance with the text of 
instruction 1-6, upon submission of a letter from the carrier's 
independent accountants, approving or otherwise commenting on the item 
and upon approval by the Commission.
    (b) This account shall be maintained in a manner sufficient to 
identify the nature and gross amount of each debit and credit.
    (c) Federal income tax consequences of charges and credits to this 
account shall be recorded in account 695, Income Taxes on Extraordinary 
Items, or account 696. Provision for Deferred Taxes--Extraordinary 
Items, as applicable.

[40 FR 53249, Nov. 17, 1975. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]
695 Income taxes on extraordinary items.
    This account shall include the estimated income tax consequences 
(debit or credit) assignable to the aggregate of items of both taxable 
income and deductions from taxable income which for accounting purposes 
are classified extraordinary, and are recorded in account 680, 
Extraordinary Items (Net). The tax effect of any temporary differences 
caused by recognizing an item in the account provided for extraordinary 
items shall be included in account 696, Provision for Deferred Taxes--
Extraordinary Items.

[40 FR 53249, Nov. 17, 1975. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981, as amended by Order 620, 65 FR 81344, Dec. 26, 2000]
696 Provision for deferred taxes--extraordinary items.
    This account shall include the deferred tax expense or benefit 
related to temporary differences applicable to items of revenue or 
expense included in

[[Page 959]]

account 680, Extraordinary Items (Net) (See instruction 1-12).

[40 FR 53249, Nov. 17, 1975. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981, as amended by Order 620, 65 FR 81344, Dec. 26, 2000]
697 Cumulative effect of changes in accounting principles.
    This account shall include the cumulative effect of changing to a 
new accounting principle, after giving effect to income tax 
consequences, in accordance with instruction 1-6, upon approval by the 
Commission.

[40 FR 53249, Nov. 17, 1975. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]

                        Retained Income Accounts

700 Net balance transferred from income.
    This account shall include net income (or deficit) for the calendar 
year.
705 Prior period adjustments to beginning retained income account.
    This account shall include adjustments after giving income tax 
effect, in accordance with the text of instruction 1-6, to the balance 
in the retained income account at the beginning of the calendar year, 
upon approval by the Commission.

[40 FR 53249, Nov. 17, 1975. Redesignated by Order 119, 46 FR 9044, Jan. 
28, 1981]
710 Other credits to retained income.
    This account shall include other credit adjustments, net of assigned 
Federal income taxes, not provided for elsewhere in this system but only 
after such inclusion has been authorized by the Commission.
720 Other debits to retained income.
    This account shall include losses from resale of reacquired capital 
stock, and charges which reduce or write off discount on capital stock 
issued by the company, but only to the extent that such charges exceed 
credit balances in account 73, Additional Paid-In Capital, for shares 
reacquired. This account shall also include other debit adjustments, net 
of assigned Federal income taxes, not provided for elsewhere in this 
system of accounts, but only after such inclusion has been authorized by 
the Commission.
740 Appropriations of retained income.
    This account shall include appropriations made from retained income 
during the calendar year. Appropriations charged to this account shall 
be credited to account 74, Appropriated Retained Income.
750 Dividend appropriations of retained income.
    This account shall include the amount of dividends declared during 
the calendar year on all classes of outstanding capital stock. Stock 
reacquired and owned by the carrier shall not be subject to dividends. 
Subsidiary records shall be kept to show separately the dividends 
declared on each type and class of capital stock. When dividends are 
paid in other than money, complete detail of each transaction shall be 
maintained.
797 Form of Balance Sheet Statement

                                 Assets

                             current assets

10 Cash.
10.5 Special deposits.
11 Temporary Investments.
12 Notes Receivable.
13 Receivables from Affiliated Companies.
14 Accounts Receivable.
15 Interest and Dividends Receivable.
16 Oil Inventory.
17 Material and Supplies.
18 Prepayments.
19 Other Current Assets.
19-5 Deferred Income Tax Charges.
     Total current assets.

                      Investments and Special Funds

20 Investments in Affiliated Companies.
21 Other Investments.
22 Sinking and Other Funds.
23 Reductions in Security Values--Credit.
24 Allowance for Net Unrealized Loss on Noncurrent Marketable Equity 
          Securities--Credit.
     Total investments and special funds.

                            Tangible Property

30 Carrier Property.
31 Accrued Depreciation--Carrier Property.
32 Accrued Amortization--Carrier Property.
33 Operating Oil Supply.
34 Noncarrier Property.

[[Page 960]]

35 Accrued Depreciation--Noncarrier Property.
     Total tangible property.

                    Other Assets and Deferred Charges

40 Organization Costs and Other Intangibles.
41 Accrued Amortization of Intangibles.
43 Miscellaneous Other Assets.
44 Other Deferred Charges.
45 Accumulated deferred income tax charges.
     Total other assets and deferred charges.
     Total Assets.

                  Liabilities and Stockholders' Equity

                               Liabilities

                           current liabilities

50 Notes Payable.
51 Payables to Affiliated Companies.
52 Accounts Payable.
53 Salaries and Wages Payable.
54 Interest Payable.
55 Dividends Payable.
56 Taxes Payable.
57 Long-Term Debt Payable Within One Year.
58 Other Current Liabilities.
59 Deferred income tax credits.
     Total current liabilities.

                         noncurrent liabilities

60 Long-Term Debt Payable After One Year.
61 Unamortized Premium on Long-Term Debt.
62 Unamortized Discount and Interest on Long-term Debt.
63 Other Noncurrent Liabilities.
64 Accumulated deferred income tax credits.
     Total noncurrent liabilities.
     Total Liabilities.

                          Stockholders' Equity

70 Capital Stock.
71 Premiums on Capital Stock.
72 Capital Stock Subscriptions.
73 Additional Paid-In Capital.
74 Appropriated Retained Income.
75 Unappropriated Retained Income.
75-5 Unrealized Loss on Noncarrier Marketable Equity Securities.
     Total Stockholders' Equity.
     Total Liabilities and Stockholders' Equity.
76 Treasury stock.
     Total Stockholders' Equity.
798 Form of Income Statement

                            Income Statement

                             ordinary items

                        Carrier Operating Income

600 Operating Revenues.
610 Operating Expenses.
     Net carrier operating income.

                       Other Income and Deductions

620 Income (Net) from Noncarrier Property.
630 Interest and Dividend Income (dividends from other than affiliates).
640 Miscellaneous Income.
645 Unusual or Infrequent Items (Credit).
650 Interest Expense.
660 Miscellaneous Income Charges.
     Income from affiliated companies.
     Dividends.
     Equity in undistributed earnings.
     (losses)
     Total other income and deductions.
665 Unusual or Infrequent Items (Debit).
670 Federal Income Taxes on Income from Continuing Operations.
671 Provision for deferred taxes.

                        discountinued operations

675 Income (Loss) from Operations of Discontinued Segments. (Less 
          Applicable Income Taxes of $----).
676 Gain (Loss) from Disposition of Discontinued Segments (Less 
          Applicable Income Taxes of $----).
     Income (Loss) before Extraordinary Items.

               extraordinary items and accounting changes

680 Extraordinary items (net).
695 Income Taxes on Extraordinary Items.
696 Provision for Deferred Taxes--Extraordinary Items.

                        total extraordinary items

697 Cumulative Effect of Changes in Accounting Principles (Less 
          Applicable Income Taxes of $----).
     Net Income (Loss).
799 Form of Unappropriated Retained Income Statement

                Unappropriated Retained Income Statement

75 Unappropriated retained income (beginning of year).
700 Net balance transferred from income.
705 Prior Period Adjustments to Beginning Retained Income Account.
710 Other credits to retained income.
720 Other debits to retained income.
740 Appropriations of retained income.
750 Dividend appropriations of retained income.

[[Page 961]]

75 Unappropriated retained income (end of year).

[32 FR 20241, Dec. 20, 1967, as amended at 37 FR 17714, Aug. 31, 1972; 
39 FR 33345, Sept. 17, 1974; 39 FR 34044, Sept. 23, 1974; 40 FR 53249, 
Nov. 17, 1975; 41 FR 52467, Nov. 30, 1976; 42 FR 33298, June 30, 1977. 
Redesignated by Order 119, 46 FR 9044, Jan. 28, 1981]

[[Page 962]]



          SUBCHAPTER R_APPROVED FORMS, INTERSTATE COMMERCE ACT



PART 356_PRESERVATION OF RECORDS FOR OIL PIPELINE COMPANIES--Table of Contents



Sec.
356.1 Promulgation.
356.2 General instructions.
356.3 Preservation of records for oil pipeline companies.

    Authority: 42 U.S.C. 7101-7352; 49 U.S.C. 1-27; E.O. 12009, 3 CFR 
1978 Comp. p. 142.

    Source: Order 617, 65 FR 48166, Aug. 7, 2000, unless otherwise 
noted.



Sec. 356.1  Promulgation.

    This part is prescribed and promulgated as the regulations governing 
the preservation of records by oil pipeline companies subject to the 
jurisdiction of the Commission, to the extent and in the manner set 
forth therein. This part is enforceable as of the date the oil pipeline 
company becomes subject to the jurisdiction of the Commission.



Sec. 356.2  General instructions.

    (a) Scope of this part. (1) The regulations in this part apply to 
all books of account and other records prepared by or on behalf of the 
oil pipeline companies.
    (2) The regulations in this part must not be construed as excusing 
compliance with other lawful requirements of any other governmental 
body, Federal or State, prescribing other record keeping requirements or 
for preservation of records longer than those prescribed in this part.
    (3) To the extent that any Commission regulations may provide for a 
different retention period, the records should be retained for the 
longer of the retention periods.
    (4) Unless otherwise specified in the schedule in Sec. 356.3, 
duplicate copies of records may be destroyed at any time. Provided, 
however, that such duplicate copies must not contain significant 
information not shown on the originals.
    (5) Records other than those listed in the schedule may be destroyed 
at the option of the oil pipeline company. Provided, however, that 
records which are used in lieu of those listed must be preserved for the 
periods prescribed for the records used for substantially similar 
purposes and that retention of records pertaining to added services, 
functions, plant, etc., the establishment of which cannot be presently 
foreseen, must conform to the principles embodied herein.
    (6) Notwithstanding the provision of the records retention schedule, 
the Commission may, upon request of the oil pipeline company, authorize 
shorter retention periods for any records listed in Sec. 356.3. The oil 
pipeline companies must show that the longer retention periods are no 
longer necessary or appropriate to protect the public interest, 
investors, or consumers. A waiver from any provision of these 
regulations may be made by the Commission upon its own initiative or 
upon submission of a written request by the company. Each request for 
waiver must demonstrate that unusual circumstances warrant a departure 
from prescribed retention periods, procedures, or techniques, or that 
compliance with such prescribed requirements would impose an 
unreasonable burden on the company.
    (b) Designation of supervisory official. Each oil pipeline company 
subject to the provision of this part must designate one or more persons 
to supervise the oil pipeline company's program for preservation and 
authorized destruction of records.
    (c) Protection and storage of records. Each oil pipeline company 
subject to these regulations must provide reasonable protection for 
records. The records must have protections from fire, floods, and other 
hazards. Storage spaces, will also prevent unnecessary exposure to 
deterioration from excessive humidity, dryness, or lack of proper 
ventilation.
    (d) Record storage media. (1) Each oil pipeline company has the 
flexibility to select its own storage media.
    (2) The storage media must have a life expectancy at least equal to 
the applicable record retention period provided in Sec. 356.3 unless 
there is a quality

[[Page 963]]

transfer from one media to another with no loss of data.
    (3) Each oil pipeline company is required to implement internal 
control procedures that assure the reliability of and ready access to 
data stored on machine readable media. Internal control procedures must 
be documented by a responsible supervisory official.
    (e) Destruction of records. Oil pipeline companies may use any 
appropriate method to destroy permitted records.
    (f) Premature destruction or loss of records. When records are 
destroyed or lost before the expiration of the prescribed period of 
retention, a certified statement listing, as far as may be determined, 
the records destroyed, and describing the circumstances of accidental or 
other premature destruction or loss must be filed with the Commission 
within ninety (90) days from the date of discovery of such destruction.
    (g) Retention periods designated ``Destroy at option''. ``Destroy at 
option'' constitutes authorization for destruction of records at 
managements' discretion if it does not conflict with other legal 
retention requirements or usefulness of such records in satisfying 
pending regulatory action or directives.
    (h) Records of services performed by associated companies. Oil 
pipeline companies must assure the availability of records of services 
performed by associated companies for the periods indicated in Sec. 
356.3 as necessary to be able to readily furnish detailed information as 
to the nature of transaction, the involved, and the accounts used to 
record the transactions.
    (i) Index of records. Oil pipeline companies must arrange, file, and 
index records so they may be readily identified and made available to 
Commission representatives.
    (j) Rate case. The schedule of records in Sec. 356.3 shows the 
periods of time that designated records must be preserved. However, not 
withstanding the minimum retention periods provided in this regulation, 
if an oil pipeline company intends to reflect costs in a current, 
pending, or future rate case, or if an oil pipeline company has 
abandoned or retired plant subsequent to the test period of its last 
rate case, it must retain the appropriate records to support the costs, 
and adjustments proposed in the next or current rate case.
    (k) Pending complaint litigation or governmental proceeding. 
Notwithstanding the minimum requirements, if an oil pipeline company is 
involved in pending litigation, complaint proceedings, proceedings 
remanded by the court, or governmental proceedings, it must retain all 
relevant records.
    (l) Companies going out of business. The records referred to in 
these regulations may be destroyed after business is discontinued and 
the company is completely liquidated. The records may not be destroyed 
until dissolution is final and all transactions are completed. When a 
company is merged with another company under jurisdiction of the 
Commission, the successor company must preserve records of the merged 
company in accordance with these regulations.
    (m) Life or mortality study data. Life or mortality study data for 
depreciation purposes must be retained for 25 years or for 10 years 
after plant is retired.



Sec. 356.3  Preservation of records for oil pipeline companies.

                            Table of Contents

                          Corporate and General

1. Incorporation and reorganization.
2. Minutes to Directors, Executive Committees, and Stockholders
3. Titles, franchises, and authorities.
4. Contracts and agreements.
5. Accountants', auditors', and inspectors' reports.

                                Treasury

6. Long-term debt records.

                          Financial Accounting

7. Ledgers.
8. Journals.
9. Vouchers.
10. Accounts receivable.
11. Records of accounting codes and instructions.

                         Property and Equipment

12. Property records.
13. Engineering records.

                          Personnel and Payroll

14. Payroll records.
15. Copies of tax returns and supporting schedules.

[[Page 964]]

16. Information returns, and reports to taxing authorities.

                           Purchase and Stores

17. Material ledger.
18. Inventories.

                             Transportation

19. Oil and other products stocks.

                            Tariffs and Rates

20. Official file copies of tariffs.
21. Authorities and supporting papers for transportation.
22. Copies of concurrences and powers of attorney.
23. Correspondence and working papers in connection with the making of 
          rates.

                         Reports and Statistics

24. Reports to Federal Energy Regulatory Commission and other regulatory 
          bodies.

              Schedule of Records and Periods of Retention
------------------------------------------------------------------------
        Item No. and description                 Retention period
------------------------------------------------------------------------
         Corporate and General
 
1. Incorporation and reorganization:
    (a) Charter of certificate of        Permanently or at termination
     incorporation and amendments.        of the corporation's
                                          existence.
    (b) Legal documents related to       Permanently or at termination
     mergers, consolidations,             of the corporation's
     reorganizations, receiverships,      existence.
     and similar actions which affect
     the identity or organization of
     the company.
2. Minutes to Directors', Executive      5 years.
 Committees', Stockholders', and other
 corporate meetings.
3. Titles, franchises, and authorities:
    (a) Certificates of public           Until expiration or
     convenience and necessity issued     cancellation.
     by regulating bodies.
    (b) Operating authorizations and     Until expiration or
     exemptions to operate issued by      cancellation.
     regulating bodies.
    (c) Copies of formal orders of       1 year after expiration or
     regulatory bodies served upon the    cancellation.
     company.
    (d) Deeds, charters, and other       3 years after disposition of
     title papers.                        property.
4. Contracts and agreements:
    (a) Contracts and related papers     4 years after expiration,
     for transactions which are subject   provided there is no pending
     to the provisions of the Clayton     litigation or governmental
     Antitrust Act (15 U.S.C. 20).        inquiry or proceeding
                                          involved.
    (b) Service contracts, such as for   3 years after expiration or
     operational management,              termination.
     accounting, financial or legal
     service, and agreements with
     agents.
    (c) Contracts and other agreements   3 years after expiration or
     relating to the construction,        termination.
     acquisition or sale of real
     property and equipment except as
     otherwise provided in paragraph
     (a) of this item.
5. Accountant's, auditor's, and
 inspector's reports:
    (a) Certifications and reports of    3 years.
     examinations and audits conducted
     by public and certified public
     accountants.
    (b) Reports of examinations and      3 years.
     audits conducted by internal
     auditors, time inspectors, weight
     inspectors, and others.
 
                Treasury
 
6. Long-term debt records:
    (a) Bond indentures, underwriting,   6 years after redemption.
     mortgage, and other long-term
     credit agreements.
 
          Financial Accounting
 
7. Ledgers:
    (a) General and subsidiary ledgers   3 years.
     with indexes thereto.
    (b) Balance sheets and trial         3 years.
     balance sheets of general and
     subsidiary ledgers.
8. Journals:
    (a) General journals...............  3 years.
    (b) Subsidiary journals and any      3 years.
     supporting data, except as
     otherwise provided for, necessary
     to explain journal entries.
    (c) Schedules of recurring or        Until superseded.
     standard journal entries with
     entry identifications.
9. Vouchers:
    (a) Voucher registers or equivalent  5 years.

[[Page 965]]

 
    (b) Paid and canceled vouchers,      5 years.
     expenditure authorizations,
     detailed distribution sheets, and
     other supporting data including
     original bills and invoices,
     except as otherwise provided
     herein.
10. Accounts receivable, record, or      3 years after settlement.
 register of accounts receivable.
11. Records of accounting codes and      3 years after discontinuance.
 instructions.
 
         Property and Equipment
 
12. Property records:
    (a) Records which maintain complete  3 years after disposition of
     information on cost or other value   property.
     of all real property or equipment.
    (b) Records and additions and        3 years after disposition of
     betterments made to property and     property.
     equipment.
    (c) Records pertaining to            3 years after disposition of
     retirements and replacements of      property.
     property and equipment.
    (d) Records pertaining to
     depreciation:
        (1) When group method and        3 years after disposition of
         depreciation rates are           property.
         prescribed by the Commission.
        (2) Other......................  3 years after disposition of
                                          property.
    (e) Records of equipment number      3 years after disposition of
     changes.                             property.
    (f) Records of motor and engine      Destroy at option.
     changes.
    (g) Files of detailed                3 years after disposition of
     authorizations for expenditures,     property.
     work or job orders showing
     estimated costs of additions and
     betterments, extensions,
     replacements, major repairs and
     dismantlements, approved by proper
     officials, together with
     supporting data.
    (h) Periodical inventories of        3 years after prior inventory.
     property and equipment.
13. Engineering records:
    (a) Plans and specifications.......  3 years after the disposition
                                          of the property.
    (b) Estimates of work, engineering   15 years.
     studies, construction bids, and
     similar data pertaining to
     property changes actually made.
 
         Personnel and Payroll
 
14. Payroll records:
    (a) Registers, abstracts, or         3 years.
     summaries showing earnings,
     deductions, and amounts paid to
     each employee by pay periods.
    (b) Records showing the detailed     3 years.
     distribution of salaries and wages
     to various accounts.
 
                 Taxes
 
15. Copies of tax returns and
 supporting schedules filed with taxing
 authorities, supporting working
 papers, records of appeals of tax
 bills, and receipts for payment. See
 Subsection 9(b) for vouchers
 evidencing disbursements:
    (a) Income tax returns.............  3 years after final tax
                                          liability is determined.
    (b) Property tax returns...........  3 years after final tax
                                          liability is determined.
    (c) Sales and other use taxes......  3 years final tax liability is
                                          determined.
    (d) Other taxes....................  3 years after final tax
                                          liability is determined.
    (e) Agreements between associate     3 years after final tax
     companies as to allocation of        liability is determined.
     consolidated income taxes.
    (f) Schedule of allocation of        3 years after final tax
     consolidated Federal income taxes    liability is determined.
     among associate companies.
16. Information returns and reports to   3 years, or for the period of
 taxing authorities.                      any extensions granted for
                                          audits.
 
          Purchase and Stores
 
17. Material ledger, records of          2 years.
 material and supplies on hand at all
 locations.
18. Inventories: General Inventories of  2 years.
 material and supplies on hand, with
 record of adjustments between accounts
 required to bring stores records into
 agreement with physical inventories.
 
             Transportation
 
19. Oil and other products stocks and
 movement pipelines only:
    (a) Records and receipts,            3 years.
     deliveries, pumpings, stocks, and
     over and short.
    (b) Run tickets showing quantities   3 years.
     by tank measurement of meter
     reading of oil and other products
     received into the delivered from
     company's lines.

[[Page 966]]

 
    (c) Statements of oil and oil        3 years.
     products consumed as fuel
     including quantity value, and
     where consumed.
    (d) Statement of oil and other       3 years.
     products lost by line breaks and
     leaks including quantity, value,
     and location of breaks and leaks.
    (e) Reports of power furnished by    3 years.
     producers: monthly reports of the
     quantity of oil run in connection
     with which power was furnished by
     producers, and records of payment
     for such power.
    (f) Records of producers' property   3 years after disconnection.
     identifying ownership and location
     for producers' tanks or wells to
     which carrier's lines are
     connected.
    (g) Division or other periodical     3 years.
     inventory reports of oil and other
     products on hand.
    (h) Division orders: Directions      3 years after discontinuance.
     received by carrier as to the
     division of interest and to whose
     account transported oil should be
     credited.
    (i) Directions received by the       3 years after discontinuance.
     carrier for the transfer of
     division order interests from one
     interest owner to another.
    (j) Transfer orders for the          3 years.
     transfer of ownership of oil or
     other products in carrier's
     custody.
 
           Tariffs and Rates
 
20. Official file copies of tariffs,     3 years after expiration or
 classifications, division sheets, and    cancelation.
 circulars relative to the
 transportation of property.
21. Authorities and supporting papers    3 years.
 for transportation of property for
 free or at reduced rates.
22.Copies of concurrences and powers of  2 years after expiration or
 attorney.                                cancelation.
23. Correspondence and working papers    2 years after cancelation of
 in connection with the making of rates   tariff.
 and compliance of tariffs,
 classifications, division sheets, and
 circulars affecting the transportation
 of property.
 
         Reports and Statistics
 
24. Reports to Federal Energy            5 years.
 Regulatory Commission and other
 regulatory bodies, annual financial,
 operating and statistical reports,
 file copies, and supporting data.
------------------------------------------------------------------------



PART 357_ANNUAL SPECIAL OR PERIODIC REPORTS: CARRIERS SUBJECT TO PART I OF THE 

INTERSTATE COMMERCE ACT--Table of Contents



Sec.
357.1 Common carriers.
357.2 FERC Form No. 6, Annual Report of Oil Pipeline Companies.
357.3 FERC Form No. 73, Oil Pipeline Data for Depreciation Analysis.
357.4 FERC Form No. 6-Q, Quarterly report of oil pipeline companies.
357.5 Cash management programs.

    Authority: 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C. 1-85 
(1988).



Sec. 357.1  Common carriers.

    All common carriers by pipeline subject to the provisions of Part I 
of Interstate Commerce Act, as amended, are hereby required hereinafter 
to file in the office of the Commission on or before the 31st day of 
March in each year, reports covering the period of 12 months ending with 
the 31st day of December preceding said date, giving the particulars 
heretofore called for in the annual reports required by the Commission 
of said carriers.

[Order 119, 46 FR 9051, Jan. 28, 1981]



Sec. 357.2  FERC Form No. 6, Annual Report of Oil Pipeline Companies.

    (a) Who must file. (1) Each pipeline carrier subject to the 
provisions of section 20 of the Interstate Commerce Act whose annual 
jurisdictional operating revenues has been $500,000 or more for each of 
the three previous calendar years must prepare and file with the 
Commission copies of FERC Form No. 6, ``Annual Report of Oil Pipeline 
Companies,'' pursuant to the General Instructions set out in that form. 
Newly established entities must use projected

[[Page 967]]

data to determine whether FERC Form No. 6 must be filed.
    (2) Oil pipeline carriers exempt from filing Form No. 6 whose annual 
jurisdictional operating revenues have been more than $350,000 but less 
than $500,000 for each of the three previous calendar years must prepare 
and file pages 301, ``Operating Revenue Accounts (Account 600),'' and 
700, ``Annual Cost of Service Based Analysis Schedule,'' of FERC Form 
No. 6. When submitting pages 301 and 700, each exempt oil pipeline 
carrier must include page 1 of Form No. 6, the Identification and 
Attestation schedules.
    (3) Oil pipeline carriers exempt from filing Form No. 6 and pages 
301 and whose annual jurisdictional operating revenues were $350,000 or 
less for each of the three previous calendar years must prepare and file 
page 700, ``Annual Cost of Service Based Analysis Schedule,'' of FERC 
Form No. 6. When submitting page 700, each exempt oil pipeline carrier 
must include page 1 of Form No. 6, the Identification and Attestation 
schedules.
    (b) When to file. (1) The annual report for the year ending December 
31, 2004, must be filed on April 25, 2005.
    (2) The annual report for each year thereafter must be filed on 
April 18 of the subsequent year.
    (c) What to submit. (1) This report form must be filed as prescribed 
in Sec. 385.2011 of this chapter and as indicated in the General 
Instructions set out in the report form, and must be properly completed 
and verified.
    (2) A copy of the report must be retained by the pipeline carrier in 
its files. The conformed copies may be produced by any legible means of 
reproduction.
    (3) The form must be filed in electronic format only pursuant to 
Sec. 385.2011 of this chapter, beginning with report year 2002, due on 
or before March 31, 2003.

[Order 620, 65 FR 81344, Dec. 26, 2000, as amended by Order 628, 68 FR 
269, Jan. 3, 2003; 69 FR 9044, Feb. 26, 2004]



Sec. 357.3  FERC Form No. 73, Oil Pipeline Data for Depreciation Analysis.

    (a) Who must file. Any oil pipeline company requesting new or 
changed depreciation rates pursuant to part 347 of this title if the 
proposed depreciation rates are based on the remaining physical life of 
the properties or if directed by the Commission to file service life 
data during an investigation of its book depreciation rates.
    (b) When to submit. Service life data is reported to the Commission 
by an oil pipeline company, as necessary, concurrently with a filing 
made pursuant to part 347 of this title or as directed during a 
depreciation rate investigation.
    (c) What to submit. The format and data which must be submitted are 
prescribed in FERC Form No. 73, Oil Pipeline Data for Depreciation 
Analysis, available for review at the Commission's Public Reference 
Section, Room 2A, 888 First Street, NE., Washington, DC 20426.

[Order 606, 64 FR 44405, Aug. 16, 1999]



Sec. 357.4  FERC Form No. 6-Q, Quarterly report of oil pipeline companies.

    (a) Prescription. The quarterly financial report form of oil 
pipeline companies, designated as FERC Form No. 6-Q, is prescribed for 
the reporting quarter ending March 31, 2004, and each quarter 
thereafter.
    (b) Filing requirements--(1) Who must file. Each oil pipeline 
company, subject to the provisions of section 20 of the Interstate 
Commerce Act, must prepare and file with the Commission FERC Form No. 6-
Q.
    (2) When to file and what to file. This quarterly financial report 
form must be filed as follows:
    (i) The quarterly financial report for the period January 1 through 
March 31, 2004, must be filed on or before July 23, 2004.
    (ii) The quarterly financial report for the period April 1 through 
June 30, 2004, must be filed on or before September 22, 2004.
    (iii) The quarterly financial report for the period July 1 through 
September 30, 2004, must be filed on or before December 23, 2004.
    (iv) The quarterly financial report for the period January 1 through 
March 31, 2005, must be filed on or before June 13, 2005.
    (v) This report must be filed as prescribed in Sec. 385.2011 of 
this chapter and

[[Page 968]]

as indicated in the General Instructions set out in the quarterly report 
form, and must be properly completed and verified. Filing on electronic 
media pursuant to Sec. 385.2011 of this chapter will be required 
commencing with the reporting quarter ending March 31, 2004, due on or 
before
    (vi) The quarterly financial report for the period April 1 through 
June 30, 2005, must be filed on or before September 12, 2005.
    (vii) Subsequent quarterly financial reports must be filed within 70 
days from the end of the reporting quarter.
    (viii) The quarterly financial report for the period July 1 through 
September 30, 2005 must be filed on or before December 13, 2005.

[69 FR 9045, Feb. 26, 2004, as amended by Order 646-A, 69 FR 32444, June 
10, 2004]



Sec. 357.5  Cash management programs.

    Oil pipeline companies subject to the provisions of the Commission's 
Uniform System of Accounts prescribed in part 352 and Sec. 357.2 of 
this title that participate in cash management programs must file these 
agreements with the Commission. The documentation establishing the cash 
management program and entry into the program must be filed within 10 
days of the effective date of the rule or entry into the program. 
Subsequent changes to the cash management agreement must be filed with 
the Commission within 10 days of the change.

[Order 634-A, 68 FR 62004, Oct. 31, 2003, as amended at 69 FR 9045, Feb. 
26, 2004]

[[Page 969]]



      SUBCHAPTER S_STANDARDS OF CONDUCT FOR TRANSMISSION PROVIDERS



PART 358_STANDARDS OF CONDUCT--Table of Contents



Sec.
358.1 Applicability.
358.2 General principles.
358.3 Definitions.
358.4 Non-discrimination requirements.
358.5 Independent functioning rule.
358.6 No conduit rule.
358.7 Transparency rule.
358.8 Implementation requirements.

    Authority: 15 U.S.C. 717-717w, 3301-3432; 16 U.S.C. 791-825r, 2601-
2645; 31 U.S.C. 9701; 42 U.S.C. 7101-7352.

    Source: 73 FR 63829, Oct. 27, 2008, unless otherwise noted.



Sec. 358.1  Applicability.

    (a) This part applies to any interstate natural gas pipeline that 
transports gas for others pursuant to subparts B or G of part 284 of 
this chapter and conducts transmission transactions with an affiliate 
that engages in marketing functions.
    (b) This part applies to any public utility that owns, operates, or 
controls facilities used for the transmission of electric energy in 
interstate commerce and conducts transmission transactions with an 
affiliate that engages in marketing functions.
    (c) This part does not apply to a public utility transmission 
provider that is a Commission-approved Independent System Operator (ISO) 
or Regional Transmission Organization (RTO). If a public utility 
transmission owner participates in a Commission-approved ISO or RTO and 
does not operate or control its transmission system and has no access to 
transmission function information, it may request a waiver from this 
part.
    (d) A transmission provider may file a request for a waiver from all 
or some of the requirements of this part for good cause.



Sec. 358.2  General principles.

    (a) As more fully described and implemented in subsequent sections 
of this part, a transmission provider must treat all transmission 
customers, affiliated and non-affiliated, on a not unduly discriminatory 
basis, and must not make or grant any undue preference or advantage to 
any person or subject any person to any undue prejudice or disadvantage 
with respect to any transportation of natural gas or transmission of 
electric energy in interstate commerce, or with respect to the wholesale 
sale of natural gas or of electric energy in interstate commerce.
    (b) As more fully described and implemented in subsequent sections 
of this part, a transmission provider's transmission function employees 
must function independently from its marketing function employees, 
except as permitted in this part or otherwise permitted by Commission 
order.
    (c) As more fully described and implemented in subsequent sections 
of this part, a transmission provider and its employees, contractors, 
consultants and agents are prohibited from disclosing, or using a 
conduit to disclose, non-public transmission function information to the 
transmission provider's marketing function employees.
    (d) As more fully described and implemented in subsequent sections 
of this part, a transmission provider must provide equal access to non-
public transmission function information disclosed to marketing function 
employees to all its transmission customers, affiliated and non-
affiliated, except as permitted in this part or otherwise permitted by 
Commission order.

[74 FR 54482, Oct. 22, 2009]



Sec. 358.3  Definitions.

    (a) Affiliate of a specified entity means:
    (1) Another person that controls, is controlled by or is under 
common control with, the specified entity. An affiliate includes a 
division of the specified entity that operates as a functional unit.
    (2) For any exempt wholesale generator (as defined under Sec. 366.1 
of this

[[Page 970]]

chapter), affiliate shall have the meaning set forth in Sec. 366.1 of 
this chapter, or any successor provision.
    (3) ``Control'' as used in this definition means the direct or 
indirect authority, whether acting alone or in conjunction with others, 
to direct or cause to direct the management policies of an entity. A 
voting interest of 10 percent or more creates a rebuttable presumption 
of control.
    (b) Internet Web site refers to the Internet location where an 
interstate natural gas pipeline or a public utility posts the 
information, by electronic means, required under this part 358.
    (c) Marketing functions means:
    (1) in the case of public utilities and their affiliates, the sale 
for resale in interstate commerce, or the submission of offers to sell 
in interstate commerce, of electric energy or capacity, demand response, 
virtual transactions, or financial or physical transmission rights, all 
as subject to an exclusion for bundled retail sales, including sales of 
electric energy made by providers of last resort (POLRs) acting in their 
POLR capacity; and
    (2) in the case of interstate pipelines and their affiliates, the 
sale for resale in interstate commerce, or the submission of offers to 
sell in interstate commerce, natural gas, subject to the following 
exclusions:
    (i) Bundled retail sales,
    (ii) Incidental purchases or sales of natural gas to operate 
interstate natural gas pipeline transmission facilities,
    (iii) Sales of natural gas solely from a seller's own production,
    (iv) Sales of natural gas solely from a seller's own gathering or 
processing facilities, and
    (v) On-system sales by an intrastate natural gas pipeline, by a 
Hinshaw interstate pipeline exempt from the Natural Gas Act, by a local 
distribution company, or by a local distribution company operating under 
section 7(f) of the Natural Gas Act.
    (d) Marketing function employee means an employee, contractor, 
consultant or agent of a transmission provider or of an affiliate of a 
transmission provider who actively and personally engages on a day-to-
day basis in marketing functions.
    (e) Open Access Same Time Information System or OASIS refers to the 
Internet location where a public utility posts the information required 
by part 37 of this chapter, and where it may also post the information 
required to be posted on its Internet Web site by this part 358.
    (f) Transmission means electric transmission, network or point-to-
point service, ancillary services or other methods of electric 
transmission, or the interconnection with jurisdictional transmission 
facilities, under part 35 of this chapter; and natural gas 
transportation, storage, exchange, backhaul, or displacement service 
provided pursuant to subparts B or G of part 284 of this chapter.
    (g) Transmission customer means any eligible customer, shipper or 
designated agent that can or does execute a transmission service 
agreement or can or does receive transmission service, including all 
persons who have pending requests for transmission service or for 
information regarding transmission.
    (h) Transmission functions means the planning, directing, organizing 
or carrying out of day-to-day transmission operations, including the 
granting and denying of transmission service requests.
    (i) Transmission function employee means an employee, contractor, 
consultant or agent of a transmission provider who actively and 
personally engages on a day-to-day basis in transmission functions.
    (j) Transmission function information means information relating to 
transmission functions.
    (k) Transmission provider means:
    (1) Any public utility that owns, operates or controls facilities 
used for the transmission of electric energy in interstate commerce; or
    (2) Any interstate natural gas pipeline that transports gas for 
others pursuant to subparts B or G of part 284 of this chapter.
    (3) A transmission provider does not include a natural gas storage 
provider authorized to charge market-based rates.
    (l) Transmission service means the provision of any transmission as 
defined in Sec. 358.3(f).

[[Page 971]]

    (m) Waiver means the determination by a transmission provider, if 
authorized by its tariff, to waive any provisions of its tariff for a 
given entity.

[73 FR 63829, Oct. 27, 2008, as amended at 74 FR 54482, Oct. 22, 2009]



Sec. 358.4  Non-discrimination requirements.

    (a) A transmission provider must strictly enforce all tariff 
provisions relating to the sale or purchase of open access transmission 
service, if the tariff provisions do not permit the use of discretion.
    (b) A transmission provider must apply all tariff provisions 
relating to the sale or purchase of open access transmission service in 
a fair and impartial manner that treats all transmission customers in a 
not unduly discriminatory manner, if the tariff provisions permit the 
use of discretion.
    (c) A transmission provider may not, through its tariffs or 
otherwise, give undue preference to any person in matters relating to 
the sale or purchase of transmission service (including, but not limited 
to, issues of price, curtailments, scheduling, priority, ancillary 
services, or balancing).
    (d) A transmission provider must process all similar requests for 
transmission in the same manner and within the same period of time.



Sec. 358.5  Independent functioning rule.

    (a) General rule. Except as permitted in this part or otherwise 
permitted by Commission order, a transmission provider's transmission 
function employees must function independently of its marketing function 
employees.
    (b) Separation of functions. (1) A transmission provider is 
prohibited from permitting its marketing function employees to:
    (i) Conduct transmission functions; or
    (ii) Have access to the system control center or similar facilities 
used for transmission operations that differs in any way from the access 
available to other transmission customers.
    (2) A transmission provider is prohibited from permitting its 
transmission function employees to conduct marketing functions.



Sec. 358.6  No conduit rule.

    (a) A transmission provider is prohibited from using anyone as a 
conduit for the disclosure of non-public transmission function 
information to its marketing function employees.
    (b) An employee, contractor, consultant or agent of a transmission 
provider, and an employee, contractor, consultant or agent of an 
affiliate of a transmission provider that is engaged in marketing 
functions, is prohibited from disclosing non-public transmission 
function information to any of the transmission provider's marketing 
function employees.



Sec. 358.7  Transparency rule.

    (a) Contemporaneous disclosure. (1) If a transmission provider 
discloses non-public transmission function information, other than 
information identified in paragraph (a)(2) of this section, in a manner 
contrary to the requirements of Sec. 358.6, the transmission provider 
must immediately post the information that was disclosed on its Internet 
Web site.
    (2) If a transmission provider discloses, in a manner contrary to 
the requirements of Sec. 358.6, non-public transmission customer 
information, critical energy infrastructure information (CEII) as 
defined in Sec. 388.113(c)(1) of this chapter or any successor 
provision, or any other information that the Commission by law has 
determined is to be subject to limited dissemination, the transmission 
provider must immediately post notice on its Web site that the 
information was disclosed.
    (b) Exclusion for specific transaction information. A transmission 
provider's transmission function employee may discuss with its marketing 
function employee a specific request for transmission service submitted 
by the marketing function employee. The transmission provider is not 
required to contemporaneously disclose information otherwise covered by 
Sec. 358.6 if the information relates solely to a marketing function 
employee's specific request for transmission service.
    (c) Voluntary consent provision. A transmission customer may 
voluntarily consent, in writing, to allow the transmission provider to 
disclose the

[[Page 972]]

transmission customer's non-public information to the transmission 
provider's marketing function employees. If the transmission customer 
authorizes the transmission provider to disclose its information to 
marketing function employees, the transmission provider must post notice 
on its Internet Web site of that consent along with a statement that it 
did not provide any preferences, either operational or rate-related, in 
exchange for that voluntary consent.
    (d) Posting written procedures on the public Internet. A 
transmission provider must post on its Internet Web site current written 
procedures implementing the standards of conduct.
    (e) Identification of affiliate information on the public Internet. 
(1) A transmission provider must post on its Internet Web site the names 
and addresses of all its affiliates that employ or retain marketing 
function employees.
    (2) A transmission provider must post on its Internet Web site a 
complete list of the employee-staffed facilities shared by any of the 
transmission provider's transmission function employees and marketing 
function employees. The list must include the types of facilities shared 
and the addresses of the facilities.
    (3) The transmission provider must post information concerning 
potential merger partners as affiliates that may employ or retain 
marketing function employees, within seven days after the potential 
merger is announced.
    (f) Identification of employee information on the public Internet. 
(1) A transmission provider must post on its Internet Web site the job 
titles and job descriptions of its transmission function employees.
    (2) A transmission provider must post a notice on its Internet Web 
site of any transfer of a transmission function employee to a position 
as a marketing function employee, or any transfer of a marketing 
function employee to a position as a transmission function employee. The 
information posted under this section must remain on its Internet Web 
site for 90 days. No such job transfer may be used as a means to 
circumvent any provision of this part. The information to be posted must 
include:
    (i) The name of the transferring employee,
    (ii) The respective titles held while performing each function 
(i.e., as a transmission function employee and as a marketing function 
employee), and
    (iii) The effective date of the transfer.
    (g) Timing and general requirements of postings on the public 
Internet. (1) A transmission provider must update on its Internet Web 
site the information required by this part 358 within seven business 
days of any change, and post the date on which the information was 
updated. A public utility may also post the information required to be 
posted under part 358 on its OASIS, but is not required to do so.
    (2) In the event an emergency, such as an earthquake, flood, fire or 
hurricane, severely disrupts a transmission provider's normal business 
operations, the posting requirements in this part may be suspended by 
the transmission provider. If the disruption lasts longer than one 
month, the transmission provider must so notify the Commission and may 
seek a further exemption from the posting requirements.
    (3) All Internet Web site postings required by this part must be 
sufficiently prominent as to be readily accessible.
    (h) Exclusion for and recordation of certain information exchanges. 
(1) Notwithstanding the requirements of Sec. Sec. 358.5(a) and 358.6, a 
transmission provider's transmission function employees and marketing 
function employees may exchange certain non-public transmission function 
information, as delineated in Sec. 358.7(h)(2), in which case the 
transmission provider must make and retain a contemporaneous record of 
all such exchanges except in emergency circumstances, in which case a 
record must be made of the exchange as soon as practicable after the 
fact. The transmission provider shall make the record available to the 
Commission upon request. The record may consist of hand-written or typed 
notes, electronic records such as e-mails and text messages, recorded 
telephone exchanges, and the like, and must be retained for a period of 
five years.

[[Page 973]]

    (2) The non-public information subject to the exclusion in Sec. 
358.7(h)(1) is as follows:
    (i) Information pertaining to compliance with Reliability Standards 
approved by the Commission, and
    (ii) Information necessary to maintain or restore operation of the 
transmission system or generating units, or that may affect the dispatch 
of generating units.
    (i) Posting of waivers. A transmission provider must post on its 
Internet Web site notice of each waiver of a tariff provision that it 
grants in favor of an affiliate, unless such waiver has been approved by 
the Commission. The posting must be made within one business day of the 
act of a waiver. The transmission provider must also maintain a log of 
the acts of waiver, and must make it available to the Commission upon 
request. The records must be kept for a period of five years from the 
date of each act of waiver.



Sec. 358.8  Implementation requirements.

    (a) Effective date. A transmission provider must be in full 
compliance with the standards of conduct on the date it commences 
transmission transactions with an affiliate that engages in marketing 
functions.
    (b) Compliance measures and written procedures. (1) A transmission 
provider must implement measures to ensure that the requirements of 
Sec. Sec. 358.5 and 358.6 are observed by its employees and by the 
employees of its affiliates.
    (2) A transmission provider must distribute the written procedures 
referred to in Sec. 358.7(d) to all its transmission function 
employees, marketing function employees, officers, directors, 
supervisory employees, and any other employees likely to become privy to 
transmission function information.
    (c) Training and compliance personnel. (1) A transmission provider 
must provide annual training on the standards of conduct to all the 
employees listed in paragraph (b)(2) of this section. The transmission 
provider must provide training on the standards of conduct to new 
employees in the categories listed in paragraph (b)(2) of this section, 
within the first 30 days of their employment. The transmission provider 
must require each employee who has taken the training to certify 
electronically or in writing that s/he has completed the training.
    (2) A transmission provider must designate a chief compliance 
officer who will be responsible for standards of conduct compliance. The 
transmission provider must post the name of the chief compliance officer 
and provide his or her contact information on its Internet Web site.
    (d) Books and records. A transmission provider must maintain its 
books of account and records (as prescribed under parts 101, 125, 201 
and 225 of this chapter) separately from those of its affiliates that 
employ or retain marketing function employees, and these must be 
available for Commission inspections.

[[Page 974]]



                         SUBCHAPTER T [RESERVED]



SUBCHAPTER U_REGULATIONS UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 

               2005, FEDERAL POWER ACT AND NATURAL GAS ACT



PART 366_BOOKS AND RECORDS--Table of Contents



Subpart A_Definitions and Provisions Under PUHCA 2005, the Federal Power 
                       Act and the Natural Gas Act

Sec.
366.1 Definitions.
366.2 Commission access to books and records.
366.3 Exemption from Commission access to books and records; waivers of 
          accounting, record-retention, and reporting requirements.
366.4 FERC-65, notification of holding company status, FERC-65A, 
          exemption notification, and FERC-65B, waiver notification.
366.5 Allocation of costs for non-power goods and services.
366.6 Previously authorized activities.
366.7 Procedures for obtaining exempt wholesale generator and foreign 
          utility company status.

  Subpart B_Accounting and Recordkeeping Under PUHCA 2005, the Federal 
                    Power Act and the Natural Gas Act

366.21 Accounts and records of holding companies.
366.22 Accounts and records of service companies.
366.23 FERC Form No. 60, Annual reports of centralized service 
          companies, and FERC-61, Narrative description of service 
          company functions.

    Authority: 15 U.S.C. 717 et seq., 16 U.S.C. 791a et seq., and 42 
U.S.C. 16451-16463.

    Source: Order No. 667-A, 71 FR 28457, May 16, 2006, unless otherwise 
noted.



Subpart A_Definitions and Provisions Under PUHCA 2005, the Federal Power 

                       Act and the Natural Gas Act



Sec. 366.1  Definitions.

    For purposes of this part:
    Affiliate. The term ``affiliate'' of a company means any company, 5 
percent or more of the outstanding voting securities of which are owned, 
controlled, or held with power to vote, directly or indirectly, by such 
company.
    Associate company. The term ``associate company'' of a company means 
any company in the same holding company system with such company.
    Commission. The term ``Commission'' means the Federal Energy 
Regulatory Commission.
    Company. The term ``company'' means a corporation, partnership, 
association, joint stock company, business trust, or any organized group 
of persons, whether incorporated or not, or a receiver, trustee, or 
other liquidating agent of any of the foregoing.
    Construction. The term ``construction'' means any construction, 
extension, improvement, maintenance, or repair of the facilities or any 
part thereof of a company, which is performed for a charge.
    Electric utility company. The term ``electric utility company'' 
means any company that owns or operates facilities used for the 
generation, transmission, or distribution of electric energy for sale. 
For the purposes of this subchapter, ``electric utility company'' shall 
not include persons that engage only in marketing of electric energy.
    Exempt wholesale generator. The term ``exempt wholesale generator'' 
means any person engaged directly, or indirectly through one or more 
affiliates as defined in this subchapter, and exclusively in the 
business of owning or operating, or both owning and operating, all or 
part of one or more eligible facilities and selling electric energy at 
wholesale. For purposes of establishing or determining whether an entity 
qualifies for exempt wholesale generator status, sections 32(a)(2) 
through (4), and sections 32(b) through (d) of the Public Utility 
Holding Company Act of 1935 (15 U.S.C. 79z-5a(a)(2)-(4), 79z-5a(b)-(d)) 
shall apply.
    Foreign utility company. The term ``foreign utility company'' means 
any company that owns or operates facilities that are not located in any 
state

[[Page 975]]

and that are used for the generation, transmission, or distribution of 
electric energy for sale or the distribution at retail of natural or 
manufactured gas for heat, light, or power, if such company:
    (1) Derives no part of its income, directly or indirectly, from the 
generation, transmission, or distribution of electric energy for sale or 
the distribution at retail of natural or manufactured gas for heat, 
light, or power, within the United States; and
    (2) Neither the company nor any of its subsidiary companies is a 
public-utility company operating in the United States.
    Gas utility company. The term ``gas utility company'' means any 
company that owns or operates facilities used for distribution at retail 
(other than the distribution only in enclosed portable containers or 
distribution to tenants or employees of the company operating such 
facilities for their own use and not for resale) of natural or 
manufactured gas for heat, light, or power. For the purposes of this 
subchapter, ``gas utility company'' shall not include entities that 
engage only in marketing of natural and manufactured gas.
    Goods. The term ``goods'' means any goods, equipment (including 
machinery), materials, supplies, appliances, or similar property 
(including coal, oil, or steam, but not including electric energy, 
natural or manufactured gas, or utility assets) which is sold, leased, 
or furnished, for a charge.
    Holding company. (1) In general. The term ``holding company'' 
means--
    (i) Any company that directly or indirectly owns, controls, or 
holds, with power to vote, 10 percent or more of the outstanding voting 
securities of a public-utility company or of a holding company of any 
public-utility company; and
    (ii) Any person, determined by the Commission, after notice and 
opportunity for hearing, to exercise directly or indirectly (either 
alone or pursuant to an arrangement or understanding with one or more 
persons) such a controlling influence over the management or policies of 
any public-utility company or holding company as to make it necessary or 
appropriate for the rate protection of utility customers with respect to 
rates that such person be subject to the obligations, duties, and 
liabilities imposed by this subtitle upon holding companies.
    (2) Exclusions. The term ''holding company'' shall not include--
    (i) A bank, savings association, or trust company, or their 
operating subsidiaries that own, control, or hold, with the power to 
vote, public utility or public utility holding company securities so 
long as the securities are--
    (A) Held as collateral for a loan;
    (B) Held in the ordinary course of business as a fiduciary; or
    (C) Acquired solely for purposes of liquidation and in connection 
with a loan previously contracted for and owned beneficially for a 
period of not more than two years; or
    (ii) A broker or dealer that owns, controls, or holds with the power 
to vote public utility or public utility holding company securities so 
long as the securities are--
    (A) Not beneficially owned by the broker or dealer and are subject 
to any voting instructions which may be given by customers or their 
assigns; or
    (B) Acquired in the ordinary course of business as a broker, dealer, 
or underwriter with the bona fide intention of effecting distribution 
within 12 months of the specific securities so acquired.
    Holding company system. The term ``holding company system'' means a 
holding company, together with its subsidiary companies.
    Jurisdictional rates. The term ``jurisdictional rates'' means rates 
accepted, established or permitted by the Commission for the 
transmission of electric energy in interstate commerce, the sale of 
electric energy at wholesale in interstate commerce, the transportation 
of natural gas in interstate commerce, and the sale in interstate 
commerce of natural gas for resale for ultimate public consumption for 
domestic, commercial, industrial, or any other use.
    Natural gas company. The term ``natural gas company'' means a person 
engaged in the transportation of natural gas in interstate commerce or 
the sale of such gas in interstate commerce for resale.

[[Page 976]]

    Person. The term ``person'' means an individual or company.
    Public utility. The term ``public utility'' means any person who 
owns or operates facilities used for transmission of electric energy in 
interstate commerce or sales of electric energy at wholesale in 
interstate commerce.
    Public-utility company. The term ``public-utility company'' means an 
electric utility company or a gas utility company. For the purposes of 
this subchapter, the owner-lessors and owner participants in lease 
financing transactions involving utility assets shall not be treated as 
``public-utility companies.''
    Service. The term ``service'' means any managerial, financial, 
legal, engineering, purchasing, marketing, auditing, statistical, 
advertising, publicity, tax, research, or any other service (including 
supervision or negotiation of construction or of sales), information or 
data, which is sold or furnished for a charge.
    Service company. The term ``service company'' means any associate 
company within a holding company system organized specifically for the 
purpose of providing non-power goods or services or the sale of goods or 
construction work to any public utility or any natural gas company, or 
both, in the same holding company system.
    State commission. The term ``state commission'' means any 
commission, board, agency, or officer, by whatever name designated, of a 
state, municipality, or other political subdivision of a state that, 
under the laws of such state, has jurisdiction to regulate public-
utility companies.
    Subsidiary company. The term ``subsidiary company'' of a holding 
company means--
    (1) Any company, 10 percent or more of the outstanding voting 
securities of which are directly or indirectly owned, controlled, or 
held with power to vote, by such holding company; and
    (2) Any person, the management or policies of which the Commission, 
after notice and opportunity for hearing, determines to be subject to a 
controlling influence, directly or indirectly, by such holding company 
(either alone or pursuant to an arrangement or understanding with one or 
more other persons) so as to make it necessary for the rate protection 
of utility customers with respect to rates that such person be subject 
to the obligations, duties, and liabilities imposed by this subtitle 
upon subsidiary companies of holding companies.
    Voting security. The term ``voting security'' means any security 
presently entitling the owner or holder thereof to vote in the direction 
or management of the affairs of a company. For the purposes of this 
subchapter, the term ``voting security'' shall not include member 
interests in electric power cooperatives.

[Order No. 667-A, 71 FR 28457, May 16, 2006, as amended by Order 667-B, 
71 FR 42755, July 28, 2006; Order 731, 74 FR 68529, Dec. 28, 2009]



Sec. 366.2  Commission access to books and records.

    (a) In general. Unless otherwise exempted by Commission rule or 
order, each holding company and each associate company thereof shall 
maintain, and shall make available to the Commission, such books, 
accounts, memoranda, and other records as the Commission determines are 
relevant to costs incurred by a public utility or natural gas company 
that is an associate company of such holding company and necessary or 
appropriate for the protection of utility customers with respect to 
jurisdictional rates. However, for purposes of this subchapter, no 
provision in the subchapter shall apply to or be deemed to include:
    (1) The United States;
    (2) A state or political subdivision of a state;
    (3) Any foreign governmental authority not operating in the United 
States;
    (4) Any agency, authority, or instrumentality of any entity referred 
to in paragraphs (a)(1), (2), or (3) of this section; or
    (5) Any officer, agent, or employee of any entity referred to in 
paragraphs (a)(1), (2), (3), or (4) of this section as such in the 
course of his or her official duty.
    (b) Affiliate companies. Unless otherwise exempted by Commission 
rule or order, each affiliate of a holding company or of any subsidiary 
company of a holding company shall maintain, and

[[Page 977]]

shall make available to the Commission, such books, accounts, memoranda, 
and other records with respect to any transaction with another 
affiliate, as the Commission determines are relevant to costs incurred 
by a public utility or natural gas company that is an associate company 
of such holding company and necessary or appropriate for the protection 
of utility customers with respect to jurisdictional rates.
    (c) Holding company systems. The Commission may examine the books, 
accounts, memoranda, and other records of any company in a holding 
company system, or any affiliate thereof, as the Commission determines 
are relevant to costs incurred by a public utility or natural gas 
company within such holding company system and necessary or appropriate 
for the protection of utility customers with respect to jurisdictional 
rates.
    (d) Confidentiality. No member, officer, or employee of the 
Commission shall divulge any fact or information that may come to his or 
her knowledge during the course of examination of books, accounts, 
memoranda, or other records as provided in this section, except as may 
be directed by the Commission or by a court of competent jurisdiction.



Sec. 366.3  Exemption from Commission access to books and records; waivers of 

accounting, record-retention, and reporting requirements.

    (a) Exempt classes of entities. Any person that is a holding company 
solely with respect to one or more of the following will be exempt from 
the requirements of Sec. Sec. 366.2 and 366.21 and any associated 
service company will be exempt from the requirements of Sec. Sec. 
366.2, 366.22, and 366.23; such person need not make the filings 
provided in Sec. 366.4(a) or (b):
    (1) Qualifying facilities under the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2601 et seq.);
    (2) Exempt wholesale generators; or
    (3) Foreign utility companies.
    (b) Exemptions of additional persons and classes of transactions--
(1) Commission authority to exempt additional persons and classes of 
transactions. The Commission shall exempt a person or class of 
transactions from the requirements of Sec. 366.2 and the accounting, 
record-retention, and reporting requirements of Sec. Sec. 366.21, 
366.22, and 366.23 if, upon individual application or upon the motion of 
the Commission--
    (i) The Commission finds that the books, accounts, memoranda, and 
other records of any person are not relevant to the jurisdictional rates 
of a public utility or natural gas company; or
    (ii) The Commission finds that any class of transactions is not 
relevant to the jurisdictional rates of a public utility or natural gas 
company.
    (2) Commission exemption of additional persons and classes of 
transactions. The Commission has determined that the following persons 
and classes of transactions satisfy the requirements of paragraph (b)(1) 
of this section, and any person that is a holding company solely with 
respect to one or more of the following may file to obtain an exemption 
for that person or class of transactions, as appropriate, from the 
requirements of Sec. Sec. 366.2 and 366.21 (applicable to holding 
companies) and Sec. Sec. 366.2, 366.22, and 366.23 (applicable to the 
holding companies' associated service companies), pursuant to the 
notification procedure contained in Sec. 366.4(b):
    (i) Passive investors, so long as the ownership remains passive, 
including:
    (A) Mutual funds,
    (B) Collective investment vehicles whose assets are managed by 
banks, savings and loan associations and their operating subsidiaries, 
or brokers/dealers; and
    (C) Persons that directly, or indirectly through their subsidiaries 
or affiliates, buy and sell the securities of public-utility companies 
in the ordinary course of business as a broker/dealer, underwriter or 
fiduciary, and not exercising operational control over such companies;
    (ii) Commission-jurisdictional utilities that have no captive 
customers and that are not affiliated with any jurisdictional utility 
that has captive customers, and that do not own Commission-
jurisdictional transmission facilities or provide Commission-
jurisdictional transmission services and that are not affiliated with 
persons that

[[Page 978]]

own Commission-jurisdictional transmission facilities or provide 
Commission-jurisdictional transmission services, and holding companies 
that own or control only such utilities;
    (iii) Transactions where the holding company affirmatively certifies 
on behalf of itself and its subsidiaries, as applicable, that it will 
not charge, bill or allocate to the public utility or natural gas 
company in its holding company system any costs or expenses in 
connection with goods and services transactions, and will not engage in 
financing transactions with any such public utility or natural gas 
company;
    (iv) Transactions between or among affiliates that are independent 
of and do not include a public utility or natural gas company;
    (v) Electric power cooperatives;
    (vi) Local distribution companies that are not regulated as 
``natural gas companies'' pursuant to sections 1(b) or 1(c) of the 
Natural Gas Act, (15 U.S.C. 717(b), (c)).
    (vii) Natural gas companies that distribute natural or manufactured 
gas at retail to industrial or electric generation customers and/or 
distribute de minimis amounts of natural or manufactured gas at retail 
to farmer or rancher customers located adjacent to the natural gas 
company's rights-of-way.
    (c) Waivers. Any person that is a holding company solely with 
respect to one or more of the following may file to obtain a waiver of 
the accounting, record-retention, and reporting requirements of Sec. 
366.21 (applicable to holding companies) and Sec. Sec. 366.22 and 
366.23 (applicable to the holding companies' associated service 
companies), pursuant to the notification procedures contained in Sec. 
366.4(c):
    (1) Single-state holding company systems; for purposes of Sec. 
366.3(c)(1), a holding company system will be deemed to be a single-
state holding company system if the holding company system derives no 
more than 13 percent of its public-utility company revenues from outside 
a single state (for purposes of this waiver, revenues derived from 
exempt wholesale generators, foreign utility companies and qualifying 
facilities will not be considered public-utility company revenues);
    (2) Holding companies that own generating facilities that total 100 
MW or less in size and are used fundamentally for their own load or for 
sales to affiliated end-users; or
    (3) Investors in independent transmission-only companies.
    (d) Other requests for exemptions and waivers. Any person seeking an 
exemption or waiver that is not covered by paragraphs (a), (b)(2) or (c) 
of this section, shall file a petition for declaratory order pursuant to 
Sec. 385.207(a) of this chapter justifying the request for exemption or 
waiver. Any person seeking such an exemption or waiver shall bear the 
burden of demonstrating that such an exemption or waiver is warranted.
    (e) Nothing in paragraphs (a)-(d) of this section shall affect the 
authority of the Commission under the Federal Power Act (16 U.S.C. 791 
et seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or other 
applicable law, including the authority of the Commission with respect 
to rates, charges, classifications, rules, regulations, practices, 
contracts, facilities, and services under the Federal Power Act and 
Natural Gas Act and with respect to access to books and records under 
the Federal Power Act and Natural Gas Act.

[Order No. 667-A, 71 FR 28457, May 16, 2006, as amended by Order 667-B, 
71 FR 42755, July 28, 2006]



Sec. 366.4  FERC-65, notification of holding company status, FERC-65A, 

exemption notification, and FERC-65B, waiver notification.

    (a) Notification of holding company status. (1) Persons that meet 
the definition of a holding company as provided by Sec. 366.1 as of 
February 8, 2006 shall notify the Commission of their status as a 
holding company no later than June 15, 2006. Holding companies formed 
after February 8, 2006 shall notify the Commission of their status as a 
holding company, no later than the later of June 15, 2006 or 30 days 
after they become holding companies.
    (2) The notification required pursuant to Sec. 366.4(a)(1) shall be 
made by submitting FERC-65 (notification of holding company status), 
which shall contain the following: The identity of the

[[Page 979]]

holding company and of the public utilities and natural gas companies in 
the holding company system; the identity of service companies, including 
special-purpose subsidiaries providing non-power goods and services; the 
identity of all affiliates and subsidiaries; and their corporate 
relationship to each other. This filing will be for informational 
purposes and will not be noticed in the Federal Register, but will be 
available on the Commission's Web site. FERC-65 must be subscribed, 
consistent with Sec. 385.2005(a) of this chapter, but need not be 
verified.
    (3) Notwithstanding Sec. 366.4(a)(1) and (2), holding companies 
that are exempt holding companies pursuant to Sec. 366.3(a) are not 
required to notify the Commission of their status or to submit FERC-65 
(notification of holding company status).
    (b) FERC-65A (exemption notification) and petitions for exemption. 
(1) Persons who, pursuant to Sec. 366.3(b)(2), seek exemption from the 
requirements of Sec. 366.2 and the accounting, record-retention, and 
reporting requirements of Sec. Sec. 366.21, 366.22, and 366.23, may 
seek such exemption by filing FERC-65A (exemption notification); FERC-
65A must be subscribed, consistent with Sec. 385.2005(a) of this 
chapter, but need not be verified. These filings will be noticed in the 
Federal Register; persons who file FERC-65A must include a form of 
notice suitable for publication in the Federal Register in accordance 
with the specifications in Sec. 385.203(d) of this chapter. Persons who 
file FERC-65A in good faith shall be deemed to have a temporary 
exemption upon filing. If the Commission has taken no action within 60 
days after the date of filing FERC-65A, the exemption shall be deemed to 
have been granted. The Commission may toll the 60-day period to request 
additional information or for further consideration of the request; in 
such case, the temporary exemption will remain in effect until such time 
as the Commission has determined whether to grant or deny the exemption. 
Authority to toll the 60-day period is delegated to the Secretary or the 
Secretary's designee.
    (2) Notwithstanding Sec. 366.4(b)(1), persons that are exempt 
holding companies pursuant to Sec. 366.3(a) are not required to file 
FERC-65A (exemption notification).
    (3) Persons that do not qualify for exemption pursuant to Sec. 
366.3(b)(2) may seek an individual exemption from this subchapter. They 
may not do so by means of filing FERC-65A and instead must file a 
petition for declaratory order as required under Sec. 366.3(d). Such 
petitions will be noticed in the Federal Register; persons that file a 
petition must include a form of notice suitable for publication in the 
Federal Register in accordance with the specifications in Sec. 
385.203(d) of this chapter. No temporary exemption will attach upon 
filing and the requested exemption will be effective only if approved by 
the Commission. Persons may also seek exemptions for classes of 
transactions by filing a petition for declaratory order pursuant to 
Sec. 385.207(a) of this chapter justifying the request for exemption. 
Any person seeking such an exemption shall bear the burden of 
demonstrating that such exemption is warranted.
    (c) FERC-65B (waiver notification) and petitions for waiver.(1) 
Persons who, pursuant to Sec. 366.3(c), seek waiver of the accounting, 
record-retention, and reporting requirements of Sec. Sec. 366.21, 
366.22, and 366.23, may seek such waiver by filing FERC-65B (waiver 
notification); FERC-65B must be subscribed, consistent with Sec. 
385.2005(a) of this chapter, but need not be verified. FERC-65B will be 
noticed in the Federal Register; persons who file FERC-65B must include 
a form of notice suitable for publication in the Federal Register in 
accordance with the specifications in Sec. 385.203(d) of this chapter. 
Persons who file FERC-65B in good faith shall be deemed to have a 
temporary exemption upon filing. If the Commission has taken no action 
within 60 days after the date of filing of FERC-65B, the waiver shall be 
deemed to have been granted. The Commission may toll the 60-day period 
to request additional information or for further consideration of the 
request; in such case, the temporary waiver will remain in effect until 
such time as the Commission has determined whether to grant or deny the 
waiver. Authority to toll the 60-day period is delegated to the 
Secretary or the Secretary's designee.

[[Page 980]]

    (2) Persons that do not qualify for waiver pursuant to Sec. 
366.3(c) may seek an individual waiver from this subchapter. They may 
not do so by means of filing FERC-65B and instead must file a petition 
for declaratory order as required under Sec. 366.3(d). Such petitions 
will be noticed in the Federal Register; persons that file a petition 
must include a form of notice suitable for publication in the Federal 
Register in accordance with the specifications in Sec. 385.203(d) of 
this chapter. No temporary waiver will attach upon filing and the 
requested exemption will be effective only if approved by the 
Commission. Persons may also seek waivers for classes of transactions by 
filing a petition for declaratory order pursuant to Sec. 385.207(a) of 
this chapter justifying the request for waiver. Any person seeking such 
waiver shall bear the burden of demonstrating that such waiver is 
warranted.
    (d) Procedure for notification of material change in facts. (1) If 
there is any material change in facts that may affect an exemption or 
waiver granted pursuant to paragraphs (b) or (c) of this section, the 
person receiving the exemption or waiver shall within 30 days of the 
material change in facts:
    (i) Submit a new FERC-65A (exemption notification) or FERC-65B 
(waiver notification) or a petition for declaratory order, pursuant to 
paragraphs (b) or (c) of this section, as appropriate;
    (ii) File a written explanation why the material change in facts 
does not affect the exemption or waiver; or
    (iii) Notify the Commission that it no longer seeks to maintain its 
exemption or waiver.
    (2) If there is a material change in facts that may affect the 
automatic exemption allowed under Sec. 366.3(a) of this subpart, the 
person receiving the exemption or waiver shall within 30 days of the 
material change in facts:
    (i) Submit a FERC-65A (exemption notification) or FERC-65B (waiver 
notification) or a petition for declaratory order, pursuant to 
paragraphs (b) or (c) of this section, as appropriate;
    (ii) File a written explanation why the material change in facts 
does not affect the exemption; or
    (iii) Notify the Commission that it no longer seeks to maintain its 
exemption.
    (e) Revocation of exemption or waiver. (1) If a person that is 
exempt pursuant to Sec. 366.3(a) fails to conform to the criteria for 
such exemption, or if a person that has been granted an exemption or 
waiver pursuant to paragraphs (b) or (c) of this section either fails to 
conform to the criteria for such exemption or waiver or fails to conform 
with any material facts or representations presented in its submittals 
to the Commission, such person may no longer rely upon the exemption or 
waiver.
    (2) The Commission may, on its own motion or on the complaint of any 
person, revoke the exemption or waiver granted under Sec. 366.3(a) or 
paragraphs (b) or (c) of this section, if the person fails to conform to 
any of the criteria under this part for exemption or waiver.

[Order No. 667-A, 71 FR 28457, May 16, 2006, as amended by Order 699, 72 
FR 45326, Aug. 14, 2007]



Sec. 366.5  Allocation of costs for non-power goods and services.

    (a) Commission review. In the case of non-power goods or 
administrative or management services provided by an associate company 
organized specifically for the purpose of providing such goods or 
services to any public utility in the same holding company system, at 
the election of that holding company system or a state commission having 
jurisdiction over the public utility, the Commission shall review and 
authorize the allocation of the costs for such goods or services to the 
extent relevant to that associate company. Such election to have the 
Commission review and authorize cost allocations shall remain in effect 
until further Commission order.
    (b) Exemptions. Paragraph (a) of this section shall not apply to any 
holding company system whose public utility operations are confined 
substantially to a single state. For purposes of this section, a holding 
company system will be deemed to have its public utility operations 
confined substantially to a single state if the holding company system 
derives no more than 13 percent

[[Page 981]]

of its public utility revenues from outside a single state. A holding 
company system or state commission may, pursuant to this subsection, 
seek a Commission determination that a holding company's public utility 
operations are confined substantially to a single state by filing a 
petition for declaratory order pursuant to Sec. 385.207(a) of this 
chapter. Any holding company system or state commission seeking such a 
determination shall bear the burden of demonstrating that such 
determination is warranted.
    (c) Other classes of transactions. Either upon petition for 
declaratory order or upon its own motion, the Commission may exclude 
from the scope of Commission review and authorization under paragraph 
(a) of this section any class of transactions that the Commission finds 
is not relevant to the jurisdictional rates of a public utility. Any 
holding company system or state commission seeking to obtain such a 
determination under this subsection shall file a petition for 
declaratory order pursuant to Sec. 385.207(a) of this chapter. Any 
holding company system or state commission seeking such an exemption 
shall bear the burden of demonstrating that such an exemption is 
warranted.
    (d) Nothing in paragraphs (a)-(c) of this section shall affect the 
authority of the Commission under the Federal Power Act (16 U.S.C. 791 
et seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or other 
applicable law, including the authority of the Commission with respect 
to rates, charges, classifications, rules, regulations, practices, 
contracts, facilities, and services under the Federal Power Act and 
Natural Gas Act, and with respect to access to books and records under 
the Federal Power Act and Natural Gas Act.



Sec. 366.6  Previously authorized activities.

    (a) General. Unless otherwise provided by Commission rule or order, 
a person may continue to engage in activities or transactions authorized 
under the Public Utility Holding Company Act of 1935 prior to the 
effective date of the Public Utility Holding Company Act of 2005, 
February 8, 2006, until the later of the date such authorization expires 
or December 31, 2007, so long as that person continues to comply with 
the terms of such authorization. If any such activities or transactions 
are challenged in a formal Commission proceeding, the person claiming 
prior authorization shall be required to provide at that time the full 
text of any such authorization (whether by rule, order, or letter) and 
the application(s) or pleading(s) underlying such authorization (whether 
by rule, order, or letter).
    (b) Financing Authorizations. Holding companies that intend to rely 
on financing authorization orders or letters issued by the Securities 
and Exchange Commission must file these orders or letters with the 
Commission within 30 days after the effective date of the Public Utility 
Holding Company Act of 2005, February 8, 2006; any reports or other 
submissions that, pursuant to such financing authorizations, previously 
were filed with the Securities and Exchange Commission must instead be 
filed with the Commission, effective February 8, 2006. For the purposes 
of this section, compliance with the terms of such financing 
authorizations includes the requirement to notify the Commission of any 
financing transactions that a holding company engages in pursuant to 
such financing authorization.



Sec. 366.7  Procedures for obtaining exempt wholesale generator and foreign 

utility company status.

    (a) Self-certification notice procedure. An exempt wholesale 
generator or a foreign utility company, or its representative, may file 
with the Commission a notice of self-certification demonstrating that it 
satisfies the definition of exempt wholesale generator or foreign 
utility company (including stating the location of its generation); such 
notices of self-certification must be subscribed, consistent with Sec. 
385.2005(a) of this chapter, but need not be verified. In the case of 
exempt wholesale generators, the person filing a notice of self-
certification under this section must also file a copy of the notice of 
self-certification with the state regulatory authority of the state in 
which the facility is located, and that person must also represent to 
this Commission in its submittal with this

[[Page 982]]

Commission that it has filed a copy of the notice of self-certification 
with the state regulatory authority of the state in which the facility 
is located. Notice of the filing of a notice of self-certification will 
be published in the Federal Register. Persons that file a notice of 
self-certification must include a form of notice suitable for 
publication in the Federal Register in accordance with the 
specifications in Sec. 385.203(d) of this chapter. A person filing a 
notice of self-certification in good faith will be deemed to have 
temporary exempt wholesale generator or foreign utility company status. 
If the Commission takes no action within 60 days from the date of filing 
of the notice of self-certification, the self-certification shall be 
deemed to have been granted; however, consistent with section 32(c) of 
the Public Utility Holding Company Act of 1935 (15 U.S.C. 79z-5a (c)) 
any self-certification of an exempt wholesale generator may not become 
effective until the relevant state commissions have made the 
determinations provided for therein if such determinations are necessary 
(if such determinations are not necessary, the notice of self-
certification should state so). The Commission may toll the 60-day 
period to request additional information, or for further consideration 
of the request; in such cases, the person's exempt wholesale generator 
or foreign utility company status will remain temporary until such time 
as the Commission has determined whether to grant or deny exempt 
wholesale generator or foreign utility company status; however, 
consistent with section 32(c) of the Public Utility Holding Company Act 
of 1935 (15 U.S.C. 79z-5a (c)), any self-certification of an exempt 
wholesale generator may not become effective until the relevant state 
commissions have made the determinations provided for therein if such 
determinations are necessary (if such determinations are not necessary, 
the notice of self-certification should state so). Authority to toll the 
60-day period is delegated to the Secretary or the Secretary's designee, 
and authority to act on uncontested notices of self-certification is 
delegated to the General Counsel or the General Counsel's designee.
    (b) Optional procedure for Commission determination of exempt 
wholesale generator status or foreign utility company status. A person 
may file for a Commission determination of exempt wholesale generator 
status or foreign utility company status under Sec. 366.1 by filing a 
petition for declaratory order pursuant to Sec. 385.207(a) of this 
chapter, justifying the request for such status; however, consistent 
with section 32(c) of the Public Utility Holding Company Act of 1935 (15 
U.S.C. 79z-5a (c)), a Commission determination of exempt wholesale 
generator status may not become effective until the relevant state 
commissions have made the determinations provided for therein if such 
determinations are necessary. (If such determinations are not necessary, 
the petition for declaratory order should state so.) Persons that file 
petitions must include a form of notice suitable for publication in the 
Federal Register in accordance with the specifications in Sec. 
385.203(d) of this chapter.
    (c) Procedure for notification of material change in facts. If there 
is any material change in facts that may affect an exempt wholesale 
generator's or a foreign utility company's status as an exempt wholesale 
generator or a foreign utility company, the exempt wholesale generator 
or foreign utility company shall within 30 days of the material change 
in facts:
    (1) Submit a new notice of self-certification or a new petition for 
declaratory order, pursuant to paragraphs (a) or (b) of this section, as 
appropriate;
    (2) File a written explanation why the material change in facts does 
not affect its status; or
    (3) Notify the Commission that it no longer seeks to maintain its 
exempt wholesale generator or foreign utility company status.
    (d) Revocation of status. (1) If an exempt wholesale generator or a 
foreign utility company fails to conform to the criteria for such status 
or fails to conform with any material facts or representations presented 
in its submittals to the Commission, the notice of self-certification of 
the status of the facility or Commission order certifying the status of 
the facility may no longer be relied upon.

[[Page 983]]

    (2) The Commission may, on its own motion or on the complaint of any 
person, revoke the status of a facility or company, if the facility or 
company fails to conform to any of the criteria under this part for such 
status.
    (e) An exempt wholesale generator shall not be subject to any 
requirements of this part other than Sec. 366.7, i.e., procedures for 
obtaining exempt wholesale generator status. A foreign utility company 
shall not be subject to any requirements of this part other than Sec. 
366.7, i.e., procedures for obtaining foreign utility company status.

[Order No. 667-A, 71 FR 28457, May 16, 2006, as amended by Order 667-B, 
71 FR 42756, July 28, 2006]



  Subpart B_Accounting and Recordkeeping Under PUHCA 2005, the Federal 

                    Power Act and the Natural Gas Act



Sec. 366.21  Accounts and records of holding companies.

    (a) General. Unless otherwise exempted or granted a waiver by 
Commission rule or order pursuant to Sec. Sec. 366.3 and 366.4, every 
holding company shall maintain and make available to the Commission 
books, accounts, memoranda, and other records of all of its transactions 
in sufficient detail to permit examination, audit and verification of 
the financial statements, schedules and reports either required to be 
filed with the Commission or issued to stockholders, as necessary and 
appropriate for the protection of utility customers with respect to 
jurisdictional rates.
    (b) Unless otherwise exempted or granted a waiver by Commission rule 
or order pursuant to Sec. Sec. 366.3 and 366.4, beginning January 1, 
2008, all holding companies must comply with the Commission's records 
retention requirements for holding companies and service companies as 
prescribed in part 368 of this chapter. Until December 31, 2007, holding 
companies registered under the Public Utility Holding Company Act of 
1935 (15 U.S.C. 79a et seq.) may follow either the Commission's records 
retention rules for public utilities and licensees or for natural gas 
companies, as appropriate (parts 125 and 225 of this chapter), or the 
Securities and Exchange Commission's record retention rules in 17 CFR 
part 257.
    (c) Nothing in this section shall relieve any company subject 
thereto from compliance with the requirements as to recordkeeping and 
record-retention that may be prescribed by any other regulatory agency.

[Order No. 667-A, 71 FR 28457, May 16, 2006, as amended by Order 684, 71 
FR 65226, Nov. 7, 2006]



Sec. 366.22  Accounts and records of service companies.

    (a) Record-retention requirements--(1) General. Unless otherwise 
exempted or granted a waiver by Commission rule or order pursuant to 
Sec. Sec. 366.3 and 366.4, beginning January 1, 2008, every service 
company must maintain and make available to the Commission such books, 
accounts, memoranda, and other records in such manner and preserve them 
for such periods as the Commission prescribes in part 368 of this 
chapter, in sufficient detail to permit examination, audit, and 
verification, as necessary and appropriate for the protection of utility 
customers with respect to jurisdictional rates.
    (2) Transition period. Until December 31, 2007, service companies in 
holding company systems registered under the Public Utility Holding 
Company Act of 1935 (15 U.S.C. 79a et seq.) may follow either the 
Commission's records retention requirements in parts 125 and 225 of this 
chapter or the Securities and Exchange Commission's records retention 
rules in 17 CFR part 257.
    (3) Nothing in this section shall relieve any service company 
subject thereto from compliance with requirements as to record-retention 
that may be prescribed by any other regulatory agency.
    (b) Accounting requirements--(1) General. Unless otherwise exempted 
or granted a waiver by Commission rule or order pursuant to Sec. Sec. 
366.3 and 366.4, beginning January 1, 2008, every centralized service 
company (See Sec. 367.2 of this chapter) must maintain and make 
available to the Commission such books, accounts, memoranda, and other 
records as the Commission prescribes in part 367 of this chapter, in

[[Page 984]]

sufficient detail to permit examination, audit, and verification, as 
necessary and appropriate for the protection of utility customers with 
respect to jurisdictional rates. Every such service company must 
maintain and make available such books, accounts, memoranda, and other 
records in such manner as are prescribed in part 367 of this chapter, 
and must keep no other records with respect to the same subject matter 
except:
    (i) Records other than accounts;
    (ii) Records required by Federal or State law;
    (iii) Subaccounts or supporting accounts which are not inconsistent 
with the accounts required either by the Uniform System of Accounts for 
Centralized Service Companies in part 367 of this chapter; and
    (iv) Any other accounts that may be authorized by the Commission.
    (2) Transition period. Until December 31, 2007, service companies in 
holding company systems registered under the Public Utility Holding 
Company Act of 1935 (15 U.S.C. 79a et seq.), as described in paragraph 
(b)(1) of this section, may follow either the Commission's Uniform 
System of Accounts in parts 101 and 201 of this chapter or the 
Securities and Exchange Commission's Uniform System of Accounts in 17 
CFR part 256.
    (3) Nothing in this section shall relieve any service company 
subject thereto from compliance with requirements as to accounting that 
may be prescribed by any other regulatory agency.

[Order No. 667-A, 71 FR 28457, May 16, 2006, as amended by Order 684, 71 
FR 65226, Nov. 7, 2006]



Sec. 366.23  FERC Form No. 60, Annual reports of centralized service 

companies, and FERC-61, Narrative description of service company functions.

    (a) General. (1) FERC Form No. 60. Unless otherwise exempted or 
granted a waiver by Commission rule or order pursuant to Sec. Sec. 
366.3 and 366.4, every centralized service company (see Sec. 367.2 of 
this chapter) in a holding company system, regardless of whether that 
service company is providing services to a public utility, a natural gas 
company, or both, must file an annual report, FERC Form No. 60, as 
provided in Sec. 369.1 of this chapter. Every report must be submitted 
on the FERC Form No. 60 then in effect and must be prepared in 
accordance with the instructions incorporated in that form.
    (2) FERC-61. Unless otherwise exempted or granted a waiver by 
Commission rule or order pursuant to Sec. Sec. 366.3 and 366.4, every 
service company in a holding company system, including a special-purpose 
company (e.g., a fuel supply company or a construction company), that 
does not file a FERC Form No. 60 shall instead file with the Commission 
by May 1, 2007 and by May 1 each year thereafter, a narrative 
description, FERC-61, of the service company's functions during the 
prior calendar year. In complying with this section, a holding company 
may make a single filing on behalf of all such service company 
subsidiaries.
    (3) For good cause shown, the Commission may extend the time within 
which any such report or narrative description required to be filed 
pursuant to paragraphs (a)(1) or (2) of this section is to be filed or 
waive the requirements applicable to any such report or narrative 
description.
    (b) Transition period. Service companies in holding company systems 
exempted from the requirements of the Public Utility Holding Company Act 
of 1935 (15 U.S.C. 79a et seq.) need not file an annual report, FERC 
Form No. 60, for calendar years 2005 through 2007, after which they must 
comply with the provisions of this section.

[Order No. 667-A, 71 FR 28457, May 16, 2006, as amended by Order 691, 72 
FR 5174, Feb. 5, 2007; Order 731, 74 FR 68529, Dec. 28, 2009]



PART 367_UNIFORM SYSTEM OF ACCOUNTS FOR CENTRALIZED SERVICE COMPANIES SUBJECT 

TO THE PROVISIONS OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 2005, FEDERAL 

POWER ACT AND NATURAL GAS ACT--Table of Contents



                          Subpart A_Definitions

Sec.
367.1 Definitions.

[[Page 985]]

                     Subpart B_General Instructions

367.2 Companies for which this system of accounts is prescribed.
367.3 Records.
367.4 Numbering system.
367.5 Accounting period.
367.6 Submittal of questions.
367.7 Item list.
367.8 Extraordinary items.
367.9 Prior period items.
367.10 Unaudited items.
367.11 Distribution of pay and expenses of employees.
367.12 Payroll distribution.
367.13 Accounting to be on accrual basis.
367.14 Transactions with associate companies.
367.15 Contingent assets and liabilities.
367.16 Long-term debt: Premium, discount and expense, and gain or loss 
          on reacquisition.
367.17 Comprehensive inter-period income tax allocation.
367.18 Criteria for classifying leases.
367.19 Accounting for leases.
367.20 Depreciation accounting.
367.22 Accounting for asset retirement obligations
367.23 Transactions with non-associate companies.
367.24 Construction and service contracts for other companies.
367.25 Determination of service cost.
367.26 Departmental classification.
367.27 Billing procedures.
367.28 Methods of allocation.
367.29 Compensation for use of capital.
367.30 Cost allocation system for associate companies.

             Subpart C_Service Company Property Instructions

367.50 Service company property to be recorded at cost.
367.51 Components of construction.
367.52 Overhead construction costs.
367.53 Service company property purchased or sold.
367.54 Expenditures on leased property.
367.55 Land and land rights.
367.56 Structures and improvements.
367.57 Equipment.
367.58 Property record system required for service company property.
367.59 Additions and retirements of property.

                Subpart D_Operating Expense Instructions

367.80 Supervision and engineering.
367.81 Maintenance.
367.82 Rents.
367.83 Training costs.

                     Subpart E_Special Instructions

367.100 Accounts 131-174, Current and accrued assets.
367.101 Accounts 231-243, Current and accrued liabilities.
367.102 Accounts 408.1 and 408.2, Taxes other than income taxes.
367.103 Accounts 409.1, 409.2, and 409.3, Income taxes.
367.104 Accounts 410.1, 410.2, 411.1, and 411.2, Provision for deferred 
          income taxes.
367.105 Accounts 411.4, and 411.5, Investment tax credit adjustments.
367.106 Accounts 426.1, 426.2, 426.3, 426.4, and 426.5, Miscellaneous 
          expense accounts.

                Subpart F_Balance Sheet Chart of Accounts

                        Service Company Property

367.1010 Account 101, Service company property.
367.1011 Account 101.1, Property under capital leases.
367.1060 Account 106, Completed construction not classified.
367.1070 Account 107, Construction work in progress.
367.1080 Account 108, Accumulated provision for depreciation of service 
          company property.
367.1110 Account 111, Accumulated provision for amortization of service 
          company property.

                     Other Property and Investments

367.1230 Account 123, Investment in associate companies.
367.1240 Account 124, Other investments.
367.1280 Account 128, Other special funds.

                       Current and Accrued Assets

367.1310 Account 131, Cash.
367.1340 Account 134, Other special deposits.
367.1350 Account 135, Working funds.
367.1360 Account 136, Temporary cash investments.
367.1410 Account 141, Notes receivable.
367.1420 Account 142, Customer accounts receivable.
367.1430 Account 143, Other accounts receivable.
367.1440 Account 144, Accumulated provision for uncollectible accounts-
          Credit.
367.1450 Account 145, Notes receivable from associate companies.
367.1460 Account 146, Accounts receivable from associate companies.
367.1520 Account 152, Fuel stock expenses undistributed.
367.1540 Account 154, Materials and operating supplies.
367.1630 Account 163, Stores expense undistributed.
367.1650 Account 165, Prepayments.

[[Page 986]]

367.1710 Account 171, Interest and dividends receivable.
367.1720 Account 172, Rents receivable.
367.1730 Account 173, Accrued revenues.
367.1740 Account 174, Miscellaneous current and accrued assets.
367.1750 Account 175, Derivative instrument assets.
367.1760 Account 176, Derivative instrument assets--Hedges.

                             Deferred Debits

367.1810 Account 181, Unamortized debt expense.
367.182.3 Account 182.3, Other regulatory assets.
367.1830 Account 183, Preliminary survey and investigation charges.
367.1840 Account 184, Clearing accounts.
367.1850 Account 185, Temporary facilities.
367.1860 Account 186, Miscellaneous deferred debits.
367.1880 Account 188, Research, development and demonstration 
          expenditures.
367.1890 Account 189, Unamortized loss on reacquired debt.
367.1900 Account 190, Accumulated deferred income taxes.

                           Proprietary Capital

367.2010 Account 201, Common stock issued.
367.2040 Account 204, Preferred stock issued.
367.2110 Account 211, Miscellaneous paid-in-capital.
367.2150 Account 215, Appropriated retained earnings.
367.2160 Account 216, Unappropriated retained earnings.
367.2161 Account 216.1, Unappropriated undistributed subsidiary 
          earnings.
367.2190 Account 219, Accumulated other comprehensive income.

                             Long-Term Debt

367.2230 Account 223, Advances from associate companies.
367.2240 Account 224, Other long-term debt.
367.2250 Account 225, Unamortized premium on long-term debt.
367.2260 Account 226, Unamortized discount on long-term debt--Debit.

                      Other Noncurrent Liabilities

367.2270 Account 227, Obligations under capital lease--Non-current.
367.2282 Account 228.2, Accumulated provision for injuries and damages.
367.2283 Account 228.3, Accumulated provision for pensions and benefits.
367.2300 Account 230, Asset retirement obligations.

                     Current and Accrued Liabilities

367.2310 Account 231, Notes payable.
367.2320 Account 232, Accounts payable.
367.2330 Account 233, Notes payable to associate companies.
367.2340 Account 234, Accounts payable to associate companies.
367.2360 Account 236, Taxes accrued.
367.2370 Account 237, Interest accrued.
367.2380 Account 238, Dividends declared.
367.2410 Account 241, Tax collections payable.
367.2420 Account 242, Miscellaneous current and accrued liabilities.
367.2430 Account 243, Obligations under capital leases-Current.
367.2440 Account 244, Derivative instrument liabilities.
367.245 Account 245, Derivative instrument liabilities--Hedges.

                            Deferred Credits

367.2530 Account 253, Other deferred credits.
367.2540 Account 254, Other regulatory liabilities.
367.2550 Account 255, Accumulated deferred investment tax credits.
367.2820 Account 282, Accumulated deferred income taxes--Other property.
367.2830 Account 283, Accumulated deferred income taxes--Other.

          Subpart G_Service Company Property Chart of Accounts

367.3010 Account 301, Organization.
367.3030 Account 303, Miscellaneous intangible property.
367.3060 Account 306, Leasehold improvements.
367.3890 Account 389, Land and land rights.
367.3900 Account 390, Structures and improvements.
367.3910 Account 391, Office furniture and equipment.
367.3920 Account 392, Transportation equipment.
367.3930 Account 393, Stores equipment.
367.3940 Account 394, Tools, shop and garage equipment.
367.3950 Account 395, Laboratory equipment.
367.3960 Account 396, Power operated equipment.
367.3970 Account 397, Communication equipment.
367.3980 Account 398, Miscellaneous equipment.
367.3990 Account 399, Other tangible property.
367.3991 Account 399.1, Asset retirement costs for service company 
          property.

              Subpart H_Income Statement Chart of Accounts

                    Service Company Operating Income

367.4000 Account 400, Operating revenues.
367.4010 Account 401, Operation expense.

[[Page 987]]

367.4020 Account 402, Maintenance expense.
367.4030 Account 403, Depreciation expense.
367.4031 Account 403.1, Depreciation expense for asset retirement costs.
367.4040 Account 404, Amortization of limited-term property.
367.4050 Account 405, Amortization of other property.
367.4073 Account 407.3, Regulatory debits.
367.4074 Account 407.4, Regulatory credits.
367.4081 Account 408.1, Taxes other than income taxes, operating income.
367.4082 Account 408.2, Taxes other than income taxes, other income and 
          deductions.
367.4091 Account 409.1, Income taxes, operating income.
367.4092 Account 409.2, Income taxes, other income and deductions.
367.4093 Account 409.3, Income taxes, extraordinary items.
367.4101 Account 410.1, Provision for deferred income taxes, operating 
          income.
367.4102 Account 410.2, Provision for deferred income taxes, other 
          income and deductions.
367.4111 Account 411.1, Provision for deferred income taxes--Credit, 
          operating income.
367.4112 Account 411.2, Provision for deferred income taxes--Credit, 
          other income and deductions.
367.4114 Account 411.4, Investment tax credit adjustments, service 
          company property.
367.4115 Account 411.5, Investment tax credit adjustments, other.
367.4116 Account 411.6, Gains from disposition of service company plant.
367.4117 Account 411.7, Losses from disposition of service company 
          plant.
367.4118 Account 411.10, Accretion expense.
367.4120 Account 412, Costs and expenses of construction or other 
          services.
367.4160 Account 416, Costs and expenses of merchandising, jobbing and 
          contract work.
367.4180 Account 418, Non-operating rental income.
367.4181 Account 418.1, Equity in earnings of subsidiary companies.
367.4190 Account 419, Interest and dividend income.
367.4191 Account 419.1, Allowance for other funds used during 
          construction.
367.4210 Account 421, Miscellaneous income or loss.
367.4211 Account 421.1, Gain on disposition of property.
367.4212 Account 421.2, Loss on disposition of property.
367.4250 Account 425, Miscellaneous amortization.
367.4261 Account 426.1, Donations.
367.4262 Account 426.2, Life insurance.
367.4263 Account 426.3, Penalties.
367.4264 Account 426.4, Expenditures for certain civic, political and 
          related activities.
367.4265 Account 426.5, Other deductions.
367.4270 Account 427, Interest on long-term debt.
367.4280 Account 428, Amortization of debt discount and expense.
367.4290 Account 429, Amortization of premium on debt--Credit.
367.4300 Account 430, Interest on debt to associate companies.
367.4310 Account 431, Other interest expense.
367.4320 Account 432, Allowance for borrowed funds used during 
          construction--Credit.

                  Subpart I_Retained Earnings Accounts

367.4330 Account 433, Balance transferred from income.
367.4340 Account 434, Extraordinary income.
367.4350 Account 435, Extraordinary deductions.
367.4360 Account 436, Appropriations of retained earnings.
367.4370 Account 437, Dividends declared--Preferred stock.
367.4380 Account 438, Dividends declared--Common stock.
367.4390 Account 439, Adjustments to retained earnings.

              Subpart J_Operating Revenue Chart of Accounts

367.4570 Account 457, Services rendered to associate companies.
367.4571 Account 457.1, Direct costs charged to associate companies.
367.4572 Account 457.2, Indirect costs charged to associate companies.
367.4573 Account 457.3, Compensation for use of capital-associate 
          companies.
367.4580 Account 458, Services rendered to non-associate companies.
367.4581 Account 458.1, Direct costs charged to non-associate companies.
367.4582 Account 458.2, Indirect costs charged to non-associate 
          companies.
367.4583 Account 458.3, Compensation for use of capital--Non-associate 
          companies.
367.4584 Account 458.4, Excess or deficiency on servicing non-associate 
          utility companies.

      Subpart K_Operation and Maintenance Expense Chart of Accounts

367.5000 Accounts 500-598, Electric operation and maintenance accounts.
367.8000 Accounts 800-894, Gas operation and maintenance accounts.
367.9010 Account 901, Supervision.
367.9020 Account 902, Meter reading expenses.
367.9030 Account 903, Customer records and collection expenses.

[[Page 988]]

367.9040 Account 904, Uncollectible accounts.
367.9050 Account 905, Miscellaneous customer accounts expenses.
367.9070 Account 907, Supervision.
367.9080 Account 908, Customer assistance expenses.
367.9090 Account 909, Informational and instructional advertising 
          expenses.
367.9100 Account 910, Miscellaneous customer service and informational 
          expenses.
367.9110 Account 911, Supervision.
367.9120 Account 912, Demonstrating and selling expenses.
367.9130 Account 913, Advertising expenses.
367.9160 Account 916, Miscellaneous sales expenses.
367.9200 Account 920, Administrative and general salaries.
367.9210 Account 921, Office supplies and expenses.
367.9230 Account 923, Outside services employed.
367.9240 Account 924, Property insurance.
367.9250 Account 925, Injuries and damages.
367.9260 Account 926, Employee pensions and benefits.
367.9280 Account 928, Regulatory commission expenses.
367.9301 Account 930.1, General advertising expenses for associated 
          companies.
367.9302 Account 930.2, Miscellaneous general expenses.
367.9310 Account 931, Rents.
367.9350 Account 935, Maintenance of structures and equipment.

    Authority: 15 U.S.C. 717 et seq., 16 U.S.C. 791a et seq., and 42 
U.S.C. 16451-16463.

    Source: Order 684, 71 FR 65226, Nov. 7, 2006, unless otherwise 
noted.



                          Subpart A_Definitions



Sec. 367.1  Definitions.

    (a) When used in this system of accounts:
    (1) Accounts mean the accounts prescribed by this Uniform System of 
Accounts.
    (2) Actually issued, as applied to securities issued or assumed by 
the service companies, means those which have been sold to bona fide 
purchasers for a valuable consideration, those issued as dividends on 
stock, and those which have been issued in accordance with contractual 
requirements direct to trustees of sinking funds.
    (3) Actually outstanding, as applied to securities issued or assumed 
by the service company, means those which have been actually issued and 
are neither retired nor held by or for the service company; provided, 
however, that securities held by trustees must be considered as actually 
outstanding.
    (4) Amortization means the gradual extinguishment of an amount in an 
account by distributing such amount over a fixed period, over the life 
of the asset or liability to which it applies, or over the period during 
which it is anticipated the benefit will be realized.
    (5) Associate company means any company in the same holding company 
system with such company.
    (6) Book cost means the amount at which property is recorded in 
these accounts without deduction of related provisions for accrued 
depreciation, amortization, or for other purposes.
    (7) Centralized service company means a service company that 
provides services such as administrative, managerial, financial, 
accounting, recordkeeping, legal or engineering services, which are 
sold, furnished, or otherwise provided (typically for a charge) to other 
companies in the same holding company system. Centralized service 
companies are different from other service companies that only provide a 
discrete good or service.
    (8) Commission means the Federal Energy Regulatory Commission.
    (9) Company, when not otherwise indicated in the context, means a 
service company.
    (10) Construction, when used in the context of a service provided to 
other companies, means any construction, extension, improvement, 
maintenance, or repair of the facilities or any part thereof of a 
company, which is performed for a charge.
    (11) Cost means the amount of money actually paid for property or 
services. When the consideration given is other than cash in a purchase 
and sale transaction, as distinguished from a transaction involving the 
issuance of common stock in a merger, the value of such consideration 
must be determined on a cash basis.
    (12) Cost accumulation system means a system for the accumulation of 
service company costs on a job, project, or functional basis. It 
includes schedules and worksheets used to account for charges billed to 
single and groups of associate and non-associate companies.

[[Page 989]]

It can be a variety of systems, including but not limited to, a work 
order system or an activity-based accounting software system.
    (13) Cost of removal means the cost of demolishing, dismantling, 
tearing down or otherwise removing service property, including the cost 
of transportation and handling incidental thereto. It does not include 
the cost of removal activities associated with asset retirement 
obligations that are capitalized as part of the tangible long-lived 
assets that give rise to the obligation (See General Instructions in 
Sec. 367.22).
    (14) Debt expense means all expenses in connection with the issuance 
and initial sale of evidences of debt, such as fees for drafting 
mortgages and trust deeds; fees and taxes for issuing or recording 
evidences of debt; cost of engraving and printing bonds and certificates 
of indebtedness; fees paid trustees; specific costs of obtaining 
governmental authority; fees for legal services; fees and commissions 
paid underwriters, brokers, and salesmen for marketing such evidences of 
debt; fees and expenses of listing on exchanges; and other like costs.
    (15) Depreciation, as applied to depreciable service company 
property, means the loss in service value not restored by current 
maintenance. Among the causes to be used as consideration for causes of 
loss in service value are wear and tear, decay, action of the elements, 
inadequacy, obsolescence, changes in the art, changes in demand and 
requirements of public authorities.
    (16) Direct cost means the labor costs and expenses which can be 
identified through a cost allocation system as being applicable to 
services performed for a single or group of associate and non-associate 
companies. Cost incidental to or related to a directly charged item must 
be classified as direct costs.
    (17) Discount, as applied to the securities issued or assumed by the 
service company, means the excess of the par (stated value of no-par 
stocks) or face value of the securities plus interest or dividends 
accrued at the date of the sale over the cash value of the consideration 
received from their sale.
    (18) Electric utility company means any company that owns or 
operates facilities used for the generation, transmission, or 
distribution of electric energy for sale. For the purposes of this 
subchapter, ``electric utility company'' shall not include entities that 
engage only in marketing of electric energy.
    (19) Gas utility company means any company that owns or operates 
facilities used for distribution at retail (other than the distribution 
only in enclosed portable containers or distribution to tenants or 
employees of the company operating such facilities for their own use and 
not for resale) of natural or manufactured gas for heat, light, or 
power. For the purposes of this subchapter, ``gas utility company'' 
shall not include entities that engage only in marketing of natural and 
manufactured gas.
    (20) Goods means any goods, equipment (including machinery), 
materials, supplies, appliances, or similar property (including coal, 
oil, or steam, but not including electric energy, natural or 
manufactured gas, or utility assets) which is sold, leased, or 
furnished, for a charge.
    (21) Holding company.
    (i) In general. The term ``holding company'' means--
    (A) Any company that directly or indirectly owns, controls, or 
holds, with power to vote, 10 percent or more of the outstanding voting 
securities of a public-utility company or of a holding company of any 
public-utility company; and
    (B) Any person, determined by the Commission, after notice and 
opportunity for hearing, to exercise directly or indirectly (either 
alone or pursuant to an arrangement or understanding with one or more 
persons) such a controlling influence over the management or policies of 
any public-utility company or holding company as to make it necessary or 
appropriate for the rate protection of utility customers with respect to 
rates that such person be subject to the obligations, duties, and 
liabilities imposed by this subchapter upon holding companies.
    (ii) Exclusions. The term ``holding company'' does not include--

[[Page 990]]

    (A) A bank, savings association, or trust company, or their 
operating subsidiaries that own, control, or hold, with the power to 
vote, public utility or public utility holding company securities so 
long as the securities are--
    (1) Held as collateral for a loan;
    (2) Held in the ordinary course of business as a fiduciary; or
    (3) Acquired solely for purposes of liquidation and in connection 
with a loan previously contracted for and owned beneficially for a 
period of not more than two years; or
    (B) A broker or dealer that owns, controls, or holds with the power 
to vote public utility or public utility holding company securities so 
long as the securities are--
    (1) Not beneficially owned by the broker or dealer and are subject 
to any voting instructions which may be given by customers or their 
assigns; or
    (2) Acquired in the ordinary course of business as a broker, dealer, 
or underwriter with the bona fide intention of effecting distribution 
within 12 months of the specific securities so acquired.
    (22) Holding company system means a holding company, together with 
its subsidiary companies.
    (23) Indirect cost means the costs of a general overhead nature such 
as general services, housekeeping costs, and other support cost which 
cannot be separately identified to a single or group of associate and 
non-associate companies and, therefore, must be allocated. Costs 
incidental to or related to indirect items should also be classified as 
an indirect cost.
    (24) Investment advances means advances, represented by notes or by 
book accounts only, with respect to which it is mutually agreed or 
intended between the creditor and debtor that they must be settled by 
the issuance of securities or must not be subject to current settlement.
    (25) Lease, capital means a lease of property used by the service 
company, which meets one or more of the criteria stated in General 
Instructions in Sec. 367.18.
    (26) Lease, operating means a lease of property used by a service 
company, which does not meet any of the criteria stated in General 
Instructions in Sec. 367.18.
    (27) Minor items of property means the associated parts or items of 
which retirement units are composed.
    (28) Natural gas company means a person engaged in the 
transportation of natural gas in interstate commerce or the sale of such 
gas in interstate commerce for resale.
    (29) Net salvage value means the salvage value of property retired 
less the cost of removal.
    (30) Nominally issued, as applied to securities issued or assumed by 
the service company, means those which have been signed, certified, or 
otherwise executed, and placed with the proper officer for sale and 
delivery, or pledged, or otherwise placed in some special fund of the 
service company, but which have not been sold, or issued direct to 
trustees of sinking funds in accordance with contractual requirements.
    (31) Nominally outstanding, as applied to securities issued or 
assumed by the service company, means those which, after being actually 
issued, have been reacquired by or for the service company under 
circumstances which require them to be considered as held alive and not 
retired, provided, however, that securities held by trustees must be 
considered as actually outstanding.
    (32) Non-associate company means a person, partnership, 
organization, government body or company which is not a member of the 
holding company system.
    (33) Non-utility company means a company that is not a utility 
company.
    (34) Person means an individual or company.
    (35) Premium, as applied to securities issued or assumed by the 
service company, means the excess of the cash value of the consideration 
received from their sale over the sum of their par (stated value of no-
par stocks) or face value and interest or dividends accrued at the date 
of sale.
    (36) Public utility means any person who owns or operates facilities 
used for transmission of electric energy in interstate commerce or sales 
of electric energy at wholesale in interstate commerce.
    (37) Public-utility company means an electric utility company or gas 
utility company.

[[Page 991]]

    (38) Regulatory assets and liabilities are the assets and 
liabilities that result from rate actions for regulatory agencies. 
Regulatory assets and liabilities arise from specific revenues, 
expenses, gains, or losses that would have been included in net income 
determination in one period under the general requirements of the 
Uniform System of Accounts but for it being probable:
    (i) That such items will be included in a different period(s) for 
purposes of developing rates the service company is authorized to charge 
for its services; or
    (ii) In the case of regulatory liabilities, that refunds to 
customers, not provided for in other accounts, will be required.
    (39) Replacing or replacement, when not otherwise indicated in the 
context, means the construction or installation of service property in 
place of property retired, together with the removal of the property 
retired.
    (40) Research, development, and demonstration (RD&D) means 
expenditures incurred by a service company, for the service company or 
on behalf of others, either directly or through another person or 
organization (such as research institute, industry association, 
foundation, university, engineering company or similar contractor) in 
pursuing research, development, and demonstration activities including 
experiment, design, installation, construction, or operation. This 
definition includes expenditures for the implementation or development 
of new and/or existing concepts until technically feasible and 
commercially feasible operations are verified. When conducted on behalf 
of an associate or non-associate utility company such research, 
development, and demonstration costs should be reasonably related to the 
existing or future business of such company. The term includes, but is 
not limited to: All the costs incidental to the design, development or 
implementation of an experimental facility, a plant process, a product, 
a formula, an invention, a system or similar items, and the improvement 
of already existing items of a like nature; amounts expended in 
connection with the proposed development and/or proposed delivery of 
alternate sources of electricity or substitute or synthetic gas supplies 
(alternate fuel sources, for example, an experimental coal gasification 
plant or an experimental plant synthetically producing gas from liquid 
hydrocarbons); and the costs of obtaining its own patent, such as 
attorney's fees expended in making and perfecting a patent application. 
The term includes preliminary investigations and detailed planning of 
specific projects for securing for customers' non-conventional electric 
power or pipeline gas supplies that rely on technology that has not been 
verified previously to be feasible. The term does not include 
expenditures for efficiency surveys; studies of management, management 
techniques and organization; consumer surveys, advertising, promotions, 
or items of a like nature.
    (41) Retained earnings means the accumulated net income of the 
service company less distribution to stockholders and transfers to other 
capital accounts.
    (42) Retirement units means those items of property which, when 
retired, with or without replacement, are accounted for by crediting the 
book cost of the retirement units to the property account in which it is 
included.
    (43) Salvage value means the amount received for property retired, 
less any expenses incurred in connection with the sale or in preparing 
the property for sale; or, if retained, the amount at which the material 
recoverable is chargeable to materials and supplies, or other 
appropriate account.
    (44) Service means any managerial, financial, legal, engineering, 
purchasing, marketing, auditing, statistical, advertising, publicity, 
tax, research, or any other service (including supervision or 
negotiation of construction or of sales), information or data, which is 
sold or furnished for a charge.
    (45) Service company means any associate company within a holding 
company system organized specifically for the purpose of providing non-
power goods or services or the sale of goods or construction work to any 
public utility or any natural gas company, or both, in the same holding 
company system.
    (46) Service cost means the total of direct and indirect costs 
incurred to provide a service to an associate or non-associate company 
which are properly

[[Page 992]]

charged to expense by the service company.
    (47) Service life means the time between the date property is placed 
in service, or property is leased to others, and the date of its 
retirement. If depreciation is accounted for on a production basis 
rather than on a time basis, then service life should be measured in 
terms of the appropriate unit of production.
    (48) Service value means the difference between the cost and net 
salvage value of service property.
    (49) State commission means any commission, board, agency, or 
officer, by whatever name designated, of a State, municipality, or other 
political subdivision of a State that, under the laws of such State, has 
jurisdiction to regulate public-utility companies.
    (50) Uniform System of Accounts (USofA) means the Uniform System of 
Accounts for Centralized Service Companies prescribed in this part, as 
amended from time to time.
    (51) Utility company means a public-utility company or natural gas 
company whose rates are regulated by the Commission, state commission or 
other similar regulatory body.
    (b) [Reserved]

[Order 684, 71 FR 65226, Nov. 7, 2006, as amended by Order 731, 74 FR 
68529, Dec. 28, 2009]



                     Subpart B_General Instructions



Sec. 367.2  Companies for which this system of accounts is prescribed.

    (a) Unless otherwise exempted or granted a waiver by Commission rule 
or order pursuant to Sec. Sec. 366.3 and 366.4 of this chapter, this 
Uniform System of Accounts applies to any centralized service company 
operating, or organized specifically to operate, within a holding 
company system for the purpose of providing non-power services to any 
public utility or any natural gas company, or both, in the same holding 
company system.
    (b) This Uniform System of Accounts is not applicable to:
    (1) Service companies that are specifically organized as a special-
purpose company such as a fuel supply company or a construction company.
    (2) Electric or gas utility companies.
    (3) Companies primarily engaged:
    (i) In the production of goods, including exploration and 
development of fuel resources,
    (ii) In the provision of water, telephone, or similar services, the 
sale of which is normally subject to public rate regulation,
    (iii) In the provision of transportation, whether or not regulated, 
or
    (iv) In the ownership of property, including leased property and 
fuel reserves, for the use of associate companies.
    (4) A service company that provides services exclusively to a local 
gas distribution company.
    (5) Holding companies.
    (c) To the extent that the term service company is used in this 
Uniform System of Accounts, it applies only to centralized service 
companies.

[Order 684, 71 FR 65226, Nov. 7, 2006, as amended by Order 731, 74 FR 
68529, Dec. 28, 2009]



Sec. 367.3  Records.

    (a) Each service company must keep its books of account, and all 
other books, records, and memoranda that support the entries in the 
books of account, so as to be able to furnish full information on any 
item included in any account. Each entry must be supported by sufficient 
detailed information that will permit ready identification, analysis, 
and verification of all facts relevant and related to the records.
    (b) The books and records referred to in this part include not only 
accounting records in a limited technical sense, but all other records, 
such as minutes books, stock books, reports, correspondence, and 
memoranda, that may be useful in developing the history of or facts 
regarding any transaction.
    (c) No service company may destroy any books or records unless the 
destruction is permitted by the rules and regulations of the Commission.
    (d) In addition to prescribed accounts, clearing accounts, temporary 
or experimental accounts, and subaccounts of any accounts may be kept, 
provided the integrity of the prescribed accounts is not impaired.
    (e) The arrangement or sequence of the accounts prescribed in this 
part

[[Page 993]]

must not be controlling as to the arrangement or sequence in report 
forms that may be prescribed by the Commission.



Sec. 367.4  Numbering system.

    (a) The account numbering plan used in this part consists of a 
system of three-digit whole numbers as follows:
    (1) 100-199, Assets and other debits.
    (2) 200-299, Liabilities and other credits.
    (3) 300-399, Property accounts.
    (4) 400-432 and 434-435, Income accounts.
    (5) 433, 436 and 439, Retained earnings accounts.
    (6) 457-458, Revenue accounts.
    (7) 500-599, Electric operating expenses.
    (8) 800-894, Gas operating expenses.
    (9) 900-949, Customer accounts, customer service and informational, 
sales, and general and administrative expenses.
    (b) The numbers prefixed to account titles are to be considered as 
parts of the titles. Each service company, however, may adopt for its 
own purposes a different system of account numbers (See also General 
Instructions in Sec. 367.3(d)) provided that the numbers prescribed in 
this part must appear in the descriptive headings of the ledger accounts 
and in the various sources of original entry; however, if a service 
company uses a different system of account numbers and it is not 
practicable to show the prescribed account numbers in the various 
sources of original entry, the reference to the prescribed account 
numbers may be omitted from the various sources of original entry. Each 
service company using different account numbers for its own purposes 
must keep readily available a list of the account numbers that it uses 
and a reconciliation of those account numbers with the account numbers 
provided in this part. It is intended that the service company's records 
must be kept so as to permit ready analysis by prescribed accounts (by 
direct reference to sources of original entry to the extent practicable) 
and to permit preparation of financial and operating statements directly 
from the records at the end of each accounting period according to the 
prescribed accounts.



Sec. 367.5  Accounting period.

    Each service company must keep its books on a monthly basis so that 
for each month all transactions applicable to the account, as nearly as 
may be ascertained, must be entered in the books of the service company. 
Amounts applicable or assignable to a single or group of associate and 
non-associate companies must be segregated monthly. Each service company 
must close its books at the end of each calendar year unless otherwise 
authorized by the Commission.



Sec. 367.6  Submittal of questions.

    To maintain uniformity of accounting, service companies must submit 
questions of doubtful interpretation to the Commission for consideration 
and decision.



Sec. 367.7  Item list.

    Lists of items appearing in the texts of the accounts or elsewhere 
in this part are for the purpose of indicating clearly the application 
of the prescribed accounting. The lists are intended to be 
representative, but not exhaustive. The appearance of an item in a list 
warrants the inclusion of the item in the account mentioned only when 
the text of the account also indicates inclusion inasmuch as the same 
item frequently appears in more than one list. The proper entry in each 
instance must be determined by the texts of the accounts.



Sec. 367.8  Extraordinary items.

    Extraordinary items are to be recognized according to the rules 
which are considered generally accepted accounting principles. These 
items are related to the effects of events and transactions that have 
occurred during the current period and that are of an unusual nature and 
infrequent occurrence. Each item recognized as extraordinary must be 
disclosed in the notes to financial statements (See Accounts 434 and 435 
in Sec. Sec. 367.4340 and 367.4350).



Sec. 367.9  Prior period items.

    (a) Items of profit and loss related to the following must be 
accounted for as prior period adjustments and excluded

[[Page 994]]

from the determination of net income for the current year:
    (1) Correction of an error in the financial statements of a prior 
year.
    (2) Adjustments that result from realization of income tax benefits 
of pre-acquisition operating loss carry forwards of purchased 
subsidiaries.
    (b) All other items of profit and loss recognized during the year 
must be included in the determination of net income for that year.



Sec. 367.10  Unaudited items.

    Whenever a financial statement is required by the Commission, if it 
is known that a transaction has occurred that affects the accounts but 
the amount involved in the transaction and its effect upon the accounts 
cannot be determined with absolute accuracy, the amount must be 
estimated and the estimated amount included in the proper accounts. The 
service company is not required to anticipate minor items that would not 
appreciably affect the accounts.



Sec. 367.11  Distribution of pay and expenses of employees.

    The charges to property, operating expense and other accounts for 
services and expenses of employees engaged in activities chargeable to 
various accounts, such as construction, maintenance, and operations, 
must be based upon the actual time engaged in the respective classes of 
work, or an appropriate allocation method.



Sec. 367.12  Payroll distribution.

    Underlying accounting data must be maintained so that the 
distribution of the cost of labor charged direct to the various accounts 
will be readily available. The underlying data must permit a reasonably 
accurate distribution to be made of the cost of labor charged initially 
to clearing accounts so that the total labor cost may be classified 
among construction, cost of removal, or operating functions.



Sec. 367.13  Accounting to be on accrual basis.

    (a) The service company is required to keep its accounts on the 
accrual basis. This requires the inclusion in its accounts of all known 
transactions of appreciable amount that affect the accounts. If bills 
covering the transactions have not been received or rendered, the 
amounts must be estimated and appropriate adjustments made when the 
bills are received. When the amount is ascertained, the necessary 
adjustments must be made through the accounts in which the estimate was 
recorded. If it is determined during the interval that a material 
adjustment will be required, the estimate must be adjusted through the 
current accounts. The service company is not required to anticipate 
minor items which would not appreciably affect these accounts.
    (b) When payments are made in advance for items such as insurance, 
rents, taxes or interest, the amount applicable to future periods must 
be charged to account 165, Prepayments (Sec. 367.1650), and spread over 
the periods to which they are applicable by credits to account 165 
(Sec. 367.1650), and charges to the accounts appropriate for the 
expenditure.



Sec. 367.14  Transactions with associate companies.

    Each service company must keep its accounts and records so as to be 
able to furnish accurately and expeditiously statements of all 
transactions with associate companies. The statements may be required to 
show the general nature of the transactions, the amounts involved in the 
transactions and the amounts included in each account prescribed in this 
part with respect to such transactions. Transactions with associate 
companies must be recorded in the appropriate accounts for transactions 
of the same nature. Nothing contained in this part, however, must be 
construed as restraining the service company from subdividing accounts 
for the purpose of recording separately transactions with associate 
companies.



Sec. 367.15  Contingent assets and liabilities.

    Contingent assets represent a possible source of value to the 
service company contingent upon the fulfillment of conditions regarded 
as uncertain. Contingent liabilities include items that, under certain 
conditions, may become obligations of the service

[[Page 995]]

company but that are neither direct nor assumed liabilities at the date 
of the balance sheet. The service company must be prepared to give a 
complete statement of significant contingent assets and liabilities 
(including cumulative dividends on preference stock) in its annual 
report and at such other times as may be requested by the Commission.



Sec. 367.16  Long-term debt: Premium, discount and expense, and gain or loss 

on reacquisition.

    (a) A separate premium, discount and expense account must be 
maintained for each class and series of long-term debt (including 
receivers' certificates) issued or assumed by the service company. The 
premium must be recorded in account 225, Unamortized premium on long-
term debt (Sec. 367.2250), the discount must be recorded in account 
226, Unamortized discount on long-term debt--Debit (Sec. 367.2260), and 
the expense of issuance must be recorded in account 181, Unamortized 
debt expense (Sec. 367.1810). The premium, discount and expense must be 
amortized over the life of the respective issues under a plan that will 
distribute the amounts equitably over the life of the securities. The 
amortization must be on a monthly basis, and the amounts relating to 
discounts and expenses must be charged to account 428, Amortization of 
debt discount and expense (Sec. 367.4280). The amounts relating to 
premiums must be credited to account 429, Amortization of premium on 
debt--Credit (Sec. 367.4290).
    (b) When long-term debt is reacquired the difference between the 
amount paid upon reacquisition of any long-term debt and the face value, 
adjusted for unamortized discount, expenses or premium, as the case may 
be, applicable to the debt redeemed must be recognized currently in 
income and recorded in account 421, Miscellaneous income or loss (Sec. 
367.4210), or account 426.5, Other deductions (Sec. 367.4265).



Sec. 367.17  Comprehensive inter-period income tax allocation.

    (a) Where there are timing differences between the periods in which 
transactions affect taxable income and the periods in which they enter 
into the determination of pretax accounting income, the income tax 
effects of such transactions are to be recognized in the periods in 
which the differences between book accounting income and taxable income 
arise and in the periods in which the differences reverse using the 
deferred tax method. In general, comprehensive inter-period tax 
allocation should be followed whenever transactions enter into the 
determination of pretax accounting income for the period even though 
some transactions may affect the determination of taxes payable in a 
different period, as further qualified in this section.
    (b) Once comprehensive inter-period tax allocation has been 
initiated, either in whole or in part, it must be practiced on a 
consistent basis and must not be changed or discontinued without prior 
Commission approval.
    (c) Tax effects deferred currently will be recorded as deferred 
debits or deferred credits in accounts 190, Accumulated deferred income 
taxes (Sec. 367.1900), 282, Accumulated deferred income taxes--Other 
property (Sec. 367.2820), and 283, Accumulated deferred income taxes--
Other (Sec. 367.2830), as appropriate. The resulting amounts recorded 
in these accounts must be disposed of as prescribed in this system of 
accounts or as otherwise authorized by the Commission.



Sec. 367.18  Criteria for classifying leases.

    (a) If, at its inception, a lease meets one or more of the following 
criteria, the lease must be classified as a capital lease. Otherwise, it 
must be classified as an operating lease.
    (1) The lease transfers ownership of the property to the lessee by 
the end of the lease term.
    (2) The lease contains a bargain purchase option.
    (3) The lease term is equal to 75 percent or more of the estimated 
economic life of the leased property. However, if the beginning of the 
lease term falls within the last 25 percent of the total estimated 
economic life of the leased property, including earlier years of use, 
this criterion must not be used for purposes of classifying the lease.
    (4) The present value at the beginning of the lease term of the 
minimum lease payments, excluding that portion

[[Page 996]]

of the payments representing executory costs such as insurance, 
maintenance, and taxes to be paid by the lessor, including any related 
profit, equals or exceeds 90 percent of the excess of the fair value of 
the leased property to the lessor at the inception of the lease over any 
related investment tax credit retained by the lessor and expected to be 
realized by the lessor. However, if the beginning of the lease term 
falls within the last 25 percent of the total estimated economic life of 
the leased property, including earlier years of use, this criterion must 
not be used for purposes of classifying the lease. The lessee must 
compute the present value of the minimum lease payments using its 
incremental borrowing rate, unless:
    (i) It is practicable for the company to learn the implicit rate 
computed by the lessor, and
    (ii) The implicit rate computed by the lessor is less than the 
lessee's incremental borrowing rate.
    (iii) If both of those conditions are met, the lessee must use the 
implicit rate.
    (b) If, at any time, the lessee and lessor agree to change the 
provisions of the lease, other than by renewing the lease or extending 
its term, in a manner that would have resulted in a different 
classification of the lease under the criteria in paragraph (a) of this 
section had the changed terms been in effect at the inception of the 
lease, the revised agreement must be considered as a new agreement over 
its term, and the criteria in paragraph (a) of this section must be 
applied for purposes of classifying the new lease. Likewise, any action 
that extends the lease beyond the expiration of the existing lease term, 
such as the exercise of a lease renewal option other than those already 
included in the lease term, must be considered as a new agreement and 
must be classified according to the criteria in paragraph (a) of this 
section. Changes in estimates (for example, changes in estimates of the 
economic life or of the residual value of the leased property) or 
changes in circumstances (for example, default by the lessee) must not 
give rise to a new classification of a lease for accounting purposes.



Sec. 367.19  Accounting for leases.

    (a) All leases must be classified as either capital or operating 
leases.
    (b) The service company must record a capital lease as an asset in 
account 101.1, Property under capital leases (Sec. 367.1011) and an 
obligation in account 227, Obligations under capital leases--Non-current 
(Sec. 367.2270), or account 243, Obligations under capital leases--
Current (Sec. 367.2430), at an amount equal to the present value at the 
beginning of the lease term of minimum lease payments during the lease 
term, excluding that portion of the payments representing executory 
costs such as insurance, maintenance, and taxes to be paid by the 
lessor, together with any related profit. However, if the determined 
amount exceeds the fair value of the leased property at the inception of 
the lease, the amount recorded as the asset and obligation must be the 
fair value.
    (c) The service company, as a lessee, must recognize an asset 
retirement obligation (See General Instructions in Sec. 367.22) arising 
from the property under a capital lease unless the obligation is 
recorded as an asset and liability under a capital lease. The service 
company must record the asset retirement cost by debiting account 101.1, 
Property under capital leases (Sec. 367.1011), and crediting the 
liability for the asset retirement obligation in account 230, Asset 
retirement obligations (Sec. 367.2300). Asset retirement costs recorded 
in account 101.1 (Sec. 367.1011) must be amortized by charging rent 
expense (see Operating Expense Instructions in Sec. 367.82) or account 
421, Miscellaneous income or loss (Sec. 367.4210), as appropriate, and 
crediting a separate subaccount of the account in which the asset 
retirement costs are recorded. Charges for the periodic accretion of the 
liability in account 230, Asset retirement obligations (Sec. 367.2300), 
must be recorded by a charge to account 411.10, Accretion expense (Sec. 
367.4118), for service company property, and account 421, Miscellaneous 
income or loss (Sec. 367.4210), for non-service company property and a 
credit to account 230, Asset retirement obligations (Sec. 367.2300).
    (d) Rental payments on all leases must be charged to rent expense, 
fuel

[[Page 997]]

expense, construction work in progress, or other appropriate accounts as 
they become payable.
    (e) For a capital lease, for each period during the lease term, the 
amounts recorded for the asset and obligation must be reduced by an 
amount equal to the portion of each lease payment that would have been 
allocated to the reduction of the obligation, if the payment had been 
treated as a payment on an installment obligation (liability) and 
allocated between interest expense and a reduction of the obligation so 
as to produce a constant periodic rate of interest on the remaining 
balance.



Sec. 367.20  Depreciation accounting.

    (a) Method. Service companies must use a method of depreciation that 
allocates in a systematic and rational manner the service value of 
depreciable property over the service life of the property.
    (b) Service lives. Estimated useful service lives of depreciable 
property must be supported by objective evidence and analysis, including 
where appropriate engineering, economic, or other depreciation studies.
    (c) Rate. Service companies must use percentage rates of 
depreciation that are based on a method of depreciation that allocates 
the service value of depreciable property over the service life of the 
property. Where composite depreciation rates are used, they must be 
based on the weighted average estimated useful service lives of the 
depreciable property comprising the composite group.



Sec. 367.22  Accounting for asset retirement obligations.

    (a) An asset retirement obligation represents a liability for the 
legal obligation associated with the retirement of a tangible, long-
lived asset that a service company is required to settle as a result of 
an existing or enacted law, statute, ordinance, or written or oral 
contract, or by legal construction of a contract under the doctrine of 
promissory estoppel. An asset retirement cost represents the amount 
capitalized when the liability is recognized for the long-lived asset 
that gives rise to the legal obligation. The amount recognized for the 
liability and an associated asset retirement cost must be stated at the 
fair value of the asset retirement obligation in the period in which the 
obligation is incurred.
    (b) The service company must initially record a liability for an 
asset retirement obligation in account 230, Asset retirement obligations 
(Sec. 367.2300), and charge the associated asset retirement costs to 
service company property (including account 101.1 in Sec. 367.1011) 
related to the property that gives rise to the legal obligation. The 
asset retirement cost must be depreciated over the useful life of the 
related asset that gives rise to the obligations. For periods subsequent 
to the initial recording of the asset retirement obligation, a service 
company must recognize the period to period changes of the asset 
retirement obligation that result from the passage of time due to the 
accretion of the liability and any subsequent measurement changes to the 
initial liability for the legal obligation recorded in account 230, 
Asset retirement obligations (Sec. 367.2300), as follows:
    (1) The service company must record the accretion of the liability 
by debiting account 411.10, Accretion expense (Sec. 367.4118); and
    (2) The service company must recognize any subsequent measurement 
changes of the liability initially recorded in account 230, Asset 
retirement obligations (Sec. 367.2300), for each specific asset 
retirement obligation as an adjustment of that liability in account 230 
with the corresponding adjustment to service company property. The 
service company must on a timely basis monitor any measurement changes 
of the asset retirement obligations.
    (c) Gains or losses resulting from the settlement of asset 
retirement obligations associated with service company property 
resulting from the difference between the amount of the liability for 
the asset retirement obligation included in account 230, Asset 
retirement obligations (Sec. 367.2300), and the actual amount paid to 
settle the obligation shall be accounted for as follows:
    (1) Gains shall be credited to account 421, Miscellaneous income or 
loss (Sec. 367.4210), and;

[[Page 998]]

    (2) Losses shall be charged to account 426.5, Other deductions 
(Sec. 367.4265).
    (d) Separate subsidiary records must be maintained for each asset 
retirement obligation showing the initial liability and associated asset 
retirement cost, any incremental amounts of the liability incurred in 
subsequent reporting periods for additional layers of the original 
liability and related asset retirement cost, the accretion of the 
liability, the subsequent measurement changes to the asset retirement 
obligation, the depreciation and amortization of the asset retirement 
costs and related accumulated depreciation, and the settlement date and 
actual amount paid to settle the obligation. For purposes of analysis, a 
service company must maintain supporting documentation so as to be able 
to furnish accurately and expeditiously with respect to each asset 
retirement obligation the full details of the identity and nature of the 
legal obligation, the year incurred, the identity of the plant giving 
rise to the obligation, the full particulars relating to each component 
and supporting computations related to the measurement of the asset 
retirement obligation.



Sec. 367.23  Transactions with non-associate companies.

    When a service or construction is performed for non-associate 
companies at an amount other than cost, the amount of revenues in excess 
or deficiency of the cost on servicing the non-associate companies must 
be charged to account 458.4, Excess or deficiency on servicing non-
associate utility companies (Sec. 367.4584). A deficiency incurred in a 
project deemed beneficial to the associate companies may be charged to 
associate companies subject to disallowance by a State Commission or 
Federal Commission having jurisdiction over the rates or services of the 
associate companies. To the extent not charged, or if disallowed, the 
deficiency will be charged to account 458.4 (Sec. 367.4584). In 
computing charges to associate companies for any calendar year, any net 
credit in this account must be deducted from amounts reimbursable by 
associate companies as compensation for use of capital invested in the 
service company.



Sec. 367.24  Construction and service contracts for other companies.

    (a) Expenditures made in the performance of construction or service 
contracts, under which the service company undertakes projects to 
construct physical property for associate or non-associate companies 
must be recorded in Account 412, Cost and expenses of construction or 
other services (Sec. 367.4120). The service company must keep records 
pursuant to its cost allocation system indicating the cost of each 
contract or project, the amount of service costs allocated to the 
contracts, and the additional classification of expenditures relating to 
projects that will meet the accounting requirements of the company for 
which the work is performed.
    (b) Account 412 (Sec. 367.4120) will include:
    (1) The cost of materials, construction payrolls, outside services, 
and other expenses which are directly attributable to the performance of 
service or construction contracts for other companies.
    (2) The cost of goods procured directly attributable to the 
performance of service or construction contracts for other companies.
    (3) The related salaries, expense of officers and employees, pay of 
employees on the service company's regular staff specifically assigned 
to construction work, and other expenses of maintaining the service 
company's organization and equipment.
    (4) The support services performed by the service company in 
connection with the procurement of goods for associate companies.



Sec. 367.25  Determination of service cost.

    A service must be deemed at cost and fair allocation of costs 
requires an accurate accounting for the elements that makes up the 
aggregate expense of conducting the business of the service company. In 
the accounts prescribed in this part, the total amounts included in the 
expense accounts during any period plus the amount that appropriately 
may be added as compensation for the use of capital constitute cost 
during that period.

[[Page 999]]



Sec. 367.26  Departmental classification.

    Salaries and wages and all other costs must be classified by 
departmental or other functional category in accordance with the 
departmental organization of the service company to provide a readily 
available basis for analysis.



Sec. 367.27  Billing procedures.

    Charges for services to associate public-utility companies must be 
made monthly with sufficient information and in sufficient detail to 
permit such company, where applicable, to identify and classify the 
charge in terms of the system of accounts prescribed by the regulatory 
authorities to which it is subject. The information provided to 
associate public-utility companies must provide a summary of the 
accounts by service provided and showing the charges, classified as 
direct cost, indirect cost, and compensation for use of capital.



Sec. 367.28  Methods of allocation.

    Indirect costs and compensation for use of capital must be allocated 
to projects in accordance with the service company's applicable and 
currently effective methods of allocation. Both direct and allocated 
indirect costs on projects must be assigned among those companies in the 
same manner. The cost accumulation system must identify the methods of 
allocation and the accounts to be charged. Companies must be notified in 
writing of any change in the methods of allocation.



Sec. 367.29  Compensation for use of capital.

    A servicing transaction is deemed to be performed at no more than 
cost if the price of the service does not exceed a fair and equitable 
allocation of expenses plus reasonable compensation for necessary 
capital procured through the issuance of capital stock. Interest on 
borrowed capital and compensation for the use of capital must only 
represent a reasonable return on the amount of capital reasonably 
necessary for the performance of services or construction work for, or 
the sale of goods to, associate companies. The compensation may be 
estimated and must be computed monthly. The amount of compensation must 
be stated separately in each billing to the associate companies. An 
annual statement to support the amount of compensation for use of 
capital billed for the previous 12 months and how it was calculated must 
be supplied to each associate company at the end of the calendar year.



Sec. 367.30  Cost accumulation system for associate companies.

    Service companies must maintain a detailed classification of service 
costs, that permits costs to be identified with the functional processes 
of the associate companies served. To permit the classification, each 
service company must maintain a cost accumulation system, as described 
in Definitions Sec. 367.1(a)(12), for accumulating reimbursable costs 
and charges to the associate companies served, and maintain time records 
for all service company employees in order to support the accounting 
allocation of all expenses assignable to the types of services performed 
and chargeable to the associate companies served. Service company 
employee records must permit a ready identification of the hours worked, 
account numbers charged, and other code designations that facilitate 
proper classification.



             Subpart C_Service Company Property Instructions



Sec. 367.50  Service company property to be recorded at cost.

    (a) All amounts included in the accounts for service company 
property must be stated at the cost incurred by the service company, 
except for property acquired by lease which qualifies as capital lease 
property under General Instructions in Sec. 367.18, Criteria for 
classifying leases, and is recorded in Account 101.1, Property under 
capital leases (Sec. 367.1011).
    (b) When the consideration given for property is other than cash, 
the value of the consideration must be determined on a cash basis (See, 
however, Definitions Sec. 367.1(a)(11)). In the entry recording the 
transaction, the actual consideration must be described with sufficient 
particularity to identify it. The service company must be prepared

[[Page 1000]]

to furnish the Commission the particulars of its determination of the 
cash value of the consideration, if other than cash.
    (c) When property is purchased under a plan involving deferred 
payments, no charge must be made to the service company property 
accounts for interest, insurance, or other expenditures occasioned 
solely by such form of payment.
    (d) The service company property accounts must not include the cost 
or other value of service company property contributed to the company. 
Contributions in the form of money or its equivalent toward the 
construction of property must be credited to accounts charged with the 
cost of such construction. Property constructed from contributions of 
cash or its equivalent must be shown as a reduction to gross property 
constructed when assembling cost data for posting to property ledgers of 
accounts. The accumulated gross costs of property must be recorded as a 
debit in the plant ledger of accounts along with the related amount of 
contributions concurrently recorded as a credit.



Sec. 367.51  Components of construction.

    (a) For service companies, the cost of construction properly 
included in the service company property accounts must include, where 
applicable, the direct and overhead costs as listed and defined as 
follows:
    (1) Contract work includes amounts paid for work performed under 
contract by other companies, firms, or individuals, costs incident to 
the award of such contracts, and the inspection of the work.
    (2) Labor includes the pay and expenses of employees of the service 
company engaged in construction work, and related workmen's compensation 
insurance, payroll taxes and similar items of expense. It does not 
include the pay and expenses of employees that are distributed to 
construction through clearing accounts nor the pay and expenses included 
in other items in this section.
    (3)(i) Materials and supplies includes the purchase price at the 
point of free delivery plus customs duties, excise taxes, the cost of 
inspection, loading and transportation, the related stores expenses, and 
the cost of fabricated materials from the service company's shop. In 
determining the cost of materials and supplies used for construction, 
proper allowance must be made for unused materials and supplies, for 
materials recovered from temporary structures used in performing the 
work involved, and for discounts allowed and realized in the purchase of 
materials and supplies.
    (ii) The cost of individual items of equipment of small value (for 
example, $500 or less) or of short life, including small portable tools 
and implements, must not be charged to service company property accounts 
unless the correctness of the accounting is verified by current 
inventories. The cost must be charged to the appropriate operating 
expense or clearing accounts, according to the use of the items, or, if 
the items are consumed directly in construction work, the cost must be 
included as part of the cost of the construction.
    (4) Transportation includes the cost of transporting employees, 
materials and supplies, tools, purchased equipment, and other work 
equipment (when not under own power) to and from points of construction. 
It includes amounts paid to others as well as the cost of operating the 
service company's own transportation equipment. (See paragraph (a)(5) of 
this section.)
    (5) Special machine service includes the cost of labor (optional), 
materials and supplies, depreciation, and other expenses incurred in the 
maintenance, operation and use of special machines, such as steam 
shovels, pile drivers, derricks, ditchers, scrapers, material unloaders, 
and other labor saving machines; also expenditures for rental, 
maintenance and operation of machines of others. It does not include the 
cost of small tools and other individual items of small value or short 
life which are included in the cost of materials and supplies. (See 
paragraph (a)(3) of this section.) When a particular construction job 
requires the use for an extended period of time of special machines, 
transportation or other equipment, the associated net book cost, less 
the appraised or salvage value at

[[Page 1001]]

time of release from the job, must be included in the cost of 
construction.
    (6) Shop service includes the proportion of the expense of the 
service company's shop department assignable to construction work except 
that the cost of fabricated materials from the service company's shop 
must be included in materials and supplies.
    (7) Protection includes the cost of protecting the service company's 
property from fire or other casualties and the cost of preventing 
damages to others, or to the property of others, including payments for 
discovery or extinguishment of fires, cost of apprehending and 
prosecuting incendiaries, related witness fees, amounts paid to 
municipalities and others for fire protection, and other analogous items 
of expenditures in connection with construction work.
    (8) Injuries and damages includes expenditures or losses in 
connection with construction work on account of injuries to persons and 
damages to the property of others; also the cost of investigation of, 
and defense against, actions for the injuries and damages. Insurance 
recovered or recoverable on account of compensation paid for injuries to 
persons incident to construction must be credited to the account or 
accounts to which such compensation is charged. Insurance recovered or 
recoverable on account of property damages incident to construction must 
be credited to the account or accounts charged with the cost of the 
damages.
    (9) Privileges and permits includes payments for and expenses 
incurred in securing temporary privileges, permits or rights in 
connection with construction work, such as for the use of private or 
public property, streets, or highways, but it does not include rents.
    (10) Rents include amounts paid for the use of construction quarters 
and office space occupied by construction forces and amounts properly 
includible in construction costs for the facilities jointly used.
    (11) Engineering and supervision includes the portion of the pay and 
expenses of engineers, surveyors, draftsmen, inspectors, superintendents 
and their assistants applicable to construction work.
    (12) General administration capitalized includes the portion of the 
pay and expenses of the general officers and administrative and general 
expenses applicable to construction work.
    (13) Engineering services includes amounts paid to other companies, 
firms, or individuals engaged by the service company to plan, design, 
prepare estimates, supervise, inspect, or give general advice and 
assistance in connection with construction work.
    (14) Insurance includes premiums paid or amounts provided or 
reserved as self-insurance for the protection against loss and damages 
in connection with construction, by fire or other casualty injuries to 
or death of persons other than employees, damages to property of others, 
defalcation of employees and agents, and the nonperformance of 
contractual obligations of others. It does not include workmen's 
compensation or similar insurance on employees included as labor in 
paragraph (a)(2) of this section.
    (15) Law expenditures includes the general law expenditures incurred 
in connection with construction and the directly related court and legal 
costs, other than law expenses included in protection in paragraph 
(a)(7) of this section, and in injuries and damages in paragraph (a)(8) 
of this section.
    (16) Taxes include taxes on physical property (including land) 
during the period of construction and other taxes properly includible in 
construction costs before the facilities become available for service.
    (17) Interest cost on funds used during construction which are 
allowed to be capitalized following generally accepted accounting 
principles.
    (18) Earnings and expenses during construction. The earnings and 
expenses during construction must constitute a component of construction 
costs.
    (19) Training costs. When it is necessary that employees be trained 
to operate or maintain property that is being constructed and the 
property is not conventional in nature, or is new to the company's 
operations, these costs may be capitalized as a component of 
construction cost. Once property is placed in service, the 
capitalization of training costs must cease and

[[Page 1002]]

subsequent training costs must be expensed. (See Operating Expense 
Instructions in Sec. 367.83.)
    (20) Studies include the costs of studies such as safety or 
environmental studies mandated by regulatory bodies relative to property 
under construction. Studies relative to facilities in service must be 
charged to account 183, Preliminary survey and investigation charges 
(Sec. 367.1830).
    (21) Asset retirement costs. The costs recognized as a result of 
asset retirement obligations incurred during the construction and 
testing of service company property must constitute a component of 
construction costs.
    (b) [Reserved]



Sec. 367.52  Overhead construction costs.

    (a) All overhead construction costs, such as engineering, 
supervision, general office salaries and expenses, construction 
engineering and supervision by others than the service company, law 
expenses, insurance, injuries and damages, relief and pensions, taxes 
and interest, must be charged to particular jobs or units on the basis 
of the amounts of the reasonably applicable overheads.
    (b) As far as practicable, the determination of payroll charges 
includible in construction overheads must be based on the related time 
card distributions. Where this procedure is impractical, special studies 
must be made periodically of the time of supervisory employees devoted 
to construction activities to the end that only the overhead costs that 
have a definite relation to construction must be capitalized.
    (c) The records supporting the entries for overhead construction 
costs must be kept so as to show the total amount of each overhead for 
each year, the nature and amount of each overhead expenditure charged to 
each construction project and to each property account, and the bases of 
distribution of such costs.



Sec. 367.53  Service company property purchased or sold.

    (a) When service company property is acquired by purchase, merger, 
consolidation, liquidation, or otherwise, after the effective date of 
this system of accounts, the costs of acquisition, including related 
incidental expenses, must be charged to the appropriate service company 
property accounts and account 107, Construction work in progress (Sec. 
367.1070), as appropriate.
    (b) If property acquired is in a physical condition so that it is 
necessary to rehabilitate it substantially in order to bring the 
property up to the standards of the service company, the cost of the 
work, except replacements, must be accounted for as a part of the 
purchase price of the property.
    (c) Unless otherwise authorized by the Commission, all service 
company property acquired from an affiliate company must be recorded at 
its book value. Additionally, if property is acquired that is in excess 
of $10 million and has been previously devoted to public service at a 
price above book value, the service company must file with the 
Commission the proposed journal entries associated with the acquisition 
within six months from the date of acquisition of the property.
    (d) When service company property is sold, conveyed, or transferred 
to another by sale, merger, consolidation, or otherwise, the book cost 
of the property sold or transferred to another must be credited to the 
appropriate service company property accounts. The amounts (estimated, 
if not known) carried with respect the accounts for accumulated 
provision for depreciation and amortization must be charged to those 
accounts. The difference, if any, between the net amount of debits and 
credits and the consideration received for the property (less 
commissions and other expenses of making the sale) must be included in 
account 421.1, Gain on disposition of property (Sec. 367.4211), or 
account 421.2, Loss on disposition of property (Sec. 367.4212).
    (e) In connection with the acquisition of service company property 
previously devoted to service company operations or acquired from an 
associate company, the service company must procure, if possible, all 
existing records relating to the property acquired or related certified 
copies, and must preserve the records in conformity with regulations or 
practices governing the preservation of records of its own construction.

[[Page 1003]]



Sec. 367.54  Expenditures on leased property.

    (a) The cost of substantial initial improvements (including repairs, 
rearrangements, additions, and betterments) made to prepare service 
company property leased to be used for a period of more than one year, 
and the cost of subsequent substantial additions, replacements, or 
betterments to the property, must be charged to the service company 
property account appropriate for the class of property leased. If the 
service life of the improvements is terminable by action of the lease, 
the cost, less net salvage, of the improvements must be spread over the 
life of the lease by charges to account 404, Amortization of limited-
term service property (Sec. 367.4040). However, if the service life is 
not terminated by action of the lease but by depreciation proper, the 
cost of the improvements, less net salvage, must be accounted for as 
depreciable property. The provisions of this paragraph are applicable to 
property leased under either capital leases or operating leases.
    (b) If improvements made to property leased for a period of more 
than one year are of relatively minor cost, or if the lease is for a 
period of not more than one year, the cost of the improvements must be 
charged to the account in which the rent is included, either directly or 
by amortization.



Sec. 367.55  Land and land rights.

    (a) The accounts for land and land rights must include the cost of 
land owned in fee by the service company and rights. Interests, and 
privileges held by the service company in land owned by others, such as 
leaseholds, easements, water and water power rights, diversion rights, 
submersion rights, rights-of-way, and other like interests in land. Do 
not include in the accounts for land and land rights and rights-of-way 
costs incurred in connection with first clearing and grading of land and 
rights-of-way and the damage costs associated with the construction and 
installation of property. The costs must be included in the appropriate 
property accounts directly benefited.
    (b) Where special assessments for public improvements provide for 
deferred payments, the full amount of the assessments must be charged to 
the appropriate land account and the unpaid balance must be carried in 
an appropriate liability account. Interest on unpaid balances must be 
charged to the appropriate interest account. If any part of the cost of 
public improvements is included in the general tax levy, the related 
amount must be charged to the appropriate tax account.
    (c) The net profit from the sale of timber, cord wood, sand, gravel, 
other resources or other property acquired with the rights-of-way or 
other lands must be credited to the appropriate property account to 
which it is related. Where land is held for a considerable period of 
time and timber and other natural resources on the land at the time of 
purchase increases in value, the net profit (after giving effect to the 
cost of the natural resources) from the sales of timber or its products 
or other natural resources must be credited to the appropriate operating 
income account when the land has been recorded in account 101, Service 
company property (Sec. 367.1010), otherwise to account 421, 
Miscellaneous income or loss (Sec. 367.4210).
    (d) Separate entries must be made for the acquisition, transfer, or 
retirement of each parcel of land, and each land right (except rights of 
way for distribution lines), or water right, having a life of more than 
one year. A record must be maintained showing the nature of ownership, 
full legal description, area, map reference, purpose for which used, 
city, county, and tax district on which situated, from whom purchased or 
to whom sold, payment given or received, other costs, contract date and 
number, date of recording of deed, and book and page of record. Entries 
transferring or retiring land or land rights must refer to the original 
entry recording its acquisition.
    (e) Any difference between the amount received from the sale of land 
or land rights, less agents' commissions and other costs incident to the 
sale, and the book cost of such land or rights, must be included in 
account 421.1, Gain on disposition of property (Sec. 367.4211), or 
account 421.2, Loss on disposition of property (Sec. 367.4212), when 
the property has been recorded in account 101, Service company property

[[Page 1004]]

(Sec. 367.1010). Appropriate adjustments of the accounts must be made 
with respect to any structures or improvements located on the land sold.
    (f) The cost of buildings and other improvements (other than public 
improvements) must not be included in the land accounts. If, at the time 
of acquisition of an interest in land the interest extends to buildings 
or other improvements (other than public improvements) that are then 
devoted to operations, the land and improvements must be separately 
appraised and the cost allocated to land and buildings or improvements 
on the basis of the appraisals. If the improvements are removed or 
wrecked without being used in operations, the cost of removing or 
wrecking must be charged and the salvage credited to the account in 
which the cost of the land is recorded.
    (g) Provisions must be made for amortizing amounts carried in the 
accounts for limited-term interests in land so as to apportion equitably 
the cost of each interest over the life thereof. (See account 111, 
Accumulated provision for amortization of service company property in 
Sec. 367.1110, and account 404, Amortization of limited-term property 
in Sec. 367.4040.)
    (h) The items of cost to be included in the accounts for land and 
land rights are as follows:
    (1) Bulkheads, buried, not requiring maintenance or replacement.
    (2) Cost, first, of acquisition including mortgages and other liens 
assumed (but not the related subsequent interest).
    (3) Condemnation proceedings, including court and counsel costs.
    (4) Consents and abutting damages, payment for.
    (5) Conveyancers' and notaries' fees.
    (6) Fees, commissions, and salaries to brokers, agents and others in 
connection with the acquisition of the land or land rights.
    (7) Leases, cost of voiding upon purchase to secure possession of 
land.
    (8) Removing, relocating, or reconstructing, property of others, 
such as buildings, highways, railroads, bridges, cemeteries, churches, 
telephone and power lines, in order to acquire quiet possession.
    (9) Retaining walls unless identified with structures.
    (10) Special assessments levied by public authorities for public 
improvements on the basis of benefits for new roads, new bridges, new 
sewers, new curbing, new pavements, and other public improvements, but 
not taxes levied to provide for the maintenance of such improvements.
    (11) Surveys in connection with the acquisition, but not amounts 
paid for topographical surveys and maps where the costs are attributable 
to structures or plant equipment erected or to be erected or installed 
on the land.
    (12) Taxes assumed, accrued to date of transfer of title.
    (13) Title, examining, clearing, insuring and registering in 
connection with the acquisition and defending against claims relating to 
the period prior to the acquisition.
    (14) Appraisals prior to closing title.
    (15) Cost of dealing with distributees or legatees residing outside 
of the state or county, such as recording power of attorney, recording 
will or exemplification of will, recording satisfaction of state tax.
    (16) Filing satisfaction of mortgage.
    (17) Documentary stamps.
    (18) Photographs of property at acquisition.
    (19) Fees and expenses incurred in the acquisition of water rights 
and grants.
    (20) Cost of fill to extend bulkhead line over land under water, 
where riparian rights are held, which is not occasioned by the erection 
of a structure.
    (21) Sidewalks and curbs constructed by the service company on 
public property.
    (22) Labor and expenses in connection with securing rights of way, 
where performed by company employees and company agents.



Sec. 367.56  Structures and improvements.

    (a) The accounts for structures and improvements must include the 
cost of all buildings and facilities to house, support, or safeguard 
property or persons, including all fixtures permanently attached to and 
made a part of buildings and that cannot be removed from the buildings 
and facilities without cutting into the walls, ceilings, or

[[Page 1005]]

floors, or without in some way impairing the buildings, and improvements 
of a permanent character on, or to, land. Also include those costs 
incurred in connection with the first clearing and grading of land and 
rights-of-way and the damage costs associated with construction and 
installation of property.
    (b) The cost of specially-provided foundations not intended to 
outlast the machinery or apparatus for which provided, and associated 
costs, such as angle irons, castings, and other items installed at the 
base of an item of equipment, must be charged to the same account as the 
cost of the machinery, apparatus, or equipment.
    (c) Where the structure of a dam also forms the foundation of the 
service company building, the foundation must be considered a part of 
the dam.
    (d) The cost of disposing of materials excavated in connection with 
construction of structures must be considered as a part of the cost of 
that work, except as follows:
    (1) When the material is used for filling, the cost of loading, 
hauling, and dumping must be equitably apportioned between the work in 
connection with which the removal occurs and the work in connection with 
which the material is used.
    (2) When the material is sold, the net amount realized from the 
sales must be credited to the work in connection with which the removal 
occurs. If the amount realized from the sale of excavated materials 
exceeds the removal costs and the costs in connection with the sale, the 
excess must be credited to the land account in which the site is 
carried.
    (e) Lighting or other fixtures temporarily attached to buildings for 
purposes of display or demonstration must not be included in the cost of 
the building but in the appropriate equipment account.
    (f) This account must include the following items:
    (1) Architects'' plans and specifications including supervision.
    (2) Ash pits (when located within the building).
    (3) Athletic field structures and improvements.
    (4) Boilers, furnaces, piping, wiring, fixtures, and machinery for 
heating, lighting, signaling, ventilating, and air-conditioning systems, 
plumbing, vacuum cleaning systems, incinerator and smoke pipe, flues and 
similar items.
    (5) Bulkheads, including dredging, riprap fill, piling, decking, 
concrete, fenders, and similar items when exposed and subject to 
maintenance and replacement.
    (6) Chimneys.
    (7) Coal bins and bunkers.
    (8) Commissions and fees to brokers, agents, architects, and others.
    (9) Conduit (not to be removed) with its contents.
    (10) Damages to abutting property during construction.
    (11) Docks.
    (12) Door checks and door stops.
    (13) Drainage and sewerage systems.
    (14) Elevators, cranes, hoists, and the machinery for operating 
them.
    (15) Excavation, including shoring, bracing, bridging, refill and 
disposal of excess excavated material, cofferdams around foundation, 
pumping water from cofferdams during construction, and test borings.
    (16) Fences and fence curbs (not including protective fences 
isolating items of equipment, which must be charged to the appropriate 
equipment account).
    (17) Fire protection systems when forming a part of a structure.
    (18) Flagpole.
    (19) Floor covering (permanently attached).
    (20) Foundations and piers for machinery, constructed as a permanent 
part of a building or other item listed in this paragraph (f).
    (21) Grading and clearing when directly occasioned by the building 
of a structure.
    (22) Intrasite communication system, poles, pole fixtures, wires, 
and cables.
    (23) Landscaping, lawns, shrubbery and similar items.
    (24) Leases, voiding upon purchase to secure possession of 
structures.
    (25) Leased property, expenditures on.
    (26) Lighting fixtures and outside lighting system.
    (27) Mail chutes when part of a building.

[[Page 1006]]

    (28) Marquee, permanently attached to building.
    (29) Painting, first cost.
    (30) Permanent paving, concrete, brick, flagstone, asphalt, within 
the property lines.
    (31) Partitions, including movable.
    (32) Permits and privileges.
    (33) Platforms, railings, and gratings when constructed as a part of 
a structure.
    (34) Power boards for services to a building.
    (35) Refrigerating systems for general use.
    (36) Retaining walls except when identified with land.
    (37) Roadways, railroads, bridges, and trestles intrasite except 
railroads provided for in equipment accounts.
    (38) Roofs.
    (39) Scales, connected to and forming a part of a structure.
    (40) Screens.
    (41) Sewer systems, for general use.
    (42) Sidewalks, culverts, curbs and streets constructed by the 
service company on its property.
    (43) Sprinkling systems.
    (44) Sump pumps and pits.
    (45) Stacks--brick, steel, or concrete, when set on foundation 
forming part of general foundation and steelwork of a building.
    (46) Steel inspection during construction.
    (47) Storage facilities constituting a part of a building.
    (48) Storm doors and windows.
    (49) Subways, areaways, and tunnels, directly connected to and 
forming part of a structure.
    (50) Tanks, constructed as part of a building or as a distinct 
structural unit.
    (51) Temporary heating during construction (net cost).
    (52) Temporary water connection during construction (net cost).
    (53) Temporary shanties and other facilities used during 
construction (net cost).
    (54) Topographical maps.
    (55) Tunnels, intake and discharge, when constructed as part of a 
structure, including sluice gates, and those constructed to house mains.
    (56) Vaults constructed as part of a building.
    (57) Watchmen's sheds and clock systems (net cost when used during 
construction only).
    (58) Water basins or reservoirs.
    (59) Water front improvements.
    (60) Water meters and supply system for a building or for general 
company purposes.
    (61) Water supply piping, hydrants and wells.
    (62) Wharves.
    (63) Window shades and ventilators.
    (64) Yard drainage system.
    (65) Yard lighting system.
    (66) Yard surfacing, gravel, concrete, or oil. (First cost only.)
    (g) Structures and Improvements accounts must be credited with the 
cost of structures created to house, support, or safeguard equipment, 
the use of which has terminated with the removal of the equipment with 
which they are associated even though they have not been physically 
removed.



Sec. 367.57  Equipment.

    (a) The cost of equipment chargeable to the service company property 
accounts, unless otherwise indicated in the text of an equipment 
account, includes the related net purchase price, sales taxes, 
investigation and inspection expenses necessary to such purchase, 
expenses of transportation when borne by the service company, labor 
employed, materials and supplies consumed, and expenses incurred by the 
service company in unloading and placing the equipment in readiness to 
operate. Also include those costs incurred in connection with the first 
clearing and grading of land and rights-of-way and the damage costs 
associated with construction and installation of property.
    (b) Exclude from equipment accounts hand and other portable tools, 
that are likely to be lost or stolen or that have relatively small value 
(for example, $500 or less) or short life, unless the correctness of the 
related accounting as service company property is verified by current 
inventories. Special tools acquired and included in the purchase price 
of equipment must be included in the appropriate property account. 
Portable drills and similar tool equipment when used in connection with 
the

[[Page 1007]]

operation and maintenance of a particular plant or department, such as 
production, transmission, distribution, or similar items, or in stores, 
must be charged to the property account appropriate for their use.
    (c) The equipment accounts must include angle irons and similar 
items that are installed at the base of an item of equipment, but piers 
and foundations that are designed to be as permanent as the buildings 
that house the equipment, or that are constructed as a part of the 
building and that cannot be removed without cutting into the walls, 
ceilings or floors or without in some way impairing the building, must 
be included in the building accounts.
    (d) The cost of efficiency or other tests made subsequent to the 
date equipment becomes available for service must be charged to the 
appropriate expense accounts, except that tests to determine whether 
equipment meets the specifications and requirements as to efficiency, 
performance, and similar items, guaranteed by manufacturers, made after 
operations have commenced and within the period specified in the 
agreement or contract of purchase may be charged to the appropriate 
service company property account.



Sec. 367.58  Property record system required for service company property.

    (a) Each service company must keep its cost allocation system so as 
to show the nature of each addition to or retirement of service company 
property, the related total cost, the source or sources of costs, and 
the property account or accounts to which charged or credited. Records 
covering jobs of short duration may be cleared monthly.
    (b) Each service company must maintain records in which, for each 
property 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.



Sec. 367.59  Additions and retirements of property.

    (a) For the purpose of avoiding undue refinement in accounting for 
additions to and retirements and replacements of service company 
property, all property will be considered as consisting of retirement 
units and minor items of property. Each company must maintain a written 
property units listing for use in accounting for additions and 
retirements of property and apply the listing consistently.
    (b) The addition and retirement of retirement units must be 
accounted for as follows:
    (1) When a retirement unit is added, the related cost must be added 
to the appropriate service company property account.
    (2) When a retirement unit is retired, with or without replacement, 
the related book cost must be credited to the property account in which 
it is included, determined in the manner provided in paragraph (d) of 
this section. If the retirement unit is of a depreciable class, the book 
cost of the unit retired and credited to service company property must 
be charged to the accumulated provision for depreciation applicable to 
the property. The cost of removal and the salvage must be charged or 
credited, as appropriate, to the depreciation account.
    (c) The addition and retirement of minor items of property must be 
accounted for as follows:
    (1) When a minor item of property that did not previously exist is 
added to service company property, the related cost must be accounted 
for in the same manner as for the addition of a retirement unit, as 
provided in paragraph (b)(1) of this section, if a substantial addition 
results, otherwise the charge must be to the appropriate maintenance 
expense account.
    (2) When a minor item of property is retired and not replaced, the 
related book cost must be credited to the property account in which it 
is included; and, in the event the minor item is a part of depreciable 
property, the account for accumulated provision for depreciation must be 
charged with the book cost and cost of removal and credited with the 
salvage. If, however, the book cost of the minor item retired and not 
replaced has been or will be accounted for by its inclusion in the 
retirement unit of which it is a part when the unit is retired, no 
separate credit to the property account is required when the minor item 
is retired.

[[Page 1008]]

    (3) When a minor item of depreciable property is replaced 
independently of the retirement unit of which it is a part, the cost of 
replacement must be charged to the maintenance account appropriate for 
the item. However, if the replacement effects a substantial betterment 
(the primary aim of which is to make the property affected more useful, 
more efficient, of greater durability, or of greater capacity), the 
excess cost of the replacement over the estimated cost at current prices 
of replacing without betterment must be charged to the appropriate 
property account.
    (d) The book cost of service company property retired must be the 
amount at which the property is included in the property accounts, 
including all components of construction costs. The book cost must be 
determined from the service company's records and, if this cannot be 
done, it must be estimated. Service companies must furnish the 
particulars of the 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 related small cost, an appropriate average 
book cost of the units, with due allowance for any differences in size 
and character, must be used as the book cost of the units retired.
    (e) The book cost of land retired must be credited to the 
appropriate land account. If the land is sold, the difference between 
the book cost (less any accumulated provision for related depreciation 
or amortization that has been authorized and provided) and the sale 
price of the land (less commissions and other expenses of making the 
sale) must be recorded in accounts 421.1, Gain on disposition of 
property (Sec. 367.4211) or 421.2, Loss on disposition of property 
(Sec. 367.4212), as appropriate.
    (f) The book cost less net salvage of depreciable service company 
property retired must be charged in its entirety to account 108, 
Accumulated provision for depreciation of service company property 
(Sec. 367.1080).
    (g) The accounting for the retirement of amounts included in account 
303, Miscellaneous intangible property (Sec. 367.3030), and the items 
of limited-term interest in land included in the accounts for land and 
land rights, must be as provided for in the text of account 111, 
Accumulated provision for amortization of service company property 
(Sec. 367.1110), account 404, Amortization of limited-term property 
(Sec. 367.4040), and account 405, Amortization of other property (Sec. 
367.4050).



                Subpart D_Operating Expense Instructions



Sec. 367.80  Supervision and engineering.

    (a) The supervision and engineering includible in the operating 
expense accounts must consist of the pay and expenses of 
superintendents, engineers, clerks, other employees and consultants 
engaged in supervising and directing the operation and maintenance of 
each service company function. Wherever allocations are necessary in 
order to arrive at the amount to be included in any account, the method 
and basis of allocation must be reflected by underlying records.
    (b) This account must include the following labor items:
    (1) Special tests to determine efficiency of equipment operation.
    (2) Preparing or reviewing budgets, estimates, and drawings relating 
to operation or maintenance for departmental approval.
    (3) Preparing instructions for operations and maintenance 
activities.
    (4) Reviewing and analyzing operating results.
    (5) Establishing organizational setup of departments and executing 
related changes.
    (6) Formulating and reviewing routines of departments and executing 
related changes.
    (7) General training and instruction of employees by supervisors 
whose pay is chargeable to the training and instruction. Specific 
instruction and training in a particular type of work is chargeable to 
the appropriate functional expense account (See Service Company Property 
in Sec. 367.51(a)(19)).
    (8) Secretarial work for supervisory personnel, but not general 
clerical and stenographic work chargeable to other accounts.
    (c) This account must include the following expense items:
    (1) Consultants' fees and expenses.

[[Page 1009]]

    (2) Meals, traveling and incidental expenses.



Sec. 367.81  Maintenance.

    (a) The cost of maintenance chargeable to the various operating 
expense and clearing accounts includes labor, materials, overheads and 
other expenses incurred in maintenance work. A list of work operations 
applicable generally to service company property is included in 
paragraph (d) of this section. Other work operations applicable to 
specific classes of property are listed in functional maintenance 
expense accounts.
    (b) Materials recovered in connection with the maintenance of 
property must be credited to the same account to which the maintenance 
cost was charged.
    (c) Maintenance of property leased from others must be treated as 
provided in operating expense instruction in Sec. 367.82.
    (d) This account must include the following items:
    (1) Direct field supervision of maintenance.
    (2) Inspecting, testing, and reporting on condition of property 
specifically to determine the need for repairs, replacements, 
rearrangements and changes and inspecting and testing the adequacy of 
repairs which have been made.
    (3) Work performed specifically for the purpose of preventing 
failure, restoring serviceability or maintaining life of property.
    (4) Rearranging and changing the location of property.
    (5) Repairing for reuse materials recovered from property.
    (6) Testing for locating and clearing trouble.
    (7) Net cost of installing, maintaining, and removing temporary 
facilities to prevent interruptions in service.
    (8) Replacing or adding minor items of plant which do not constitute 
a retirement unit. (See Service Company Property Instruction in Sec. 
367.59.)



Sec. 367.82  Rents.

    (a) The rent expense accounts provided under the several functional 
groups of expense accounts must include all rents, including taxes paid 
by the lessee on leased property, for property used in the operations of 
the service company, except:
    (1) Minor amounts paid for occasional or infrequent use of any 
property or equipment and all amounts paid for use of equipment that, if 
owned, would be includible in property accounts 391 to 398 (Sec. Sec. 
367.3910 to 367.3980), inclusive, that must be treated as an expense 
item and included in the appropriate functional account, and
    (2) Rents that are chargeable to clearing accounts, and distributed 
from the clearing accounts to the appropriate account. If rents cover 
property used for more than one function, such as production and 
transmission, or by more than one department, the rents must be 
apportioned to the appropriate rent expense or clearing accounts of each 
department on an actual, or, if necessary, an estimated basis.
    (b) When a portion of property or equipment rented from others for 
use in connection with service company operations is subleased, the 
revenue derived from the subleasing must be credited to the rent revenue 
account in operating revenues. However, if the rent was charged to a 
clearing account, amounts received from subleasing the property must be 
credited to the clearing account.
    (c) The cost, when incurred by the lessee, of operating and 
maintaining leased property, must be charged to the accounts appropriate 
for the expense if the property were owned.
    (d) The cost incurred by the lessee of additions and replacements to 
property leased from others must be accounted for as provided in Service 
Company Property Instruction in Sec. 367.54.



Sec. 367.83  Training costs.

    When it is necessary that employees be trained to specifically 
operate or maintain facilities that are being constructed, the related 
costs must be accounted for as a current operating and maintenance 
expense. These expenses must be charged to the appropriate functional 
accounts currently as they are incurred. However, when the training 
costs involved relate to facilities that are not conventional in nature, 
or are new to the service company's operations, these costs may be 
capitalized

[[Page 1010]]

until the time that the facilities are ready for functional use.



                     Subpart E_Special Instructions



Sec. 367.100  Accounts 131-174, Current and accrued assets.

    Current and accrued assets are cash, those assets which are readily 
convertible into cash or are held for current use in operations or 
construction, current claims against others, payment of which is 
reasonably assured, and amounts accruing to the service company that are 
subject to current settlement, except those items for which accounts 
other than those designated as current and accrued assets are provided. 
There must not be included in the group of accounts designated as 
current and accrued assets any item, the amount or collectibility of 
which is not reasonably assured, unless an adequate provision for the 
related possible loss has been made. Items of current character but of 
doubtful value may be written down and for record purposes carried in 
these accounts at nominal value.



Sec. 367.101  Accounts 231-243, Current and accrued liabilities.

    Current and accrued liabilities are those obligations which have 
either matured or which become due within one year from the date of 
issuance or assumption, except for: bonds, receivers' certificates and 
similar obligations which must be classified as long-term debt until 
date of maturity; accrued taxes, such as income taxes, which must be 
classified as accrued liabilities even though payable more than one year 
from date; compensation awards, which must be classified as current 
liabilities regardless of date due; and minor amounts payable in 
installments which may be classified as current liabilities. If a 
liability is due more than one year from date of issuance or assumption 
by the service company, it shall be credited to a long-term debt account 
appropriate for the transaction, except, however, the current 
liabilities previously mentioned.



Sec. 367.102  Accounts 408.1 and 408.2, Taxes other than income taxes.

    (a) These accounts must include the amounts of ad valorem, gross 
revenue or gross receipts taxes, state unemployment insurance, franchise 
taxes, Federal excise taxes, social security taxes, and all other taxes 
assessed by Federal, state, county, municipal, or other local 
governmental authorities, except income taxes.
    (b) These accounts shall be charged in each accounting period with 
the amounts of taxes which are applicable to each account, with 
concurrent credits to account 236, Taxes accrued (Sec. 367.2360), or 
account 165, Prepayments (Sec. 367.1650), as appropriate. When it is 
not possible to determine the exact amounts of taxes, the amounts shall 
be estimated and adjustments made in current accruals as the actual tax 
levies become known.
    (c) Special assessments for street and similar improvements must be 
included in the appropriate service company property account.
    (d) Taxes specifically applicable to construction must be included 
in the cost of construction.
    (e) Gasoline and other sales taxes must be charged as far as 
practicable to the same account as the materials on which the tax is 
levied.
    (f) Social security and other forms of so-called payroll taxes must 
be distributed to utility and non-utility functions on a basis related 
to payroll. Amounts applicable to construction must be charged to the 
appropriate plant account.
    (g) Interest on tax refunds or deficiencies must not be included in 
these accounts but in accounts 419, Interest and dividend income (Sec. 
367.4190), or 431, Other interest expense (Sec. 367.4310), as 
appropriate.



Sec. 367.103  Accounts 409.1, 409.2, and 409.3, Income taxes.

    (a) These accounts must include the amounts of local, state and 
Federal income taxes on income properly accruable during the period 
covered by the income statement to meet the actual liability for such 
taxes. Concurrent credits for the tax accruals must be made to account 
236, Taxes accrued (Sec. 367.2360), and as the exact amounts of

[[Page 1011]]

taxes become known, the current tax accruals must be adjusted by charges 
or credits to these accounts, so that these accounts include the actual 
taxes payable by the service company.
    (b) The accruals for income taxes shall be apportioned to Operating 
Income, Other Income and Deductions, and Extraordinary Items so that, as 
nearly as practicable, each tax will be included in the appropriate 
account based on the income which gave rise to the tax.
    (c) Taxes assumed by the service company on interest must be charged 
to account 431, Other interest expense (Sec. 367.4310).
    (d) Interest on tax refunds or deficiencies must not be included in 
these accounts but in account 419, Interest and dividend income (Sec. 
367.4190), or account 431, Other interest expense (Sec. 367.4310), as 
appropriate.



Sec. 367.104  Accounts 410.1, 410.2, 411.1, and 411.2, Provision for deferred 

income taxes.

    (a) Accounts 410.1 (Sec. 367.4101) and 410.2 (Sec. 367.4102) must 
be debited, and Accumulated Deferred Income Taxes must be credited, with 
amounts equal to any current deferrals of taxes on income or any 
allocations of deferred taxes originating in prior periods, as provided 
by the texts of accounts 190 (Sec. 367.1900), 282 (Sec. 367.2820), and 
283 (Sec. 367.2830). There must not be netted against entries required 
to be made to these accounts any credit amounts appropriately includible 
in accounts 411.1 (Sec. 367.4111) or 411.2 (Sec. 367.4112).
    (b) Accounts 411.1 (Sec. 367.4111) and 411.2 (Sec. 367.4112) must 
be credited, and Accumulated Deferred Income Taxes must be debited, with 
amounts equal to any allocations of deferred taxes originating in prior 
periods or any current deferrals of taxes on income, as provided by the 
texts of accounts 190 (Sec. 367.1900), 282 (Sec. 367.2820), and 283 
(Sec. 367.2830). There must not be netted against entries required to 
be made to these accounts any debit amounts appropriately includible in 
account 410.1 (Sec. 367.4101) or 410.2 (Sec. 367.4102).



Sec. 367.105  Accounts 411.4, and 411.5, Investment tax credit adjustments.

    (a) Account 411.4 (Sec. 367.4114) must be debited with the amounts 
of investment tax credits related to service company property that are 
credited to account 255, Accumulated deferred investment tax credits 
(Sec. 367.2550), by companies which do not apply the entire amount of 
the benefits of the investment credit as a reduction of the overall 
income tax expense in the year in which such credit is realized (See 
account 255 in Sec. 367.2550).
    (b) Account 411.4 (Sec. 367.4114) must be credited with the amounts 
debited to account 255 (Sec. 367.2550) for proportionate amounts of tax 
credit deferrals allocated over the average useful life of service 
company property to which the tax credits relate or such lesser period 
of time as may be adopted and consistently followed by the company.
    (c) Account 411.5 (Sec. 367.4115) must also be debited and credited 
as directed in paragraphs (a) and (b), for investment tax credits 
related to other income and deductions.



Sec. 367.106  Accounts 426.1, 426.2, 426.3, 426.4, and 426.5, Miscellaneous 

expense accounts.

    These accounts must include miscellaneous expense items which are 
nonoperating in nature but which are properly deductible before 
determining total income before interest charges.



                Subpart F_Balance Sheet Chart of Accounts

                        Service Company Property



Sec. 367.1010  Account 101, Service company property.

    (a) This account must include the cost of service company property, 
included in accounts 301 (Sec. 367.3010), 303 (Sec. 367.3030) and 389 
to 399.1 (Sec. Sec. 376.3890 to 367.3991), owned and used by the 
service company in its operations, and having an expectation of life in 
service of more than one year from date of installation.
    (b) The cost of additions to, and betterments of, property leased 
from others, that are includible in this account, must be recorded in 
subaccounts separate and distinct from those relating to

[[Page 1012]]

owned property. (See Service Company Property Instruction in Sec. 
367.54.)



Sec. 367.1011  Account 101.1, Property under capital leases.

    (a) This account must include the amount recorded under capital 
leases for property leased from others and used by the service company 
in its operations.
    (b) The property included in this account must be classified 
separately according to detailed accounts 301 (Sec. 367.3010), 303 
(Sec. 367.3030) and 389 to 399.1 (Sec. Sec. 367.3890 to 367.3991) 
prescribed for service company property.
    (c) Records must be maintained with respect to each capital lease 
reflecting:
    (1) Name of lessor,
    (2) Basic details of lease,
    (3) Terminal date,
    (4) Original cost or fair market value of property leased,
    (5) Future minimum lease payments,
    (6) Executory costs,
    (7) Present value of minimum lease payments,
    (8) The amount representing interest and the interest rate used, and
    (9) Expenses paid.



Sec. 367.1060  Account 106, Completed construction not classified.

    At the end of the year or such other date as a balance sheet may be 
required by the Commission, this account must include the total of the 
balances of construction projects for service company property which has 
been completed and placed in service but have not been classified for 
transfer to the detailed service company property accounts.



Sec. 367.1070  Account 107, Construction work in progress.

    (a) This account must include the total of the balances of 
construction projects for service company property in process of 
construction.
    (b) Construction projects must be cleared from this account as soon 
as practicable after completion of the job. Further, if a project is 
designed to consist of two or more units that may be placed in service 
at different dates, any expenditures that are common to and that will be 
used in the operation of the project as a whole must be included in 
service company property upon the completion and the readiness for 
service of the first unit. Any expenditures that are identified 
exclusively with units of property not yet in service must be included 
in this account.
    (c) Expenditures on research, development, and demonstration 
projects for construction of facilities are to be included in a separate 
subaccount in this account. Records must be maintained to show 
separately each project along with complete detail of the nature and 
purpose of the research, development, and demonstration project together 
with the related costs.



Sec. 367.1080  Account 108, Accumulated provision for depreciation of service 

company property.

    (a) This account must be credited with the following:
    (1) Amounts charged to account 403, Depreciation expense (Sec. 
367.4030), or to clearing accounts for current depreciation expense for 
service company property.
    (2) Amounts charged to account 416, Costs and expenses of 
merchandising, jobbing, and contract work (Sec. 367.4160), or to 
clearing accounts for current depreciation expense.
    (3) Amounts of depreciation applicable to properties acquired. (See 
Service Company Property Instruction in Sec. 367.53.)
    (4) Amounts of depreciation applicable to service company property 
donated to the service company.
    (b) The service company must maintain separate subaccounts for 
depreciation applicable to service company property.
    (c) At the time of retirement of depreciable service company 
property, this account must be charged with the book cost of the 
property retired and the cost of removal, and must be credited with the 
salvage value and any other amounts recovered, such as insurance.
    (d) The subsidiary records for this account must reflect the current 
credits and debits to this account in sufficient detail to show the 
following separately:
    (1) The amount of accrual for depreciation,
    (2) The book cost of property retired,
    (3) Cost of removal,

[[Page 1013]]

    (4) Salvage, and
    (5) Other items, including recoveries from insurance.
    (e) The service company is restricted in its use of the accumulated 
provision for depreciation to the purposes identified in paragraphs (a) 
through (d) of this section. It must not transfer any portion of this 
account to retained earnings or make any other use of the depreciation 
without authorization by the Commission.



Sec. 367.1110  Account 111, Accumulated provision for amortization of service 

company property.

    (a) This account must be credited with the following:
    (1) Amounts charged to account 404, Amortization of limited-term 
property (Sec. 367.4040), for the current amortization of limited-term 
service company property investments.
    (2) Amounts charged to account 405, Amortization of other property 
(Sec. 367.4050).
    (3) Amounts charged to account 425, Miscellaneous amortization 
(Sec. 367.4250), for the amortization of intangible or other property, 
that does not have a definite or terminable life and is not subject to 
charges for depreciation expense, with Commission approval.
    (b) The service company must maintain subaccounts of this account 
for the amortization applicable to service company property and property 
leased to others.
    (c) When any property to which this account applies is sold, 
relinquished, or otherwise retired from service, this account must be 
charged with the amount previously credited in respect to the property. 
The book cost of the retired property less the amount chargeable to this 
account and less the net proceeds realized at retirement must be 
included in account 421.1, Gain on disposition of property (Sec. 
367.4211), or account 421.2, Loss on disposition of property (Sec. 
367.4212), as appropriate.
    (d) For general ledger and balance sheet purposes, this account must 
be regarded and treated as a single composite provision for 
amortization. The subsidiary records must reflect the current credits 
and debits to this account in sufficient detail to show the following 
separately:
    (1) The amount of accrual for amortization,
    (2) The book cost of property retired,
    (3) Cost of removal,
    (4) Salvage, and
    (5) Other items, including recoveries from insurance.
    (e) The service company is restricted in its use of the accumulated 
provision for amortization to the purposes provided in paragraphs (a) 
through (d) of this section. It must not transfer any portion of this 
account to retained earnings or make any other use of the amortization 
without authorization by the Commission.

                     Other Property and Investments



Sec. 367.1230  Account 123, Investment in associate companies.

    (a) This account must include the book cost of investments in 
securities issued or assumed by associate companies and investment 
advances to the companies, including related accrued interest when the 
interest is not subject to current settlement, provided that the 
investment does not relate to a subsidiary company. (If the investment 
relates to a subsidiary company, it must be included in account 123.1, 
Investment in subsidiary companies (Sec. 367.1231).) Include in this 
account the offsetting entry to the recording of amortization of 
discount or premium on interest bearing investments. (See account 419, 
Interest and dividend income (Sec. 367.4190).)
    (b) This account must be maintained in a manner so as to show the 
investment in securities of, and advances to, each associate company 
together with full particulars regarding any of the investments that are 
pledged.
    (c) Securities and advances of associate companies owned and pledged 
must be included in this account, but the securities, if held in special 
deposits or in special funds, must be included in the appropriate 
deposit or fund account. A complete record of securities pledged must be 
maintained.
    (d) Securities of associate companies held as temporary cash 
investments are includible in account 136, Temporary cash investments 
(Sec. 367.1360).
    (e) Balances in open accounts with associate companies that are 
subject to

[[Page 1014]]

current settlement are includible in account 146, Accounts receivable 
from associate companies (Sec. 367.1460).
    (f) The service company must write down the cost of any security in 
recognition of a decline in the related value. Securities must be 
written off or written down to a nominal value if there is no reasonable 
prospect of substantial value. Fluctuations in market value must not be 
recorded but a permanent impairment in the value of securities must be 
recognized in the accounts. When securities are written off or written 
down, the amount of the adjustment must be charged to account 426.5, 
Other deductions (Sec. 367.4265), or to an appropriate account for 
accumulated provisions for loss in value established as a separate 
subdivision of this account.



Sec. 367.1240  Account 124, Other investments.

    (a) This account must include the book cost of investments in 
securities issued or assumed by non-associate companies, investment 
advances to these companies, and any investments not accounted for 
elsewhere. This account must also include unrealized holding gains and 
losses on trading and available-for-sale types of security investments. 
Include also the offsetting entry to the recording of amortization of 
discount or premium on interest bearing investments. (See account 419, 
Interest and dividend income (Sec. 367.4190).)
    (b) The records must be maintained in a manner so as to show the 
amount of each investment and the investment advances to each person.



Sec. 367.1280  Account 128, Other special funds.

    (a) This account must include the amount of cash and book cost of 
investments that have been segregated in special funds for insurance, 
employee pensions, savings, relief, hospital, and other purposes not 
provided for elsewhere. This account must also include unrealized 
holding gains and losses on trading and available-for-sale types of 
security investments. A separate account with appropriate title, must be 
kept for each fund.
    (b) Amounts deposited with a trustee under the terms of an 
irrevocable trust agreement for pensions or other employee benefits must 
not be included in this account.

                       Current and Accrued Assets



Sec. 367.1310  Account 131, Cash.

    This account must include the amount of current cash funds except 
working funds.



Sec. 367.1340  Account 134, Other special deposits.

    (a) This account must include deposits with fiscal agents or others 
for special purposes other than the payment of interest and dividends. 
The special deposits may include, among other things, cash deposited 
with federal, state, or municipal authorities as a guaranty for the 
fulfillment of obligations; cash deposited with trustees to be held 
until mortgaged property sold, destroyed, or otherwise disposed of is 
replaced; cash realized from the sale of the accounting service 
company's securities and deposited with trustees to be held until 
invested in property of the service company. Entries to this account 
must specify the purpose for which the deposit is made.
    (b) Assets available for general corporate purposes must not be 
included in this account. Further, deposits for more than one year, that 
are not offset by current liabilities, must be charged to account 128, 
Other special funds (Sec. 367.1280).



Sec. 367.1350  Account 135, Working funds.

    This account must include cash advanced to officers, agents, 
employees, and others as petty cash or working funds.



Sec. 367.1360  Account 136, Temporary cash investments.

    (a) This account must include the book cost of investments, such as 
demand and time loans, bankers' acceptances, United States Treasury 
certificates, marketable securities, and other similar investments, 
acquired for the purpose of temporarily investing cash.
    (b) This account must be maintained so as to show separately 
temporary

[[Page 1015]]

cash investments in securities of associate companies and of others. 
Records must be kept of any pledged investments.



Sec. 367.1410  Account 141, Notes receivable.

    (a) This account must include the book cost, not includible 
elsewhere, of all collectible obligations in the form of notes 
receivable and similar evidences (except interest coupons) of money due 
on demand or within one year from the date of issue, except, however, 
notes receivable from associate companies. (See account 136, Temporary 
cash investments (Sec. 367.1360), and account 145, Notes receivable 
from associate companies (Sec. 367.1450).)
    (b) The face amount of notes receivable discounted, sold, or 
transferred without releasing the service company from liability as a 
related endorser, must be credited to a separate subaccount of this 
account and appropriate disclosure must be made in financial statements 
of any contingent liability arising from the transactions.



Sec. 367.1420  Account 142, Customer accounts receivable.

    (a) This account must include amounts due from customers for 
service, and for merchandising, jobbing and contract work. This account 
must not include amounts due from associate companies.
    (b) This account must be maintained so as to permit ready 
segregation of the amounts due for merchandising, jobbing and contract 
work.



Sec. 367.1430  Account 143, Other accounts receivable.

    (a) This account must include amounts due the service company upon 
open accounts, other than amounts due from associate companies and from 
customers for services and merchandising, jobbing and contract work.
    (b) This account must be maintained so as to show separately amounts 
due on subscriptions to capital stock and from officers and employees, 
but the account must not include amounts advanced to officers or others 
as working funds. (See account 135, Working funds (Sec. 367.1350).)



Sec. 367.1440  Account 144, Accumulated provision for uncollectible accounts--

Credit.

    (a) This account must be credited with amounts provided for losses 
on accounts receivable that may become uncollectible, and also with 
collections on related previously charged accounts. Concurrent charges 
must be made to account 904, Uncollectible accounts (Sec. 367.9040), 
for amounts applicable to service company operations, and to 
corresponding accounts for other operations. Records must be maintained 
so as to show the write-offs of account receivable for each service 
company department.
    (b) This account must be subdivided to show the provision applicable 
to the following classes of accounts receivable:
    (1) Service company customers.
    (2) Merchandising, jobbing and contract work.
    (3) Officers and employees.
    (4) Others.
    (c) Accretions to this account must not be made in excess of a 
reasonable provision against losses of the related character.
    (d) If provisions for uncollectible notes receivable or for 
uncollectible receivables from associate companies are necessary, 
separate related subaccounts must be established under the account in 
which the receivable is carried.



Sec. 367.1450  Account 145, Notes receivable from associate companies.

    (a) This account must include notes and drafts upon which associate 
companies are liable, and that mature and are expected to be paid in 
full not later than one year from the date of issue, together with any 
related interest, and debit balances subject to current settlement in 
open accounts with associate companies. Items that do not bear a 
specified due date but that have been carried for more than twelve 
months and items that are not paid within twelve months from due date 
must be transferred to account 123, Investment in associate companies 
(Sec. 367.1230).
    (b) On the balance sheet, accounts receivable from an associate 
company

[[Page 1016]]

may be set off against accounts payable to the same company.
    (c) The face amount of notes receivable discounted, sold or 
transferred without releasing the service company from liability as 
endorser thereon, must be credited to a separate subaccount of this 
account and appropriate disclosure must be made in financial statements 
of any contingent liability arising from such transactions.



Sec. 367.1460  Account 146, Accounts receivable from associate companies.

    (a) This account must include notes and drafts upon which associate 
companies are liable, and that mature and are expected to be paid in 
full not later than one year from the date of issue, together with any 
related interest thereon, and debit balances subject to current 
settlement in open accounts with associate companies. Items that do not 
bear a specified due date but that have been carried for more than 
twelve months and items that are not paid within twelve months from due 
date must be transferred to account 123, Investment in associate 
companies (Sec. 367.1230).
    (b) On the balance sheet, accounts receivable from an associate 
company may be set off against accounts payable to the same company.
    (c) The face amount of notes receivable discounted, sold or 
transferred without releasing the service company from liability as the 
related endorser, must be credited to a separate subaccount of this 
account and appropriate disclosure must be made in financial statements 
of any contingent liability arising from the transactions.



Sec. 367.1520  Account 152, Fuel stock expenses undistributed.

    The service company must utilize this account, where appropriate, to 
include the cost of service company labor and of office supplies used 
and operating expenses incurred with respect to the review, analysis and 
management of fuel supply contracts or agreements, the accumulation of 
fuel information and its interpretation, the logistics and handling of 
fuel, and other related support functions, as a service to the company 
engaged in the procurement and transportation of fuel. This account must 
be maintained to show the expenses attributable to each company through 
its cost allocation system. All expenses of a service company's fuel 
department or functions must be cleared through this account.



Sec. 367.1540  Account 154, Materials and operating supplies.

    (a) This account must include the cost of materials purchased 
primarily for use in the service company business for construction, 
operation and maintenance purposes. It must include the book cost of 
materials recovered in connection with construction, maintenance or the 
retirement of service company property, the materials being credited to 
construction, maintenance or accumulated depreciation provision, 
respectively. This account must include the following items:
    (1) Reusable materials consisting of large individual items must be 
included in this account at original cost, estimated if not known. The 
cost of repairing the items must be charged to the maintenance account 
appropriate for the previous use.
    (2) Reusable materials consisting of relatively small items, the 
identity of which (from the date of original installation to the related 
final abandonment or sale) cannot be ascertained without undue 
refinement in accounting, must be included in this account at current 
prices new for the items. The cost of repairing the items must be 
charged to the appropriate expense account as indicated by previous use.
    (3) Scrap and non-usable materials included in this account must be 
carried at the estimated net amount realizable. The difference between 
the amounts realized for scrap and non-usable materials sold and the net 
amount at which the materials were carried in this account, as far as 
practicable, must be adjusted to the accounts credited when the 
materials were charged to this account.
    (b) Materials and supplies issued must be credited in this account 
and charged to the appropriate construction, operating expense, or other 
account on the basis of a unit price determined by the use of cumulative 
average, first-in-first-out, or any other

[[Page 1017]]

method of inventory accounting that conforms with accepted accounting 
standards consistently applied.
    (c) This account must include the following items:
    (1) Invoice price of materials less cash or other discounts.
    (2) Freight, switching or other transportation charges when 
practicable to include as part of the cost of particular materials to 
which they relate.
    (3) Customs duties and excise taxes.
    (4) Costs of inspection and special tests prior to acceptance.
    (5) Insurance and other directly assignable charges.
    (d) Where expenses applicable to materials purchased cannot be 
directly assigned to particular purchases, they may be charged to a 
stores expense clearing account (account 163, Stores expense 
undistributed (Sec. 367.1630)), and distributed from there to the 
appropriate account.
    (e) When materials and supplies are purchased for immediate use, 
they need not be carried through this account, but may be charged 
directly to the appropriate service company property or expense account.



Sec. 367.1630  Account 163, Stores expense undistributed.

    (a) This account must include the cost of supervision, labor and 
expenses incurred in the operation of general storerooms, including 
purchasing, storage, handling and distribution of materials and 
supplies.
    (b) This account must be cleared by adding to the cost of materials 
and supplies issued a suitable loading charge that will distribute the 
expense equitably over stores issues. The balance in the account at the 
close of the calendar year must not exceed the amount of stores expenses 
reasonably attributable to the inventory of materials and supplies 
exclusive of fuel, as any amount applicable to fuel costs should be 
included in account 152, Fuel stock expenses undistributed (Sec. 
367.1520).
    (c) This account must include the following labor items:
    (1) Inspecting and testing materials and supplies when not 
assignable to specific items.
    (2) Unloading from shipping facility and putting in storage.
    (3) Supervision of purchasing and stores department to extent 
assignable to materials handled through stores.
    (4) Getting materials from stock and in readiness to go out.
    (5) Inventorying stock received or stock on hand by stores employees 
but not including inventories by general department employees as part of 
internal or general audits.
    (6) Purchasing department activities in checking material needs, 
investigating sources of supply, analyzing prices, preparing and placing 
orders, and related activities to extent applicable to materials handled 
through stores. (Optional. Purchasing department expenses may be 
included in administrative and general expenses.)
    (7) Maintaining stores equipment.
    (8) Cleaning and tidying storerooms and stores offices.
    (9) Keeping stock records, including recording and posting of 
material receipts and issues and maintaining inventory record of stock.
    (10) Collecting and handling scrap materials in stores.
    (d) This account must include the following supplies and expenses 
items:
    (1) Adjustments of inventories of materials and supplies, but not 
including large differences that can readily be assigned to important 
classes of materials and equitably distributed among the accounts to 
which the classes of materials have been charged since the previous 
inventory.
    (2) Cash and other discounts not practically assignable to specific 
materials.
    (3) Freight, express, and similar items, when not assignable to 
specific items.
    (4) Heat, light and power for storerooms and store offices.
    (5) Brooms, brushes, sweeping compounds and other supplies used in 
cleaning and tidying storerooms and stores offices.
    (6) Injuries and damages.
    (7) Insurance on materials and supplies and on stores equipment.
    (8) Losses due to breakage, leakage, evaporation, fire or other 
causes, less

[[Page 1018]]

credits for amounts received from insurance, transportation companies or 
others in compensation of the losses.
    (9) Postage, printing, stationery and office supplies.
    (10) Rent of storage space and facilities.
    (11) Communication service.
    (12) Excise and other similar taxes not assignable to specific 
materials.
    (13) Transportation expense on inward movement of stores and on 
transfer between storerooms, but not including charges on materials 
recovered from retirements that must be accounted for as part of cost of 
removal.
    (e) A physical inventory of each class of materials and supplies 
must be made at least every two years.



Sec. 367.1650  Account 165, Prepayments.

    This account must include amounts representing prepayments of 
insurance, rents, taxes, interest and miscellaneous items, and must be 
kept or supported in a manner so as to disclose the amount of each class 
of prepayment.



Sec. 367.1710  Account 171, Interest and dividends receivable.

    (a) This account must include the amount of interest on bonds, 
mortgages, notes, commercial paper, loans, open accounts, deposits, and 
other similar items, the payment of which is reasonably assured, and the 
amount of dividends declared or guaranteed on stocks owned.
    (b) Interest that is not subject to current settlement must not be 
included in this account, but in the account in which is carried the 
principal on which the interest is accrued.
    (c) Interest and dividends receivable from associate companies must 
be included in account 146, Accounts receivable from associate companies 
(Sec. 367.1460).



Sec. 367.1720  Account 172, Rents receivable.

    (a) This account must include rents receivable or accrued on 
property rented or leased by the service company to others.
    (b) Rents receivable from associate companies must be included in 
account 146, Accounts receivable from associate companies (Sec. 
367.1460).



Sec. 367.1730  Account 173, Accrued revenues.

    At the option of the service company, the estimated amount accrued 
for service rendered, but not billed at the end of any accounting 
period, may be included in this account. In case accruals are made for 
unbilled revenues, they must be made likewise for unbilled expenses, 
such as for the purchase of energy.



Sec. 367.1740  Account 174, Miscellaneous current and accrued assets.

    This account must include the book cost of all other current and 
accrued assets, appropriately designated and supported so as to show the 
nature of each asset included in the account.



Sec. 367.1750  Account 175, Derivative instrument assets.

    This account must include the amounts paid for derivative 
instruments, and the change in the fair value of all derivative 
instrument assets not designated as cash flow or fair value hedges. 
Account 421, Miscellaneous income or loss (Sec. 367.4210), must be 
credited or debited, as appropriate, with the corresponding amount of 
the change in the fair value of the derivative instrument.



Sec. 367.1760  Account 176, Derivative instrument assets--Hedges.

    (a) This account must include the amounts paid for derivative 
instruments, and the change in the fair value of derivative instrument 
assets designated by the service company as cash flow or fair value 
hedges.
    (b) When a service company designates a derivative instrument asset 
as a cash flow hedge it will record the change in the fair value of the 
derivative instrument in this account with a concurrent charge to 
account 219, Accumulated other comprehensive income (Sec. 367.2190), 
with the effective portion of the gain or loss. The ineffective portion 
of the cash flow hedge must be charged to the same income or expense 
account that will be used when the hedged item enters into the 
determination of net income.
    (c) When a service company designates a derivative instrument as a 
fair value hedge it must record the

[[Page 1019]]

change in the fair value of the derivative instrument in this account 
with a concurrent charge to a subaccount of the asset or liability that 
carries the item being hedged. The ineffective portion of the fair value 
hedge must be charged to the same income or expense account that will be 
used when the hedged item enters into the determination of net income.

                             Deferred Debits



Sec. 367.1810  Account 181, Unamortized debt expense.

    This account must include expenses related to the issuance or 
assumption of debt securities. Amounts recorded in this account must be 
amortized over the life of each respective issue under a plan that will 
distribute the amount equitably over the life of the security. The 
amortization must be on a monthly basis, and the related amounts must be 
charged to account 428, Amortization of debt discount and expense (Sec. 
367.4280). Any unamortized amounts outstanding at the time that the 
related debt is prematurely reacquired must be accounted for as 
indicated in General Instructions in Sec. 367.16.



Sec. 367.1823  Account 182.3, Other regulatory assets.

    (a) This account must include the amounts of regulatory-created 
assets, not includible in other accounts, resulting from the ratemaking 
actions of regulatory agencies. (See Definitions Sec. 367.1(a)(38).)
    (b) The amounts included in this account are to be established by 
those charges which would have been included in net income, or 
accumulated other comprehensive income, determinations in the current 
period under the general requirements of the Uniform System of Accounts 
but for it being probable that such items will be included in a 
different period(s) for purposes of developing rates that the utility is 
authorized to charge for its utility services. When specific 
identification of the particular source of a regulatory asset cannot be 
made, such as in plant phase-ins, rate moderation plans, or rate 
levelization plans, account 407.4, Regulatory credits (Sec. 367.4074), 
must be credited. The amounts recorded in this account are generally to 
be charged, concurrently with the recovery of the amounts in rates, to 
the same account that would have been charged if included in income when 
incurred, except all regulatory assets established through the use of 
account 407.4 (Sec. 367.4074) must be charged to account 407.3, 
Regulatory debits (Sec. 367.4073), concurrent with the recovery in 
rates.
    (c) If rate recovery of all or part of an amount included in this 
account is disallowed, the disallowed amount must be charged to Account 
426.5, Other deductions (Sec. 367.4265), or Account 435, Extraordinary 
deductions (Sec. 367.4350), in the year of the disallowance.
    (d) The records supporting the entries to this account must be kept 
so that the service company can furnish full information as to the 
nature and amount of each regulatory asset included in this account, 
including justification for inclusion of such amounts in this account.



Sec. 367.1830  Account 183, Preliminary survey and investigation charges.

    (a) This account must be charged with all expenditures for 
preliminary surveys, plans, investigations, and other similar items, 
made for the purpose of determining the feasibility of service company 
projects under contemplation. If construction results, this account must 
be credited and the appropriate service company property account 
charged. If the work is abandoned, the charge must be made to account 
426.5, Other deductions (Sec. 367.4265), or to the appropriate 
operating expense account.
    (b) The records supporting the entries to this account must be kept 
so that the service company can furnish complete information as to the 
nature and the purpose of the survey, plans, or investigations and the 
nature and amounts of the several charges.
    (c) The amount of preliminary survey and investigation charges 
transferred to service company property must not exceed the expenditures 
that may reasonably be determined to contribute directly and immediately 
and without duplication to service company property.

[[Page 1020]]



Sec. 367.1840  Account 184, Clearing accounts.

    This account must include undistributed balances in clearing 
accounts at the date of the balance sheet. Balances in clearing accounts 
must be substantially cleared not later than the end of the calendar 
year unless the items held relate to a future period.



Sec. 367.1850  Account 185, Temporary facilities.

    This account must include amounts shown by project for property 
installed for temporary use for a period of less than one year. Each 
project must be charged with the cost of temporary facilities and 
credited with payments received from customers and net salvage realized 
on removal of the temporary facilities. Any net credit or debit 
resulting must be cleared to the construction or service project to 
which the facilities relate.



Sec. 367.1860  Account 186, Miscellaneous deferred debits.

    (a) This account must include all debits not provided for elsewhere, 
such as miscellaneous work in progress, and unusual or extraordinary 
expenses, not included in other accounts, that are in the process of 
amortization and items the proper final disposition of which is 
uncertain.
    (b) The records supporting the entries to this account must be kept 
so that the service company can furnish full information as to each 
deferred debit included in this account.



Sec. 367.1880  Account 188, Research, development, or demonstration 

expenditures.

    (a) This account must be charged with the cost of all expenditures 
coming within the meaning of research, development and demonstration 
(RD&D) of this Uniform System of Accounts (See Definitions Sec. 
367.1(a)(40)), except those expenditures properly chargeable to account 
107, Construction work in progress (Sec. 367.1070).
    (b) Costs that are minor or of a general or recurring nature must be 
transferred from this account to the appropriate operating expense 
function or, if the costs are common to the overall operations or cannot 
be feasibly allocated to the various operating accounts, then the costs 
must be recorded in account 930.2, Miscellaneous general expenses (Sec. 
367.9302).
    (c) In certain instances, a service company may incur large and 
significant research, development, and demonstration expenditures that 
are nonrecurring and that would distort the annual research, 
development, and demonstration charges for the period. In such a case, 
the portion of such amounts that causes the distortion may be amortized 
to the appropriate operating expense account over a period not to exceed 
five years, unless otherwise authorized by the Commission.
    (d) The entries in this account must be maintained so as to show 
separately each project along with complete detail of the nature and 
purpose of the research, development, and demonstration project together 
with the related costs.



Sec. 367.1890  Account 189, Unamortized loss on reacquired debt.

    This account must include the losses on long-term debt reacquired or 
redeemed. The amounts in this account must be amortized in accordance 
with General Instruction Sec. 367.16.



Sec. 367.1900  Account 190, Accumulated deferred income taxes.

    (a) This account must be debited and account 411.1, Provision for 
deferred income taxes--Credit, operating income (Sec. 367.4111), or 
account 411.2, Provision for deferred income taxes--Credit, other income 
and deductions (Sec. 367.4112), as appropriate, must be credited with 
an amount equal to that by which income taxes payable for the year are 
higher because of the inclusion of certain items in income for tax 
purposes, which items for general accounting purposes will not be fully 
reflected in the service company's determination of annual net income 
until subsequent years.
    (b) This account must be credited and account 410.1, Provision for 
deferred income taxes, operating income (Sec. 367.4101), or account 
410.2, Provision for deferred income taxes, other income and deductions 
(Sec. 367.4102), as appropriate, must be debited with an

[[Page 1021]]

amount equal to that by which income taxes payable for the year are 
lower because of prior payment of taxes as provided by paragraph (a) of 
this section, because of difference in timing for tax purposes of 
particular items of income or income deductions from that recognized by 
the utility for general accounting purposes. The credit to this account 
and debit to account 410.1 (Sec. 367.4101), or 410.2 (Sec. 367.4102) 
must, in general, represent the effect on taxes payable in the current 
year of the smaller amount of book income recognized for tax purposes as 
compared to the amount recognized in the service company's current 
accounts with respect to the item or class of items for which deferred 
tax accounting by the service company was authorized by the Commission.
    (c) The service company is restricted in its use of this account to 
the purpose provided in paragraphs (a) and (b) of this section. The 
service company must not make use of the balance in this account or any 
related portion except as provided in the text of this account, without 
prior approval of the Commission. Any remaining deferred tax account 
balance with respect to an amount for any prior year's tax deferral, the 
amortization of which or other recognition in the service company's 
income accounts has been completed, or other disposition made, must be 
debited to account 410.1, Provision for deferred income taxes, operating 
income (Sec. 367.4101), or account 410.2, Provision for deferred income 
taxes, other income and deductions (Sec. 367.4102), as appropriate, or 
otherwise disposed of as the Commission may authorize or direct. (See 
General Instructions in Sec. 367.17.)

                           Proprietary Capital



Sec. 367.2010  Account 201, Common stock issued.

    This account must include the par or stated value of all common 
capital stock issued and outstanding.



Sec. 367.2040  Account 204, Preferred stock issued.

    This account must include the par or stated value of all preferred 
stock issued and outstanding.



Sec. 367.2110  Account 211, Miscellaneous paid-in capital.

    This account must include the balance of all other credits for paid-
in capital that is not properly included in proprietary capital 
accounts. This account may include all commissions and expenses incurred 
in connection with the issuance of capital stock.



Sec. 367.2150  Account 215, Appropriated retained earnings.

    This account must include the amount of retained earnings that has 
been appropriated or set aside for special purposes. Separate 
subaccounts must be maintained under titles that will designate the 
purpose for which each appropriation was made.



Sec. 367.2160  Account 216, Unappropriated retained earnings.

    This account must include the balances, either debit or credit, of 
unappropriated retained earnings arising from earnings of the service 
company. This account must not include any amounts representing the 
undistributed earnings of subsidiary companies.



Sec. 367.2161  Account 216.1, Unappropriated undistributed subsidiary 

earnings.

    This account must include the balances, either debit or credit, of 
undistributed retained earnings of subsidiary companies since their 
acquisition. When dividends are received from subsidiary companies 
relating to amounts included in this account, this account must be 
debited and account 216, Unappropriated retained earnings (Sec. 
367.2160), credited.



Sec. 367.2190  Account 219, Accumulated other comprehensive income.

    (a) This account must include revenues, expenses, gains, and losses 
that are properly includable in other comprehensive income during the 
period. Examples of other comprehensive income include, but are not 
limited to, minimum pension liability adjustments, and unrealized gains 
and losses on certain investments in debt and equity securities. Records 
supporting the entries to this account must be maintained so that the 
service company can

[[Page 1022]]

furnish the amount of other comprehensive income for each item included 
in this account.
    (b) This account also must be debited or credited, as appropriate, 
with amounts of accumulated other comprehensive income that have been 
included in the determination of net income during the period and in 
accumulated other comprehensive income in prior periods. Separate 
records for each category of items must be maintained to identify the 
amount of the reclassification adjustments from accumulated other 
comprehensive income to earnings made during the period.

                             Long-Term Debt



Sec. 367.2230  Account 223, Advances from associate companies.

    (a) This account must include the face value of notes payable to 
associate companies and the amount of open book accounts representing 
advances from associate companies. It does not include notes and open 
accounts representing indebtedness subject to current settlement that 
are includible in account 233, Notes payable to associate companies 
(Sec. 367.2330), or account 234, Accounts payable to associate 
companies (Sec. 367.2340).
    (b) The records supporting the entries to this account must be kept 
so that the service company can furnish complete information concerning 
each note and open account.



Sec. 367.2240  Account 224, Other long-term debt.

    (a) This account must include, until maturity, all long-term debt 
not otherwise provided for. This covers items such as receivers' 
certificates, real estate mortgages executed or assumed, assessments for 
public improvements, notes and unsecured certificates of indebtedness 
not owned by associate companies, receipts outstanding for long-term 
debt, and other obligations maturing more than one year from date of 
issue or assumption.
    (b) Separate accounts must be maintained for each class of 
obligation, and records must be maintained to show for each class all 
details as to date of obligation, date of maturity, interest dates and 
rates, security for the obligation, and other similar items.



Sec. 367.2250  Account 225, Unamortized premium on long-term debt.

    (a) This account must include the excess of the cash value of 
consideration received over the face value upon the issuance or 
assumption of long-term debt securities.
    (b) Amounts recorded in this account must be amortized over the life 
of each respective issue under a plan that will distribute the amount 
equitably over the life of the security. The amortization must be on a 
monthly basis, with the related amounts credited to account 429, 
Amortization of premium on debt--Credit (Sec. 367.4290) (see General 
Instructions in Sec. 367.16).



Sec. 367.2260  Account 226, Unamortized discount on long-term debt--Debit.

    (a) This account must include the excess of the face value of long-
term debt securities over the related cash value of consideration 
received, related to the issue or assumption of all types and classes of 
debt.
    (b) Amounts recorded in this account must be amortized over the life 
of the respective issues under a plan that will distribute the amount 
equitably over the life of the securities. The amortization must be on a 
monthly basis, with the related amounts charged to account 428, 
Amortization of debt discount and expense (Sec. 367.4280). (see General 
Instructions in Sec. 367.16.)

                      Other Noncurrent Liabilities



Sec. 367.2270  Account 227, Obligations under capital lease--Non-current.

    This account must include the portion not due within one year, of 
the obligations recorded for the amounts applicable to leased property 
recorded as assets in account 101.1, Property under capital leases 
(Sec. 367.1011).



Sec. 367.2282  Account 228.2, Accumulated provision for injuries and damages.

    (a) This account must be credited with amounts charged to account 
925, Injuries and damages (Sec. 367.9250), or other appropriate 
accounts, to meet the probable liability, not covered by

[[Page 1023]]

insurance, for deaths or injuries to employees and others and for 
damages to property neither owned nor held under lease by the service 
company.
    (b) When liability for any injury or damage is admitted by the 
service company, either voluntarily or because of the decision of a 
court or other lawful authority, such as workmen's compensation board, 
the admitted liability must be charged to this account and credited to 
the appropriate current liability account. Details of these charges must 
be maintained according to the year the casualty occurred which gave 
rise to the loss.
    (c) Recoveries or reimbursements for losses charged to this account 
must be credited to this account; the cost of repairs to property of 
others if provided for in this account must be charged to this account.



Sec. 367.2283  Account 228.3, Accumulated provision for pensions and benefits.

    (a) This account must include provisions made by the service company 
and amounts contributed by employees for pensions, accident and death 
benefits, savings, relief, hospital and other provident purposes, where 
the funds are included in the assets of the service company either in 
general or in segregated fund accounts.
    (b) Amounts paid by the service company for the purposes for which 
this liability is established must be charged to this account.
    (c) A separate account must be kept for each kind of provision 
included in this account.
    (d) If employee pension or benefit plan funds are not included among 
the assets of the service company but are held by outside trustees, 
payments into such funds, or accruals therefore, must be included in 
this account.



Sec. 367.2300  Account 230, Asset retirement obligations.

    (a) This account must include the amount of liabilities for the 
recognition of asset retirement obligations related to service company 
property. This account must be credited for the amount of the 
liabilities for asset retirement obligations with amounts charged to the 
appropriate property account to record the related asset retirement 
costs.
    (b) The service company must charge the accretion expense to account 
411.10, Accretion expense (Sec. 367.4118), and credit account 230, 
Asset retirement obligations (Sec. 367.2300).
    (c) This account must be debited with amounts paid to settle the 
asset retirement obligations recorded in this account.
    (d) The service company must clear from this account any gains or 
losses resulting from the settlement of asset retirement obligations in 
accordance with the instructions prescribed in the General Instructions 
in Sec. 367.22.

                     Current and Accrued Liabilities



Sec. 367.2310  Account 231, Notes payable.

    This account must include the face value of all notes, drafts, 
acceptances, or other similar evidences of indebtedness, payable on 
demand or within a time not exceeding one year from date of issue, to 
other than associate companies.



Sec. 367.2320  Account 232, Accounts payable.

    This account must include all amounts payable by the service company 
within one year that are not provided for in other accounts.



Sec. 367.2330  Account 233, Notes payable to associate companies.

    (a) This account must include amounts owing to associate companies 
on notes, drafts, acceptances, or other similar evidences of 
indebtedness, and open accounts payable on demand or not more than one 
year from date of issue or creation.
    (b) Exclude from this account notes and accounts that are includible 
in account 223, Advances from associate companies (Sec. 367.2230).



Sec. 367.2340  Account 234, Accounts payable to associate companies.

    This account must include all amounts payable to associate companies 
by the service company within one year, which are not provided for in 
other accounts.

[[Page 1024]]



Sec. 367.2360  Account 236, Taxes accrued.

    (a) This account must be credited with the amount of taxes accrued 
during the accounting period, corresponding debits being made to the 
appropriate accounts for tax charges. The credits may be based upon 
estimates, but from time to time during the year as the facts become 
known, the amount of the periodic credits must be adjusted so as to 
include as nearly as can be determined in each year the related 
applicable taxes. Any amount representing a prepayment of taxes 
applicable to the period subsequent to the date of the balance sheet, 
must be shown under account 165, Prepayments (Sec. 367.1650).
    (b) If accruals for taxes are found to be insufficient or excessive, 
corrections must be made through current tax accruals.
    (c) Accruals for taxes must be based upon the net amounts payable 
after credit for any discounts, and must not include any amounts for 
interest on tax deficiencies or refunds. Interest received on refunds 
must be credited to account 419, Interest and dividend income (Sec. 
367.4190), and interest paid on deficiencies must be charged to account 
431, Other interest expense (Sec. 367.4310).
    (d) The records supporting the entries to this account must be kept 
so as to show for each class of taxes, the amount accrued, the basis for 
the accrual, the accounts to which charged, and the amount of tax paid.



Sec. 367.2370  Account 237, Interest accrued.

    This account must include the amount of interest accrued but not 
matured on all liabilities of the service company not including, 
however, interest that is added to the principal of the debt on which it 
is incurred. Supporting records must be maintained so as to show the 
amount of interest accrued on each obligation.



Sec. 367.2380  Account 238, Dividends declared.

    This account must include the amount of dividends that have been 
declared but not paid. Dividends must be credited to this account when 
they become a liability.



Sec. 367.2410  Account 241, Tax collections payable.

    (a) This account must include the amount of taxes collected by the 
service company through payroll deductions or otherwise pending 
transmittal of the taxes to the proper taxing authority.
    (b) Do not include liability for taxes assessed directly against the 
service company that is accounted for as part of the service company's 
own tax expense.



Sec. 367.2420  Account 242, Miscellaneous current and accrued liabilities.

    This account must include the amount of all other current and 
accrued liabilities not provided for elsewhere, appropriately designated 
and supported so as to show the nature of each liability.



Sec. 367.2430  Account 243, Obligations under capital leases--Current.

    This account must include the portion, due within one year, of the 
obligations recorded for the amounts applicable to leased property 
recorded as assets in account 101.1, Property under capital leases 
(Sec. 367.1011).



Sec. 367.2440  Account 244, Derivative instrument liabilities.

    This account must include the change in the fair value of all 
derivative instrument liabilities not designated as cash flow or fair 
value hedges. Account 426.5, Other deductions (Sec. 367.4265), must be 
debited or credited as appropriate with the corresponding amount of the 
change in the fair value of the derivative instrument.



Sec. 367.2450  Account 245, Derivative instrument liabilities--Hedges

    (a) This account must include the change in the fair value of 
derivative instrument liabilities designated by the service company as 
cash flow or fair value hedges.
    (b) A service company must record the change in the fair value of a 
derivative instrument liability related to a cash flow hedge in this 
account, with a concurrent charge to account 219, Accumulated other 
comprehensive income (Sec. 367.2190), with the effective portion of the 
derivative's gain or loss.

[[Page 1025]]

The ineffective portion of the cash flow hedge must be charged to the 
same income or expense account that will be used when the hedged item 
enters into the determination of net income.
    (c) A service company must record the change in the fair value of a 
derivative instrument liability related to a fair value hedge in this 
account, with a concurrent charge to a subaccount of the asset or 
liability that carries the item being hedged. The ineffective portion of 
the fair value hedge must be charged to the same income or expense 
account that will be used when the hedged item enters into the 
determination of net income.

                            Deferred Credits



Sec. 367.2530  Account, 253, Other deferred credits.

    This account must include advance billings and receipts and other 
deferred credit items, not provided for elsewhere, including amounts 
which cannot be entirely cleared or disposed of until additional 
information has been received.



Sec. 367.2540  Account 254, Other regulatory liabilities.

    (a) This account must include the amounts of regulatory liabilities, 
not includible in other accounts, imposed on the service company by the 
ratemaking actions of regulatory agencies. (See Definitions Sec. 
367.1(a)(38).)
    (b) The amounts included in this account are to be established by 
those credits which would have been included in net income, or 
accumulated other comprehensive income, determinations in the current 
period under the general requirements of the USofA but for it being 
probable that: Such items will be included in a different period(s) for 
purposes of developing the rates that the service company is authorized 
to charge for its services; or refunds to customers, not provided for in 
other accounts, will be required. When specific identification of the 
particular source of the regulatory liability cannot be made or when the 
liability arises from revenues collected pursuant to tariffs on file at 
a regulatory agency, account 407.3, Regulatory debits (Sec. 367.4073), 
must be debited. The amounts recorded in this account generally are to 
be credited to the same account that would have been credited if 
included in income when earned except: All regulatory liabilities 
established through the use of account 407.3 (Sec. 367.4073) must be 
credited to account 407.4, Regulatory credits (Sec. 367.4074); and in 
the case of refunds, a cash account or other appropriate account should 
be credited when the obligation is satisfied.
    (c) If it is later determined that the amounts recorded in this 
account will not be returned to customers through rates or refunds, such 
amounts must be credited to Account 421, Miscellaneous income or loss 
(Sec. 367.4210), or Account 434, Extraordinary income (Sec. 367.4340), 
as appropriate, in the year such determination is made.
    (d) The records supporting the entries to this account must be so 
kept that the service company can furnish full information as to the 
nature and amount of each regulatory liability included in this account, 
including justification for inclusion of such amounts in this account.



Sec. 367.2550  Account 255, Accumulated deferred investment tax credits.

    This account must be credited with all investment tax credits 
deferred by companies that have elected to follow deferral accounting, 
partial or full, rather than recognizing in the income statement the 
total benefits of the tax credit as realized. After this election, a 
company may not transfer amounts from this account, except as authorized 
in this account and in accounts 411.4, Investment tax credit 
adjustments, service company property (Sec. 367.4114) or 411.5, 
Investment tax credit adjustments, other income and deductions (Sec. 
367.4115), or with approval of the Commission.



Sec. 367.2820  Account 282, Accumulated deferred income taxes--Other property.

    (a) This account must include the tax deferrals resulting from 
adoption of the principle of comprehensive inter-period income tax 
allocation described in the General Instructions in Sec. 367.17 that 
are related to all property other than accelerated amortization 
property.

[[Page 1026]]

    (b) This account must be credited and accounts 410.1, Provision for 
deferred income taxes, operating income (Sec. 367.4101), or 410.2, 
Provision for deferred income taxes, Other income and deductions (Sec. 
367.4102), as appropriate, must be debited with tax effects related to 
property described in paragraph (a) of this section where taxable income 
is lower than pretax accounting income due to differences between the 
periods in which revenue and expense transactions affect taxable income 
and the periods in which they enter into the determination of pretax 
accounting income.
    (c) This account must be debited, and accounts 411.1, Provision for 
deferred income taxes--Credit, operating income (Sec. 367.4111), or 
411.2, Provision for deferred income taxes--Credit, other income and 
deductions (Sec. 367.4112), as appropriate, must be credited with tax 
effects related to property described in paragraph (a) of this section 
where taxable income is higher than pretax accounting income due to 
differences between the periods in which revenue and expense 
transactions affect taxable income and the periods in which they enter 
into the determination of pretax accounting income.
    (d) The service company is restricted in its use of this account to 
the purposes described in paragraphs (a) through (c) of this section. It 
must not transfer the balance in this account or any related portion to 
retained earnings or make any other use of the balance except as 
provided in paragraph (a) through (c) of this section without prior 
approval of the Commission. Upon the disposition by sale, exchange, 
transfer, abandonment or premature retirement of property on which there 
is a related balance, this account must be charged with an amount equal 
to the related income tax expense, if any, arising from the disposition 
and accounts 411.1, Income taxes deferred in prior years--Credit, 
operating income (Sec. 367.4111), or 411.2, Income taxes deferred in 
prior years--Credit, other income and deductions (Sec. 367.4112), must 
be credited. When property is disposed of by transfer to a wholly-owned 
subsidiary, the related balance in this account also must be 
transferred. When the disposition relates to retirement of an item or 
items under a group method of depreciation where there is no tax effect 
in the year of retirement, no entries are required in this account if it 
can be determined that the related balance must be retained to offset 
future group item tax deficiencies.



Sec. 367.2830  Account 283, Accumulated deferred income taxes--Other.

    (a) This account must include all credit tax deferrals resulting 
from the adoption of the principles of comprehensive inter-period income 
tax allocation described in the General Instructions in Sec. 367.17 
other than those deferrals that are includible in account 282, 
Accumulated deferred income taxes--Other property (Sec. 367.2820).
    (b) This account must be credited, and accounts 410.1 Provision for 
deferred income taxes, operating income (Sec. 367.4101), or 410.2 
Provision for deferred income taxes, other income and deductions (Sec. 
367.4102), as appropriate, must be debited with tax effects related to 
items described in paragraph (a) of this section where taxable income is 
lower than pretax accounting income due to differences between the 
periods in which revenue and expense transactions affect taxable income 
and the periods in which they enter into the determination of pretax 
accounting income.
    (c) This account must be debited, and accounts 411.1, Provision for 
deferred income taxes-Credit, operating income (Sec. 367.4111), or 
411.2, Provision for deferred income taxes-Credit, other income and 
deductions (Sec. 367.4112), as appropriate, must be credited with tax 
effects related to items described in paragraph (a) of this account 
where taxable income is higher than pretax accounting income due to 
differences between the periods in which revenue and expense 
transactions affect taxable income and the periods in which they enter 
into the determination of pretax accounting income.
    (d) Records with respect to entries to this account, as described in 
paragraphs (a) through (c) of this section, and the account balance, 
must be maintained so as to show the factors of calculation with respect 
to each annual amount of the item or class of items.

[[Page 1027]]

    (e) The service company is restricted in its use of this account to 
the purposes described in paragraphs (a) through (c) of this section. It 
must not transfer the balance in the account or any portion of the 
account to retained earnings or to any other account or make any use of 
the account except as provided in the text of this account, without 
prior approval of the Commission. Upon the disposition by sale, 
exchange, transfer, abandonment or premature retirement of items on 
which there is a related balance herein, this account must be charged 
with an amount equal to the related income tax effect, if any, arising 
from the disposition and accounts 411.1, Provision for deferred income 
taxes-Credit, operating income (Sec. 367.4111), or 411.2, Provision for 
deferred income taxes--Credit, other income and deductions (Sec. 
367.4112), as appropriate, must be credited.
    (f) When property is disposed of by transfer to a wholly-owned 
subsidiary, the related balance in this account also must be 
transferred. When the disposition relates to retirement of an item or 
items under a group method of depreciation where there is no tax effect 
in the year of retirement, no entries are required in this account if it 
can be determined that the related balance must be retained to offset 
future group item tax deficiencies.



          Subpart G_Service Company Property Chart of Accounts



Sec. 367.3010  Account 301, Organization.

    (a) This account must include all fees paid to federal or state 
governments for the privilege of incorporation and expenditures incident 
to organizing the corporation, partnership, or other enterprise and 
putting it into readiness to do business.
    (b) This account must include the following items:
    (1) Cost of obtaining certificates authorizing the service company 
to engage in its business.
    (2) Fees and expenses for incorporation.
    (3) Fees and expenses for mergers or consolidations.
    (4) Office expenses incident to organizing the service company.
    (5) Stock and minute books and corporate seal.
    (c) This account must not include any discounts upon securities 
issued or assumed; nor may it include any costs incident to negotiating 
loans, selling bonds or other evidences of debt or expenses in 
connection with the authorization, issuance or sale of capital stock.
    (d) Exclude from this account and include in the appropriate expense 
account, the cost of preparing and filing papers in connection with the 
extension of the term of incorporation unless the first organization 
costs have been written off. When charges are made to this account for 
expenses incurred in mergers, consolidations, or reorganizations, 
amounts previously included in this account or in similar accounts in 
the books of the companies concerned must be excluded from this account.



Sec. 367.3030  Account 303, Miscellaneous intangible property.

    (a) This account must include the cost of patent rights, licenses, 
privileges, and other intangible property necessary or valuable in the 
conduct of service company operations and not specifically chargeable to 
any other account.
    (b) When any item included in this account is retired or expires, 
the related book cost must be credited to this account and charged to 
account 426.5, Other deductions (Sec. 367.4265), or account 111, 
Accumulated provision for amortization of property (Sec. 367.1110).
    (c) This account must be maintained in a manner so that the service 
company can furnish full information with respect to the amounts 
included in this account.



Sec. 367.3060  Account 306, Leasehold improvements.

    This account must include all costs incurred by the service company 
in improvements of, remodeling of, or installation of additional 
facilities in rented offices or buildings to suit tenant's needs, placed 
in service prior to January 1, 2008.

[[Page 1028]]



Sec. 367.3890  Account 389, Land and land rights.

    This account must include the cost of land and land rights used for 
service company purposes, the cost of which is not properly includible 
in other land and land rights accounts (See Service Company Property 
Instructions in Sec. 367.55).



Sec. 367.3900  Account 390, Structures and improvements.

    This account must include the cost in place of structures and 
improvements used for service company purposes, the cost of which is not 
properly includible in other structures and improvements accounts (See 
Service Company Property Instructions in Sec. 367.56).



Sec. 367.3910  Account 391, Office furniture and equipment.

    (a) This account must include the cost of office furniture and 
equipment owned by the service company and devoted to service company 
operations, and not permanently attached to buildings, except the cost 
of the furniture and equipment that the service company elects to assign 
to other property accounts on a functional basis.
    (b) This account must include the following items:
    (1) Bookcases and shelves.
    (2) Desks, chairs, and desk equipment.
    (3) Drafting-room equipment.
    (4) Filing, storage, and other cabinets.
    (5) Floor covering.
    (6) Library and library equipment.
    (7) Mechanical office equipment, such as accounting machines, 
typewriters, and other similar items.
    (8) Safes.
    (9) Tables.



Sec. 367.3920  Account 392, Transportation equipment.

    (a) This account must include the cost of transportation vehicles 
used for service company purposes.
    (b) This account must include the following items:
    (1) Airplanes.
    (2) Automobiles.
    (3) Bicycles.
    (4) Electrical vehicles.
    (5) Motor trucks.
    (6) Motorcycles.
    (7) Repair cars or trucks.
    (8) Tractors and trailers.
    (9) Other transportation vehicles.



Sec. 367.3930  Account 393, Stores equipment.

    (a) This account must include the cost of equipment used for the 
receiving, shipping, handling, and storage of materials and supplies.
    (b) This account must include the following items:
    (1) Chain falls.
    (2) Counters.
    (3) Cranes (portable).
    (4) Elevating and stacking equipment (portable).
    (5) Hoists.
    (6) Lockers.
    (7) Scales.
    (8) Shelving.
    (9) Storage bins.
    (10) Trucks, hand and power driven.
    (11) Wheelbarrows.



Sec. 367.3940  Account 394, Tools, shop and garage equipment.

    (a) This account must include the cost of tools, implements, and 
equipment used in construction, repair work, general shops and garages 
and not specifically provided for or includible in other accounts.
    (b) This account must include the following items:
    (1) Air compressors.
    (2) Anvils.
    (3) Automobile repair shop equipment.
    (4) Battery charging equipment.
    (5) Belts, shafts and countershafts.
    (6) Boilers.
    (7) Cable pulling equipment.
    (8) Concrete mixers.
    (9) Drill presses.
    (10) Derricks.
    (11) Electric equipment.
    (12) Engines.
    (13) Forges.
    (14) Furnaces.
    (15) Foundations and settings specially constructed for equipment in 
this account and not expected to outlast the equipment for which 
provided.
    (16) Gas producers.
    (17) Gasoline pumps, oil pumps and storage tanks.

[[Page 1029]]

    (18) Greasing tools and equipment.
    (19) Hoists.
    (20) Ladders.
    (21) Lathes.
    (22) Machine tools.
    (23) Motor-driven tools.
    (24) Motors.
    (25) Pipe threading and cutting tools.
    (26) Pneumatic tools.
    (27) Pumps.
    (28) Riveters.
    (29) Smithing equipment.
    (30) Tool racks.
    (31) Vises.
    (32) Welding apparatus.
    (33) Work benches.



Sec. 367.3950  Account 395, Laboratory equipment.

    (a) This account must include the cost installed of laboratory 
equipment used for general laboratory purposes.
    (b) This account must include the following items:
    (1) Ammeters.
    (2) Balances and scales.
    (3) Barometers.
    (4) Calorimeters-bomb, flow, recording types, and other similar 
items.
    (5) Current batteries.
    (6) Electric furnaces.
    (7) Frequency changers.
    (8) Galvanometers.
    (9) Gas burning equipment.
    (10) Gauges.
    (11) Glassware, beakers, burettes, and other similar items.
    (12) Humidity testing apparatus.
    (13) Inductometers.
    (14) Laboratory hoods.
    (15) Laboratory standard millivolt meters.
    (16) Laboratory standard volt meters.
    (17) Laboratory tables and cabinets.
    (18) Meter-testing equipment.
    (19) Millivolt meters.
    (20) Motor generator sets.
    (21) Muffles.
    (22) Oil analysis apparatus.
    (23) Panels.
    (24) Phantom loads.
    (25) Piping.
    (26) Portable graphic ammeters, voltmeters, and wattmeters.
    (27) Portable loading devices.
    (28) Potential batteries.
    (29) Potentiometers.
    (30) Rotating standards.
    (31) Specific gravity apparatus.
    (32) Standard bottles for meter prover testing.
    (33) Standard cell, reactance, resistor, and shunt.
    (34) Stills.
    (35) Sulphur and ammonia apparatus.
    (36) Switchboards.
    (37) Synchronous timers.
    (38) Tar analysis apparatus.
    (39) Testing panels.
    (40) Testing resistors.
    (41) Thermometers--indicating and recording.
    (42) Transformers.
    (43) Voltmeters.
    (44) Other testing, laboratory, or research equipment not provided 
for elsewhere.
    (45) Other items of equipment for testing gas, fuel, flue gas, 
water, residuals, and other similar items.



Sec. 367.3960  Account 396, Power operated equipment.

    (a) This account must include the cost of power operated equipment 
used in construction or repair work exclusive of equipment includible in 
other accounts. Include, also, the tools and accessories acquired for 
use with the equipment and the vehicle on which the equipment is 
mounted.
    (b) This account must include the following items:
    (1) Air compressors, including driving unit and vehicle.
    (2) Back filling machines.
    (3) Boring machines.
    (4) Bulldozers.
    (5) Cranes and hoists.
    (6) Diggers.
    (7) Engines.
    (8) Pile drivers.
    (9) Pipe cleaning machines.
    (10) Pipe coating or wrapping machines.
    (11) Tractors--Crawler type.
    (12) Trenchers.
    (13) Other power operated equipment.
    (c) It is intended that this account include only the large units 
that are generally self-propelled or mounted on movable equipment.



Sec. 367.3970  Account 397, Communication equipment.

    (a) This account must include the cost installed of telephone, 
telegraph, and wireless equipment for general use

[[Page 1030]]

in connection with service company operations.
    (b) This account must include the following items:
    (1) Amplifiers.
    (2) Antennae.
    (3) Booths.
    (4) Cables.
    (5) Carrier terminal equipment.
    (6) Conductors.
    (7) Distributing boards.
    (8) Extension cords.
    (9) Gongs.
    (10) Hand sets, manual and dial.
    (11) Insulators.
    (12) Intercommunicating sets.
    (13) Loading coils.
    (14) Microwave equipment.
    (15) Operators' desks.
    (16) Paraboloids.
    (17) Poles and fixtures used wholly for telephone or telegraph wire.
    (18) Power supply equipment.
    (19) Radio transmitting and receiving sets.
    (20) Reflectors.
    (21) Repeaters.
    (22) Remote control equipment and lines.
    (23) Sending keys.
    (24) Storage batteries.
    (25) Switchboards.
    (26) Telautograph circuit connections.
    (27) Telegraph receiving sets.
    (28) Telephone and telegraph circuits.
    (29) Testing instruments.
    (30) Towers.
    (31) Underground conduit used wholly for telephone or telegraph 
wires and cable wires.



Sec. 367.3980  Account 398, Miscellaneous equipment.

    (a) This account must include the cost of equipment, apparatus, and 
other similar items, used in the service company's operations that are 
not included in any other account of this system of accounts.
    (b) This account must include the following items:
    (1) Hospital and infirmary equipment.
    (2) Kitchen equipment.
    (3) Employees' recreation equipment.
    (4) Radios.
    (5) Restaurant equipment.
    (6) Soda fountains.
    (7) Operators' cottage furnishings.
    (8) Other miscellaneous equipment.



Sec. 367.3990  Account 399, Other tangible property.

    This account must include the cost of tangible service company 
property not provided for elsewhere.



Sec. 367.3991  Account 399.1, Asset retirement costs for service company 

property.

    This account must include asset retirement costs on service company 
property.



              Subpart H_Income Statement Chart of Accounts

                    Service Company Operating Income



Sec. 367.4000  Account 400, Operating revenues.

    There must be shown under this caption the total amount included in 
the service company operating revenue accounts 457 through 459 
(Sec. Sec. 367.4570 through 367.4590).



Sec. 367.4010  Account 401, Operation expense.

    There must be shown under this caption the total amount included in 
the service company operation expense accounts 500 through 589 
(Sec. Sec. 367.5000 through 367.5890), 800 through 881 (Sec. Sec. 
367.8000 through 367.8810) and 901 through 931 (Sec. Sec. 367.9010 
through 367.9310).



Sec. 367.4020  Account 402, Maintenance expense.

    There must be shown under this caption the total amount included in 
the service company maintenance expense accounts 500 through 598 
(Sec. Sec. 367.5000 through 367.5890), 800 through 894 (Sec. Sec. 
367.8000 through 367.8810), and 935 (Sec. 367.9350).



Sec. 367.4030  Account 403, Depreciation expense.

    (a) This account must include the amount of depreciation for all 
service company property, the cost of which is included in accounts 390 
through 399.1 (Sec. Sec. 367.3900 through 367.3991). Provide 
subaccounts by each class of service

[[Page 1031]]

company property owned or leased except the depreciation expense that is 
charged to clearing accounts or to account 416, Costs and expenses of 
merchandising, jobbing and contract work (Sec. 367.4160).
    (b) The service company must keep the records of property and 
property retirements that will reflect the service life of property that 
has been retired and aid in estimating probable service life by 
mortality, turnover, or other appropriate methods; and also the records 
that will reflect the percentage of salvage and costs of removal for 
property retired from each account, or related subaccount, for 
depreciable property.
    (c) Depreciation expenses applicable to transportation equipment, 
shop equipment, tools, work equipment, power operated equipment and 
other general equipment may be charged to clearing accounts as necessary 
in order to obtain a proper distribution of expenses between 
construction and operation.



Sec. 367.4031  Account 403.1, Depreciation expense for asset retirement costs.

    This account must include the depreciation expense for asset 
retirement costs included in service company property.



Sec. 367.4040  Account 404, Amortization of limited-term property.

    This account must include amortization charges applicable to amounts 
included in the service company property accounts for limited-term 
franchises, licenses, patent rights, limited-term interests in land, and 
expenditures on leased property where the service life of the 
improvements is terminable by action of the lease. The charges to this 
account must be sufficient to distribute the book cost of each 
investment as evenly as may be over the period of its benefit (See 
account 111, Accumulated provision for amortization of service company 
property (Sec. 367.1110)).



Sec. 367.4050  Account 405, Amortization of other property.

    (a) When authorized by the Commission, this account must include 
charges for amortization of intangible or other property that does not 
have a definite or terminable life and that is not subject to charges 
for depreciation expense.
    (b) This account must be supported in sufficient detail to show the 
amortization applicable to each investment being amortized, together 
with the book cost of the investment and the period over which it is 
being written off.



Sec. 367.4073  Account 407.3, Regulatory debits.

    This account shall be debited, when appropriate, with amounts 
credited to Account 254, Other Regulatory Liabilities, to record 
regulatory liabilities imposed on the service company by the ratemaking 
actions of regulatory agencies. This account shall also be debited, when 
appropriate, with the amounts credited to Account 182.3, Other 
Regulatory Assets, concurrent with the recovery of such amounts in 
rates.



Sec. 367.4074  Account 407.4, Regulatory credits.

    This account shall be credited, when appropriate, with amounts 
debited to Account 182.3, Other Regulatory Assets, to establish 
regulatory assets. This account shall also be credited, when 
appropriate, with the amounts debited to Account 254, Other Regulatory 
Liabilities, concurrent with the return of such amounts to customers 
through rates.



Sec. 367.4081  Account 408.1, Taxes other than income taxes, operating income.

    This account must include those taxes, other than income taxes, that 
relate to service company operating income. This account must be 
maintained so as to allow ready identification of the various classes of 
taxes.



Sec. 367.4082  Account 408.2, Taxes other than income taxes, other income and 

deductions.

    This account must include those taxes, other than income taxes, that 
relate to other income and deductions.

[[Page 1032]]



Sec. 367.4091  Account 409.1, Income taxes, operating income.

    This account must include the amount of those local, state and 
Federal income taxes that relate to service company operating income.



Sec. 367.4092  Account 409.2, Income taxes, other income and deductions.

    This account must include the amount of those local, state and 
Federal income taxes (both positive and negative), that relate to other 
income and deductions.



Sec. 367.4093  Account 409.3, Income taxes, extraordinary items.

    This account must include the amount of those local, state and 
Federal income taxes (both positive and negative), that relate to 
extraordinary items.



Sec. 367.4101  Account 410.1, Provision for deferred income taxes, operating 

income.

    This account must include the amounts of those deferrals of taxes 
and allocations of deferred taxes that relate to service company 
operating income.



Sec. 367.4102  Account 410.2, Provision for deferred income taxes, other 

income and deductions.

    This account must include the amounts of those deferrals of taxes 
and allocations of deferred taxes that relate to other income and 
deductions.



Sec. 367.4111  Account 411.1, Provision for deferred income taxes--Credit, 

operating income.

    This account must include the amounts of those allocations of 
deferred taxes and deferrals of taxes, credit, that relate to service 
company operating income.



Sec. 367.4112  Account 411.2, Provision for deferred income taxes--Credit, 

other income and deductions.

    This account must include the amounts of those allocations of 
deferred taxes and deferrals of taxes, credit, that relate to other 
income and deductions.



Sec. 367.4114  Account 411.4, Investment tax credit adjustments, service 

company property.

    This account must include the amount of those investment tax credit 
adjustments that relate to service company property.



Sec. 367.4115  Account 411.5, Investment tax credit adjustments, other.

    This account must include the amount of those investment tax credit 
adjustments not properly included in other accounts.



Sec. 367.4116  Account 411.6, Gains from disposition of service company plant.

    (a) The service company must record in this account gains resulting 
from the settlement of asset retirement obligations related to service 
company plant in accordance with the accounting prescribed in General 
Instructions in Sec. 367.22.
    (b) Income taxes relating to losses, recorded in this account must 
be recorded in Account 409.1, Income Taxes, operating income (Sec. 
367.4091).



Sec. 367.4117  Account 411.7, Losses from disposition of service company 

plant.

    (a) The service company must record in this account losses resulting 
from the settlement of asset retirement obligations related to service 
company plant in accordance with the accounting prescribed in General 
Instructions in Sec. 367.22.
    (b) Income taxes relating to losses, recorded in this account must 
be recorded in Account 409.1, Income Taxes, operating income (Sec. 
367.4091).



Sec. 367.4118  Account 411.10, Accretion expense.

    This account must be charged for accretion expense on the 
liabilities associated with asset retirement obligations included in 
account 230, Asset retirement obligations (Sec. 367.2300), related to 
service company property.



Sec. 367.4120  Account 412, Cost and expenses of construction or other 

services.

    This account must include expenditures related to the performance of

[[Page 1033]]

construction or service contracts, under which the service company 
undertakes projects to construct physical property for associate or non-
associate companies (see General Instructions Sec. 367.24, Construction 
and service contracts for other companies) and the cost of services 
performed for others not provided for elsewhere.



Sec. 367.4160  Account 416, Costs and expenses of merchandising, jobbing and 

contract work.

    (a) This account must include the following labor items for services 
provided:
    (1) Canvassing and demonstrating appliances in homes and other 
places for the purpose of selling appliances.
    (2) Demonstrating and selling activities in sales rooms.
    (3) Installing appliances on customer premises where the work is 
done only for purchasers of appliances from the associated company.
    (4) Installing wiring, piping, or other property work, on a jobbing 
or contract basis.
    (5) Preparing advertising materials for appliance sales purposes.
    (6) Receiving and handling customer orders for merchandise or for 
jobbing services.
    (7) Cleaning and tidying sales rooms.
    (8) Maintaining display counters and other equipment used in 
merchandising.
    (9) Arranging merchandise in sales rooms and decorating display 
windows.
    (10) Reconditioning repossessed appliances.
    (11) Bookkeeping and other clerical work in connection with 
merchandise and jobbing activities.
    (12) Supervising merchandise and jobbing operations.
    (b) This account must include the following materials and expenses 
items:
    (1) Advertising in newspapers, periodicals, radio, television, and 
other similar items.
    (2) Cost of merchandise sold and of materials used in jobbing work.
    (3) Stores expenses on merchandise and jobbing stocks.
    (4) Fees and expenses of advertising and commercial artists' 
agencies.
    (5) Printing booklets, dodgers, and other advertising data.
    (6) Premiums given as inducement to buy appliances.
    (7) Light, heat and power.
    (8) Depreciation on equipment used primarily for merchandise and 
jobbing operations.
    (9) Rent of sales rooms or of equipment.
    (10) Transportation expense in delivery and pick-up of appliances by 
the associated company's facilities.
    (11) Stationery and office supplies and expenses.
    (12) Losses from uncollectible merchandise and jobbing accounts.
    (c) Records in support of this account shall be so kept as to permit 
ready summarization of costs and expenses by such major items as are 
feasible.
    (d) Related taxes must be recorded in account 408.2, Taxes other 
than income taxes, other income and deductions (Sec. 367.4082), or 
account 409.2, Income taxes, other income and deductions (Sec. 
367.4092), as appropriate.



Sec. 367.4180  Account 418, Non-operating rental income.

    (a) The expenses shall include all elements of costs incurred in the 
ownership and rental of property and the accounts shall be maintained so 
as to permit ready summarization of operation, maintenance, rents, 
depreciation, and amortization.
    (b) Related taxes shall be recorded in Account 408.2, Taxes other 
than income taxes, other income and deductions (Sec. 367.4082) or 
Account 409.2, Income taxes, other income and deductions (Sec. 
367.4092), as appropriate.



Sec. 367.4181  Account 418.1, Equity in earnings of subsidiary companies.

    This account must include the service company's equity in the 
earnings or losses of subsidiary companies for the year.



Sec. 367.4190  Account 419, Interest and dividend income.

    (a) This account must include interest revenues on securities, 
loans, notes, advances, special deposits, tax refunds and all other 
interest-bearing assets, and dividends on stocks of other companies, 
whether the securities on which the interest and dividends are received 
are carried as investments or included

[[Page 1034]]

in sinking or other special fund accounts.
    (b) This account may include the pro rata amount necessary to 
extinguish (during the interval between the date of acquisition and the 
date of maturity) the difference between the cost to the service company 
and the face value of interest-bearing securities. The amounts credited 
or charged must be concurrently included in the accounts in which the 
securities are carried.
    (c) Where significant in amount, expenses, excluding operating taxes 
and income taxes, applicable to security investments and to interest and 
dividend revenues on the account must be charged in this account.
    (d) Related taxes must be recorded in account 408.2, Taxes other 
than income taxes, other income and deductions (Sec. 367.4082), or 
account 409.2, Income taxes, other income and deductions (Sec. 
367.4092).
    (e) Interest accrued, the payment of which is not reasonably 
assured, dividends receivable that have not been declared or guaranteed, 
and interest or dividends upon reacquired securities issued or assumed 
by the service company must not be credited to this account.



Sec. 367.4191  Account 419.1, Allowance for other funds used during 

construction.

    This account must include concurrent credits for allowance for other 
funds used during construction.



Sec. 367.4210  Account 421, Miscellaneous income or loss.

    This account must include all revenue and expense items except taxes 
properly includible in the income account and not provided for 
elsewhere. Related taxes must be recorded in account 408.2, Taxes other 
than income taxes, other income and deductions (Sec. 367.4082), or 
account 409.2, Income taxes, other income and deductions (Sec. 
367.4092).



Sec. 367.4211  Account 421.1, Gain on disposition of property.

    This account must be credited with the gain on the sale, conveyance, 
exchange, or transfer of service or other property to another. Income 
taxes on gains recorded in this account must be recorded in account 
409.2, Income taxes, other income and deductions (Sec. 367.4092).



Sec. 367.4212  Account 421.2, Loss on disposition of property.

    This account must be charged with the loss on the sale, conveyance, 
exchange or transfer of service or other property to another. The 
reduction in income taxes relating to losses recorded in this account 
must be recorded in account 409.2, Income taxes, other income and 
deductions (Sec. 367.4092).



Sec. 367.4250  Account 425, Miscellaneous amortization.

    (a) This account must include amortization charges not includible in 
other accounts which are properly deductible in determining the income 
of the service company before interest charges. Charges included in this 
account, if significant in amount, must be in accordance with an orderly 
and systematic amortization program.
    (b) This account must include the following items:
    (1) Amortization of intangibles included in service company 
property.
    (2) Other miscellaneous amortization charges authorized to be 
included in this account by the Commission.



Sec. 367.4261  Account 426.1, Donations.

    This account must include all payments or donations for charitable, 
social or community welfare purposes.



Sec. 367.4262  Account 426.2, Life insurance.

    This account must include all payments for life insurance of 
officers and employees where the service company is beneficiary (net 
premiums less increase in cash surrender value of policies).



Sec. 367.4263  Account 426.3, Penalties.

    This account must include payments by the service company for 
penalties or fines for violation of any regulatory statutes by the 
service company or its officials.

[[Page 1035]]



Sec. 367.4264  Account 426.4, Expenditures for certain civic, political and related activities.

    (a) This account must include expenditures for the purpose of 
influencing public opinion with respect to the election or appointment 
of public officials, referenda, legislation, or ordinances (either with 
respect to the possible adoption of new referenda, legislation or 
ordinances or repeal or modification of existing referenda, legislation 
or ordinances) or approval, modification, or revocation of franchises; 
or for the purpose of influencing the decisions of public officials.
    (b) This account must not include expenditures that are directly 
related to appearances before regulatory or other governmental bodies in 
connection with an associate utility company's existing or proposed 
operations.



Sec. 367.4265  Account 426.5, Other deductions.

    This account must include other miscellaneous expenses that are not 
properly included in service company operations.



Sec. 367.4270  Account 427, Interest on long-term debt.

    (a) This account must include the amount of interest on outstanding 
long-term debt issued or assumed by the service company, the liability 
for which is included in account 224, Other long-term debt (Sec. 
367.2240).
    (b) This account must be kept or supported so as to show the 
interest accruals on each class and series of long-term debt.
    (c) This account must not include interest on nominally issued or 
nominally outstanding long-term debt, including securities assumed.



Sec. 367.4280  Account 428, Amortization of debt discount and expense.

    (a) This account must include the amortization of unamortized debt 
discount and expense on outstanding long-term debt. Amounts charged to 
this account must be credited concurrently to accounts 181, Unamortized 
debt expense (Sec. 367.1810), and 226, Unamortized discount on long-
term debt--Debit (Sec. 367.2260).
    (b) This account must be kept or supported so as to show the debt 
discount and expense on each class and series of long-term debt.



Sec. 367.4290  Account 429, Amortization of premium on debt--Credit.

    (a) This account must include the amortization of unamortized net 
premium on outstanding long-term debt. Amounts credited to this account 
must be charged concurrently to account 225, Unamortized premium on 
long-term debt (Sec. 367.2250).
    (b) This account must be kept or supported so as to show the premium 
on each class and series of long-term debt.
    (c) This account must include the following items:
    (1) Loss relating to investments in securities written-off or 
written-down.
    (2) Loss on sale of investments.
    (3) Loss on reacquisition, resale or retirement of service company's 
debt securities.
    (4) Preliminary survey and investigation expenses related to 
abandoned projects, when not written-off to the appropriate operating 
expense account.



Sec. 367.4300  Account 430, Interest on debt to associate companies.

    This account must include interest accrued on amounts included in 
account 223, Advances from associate companies (Sec. 367.2230), and 
account 233, Notes payable to associate companies (Sec. 367.2330). The 
records supporting the entries to this account must be kept so as to 
show to who the interest is to be paid, the period covered by the 
accrual, the rate of interest and the principal amount of the advances 
or other obligations on which the interest is accrued. Separate 
subaccounts must be maintained for each related debt account.



Sec. 367.4310  Account 431, Other interest expense.

    This account must include all interest charges not provided for 
elsewhere.



Sec. 367.4320  Account 432, Allowance for borrowed funds used during 

construction--Credit.

    This account must include concurrent credits for allowance for 
borrowed funds used during construction.

[[Page 1036]]



                  Subpart I_Retained Earnings Accounts



Sec. 367.4330  Account 433, Balance transferred from income.

    This account must include the net credit or debit transferred from 
income for the year.



Sec. 367.4340  Account 434, Extraordinary income.

    This account must be credited with gains of unusual nature and 
infrequent occurrence that would significantly distort the current 
year's income computed before extraordinary items, if reported other 
than as extraordinary items. Income tax relating to the amounts recorded 
in this account must be recorded in account 409.3, Income taxes, 
extraordinary items (Sec. 367.4093) (See General Instructions in Sec. 
367.8).



Sec. 367.4350  Account 435, Extraordinary deductions.

    This account must be debited with losses of unusual nature and 
infrequent occurrence that would significantly distort the current 
year's income computed before extraordinary items, if reported other 
than as extraordinary items. Income tax relating to the amounts recorded 
in this account must be recorded in account 409.3, Income taxes, 
extraordinary items (Sec. 367.4093) (See General Instructions in Sec. 
367.8).



Sec. 367.4360  Account 436, Appropriations of retained earnings.

    This account must include appropriations of retained earnings as 
follows:
    (a) Appropriations required under terms of mortgages, orders of 
courts, contracts, or other agreements.
    (b) Appropriations required by action of regulatory authorities.
    (c) Other appropriations made at option of the service company for 
specific purposes.



Sec. 367.4370  Account 437, Dividends declared--preferred stock.

    (a) This account must include amounts declared payable out of 
retained earnings as dividends on actually outstanding preferred or 
prior lien capital stock issued by the service company.
    (b) Dividends must be segregated for each class and series of 
preferred stock as to those payable in cash, stock, and other forms. If 
not payable in cash, the medium of payment must be described with 
sufficient detail to identify it.



Sec. 367.4380  Account 438, Dividends declared--common stock.

    (a) This account must include amounts declared payable out of 
retained earnings as dividends on actually outstanding common capital 
stock issued by the service company.
    (b) Dividends must be segregated for each class of common stock as 
to those payable in cash, stock and other forms. If not payable in cash, 
the medium of payment must be described with sufficient detail to 
identify it.



Sec. 367.4390  Account 439, Adjustments to retained earnings.

    (a) This account must, with prior Commission approval, include 
significant non-recurring transactions accounted for as prior period 
adjustments, as follows:
    (1) Correction of an error in the financial statements of a prior 
year.
    (2) Adjustments that result from realization of income tax benefits 
of reacquisition operating loss carry forwards of purchased 
subsidiaries. All other items of profit and loss recognized during a 
year must be included in the determination of net income for that year.
    (b) Adjustments, charges, or credits due to losses on reacquisition, 
resale or retirement of the company's own capital stock must be included 
in this account.



              Subpart J_Operating Revenue Chart of Accounts



Sec. 367.4570  Account 457, Services rendered to associate companies.

    This account must include amounts billed to associate companies for 
services rendered at cost (See accounts 457.1 through 457.3 in 
Sec. Sec. 367.4571 through 367.4573). Overbillings or underbillings 
arising from adjustments of estimated costs to actual costs must be 
cleared through this account and concurrent adjustments made to other 
accounts involved.

[[Page 1037]]



Sec. 367.4571  Account 457.1, Direct costs charged to associate companies.

    This account must include those direct costs that can be identified 
through a cost allocation system as being applicable to services 
performed for associate companies. This account must not include any 
compensation for use of equity capital or inter-company interest on 
indebtedness.



Sec. 367.4572  Account 457.2, Indirect costs charged to associate companies.

    This account must include recovery of those indirect costs that 
cannot be separately identified to a single or group of associate 
companies and therefore must be allocated. Only journal or memorandum 
entries should be prepared monthly, by departments, for all such cost 
accumulated and billed to customers. Amounts billed to associate 
companies must be included in this account. This account must not 
include any compensation for use of equity capital or inter-company 
interest on indebtedness.



Sec. 367.4573  Account 457.3, Compensation for use of capital-associate 

companies.

    This account must include only the portion of compensation for use 
of equity capital and inter-company interest on indebtedness before 
income taxes that is properly allocable to services rendered to each 
associate company.



Sec. 367.4580  Account 458, Services rendered to non-associate companies.

    This account must include amounts billed for services rendered to 
non-associate companies (See accounts 458.1 through 458.4 (Sec. Sec. 
367.4581 through 367.4584)).



Sec. 367.4581  Account 458.1, Direct costs charged to non-associate companies.

    This account must include those direct costs that can be identified 
through a cost allocation system as being applicable to services 
performed for non-associate companies. This account must not include any 
compensation for use of equity capital or interest on indebtedness.



Sec. 367.4582  Account 458.2, Indirect costs charged to non-associate 

companies.

    This account must include recovery of those indirect costs of 
services performed for non-associate companies that cannot be 
specifically assigned and therefore must be allocated. This account must 
not include any compensation for use of equity capital or inter-company 
interest on indebtedness.



Sec. 367.4583  Account 458.3, Compensation for use of capital--Non-associate 

companies.

    This account must include only the portion of compensation for use 
of equity capital and inter-company interest on indebtedness before 
income taxes that is properly allocable to services rendered to non-
associate utility companies. A statement to support the basis for the 
compensation and how it was calculated must be attached to a separate 
journal entry, ledger system, or memorandum file.



Sec. 367.4584  Account 458.4, Excess or deficiency on servicing non-associate 

utility companies.

    This account must include the amount by which the aggregate price 
received for services rendered to non-associate utility companies 
differs from the sum of the total direct and indirect costs and 
compensation for use of capital which are properly allocable to such 
services (See accounts 458.1 through 458.3 (Sec. Sec. 367.4581 through 
367.4583) and General Instructions in Sec. 367.23).



      Subpart K_Operation and Maintenance Expense Chart of Accounts



Sec. 367.5000  Accounts 500-598, Electric operation and maintenance accounts.

    Service companies must use accounts 500 through 598 in part 101 of 
this chapter.



Sec. 367.8000  Accounts 800-894, Gas operation and maintenance accounts.

    Service companies must use accounts 800 through 894 in part 201 of 
this chapter.

[[Page 1038]]



Sec. 367.9010  Account 901, Supervision.

    This account must include the cost of labor and expenses incurred in 
the general direction and supervision of customer accounting and 
collecting activities. Direct supervision of a specific activity must be 
charged to account 902, Meter reading expenses (Sec. 367.9020), or 
account 903, Customer records and collection expenses (Sec. 367.9030), 
as appropriate (See Operating Expense Instructions in Sec. 367.80).



Sec. 367.9020  Account 902, Meter reading expenses.

    (a) This account must include the cost of labor, materials used and 
expenses incurred in reading customer meters, and determining 
consumption when performed by employees engaged in reading meters.
    (b) This account must include the following labor items:
    (1) Addressing forms for obtaining meter readings by mail.
    (2) Changing and collecting meter charts used for billing purposes.
    (3) Inspecting time clocks, checking seals, and other similar items, 
when performed by meter readers and the work represents a minor activity 
incidental to regular meter reading routine.
    (4) Reading meters, including demand meters, and obtaining load 
information for billing purposes. Exclude and charge to account 586, 
Meter expenses (Sec. 367.5000), account 878, Meter and house regulator 
expenses (Sec. 367.8000), or to account 903, Customer records and 
collection expenses (Sec. 367.9030), as applicable, the cost of 
obtaining meter readings, first and final, if incidental to the 
operation of removing or resetting, sealing, or locking, and 
disconnecting or reconnecting meters.
    (5) Computing consumption from meter reader's book or from reports 
by mail when done by employees engaged in reading meters.
    (6) Collecting from prepayment meters when incidental to meter 
reading.
    (7) Maintaining record of customers'' keys.
    (8) Computing estimated or average consumption when performed by 
employees engaged in reading meters.
    (c) This account must include the following materials and expenses 
items:
    (1) Badges, lamps, and uniforms.
    (2) Demand charts, meter books and binders and forms for recording 
readings, but not the cost of preparation.
    (3) Postage and supplies used in obtaining meter readings by mail.
    (4) Transportation, meals, and incidental expenses.



Sec. 367.9030  Account 903, Customer records and collection expenses.

    (a) This account must include the cost of labor, materials used and 
expenses incurred in work on customer applications, contracts, orders, 
credit investigations, billing and accounting, collections and 
complaints.
    (b) This account must include the following labor items:
    (1) Receiving, preparing, recording and handling routine orders for 
service, disconnections, transfers or meter tests initiated by the 
customer, excluding the cost of carrying out the orders, that is 
chargeable to the account appropriate for the work called for by the 
orders.
    (2) Investigations of customers'' credit and keeping of records 
pertaining to the investigations, including records of uncollectible 
accounts written off.
    (3) Receiving, refunding or applying customer deposits and 
maintaining customer deposit, line extension, and other miscellaneous 
records.
    (4) Checking consumption shown by meter readers'' reports where 
incidental to preparation of billing data.
    (5) Preparing address plates and addressing bills and delinquent 
notices.
    (6) Preparing billing data.
    (7) Operating billing and bookkeeping machines.
    (8) Verifying billing records with contracts or rate schedules.
    (9) Preparing bills for delivery, and mailing or delivering bills.
    (10) Collecting revenues, including collection from prepayment 
meters unless incidental to meter-reading operations.
    (11) Balancing collections, preparing collections for deposit, and 
preparing cash reports.
    (12) Posting collections and other credits or charges to customer 
accounts and extending unpaid balances.
    (13) Balancing customer accounts and controls.

[[Page 1039]]

    (14) Preparing, mailing, or delivering delinquent notices and 
preparing reports of delinquent accounts.
    (15) Final meter reading of delinquent accounts when done by 
collectors incidental to regular activities.
    (16) Disconnecting and reconnecting service because of nonpayment of 
bills.
    (17) Receiving, recording, and handling of inquiries, complaints, 
and requests for investigations from customers, including preparation of 
necessary orders, but excluding the cost of carrying out such orders, 
which is chargeable to the account appropriate for the work called for 
by the orders.
    (18) Statistical and tabulating work on customer accounts and 
revenues, but not including special analyses for sales department, rate 
department, or other general purposes, unless incidental to regular 
customer accounting routines.
    (19) Preparing and periodically rewriting meter reading sheets.
    (20) Determining consumption and computing estimated or average 
consumption when performed by employees other than those engaged in 
reading meters.
    (c) This account must include the following materials and expenses 
items:
    (1) Address plates and supplies.
    (2) Cash overages and shortages.
    (3) Commissions or fees to others for collecting.
    (4) Payments to credit organizations for investigations and reports.
    (5) Postage.
    (6) Transportation expenses (Major only), including transportation 
of customer bills and meter books under centralized billing procedure.
    (7) Transportation, meals, and incidental expenses.
    (8) Bank charges, exchange, and other fees for cashing and 
depositing customers' checks.
    (9) Forms for recording orders for services removals, and other 
similar forms.
    (10) Rent of mechanical equipment.
    (d) The cost of work on meter history and meter location records is 
chargeable to account 586, Meter expenses (Sec. 367.5000) or account 
878, Meter and house regulator expenses (Sec. 367.8000).



Sec. 367.9040  Account 904, Uncollectible accounts.

    This account must be charged with amounts sufficient to provide for 
losses from uncollectible service company revenues. Concurrent credits 
must be made to account 144, Accumulated provision for uncollectible 
accounts--Credit (Sec. 367.1440). Losses from uncollectible accounts 
also must be charged to account 144 (Sec. 367.1440).



Sec. 367.9050  Account 905, Miscellaneous customer accounts expenses.

    (a) This account must include the cost of labor, materials used and 
expenses incurred not provided for in other accounts.
    (b) This account must include the following labor items:
    (1) General clerical and stenographic work.
    (2) Miscellaneous labor.
    (c) This account must include the following materials and expenses 
items:
    (1) Communication service.
    (2) Miscellaneous office supplies and expenses and stationery and 
printing other than those specifically provided for in accounts 902 and 
903 (Sec. Sec. 367.9020 and 367.9030).



Sec. 367.9070  Account 907, Supervision.

    This account must include the cost of labor and expenses incurred in 
the general direction and supervision of customer service activities, 
the object of which is to encourage safe, efficient and economical use 
of the associate utility company's service. Direct supervision of a 
specific activity within customer service and informational expense 
classification must be charged to the account wherein the costs of such 
activity are included (See Operating Expense Instructions in Sec. 
367.80).



Sec. 367.9080  Account 908, Customer assistance expenses.

    (a) This account must include the cost of labor, materials used and 
expenses incurred in providing instructions or assistance to customers, 
the object of which is to encourage safe, efficient and economical use 
of the associate utility company's service.
    (b) This account must include the following labor items:
    (1) Direct supervision of department.

[[Page 1040]]

    (2) Processing customer inquiries relating to the proper use of 
electric equipment, the replacement of such equipment and information 
related to the equipment.
    (3) Advice directed to customers as to how they may achieve the most 
efficient and safest use of electric equipment.
    (4) Demonstrations, exhibits, lectures, and other programs designed 
to instruct customers in the safe, economical or efficient use of 
electric service, and/or oriented toward conservation of energy.
    (5) Engineering and technical advice to customers, the object of 
which is to promote safe, efficient and economical use of the associate 
utility company's service.
    (c) This account must include the following materials and expenses 
items:
    (1) Supplies and expenses pertaining to demonstrations, exhibits, 
lectures, and other programs.
    (2) Loss in value on equipment and appliances used for customer 
assistance programs.
    (3) Office supplies and expenses.
    (4) Transportation, meals, and incidental expenses.
    (d) Do not include in this account expenses that are provided for 
elsewhere, such as accounts 416, Costs and expenses of merchandising, 
jobbing and contract work (Sec. 367.4160), 587, Customer installations 
expenses (Sec. 367.5870), 879, Customer installations expenses (Sec. 
367.8790), and 912, Demonstrating and selling expenses (Sec. 367.9120).



Sec. 367.9090  Account 909, Informational and instructional advertising 

expenses.

    (a) This account must include the cost of labor, materials used and 
expenses incurred in activities which primarily convey information as to 
what the associate utility company urges or suggests customers should do 
in utilizing service to protect health and safety, to encourage 
environmental protection, to utilize their equipment safely and 
economically, or to conserve energy.
    (b) This account must include the following labor items:
    (1) Direct supervision of informational activities.
    (2) Preparing informational materials for newspapers, periodicals, 
billboards, and other similar forms of advertisement, and preparing and 
conducting informational motion pictures, radio and television programs.
    (3) Preparing informational booklets, bulletins, and other similar 
forms of advertisement, used in direct mailings.
    (4) Preparing informational window and other displays.
    (5) Employing agencies, selecting media and conducting negotiations 
in connection with the placement and subject matter of information 
programs.
    (c) This account must include the following materials and expenses 
items:
    (1) Use of newspapers, periodicals, billboards, radio, and other 
similar forms of advertisement, for informational purposes.
    (2) Postage on direct mailings to customers exclusive of postage 
related to billings.
    (3) Printing of informational booklets, dodgers, bulletins, and 
other similar items.
    (4) Supplies and expenses in preparing informational materials for 
the associate utility company.
    (5) Office supplies and expenses.
    (d) Exclude from this account and charge to account 930.2, 
Miscellaneous general expenses, the cost of publication of stockholder 
reports, dividend notices, bond redemption notices, financial 
statements, and other notices of a general corporate character. Also 
exclude all expenses of a promotional, institutional, goodwill or 
political nature, that are included in accounts 913, Advertising 
expenses (Sec. 367.9130), 930.1, General advertising expenses (Sec. 
367.9301), and 426.4, Expenditures for certain civic, political, and 
related expenses (Sec. 367.4264).
    (e) Entries relating to informational advertising included in this 
account must contain or refer to supporting documents that identify the 
specific advertising message. If references are used, copies of the 
advertising message must be readily available.

[[Page 1041]]



Sec. 367.9100  Account 910, Miscellaneous customer service and informational 

expenses.

    (a) This account must include the cost of labor, materials used and 
expenses incurred in connection with customer service and informational 
activities that are not includible in other customer information expense 
accounts.
    (b) This account must include the following labor items:
    (1) General clerical and stenographic work not assigned to specific 
customer service and informational programs.
    (2) Miscellaneous labor.
    (c) This account must include the following materials and expenses 
items:
    (1) Communication service.
    (2) Printing, postage and office supplies expenses.



Sec. 367.9110  Account 911, Supervision.

    This account must include the cost of labor and expenses incurred in 
the general direction and supervision of sales activities, except 
merchandising. Direct supervision of a specific activity, such as 
demonstrating, selling, or advertising, must be charged to the account 
wherein the costs of such activity are included (See Operating Expense 
Instructions in Sec. 367.80).



Sec. 367.9120  Account 912, Demonstrating and selling expenses.

    (a) This account must include the cost of labor, materials used and 
expenses incurred in promotional, demonstrating, and selling activities, 
except by merchandising, the object of which is to promote or retain the 
business of present and prospective customers of the service company and 
the companies within the holding company system that is not recorded in 
Accounts 416, Costs and expenses of merchandising, jobbing and contract 
work (Sec. 367.4160), or 930.1, General advertising expenses for 
associated companies (Sec. 367.9301).
    (b) This account must include the following labor items:
    (1) Demonstrating uses of services provided by companies within the 
holding company system.
    (2) Conducting cooking schools, preparing recipes, and related home 
service activities.
    (3) Exhibitions, displays, lectures, and other programs to promote 
the services provided by the service company or the companies within the 
holding company system.
    (4) Experimental and development work in connection with new and 
improved appliances and equipment, prior to general public acceptance.
    (5) Solicitation of new customers or of additional business from old 
customers, including commissions paid employees.
    (6) Engineering and technical advice to present or prospective 
customers in connection with promoting or retaining the use of services.
    (7) Special customer canvasses when their primary purpose is the 
retention of business or the promotion of new business.
    (c) This account must include the following materials and expenses 
items:
    (1) Supplies and expenses pertaining to demonstration and 
experimental and development activities.
    (2) Booth and temporary space rental.
    (3) Loss in value on equipment and appliances used for demonstration 
purposes.
    (4) Transportation, meals, and incidental expenses.



Sec. 367.9130  Account 913, Advertising expenses.

    (a) This account must include the cost of labor, materials used and 
expenses incurred in advertising designed to promote or retain the use 
of services provided by the service company or the companies within the 
holding company system, except advertising the sale of merchandise.
    (b) This account must include the following labor items:
    (1) Direct supervision of department.
    (2) Preparing advertising material for newspapers, periodicals, 
billboards, and other similar forms of advertisement, and preparing and 
conducting motion pictures, radio and television programs.
    (3) Preparing booklets, bulletins, and other similar forms of 
advertisement, used in direct mail advertising.
    (4) Preparing window and other displays.
    (5) Clerical and stenographic work.

[[Page 1042]]

    (6) Investigating advertising agencies and media and conducting 
negotiations in connection with the placement and subject matter of 
sales advertising.
    (c) This account must include the following materials and expenses 
items:
    (1) Advertising in newspapers, periodicals, billboards, radio, and 
other similar forms of advertisement, for sales promotion purposes, but 
not including institutional or goodwill advertising included in account 
930.1, General advertising expenses (Sec. 367.9301).
    (2) Materials and services given as prizes or otherwise in 
connection with civic lighting contests, canning, or cooking contests, 
bazaars, and other similar materials and services, in order to publicize 
and promote the use of utility services.
    (3) Fees and expenses of advertising agencies and commercial 
artists.
    (4) Novelties for general distribution.
    (5) Postage on direct mail advertising.
    (6) Premiums distributed generally, such as recipe books, and other 
similar items, when not offered as inducement to purchase appliances.
    (7) Printing booklets, dodgers, bulletins, and other similar forms 
of advertisement.
    (8) Supplies and expenses in preparing advertising material.
    (9) Office supplies and expenses.
    (d) The cost of advertisements which set forth the value or 
advantages of offered services without reference to specific appliances 
or the promotion of appliances must be considered sales promotion 
advertising and charged to this account. However, advertisements that 
are limited to specific makes of appliances sold by any company and 
prices, terms, and other similar items, without referring to the value 
or advantages of offered services, must be considered as merchandise 
advertising and the cost must be charged to account 416, Costs and 
expenses of merchandising, jobbing and contract work (Sec. 367.4160).
    (e) Advertisements that substantially mention or refer to the value 
or advantages of offered services, together with specific reference to 
makes of appliances sold by any company and the price, terms, and other 
similar items, and designed for the joint purpose of increasing the use 
of offered services and the sales of appliances, must be considered as a 
combination advertisement and the costs must be distributed between this 
account and account 416 (Sec. 367.4160) on the basis of space, time, or 
other proportional factors.
    (f) Exclude from this account and charge to account 930.2, 
Miscellaneous general expenses (Sec. 367.9302), the cost of publication 
of stockholder reports, dividend notices, bond redemption notices, 
financial statements, and other notices of a general corporate 
character. Exclude also all institutional or goodwill advertising (See 
account 930.1, General advertising expenses (Sec. 367.9301)).



Sec. 367.9160  Account 916, Miscellaneous sales expenses.

    (a) This account must include the cost of labor, materials used and 
expenses incurred in connection with sales activities, except 
merchandising, which are not includible in other sales expense accounts.
    (b) This account must include the following labor items:
    (1) General clerical and stenographic work not assigned to specific 
functions.
    (2) Special analysis of customer accounts and other statistical work 
for sales purposes not a part of the regular customer accounting and 
billing routine.
    (3) Miscellaneous labor.
    (c) This account must include the following materials and expenses 
items:
    (1) Communication service.
    (2) Printing, postage, and office supplies and expenses applicable 
to sales activities, except those chargeable to account 913, Advertising 
expenses (Sec. 367.9130).



Sec. 367.9200  Account 920, Administrative and general salaries.

    (a) This account must include salaries, wages, bonuses and other 
consideration for services, with the exception of director's fees paid 
directly to officers and employees of the service company.
    (b) This account must be supported by time records and appropriately 
referenced to detailed records subdividing salaries and wages by 
departments or other functional organization units.

[[Page 1043]]



Sec. 367.9210  Account 921, Office supplies and expenses.

    (a) This account must include office supplies and expenses incurred 
in connection with the general administration of service company 
operations assignable to specific administrative or general departments 
and not specifically provided for in other accounts. This includes the 
expenses of the various administrative and general departments, the 
salaries and wages of which are included in account 920, Administrative 
and general salaries (Sec. 367.9200).
    (b) This account may be subdivided in accordance with a 
classification appropriate to the departmental or other functional 
organization of the service company. The following items must be 
included in this account:
    (1) Automobile service, including charges through clearing account.
    (2) Bank messenger and service charges.
    (3) Books, periodicals, bulletins and subscriptions to newspapers, 
newsletters, tax service, and other similar items.
    (4) Building service expenses for customer accounts, sales, and 
administrative and general purposes.
    (5) Communication service expenses to include telephone, telegraph, 
wire transfer, micro-wave, and other similar items.
    (6) Cost of individual items of office equipment used by general 
departments which are of small value or short life.
    (7) Membership fees and dues in trade, technical, and professional 
associations paid by a utility for employees. (Company memberships must 
be included in account 930.2 in Sec. 367.9302.)
    (8) Office supplies and expenses.
    (9) Payment of court costs, witness fees, and other expenses of 
legal department.
    (10) Postage, printing and stationery.
    (11) Meals, traveling, entertainment and incidental expenses.
    (c) Records must be so maintained to permit ready analysis by item 
showing the nature of the expense and identity of the person furnishing 
the service.



Sec. 367.9230  Account 923, Outside services employed.

    (a) This account must include the fees and expenses of professional 
consultants and others for general services with the exception of fees 
and expenses for outside services of account 928, Regulatory commission 
expenses (Sec. 367.9280), and account 930.1, General advertising 
expenses (Sec. 367.9301). Separate subaccounts must be provided for 
auditing, legal, engineering, management consulting fees and any other 
fees for professional or outside services.
    (b) Records must be maintained so as to permit ready analysis 
showing the nature of service, identity of the person furnishing the 
service, affiliation to the service company, and, if allocated to more 
than one company, the specific method of allocation.



Sec. 367.9240  Account 924, Property insurance.

    (a) This account must include the cost of insurance or reserve 
accruals to protect the service company against losses and damages to 
owned or leased property used in service company operations. It also 
must include the cost of labor and related supplies and expenses 
incurred in property insurance activities.
    (b) Recoveries from insurance companies or others for property 
damages must be credited to the account charged with the cost of the 
damage. If the damaged property has been retired, the credit must be to 
the appropriate account for accumulated provision for depreciation.
    (c) Records must be kept so as to show the amount of coverage for 
each class of insurance carried, the property covered, and the 
applicable premiums. Any dividends distributed by mutual insurance 
companies must be credited to the accounts to which the insurance 
premiums were charged. The following items must be included in this 
account:
    (1) Premiums payable to insurance companies for fire, storm, 
burglary, boiler explosion, lightning, fidelity, riot, and similar 
insurance.
    (2) Special costs incurred in procuring insurance.
    (3) Insurance inspection service.

[[Page 1044]]

    (4) Insurance counsel, brokerage fees, and expenses.
    (d) The cost of insurance or reserve accruals capitalized must be 
charged to construction either directly or by transfer to construction 
projects from this account.
    (e) The cost of insurance or reserve accruals for the following 
classes of property must be charged as indicated.
    (1) Materials and supplies and stores equipment, to account 163, 
Stores expense undistributed (Sec. 367.1630), or appropriate materials 
account.
    (2) Transportation and other general equipment to appropriate 
clearing accounts that may be maintained.
    (3) Merchandise and jobbing property, to account 416, Costs and 
expenses of merchandising, jobbing and contract work (Sec. 367.4160).
    (f) The cost of labor and related supplies and expenses of 
administrative and general employees who are only incidentally engaged 
in property insurance work may be included in accounts 920 and 921 
(Sec. Sec. 367.9200 and 367.9210), as appropriate.



Sec. 367.9250  Account 925, Injuries and damages.

    (a) This account must include the cost of insurance or reserve 
accruals to protect the service company against injuries and damages 
claims of employees or others, losses of such character not covered by 
insurance, and expenses incurred in settlement of injuries and damages 
claims. It also must include the cost of labor and related supplies and 
expenses incurred in injuries and damages activities.
    (b) Reimbursements from insurance companies or others for expenses 
charged to this account because of injuries and damages and insurance 
dividends or refunds must be credited to this account. The following 
items must be included in this account:
    (1) Premiums payable to insurance companies for protection against 
claims from injuries and damages by employees or others, such as public 
liability, property damages, casualty, employee liability, and other 
similar items.
    (2) Losses not covered by insurance or reserve accruals on account 
of injuries or deaths to employees or others and damages to the property 
of others.
    (3) Fees and expenses of claim investigators.
    (4) Payment of awards to claimants for court costs and attorneys' 
services.
    (5) Medical and hospital service and expenses for employees as the 
result of occupational injuries, or resulting from claims of others.
    (6) Compensation payments under workmen's compensation laws.
    (7) Compensation paid while incapacitated as the result of 
occupational injuries (See paragraph (c) of this section).
    (8) Cost of safety, accident prevention and similar educational 
activities.
    (c) Payments to or on behalf of employees for accident or death 
benefits, hospital expenses, medical supplies or for salaries while 
incapacitated for service or on leave of absence beyond periods normally 
allowed, when not the result of occupational injuries, must be charged 
to account 926, Employee pensions and benefits (Sec. 367.9260) (See 
also paragraph (e) of account 926 (Sec. 367.9260)).
    (d) The cost of injuries and damages or reserve accruals capitalized 
must be charged to construction directly or by transfer to construction 
projects from this account.
    (e) Exclude the time and expenses of employees (except those engaged 
in injuries and damages activities) spent in attendance at safety and 
accident prevention educational meetings, if occurring during the 
regular work period.
    (f) The cost of labor and related supplies and expenses of 
administrative and general employees who are only incidentally engaged 
in injuries and damages activities may be included in accounts 920 and 
921 (Sec. Sec. 367.9200 and 367.9210), as appropriate.



Sec. 367.9260  Account 926, Employee pensions and benefits.

    (a) This account must include pensions paid to, or on behalf of, 
retired employees, or accruals to provide for pensions, or payments for 
the purchase of annuities for this purpose, when the service company has 
definitely, by contract, committed itself to a pension plan under which 
the pension funds are

[[Page 1045]]

irrevocably devoted to pension purposes, and payments for employee 
accident, sickness, hospital, and death benefits, or insurance related 
to this account. Include, also, expenses incurred in medical, 
educational or recreational activities for the benefit of employees, and 
administrative expenses in connection with employee pensions and 
benefits.
    (b) The service company must maintain a complete record of accruals 
or payments for pensions and be prepared to furnish full information to 
the Commission of the plan under which it has created or proposes to 
create a pension fund and a copy of the declaration of trust or 
resolution under which the pension plan is established.
    (c) Records in support of this account must be kept so that the 
total pensions expense, the total benefits expense, the administrative 
expenses included in this account, and the amounts of pensions and 
benefits expenses transferred to construction or other accounts will be 
readily available. The following items must be included in this account:
    (1) Payment of pensions under a non-accrual or non-funded basis.
    (2) Accruals for or payments to pension funds or to insurance 
companies for pension purposes.
    (3) Group and life insurance premiums (credit dividends received).
    (4) Payments for medical and hospital services and expenses of 
employees when not the result of occupational injuries.
    (5) Payments for accident, sickness, hospital, and death benefits or 
insurance.
    (6) Payments to employees incapacitated for service or on leave of 
absence beyond periods normally allowed, when not the result of 
occupational injuries, or in excess of statutory awards.
    (7) Expenses in connection with educational and recreational 
activities for the benefit of employees.
    (d) The cost of labor and related supplies and expenses of 
administrative and general employees who are only incidentally engaged 
in employee pension and benefit activities may be included in accounts 
920 and 921 (Sec. Sec. 367.9200 and 367.9210), as appropriate.
    (e) Salaries paid to employees during periods of non-occupational 
sickness may be charged to the appropriate labor account rather than to 
employee benefits.



Sec. 367.9280  Account 928, Regulatory commission expenses.

    (a) This account must include all expenses, properly included in 
service company operating expenses, incurred by the service company in 
connection with formal cases before regulatory commissions, or other 
regulatory bodies, on its own behalf or on behalf of associate 
companies, including payments made to a regulatory commission for fees 
assessed to the service company for pay and expenses of such commission, 
its officers, agents and employees, and for filings or reports made 
under regulations of regulatory commissions. The service company must be 
prepared to show the cost of each formal case. The following items must 
be included in this account:
    (1) Salaries, fees, retainers, and expenses of counsel, solicitors, 
attorneys, accountants, engineers, clerks, attendants, witnesses, and 
others engaged in the prosecution of, or defense against petitions or 
complaints presented to regulatory bodies.
    (2) Office supplies and expenses, payments to public service or 
other regulatory commissions, stationery and printing, traveling 
expenses, and other expenses incurred directly in connection with formal 
cases before regulatory commissions.
    (b) Exclude from this account and include in other appropriate 
operating expense accounts, expenses incurred in the improvement of 
service, additional inspection, or rendering reports, which are made 
necessary by the rules and regulations, or orders, of regulatory bodies.



Sec. 367.9301  Account 930.1, General advertising expenses for associated 

companies.

    (a) This account must include the cost of labor, materials used, and 
expenses incurred in advertising and related activities, the cost of 
which by their content and purpose are not provided for elsewhere.
    (b) This account must include the following labor items:
    (1) Supervision.

[[Page 1046]]

    (2) Preparing advertising material for newspapers, periodicals, 
billboards, and other similar items, and preparing or conducting motion 
pictures, radio and television programs.
    (3) Preparing booklets, bulletins, and other similar forms of 
advertisement, used in direct mail advertising.
    (4) Preparing window and other displays.
    (5) Clerical and stenographic work.
    (6) Investigating and employing advertising agencies, selecting 
media and conducting negotiations in connection with the placement and 
subject matter of advertising.
    (c) This account must include the following materials and expenses 
items:
    (1) Advertising in newspapers, periodicals, billboards, radio, and 
other similar forms of advertisement.
    (2) Advertising matter such as posters, bulletins, booklets, and 
related items.
    (3) Fees and expenses of advertising agencies and commercial 
artists.
    (4) Postage and direct mail advertising.
    (5) Printing of booklets, dodgers, bulletins, and other related 
items.
    (6) Supplies and expenses in preparing advertising materials.
    (7) Office supplies and expenses.
    (d) Properly includible in this account is the cost of advertising 
activities on a local or national basis of a good will or institutional 
nature, which is primarily designed to improve the image of the 
associate utility company or the industry, including advertisements 
which inform the public concerning matters affecting the associate 
utility company's operations, such as, the cost of providing service, 
the associate utility company's efforts to improve the quality of 
service, the company's efforts to improve and protect the environment, 
and other similar forms of advertisement. Entries relating to 
advertising included in this account must contain or refer to supporting 
documents which identify the specific advertising message. If references 
are used, copies of the advertising message must be readily available.
    (e) Exclude from this account and include in account 426.4, 
Expenditures for certain civic, political and related activities (Sec. 
367.4264), expenses for advertising activities that are designed to 
solicit public support or the support of public officials in matters of 
a political nature.



Sec. 367.9302  Account 930.2, Miscellaneous general expenses.

    (a) This account must include the cost of expenses incurred in 
connection with the general management of the service company not 
provided for elsewhere.
    (b) This account must include labor items including miscellaneous 
labor not elsewhere provided for.
    (c) This account must include the following expenses items:
    (1) Industry association dues for company memberships.
    (2) Contributions for conventions and meetings of the industry.
    (3) Research, development, and demonstration expenses not charged to 
other operation and maintenance expense accounts on a functional basis.
    (4) Communication service not chargeable to other accounts.
    (5) Trustee, registrar, and transfer agent fees and expenses.
    (6) Stockholders meeting expenses.
    (7) Dividend and other financial notices.
    (8) Printing and mailing dividend checks.
    (9) Directors' fees and expenses.
    (10) Publishing and distributing annual reports to stockholders.
    (11) Public notices of financial, operating and other data required 
by regulatory statutes, not including, however, notices required in 
connection with security issues or acquisitions of property.
    (d) Records must be maintained so as to permit ready analysis by 
item showing the nature of the expense and identity of the person 
furnishing the service.



Sec. 367.9310  Account 931, Rents.

    This account must include rents, including taxes, paid for the 
property of others used, occupied or operated in connection with service 
company functions. Provide subaccounts for major

[[Page 1047]]

groupings such as office space, warehouses, other structure, office 
furniture, fixtures, computers, data processing equipment, microwave and 
telecommunication equipment, airplanes, automobiles, and other similar 
groupings of property. The cost, when incurred by the lessee, of 
operating and maintaining leased property, must be charged to the 
accounts appropriate for the expense as if the property were owned.



Sec. 367.9350  Account 935, Maintenance of structures and equipment.

    This account must include materials used and expenses incurred in 
the maintenance of property owned, the cost of which is included in 
accounts 390 through 399 (Sec. Sec. 367.3900 through 367.3990), and of 
property leased from others. Provide subaccounts by major classes of 
structures and equipment, owned and leased.



PART 368_PRESERVATION OF RECORDS OF HOLDING COMPANIES AND SERVICE COMPANIES--

Table of Contents



Sec.
368.1 Promulgation.
368.2 General instructions.
368.3 Schedule of records and periods of retention.

    Authority: 42 U.S.C. 16451-16463.

    Source: Order 684, 71 FR 65262, Nov. 7, 2006, unless otherwise note.



Sec. 368.1  Promulgation.

    This part is prescribed and promulgated as the regulations governing 
the preservation of records by any holding company and by any service 
company within a holding company system subject to the jurisdiction of 
the Commission under the Public Utility Holding Company Act of 2005 (42 
U.S.C. Sec. Sec. 16451 et seq.).



Sec. 368.2  General instructions.

    (a) Scope of this part. (1) The regulations in this part apply to 
all books of account and other records prepared, maintained or held by 
any agent or employee on behalf of the company. The specification in the 
schedule in Sec. 368.3 of a record related to a type of transaction 
includes all documents and correspondence, not redundant or duplicative 
of other records retained, needed to explain or verify the transaction.
    (2) Company means a service company or a holding company as defined 
in Sec. 367.1 of this chapter. Public utilities, licensees, and natural 
gas companies must continue to use parts 125 and 225 of this chapter.
    (3) Any company subject to this regulation, that, as agent, 
operator, lessor or otherwise, maintains or has possession of any 
records relating to the operation, property or obligations of a public 
utility, licensee, or natural gas company, as defined in the Federal 
Power Act (16 U.S.C. Sec. Sec. 824 et seq.), the Natural Gas Act (15 
U.S.C. Sec. Sec. 717 et seq.), or the laws of any state within which 
the public utility, licensee, or natural gas company operates, must 
comply with the laws or regulations as to record retention and 
destruction which would apply to the records if they were records of the 
public utility, licensee, or natural gas company as codified in parts 
125 and 225 of this chapter.
    (4) The regulations in this part should not be construed as excusing 
compliance with other lawful requirements of any other governmental 
body, Federal or State, prescribing other record keeping requirements or 
for preservation of records longer than those prescribed in this part.
    (5) To the extent that any Commission regulations may provide for a 
different record retention period, the records must be retained for the 
longer of the retention periods.
    (6) Records, other than those listed in the schedule, may be 
destroyed at the option of the company. However, records that are used 
in lieu of those listed must be preserved for the periods prescribed for 
the records used for substantially similar purposes. Additionally, 
retention of records pertaining to added services, functions, plant, and 
other similar service, the establishment of which cannot be presently 
foreseen, must conform to the principles embodied in this section.
    (7) Notwithstanding the provisions of the records retention schedule 
in this section, the Commission may, upon the request of the company, 
authorize a shorter period of retention for any record listed in the 
schedule upon a

[[Page 1048]]

showing by the company that preservation of the record for a longer 
period is not necessary or appropriate, in the public interest or for 
the protection of investors or consumers.
    (b) Designation of supervisory official. Each company subject to 
these record retention regulations must designate one or more officials 
to supervise the preservation or authorized destruction of its records.
    (c) Protection and storage of records. The company must provide 
reasonable protection from damage by fire, flood, and other hazards for 
records required by these record retention regulations to be preserved 
and, in the selection of storage space, safeguard such records from 
unnecessary exposure to deterioration from excessive humidity, dryness, 
or lack of proper ventilation.
    (d) Index of records. At each site or location where company records 
are kept or stored, the records must be arranged, filed, and currently 
indexed so that records may be readily identified and made available for 
inspection by authorized representatives of any regulatory agency 
concerned, including the Commission.
    (e) Record storage media. Each company has the flexibility to select 
its own storage media subject to the following conditions.
    (1) The storage media must have a life expectancy at least equal to 
the applicable record retention period provided in Sec. 368.3 of this 
chapter unless there is a quality transfer from one media to another 
with no loss of data.
    (2) Each company is required to implement internal control 
procedures that assure the reliability of, and ready access to, data 
stored on machine readable media. Internal control procedures must be 
documented by a responsible supervisory official.
    (3) Each transfer of data from one media to another must be verified 
for accuracy and documented. Software and hardware required to produce 
readable records must be retained for the same period the media format 
is used.
    (f) Destruction of records. At the expiration of the retention 
period, the company may use any appropriate method to destroy records. 
Precautions should be taken, however, to macerate or otherwise destroy 
the legibility of records, the content of which is forbidden by law to 
be divulged to unauthorized persons.
    (g) Premature destruction or loss of records. When records are 
destroyed or lost before the expiration of the prescribed period of 
retention, a certified statement listing, as far as may be determined, 
the records destroyed and describing the circumstances of accidental or 
other premature destruction or loss must be filed with the Commission 
within 90 days from the date of discovery of the destruction.
    (h) Schedule of records and periods of retention. The schedule of 
records retention periods constitutes a part of these records retention 
regulations. The schedule prescribes the periods of time that designated 
records must be preserved. Plant records related to public utilities and 
licensees and natural gas companies must be retained in accordance with 
Sec. Sec. 125.3 and 225.3 of this chapter.
    (i) Retention periods designated ``Destroy at option.'' ``Destroy at 
option'' constitutes authorization for destruction of records at 
managements' discretion if the destruction does not conflict with other 
legal retention requirements or usefulness of the records in satisfying 
pending regulatory actions or directives. ``Destroy at option after 
audit'' requires retention until the company has received an opinion 
from its independent accountants with respect to the financial 
statements including the transactions to which the records relate.
    (j) Records of services performed by associate companies. Holding 
companies and service companies must assure the availability of records 
of services performed by and for public utilities and licensees and 
natural gas companies with supporting cost information for the periods 
indicated in Sec. Sec. 125.3 and 225.3 of this chapter as necessary to 
be able to readily furnish detailed information as to the nature of the 
transaction, the amounts involved, and the accounts used to record the 
transactions.
    (k) Rate case. Notwithstanding the minimum retention periods 
provided in these regulations, the company must

[[Page 1049]]

retain the appropriate records to support the costs and adjustments 
proposed in any rate case.
    (l) Pending complaint litigation or governmental proceedings. 
Notwithstanding the minimum requirements, if a company is involved in 
pending litigation, complaint procedures, proceedings remanded by the 
court, or governmental proceedings, it must retain all relevant records.
    (m) Life or mortality study data. Life or mortality study data for 
depreciation purposes must be retained for 25 years or for 10 years 
after property is retired, whichever is longer.



Sec. 368.3  Schedule of records and periods of retention.

              Schedule of Records and Periods of Retention
------------------------------------------------------------------------
        Item No. and description                 Retention period
------------------------------------------------------------------------
                          Corporate and General
------------------------------------------------------------------------
1. Reports to stockholders: Annual       5 years.
 reports or statements to stockholders.
2. Organizational documents:
    (a) Minute books of stockholders,    5 years or termination of the
     directors' and directors'            corporation's existence,
     committee meetings.                  whichever occurs first.
    (b) Title, franchises, and           6 years after final non-
     licenses: Copies of formal orders    appealable order.
     of regulatory commissions served
     upon the company.
        (1) Certificates of              Life of corporation.
         incorporation, or equivalent
         agreements and amendments
         thereto.
        (2) Deeds, leases and other      6 years after property or
         title papers (including          investment is disposed of
         abstracts of title and           unless delivered to
         supporting data), and            transferee.
         contracts and agreements
         related to the acquisition or
         disposition of property or
         investments.
3. Contracts and agreements: Contracts,
 including amendments and agreements
 (except contracts provided for
 elsewhere):
    (a) Service contracts, such as for   All contracts, related
     management, consulting,              memoranda, and revisions
     accounting, legal, financial or      should be retained for 4 years
     engineering services.                after expiration or until the
                                          conclusion of any contract
                                          disputes pertaining to such
                                          contracts, whichever is later.
    (b) Memoranda essential to clarify   For same period as contract to
     or explain provisions of contracts   which they relate.
     and agreements.
    (c) Card or book records of          For the same periods as
     contracts, leases, and agreements    contracts to which they
     made, showing dates of expirations   relate.
     and of renewals, memoranda of
     receipts, and payments under such
     contracts.
    (d) Contracts and other agreements   All contracts, related
     relating to services performed in    memoranda, and revisions
     connection with construction of      should be retained for 4 years
     property (including contracts for    after expiration or until the
     the construction of property by      conclusion of any contract
     others for the company and for       disputes or governmental
     supervision and engineering          proceedings pertaining to such
     relating to construction work).      contracts, whichever is later.
4. Accountants' and auditors' reports:
    (a) Reports of examinations and      5 years after the date of the
     audits by accountants and auditors   report.
     not in the regular employ of the
     company (such as reports of public
     accounting firms and commission
     accountants).
    (b) Internal audit reports and       5 years after the date of the
     working papers.                      report.
------------------------------------------------------------------------
                    Information Technology Management
------------------------------------------------------------------------
5. Automatic data processing records     Retain as long as it represents
 (retain original source data used as     an active viable program or
 input for data processing and data       for periods prescribed for
 processing report printouts for the      related output data, whichever
 applicable periods prescribed            is shorter.
 elsewhere in the schedule): Software
 program documentation and revisions
 thereto.
------------------------------------------------------------------------
                       General Accounting Records
------------------------------------------------------------------------
6. General and subsidiary ledgers:
    (a) Ledgers:
        (1) General ledgers............  10 years.

[[Page 1050]]

 
        (2) Ledgers subsidiary or        10 years.
         auxiliary to general ledgers
         except ledgers provided for
         elsewhere.
    (b) Indexes:
        (1) Indexes to general ledgers.  10 years.
        (2) Indexes to subsidiary        10 years.
         ledgers except ledgers
         provided for elsewhere.
    (c) Trial balance sheets of general  2 years
     and subsidiary ledgers.
7. Journals: General and subsidiary....  10 years.
8. Journal vouchers and journal entries
 including supporting detail:
    (a) Journal vouchers and journal     10 years.
     entries.
    (b) Analyses, summarization,
     distributions, and other
     computations which support journal
     vouchers and journal entries:
        (1) Charging property accounts.  25 years. See Sec. Sec.
                                          125.2(g) and 225.2(g) of this
                                          chapter for public utilities
                                          and licensees and natural gas
                                          companies.
        (2) Charging all other accounts  6 years.
9. Cash books: General and subsidiary    5 years after close of fiscal
 or auxiliary books.                      year.
10. Voucher registers: Voucher           5 years. See Sec. Sec.
 registers or similar records when used   125.2(g) and 225.2(g) of this
 as a source document.                    chapter for public utilities
                                          and licensees and natural gas
                                          companies.
11. Vouchers:
    (a) Paid and canceled vouchers (one  5 years. See Sec. Sec.
     copy-analysis sheets showing         125.2(g) and 225.2(g) of this
     detailed distribution of charges     chapter for public utilities
     on individual vouchers and other     and licensees and natural gas
     supporting papers.                   companies.
    (b) Original bills and invoices for  5 years. See Sec. Sec.
     materials, services, etc., paid by   125.2(g) and 225.2(g) of this
     vouchers.                            chapter for public utilities
                                          and licensees and natural gas
                                          companies.
    (c) Paid checks and receipts for     5 years.
     payments of specific vouchers.
    (d) Authorization for the payment    5 years. See Sec. Sec.
     of specific vouchers.                125.2(g) and 225.2(g) of this
                                          chapter for public utilities
                                          and licensees and natural gas
                                          companies.
    (e) Lists of unaudited bills         Destroy at option.
     (accounts payable), list of
     vouchers transmitted, and
     memoranda regarding changes in
     audited bills.
    (f) Voucher indexes................  Destroy at option.
    (g) Purchases and stores records     5 years.
     related to disbursement vouchers.
------------------------------------------------------------------------
                                Insurance
------------------------------------------------------------------------
12. Insurance records:
    (a) Records of insurance policies    Destroy at option after
     in force, showing coverage,          expiration of such policies.
     premiums paid, and expiration
     dates.
    (b) Records of amounts recovered     6 years. See Sec. Sec.
     from insurance companies in          125.2(g) and 225.2(g) of this
     connection with losses and of        chapter for public utilities
     claims against insurance             and licensees and natural gas
     companies, including reports of      companies.
     losses, and supporting papers.
    (c) Records of self-insurance
     against:
        (1) losses from fire and         6 years after date of last
         casualty,.                       accounting entry with respect
                                          thereto.
        (2) damage to property of        6 years after date of last
         others, and.                     accounting entry with respect
                                          thereto.
        (3) personal injuries..........  6 years after date of last
                                          accounting entry with respect
                                          thereto.
    (d) Inspectors' reports and reports  Destroy when superseded.
     of condition of property.
------------------------------------------------------------------------
                               Maintenance
------------------------------------------------------------------------
13. Maintenance project and work
 orders:
    (a) Authorizations for expenditures  5 years.
     for maintenance work to be covered
     by project or work orders,
     including memoranda showing the
     estimates of costs to be incurred.
    (b) Project or work order sheets to  5 years.
     which are posted in detail the
     entries for labor, material, and
     other charges in connection with
     maintenance, and other work
     pertaining to company operations.
    (c) Summaries of expenditures on     5 years.
     maintenance and job orders and
     clearances to operating other
     accounts (exclusive of property
     accounts).
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[[Page 1051]]

 
                 Property, Depreciation and Investments
------------------------------------------------------------------------
14. Property records, excluding
 documents included in Item 2(a)(2):
    (a) Ledgers of property accounts     25 years. See Sec. Sec.
     including land and other detailed    125.2(g) and 225.2(g) of this
     ledgers showing the cost of          chapter for public utilities
     property by classes.                 and licensees and natural gas
                                          companies.
    (b) Continuing property inventory    25 years. See Sec. Sec.
     ledger, book or card records         125.2(g) and 225.2(g) of this
     showing description, location,       chapter for public utilities
     quantities, cost, etc., of           and licensees and natural gas
     physical units (or items) of         companies.
     property owned.
    (c) Operating equipment records....  3 years after disposition,
                                          termination of lease, or write-
                                          off of property or investment.
    (d) Office furniture and equipment   3 years after disposition,
     records.                             termination of lease or write-
                                          off of property or investment.
    (e) Automobiles, other vehicles and  3 years after disposition,
     related garage equipment records.    termination of lease or write-
                                          off of property or investment.
    (f) Aircraft and airport equipment   3 years after disposition,
     records.                             termination of lease or write-
                                          off of property or investment.
    (g) Other property records not       3 years after disposition,
     defined elsewhere.                   termination of lease or write-
                                          off of property or investment.
15. Construction work in progress
 ledgers, project or work orders, and
 supplemental records:
    (a) Construction work in progress    5 years after clearance to
     ledgers.                             property account, provided
                                          continuing inventory records
                                          are maintained; otherwise 5
                                          years after property is
                                          retired.
    (b) Project or work orders sheets    5 years after clearance to
     to which are posted in summary       property account, provided
     form or in detail the entries for    continuing inventory records
     labor, materials, and other          are maintained; otherwise 5
     charges for property additions and   years after property is
     the entries closing the project or   retired.
     work orders to property records at
     completion.
    (c) Authorizations for expenditures  5 years after clearance to
     for additions to property,           property account.
     including memoranda showing the
     detailed estimates of cost, and
     the bases therefore (including
     original and revised or subsequent
     authorizations).
    (d) Requisitions and registers of    5 years after clearance to
     authorizations for property          property account.
     expenditures.
    (e) Completion or performance        5 years after clearance to
     reports showing comparison between   property account.
     authorized estimates and actual
     expenditures for property
     additions.
    (f) Analysis or cost reports         5 years after clearance to
     showing quantities of materials      property account.
     used, unit costs, number of man-
     hours etc., in connection with
     completed construction project.
    (g) Records and reports pertaining   Destroy at option.
     to progress of construction work,
     the order in which jobs are to be
     completed, and similar records
     which do not form a basis of
     entries to the accounts.
16. Retirement work in progress
 ledgers, project or work orders, and
 supplemental records:
    (a) Project or work order sheets to  5 years after the property is
     which are posted the entries for     retired.
     removal costs, materials
     recovered, and credits to property
     accounts for cost of property
     retirement.
    (b) Authorizations for retirement    5 years after the property is
     of property, including memoranda     retired.
     showing the basis for
     determination to be retired and
     estimates of salvage and removal
     costs.
    (c) Registers of retirement work...  5 years.
17. Summary sheets, distribution         5 years.
 sheets, reports, statements, and
 papers directly supporting debits and
 credits to property accounts not
 covered by construction or retirement
 project or work orders and their
 supporting records.
18. Appraisals and valuations:
    (a) Appraisals and valuations made   3 years after appraisal.
     by the company of its properties
     or investments or of the
     properties or investments of any
     associated companies. (Includes
     all records essential thereto.).
    (b) Determinations of amounts by
     which properties or investments of
     the company or any of its
     associated companies will be
     either written up or written down
     as a result of:

[[Page 1052]]

 
        (1) Mergers or acquisitions....  10 years after completion of
                                          transaction or as ordered by
                                          the Commission.
        (2) Asset impairments..........  10 years after recognition of
                                          asset impairment.
        (3) Other bases................  10 years after the asset was
                                          written up or down.
19. Production maps, geological maps,    6 years after completion of
 reproductions, including aerial          project or work order.
 photographs, showing the location of
 all facilities the subject matter of
 which falls within the project or work
 orders of the company.
20. Engineering records, drawings,       6 years after completion of
 supporting data to include diagrams,     project or work order.
 profiles, photographs, field-survey
 notes, plot plans, detail drawings,
 and records of engineering studies
 that are part of or performed by the
 company within the project or work
 order system.
21. Records of building space occupied   6 years.
 by various departments of the company.
22. Contracts relating to property:
    (a) Contracts relating to            6 years after property is
     acquisition or sale of property.     retired or sold
    (b) Contracts and other agreements   6 years after property is
     relating to services performed in    retired or sold.
     connection with construction of
     property (including contracts for
     the construction of property by
     others for the company and for
     supervision and engineering
     relating to construction work).
23. Records pertaining to                6 years.
 reclassification of property accounts
 to conform to prescribed systems of
 accounts including supporting papers
 showing the bases for such
 reclassifications.
24. Records of accumulated provisions
 for depreciation and depletion of
 property and amortization of
 intangible property and supporting
 computation of expense:
    (a) Detailed records or analysis     3 years after retirement or
     sheets segregating the accumulated   disposition of property
     depreciation according to the
     classification of property.
    (b) Records reflecting the service   3 years after retirement or
     life of property and the             disposition of property
     percentage of salvage and cost of
     removal for property retired from
     each account for depreciable
     company property.
25. Investment records:
    (a) Records of investment in         3 years after disposition of
     associate companies.                 investment.
    (b) Records of other investments,    3 years after disposition of
     including temporary investments of   investment.
     cash.
------------------------------------------------------------------------
                           Purchase and Stores
------------------------------------------------------------------------
26. Procurement:
    (a) Agreements entered into for the
     acquisition of goods or the
     performance of services. Includes
     all forms of agreements such as
     but not limited to: Letters of
     intent, exchange of
     correspondence, master agreements,
     term contracts, rental agreements,
     and the various types of purchase
     orders:
        (1) For goods or services        6 years. See Sec. Sec.
         relating to property             125.2(g) and 225.2(g) of this
         construction.                    chapter for public utilities
                                          and licensees and natural gas
                                          companies.
        (2) For other goods or services  6 years.
    (b) Supporting documents including   6 years. See Sec. Sec.
     accepted and unaccepted bids or      125.2(g) and 225.2(g) of this
     proposals (summaries of unaccepted   chapter for public utilities
     bids or proposals may be kept in     and licensees and natural gas
     lieu of originals) evidencing all    companies.
     relevant elements of the
     procurement.
27. Material ledgers: Ledger sheets of   6 years after the date the
 materials and supplies received,         records/ledgers were created.
 issued, and on hand.
28. Materials and supplies received and  6 years. See Sec. Sec.
 issued: Records showing the detailed     125.2(g) and 225.2(g) of this
 distribution of materials and supplies   chapter for public utilities
 issued during accounting periods.        and licensees and natural gas
                                          companies).
------------------------------------------------------------------------
                           Revenue Accounting
------------------------------------------------------------------------
29. Miscellaneous billing data: Billing  5 years.
 department's copies of contracts with
 customers (other than contracts in
 general files).
30. Revenue summaries: Summaries of      5 years.
 monthly revenues according to classes
 of service. Including summaries of
 forfeited discounts and penalties.
------------------------------------------------------------------------

[[Page 1053]]

 
                                   Tax
------------------------------------------------------------------------
31. Tax records:
    (a) Copies of tax returns and
     supporting schedules filed with
     taxing authorities, supporting
     working papers, records of appeals
     of tax bills, and receipts for
     payment. See Item 11 for vouchers
     evidencing disbursements:
        (1) Income tax returns.........  2 years after final tax
                                          liability is determined.
        (2) Agreements between and       2 years after final tax
         schedule of allocation by        liability is determined.
         associate companies of
         consolidated Federal income
         taxes.
    (b) Other taxes, including State or
     local property or income taxes.
        (1) Property tax returns.......  2 years after final tax
                                          liability is determined.
        (2) Sales and other use taxes..  2 years.
        (3) Other Taxes................  2 years after final tax
                                          liability is determined.
    (c) Filings with taxing authorities  5 years after discontinuance of
     to qualify employee benefit plans.   plan.
    (d) Information returns and reports  3 years after final tax
     to taxing authorities.               liability is determined.
------------------------------------------------------------------------
                                Treasury
------------------------------------------------------------------------
32. Statements of funds and deposits:
    (a) Summaries and periodic           Destroy at option after
     statements of cash balances on       completion of audit by
     hand and with depositories for       independent accountants.
     company or associate.
    (b) Requisitions and receipts for    Destroy at option after funds
     funds furnished associates and       have been returned or
     others.                              accounted for.
    (c) Statements of periodic deposits  Retain records for the most
     with external fund administrators    recent 3 years.
     or trustees.
    (d) Statements of periodic           Retain records for the most
     withdrawals from external fund.      recent 3 years.
33. Records of deposits with banks and
 others:
    (a) Statements from depositories     Destroy at option after
     showing the details of funds         completion of audit by
     received, disbursed, transferred,    independent accountants.
     and balances on deposit, bank
     reconcilement papers and
     statements of interest credits.
    (b) Check stubs, registers, or       6 years.
     other records of checks issued.
------------------------------------------------------------------------
                             Payroll Records
------------------------------------------------------------------------
34. Payroll records:
    (a) Payroll sheets or registers of   6 years.
     payments of salaries and wages,
     pensions and annuities paid by
     company or by contractors of its
     account.
    (b) Records showing the              6 years.
     distribution of salaries and wages
     paid for each payroll period and
     summaries or recapitulations of
     such distribution.
------------------------------------------------------------------------
                              Miscellaneous
------------------------------------------------------------------------
35. Financial, operating and             5 years.
 statistical annual reports regularly
 prepared in the course of business for
 internal administrative or operating
 purposes.
36. Budgets and other forecasts          3 years.
 (prepared for internal administrative
 or operating purposes) of estimated
 future income, receipts and
 expenditures in connection with
 financing, construction and
 operations, including acquisitions and
 disposals of properties or investments.
37. Periodic or special reports filed
 by the company on its own behalf with
 the Commission or with any other
 Federal or State rate-regulatory
 agency, including exhibits or
 amendments to such reports:
    (a) Reports to Federal and State     5 years.
     regulatory commissions including
     annual financial, operating and
     statistical reports.
    (b) Monthly and quarterly reports    5 years.
     of operating revenues, expenses,
     and statistics.

[[Page 1054]]

 
38. Advertising: Copies of               2 years.
 advertisements by or for the company
 on behalf of itself or any associate
 company in newspapers, magazines, and
 other publications, including costs
 and other records relevant thereto
 (excluding advertising of appliances,
 employment opportunities, routine
 notices, and invitations for bids all
 of which may be destroyed at option).
------------------------------------------------------------------------



PART 369_STATEMENTS AND REPORTS (SCHEDULES)--Table of Contents



    Authority: 42 U.S.C. 16451-16463.

    Source: Order 684, 71 FR 65267, Nov. 7, 2006, unless otherwise 
noted.



Sec. 369.1  FERC Form No. 60, Annual report of centralized service company.

    (a) Prescription. The form of annual report for centralized service 
companies, designated as FERC Form No. 60, is prescribed for the 
reporting year 2008 and each subsequent year.
    (b) Filing requirements. (1) Who must file. Unless the holding 
company system is exempted or granted a waiver by Commission rule or 
order pursuant to Sec. Sec. 366.3 and 366.4, every centralized service 
company (See Sec. 367.2 of this chapter) in a holding company system 
must prepare and file electronically with the Commission the FERC Form 
No. 60 then in effect pursuant to the General Instructions set out in 
the form.
    (2) When to file and what to file.
    (i) The annual report for the year ending December 31, 2008 must be 
filed by May 1, 2009. The annual report for each year thereafter must be 
filed by May 1 of the following years.
    (ii) The annual report in effect must be filed with the Commission 
as prescribed in Sec. 385.2011 of this chapter and as indicated in the 
General Instructions set out in the form, and must be properly completed 
and verified. Filing on electronic media pursuant to Sec. 385.2011 of 
this chapter is required.

[[Page 1055]]



                   SUBCHAPTER W_REVISED GENERAL RULES



PART 375_THE COMMISSION--Table of Contents



                      Subpart A_General Provisions

Sec.
375.101 The Commission.
375.102 Custody and authentication of Commission records.
375.103 Official seal.
375.104 Transfer of proceedings from other agencies to the Commission.
375.105 Filings.

      Subpart B_Procedures Under the Government in the Sunshine Act

375.201 Purpose.
375.202 Definitions and limitations on definitions.
375.203 Open meetings.
375.204 Notice of meetings.
375.205 Closed meetings.
375.206 Procedures to close meetings.

                          Subpart C_Delegations

375.301 Purpose and subdelegations.
375.302 Delegations to the Secretary.
375.303 Delegations to the Director of the Office of Electric 
          Reliability.
375.304 Delegations to the Chief Administrative Law Judge.
375.305 Delegations to the Solicitor.
375.307 Delegations to the Director of the Office of Energy Market 
          Regulation.
375.308 Delegations to the Director of the Office of Energy Projects.
375.309 Delegations to the General Counsel.
375.310 Delegations during emergency conditions.
375.311 Delegations to the Director of the Office of Enforcement.
375.312 Delegations to the Office of the Executive Director.
375.313 Delegations to the Critical Energy Infrastructure Information 
          Coordinator.
375.315 Delegations to the Director of the Office of Energy Policy and 
          Innovation.

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w, 3301-3432; 16 
U.S.C. 791-825r, 2601-2645; 42 U.S.C. 7101-7352.

    Source: 45 FR 21217, Apr. 1, 1980, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 375.101  The Commission.

    (a) Establishment. The Federal Energy Regulatory Commission is an 
independent regulatory commission within the Department of Energy 
established by section 401 of the DOE Act.
    (b) Offices. The principal office of the Commission is at 888 First 
Street, NE., Washington, DC 20426. Regional offices are maintained at 
Atlanta, GA, Chicago, IL, Portland, OR, New York, NY, and San Francisco, 
CA.
    (c) Hours. Unless the Chairman otherwise directs, the offices of the 
Commission are open each day, except Saturdays, Sundays, and Holidays, 
from 8:30 a.m. to 5:00 p.m.
    (d) Sessions. The Commission may meet and exercise its powers at any 
place in the United States. The time and place of meetings of the 
Commission are announced in advance as provided in Sec. 375.204.
    (e) Quorum. A quorum for the transaction of business consists of at 
least three members present.
    (f) Action by Commissioners or representatives. The Commission may, 
by one or more of its members or by such agents as it may designate, 
conduct any hearing, or other inquiry necessary or appropriate to its 
functions, except that nothing in this paragraph supercedes the 
provisions of section 556, of Title 5, United States Code relating to 
Administrative Law Judges.

[45 FR 21217, Apr. 1, 1980, as amended by Order 647, 69 FR 32439, June 
10, 2004]



Sec. 375.102  Custody and authentication of Commission records.

    (a) Custody of official records. (1) The Secretary shall have 
custody of the Commission's seal, the minutes of all action taken by the 
Commission, the transcripts, electronic recordings, or minutes of 
meetings closed to public observation, its rules and regulations, and 
its administrative orders.
    (2) The Executive Director shall have custody of records of the 
Commission except records designated in paragraph (a)(1) of this 
section.
    (b) Authentication of Commission action. All orders and other 
actions of the Commission shall be authenticated or signed by the 
Secretary or the Secretary's designee.

[[Page 1056]]



Sec. 375.103  Official seal.

    The Commission hereby prescribes as its official seal, judicial 
notice of which shall be taken pursuant to section 401(e) of the DOE 
Act, the imprint illustrated below and described as follows:

    A circle, the outside border of which shall consist of two 
concentric circles enclosing the words ``Department of Energy'' and 
``Federal Energy Regulatory Commission.'' Within the inner circle shall 
appear a stylized eagle with head facing to its right. Its body shall be 
in the shape of a tapered shield, widest at the top, consisting of nine 
vertical stripes. The top of the shield contains five equally-spaced 
light color stars representing the five members of the Commission 
appointed by the President under Title IV of the DOE Act. Identical 
stylized wings appear on either side of the shield, each incorporating 
twenty stylized feathers protruding from a solid color wing-like shape. 
Below the eagle shall appear five squares, arranged in a horizontal 
line. Each of these squares shall contain a circle representing an area 
of the Commission's responsibility. The first square at the left of the 
line shall include a stylized representation of a pipeline; the second 
square shall represent a hydroelectric power facility; the third, and 
center square, shall represent a natural gas flame; the fourth square 
shall represent a drilling rig; the fifth square shall represent a 
stylized lightning bolt.
[GRAPHIC] [TIFF OMITTED] TC05OC91.036



Sec. 375.104  Transfer of proceedings from other agencies to the Commission.

    (a) Transfer of pending proceedings. Pursuant to the authorization 
provided in section 705(b)(2), and the provisions of section 705(b)(1) 
of the DOE Act, all proceedings and applications pending at the time 
such Act took effect, before any department, agency, commission, or 
component thereof, the functions of which have been transferred to the 
Commission by the Act, have been transferred in accordance with the 
joint regulations issued by the Commission and the Secretary of Energy 
on October 1, 1977. Those joint regulations appear as an appendix to 
this section.
    (b) Substitution of Commission for other agencies in court 
proceedings. Pursuant to section 705(e) of the DOE Act, the Commission 
authorizes the Solicitor of the Commission to file the appropriate 
pleadings to substitute the Commission for the Interstate Commerce 
Commission or the Federal Power Commission as necessary in any pending 
court litigation, responsibility for which is transferred to the 
Commission.

                        Appendix to Sec. 375.104

 PART 1000--TRANSFER OF PROCEEDINGS TO THE SECRETARY OF ENERGY AND THE 
                  FEDERAL ENERGY REGULATORY COMMISSION

Sec. 1000.1 Transfer of proceedings.
    (a)Scope. This part establishes the transfer of proceedings pending 
with regard to those functions of various agencies which have been 
consolidated in the Department of Energy and identifies those 
proceedings which are transferred into the jurisdiction of the Secretary 
and those which are transferred into the jurisdiction of the Federal 
Energy Regulatory Commission.
    (b) Proceedings transferred to the Secretary. The following 
proceedings are transferred to the Secretary:
    (1) All Notices of Proposed Rulemaking, pending and outstanding, 
which have been proposed by the Department of Energy;
    (2) All Notices of Inquiry which have been issued by the Department 
of Energy;
    (3) All Requests for Interpretations which have been filed pursuant 
to 10 CFR part 205, subpart F, and on which no interpretation has been 
issued, with the Office of General Counsel of the Department of Energy;
    (4) All Applications for Exception Relief which have been filed 
pursuant to 10 CFR part 205, subpart D, and on which no final decision 
and order has been issued, with the Office of Exceptions and Appeals of 
the Department of Energy;
    (5) All petitions for special redress, relief or other extraordinary 
assistance which have been filed pursuant to 10 CFR part 205, subpart R, 
and on which no order has been issued, with the Office of Private 
Grievances and Redress of the Department of Energy;

[[Page 1057]]

    (6) All appeals from Remedial Orders, Exception Decisions and 
Orders, Interpretations issued by the Office of General Counsel, and 
other agency orders which have been filed pursuant to 10 CFR part 205, 
subpart H, and on which no order has been issued prior to October 1, 
1977, with the Office of Exceptions and Appeals of the Department of 
Energy;
    (7) All applications for modification or rescission of any DOE order 
or interpretation which have been filed pursuant to 10 CFR part 205, 
subpart J, and on which no order has been issued prior to October 1, 
1977, with the Office of Exceptions and Appeals of the Federal Energy 
Administration;

    Note: For a document relating to procedures for natural gas import 
and export proceedings see 42 FR 61856, Dec. 7, 1977.

    (8) All applications for temporary stays and stays which have been 
filed pursuant to 10 CFR part 205, subpart I, and on which no order has 
been issued, with the Office of Exceptions and Appeals of the Department 
of Energy;
    (9) All applications which have been filed with the Office of 
Regulatory Programs of the Department of Energy and on which no final 
order has been issued;
    (10) All investigations which have been instituted and have not been 
resolved by the Office of Compliance of the Department of Energy;
    (11) All Notices of Probable Violation which have been issued prior 
to October 1, 1977, by the Office of Compliance of Department of Energy;
    (12) All Notices of Proposed Disallowance which have been issued 
prior to October 1, 1977, by the Office of Compliance of Department of 
Energy;
    (13) All Prohibition Orders which have been issued pursuant to 10 
CFR part 303 and as to which no Notice of Effectiveness has been issued;
    (14) From the Department of the Interior:
    (i) The tentative power rate adjustments for the Central Valley 
Project, California, proposed on September 12, 1977 (42 FR 46619, 
September 16, 1977).
    (15) From the Interstate Commerce Commission:
    (i) Ex Parte No. 308 (Sub-No. 1)--Investigation of Common Carrier 
Pipelines.
    (16) From the Federal Power Commission:
    (i) Cases:
    (A) Northwest Pipeline Corporation, Docket No. CP75-340.
    (B) Midwestern Gas Transmission Co., Docket No. CP77-458, et al.
    (C) St. Lawrence Gas Company, Docket No. G-17500.
    (D) U.S.D.I. Bonneville Power Administration, Docket No. E-9563.
    (E) U.S.D.I. Southwestern Power Administration, Docket No. E-7201.
    (F) U.S.D.I. Southeastern Power Administration, Docket No. E-6957.
    (G) Tenneco InterAmerica, Inc., Docket No. CP77-561.
    (ii) Applications:
    (A) Maine Public Service Co., Docket No. E-6751, (ERA Docket No. IE-
78-1).
    (B) Northern States Power Co., Docket No. E-9589, (ERA Docket No. 
IE-78-2).
    (C) Arizona Public Service Co., Docket No. IT-5331, (ERA Docket No. 
IE-78-3).
    (D) Niagara Mohawk Power Corp., Docket No. E-7022, (ERA Docket No. 
IE-77-6).
    (E) Maine Public Service Co., Docket No. IT-6027, (ERA Docket No. 
PP-12).
    (F) Boise Cascade, Docket No. E-7765, (ERA Docket No. PP-52).
    (G) Bonneville Power Administration, Docket No. IT-5959, (ERA Docket 
No. PP-10).
    (H) EPR--Oregon (Geothermal Steam Leases).
    (I) EPR--Utah (Geothermal Steam Leases).
    (J) EPR--Idaho (Geothermal Steam Leases).
    (K) EPR--Oregon (Geothermal Steam Leases).
    (L) EPR--Idaho (Geothermal Steam Leases).
    (iii) Rulemakings:
    (A) Implementation of sections 382(b) and 382(c) of the Energy 
Policy and Conservation Act of 1971. Docket No. RM77-3.
    (B) Naw Form Nos:
    151, Docket No. RM76-19.
    153, Docket No. RM76-27.
    154, Docket No. RM36-33.
    156, Docket No. RM76-32.
    157, Docket No. RM76-21.
    158, Docket No. RM76-31.
    159, Docket No. RM76-23.
    160, Docket No. RM76-20.
    161, Docket No. RM76-26.
    162, Docket No. RM76-34.
    155, Docket No. RM76-28.
    163, Docket No. RM76-30.
    164, Docket No. RM76-25.
    (C) Procedures for the Filing of Federal Rate Schedules Docket No. 
RM77-9.
    (iv) Project withdrawals and power site revocations:
    (A) Project 1021, 1226, 1606, and 1772--(Wyoming)--U.S. Forest 
Service (Applicant).
    (B) Project Nos. 1021, 1226, 1606, and 1772--(Wyoming)--U.S. Forest 
Service (Applicant).
    (C) Project Nos. 220 and 691--(Wyoming)--Cliff Gold Mining Co. 
(Applicant for P-691) The Colowyo Gold Mining Co. (Applicant for P-220).
    (D) Project No. 1203--(Wyoming)--F. D. Foster (Applicant).
    (E) Project No. 1241--(Wyoming)--F. B. Hommel (Applicant).
    (F) Project No. 847--(Oregon)--H. L. Vorse (Applicant).
    (G) Project No. 907--(Colorado)--S. B. Collins (Applicant).

[[Page 1058]]

    (H) Project No. 941--(Colorado)--Marian Mining Company (Applicant).
    (I) Project Nos. 347 and 418--(Colorado)--Jones Brothers (Applicant 
for P-347) Frank Gay et al. (Applicant for P-418).
    (J) Project Nos. 373, 521, 937, 1024, 1415, 1546, 1547, and 1025--( 
)--U.S. Forest (Applicant).
    (K) Project No. 163--(Colorado)--James F. Meyser and Edward E. Drach 
(Applicants).
    (L) Project Nos. 385, 445, 506, 519, 1220, 1296, 1418, 1519, 1576, 
1615, 1616, 1618, 1678, 1682, and 1750--(Colorado)--U.S. Forest Service 
(Applicant).
    (M) DA-117--(Alaska)--Bureau of Land Management (Applicant).
    (N) Project No. 114--(Alaska)--Elizabeth H. Graff et al. 
(Applicant).
    (O) DA-222--(Washington)--Bureau of Land Management (Applicant).
    (P) DA-562--(Oregon)--U.S. Geological Survey (Applicant).
    (Q) DA-601--(Idaho)--Bureau of Land Management (Applicant).
    (R) DA-509--(Colorado)--Fed. Highway Admin. (Applicant).
    (S) DA-616--(Idaho)--U.S. Forest Service (Applicant).
    (T) DA-1--(South Carolina)--U.S. Forest Service (Applicant).
    (U) DA-1116--(California)--U.S. Geological Survey (Applicant).
    (V) DA-154--(Arizona)--U.S. Geological Survey (Applicant).
    (W) DA-1098--(California)--Merced Irrigation District (Applicant).
    (c) Proceedings transferred to the Commission. There are hereby 
transferred to the jurisdiction of the Federal Energy Regulatory 
Commission the following proceedings:
    (1) From the Interstate Commerce Commission:
    (i) Ex Parte No. 308--Valuation of Common Carrier Pipelines.
    (ii) I&S 9164--Trans Alaska Pipeline System--Rate Filings (including 
I&S 9164 (Sub-No. 1), NOR 36611, NOR 36611 (Sub-No. 1). NOR 36611 (Sub-
No. 2), NOR 36611 (Sub-No. 3), NOR 36611 (Sub-No. 4)).
    (iii) I&S 9089--General Increase, December 1975, Williams Pipeline 
Company.
    (iv) I&S 9128--Anhydrous Ammonia, Gulf Central Pipeline Company.
    (v) NOR 35533 (Sub-No. 3)--Petroleum Products, Southwest & Midwest 
Williams Pipeline.
    (vi) NOR 35794--Northville Dock Pipeline Corp. et al.
    (vii) NOR 35895--Inexco Oil Company v. Belle Fourche Pipeline Co. et 
al.
    (viii) NOR 36217--Department of Defense v. Interstate Storage & 
Pipeline Corp.
    (ix) NOR 36423--Petroleum Products Southwest to Midwest Points.
    (x) NOR 36520--Williams Pipeline Company--Petroleum Products 
Midwest.
    (xi) NOR 36553--Kerr-McGee Refining Corporation v. Texoma Pipeline 
Co.
    (xii) Suspension Docket 67124--Williams Pipeline Co.--General 
Increase.
    (xiii) Valuation Docket 1423--Williams Pipeline Company (1971-1974 
inclusive).
    (2) To remain with the Commission until forwarding to the Secretary:

The following proceedings will continue in effect under the jurisdiction 
of the Commission until the timely filing of all briefs on and opposing 
exceptions to the initial decision of the presiding Administrative Law 
Judge, at which time the Commission shall forward the record of the 
proceeding to the Secretary for decision on those matters within his 
jurisdiction:
    (i) El Paso Eastern Co., et al., Docket No. CP 77-330, et al.
    (ii) Tenneco Atlantic Pipeline Co., et al., Docket No. CP 77-100, et 
al.
    (iii) Distrigas of Massachusetts Corp., et al., Docket No. CP 70-
196, et al.
    (iv) Distrigas of Massachusetts Corp., et al., Docket No. CP 77-216, 
et al.
    (v) Eascogas LNG, Inc., et al., Docket No. CP 73-47, et al.
    (vi) Pacific Indonesia LNG Co., et al., Docket No. CP74-160, et al., 
(except as provided in paragraph (c)(3) of this section).
    (3) The Amendment to Application of Western LNG Terminal Associates, 
filed on November 11, 1977, in Pacific Indonesia LNG Co., et al., FPC 
Docket No. CP74-160, et al., ERA Docket No. 77-001-LNG, is transferred 
to the jurisdiction of the Commission until timely filing of all briefs 
on and opposing exceptions to the Initial Decision of the presiding 
Administrative Law Judge on that Amendment, at which time the Commission 
shall forward a copy of the record of that proceeding to the Secretary 
of Energy for decision on those matters within his jurisdiction. (If the 
Commission waives the preparation of an initial decision, the Commission 
will forward a copy of the record after completion of the hearing, or 
after the timely filing of any briefs submitted to the Commission, 
whichever occurs later.)
    (d) Residual clause. All proceedings (other than proceedings 
described in paragraphs (b) and (c) of this section) pending with regard 
to any function of the Department of Energy, the Department of Energy, 
Department of the Interior, the Department of Commerce, the Department 
of Housing and Urban Development, the Department of Navy, and the Naval 
Reactor and Military Applications Programs which is transferred to the 
Department of Energy (DOE) by the DOE Organization Act, will be 
conducted by the Secretary. All proceedings (other than proceedings 
described in paragraphs (b) and (c) of this section) before the Federal 
Power

[[Page 1059]]

Commission or Interstate Commerce Commission will be conducted by the 
Federal Energy Regulatory Commission.

(Department of Energy Organization Act, Pub. L. 95-91; EO 12009, 42 FR 
46267)

[42 FR 55534, Oct. 17, 1977, as amended at 43 FR 21434, May 18, 1978; 43 
FR 21658, May 19, 1978]



Sec. 375.105  Filings.

    (a) Filings in pending proceedings. All filings in proceedings 
referred to in Sec. 375.104 shall be made with the Secretary.
    (b) Filings in connection with functions transferred to the 
Commission. All persons required to file periodic or other reports with 
any agency or commission whose functions are transferred under such Act 
to the Commission shall file such reports which relate to those 
transferred functions with the Secretary. The Commission hereby 
continues in effect all previously-approved forms for making periodic or 
other reports.
    (c) Where to make filings. All filings of documents with the 
Commission shall be made with the Secretary. The address for filings to 
be made with the Secretary is: Secretary, Federal Energy Regulatory 
Commission, 888 First St., NE., Washington, DC 20426. Where a document 
to be filed with the Secretary is hand-delivered, it shall be submitted 
to Room 1A, 888 First St., NE., Washington, DC 20426. Documents received 
after regular business hours are deemed to have been filed on the next 
regular business day.

[45 FR 21217, Apr. 1, 1980, as amended by Order 647, 69 FR 32439, June 
10, 2004]



      Subpart B_Procedures Under the Government in the Sunshine Act



Sec. 375.201  Purpose.

    The purpose of this subpart is to set forth the Commission 
procedures for conduct of its official business in accordance with the 
provisions of 5 U.S.C. 552b. The Commission may waive the provisions set 
forth in this subpart to the extent authorized by law.



Sec. 375.202  Definitions and limitations on definitions.

    (a) Definitions. For purposes of this subpart:
    (1) Meeting means the deliberations of at least a quorum of the 
Commission where such deliberations determine or result in the joint 
conduct of official Commission business, except that such term does not 
include deliberations to determine whether to conduct a closed meeting.
    (2) Portion of a meeting means the consideration during a meeting of 
a particular topic or item separately identified in the notice of 
Commission meeting described in Sec. 375.204.
    (3) Open when used in the context of a Commission meeting or a 
portion thereof, means the public may attend and observe the 
deliberations of the Commission during such meeting or portion of a 
meeting consistent with the provisions of Sec. 375.203.
    (4) Closed when used in the context of a Commission meeting or a 
portion thereof, means that the public may not attend or observe the 
deliberations of the Commission during such meeting or portion of such 
meeting.
    (b) Limitations on other definitions in this chapter. For purposes 
of this subpart:
    (1) Transcripts, minutes and electronic recordings of Commission 
meetings (whether or not prepared at the direction of the Commission) 
are not part of the ``formal record'' as defined in Sec. 388.101(c) of 
this chapter; and
    (2) Transcripts, minutes and electronic recordings of Commission 
meetings (whether or not prepared at the direction of the Commission) 
are not part of the ``public record'' of the Commission as defined in 
Sec. 388.105(b)) of this chapter.

[45 FR 21217, Apr. 1, 1980, as amended by Order 225, 47 FR 19058, May 3, 
1982]



Sec. 375.203  Open meetings.

    (a) General rule. Except as provided in Sec. 375.206, meetings of 
the Commission will be open meetings.
    (b) Public participation in open meetings. (1) Members of the public 
are invited to listen and observe at open meetings.
    (2)(i) Subject to the provisions of paragraphs (b)(2) (ii), (iii), 
and (iv) of

[[Page 1060]]

this section, members of the public may record discussions at Commission 
meetings by means of electronic or other devices (including tape 
recorders, stenotype, stenomask, or shorthand). The photographing of 
Commission meetings by still or movie camera, or by video taping without 
lighting aids, is permitted.
    (ii) Due to the limited space of the Commission meeting room, use of 
recording or photographic equipment which would require the user to move 
about the room during the meeting is not allowed. Recording and 
photographic equipment may be set up and used only in the public areas 
of the Commission meeting room as designated by the Commission.
    (iii) Except for portable equipment which is used at an individual's 
seat in the audience, equipment must be in place and ready to use prior 
to the start of the meeting or set up during a recess of the meeting. 
Such equipment may be removed only at the conclusion of the meeting or 
during a recess. A pre-arranged recess for the set up or removal of 
equipment may be requested through the Commission's Director of the 
Division of Public Information.
    (iv) No microphones may be placed on the tables used by the 
Commissioners and Staff.
    (c) Physical arrangements. The Secretary shall be responsible for 
seeing that ample space, sufficient visibility, and adequate acoustics 
are provided for public observation of open meetings.



Sec. 375.204  Notice of meetings.

    (a) Public announcements of meetings--1) General rule. Except to the 
extent that information described in Sec. 375.205(a) (involving closed 
meetings) is exempt from disclosure, the Secretary shall announce at 
least one week before each Commission meeting, the time, place, and 
subject matter of the meeting, whether it is an open meeting or closed 
meeting, and the name and telephone number of the official designated by 
the Commission to respond to requests for information about the meeting.
    (2) Abbreviated notice. If the Commission determines by a majority 
of its members by a recorded vote that Commission business requires that 
a Commission meeting be called with less than one week's notice as 
prescribed in paragraph (a)(1) of this section, the Secretary shall make 
public announcements of the time, place, and subject matter of such 
meeting and whether open or closed to the public, at the earliest 
practicable time.
    (3) Change in the time or place. If there is a change in time or 
place of a meeting following the public announcement prescribed in 
paragraph (a)(1) or (2) of this section the Secretary shall publicly 
announce such change at the earliest practicable time.
    (4) Change in the subject matter or the determination to open or 
close a meeting. The subject matter of a meeting, or the determination 
of the Commission to open or close a meeting or a portion of a meeting, 
may be changed following the public announcement prescribed in paragraph 
(a) (1) or (2) of this section only if:
    (i) The Commission determines by a recorded vote by a majority of 
the membership that Commission business so requires and that no earlier 
announcement of the change is possible; and
    (ii) The Secretary publicly announces such change and the vote of 
each member upon such change at the earliest practicable time.
    (b) Stricken items. Notwithstanding the provisions of paragraph (a) 
of this section, individual items that have been announced for 
consideration at Commission meetings may be deleted without vote or 
notice.
    (c) Definitions. For the purpose of this section, earliest 
practicable time, means as soon as practicable, which should in few, if 
any, instances be later than the commencement of the meeting or portion 
of the meeting in question.
    (d) Informing public of meeting announcements. (1) The Secretary 
shall use reasonable means to assure that the public is fully informed 
of the public announcements required by this section. For example, such 
announcements may be posted on the Commission's public notice boards, 
published in official Commission publications, or sent to the persons on 
a mailing list maintained for those who want to receive such material.

[[Page 1061]]

    (2) Immediately following each public announcement required by this 
section, notice of the time, place, and subject matter of a meeting, 
whether the meeting is open or closed, any change in a preceding 
announcement, and the name and telephone number of the official 
designated by the Commission to respond to requests for information 
about the meeting shall also be submitted by the Secretary for 
publication in the Federal Register.
    (e) Issuance of list of Commission actions. Following each 
Commission meeting, the Secretary shall issue a list of Commission 
actions taken which shall become effective as of the date of issuance of 
the related order (or date designated therein) or other document, which 
the Secretary shall issue in due course, in the manner prescribed by the 
Commission.



Sec. 375.205  Closed meetings.

    (a) Meetings will be closed to public observation where the 
Commission properly determines, according to the procedures set forth in 
Sec. 375.206, that such meeting or portion of the meeting or disclosure 
of information to be considered at the meeting is likely to:
    (1) Disclose matters that are (i) specifically authorized under 
criteria established by an Executive order to be kept secret in the 
interests of national defense or foreign policy and are (ii) in fact 
properly classified pursuant to such Executive order;
    (2) Relate solely to the internal personnel rules and practices of 
the Commission;
    (3) Disclose matters specifically exempted from disclosure by 
statute (other than 5 U.S.C. 552): Provided, That such statute:
    (i) Requires that the matters be withheld from the public in such a 
manner as to leave no discretion on the issue, or
    (ii) Establishes particular criteria for withholding or refers to 
particular types of matters to be withheld;
    (4) Disclose the trade secrets and commercial or financial 
information obtained from a person and privileged or confidential, which 
may include geological or geophysical information and data, including 
maps, concerning wells;
    (5) Involve accusing any person of a crime, or formally censuring 
any person;
    (6) Disclose information of a personal nature where disclosure would 
constitute a clearly unwarranted invasion of personal privacy, including 
personnel and medical files and similar files;
    (7) Disclose investigatory records compiled for law enforcement 
purposes, or information which if written would be contained in such 
records, but only to the extent that the production of such records or 
information would:
    (i) Interfere with enforcement proceedings;
    (ii) Deprive a person of a right to a fair trial or an impartial 
adjudication;
    (iii) Constitute an unwarranted invasion of personal privacy;
    (iv) Disclose the identity of a confidential source and, in the case 
of a record compiled by a criminal law enforcement authority in the 
course of a criminal investigation, or by an agency conducting a lawful 
national security intelligence investigation, confidential information 
furnished only by the confidential source;
    (v) Disclose investigative techniques and procedures, or;
    (vi) Endanger the life or physical safety of law enforcement 
personnel.
    (8) Disclose information contained in or related to examination, 
operating, or condition reports prepared by, on behalf of, or for the 
use of an agency responsible for the regulation or supervision of 
financial institutions;
    (9) Disclose information the premature disclosure of which would be:
    (i) In the case of an agency which regulates currencies, securities, 
commodities, or financial institutions, likely to:
    (A) Lead to significant financial speculation in currencies, 
securities, or commodities, or
    (B) Significantly endanger the stability of any financial 
institution; or
    (ii) Likely to frustrate significantly implementation of a proposed 
Commission action, except that paragraph (a)(9)(i) of this section shall 
not apply where the Commission has already disclosed to the public the 
content or nature of such proposed action, or where the Commission is 
required by law to

[[Page 1062]]

make such disclosure on its own initiative prior to taking final agency 
action on such proposal; or
    (10) Specifically concern the Commission's issuance of a subpoena, 
or the Commission's participation in a civil action or proceeding, an 
action in a foreign court or international tribunal, or an arbitration, 
or the initiation, conduct, or disposition by the Commission of a 
particular case:
    (i) Of formal Commission adjudication pursuant to the procedures in 
5 U.S.C. 554; or
    (ii) Otherwise involving a determination on the record after 
opportunity for a hearing.
    (b) Commission meetings shall not be closed pursuant to paragraph 
(a) of this section when the Commission finds that the public interest 
requires that they be open.



Sec. 375.206  Procedures to close meetings.

    (a) General rule. A meeting or a portion of a meeting may be closed 
only when the Commission votes by a majority of the membership to close 
the meeting. A separate vote shall be taken with respect to each 
Commission meeting or portion of a meeting which is proposed to be 
closed to the public or with respect to any information which is 
proposed to be withheld. A single vote may be taken with respect to a 
series of meetings, a portion or portions of which are proposed to be 
closed to the public, or with respect to any information concerning such 
series of meetings, so long as each meeting in such series involves the 
same particular matters and is scheduled to be held no more than thirty 
days after the initial meeting in such series. The vote of each 
Commission member participating in such vote shall be recorded and no 
proxies shall be allowed.
    (b) Request for closed meeting. Whenever any person whose interests 
may be directly affected by a meeting or a portion of a meeting requests 
that the Commission close such portion to the public for any of the 
reasons referred to in paragraph (a) (5), (6), or (7) of Sec. 375.205, 
the Commission, upon request of any one of its members, shall vote by 
recorded vote whether to close such meeting.
    (c) Release of vote. Within one day of any vote taken pursuant to 
paragraph (a) or (b) of this section, the Secretary of the Commission 
shall make publicly available a written copy of such vote reflecting the 
vote of each member. If a portion of a meeting is to be closed to the 
public, the Secretary shall, within one day of the vote taken pursuant 
to paragraph (a) or (b) of this section, make publicly available a full 
written explanation of the Commission's action closing the portion 
together with a list of all persons expected to attend the meeting and 
their affiliation. The information required by this paragraph shall be 
disclosed except to the extent that it is exempt from disclosure under 
the provisions of Sec. 375.205(a).
    (d) Certification. Prior to a determination that a meeting should be 
closed pursuant to paragraph (a) or (b) of this section, the General 
Counsel of the Commission shall publicly certify that, in his opinion, 
the meeting may be closed to the public and shall state each relevant 
exemptive provision. A copy of such certification, together with a 
statement from the presiding officer of the meeting setting forth the 
time and place of the meeting, and the persons present, shall be 
retained by the Secretary of the Commission as part of the transcript, 
recording, or minutes required by paragraph (e) of this section.
    (e) Transcripts, recordings, minutes. (1) The Secretary shall 
maintain a complete transcript or electronic recording adequate to 
record fully the proceedings of each meeting, or portion of a meeting, 
closed to the public, except that in the case of a meeting, or portion 
of a meeting, closed to the public pursuant to Sec. 375.205(a)(8), 
(9)(i), or (10), the Secretary shall maintain either a transcript or 
recording, or a set of minutes. Any such minutes shall fully and clearly 
describe all matters discussed and shall provide a full and accurate 
summary of any actions taken, and the reasons therefor, including a 
description of each of the views expressed on any item and the record of 
any rollcall vote (reflecting the vote of each member on the question). 
All agenda documents considered in connection with any Commission action 
shall be identified in such minutes.

[[Page 1063]]

    (2) The Secretary shall maintain a complete verbatim copy of the 
transcript, a complete copy of the minutes, or a complete electronic 
recording of each meeting, or portion of a meeting, closed to the 
public, for a period of at least two years after such meeting, or until 
one year after the conclusion of any Commission proceeding with respect 
to which the meeting or portion was held, whichever occurs later.
    (f) Public availability of transcripts, records, minutes. (1) Within 
a reasonable time after the adjournment of a meeting closed to the 
public, the Commission shall make available to the public, in the 
Division of Public Information of the Commission, Washington, DC, the 
transcript, electronic recording, or minutes of the discussion of any 
item on the agenda, or of any item of the testimony of any witness 
received at the meeting, except for such item or items of such 
discussion or testimony as the Director of Public Information determines 
may be withheld under Sec. 375.204. Copies of such transcript, or 
minutes, or a transcription of such recording shall be furnished to any 
person at the actual cost of duplication or transcription.
    (2) The determination of the Director of the Division of Public 
Information to withhold information pursuant to paragraph (f)(1) of this 
section may be appealed to the General Counsel or the General Counsel's 
designee, in accordance with Sec. 388.107 of this chapter.

[45 FR 21217, Apr. 1, 1980, as amended at 52 FR 7825, Mar. 13, 1987]



                          Subpart C_Delegations



Sec. 375.301  Purpose and subdelegations.

    (a) The purpose of this subpart is to set forth the authorities that 
the Commission has delegated to staff officials. Any action by a staff 
official under the authority of this subpart may be appealed to the 
Commission in accordance with Sec. 385.1902 of this chapter.
    (b) Where the Commission, in delegating functions to specified 
Commission officials, permits an official to further delegate those 
functions to a designee of such official, designee shall mean the deputy 
of such official, the head of a division, or a comparable official as 
designated by the official to whom the direct delegation is made.
    (c) For purposes of Subpart C, uncontested and in uncontested cases 
mean that no motion to intervene, or notice of intervention, in 
opposition to the pending matter made under Sec. 385.214 (intervention) 
has been received by the Commission.

[Order 112, 45 FR 79025, Nov. 28, 1980, as amended by Order 225, 47 FR 
19058, May 3, 1982; Order 492, 53 FR 16062, May 5, 1988]



Sec. 375.302  Delegations to the Secretary.

    The Commission authorizes the Secretary, or the Secretary's designee 
to:
    (a) Sign official general correspondence on behalf of the 
Commission, except as otherwise provided in this section.
    (b) Except as provided in Sec. 385.213 of this chapter, prescribe, 
for good cause, a different time than that required by the Commission's 
Rules of Practice and Procedure for filing by public utilities, 
licensees, natural gas companies, and other persons of answers to 
complaints, petitions, motions, and other documents. Absent a waiver, no 
answers will be required to be filed by a party within less than ten 
days after the date of service of the document.
    (c) Schedule hearings and issue notices thereof.
    (d) Accept for filing notices of intervention and petitions to 
intervene by commissions and agencies of the States and the Federal 
government.
    (e) Pass upon motions to intervene before a presiding administrative 
law judge is designated. If a presiding administrative law judge has 
been designated, the provisions of Sec. 385.504(b)(12) of this chapter 
are controlling.
    (f) Deny motions for extensions of time (other than motions made 
while a proceeding is pending before a presiding officer as defined in 
Sec. 385.102(e)), except that such motions may be granted in accordance 
with Sec. 385.2008 of this chapter.
    (g) Reject any documents filed later than the time prescribed by an 
order or rule of the Commission, except that such documents may be 
accepted in accordance with Sec. 385.2008 of this chapter.
    (h) Reject any documents filed that do not meet the requirements of 
the

[[Page 1064]]

Commission's rules which govern matters of form, except that such 
documents may be accepted in accordance with Sec. 385.2001 of this 
chapter for good cause shown.
    (i) Waive requirements of the Commission's rules which govern 
matters of form, when consistent with the public interest in a 
particular case.
    (j) Pass upon, in contested proceedings, questions of extending time 
for electric public utilities, licensees, natural gas companies, and 
other persons to file required reports, data, and information and to do 
other acts required to be done at or within a specific time by any rule, 
regulation, license, permit, certificate, or order of the Commission.
    (k) Accept service of process on behalf of the Commission.
    (l) Accept for filing bonds or agreements and undertakings submitted 
in rate suspension proceedings.
    (m) Issue notices or orders instituting procedures to be followed 
concerning contested audit issues under part 41 or 158 of this chapter 
either when the utility:
    (1) Initially notifies the Commission that it requests disposition 
of a contested issue pursuant to Sec. 41.7 or 158.7 of this chapter; or
    (2) Requests disposition of a contested issue pursuant to the 
shortened procedures provided in Sec. 41.3 or 158.3 of this chapter.
    (n) Publish notice of land withdrawals under section 24 of the 
Federal Power Act.
    (o) Issue notices of applications filed under the Federal Power Act 
and the Natural Gas Act, fixing the time for filing comments, protests 
or petitions to intervene and schedule hearings on such applications 
when appropriate or required by law.
    (p) Accept for filing amendments to agreements and contracts or rate 
schedules submitted in compliance with Commission orders accepting 
offers of rate settlements if such filings are in satisfactory 
compliance with such orders.
    (q) Grant authorizations, pursuant to the provisions of Sec. 
35.1(a) of this chapter for a designated representative to post and file 
rate schedules of public utilities which are parties to the same rate 
schedule.
    (r) Redesignate proceedings, licenses, certificates, rate schedules, 
and other authorizations and filing to reflect changes in the names of 
persons and municipalities subject to or invoking Commission 
jurisdiction under the Federal Power Act or the Natural Gas Act, where 
no substantive changes in ownership, corporate structure or domicile, or 
jurisdictional operation are involved.
    (s) Change the appropriate hydroelectric project license article 
upon application by the licensee to reflect the specified reasonable 
rate of return as provided in Sec. 2.15 of this chapter.
    (t) Reject without prejudice all requests for rehearing and requests 
for modification of a proposed order issued in a proceeding under 
section 210 or section 211 of the Federal Power Act, 16 U.S.C. 824i, 
824j.
    (u) Reject without prejudice all motions for clarification that are 
combined with requests for rehearing and/or requests for modification of 
a proposed order issued in a proceeding under section 210 or section 211 
of the Federal Power Act, 16 U.S.C. 824i, 824j.
    (v) Toll the time for action on requests for rehearing.
    (w) Issue notices in compliance with section 206(b) of the Federal 
Power Act.
    (x) Issue instructions for electronic registration pursuant to, 
grant applications for waivers of the requirements of, and make 
determinations regarding exemptions from 18 CFR part 390.
    (y) Direct the staff of the Dispute Resolution Service (DRS) to 
contact the parties in a complaint proceeding and establish a date by 
which DRS must report to the Commission whether a dispute resolution 
process to address the complaint will be pursued by the parties.
    (z) Issue instructions pertaining to allowable electronic file and 
document formats, the filing of complex documents, whether paper copies 
are required, and procedural guidelines for submissions via the 
Internet, on electronic media or via other electronic means.
    (aa) Issue a notice that the Commission will not further review on 
its own motion a Notice of Penalty filed under

[[Page 1065]]

Section 215(e) of the Federal Power Act.

[43 FR 36435, Aug. 17, 1978]

    Editorial Note: For Federal Register citations affecting Sec. 
375.302, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 375.303  Delegations to the Director of the Office of Electric 

Reliability.

    The Commission authorizes the Director or the Director's designee 
to:
    (a) Program-Specific Delegated Authority: Take the following actions 
with respect to the following programs:
    (1) Section 206 of the Public Utility Regulatory Policy Act of 1978 
and corresponding Section 202(g) of the Federal Power Act.
    (i) Accept for filing all uncontested contingency plans regarding 
shortages of electric energy or capacity, circumstances which may result 
in such shortages, and accommodations of any such shortages or 
circumstances, if said contingency plans comply with all applicable 
statutory requirements, and with all applicable Commission rules, 
regulations and orders for which waivers have not been granted, or if 
waivers have been granted by the Commission, if the filings comply with 
the terms of the waivers;
    (ii) Reject a contingency plan regarding shortages of electric 
energy or capacity, unless accompanied by a request for waiver in 
conformity with Sec. 385.2001 of this chapter, if it fails patently to 
comply with applicable statutory requirements and with all applicable 
Commission rules, regulations and orders;
    (iii) Sign and issue deficiency letters;
    (iv) Act on any request or petition for waiver, consistent with 
Commission policy.
    (2) Section 215 of the Federal Power Act.
    (i) Approve uncontested applications, including uncontested 
revisions to Electric Reliability Organization or Regional Entity rules 
or procedures;
    (ii) Reject an application, unless accompanied by a request for 
waiver in conformity with Sec. 385.2001 of this chapter, if it fails 
patently to comply with applicable statutory requirements or with all 
applicable Commission rules, regulations or orders;
    (iii) Act on any request or petition for waiver, consistent with 
Commission policy;
    (iv) Sign and issue deficiency letters; and
    (v) Direct the Electric Reliability Organization, Regional Entities, 
or users, owners, and operators of the Bulk-Power System within the 
United States (not including Alaska and Hawaii) to provide such 
information as is necessary to implement Section 215 of the Federal 
Power Act (16 U.S.C. 824o) pursuant to Sec. Sec. 39.2(d) and 39.11 and 
Part 40 of this chapter.
    (b) Non-Program-Specific Delegated Authority:
    (1) Take appropriate action on:
    (i) Any notice of intervention or motion to intervene filed in an 
uncontested proceeding processed by the Office of Electric Reliability; 
and
    (ii) Applications for extensions of time to file required filings, 
reports, data and information and to perform other acts required at or 
within a specific time by any rule, regulation, license, permit, 
certificate, or order by the Commission.
    (2) Take appropriate action on requests or petitions for waivers of 
filing requirements for the appropriate statements and reports processed 
by the Office of Electric Reliability pursuant to Sec. Sec. 141.51 and 
141.300 of this chapter; and
    (3) Undertake the following actions:
    (i) Issue reports for public information purposes. Any report issued 
without Commission approval must:
    (A) Be of a noncontroversial nature, and
    (B) Contain the statement, ``This report does not necessarily 
reflect the views of the Commission,'' in bold face type on the cover;
    (ii) Upon request or otherwise, issue staff position papers to 
further the Electric Reliability Organization and Regional Entity 
reliability standard development process. Any such staff position paper 
issued without Commission approval must contain the statement, ``This 
position paper does not necessarily reflect the views of the 
Commission,'' in bold face type on the cover;

[[Page 1066]]

    (iii) Issue and sign requests for additional information regarding 
applications, filings, reports and data processed by the Office of 
Electric Reliability.
    (iv) Accept for filing, data and reports required by Commission 
regulations, rules or orders, or presiding officers' initial decisions 
upon which the Commission has taken no further action, if such filings 
are in compliance with such regulations, rules, orders or decisions and, 
when appropriate, notify the filing party of such acceptance.

[Order 701, 72 FR 61054, Oct. 29, 2007, by Order 721, redesignated at 74 
FR 6541, Feb. 10, 2009]



Sec. 375.304  Delegations to the Chief Administrative Law Judge.

    (a) The Commission authorizes the Chief Administrative Law Judge and 
the Administrative Law Judge designated by the Chief Administrative Law 
Judge to exercise the power granted to a Presiding Officer by part 385, 
particularly Sec. 385.504 of this chapter.
    (b) The Commission authorizes the Chief Administrative Law Judge to
    (1) For those proceedings pending under subpart E of part 385 of 
this chapter:
    (i) Consolidate for hearing two or more proceedings on any or all 
issues,
    (ii) Sever two or more proceedings or issues in a proceeding,
    (iii) Designate and substitute presiding officers, and
    (iv) Extend any close or record date ordered by the Commission in a 
proceeding for good cause, and
    (v) Set or extend procedural time standards, including but not 
limited to hearing, briefing and initial decision dates, including dates 
set by the Commission, unless the Commission states otherwise in its 
hearing order.
    (2) For proceedings under subparts I and J of part 385 of this 
chapter, designate presiding officers who will have all the authorities 
and duties vested in presiding officers by those rules and other 
applicable rules in conducting proceedings pursuant to sections 503(c) 
and 504(b)(1) of the Department of Energy Organization Act, 42 U.S.C. 
7193(c) and 7194(b)(1) (1982).
    (3) Deny or grant, in whole or in part, petitions for waivers of 
fees prescribed in Sec. Sec. 381.303 and 381.304 of this chapter in 
accordance with Sec. 381.106 of this chapter.

[Order 492, 53 FR 16063, May 5, 1988, as amended by Order 629, 68 FR 
6609, Feb. 10, 2003]



Sec. 375.305  Delegations to the Solicitor.

    The Commission authorizes the Solicitor, or the Solicitor's designee 
to:
    (a) File with the appropriate court of the United States a certified 
list of the materials comprising the record of any proceeding which 
involves the Commission;
    (b) Retain appropriate materials; and
    (c) Deliver such materials to the court as required.

[43 FR 36435, Aug. 17, 1978. Redesignated and amended at 45 FR 21224, 
21225, Apr. 1, 1980; Order 112, 45 FR 79025, Nov. 28, 1980]



Sec. 375.307  Delegations to the Director of the Office of Energy Market 

Regulation.

    The Commission authorizes the Director or the Director's designee 
to:
    (a) Program-Specific Delegated Authority: Take the following actions 
with respect to the following programs:
    (1) Sections 205 and 206 of the Federal Power Act. (i) Accept for 
filing all uncontested tariffs or rate schedules and uncontested tariff 
or rate schedule changes submitted by public utilities, including 
changes that would result in rate increases, if they comply with all 
applicable statutory requirements, and with all applicable Commission 
rules, regulations and orders for which waivers have not been granted, 
or if waivers have been granted by the Commission, if the filings comply 
with the terms of the waivers;
    (ii) Reject a tariff or rate schedule filing, unless accompanied by 
a request for waiver in conformity with Sec. 385.2001 of this chapter, 
if it fails patently to comply with applicable statutory requirements 
and with all applicable Commission rules, regulations and orders;
    (iii) Take appropriate action on requests or petitions for waivers 
of notice as provided in section 205(d) of the Federal Power Act, 
provided the requests conform to the requirements of Sec. 385.2001 of 
this chapter;
    (iv) Refer to the Chief Administrative Law Judge (Chief ALJ) for 
action

[[Page 1067]]

by the Chief ALJ, with the Chief ALJ's concurrence, uncontested motions 
that would result in lower interim settlement rates, pending Commission 
action on settlement agreements;
    (v) Sign and issue deficiency letters; and
    (vi) Act on requests for authorization for a designated 
representative to post and file rate schedules of public utilities which 
are parties to the same rate schedules.
    (2) Other sections of the Federal Power Act. (i) Pass upon any 
uncontested application for authorization to issue securities or to 
assume obligations and liabilities filed by public utilities and 
licensees pursuant to Part 34 of this chapter;
    (ii) Take appropriate action on uncontested applications for the 
sale or lease or other disposition of facilities, merger or 
consolidation of facilities, purchase or acquisition or taking of 
securities of a public utility, or purchase or lease or acquisition of 
an existing generation facility under section 203 of the Federal Power 
Act;
    (iii) Take appropriate action on uncontested applications for 
interlocking positions under section 305(b) of the Federal Power Act; 
and
    (iv) Sign and issue deficiency letters for filings under Federal 
Power Act sections 203, 204, and 305(b).
    (3) Public Utility Holding Company Act of 2005. Take appropriate 
action on:
    (i) Uncontested FERC-65A (exemption notification) filings;
    (ii) Uncontested FERC-65B (waiver notification) filings; and
    (iii) Uncontested applications under section 1275(b) of the Energy 
Policy Act of 2005 and/or the Federal Power Act to allocate service 
company costs to members of a holding company system.
    (4) Federal Power Marketing Administration Filings. Approve 
uncontested rates and rate schedules filed by the Secretary of Energy or 
his designee, for power developed at projects owned and operated by the 
federal government and for services provided by federal power marketing 
agencies.
    (5) Section 210(m) of the Public Utility Regulatory Policies Act of 
1978. (i) Approve uncontested applications;
    (ii) Reject an application, unless accompanied by a request for 
waiver in conformity with Sec. 385.2001 of this chapter, if it fails 
patently to comply with applicable statutory requirements or with all 
applicable Commission rules, regulations and orders;
    (iii) Act on any request or petition for waiver, consistent with 
Commission policy; and
    (iv) Sign and issue deficiency letters.
    (6) Other sections of the Public Utility Regulatory Policies Act of 
1978. Take appropriate action on:
    (i) Filings related to uncontested nonexempt qualifying small power 
production facilities;
    (ii) Uncontested applications for certification of qualifying status 
for small power production and cogeneration facilities under Sec. 
292.207 of this chapter;
    (iii) Requests or petitions for waivers of the requirements of 
subpart C of Part 292 of this chapter governing cogeneration and small 
power production facilities made by any state regulatory authority or 
nonregulated electric utility pursuant to Sec. 292.402 of this chapter;
    (iv) Requests or petitions for waivers of the Commission's 
regulations under the Federal Power Act related to nonexempt qualifying 
small power production facilities and related authorizations consistent 
with Massachusetts Refusetech, Inc., 31 FERC ] 61,048 (1985), and the 
orders cited therein without limitation as to whether qualifying status 
is by Commission certification or notice of qualifying status, provided 
that, in the case of a notice of qualifying status, any waiver is 
granted on condition that the filing party has correctly noticed the 
facility as a qualifying facility; and
    (v) Requests or petitions for waivers of the technical requirements 
applicable to qualifying small power production facilities and 
qualifying cogeneration facilities.
    (7) Sections 4 and 5 of the Natural Gas Act. (i) Accept for filing 
all uncontested tariffs or rate schedules and uncontested tariff or rate 
schedule changes, except major pipeline rate increases under section 
4(e) of the Natural Gas Act and under subpart D of Part 154 of this 
chapter, if they comply

[[Page 1068]]

with all applicable statutory requirements, and with all applicable 
Commission rules, regulations and orders for which waivers have not been 
granted, or if waivers have been granted by the Commission, if the 
filings comply with the terms of the waivers;
    (ii) Accept for filing all uncontested tariff or rate schedules 
changes made in compliance with Commission orders;
    (iii) Reject a tariff or rate schedule filing, unless accompanied by 
a request for waiver in conformity with Sec. 385.2001 of this chapter, 
if it patently fails to comply with applicable statutory requirements 
and with all applicable Commission rules, regulations and orders;
    (iv) Take appropriate action on requests or petitions for waiver of 
notice as provided in section 4(d) of the Natural Gas Act, provided the 
request conforms to the requirements of Sec. 385.2001 of this chapter; 
and
    (v) Refer to the Chief Administrative Law Judge (Chief ALJ) for 
action by the Chief ALJ, with the Chief ALJ's concurrence, uncontested 
motions that would result in lower interim settlement rates, pending 
Commission action on settlement agreements.
    (8) Section 7 of the Natural Gas Act. Take appropriate action on the 
following types of uncontested applications for authorizations and 
uncontested amendments to applications and authorizations filed pursuant 
to section 7 of the Natural Gas Act and impose appropriate conditions:
    (i) Applications by a pipeline for the deletion of delivery points 
but not facilities;
    (ii) Applications to abandon pipeline services, but not facilities, 
involving a specific customer or customers, if such customer or 
customers have agreed to the abandonment;
    (iii) Applications for temporary or permanent certificates (and for 
amendments thereto) for services, but not facilities, in connection with 
the transportation;
    (iv) Blanket certificate applications by interstate pipelines and 
local distribution companies served by interstate pipelines filed 
pursuant to Sec. Sec. 284.221 and 284.224 of this chapter;
    (v) Applications for temporary certificates involving transportation 
service or sales, but not facilities, pursuant to Sec. 157.17 of this 
chapter;
    (vi) Dismiss any protest to prior notice filings involving existing 
service, made pursuant to Sec. 157.205 of this chapter, that does not 
raise a substantive issue and fails to provide any specific detailed 
reason or rationale for the objection;
    (vii) Applications pertaining to approval of changes in customer 
names where there is no change in rate schedule, rate, or other incident 
of service;
    (viii) Applications for approval of customer rate schedule shifts;
    (ix) Applications filed under section 1(c) of the Natural Gas Act 
and Part 152 of this chapter, for declaration of exemption from the 
provisions of the Natural Gas Act and certificates held by the 
applicant;
    (x) Applications and amendments requesting authorizations filed 
pursuant to section 7(c) of the Natural Gas Act for new or additional 
service through existing facilities to right-of-way grantors either 
directly or through distributors, where partial consideration for the 
granting of the rights-of-way was the receipt of gas service pursuant to 
section 7(c) of the Natural Gas Act;
    (xi) An uncontested request from the holder of an authorization, 
granted pursuant to the Director's delegated authority, to vacate all or 
part of such authorization; and
    (xii) Sign and issue deficiency letters.
    (9) Natural Gas Policy Act of 1978. (i) Notify jurisdictional 
agencies within 45 days after the date on which the Commission receives 
notice of a determination pursuant to Sec. 270.502(b) of this chapter 
that the notice is incomplete under Sec. 270.204 of this chapter;
    (ii) Issue preliminary findings under Sec. 270.502(a)(1) of this 
chapter;
    (iii) Accept any uncontested item that has been filed under Sec. 
284.123 of this chapter consistent with Commission regulations and 
policy;
    (iv) Reject an application filed pursuant to Sec. 284.123 of this 
chapter, unless accompanied by a request for waiver in conformity with 
Sec. 385.2001 of this chapter, if it fails patently to comply with 
applicable statutory requirements or Commission rules, regulations and 
orders; and

[[Page 1069]]

    (v) Take appropriate action on petitions to permit after an initial 
60-day period one additional 60-day period of exemption pursuant to 
Sec. 284.264(b) of this chapter where the application for extension 
arrives at the Commission no later than 45 days after the commencement 
of the initial period of exemption and where only services are involved.
    (10) Regulation of Oil Pipelines Under the Interstate Commerce Act. 
(i) Accept any uncontested item that has been filed consistent with 
Commission regulations and policy;
    (ii) Reject any filing, unless accompanied by a request for waiver 
in conformity with Sec. 385.2001 of this chapter, that patently fails 
to comply with applicable statutory requirements and with all applicable 
Commission rules, regulations and orders; and
    (iii) Prescribe for carriers the classes of property for which 
depreciation charges may be properly included under operating expenses, 
review the fully documented depreciation studies filed by the carriers, 
and authorize or revise the depreciation rates reflected in the 
depreciation study with respect to each of the designated classes of 
property.
    (b) General, Non-Program-Specific Delegated Authority. (1) Take 
appropriate action on:
    (i) Any notice of intervention or motion to intervene, filed in an 
uncontested proceeding processed by the Office of Energy Market 
Regulation;
    (ii) Applications for extensions of time to file required filings, 
reports, data and information and to perform other acts required at or 
within a specific time by any rule, regulation, license, permit, 
certificate, or order by the Commission; and
    (iii) Filings for administrative revisions to electronic filed 
tariffs.
    (2) Take appropriate action on requests or petitions for waivers of:
    (i) Filing requirements for the appropriate statements and reports 
processed by the Office of Energy Market Regulation under Parts 46, 141, 
260 and 357 of this chapter, Sec. Sec. 284.13 and 284.126 of this 
chapter, and other relevant Commission orders; and
    (ii) Fees prescribed in Sec. Sec. 381.403 and 381.505 of this 
chapter in accordance with Sec. 381.106(b) of this chapter.
    (3) Undertake the following actions:
    (i) Issue reports for public information purposes. Any report issued 
without Commission approval must:
    (A) Be of a noncontroversial nature, and
    (B) Contain the statement, ``This report does not necessarily 
reflect the views of the Commission,'' in bold face type on the cover;
    (ii) Issue and sign requests for additional information regarding 
applications, filings, reports and data processed by the Office of 
Energy Market Regulation; and
    (iii) Accept for filing, data and reports required by Commission 
regulations, rules or orders, or presiding officers' initial decisions 
upon which the Commission has taken no further action, if such filings 
are in compliance with such regulations, rules, orders or decisions and, 
when appropriate, notify the filing party of such acceptance.

[Order 699, 72 FR 45326, Aug. 14, 2007, as amended by Order 701, 72 FR 
61054, Oct. 29, 2007; Order 714, 73 FR 57537, Oct. 3, 2008]



Sec. 375.308  Delegations to the Director of the Office of Energy Projects.

    The Commission authorizes the Director or the Director's designee 
to:
    (a) Take appropriate action on uncontested applications and on 
applications for which the only motion or notice of intervention in 
opposition is filed by a competing preliminary permit or exemption 
applicant that does not propose and substantiate materially different 
plans to develop, conserve, and utilize the water resources of the 
region for the following:
    (1) Licenses (including original, new, and transmission line 
licenses) under part I of the Federal Power Act;
    (2) Exemptions from all or part of the licensing requirements of 
part I of the Federal Power Act; and
    (3) Preliminary permits for proposed projects.
    (b) Take appropriate action on uncontested applications for:
    (1) Amendments (including changes in the use or disposal of water 
power

[[Page 1070]]

project lands or waters or in the boundaries of water power projects) to 
licenses (including original, new, and transmission line licenses) under 
part I of the Federal Power Act, exemptions from all or part of the 
requirements of part I of the Federal Power Act, and preliminary 
permits; and
    (2) Surrenders of licenses (including original and new), exemptions, 
and preliminary permits.
    (c) Take appropriate action on the following:
    (1) Determinations or vacations with respect to lands of the United 
States reserved from entry, location, or other disposal under section 24 
of the Federal Power Act;
    (2) Transfer of a license under section 8 of the Federal Power Act;
    (3) Applications for the surrender of transmission line licenses 
pursuant to part 6 of this chapter;
    (4) Motions filed by licensees, permittees, exemptees, applicants, 
and others requesting an extension of time to file required submittals, 
reports, data, and information and to do other acts required to be done 
at or within a specific time period by any rule, regulation, license, 
exemption, permit, notice, letter, or order of the Commission in 
accordance with Sec. 385.2008 of this chapter;
    (5) Declarations of intent and petitions for declaratory orders 
concerning the Commission's jurisdiction over a hydropower project under 
the Federal Power Act;
    (6) New or revised exhibits, studies, plans, reports, maps, 
drawings, or specifications, or other such filings made voluntarily or 
in response to a term or condition in a preliminary permit, license, or 
exemption issued for a hydropower project, or in response to the 
requirements of an order of the Commission or presiding officer's 
initial decision concerning a hydropower project;
    (7) Requests by applicants to withdraw, pursuant to Sec. 385.216 of 
this chapter, any pleadings under part I of the Federal Power Act and 
any pleadings related to exemptions from all or part of part I of the 
Federal Power Act;
    (8) Requests by licensees for exemption from:
    (i) The requirement of filing FERC Form No. 80, Licensed Projects 
Recreation, under Sec. 8.11 of this chapter; and
    (ii) The fees prescribed in Sec. 381.302(a) of this chapter in 
accordance with Sec. 381.302(c) of this chapter and the fees in Sec. 
381.601 of this chapter, in accordance with Sec. 381.106 of this 
chapter;
    (9) Requests for waivers incidental to the exercise of delegated 
authority provided the request conforms to the requirements of Sec. 
385.2001 of this chapter;
    (10) Proposals for the development of water resources projects 
submitted by other agencies of the Federal government for Commission 
review or comment. The Director shall direct comments, when necessary, 
to the sponsoring agency on matters including, but not limited to, the 
need for, and appropriate size of, any hydroelectric power installation 
proposed by any other agency of the Federal government;
    (11) The reasonableness of disputed agency cost statements pursuant 
to Sec. 4.303(e) of this chapter.
    (d) Issue an order pursuant to section 5 of the Federal Power Act to 
cancel a preliminary permit if the permittee fails to comply with the 
specific terms and conditions of the permit; provided:
    (1) The Director gives notice to the permittee of probable 
cancellation no less than 30 days prior to the issuance of the 
cancellation order, and
    (2) The permittee does not oppose the issuance of the cancellation 
order.
    (e) Issue an order to revoke an exemption of a small conduit 
hydroelectric facility from the licensing provisions of part I of the 
Federal Power Act granted pursuant to Sec. 4.93 of this chapter, or an 
exemption of a small hydroelectric power project from the licensing 
provisions of part I of the Federal Power Act granted pursuant to Sec. 
4.105 of this chapter if the exemption holder fails to begin or complete 
actual construction of the exempted facility or project within the time 
specified in the order granting the exemption or in Commission 
regulations at Sec. 4.94(c) or Sec. 4.106(c) of this chapter, 
provided:
    (1) The Director gives notice to the exemption holder by certified 
mail of probable revocation no less than 30 days prior to the issuance 
of the revocation order, and

[[Page 1071]]

    (2) The holder of the exemption does not oppose the issuance of the 
revocation order.
    (f) Issue an order pursuant to section 13 of the Federal Power Act 
to terminate a license granted under part I of the Federal Power Act if 
the licensee fails to commence actual construction of the project works 
within the time prescribed in the license, provided:
    (1) The Director gives notice by certified mail to the licensee of 
probable termination no less than 30 days prior to the issuance of the 
termination order, and
    (2) The licensee does not oppose the issuance of the termination 
order.
    (g) Require licensees and applicants for water power projects to 
make repairs to project works, take any related actions for the purpose 
of maintaining the safety and adequacy of such works, make or modify 
emergency action plans, have inspections by independent consultants, and 
perform other actions necessary to comply with part 12 of this chapter 
or otherwise protect human life, health, property, or the environment.
    (h) For any unlicensed or unexempted hydropower project, take the 
following actions:
    (1) Conduct investigations to ascertain the Commission's 
jurisdiction,
    (2) Make preliminary jurisdictional determinations, and
    (3) If a project has been preliminarily determined to require a 
license, issue notification of the Commission's jurisdiction; require 
the filing of a license application; and require that actions necessary 
to comply with part 12 of this chapter or otherwise protect human life, 
health, property, or the environment are taken.
    (i) Take appropriate action on uncontested settlements among non-
Federal parties involving headwater benefits.
    (j) Dismiss applications for licenses and approve the withdrawal of 
applications for hydropower project licenses, in instances where no 
petition for or notice of intervention contending that licensing is 
required under part I of the Federal Power Act has been filed and the 
Director determines that licensing is not required by such Part I.
    (k) Reject or dismiss an application filed under Part I of the 
Federal Power Act or an application for an exemption from some or all of 
the requirements of Part I of the Federal Power Act if:
    (1) An application is patently deficient under Sec. 4.32(e)(2)(i);
    (2) A revised application
    (i) Does not conform to the requirements of Sec. Sec. 4.32(a), 
4.32(b), or 4.38, under Sec. 4.32(d)(1) or
    (ii) If revisions to an application are not timely submitted under 
Sec. 4.32(e)(1)(iii); or
    (3) The applicant fails to provide timely additional information, 
documents, or copies of submitted materials under Sec. 4.32(g).
    (l) Redesignate proceedings, licenses, and other authorizations and 
filings to reflect changes in the names of persons and municipalities 
subject to or invoking Commission jurisdiction under the Federal Power 
Act, where no substantive changes in ownership, corporate structure or 
domicile, or jurisdictional operation are involved.
    (m) Determine payments for headwater benefits from the operation of 
Federal reservoir projects.
    (n) Determine whether to allow a credit against annual charges for 
the use of government dams or other structures billed to licensees each 
year for contractual payments for the construction, operation, and 
maintenance of a Federal dam.
    (o) Prepare and issue comments on general water policy and planning 
issues for the use of the Director of the Water Resources Council or the 
Assistant Secretaries of the Department of Energy.
    (p) Prepare and transmit letters concerning power site lands to the 
Bureau of Land Management and the U.S. Geological Survey; respond to 
routine requests for information and any non-docketed correspondence; 
prepare and transmit letters requesting comments or additional 
information on applications for hydropower project licenses, preliminary 
permits, exemptions, amendments of licenses, permits, or exemptions, and 
other similar matters from Federal, state, and local agencies,

[[Page 1072]]

from applicants, and from other appropriate persons; and prepare and 
transmit letters regarding whether transmission lines are works of a 
hydropower project and are required to be licensed.
    (q) Reject an application or other filing under Section 405 of the 
Public Utility Regulatory Policies Act of 1978, unless accompanied by a 
request for waiver in conformity with Sec. 385.2001 of this chapter, if 
it fails patently to comply with applicable statutory requirements or 
Commission rules, regulations, and orders.
    (r) Pass upon petitions filed under Sec. Sec. 292.210 and 292.211 
of this chapter.
    (s) Make any preliminary determination of inconsistency between a 
fish and wildlife agency's fish and wildlife recommendation and 
applicable law, and conduct through staff whatever consultation with the 
agency that is necessary or appropriate in order to attempt to resolve 
any inconsistency, under section 10(j) of the Federal Power Act, and to 
take such related actions as are required under that section.
    (t) Waive the pre-filing consultation requirements in Sec. Sec. 
4.38 and 16.8 of this title whenever the Director, in his discretion, 
determines that an emergency so requires, or that the potential benefit 
of expeditiously considering a proposed improvement in safety, 
environmental protection, efficiency, or capacity outweighs the 
potential benefit of requiring completion of the consultation process 
prior to the filing of an application.
    (u) Approve, on a case-specific basis, and issue such orders as may 
be necessary in connection with the use of alternative procedures, under 
Sec. 4.34(i) of this chapter, for the development of an application for 
an original, new or subsequent license, exemption, or license amendment 
subject to the pre-filing consultation process, and assist in the pre-
filing consultation and related processes.
    (v) Take appropriate action on the following types of uncontested 
applications for authorizations and uncontested amendments to 
applications and authorizations and impose appropriate conditions:
    (1) Applications or amendments requesting authorization for the 
construction or acquisition and operation of facilities that have a 
construction or acquisition cost less than the limits specified in 
column 2 of table I in Sec. 157.208(d) of this chapter;
    (2) Applications by a pipeline for the abandonment of pipeline 
facilities;
    (3) Applications for temporary certificates for facilities pursuant 
to Sec. 157.17 of this chapter;
    (4) Petitions to amend certificates to conform to actual 
construction;
    (5) Applications for temporary certificates for facilities pursuant 
to Sec. 157.17 of this chapter;
    (6) Dismiss any protest to prior notice filings made pursuant to 
Sec. 157.205 of this chapter and involving pipeline facilities that 
does not raise a substantive issue and fails to provide any specific 
detailed reason or rationale for the objection;
    (7) Applications for temporary or permanent certificates (and for 
amendments thereto) for the transportation, exchange or storage of 
natural gas, provided that the cost of construction of the applicant's 
related facility is less than the limits specified in column 2 of table 
1 in Sec. 157.208(d) of this chapter; and
    (8) Applications for blanket certificates of public convenience and 
necessity pursuant to subpart F of part 157 of this chapter, including 
waiver of project cost limitations in Sec. Sec. 157.208 and 157.215 of 
this chapter, and the convening of informal conferences during the 30-
day reconciliation period pursuant to the procedures in Sec. 
157.205(f).
    (w) Take appropriate action on the following:
    (1) Any notice of intervention or petition to intervene, filed in an 
uncontested application for pipeline facilities;
    (2) An uncontested request from one holding an authorization, 
granted pursuant to the Director's delegated authority, to vacate all or 
part of such authorization;
    (3) Petitions to permit after an initial 60-day period one 
additional 60-day period of exemption pursuant to Sec. 284.264(b) of 
this chapter where the application or extension arrives at the 
Commission later than 45 days after

[[Page 1073]]

the commencement of the initial period of exemption when the emergency 
requires installation of facilities;
    (4) Applications for extensions of time to file required reports, 
data, and information and to perform other acts required at or within a 
specific time by any rule, regulation, license, permit, certificate, or 
order by the Commission; and
    (5) Requests for waiver of the landowner notification requirements 
in Sec. 157.203(d) of this chapter.
    (x) Undertake the following actions:
    (1) Compute, for each calendar year, the project limits specified in 
table I of Sec. 157.208 and table II of Sec. 157.215(a) of this 
chapter, adjusted for inflation, and publish such limits as soon as 
possible thereafter in the Federal Register;
    (2) Issue reports for public information purposes. Any report issued 
without Commission approval must:
    (i) Be of a noncontroversial nature, and
    (ii) Contain the statement, ``This report does not necessarily 
reflect the view of the Commission,'' in bold face type on the cover;
    (3) Issue and sign deficiency letters regarding natural gas 
applications;
    (4) Accept for filing, data and reports required by Commission 
orders, or presiding officers' initial decisions upon which the 
Commission has taken no further action, if such filings are in 
compliance with such orders or decisions and, when appropriate, notify 
the filing party of such acceptance;
    (5) Reject requests which patently fail to comply with the 
provisions of 157.205(b) of this chapter;
    (6) Take appropriate action on requests or petitions for waivers of 
any action incidental to the exercise of delegated authority, including 
waiver of notice as provided in section 4(d) of the Natural Gas Act, 
provided the request conforms to the requirements of Sec. 385.2001 of 
this chapter; and
    (7) Take whatever steps are necessary to ensure the protection of 
all environmental resources during the construction or operation of 
natural gas facilities, including authority to design and implement 
additional or alternative measures and stop work authority.
    (y) Take appropriate action on the following:
    (1) Any action incidental to the exercise of delegated authority, 
including waiver of notice as provided in section 4(d) of the Natural 
Gas Act, provided the request conforms to the requirements of Sec. 
385.2001 of this chapter; and
    (2) Requests or petitions for waivers of filing requirements for 
statements and reports under Sec. Sec. 260.8 and 260.9 of this chapter.
    (z) Approve, on a case-specific basis, and make such decisions and 
issue guidance as may be necessary in connection with the use of the 
pre-filing procedures in Sec. 157.21, `` Pre-filing procedures and 
review process for LNG terminal facilities and other natural gas 
facilities prior to filing of applications.''
    (aa) Take the following actions to implement part 5 of this chapter 
on or after October 23, 2003:
    (1) Act on requests for approval to use the application procedures 
of parts 4 or 16, pursuant to Sec. 5.3 of this chapter;
    (2) Approve a potential license applicant's proposed study plan with 
appropriate modifications pursuant to Sec. 5.13 of this chapter;
    (3) Resolve formal study disputes pursuant to Sec. 5.14 of this 
chapter; and
    (4) Resolve disagreements brought pursuant to Sec. 5.15 of this 
chapter.
    (bb) Establish a schedule for each Federal agency or officer, or 
State agency or officer acting pursuant to delegated Federal authority, 
to issue or deny Federal authorizations required for natural gas 
projects subject to section 3 or 7 of the Natural Gas Act.

[Order 492, 53 FR 16065, May 5, 1988]

    Editorial Note: For Federal Register citations affecting Sec. 
375.308, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 375.309  Delegations to the General Counsel.

    The Commission authorizes the General Counsel or the General 
Counsel's designee to:
    (a) Designate officers empowered to administer oaths and 
affirmations, subpoena witnesses, compel their attendance and testimony, 
take evidence, compel the filing of special reports and interrogatories, 
gather information,

[[Page 1074]]

and require the production of any books, papers, correspondence, 
memoranda, contracts, agreements, or other records, in the course of 
formal investigations conducted by the Office of the General Counsel to 
the extent the Commission's order of investigation expressly provides 
for the exercise of such investigative powers.
    (b) Grant or deny requests of persons pursuant to Sec. 1b.12 of 
this chapter to procure copies of the transcripts of their testimony 
taken during non-public investigations conducted by the Office of the 
General Counsel.
    (c) Terminate any informal non-public investigation conducted by the 
Office of the General Counsel.
    (d) Terminate the authority of officers to administer oaths and 
affirmations, subpoena witnesses, compel their attendance and testimony, 
take evidence, compel the filing of special reports and interrogatories, 
gather information, and require the production of any books, papers, 
correspondence, memoranda, contracts, agreements or other records in the 
course of formal investigations conducted by the Office of the General 
Counsel.
    (e) Designate presiding officers for proceedings under Sec. 
385.1110, who will have all the authorities and duties vested in 
presiding officers by that section and other applicable rules in 
conducting proceedings pursuant to section 502(c) of the Natural Gas 
Policy Act of 1978, 15 U.S.C. 3301-3432 (1982).
    (f) Deny or grant, in whole or in part, petitions for waivers of 
fees prescribed in Sec. 381.305 of this chapter in accordance with 
Sec. 381.106 of this chapter.
    (g) Grant uncontested applications for exempt wholesale generator 
status that do not involve unusual or interpretation issues; to act on 
uncontested motions to withdraw such applications; and to act on 
uncontested amendments to applications for EWG status that do not 
present unusual or interpretation issues.

[Order No. 38, 44 FR 46453, Aug. 8, 1979]

    Editorial Note: For Federal Register citations affecting Sec. 
375.309, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 375.310  Delegations during emergency conditions.

    For delegations of Commission authority during emergency conditions, 
see subpart B of part 376 of this chapter.

[45 FR 21217, Apr. 1, 1980. Redesignated by Order 613, 64 FR 73407, Dec. 
30, 1999]



Sec. 375.311  Delegations to the Director of the Office of Enforcement.

    The Commission authorizes the Director or the Director's designee 
to:
    (a) Request information for purposes of a preliminary investigation 
under Part 1b of this chapter, or for purposes of conducting market 
surveillance from an entity whose activities may affect energy markets, 
and from state or federal agencies that monitor or regulate such 
entities, whether or not subject to the Commission's jurisdiction.
    (b) Designate, and terminate the authority of, officers empowered to 
administer oaths and affirmations, subpoena witnesses, compel their 
attendance and testimony, take evidence, compel the filing of special 
reports and responses to interrogatories, gather information, and 
require the production of any books, papers, correspondence, memoranda, 
contracts, agreements, or other records, in the course of formal 
investigations conducted by the Office of Enforcement, to the extent the 
Commission's order of investigation expressly provides for the exercise 
of such investigative powers.
    (c) Grant or deny requests of persons pursuant to Sec. 1b.12 of 
this chapter to procure copies of the transcripts of their testimony 
taken during non-public investigations conducted by the Office of 
Enforcement.
    (d) Terminate any informal non-public investigation conducted by the 
Office of Enforcement.
    (e) Issue reports for public information purposes. Any report issued 
without Commission approval must
    (1) Be of a non-controversial nature, and
    (2) Contain the statement, ``This report does not necessarily 
reflect the view of the Commission,'' in bold-face type on the cover.
    (f) Deny or grant, in whole or in part, requests for waiver of the 
requirements for particular forms, including Electric

[[Page 1075]]

Quarterly Reports required under Sec. 35.10b of this chapter.
    (g) Take appropriate action on applications for extensions of time 
to file required reports, data and information, and to perform other 
acts required at or within a specific time by any rule, regulation, 
license, permit, certificate, or by order of the Commission.
    (h) Undertake the following action with respect to data and reports 
submitted pursuant to Commission opinions or orders:
    (1) Accept for filing data and reports that are in compliance and, 
when appropriate, notify the filing party of such acceptance;
    (2) Reject for filing any data and reports which are not in 
compliance or not required and, when appropriate, notify the filing 
party of such rejection, or
    (3) Issue deficiency letters regarding such data or reports.
    (i) Sign all correspondence on behalf of the Commission with state 
regulatory commissions and agencies in connection with auditing matters.
    (j) Pass upon actual legitimate original cost and depreciation 
thereon and the net investment in jurisdictional companies and revisions 
thereof, and sign audit reports involving jurisdictional companies,
    (1) If the company agrees with the audit report, or
    (2) If the company does not agree with the audit report, provided 
that any notification of the opportunity for a hearing required under 
Section 301(a) of the Federal Power Act or Section 8(a) of the Natural 
Gas Act accompanies the audit report.
    (k) Act upon requests by state and federal agencies to review staff 
audit working papers in connection with audits if the company agrees to 
the release of the audit working papers, and provided that:
    (1) The papers are examined at the Commission; and
    (2) The requester
    (i) Only makes general notes concerning the contents of the audit 
working papers,
    (ii) Does not make copies of the audit working papers, and
    (iii) Does not remove the audit working papers from the area 
designated by the Director.
    (l) With regard to billing errors noted as a result of the 
Commission staff's examination of automatic adjustment tariffs approved 
by the Commission, approve corrective measures, including recomputation 
of billings and refunds, to the extent the company agrees.
    (m) Sign all correspondence with respect to financial accounting and 
reporting matters on behalf of the Commission.
    (n) Pass upon actual legitimate original cost and depreciation 
thereon and the net investment in jurisdictional companies and revisions 
thereof.
    (o) Issue interpretations of the Uniform Systems of Accounts for 
public utilities and licensees, centralized service companies, natural 
gas companies and oil pipeline companies.
    (p) Pass upon any proposed accounting matters submitted by or on 
behalf of jurisdictional companies that require Commission approval 
under the Uniform Systems of Accounts, except that if the proposed 
accounting matters involve unusually large transactions or unique or 
controversial features, the Director of the Office of Enforcement must 
present the matters to the Commission for consideration.
    (q) Pass upon applications to increase the size or combine property 
units of jurisdictional companies.
    (r) Deny or grant, in whole or in part, motions for extension of 
time to file, or requests for waiver of the requirements of the 
following forms, data collections, and reports: Annual Reports (Form 
Nos. 1, 1-F, 2, 2-A, and 6); Quarterly Reports (Form Nos. 3-Q and 6-Q); 
Annual Report of Centralized Service Companies (Form No. 60); Narrative 
Description of Service Company Functions (FERC-61); Report of 
Transmission Investment Activity (FERC-730); and Electric Quarterly 
Reports, as well as, where required, the electronic filing of such 
information (Sec. 385.2011 of this chapter, Procedures for filing on 
electronic media, paragraphs (a)(6), (c), and (e)).
    (s) Provide notification if a submitted Annual Report (Form Nos. 1, 
1-F, 2, 2-A, and 6), Quarterly Report

[[Page 1076]]

(Form Nos. 3-Q and 6-Q), Annual Report of Centralized Service Companies 
(Form No. 60), Narrative Description of Service Company Functions (FERC-
61), Report of Transmission Investment Activity (FERC-730), or Electric 
Quarterly Report fails to comply with applicable statutory requirements, 
and with all applicable Commission rules, regulations, and orders for 
which a waiver has not been granted, or, when appropriate, notify a 
party that a submission is acceptable.
    (t) Deny or grant, in whole or in part, requests for waiver of the 
requirements of parts 352, 356, 367 and 368 of this chapter, except 
that, if the matters involve unusually large transactions or unique or 
controversial features, the Director of the Office of Enforcement must 
present the matters to the Commission for consideration.
    (u) Direct the Electric Reliability Organization or the applicable 
Regional Entity to provide such information as is necessary to implement 
Section 215(e)(2) of the Federal Power Act (16 U.S.C. 824o(e)(2)) 
pursuant to Sec. 39.2 and Part 40 of this chapter.
    (v) Issue an order extending the period of time for consideration of 
a Notice of Penalty filed under Section 215(e) of the Federal Power Act 
for the purpose of directing the Electric Reliability Organization or 
the applicable Regional Entity to provide such information as is 
necessary to implement Section 215(e)(2) of the Federal Power Act (16 
U.S.C. 824o(e)(2)) pursuant to Sec. 39.2 and Part 40 of this chapter.

[Order 632, 68 FR 25816, May 14, 2003, as amended at 69 FR 64661, Nov. 
8, 2004; Order 691, 72 FR 5174, Feb. 5, 2007. Redesignated at Order 699, 
72 FR 45326, Aug. 14, 2007; Order 721, 74 FR 6541, Feb. 10, 2009; Order 
728, 74 FR 57248, Nov. 5, 2009]



Sec. 375.312  Delegations to the Office of the Executive Director.

    The Commission authorizes the Executive Director or the Executive 
Director's designee to:
    (a) Prescribe the updated fees for part 381 of this chapter in 
accordance with Sec. 381.104 of this chapter.
    (b) Prescribe the updated fees for part 381 of this chapter in 
accordance with Sec. 388.109(b)(2) of this chapter.
    (c) Deny or grant, in whole or in part, petitions for waiver of fees 
prescribed in Sec. 381.302 of this chapter in accordance with Sec. 
381.106(b) of this chapter.
    (d) Deny or grant, in whole or in part, petitions for exemption from 
fees prescribed in part 381 of this chapter in accordance with Sec. 
381.108 of this chapter.
    (e) Determine the annual charges for administrative costs, for use 
of United States lands, and for use of government dams or other 
structures.
    (f) Grant or deny waiver of penalty charges for late payment of 
annual charges.
    (g) Give credit for overpayment of annual charges.
    (h) Deny or grant, in whole or in part, petitions for exemption from 
annual charges under Sec. 11.6 of this chapter for state and municipal 
licensees.
    (i) Grant or deny petitions for waiver of annual charges for oil 
pipelines.

[Order 613, 64 FR 73407, Dec. 30, 1999, as amended by Order 632, 68 FR 
25816, May 14, 2003; 69 FR 64661, Nov. 8, 2004]



Sec. 375.313  Delegations to the Critical Energy Infrastructure Information 

Coordinator.

    The Commission authorizes the Coordinator or the Coordinator's 
designee to:
    (a) Receive and review all requests for critical energy 
infrastructure information as defined in Sec. 388.113(c)(1).
    (b) Make determinations as to whether particular information fits 
within the definition of CEII found at Sec. 388.113(c)(1).
    (c) Make determinations as to whether a particular requester's need 
for and ability and willingness to protect critical energy 
infrastructure information warrants limited disclosure of the 
information to the requester.
    (d) Establish reasonable conditions on the release of critical 
energy infrastructure information.
    (e) Release critical energy infrastructure information to requesters 
who satisfy the requirements in paragraph (b) of this section and agree 
in writing to abide by any conditions set forth by the Coordinator 
pursuant to paragraph (c) of this section.

[Order 630, 68 FR 9869, Mar. 3, 2003]

[[Page 1077]]



Sec. 375.315  Delegations to the Director of the Office of Energy Policy and 

Innovation.

    The Commission authorizes the Director or the Director's designee 
to:
    (a) Take appropriate action on:
    (1) Any notice of intervention or motion to intervene, filed in an 
uncontested proceeding processed by the Office of Energy Policy and 
Innovation; and
    (2) Applications for extensions of time to file required filings, 
reports, data and information and to perform other acts required at or 
within a specific time by any rule, regulation, license, permit, 
certificate, or order by the Commission.
    (b) Undertake the following actions:
    (1) Issue reports for public information purposes. Any report issued 
without Commission approval must:
    (i) Be of a noncontroversial nature, and
    (ii) Contain the statement, ``This report does not necessarily 
reflect the views of the Commission,'' in bold face type on the cover;
    (2) Issue and sign requests for additional information regarding 
applications, filings, reports and data processed by the Office of 
Energy Policy and Innovation; and
    (3) Accept for filing, data and reports required by Commission 
regulations, rules, or orders, or presiding officers' initial decisions 
upon which the Commission has taken no further action, if such filings 
are in compliance with such regulations, rules, orders or decisions and, 
when appropriate, notify the filing party of such acceptance.

[Order 736, 75 FR 32658, June 9, 2010]



PART 376_ORGANIZATION, MISSION, AND FUNCTIONS; OPERATIONS DURING EMERGENCY 

CONDITIONS--Table of Contents



             Subpart A_Organization, Mission, and Functions

Sec.
376.101 Purpose.
376.102 Organization.
376.103 Mission.
376.104 Functions.
376.105 Chairman.

       Subpart B_Commission Operation During Emergency Conditions

376.201 Emergency condition defined.
376.202 Authority to move Commission offices.
376.203 Mailing address of Commission during emergency conditions.
376.204 Delegation of Commission's authority during emergency 
          conditions.
376.205 Delegation of Chairman's authority during emergency conditions.
376.206 Delegation of functions of certain Commission staff members.
376.207 Personnel and fiscal functions.
376.208 Effect upon existing Commission requirements.
376.209 Procedures during periods of emergency requiring activation of 
          the Continuity of Operations Plan.

    Authority: 5 U.S.C. 553; 42 U.S.C. 7101-7352; E.O. 12009, 3 CFR 1978 
Comp., p. 142.

    Source: 45 FR 21222, Apr. 1, 1980, unless otherwise noted.



             Subpart A_Organization, Mission, and Functions



Sec. 376.101  Purpose.

    This subpart sets forth the organization, mission and functions of 
the Commission, and its offices and divisions.



Sec. 376.102  Organization.

    The Commission is established as an independent regulatory 
Commission within the DOE by the DOE Act. The Commission is composed of 
five members appointed by the President, by and with the advice and 
consent of the Senate. One of the members is designated by the President 
as the Chairman. To carry out its mission and functions, the Chairman 
has organized the Commission into a number of major offices, some of 
which are further organized into divisions and lower units. The 
organization of the Commission staff structure may be obtained from the 
Division of Public Information.



Sec. 376.103  Mission.

    The Commission is responsible for developing, managing, and 
directing energy regulatory programs and activities assigned to it by 
statute, executive orders, or by the Secretary, DOE. The Chairman serves 
as the chief executive

[[Page 1078]]

officer of the Commission and is responsible for the conduct of all 
Commission executive and administrative functions. In carrying out its 
mission, the Commission and its employees are not subject to the 
supervision or direction of any other official of DOE.



Sec. 376.104  Functions.

    The functions of the Commission include:
    (a) All functions vested in the Commission under the DOE Act;
    (b) All functions delegated to the Commission by the Secretary of 
Energy in accordance with the DOE Act; and
    (c) All functions vested in the Commission by statute.



Sec. 376.105  Chairman.

    (a) Administrative head of agency. The Chairman is the 
administrative head of the Commission.
    (b) Administrative responsibilities. The Chairman is responsible on 
behalf of the Commission for the executive and administrative operation 
of the Commission, including functions of the Commission with respect 
to--
    (1) The appointment and employment of Administrative Law Judges in 
accordance with the provisions of Title 5, United States Code.
    (2) The selection, appointment, and fixing of the compensation of 
such personnel as he deems necessary.
    (3) The supervision of personnel employed by or assigned to the 
Commission, except that each Commissioner may select and supervise 
personnel for his personal staff.
    (4) The distribution of business among personnel and among 
administrative units of the Commission.
    (5) The procurement of services of experts and consultants in 
accordance with section 3109 of Title 5, United States Code.

[45 FR 21222, Apr. 1, 1980, as amended by Order 613, 64 FR 73407, Dec. 
30, 1999]



       Subpart B_Commission Operation During Emergency Conditions



Sec. 376.201  Emergency condition defined.

    For purposes of this subpart, emergency conditions:
    (a) Shall commence:
    (1) At the time of an armed attack upon the United States, or its 
territories or possessions;
    (2) At the time the Commission is officially notified of the 
likelihood or imminence of such an attack; or
    (3) At a time specified by the authority of the President; or
    (4) At such time that the Commission's Continuity of Operations Plan 
is activated; and
    (b) Shall continue until the Commission is officially notified of 
the end of such conditions.

[45 FR 21222, Apr. 1, 1980, as amended by Order 680, 71 FR 42595, July 
27, 2006]



Sec. 376.202  Authority to move Commission offices.

    The Commission may provide for removal of its headquarters to any 
location in the United States for the duration of emergency conditions. 
Consistent with directives of the Chairman, the Commission officer or 
employee in charge of a regional office of the Commission may move such 
office to a new location in the United States for the duration of 
emergency conditions.



Sec. 376.203  Mailing address of Commission during emergency conditions.

    The Chairman may direct that during the continuance of emergency 
conditions, communications, filings, reports, or other submittals to the 
Commission shall be addressed to the Federal Energy Regulatory 
Commission, Official Mail and Messenger Service, United States Postal 
Service to such or other address as the Commission may designate.



Sec. 376.204  Delegation of Commission's authority during emergency conditions.

    (a) Delegation of authority to one or two Commissioners. During 
emergency

[[Page 1079]]

conditions, the Commission shall function as usual, if a quorum of the 
Commission is available and capable of acting. If by reason of such 
conditions a quorum of the Commission is not available and capable of 
acting, all functions of the Commission are delegated to the 
Commissioner or Commissioners who are available and capable of acting.
    (b) Delegation of authority to Commission staff. (1) When, by reason 
of emergency conditions, there is no Commissioner available and capable 
of acting, the functions of the Commission are delegated to the first 
five members of the Commission staff on the list set forth in paragraph 
(b)(2) of this section who are available and capable of acting.
    (2) The list referred to in paragraph (b)(1) of this section is:
    (i) The Executive Director;
    (ii) Director of the Office of Energy Market Regulation;
    (iii) Director of the Office of Energy Projects;
    (iv) Director of the Office of Electric Reliability;
    (v) General Counsel;
    (vi) Director of the Office of Enforcement;
    (vii) Deputy Directors, Office of Energy Market Regulation, in order 
of seniority;
    (viii) Deputy Directors, Office of Energy Projects, in order of 
seniority;
    (ix) Deputy Directors, Office of Electric Reliability, in order of 
seniority;
    (x) Deputy General Counsels, in order of seniority;
    (xi) Associate General Counsels and Solicitor, in order of 
seniority;
    (xii) Assistant Directors and Division heads, Office of Energy 
Market Regulation; Assistant Directors and Division heads, Office of 
Energy Projects; Assistant Directors and Division heads, Office of 
Electric Reliability; Deputy Associate General Counsels; and Assistant 
Directors and Division heads, Office of Enforcement; in order of 
seniority.
    (3) For purposes of paragraph (b)(2) of this section order of 
seniority shall be based on the highest grade and longest period of 
service in that grade but without regard to the particular office or 
Division to which assigned.
    (c) Reconsideration of staff action taken under delegations. Action 
taken pursuant to the delegations provided for in this section shall be 
subject to reconsideration by the Commission, acting with a quorum, 
within thirty days after the date upon which public notice is given that 
a quorum of the Commission has been reconstituted and is functioning.

[45 FR 21222, Apr. 1, 1980, as amended by Order 613, 64 FR 73407, Dec. 
30, 1999; Order 632, 68 FR 25816, May 14, 2003; Order 680, 71 FR 42595, 
July 27, 2006; Order 699, 72 FR 45328, Aug. 14, 2007; Order 701, 72 FR 
61055, Oct. 29, 2007]



Sec. 376.205  Delegation of Chairman's authority during emergency conditions.

    When, by reason of emergency conditions, the Chairman is not 
available and capable of acting, his functions are delegated to the 
Commissioner available and capable of acting and who is designated by 
the President. Until such time as the President designates, or if no 
such Commissioner is designated, such functions are delegated to the 
Commissioner designated by the Chairman as Acting Chairman, but if such 
Acting Chairman is not available and capable of acting such functions 
are delegated to the Commissioner who is available and capable of acting 
and who has the longest tenure as a member of the Commission. If there 
is no Commissioner available and capable of acting, such functions are 
delegated to the person on the Commission staff who is available and 
capable of acting and who is highest on the list set forth in Sec. 
376.204(b)(2).



Sec. 376.206  Delegation of functions of certain Commission staff members.

    When, by reason of emergency conditions, the Secretary, Director of 
any Office or Division, or officer in charge of a regional office, is 
not available and capable of carrying out his or her functions, such 
functions are delegated to staff members designated by the Chairman to 
perform such functions. If no staff member so designated is available 
and capable of carrying out their functions, such functions are 
delegated to the next subordinate employee in the Office or Division of 
the highest grade

[[Page 1080]]

and longest period of service in that grade. If no subordinate employee 
of the Office or Division is available and capable of carrying out their 
functions, such functions are delegated to the Commission employee of 
the highest grade and longest period of service in that grade who is 
available and capable of carrying out their functions.

[Order 680, 71 FR 42595, July 27, 2006]



Sec. 376.207  Personnel and fiscal functions.

    Subject to modifications or revocation by authority of the Executive 
Director, during the continuation of emergency conditions authority to 
effect temporary appointments of such additional officers and employees, 
to classify and allocate positions to their proper grades, to issue 
travel orders, and to effect emergency purchases of supplies, equipment 
and services shall be exercised by the respective Directors of Offices 
and officials in charge of regional offices, their deputies, or staff in 
line of succession, as may be required for the discharge of the lawful 
duties of such organization.

[Order 613, 64 FR 73408, Dec. 30, 1999, as amended by Order 699, 72 FR 
45328, Aug. 14, 2007]



Sec. 376.208  Effect upon existing Commission requirements.

    All outstanding Commission orders, rules and regulations shall 
remain in force and effect during the continuance of emergency 
conditions, except to the extent modified in accordance with authority 
exercised under this subpart.



Sec. 376.209  Procedures during periods of emergency requiring activation of 

the Continuity of Operations Plan.

    (a)(1) The Commission's Continuity of Operations Plan is activated 
during emergency conditions lasting up to 30 days during which 
Commission headquarters operations may be temporarily disrupted or 
communications with the Commission's headquarters may be temporarily 
unavailable, either of which may prevent the public or the Commission 
from meeting regulatory or statutory requirements. The provisions of 
this paragraph are effective upon activation of the Plan. The Commission 
will notify the public that the Plan has been activated by sending a 
press release announcing that fact to major wire services, industry 
press, and appropriate metropolitan area radio stations announcing that 
the Commission has activated the Plan. The Commission's alternative Web 
site (http://www.fercalt.gov) will be activated and a notice that the 
Plan has been activated will be prominently displayed thereon. The 
alternative Web site will act as a resource for the press, industry, and 
general public. An additional press release will be sent to appropriate 
media outlets when the Plan is deactivated and the Commission's 
headquarters constituted, and appropriate modifications made to the 
alternative Web site.
    (2) During periods when the Continuity of Operations Plan is 
activated, the Commission will continue to act on requests to ensure 
continued construction of essential natural gas facilities with 
sensitive construction timelines, on Commencement of Service requests, 
and on completion of dam safety work, in a manner consistent with the 
maintenance of environmental protections. The Commission will further 
ensure that its personnel are available to respond to plant accidents or 
reportable incidents at LNG facilities, and address dam safety, public 
safety, and security incidents at jurisdictional hydropower projects. 
Alternate channels of communication will include measures to ensure that 
these activities can go forward unhindered.
    (b) Standards of conduct for transmission service providers. During 
periods when the Commission's Continuity of Operations Plan is 
activated, a Transmission Provider affected by the same emergency 
affecting the Commission may, for 30 days, delay compliance with the 
requirement to report to the Commission each emergency that resulted in 
any deviation from the standards of conduct within 24 hours of such 
deviation. If the emergency prevents a Transmission Provider from 
posting information on the OASIS or Internet Web site, the Transmission 
Provide may, for 30 days, also delay compliance with the requirements of 
Sec. 358.4(a)(2) of this chapter to post this information on the OASIS 
or Internet Web site, as applicable. Upon application by any

[[Page 1081]]

such Transmission Provider, the Commission may extend these periods.
    (c) Tolling of time periods for Commission action. The Commission 
tolls, for purposes of further consideration, the time period in which 
the Commission must act on the following matters if the time period 
during which the Commission would ordinarily be required to act closes 
during the period when the Continuity of Operations Plan is activated:
    (1) 60-day period to act on requests for Exempt Wholesale Generator 
or Foreign Utility Company status;
    (2) 90-day period for acting on requests for certification of 
qualifying facility status;
    (3) 60-day period for acting on interlocking directorate 
applications;
    (4) 60-day period for acting on Public Utility Holding Company Act 
exemptions and waivers;
    (5) 180-period for acting on applications under Sec. 203 of the 
FPA;
    (6) 150-day period for acting on intrastate pipeline applications 
for approval of proposed rates;
    (7) Period ending 60 days prior to the Electric Reliability 
Organization's (ERO) fiscal year for acting on the ERO's budget;
    (8) 60-day period for acting on notifications that a Reliability 
Standard may conflict with a function, rule, order, tariff, rate 
schedule or agreement;
    (9) 60-day period for acting on applications for review of a penalty 
imposed by the ERO for violation of a reliability standard;
    (10) 45-day Protest period for protesting Prior Notice Filings, and 
the 30-day period for resolving and filing to withdraw such Protests;
    (11) 30-day period for acting on requests for rehearing;
    (12) Time periods for acting on interlocutory appeals and certified 
questions; and
    (13) 90-day period for acting on applications requesting relief 
from, or reinstatement of, an electric utility's mandatory purchase 
obligation pursuant to section 210(m) of the Public Utility Regulatory 
Policies Act of 1978.
    (d) Suspension of certain requirements. During periods when the 
Commission's Continuity of Operations Plan is activated, requirements 
for the following filings, submissions, and notifications are suspended.
    (1) Filings to comply with Commission orders, including orders 
issued by administrative law judges;
    (2) Filings required to be made by a date certain under the 
Commission's regulations or orders;
    (3) Motions to intervene and protests, and notices of intervention;
    (4) Comments responding to proposed rulemakings or technical 
conferences;
    (5) Responses to data requests;
    (6) Self-reports of violations;
    (7) Responses to staff audit reports;
    (8) Contacts with the Commission's Enforcement Hotline;
    (9) Accounting filings required by the Commission's Uniform Systems 
of Accounts; and
    (10) Forms required to be filed by a date certain.
    (e) Acceptance and Suspension of Rate Filings. When the date by 
which the Commission is required to act on filings made pursuant to 
section 4 of the Natural Gas Act, sections 205 of the Federal Power Act, 
and section 6(3) of the Interstate Commerce Act falls during periods 
when the Continuity of Operations Plan is activated, such filings shall 
be deemed to be accepted and suspended and made effective on the 
requested effective date, subject to refund and further order of the 
Commission.
    (f) Electric Reliability Organization Penalties. If the date on 
which an Electric Reliability Organization imposes a penalty under 
Federal Power Act Sec. 215 would take effect falls during a period when 
the COOP Plan is activated, review of such penalty by the Commission 
shall be deemed to be initiated and the penalty shall be stayed pending 
further action of the Commission.
    (g) Consistency of State action with reliability standard. If the 
date by which a Commission determination under FPA Sec. 215 as to 
whether a State action is inconsistent with a reliability standard is 
required to be made falls during a period when the COOP Plan is 
activated, the effectiveness of the State action will be deemed to be 
stayed pending further action by the Commission.
    (h) Suspension of Evidentiary Hearings. During periods when the 
Continuity of

[[Page 1082]]

Operations Plan is activated, all hearings, prehearing conferences, 
settlement conferences, and meetings before administrative law judges 
are suspended.
    (i) Enforcement Actions. During periods when the Continuity of 
Operations Plan is activated, the Commission will not initiate an 
enforcement action under section 210(h)(2) of the Public Utility 
Regulatory Policies Act of 1978.

[Order 680, 71 FR 42595, July 27, 2006, as amended by Order 738, 75 FR 
48555, Aug. 11, 2010; Order 756, 77 FR 4894, Feb. 1, 2012]



PART 380_REGULATIONS IMPLEMENTING THE NATIONAL ENVIRONMENTAL POLICY ACT--Table 

of Contents



Sec.
380.1 Purpose.
380.2 Definitions and terminology.
380.3 Environmental information to be supplied by an applicant.
380.4 Projects or actions categorically excluded.
380.5 Actions that require an environmental assessment.
380.6 Actions that require an environmental impact statement.
380.7 Format of an environmental impact statement.
380.8 Preparation of environmental documents.
380.9 Public availability of NEPA documents and public notice of NEPA 
          related hearings and public meetings.
380.10 Participation in Commission proceedings.
380.11 Environmental decisionmaking.
380.12 Environmental reports for Natural Gas Act applications.
380.13 Compliance with the Endangered Species Act.
380.14 Compliance with the National Historic Preservation Act.
380.15 Siting and maintenance requirements.
380.16 Environmental reports for section 216 Federal Power Act Permits.

Appendix A to Part 380--Minimum Filing Requirements for Environmental 
          Reports Under the Natural Gas Act

    Authority: 42 U.S.C. 4321-4370h, 7101-7352; E.O. 12009, 3 CFR 1978 
Comp., p. 142.

    Source: Order 486, 52 FR 47910, Dec. 17, 1987, unless otherwise 
noted.



Sec. 380.1  Purpose.

    The regulations in this part implement the Federal Energy Regulatory 
Commission's procedures under the National Environmental Policy Act of 
1969 (NEPA). These regulations supplement the regulations of the Council 
on Environmental Quality, 40 CFR parts 1500 through 1508. The Commission 
will comply with the regulations of the Council on Environmental Quality 
except where those regulations are inconsistent with the statutory 
requirements of the Commission.

[Order 486, 52 FR 47910, Dec. 17, 1987, as amended by Order 756, 77 FR 
4895, Feb. 1, 2012]



Sec. 380.2  Definitions and terminology.

    For purposes of this part--
    (a) Categorical exclusion means a category of actions described in 
Sec. 380.4, which do not individually or cumulatively have a 
significant effect on the human environment and which the Commission has 
found to have no such effect and for which, therefore, neither an 
environmental assessment nor an environmental impact statement is 
required. The Commission may decide to prepare environmental assessments 
for the reasons stated in Sec. 380.4(b).
    (b) Commission means the Federal Energy Regulatory Commission.
    (c) Council means the Council on Environmental Quality.
    (d) Environmental assessment means a concise public document for 
which the Commission is responsible that serves to:
    (1) Briefly provide sufficient evidence and analysis for determining 
whether to prepare an environmental impact statement or a finding of no 
significant impact.
    (2) Aid the Commission's compliance with NEPA when no environmental 
impact statement is necessary.
    (3) Facilitate preparation of a statement when one is necessary. 
Environmental assessments must include brief discussions of the need for 
the proposal, of alternatives as required by section 102(2)(E) of NEPA, 
of the environmental impacts of the proposed action and alternatives, 
and a listing of agencies and persons consulted.
    (e) Environmental impact statement (EIS) means a detailed written 
statement as required by section 102(2)(C) of NEPA. DEIS means a draft 
EIS and FEIS means a final EIS.

[[Page 1083]]

    (f) Environmental report or ER means that part of an application 
submitted to the Commission by an applicant for authorization of a 
proposed action which includes information concerning the environment, 
the applicant's analysis of the environmental impact of the action, or 
alternatives to the action required by this or other applicable statutes 
or regulations.
    (g) Finding of no significant impact (FONSI) means a document by the 
Commission briefly presenting the reason why an action, not otherwise 
excluded by Sec. 380.4, will not have a significant effect on the human 
environment and for which an environmental impact statement therefore 
will not be prepared. It must include the environmental assessment or a 
summary of it and must note other environmental documents related to it. 
If the assessment is included, the FONSI need not repeat any of the 
discussion in the assessment but may incorporate it by reference.



Sec. 380.3  Environmental information to be supplied by an applicant.

    (a) An applicant must submit information as follows:
    (1) For any proposed action identified in Sec. Sec. 380.5 and 
380.6, an environmental report with the proposal as prescribed in 
paragraph (c) of this section.
    (2) For any proposal not identified in paragraph (a)(1) of this 
section, any environmental information that the Commission may determine 
is necessary for compliance with these regulations, the regulations of 
the Council, NEPA and other Federal laws such as the Endangered Species 
Act, the National Historic Preservation Act or the Coastal Zone 
Management Act.
    (b) An applicant must also:
    (1) Provide all necessary or relevant information to the Commission;
    (2) Conduct any studies that the Commission staff considers 
necessary or relevant to determine the impact of the proposal on the 
human environment and natural resources;
    (3) Consult with appropriate Federal, regional, State, and local 
agencies during the planning stages of the proposed action to ensure 
that all potential environmental impacts are identified. (The specific 
requirements for consultation on hydropower projects are contained in 
Sec. 4.38 and Sec. 16.8 of this chapter and in section 4(a) of the 
Electric Consumers Protection Act, Pub. L. No. 99-495, 100 Stat. 1243, 
1246 (1986));
    (4) Submit applications for all Federal and State approvals as early 
as possible in the planning process; and
    (5) Notify the Commission staff of all other Federal actions 
required for completion of the proposed action so that the staff may 
coordinate with other interested Federal agencies.
    (c) Content of an applicant's environmental report for specific 
proposals--1) Hydropower projects. The information required for specific 
project applications under part 4 or 16 of this chapter.
    (2) Natural gas projects. (i) For any application filed under the 
Natural Gas Act for any proposed action identified in Sec. Sec. 380.5 
or 380.6, except for prior notice filings under Sec. 157.208, as 
described in Sec. 380.5(b), the information identified in Sec. 380.12 
and Appendix A of this part.
    (ii) For prior notice filings under Sec. 157.208, the report 
described by Sec. 157.208(c)(11) of this chapter.
    (3) Electric transmission project. For pre-filing requests and 
applications filed under section 216 of the Federal Power Act identified 
in Sec. Sec. 380.5(b)(14) and 380.6(a)(5).

[Order 486, 52 FR 47910, Dec. 17, 1987, as amended by Order 533, 56 FR 
23155, May 20, 1991; Order 603, 64 FR 26611, May 14, 1999; Order 689, 71 
FR 69470, Dec. 1, 2006; Order 756, 77 FR 4895, Feb. 1, 2012]



Sec. 380.4  Projects or actions categorically excluded.

    (a) General rule. Except as stated in paragraph (b) of this section, 
neither an environmental assessment nor an environmental impact 
statement will be prepared for the following projects or actions:
    (1) Procedural, ministerial, or internal administrative and 
management actions, programs, or decisions, including procurement, 
contracting, personnel actions, correction or clarification of filings 
or orders, and acceptance, rejection and dismissal of filings;
    (2)(i) Reports or recommendations on legislation not initiated by 
the Commission, and
    (ii) Proposals for legislation and promulgation of rules that are 
clarifying,

[[Page 1084]]

corrective, or procedural, or that do not substantially change the 
effect of legislation or regulations being amended;
    (3) Compliance and review actions, including investigations 
(jurisdictional or otherwise), conferences, hearings, notices of 
probable violation, show cause orders, and adjustments under section 
502(c) of the Natural Gas Policy Act of 1978 (NGPA);
    (4) Review of grants or denials by the Department of Energy (DOE) of 
any adjustment request, and review of contested remedial orders issued 
by DOE;
    (5) Information gathering, analysis, and dissemination;
    (6) Conceptual or feasibility studies;
    (7) Actions concerning the reservation and classification of United 
States lands as water power sites and other actions under section 24 of 
the Federal Power Act;
    (8) Transfers of water power project licenses and transfers of 
exemptions under Part I of the Federal Power Act and Part 9 of this 
chapter;
    (9) Issuance of preliminary permits for water power projects under 
Part I of the Federal Power Act and Part 4 of this chapter;
    (10) Withdrawals of applications for certificates under the Natural 
Gas Act, or for water power project preliminary permits, exemptions, or 
licenses under Part I of the Federal Power Act and Part 4 of this 
chapter;
    (11) Actions concerning annual charges or headwater benefits, 
charges for water power projects under Parts 11 and 13 of this chapter 
and establishment of fees to be paid by an applicant for a license or 
exemption required to meet the terms and conditions of section 30(c) of 
the Federal Power Act;
    (12) Approval for water power projects under Part I of the Federal 
Power Act, of ``as built'' or revised drawings or exhibits that propose 
no changes to project works or operations or that reflect changes that 
have previously been approved or required by the Commission;
    (13) Surrender and amendment of preliminary permits, and surrender 
of water power licenses and exemptions where no project works exist or 
ground disturbing activity has occurred and amendments to water power 
licenses and exemptions that do not require ground disturbing activity 
or changes to project works or operation;
    (14) Exemptions for small conduit hydroelectric facilities as 
defined in Sec. 4.30(b)(26) of this chapter under Part I of the Federal 
Power Act and Part 4 of this chapter;
    (15) Electric rate filings submitted by public utilities under 
sections 205 and 206 of the Federal Power Act, the establishment of just 
and reasonable rates, and confirmation, approval, and disapproval of 
rate filings submitted by Federal power marketing agencies under the 
Pacific Northwest Electric Power Planning and Conservation Act, the 
Department of Energy Organization Act, and DOE Delegation Order No. 
0204-108.
    (16) Approval of actions under sections 4(b), 203, 204, 301, 304, 
and 305 of the Federal Power Act relating to issuance and purchase of 
securities, acquisition or disposition of property, merger, interlocking 
directorates, jurisdictional determinations and accounting orders;
    (17) Approval of electrical interconnections and wheeling under 
sections 202(b), 210, 211, and 212 of the Federal Power Act, that would 
not entail:
    (i) Construction of a new substation or expansion of the boundaries 
of an existing substation;
    (ii) Construction of any transmission line that operates at more 
than 115 kilovolts (KV) and occupies more than ten miles of an existing 
right-of-way; or
    (iii) Construction of any transmission line more than one mile long 
if located on a new right-of-way;
    (18) Approval of changes in land rights for water power projects 
under Part I of the Federal Power Act and Part 4 of this chapter, if no 
construction or change in land use is either proposed or known by the 
Commission to be contemplated for the land affected;
    (19) Approval of proposals under Part I of the Federal Power Act and 
Part 4 of this chapter to authorize use of water power project lands or 
waters for gas or electric utility distribution lines, radial (sub-
transmission) lines, communications lines and cables, storm drains, 
sewer lines not discharging into project waters, water

[[Page 1085]]

mains, piers, landings, boat docks, or similar structures and 
facilities, landscaping or embankments, bulkheads, retaining walls, or 
similar shoreline erosion control structures;
    (20) Action on applications for exemption under section 1(c) of the 
Natural Gas Act;
    (21) Approvals of blanket certificate applications and prior notice 
filings under Sec. 157.204 and Sec. Sec. 157.209 through 157.218 of 
this chapter;
    (22) Approvals of blanket certificate applications under Sec. Sec. 
284.221 through 284.224 of this chapter;
    (23) Producers' applications for the sale of gas filed under 
Sec. Sec. 157.23 through 157.29 of this chapter;
    (24) Approval under section 7 of the Natural Gas Act of taps, 
meters, and regulating facilities located completely within an existing 
natural gas pipeline right-of-way or compressor station if company 
records show the land use of the vicinity has not changed since the 
original facilities were installed, and no significant nonjurisdictional 
facilities would be constructed in association with construction of the 
interconnection facilities;
    (25) Review of natural gas rate filings, including any curtailment 
plans other than those specified in Sec. 380.5(b)(5), and establishment 
of rates for transportation and sale of natural gas under sections 4 and 
5 of the Natural Gas Act and sections 311 and 401 through 404 of the 
Natural Gas Policy Act of 1978;
    (26) Review of approval of oil pipeline rate filings under Parts 340 
and 341 of this chapter;
    (27) Sale, exchange, and transportation of natural gas under 
sections 4, 5 and 7 of the Natural Gas Act that require no construction 
of facilities;
    (28) Abandonment in place of a minor natural gas pipeline (short 
segments of buried pipe of 6-inch inside diameter or less), or 
abandonment by removal of minor surface facilities such as metering 
stations, valves, and taps under section 7 of the Natural Gas Act so 
long as appropriate erosion control and site restoration takes place;
    (29) Abandonment of service under any gas supply contract pursuant 
to section 7 of the Natural Gas Act;
    (30) Approval of filing made in compliance with the requirements of 
a certificate for a natural gas project under section 7 of the Natural 
Gas Act or a preliminary permit, exemption, license, or license 
amendment order for a water power project under Part I of the Federal 
Power Act;
    (31) Abandonment of facilities by sale that involves only minor or 
no ground disturbance to disconnect the facilities from the system;
    (32) Conversion of facilities from use under the NGPA to use under 
the NGA;
    (33) Construction or abandonment of facilities constructed entirely 
in Federal offshore waters that has been approved by the Minerals 
Management Service and the Corps of Engineers, as necessary;
    (34) Abandonment or construction of facilities on an existing 
offshore platform;
    (35) Abandonment, construction or replacement of a facility (other 
than compression) solely within an existing building within a natural 
gas facility (other than LNG facilities), if it does not increase the 
noise or air emissions from the facility, as a whole; and
    (36) Conversion of compression to standby use if the compressor is 
not moved, or abandonment of compression if the compressor station 
remains in operation.
    (b) Exceptions to categorical exclusions. (1) In accordance with 40 
CFR 1508.4, the Commission and its staff will independently evaluate 
environmental information supplied in an application and in comments by 
the public. Where circumstances indicate that an action may be a major 
Federal action significantly affecting the quality of the human 
environment, the Commission:
    (i) May require an environmental report or other additional 
environmental information, and
    (ii) Will prepare an environmental assessment or an environmental 
impact statement.
    (2) Such circumstances may exist when the action may have an effect 
on one of the following:
    (i) Indian lands;
    (ii) Wilderness areas;
    (iii) Wild and scenic rivers;
    (iv) Wetlands;

[[Page 1086]]

    (v) Units of the National Park System, National Refuges, or National 
Fish Hatcheries;
    (vi) Anadromous fish or endangered species; or
    (vii) Where the environmental effects are uncertain.

However, the existence of one or more of the above will not 
automatically require the submission of an environmental report or the 
preparation of an environmental assessment or an environmental impact 
statement.

[Order 486, 52 FR 47910, Dec. 17, 1987, as amended at 53 FR 8177, Mar. 
14, 1988; Order 486-B, 53 FR 26437, July 13, 1988; 54 FR 48740, Nov. 27, 
1989; Order 603, 64 FR 26611, May 14, 1999; Order 609, 64 FR 57392, Oct. 
25, 1999; Order 756, 77 FR 4895, Feb. 1, 2012]



Sec. 380.5  Actions that require an environmental assessment.

    (a) An environmental assessment will normally be prepared first for 
the actions identified in this section. Depending on the outcome of the 
environmental assessment, the Commission may or may not prepare an 
environmental impact statement. However, depending on the location or 
scope of the proposed action, or the resources affected, the Commission 
may in specific circumstances proceed directly to prepare an 
environmental impact statement.
    (b) The projects subject to an environmental assessment are as 
follows:
    (1) Except as identified in Sec. Sec. 380.4, 380.6 and 2.55 of this 
chapter, authorization for the site of new gas import/export facilities 
under DOE Delegation No. 0204-112 and authorization under section 7 of 
the Natural Gas Act for the construction, replacement, or abandonment of 
compression, processing, or interconnecting facilities, onshore and 
offshore pipelines, metering facilities, LNG peak-shaving facilities, or 
other facilities necessary for the sale, exchange, storage, or 
transportation of natural gas;
    (2) Prior notice filings under Sec. 157.208 of this chapter for the 
rearrangement of any facility specified in Sec. Sec. 157.202 (b)(3) and 
(6) of this chapter or the acquisition, construction, or operation of 
any eligible facility as specified in Sec. Sec. 157.202 (b)(2) and (3) 
of this chapter;
    (3) Abandonment or reduction of natural gas service under section 7 
of the Natural Gas Act unless excluded under Sec. 380.4 (a)(21), (28) 
or (29);
    (4) Except as identified in Sec. 380.6, conversion of existing 
depleted oil or natural gas fields to underground storage fields under 
section 7 of the Natural Gas Act.
    (5) New natural gas curtailment plans, or any amendment to an 
existing curtailment plan under section 4 of the Natural Gas Act and 
sections 401 through 404 of the Natural Gas Policy Act of 1978 that has 
a major effect on an entire pipeline system;
    (6) Licenses under Part I of the Federal Power Act and part 4 of 
this chapter for construction of any water power project--existing dam;
    (7) Exemptions under section 405 of the Public Utility Regulatory 
Policies Act of 1978, as amended, and Sec. Sec. 4.30(b)(29) and 4.101-
4.108 of this chapter for small hydroelectric power projects of 5 MW or 
less;
    (8) Licenses for additional project works at licensed projects under 
Part I of the Federal Power Act whether or not these are styled license 
amendments or original licenses;
    (9) Licenses under Part I of the Federal Power Act and part 4 of 
this chapter for transmission lines only;
    (10) Applications for new licenses under section 15 of the Federal 
Power Act;
    (11) Approval of electric interconnections and wheeling under 
section 202(b), 210, 211, and 212 of the Federal Power Act, unless 
excluded under Sec. 380.4(a)(17);
    (12) Regulations or proposals for legislation not included under 
Sec. 380.4(a)(2);
    (13) Surrender of water power licenses and exemptions where project 
works exist or ground disturbing activity has occurred and amendments to 
water power licenses and exemptions that require ground disturbing 
activity or changes to project works or operations; and
    (14) Except as identified in Sec. 380.6, authorization to site new 
electric transmission facilities under section 216 of

[[Page 1087]]

the Federal Power Act and DOE Delegation Order No. 00-004.00A.

[Order 486, 52 FR 47910, Dec. 17, 1987; Order 486, 53 FR 4817, Feb. 17, 
1988, as amended by 53 FR 8177, Mar. 14, 1988; Order 486-B, 53 FR 26437, 
July 13, 1988; Order 689, 71 FR 69470, Dec. 1, 2006; Order 756, 77 FR 
4895, Feb. 1, 2012]



Sec. 380.6  Actions that require an environmental impact statement.

    (a) Except as provided in paragraph (b) of this section, an 
environmental impact statement will normally be prepared first for the 
following projects:
    (1) Authorization under sections 3 or 7 of the Natural Gas Act and 
DOE Delegation Order No. 0204-112 for the siting, construction, and 
operation of jurisdictional liquefied natural gas import/export 
facilities used wholly or in part to liquefy, store, or regasify 
liquefied natural gas transported by water;
    (2) Certificate applications under section 7 of the Natural Gas Act 
to develop an underground natural gas storage facility except where 
depleted oil or natural gas producing fields are used;
    (3) Major pipeline construction projects under section 7 of the 
Natural Gas Act using rights-of-way in which there is no existing 
natural gas pipeline;
    (4) Licenses under Part I of the Federal Power Act and part 4 of 
this chapter for construction of any unconstructed water power projects; 
and
    (5) Major electric transmission facilities under section 216 of the 
Federal Power Act and DOE Delegation Order No. 00-004.00A using right-
of-way in which there is no existing facility.
    (b) If the Commission believes that a proposed action identified in 
paragraph (a) of this section may not be a major Federal action 
significantly affecting the quality of the human environment, an 
environmental assessment, rather than an environmental impact statement, 
will be prepared first. Depending on the outcome of the environmental 
assessment, an environmental impact statement may or may not be 
prepared.
    (c) An environmental impact statement will not be required if an 
environmental assessment indicates that a proposal has adverse 
environmental affects and the proposal is not approved.

[Order 486, 52 FR 47910, Dec. 17, 1987, as amended at 53 FR 8177, Mar. 
14, 1988; Order 486-B, 53 FR 26437, July 13, 1988; Order 689, 71 FR 
69470, Dec. 1, 2006; Order 756, 77 FR 4895, Feb. 1, 2012]



Sec. 380.7  Format of an environmental impact statement.

    In addition to the requirements for an environmental impact 
statement prescribed in 40 CFR 1502.10 of the regulations of the 
Council, an environmental impact statement prepared by the Commission 
will include a section on the literature cited in the environmental 
impact statement and a staff conclusion section. The staff conclusion 
section will include summaries of:
    (a) The significant environmental impacts of the proposed action;
    (b) Any alternative to the proposed action that would have a less 
severe environmental impact or impacts and the action preferred by the 
staff;
    (c) Any mitigation measures proposed by the applicant, as well as 
additional mitigation measures that might be more effective;
    (d) Any significant environmental impacts of the proposed action 
that cannot be mitigated; and
    (e) References to any pending, completed, or recommended studies 
that might provide baseline data or additional data on the proposed 
action.



Sec. 380.8  Preparation of environmental documents.

    The preparation of environmental documents, as defined in Sec. 
1508.10 of the regulations of the Council (40 CFR 1508.10), on 
hydroelectric projects, natural gas facilities, and electric 
transmission facilities in national interest electric transmission 
corridors is the responsibility of the Commission's Office of Energy 
Projects, 888 First Street NE., Washington, DC 20426, (202) 502-8700. 
Persons interested in status reports or information on environmental 
impact statements or other elements of

[[Page 1088]]

the NEPA process, including the studies or other information the 
Commission may require on these projects, can contact this office.

[Order 689, 71 FR 69471, Dec. 1, 2006, as amended by Order 756, 77 FR 
4895, Feb. 1, 2012]



Sec. 380.9  Public availability of NEPA documents and public notice of NEPA 

related hearings and public meetings.

    (a)(1) The Commission will comply with the requirements of 40 CFR 
1506.6 of the regulations of the Council for public involvement in NEPA.
    (2) If an action has effects of primarily local concern, the 
Commission may give additional notice in a Commission order.
    (b) The Commission will make environmental impact statements, 
environmental assessments, the comments received, and any underlaying 
documents available to the public pursuant to the provisions of the 
Freedom of Information Act (5 U.S.C. 552 (1982)). The exclusion in the 
Freedom of Information Act for interagency memoranda is not applicable 
where such memoranda transmit comments of Federal agencies on the 
environmental impact of the proposed action. Such materials will be made 
available to the public at the Commission's Public Reference Room at 888 
First Street NE., Room 2A, Washington, DC 20426 at a fee and in the 
manner described in Part 388 of this chapter. A copy of an environmental 
impact statement or environmental assessment for hydroelectric projects 
may also be made available for inspection at the Commission's regional 
office for the region where the proposed action is located.

[Order 486, 52 FR 47910, Dec. 17, 1987, as amended by Order 603-A, 64 FR 
54537, Oct. 7, 1999]



Sec. 380.10  Participation in Commission proceedings.

    (a) Intervention proceedings involving a party or parties--1) Motion 
to intervene. (i) In addition to submitting comments on the NEPA process 
and NEPA related documents, any person may file a motion to intervene in 
a Commission proceeding dealing with environmental issues under the 
terms of Sec. 385.214 of this chapter. Any person who files a motion to 
intervene on the basis of a draft environmental impact statement will be 
deemed to have filed a timely motion, in accordance with Sec. 385.214, 
as long as the motion is filed within the comment period for the draft 
environmental impact statement.
    (ii) Any person that is granted intervention after petitioning 
becomes a party to the proceeding and accepts the record as developed by 
the parties as of the time that intervention is granted.
    (2)(i) Issues not set for trial-type hearing. An intervenor who 
takes a position on any environmental issue that has not yet been set 
for hearing must file a timely motion with the Secretary containing an 
analysis of its position on such issue and specifying any differences 
with the position of Commission staff or an applicant upon which the 
intervenor wishes to be heard at a hearing.
    (ii) Issues set for trial-type hearing. (A) Any intervenor that 
takes a position on an environmental issue set for hearing may offer 
evidence for the record in support of such position and otherwise 
participate in accordance with the Commission's Rules of Practice and 
Procedure. Any intervenor must specify any differences from the staff's 
and the applicant's positions.
    (B) To be considered, any facts or opinions on an environmental 
issue set for hearing must be admitted into evidence and made part of 
the record of the proceeding.
    (iii) Commission pre-filing activities commenced under Sec. Sec. 
157.21 and 50.5 of this chapter, respectively, are not considered 
proceedings under part 385 of this chapter and are not open to motions 
to intervene. Once an application is filed under part 157 subpart A or 
part 50 of this chapter, any person may file a motion to intervene in 
accordance with Sec. Sec. 157.10 or 50.10 of this chapter or in 
accordance with this section.
    (b) Rulemaking proceedings. Any person may file comments on any 
environmental issue in a rulemaking proceeding.

[Order 486, 52 FR 47910, Dec. 17, 1987, as amended by Order 689, 71 FR 
69471, Dec. 1, 2006]

[[Page 1089]]



Sec. 380.11  Environmental decisionmaking.

    (a) Decision points. For the actions which require an environmental 
assessment or environmental impact statement, environmental 
considerations will be addressed at appropriate major decision points.
    (1) In proceedings involving a party or parties and not set for 
trial-type hearing, major decision points are the approval or denial of 
proposals by the Commission or its designees.
    (2) In matters set for trial-type hearing, the major decision points 
are the initial decision of an administrative law judge or the decision 
of the Commission.
    (3) In a rulemaking proceeding, the major decision points are the 
Notice of Proposed Rulemaking and the Final Rule.
    (b) Environmental documents as part of the record. The Commission 
will include environmental assessments, findings of no significant 
impact, or environmental impact statements, and any supplements in the 
record of the proceeding.
    (c) Application denials. Notwithstanding any provision in this part, 
the Commission may dismiss or deny an application without performing an 
environmental impact statement or without undertaking environmental 
analysis.



Sec. 380.12  Environmental reports for Natural Gas Act applications.

    (a) Introduction. (1) The applicant must submit an environmental 
report with any application that proposes the construction, operation, 
or abandonment of any facility identified in Sec. 380.3(c)(2)(i). The 
environmental report shall consist of the thirteen resource reports and 
related material described in this section.
    (2) The detail of each resource report must be commensurate with the 
complexity of the proposal and its potential for environmental impact. 
Each topic in each resource report shall be addressed or its omission 
justified, unless the resource report description indicates that the 
data is not required for that type of proposal. If material required for 
one resource report is provided in another resource report or in another 
exhibit, it may be incorporated by reference. If any resource report 
topic is required for a particular project but is not provided at the 
time the application is filed, the environmental report shall explain 
why it is missing and when the applicant anticipates it will be filed.
    (3) The appendix to this part contains a checklist of the minimum 
filing requirements for an environmental report. Failure to provide at 
least the applicable checklist items will result in rejection of the 
application unless the Director of the Office of Energy Projects 
determines that the applicant has provided an acceptable reason for the 
item's absence and an acceptable schedule for filing it. Failure to file 
within the accepted schedule will result in rejection of the 
application.
    (b) General requirements. As appropriate, each resource report 
shall:
    (1) Address conditions or resources that might be directly or 
indirectly affected by the project;
    (2) Identify significant environmental effects expected to occur as 
a result of the project;
    (3) Identify the effects of construction, operation (including 
maintenance and malfunctions), and termination of the project, as well 
as cumulative effects resulting from existing or reasonably foreseeable 
projects;
    (4) Identify measures proposed to enhance the environment or to 
avoid, mitigate, or compensate for adverse effects of the project;
    (5) Provide a list of publications, reports, and other literature or 
communications, including agency contacts, that were cited or relied 
upon to prepare each report. This list should include the name and title 
of the person contacted, their affiliations, and telephone number;
    (6) Whenever this section refers to ``mileposts'' the applicant may 
substitute ``survey centerline stationing'' if so desired. However, 
whatever method is chosen should be used consistently throughout the 
resource reports.
    (c) Resource Report 1--General project description. This report is 
required for all applications. It will describe facilities associated 
with the project, special construction and operation procedures, 
construction timetables, future plans

[[Page 1090]]

for related construction, compliance with regulations and codes, and 
permits that must be obtained. Resource Report 1 must:
    (1) Describe and provide location maps of all jurisdictional 
facilities, including all aboveground facilities associated with the 
project (such as: meter stations, pig launchers/receivers, valves), to 
be constructed, modified, abandoned, replaced, or removed, including 
related construction and operational support activities and areas such 
as maintenance bases, staging areas, communications towers, power lines, 
and new access roads (roads to be built or modified). As relevant, the 
report must describe the length and diameter of the pipeline, the types 
of aboveground facilities that would be installed, and associated land 
requirements. It must also identify other companies that must construct 
jurisdictional facilities related to the project, where the facilities 
would be located, and where they are in the Commission's approval 
process.
    (2) Identify and describe all nonjurisdictional facilities, 
including auxiliary facilities, that will be built in association with 
the project, including facilities to be built by other companies.
    (i) Provide the following information:
    (A) A brief description of each facility, including as appropriate: 
Ownership, land requirements, gas consumption, megawatt size, 
construction status, and an update of the latest status of Federal, 
state, and local permits/approvals;
    (B) The length and diameter of any interconnecting pipeline;
    (C) Current 1:24,000/1:25,000 scale topographic maps showing the 
location of the facilities;
    (D) Correspondence with the appropriate State Historic Preservation 
Officer (SHPO) or duly authorized Tribal Historic Preservation Officer 
(THPO) for tribal lands regarding whether properties eligible for 
listing on the National Register of Historic Places (NRHP) would be 
affected;
    (E) Correspondence with the U.S. Fish and Wildlife Service (and 
National Marine Fisheries Service, if appropriate) regarding potential 
impacts of the proposed facility on federally listed threatened and 
endangered species; and
    (F) For facilities within a designated coastal zone management area, 
a consistency determination or evidence that the owner has requested a 
consistency determination from the state's coastal zone management 
program.
    (ii) Address each of the following factors and indicate which ones, 
if any, appear to indicate the need for the Commission to do an 
environmental review of project-related nonjurisdictional facilities.
    (A) Whether or not the regulated activity comprises ``merely a 
link'' in a corridor type project (e.g., a transportation or utility 
transmission project).
    (B) Whether there are aspects of the nonjurisdictional facility in 
the immediate vicinity of the regulated activity which uniquely 
determine the location and configuration of the regulated activity.
    (C) The extent to which the entire project will be within the 
Commission's jurisdiction.
    (D) The extent of cumulative Federal control and responsibility.
    (3) Provide the following maps and photos:
    (i) Current, original United States Geological Survey (USGS) 7.5-
minute series topographic maps or maps of equivalent detail, covering at 
least a 0.5-mile-wide corridor centered on the pipeline, with integer 
mileposts identified, showing the location of rights-of-way, new access 
roads, other linear construction areas, compressor stations, and pipe 
storage areas. Show nonlinear construction areas on maps at a scale of 
1:3,600 or larger keyed graphically and by milepost to the right-of-way 
maps.
    (ii) Original aerial images or photographs or photo-based alignment 
sheets based on these sources, not more than 1 year old (unless older 
ones accurately depict current land use and development) and with a 
scale of 1:6,000 or larger, showing the proposed pipeline route and 
location of major aboveground facilities, covering at least a 0.5 mile-
wide corridor, and including mileposts. Older images/photographs/
alignment sheets should be modified to show any residences not depicted 
in the original. Alternative formats (e.g.,

[[Page 1091]]

blue-line prints of acceptable resolution) need prior approval by the 
environmental staff of the Office of Energy Projects.
    (iii) In addition to the copy required under Sec. 157.6(a)(2) of 
this chapter, applicant should send two additional copies of topographic 
maps and aerial images/photographs directly to the environmental staff 
of the Office of Energy Projects.
    (4) When new or additional compression is proposed, include large 
scale (1:3,600 or greater) plot plans of each compressor station. The 
plot plan should reference a readily identifiable point(s) on the USGS 
maps required in paragraph (c)(3) of this section. The maps and plot 
plans must identify the location of the nearest noise-sensitive areas 
(schools, hospitals, or residences) within 1 mile of the compressor 
station, existing and proposed compressor and auxiliary buildings, 
access roads, and the limits of areas that would be permanently 
disturbed.
    (5)(i) Identify facilities to be abandoned, and state how they would 
be abandoned, how the site would be restored, who would own the site or 
right-of-way after abandonment, and who would be responsible for any 
facilities abandoned in place.
    (ii) When the right-of-way or the easement would be abandoned, 
identify whether landowners were given the opportunity to request that 
the facilities on their property, including foundations and below ground 
components, be removed. Identify any landowners whose preferences the 
company does not intend to honor, and the reasons therefore.
    (6) Describe and identify by milepost, proposed construction and 
restoration methods to be used in areas of rugged topography, 
residential areas, active croplands, sites where the pipeline would be 
located parallel to and under roads, and sites where explosives are 
likely to be used.
    (7) Unless provided in response to Resource Report 5, describe 
estimated workforce requirements, including the number of pipeline 
construction spreads, average workforce requirements for each 
construction spread and meter or compressor station, estimated duration 
of construction from initial clearing to final restoration, and number 
of personnel to be hired to operate the proposed project.
    (8) Describe reasonably foreseeable plans for future expansion of 
facilities, including additional land requirements and the compatibility 
of those plans with the current proposal.
    (9) Describe all authorizations required to complete the proposed 
action and the status of applications for such authorizations. Identify 
environmental mitigation requirements specified in any permit or 
proposed in any permit application to the extent not specified elsewhere 
in this section.
    (10) Provide the names and mailing addresses of all affected 
landowners specified in Sec. 157.6(d) and certify that all affected 
landowners will be notified as required in Sec. 157.6(d).
    (d) Resource Report 2--Water use and quality. This report is 
required for all applications, except those which involve only 
facilities within the areas of an existing compressor, meter, or 
regulator station that were disturbed by construction of the existing 
facilities, no wetlands or waterbodies are on the site and there would 
not be a significant increase in water use. The report must describe 
water quality and provide data sufficient to determine the expected 
impact of the project and the effectiveness of mitigative, enhancement, 
or protective measures. Resource Report 2 must:
    (1) Identify and describe by milepost perennial waterbodies and 
municipal water supply or watershed areas, specially designated surface 
water protection areas and sensitive waterbodies, and wetlands that 
would be crossed. For each waterbody crossing, identify the approximate 
width, state water quality classifications, any known potential 
pollutants present in the water or sediments, and any potable water 
intake sources within 3 miles downstream.
    (2) Compare proposed mitigation measures with the staff's current 
``Wetland and Waterbody Construction and Mitigation Procedures,'' which 
are available from the Commission Internet home page or the Commission 
staff, describe what proposed alternative mitigation would provide 
equivalent or greater protection to the environment,

[[Page 1092]]

and provide a description of site- specific construction techniques that 
would be used at each major waterbody crossing.
    (3) Describe typical staging area requirements at waterbody and 
wetland crossings. Also, identify and describe waterbodies and wetlands 
where staging areas are likely to be more extensive.
    (4) Include National Wetland Inventory (NWI) maps. If NWI maps are 
not available, provide the appropriate state wetland maps. Identify for 
each crossing, the milepost, the wetland classification specified by the 
U.S. Fish and Wildlife Service, and the length of the crossing. Include 
two copies of the NWI maps (or the substitutes, if NWI maps are not 
available) clearly showing the proposed route and mileposts directed to 
the environmental staff. Describe by milepost, wetland crossings as 
determined by field delineations using the current Federal methodology.
    (5) Identify aquifers within excavation depth in the project area, 
including the depth of the aquifer, current and projected use, water 
quality and average yield, and known or suspected contamination 
problems.
    (6) Describe specific locations, the quantity required, and the 
method and rate of withdrawal and discharge of hydrostatic test water. 
Describe suspended or dissolved material likely to be present in the 
water as a result of contact with the pipeline, particularly if an 
existing pipeline is being retested. Describe chemical or physical 
treatment of the pipeline or hydrostatic test water. Discuss waste 
products generated and disposal methods.
    (7) If underground storage of natural gas is proposed:
    (i) Identify how water produced from the storage field will be 
disposed of, and
    (ii) For salt caverns, identify the source locations, the quantity 
required, and the method and rate of withdrawal of water for creating 
salt cavern(s), as well as the means of disposal of brine resulting from 
cavern leaching.
    (8) Discuss proposed mitigation measures to reduce the potential for 
adverse impacts to surface water, wetlands, or groundwater quality to 
the extent they are not described in response to paragraph (d)(2) of 
this section. Discuss the potential for blasting to affect water wells, 
springs, and wetlands, and measures to be taken to detect and remedy 
such effects.
    (9) Identify the location of known public and private groundwater 
supply wells or springs within 150 feet of proposed construction areas. 
Identify locations of EPA or state-designated sole-source aquifers and 
wellhead protection areas crossed by the proposed pipeline facilities.
    (e) Resource Report 3--Fish, wildlife, and vegetation. This report 
is required for all applications, except those involving only facilities 
within the improved area of an existing compressor, meter, or regulator 
station. It must describe aquatic life, wildlife, and vegetation in the 
vicinity of the proposed project; expected impacts on these resources 
including potential effects on biodiversity; and proposed mitigation, 
enhancement or protection measures. Resource Report 3 must:
    (1) Describe commercial and recreational warmwater, coldwater, and 
saltwater fisheries in the affected area and associated significant 
habitats such as spawning or rearing areas and estuaries.
    (2) Describe terrestrial habitats, including wetlands, typical 
wildlife habitats, and rare, unique, or otherwise significant habitats 
that might be affected by the proposed action. Describe typical species 
that have commercial, recreational, or aesthetic value.
    (3) Describe and provide the acreage of vegetation cover types that 
would be affected, including unique ecosystems or communities such as 
remnant prairie or old-growth forest, or significant individual plants, 
such as old-growth specimen trees.
    (4) Describe the impact of construction and operation on aquatic and 
terrestrial species and their habitats, including the possibility of a 
major alteration to ecosystems or biodiversity, and any potential impact 
on state-listed endangered or threatened species. Describe the impact of 
maintenance, clearing and treatment of the project area on fish, 
wildlife, and vegetation. Surveys may be required to determine specific 
areas of significant habitats or

[[Page 1093]]

communities of species of special concern to state or local agencies.
    (5) Identify all federally listed or proposed endangered or 
threatened species and critical habitat that potentially occur in the 
vicinity of the project. Discuss the results of the consultation 
requirements listed in Sec. 380.13(b) at least through Sec. 
380.13(b)(5)(i) and include any written correspondence that resulted 
from the consultation. The initial application must include the results 
of any required surveys unless seasonal considerations make this 
impractical. If species surveys are impractical, there must be field 
surveys to determine the presence of suitable habitat unless the entire 
project area is suitable habitat.
    (6) Identify all federally listed essential fish habitat (EFH) that 
potentially occurs in the vicinity of the project. Provide information 
on all EFH, as identified by the pertinent Federal fishery management 
plans, that may be adversely affected by the project and the results of 
abbreviated consultations with NMFS, and any resulting EFH assessments.
    (7) Describe site-specific mitigation measures to minimize impacts 
on fisheries, wildlife, and vegetation.
    (8) Include copies of correspondence not provided pursuant to 
paragraph (e)(5) of this section, containing recommendations from 
appropriate Federal and state fish and wildlife agencies to avoid or 
limit impact on wildlife, fisheries, and vegetation, and the applicant's 
response to the recommendations.
    (f) Resource Report 4--Cultural resources. This report is required 
for all applications. In preparing this report, the applicant must 
follow the principles in Sec. 380.14 of this part. Guidance on the 
content and the format for the documentation listed below, as well as 
professional qualifications of preparers, is detailed in `` Office of 
Energy Projects' (OEP) Guidelines for Reporting on Cultural Resources 
Investigations,'' which is available from the Commission Internet home 
page or from the Commission staff.
    (1) Resource Report 4 must contain:
    (i) Documentation of the applicant's initial cultural resources 
consultation, including consultations with Native Americans and other 
interested persons (if appropriate);
    (ii) Overview and Survey Reports, as appropriate;
    (iii) Evaluation Report, as appropriate;
    (iv) Treatment Plan, as appropriate; and
    (v) Written comments from State Historic Preservation Officer(s) 
(SHPO), Tribal Historic Preservation Officers (THPO), as appropriate, 
and applicable land-managing agencies on the reports in paragraphs 
(f)(1)(i)-(iv) of this section.
    (2) Initial filing requirements. The initial application must 
include the documentation of initial cultural resource consultation, the 
Overview and Survey Reports, if required, and written comments from 
SHPOs, THPOs and land-managing agencies, if available. The initial 
cultural resources consultations should establish the need for surveys. 
If surveys are deemed necessary by the consultation with the SHPO/THPO, 
the survey report must be filed with the application.
    (i) If the comments of the SHPOs, THPOs, or land-management agencies 
are not available at the time the application is filed, they may be 
filed separately, but they must be filed before a final certificate is 
issued.
    (ii) If landowners deny access to private property and certain areas 
are not surveyed, the unsurveyed area must be identified by mileposts, 
and supplemental surveys or evaluations shall be conducted after access 
is granted. In such circumstances, reports, and treatment plans, if 
necessary, for those inaccessible lands may be filed after a certificate 
is issued.
    (3) The Evaluation Report and Treatment Plan, if required, for the 
entire project must be filed before a final certificate is issued.
    (i) The Evaluation Report may be combined in a single synthetic 
report with the Overview and Survey Reports if the SHPOs, THPOs, and 
land-management agencies allow and if it is available at the time the 
application is filed.
    (ii) In preparing the Treatment Plan, the applicant must consult 
with the Commission staff, the SHPO, and any

[[Page 1094]]

applicable THPO and land-management agencies.
    (iii) Authorization to implement the Treatment Plan will occur only 
after the final certificate is issued.
    (4) Applicant must request privileged treatment for all material 
filed with the Commission containing location, character, and ownership 
information about cultural resources in accordance with Sec. 388.112 of 
this chapter. The cover and relevant pages or portions of the report 
should be clearly labeled in bold lettering: ``CONTAINS PRIVILEGED 
INFORMATION--DO NOT RELEASE.''
    (5) Except as specified in a final Commission order, or by the 
Director of the Office of Energy Projects, construction may not begin 
until all cultural resource reports and plans have been approved.
    (g) Resource Report 5--Socioeconomics. This report is required only 
for applications involving significant aboveground facilities, 
including, among others, conditioning or liquefied natural gas (LNG) 
plants. It must identify and quantify the impacts of constructing and 
operating the proposed project on factors affecting towns and counties 
in the vicinity of the project. Resource Report 5 must:
    (1) Describe the socioeconomic impact area.
    (2) Evaluate the impact of any substantial immigration of people on 
governmental facilities and services and plans to reduce the impact on 
the local infrastructure.
    (3) Describe on-site manpower requirements and payroll during 
construction and operation, including the number of construction 
personnel who currently reside within the impact area, would commute 
daily to the site from outside the impact area, or would relocate 
temporarily within the impact area.
    (4) Determine whether existing housing within the impact area is 
sufficient to meet the needs of the additional population.
    (5) Describe the number and types of residences and businesses that 
would be displaced by the project, procedures to be used to acquire 
these properties, and types and amounts of relocation assistance 
payments.
    (6) Conduct a fiscal impact analysis evaluating incremental local 
government expenditures in relation to incremental local government 
revenues that would result from construction of the project. Incremental 
expenditures include, but are not limited to, school operating costs, 
road maintenance and repair, public safety, and public utility costs.
    (h) Resource Report 6--Geological resources. This report is required 
for applications involving LNG facilities and all other applications, 
except those involving only facilities within the boundaries of existing 
aboveground facilities, such as a compressor, meter, or regulator 
station. It must describe geological resources and hazards in the 
project area that might be directly or indirectly affected by the 
proposed action or that could place the proposed facilities at risk, the 
potential effects of those hazards on the facility, and methods proposed 
to reduce the effects or risks. Resource Report 6 must:
    (1) Describe, by milepost, mineral resources that are currently or 
potentially exploitable;
    (2) Describe, by milepost, existing and potential geological hazards 
and areas of nonroutine geotechnical concern, such as high seismicity 
areas, active faults, and areas susceptible to soil liquefaction; 
planned, active, and abandoned mines; karst terrain; and areas of 
potential ground failure, such as subsidence, slumping, and landsliding. 
Discuss the hazards posed to the facility from each one.
    (3) Describe how the project would be located or designed to avoid 
or minimize adverse effects to the resources or risk to itself, 
including geotechnical investigations and monitoring that would be 
conducted before, during, and after construction. Discuss also the 
potential for blasting to affect structures, and the measures to be 
taken to remedy such effects.
    (4) Specify methods to be used to prevent project-induced 
contamination from surface mines or from mine tailings along the right-
of-way and whether the project would hinder mine reclamation or 
expansion efforts.
    (5) If the application involves an LNG facility located in zones 2, 
3, or 4 of the Uniform Building Code's Seismic Risk

[[Page 1095]]

Map, or where there is potential for surface faulting or liquefaction, 
prepare a report on earthquake hazards and engineering in conformance 
with ``Data Requirements for the Seismic Review of LNG Facilities,'' 
NBSIR 84-2833. This document may be obtained from the Commission staff.
    (6) If the application is for underground storage facilities:
    (i) Describe how the applicant would control and monitor the 
drilling activity of others within the field and buffer zone;
    (ii) Describe how the applicant would monitor potential effects of 
the operation of adjacent storage or production facilities on the 
proposed facility, and vice versa;
    (iii) Describe measures taken to locate and determine the condition 
of old wells within the field and buffer zone and how the applicant 
would reduce risk from failure of known and undiscovered wells; and
    (iv) Identify and discuss safety and environmental safeguards 
required by state and Federal drilling regulations.
    (i) Resource Report 7--Soils. This report is required for all 
applications except those not involving soil disturbance. It must 
describe the soils that would be affected by the proposed project, the 
effect on those soils, and measures proposed to minimize or avoid 
impact. Resource Report 7 must:
    (1) List, by milepost, the soil associations that would be crossed 
and describe the erosion potential, fertility, and drainage 
characteristics of each association.
    (2) If an aboveground facility site is greater than 5 acres:
    (i) List the soil series within the property and the percentage of 
the property comprised of each series;
    (ii) List the percentage of each series which would be permanently 
disturbed;
    (iii) Describe the characteristics of each soil series; and
    (iv) Indicate which are classified as prime or unique farmland by 
the U.S. Department of Agriculture, Natural Resources Conservation 
Service.
    (3) Identify, by milepost, potential impact from: Soil erosion due 
to water, wind, or loss of vegetation; soil compaction and damage to 
soil structure resulting from movement of construction vehicles; wet 
soils and soils with poor drainage that are especially prone to 
structural damage; damage to drainage tile systems due to movement of 
construction vehicles and trenching activities; and interference with 
the operation of agricultural equipment due to the probability of large 
stones or blasted rock occurring on or near the surface as a result of 
construction.
    (4) Identify, by milepost, cropland and residential areas where loss 
of soil fertility due to trenching and backfilling could occur.
    (5) Describe proposed mitigation measures to reduce the potential 
for adverse impact to soils or agricultural productivity. Compare 
proposed mitigation measures with the staff's current ``Upland Erosion 
Control, Revegetation and Maintenance Plan,'' which is available from 
the Commission Internet home page or from the Commission staff, and 
explain how proposed mitigation measures provide equivalent or greater 
protections to the environment.
    (j) Resource Report 8--Land use, recreation and aesthetics. This 
report is required for all applications except those involving only 
facilities which are of comparable use at existing compressor, meter, 
and regulator stations. It must describe the existing uses of land on, 
and (where specified) within 0.25 mile of, the proposed project and 
changes to those land uses that would occur if the project is approved. 
The report shall discuss proposed mitigation measures, including 
protection and enhancement of existing land use. Resource Report 8 must:
    (1) Describe the width and acreage requirements of all construction 
and permanent rights-of-way and the acreage required for each proposed 
plant and operational site, including injection or withdrawal wells.
    (i) List, by milepost, locations where the proposed right-of-way 
would be adjacent to existing rights-of-way of any kind.
    (ii) Identify, preferably by diagrams, existing rights-of-way that 
would be used for a portion of the construction or operational right-of-
way, the overlap and how much additional width would be required.

[[Page 1096]]

    (iii) Identify the total amount of land to be purchased or leased 
for each aboveground facility, the amount of land that would be 
disturbed for construction and operation of the facility, and the use of 
the remaining land not required for project operation.
    (iv) Identify the size of typical staging areas and expanded work 
areas, such as those at railroad, road, and waterbody crossings, and the 
size and location of all pipe storage yards and access roads.
    (2) Identify, by milepost, the existing use of lands crossed by the 
proposed pipeline, or on or adjacent to each proposed plant and 
operational site.
    (3) Describe planned development on land crossed or within 0.25 mile 
of proposed facilities, the time frame (if available) for such 
development, and proposed coordination to minimize impacts on land use. 
Planned development means development which is included in a master plan 
or is on file with the local planning board or the county.
    (4) Identify, by milepost and length of crossing, the area of direct 
effect of each proposed facility and operational site on sugar maple 
stands, orchards and nurseries, landfills, operating mines, hazardous 
waste sites, state wild and scenic rivers, state or local designated 
trails, nature preserves, game management areas, remnant prairie, old-
growth forest, national or state forests, parks, golf courses, 
designated natural, recreational or scenic areas, or registered natural 
landmarks, Native American religious sites and traditional cultural 
properties to the extent they are known to the public at large, and 
reservations, lands identified under the Special Area Management Plan of 
the Office of Coastal Zone Management, National Oceanic and Atmospheric 
Administration, and lands owned or controlled by Federal or state 
agencies or private preservation groups. Also identify if any of those 
areas are located within 0.25 mile of any proposed facility.
    (5) Identify, by milepost, all residences and buildings within 50 
feet of the proposed pipeline construction right-of-way and the distance 
of the residence or building from the right-of-way. Provide survey 
drawings or alignment sheets to illustrate the location of the 
facilities in relation to the buildings.
    (6) Describe any areas crossed by or within 0.25 mile of the 
proposed pipeline or plant and operational sites which are included in, 
or are designated for study for inclusion in: The National Wild and 
Scenic Rivers System (16 U.S.C. 1271); The National Trails System (16 
U.S.C. 1241); or a wilderness area designated under the Wilderness Act 
(16 U.S.C. 1132).
    (7) For facilities within a designated coastal zone management area, 
provide a consistency determination or evidence that the applicant has 
requested a consistency determination from the state's coastal zone 
management program.
    (8) Describe the impact the project will have on present uses of the 
affected area as identified above, including commercial uses, mineral 
resources, recreational areas, public health and safety, and the 
aesthetic value of the land and its features. Describe any temporary or 
permanent restrictions on land use resulting from the project.
    (9) Describe mitigation measures intended for all special use areas 
identified under paragraphs (j)(2) through (6) of this section.
    (10) Describe proposed typical mitigation measures for each 
residence that is within 50 feet of the edge of the pipeline 
construction right-of-way, as well as any proposed residence-specific 
mitigation. Describe how residential property, including for example, 
fences, driveways, stone walls, sidewalks, water supply, and septic 
systems, would be restored. Describe compensation plans for temporary 
and permanent rights-of-way and the eminent domain process for the 
affected areas.
    (11) Describe measures proposed to mitigate the aesthetic impact of 
the facilities especially for aboveground facilities such as compressor 
or meter stations.
    (12) Demonstrate that applications for rights-of-way or other 
proposed land use have been or soon will be filed with Federal land-
management agencies with jurisdiction over land that would be affected 
by the project.

[[Page 1097]]

    (k) Resource Report 9--Air and noise quality. This report is 
required for applications involving compressor facilities at new or 
existing stations, and for all new LNG facilities. It must identify the 
effects of the project on the existing air quality and noise environment 
and describe proposed measures to mitigate the effects. Resource Report 
9 must:
    (1) Describe the existing air quality, including background levels 
of nitrogen dioxide and other criteria pollutants which may be emitted 
above EPA-identified significance levels.
    (2) Quantitatively describe existing noise levels at noise-sensitive 
areas, such as schools, hospitals, or residences and include any areas 
covered by relevant state or local noise ordinances.
    (i) Report existing noise levels as the Leq (day), 
Leq (night), and Ldn and include the basis for the 
data or estimates.
    (ii) For existing compressor stations, include the results of a 
sound level survey at the site property line and nearby noise-sensitive 
areas while the compressors are operated at full load.
    (iii) For proposed new compressor station sites, measure or estimate 
the existing ambient sound environment based on current land uses and 
activities.
    (iv) Include a plot plan that identifies the locations and duration 
of noise measurements, the time of day, weather conditions, wind speed 
and direction, engine load, and other noise sources present during each 
measurement.
    (3) Estimate the impact of the project on air quality, including how 
existing regulatory standards would be met.
    (i) Provide the emission rate of nitrogen oxides from existing and 
proposed facilities, expressed in pounds per hour and tons per year for 
maximum operating conditions, include supporting calculations, emission 
factors, fuel consumption rates, and annual hours of operation.
    (ii) For major sources of air emissions (as defined by the 
Environmental Protection Agency), provide copies of applications for 
permits to construct (and operate, if applicable) or for applicability 
determinations under regulations for the prevention of significant air 
quality deterioration and subsequent determinations.
    (4) Provide a quantitative estimate of the impact of the project on 
noise levels at noise-sensitive areas, such as schools, hospitals, or 
residences.
    (i) Include step-by-step supporting calculations or identify the 
computer program used to model the noise levels, the input and raw 
output data and all assumptions made when running the model, far-field 
sound level data for maximum facility operation, and the source of the 
data.
    (ii) Include sound pressure levels for unmuffled engine inlets and 
exhausts, engine casings, and cooling equipment; dynamic insertion loss 
for all mufflers; sound transmission loss for all compressor building 
components, including walls, roof, doors, windows and ventilation 
openings; sound attenuation from the station to nearby noise-sensitive 
areas; the manufacturer's name, the model number, the performance 
rating; and a description of each noise source and noise control 
component to be employed at the proposed compressor station. For 
proposed compressors the initial filing must include at least the 
proposed horsepower, type of compression, and energy source for the 
compressor.
    (iii) Far-field sound level data measured from similar units in 
service elsewhere, when available, may be substituted for manufacturer's 
far-field sound level data.
    (iv) If specific noise control equipment has not been chosen, 
include a schedule for submitting the data prior to certification.
    (v) The estimate must demonstrate that the project will comply with 
applicable noise regulations and show how the facility will meet the 
following requirements:
    (A) The noise attributable to any new compressor station, 
compression added to an existing station, or any modification, upgrade 
or update of an existing station, must not exceed a day- night sound 
level (Ldn) of 55 dBA at any pre-existing noise-sensitive 
area (such as schools, hospitals, or residences).
    (B) New compressor stations or modifications of existing stations 
shall not

[[Page 1098]]

result in a perceptible increase in vibration at any noise-sensitive 
area.
    (5) Describe measures and manufacturer's specifications for 
equipment proposed to mitigate impact to air and noise quality, 
including emission control systems, installation of filters, mufflers, 
or insulation of piping and buildings, and orientation of equipment away 
from noise-sensitive areas.
    (l) Resource Report 10--Alternatives. This report is required for 
all applications. It must describe alternatives to the project and 
compare the environmental impacts of such alternatives to those of the 
proposal. The discussion must demonstrate how environmental benefits and 
costs were weighed against economic benefits and costs, and 
technological and procedural constraints. The potential for each 
alternative to meet project deadlines and the environmental consequences 
of each alternative shall be discussed. Resource Report 10 must:
    (1) Discuss the ``no action'' alternative and the potential for 
accomplishing the proposed objectives through the use of other systems 
and/or energy conservation. Provide an analysis of the relative 
environmental benefits and costs for each alternative.
    (2) Describe alternative routes or locations considered for each 
facility during the initial screening for the project.
    (i) For alternative routes considered in the initial screening for 
the project but eliminated, describe the environmental characteristics 
of each route or site, and the reasons for rejecting it. Identify the 
location of such alternatives on maps of sufficient scale to depict 
their location and relationship to the proposed action, and the 
relationship of the pipeline to existing rights-of-way.
    (ii) For alternative routes or locations considered for more in-
depth consideration, describe the environmental characteristics of each 
route or site and the reasons for rejecting it. Provide comparative 
tables showing the differences in environmental characteristics for the 
alternative and proposed action. The location of any alternatives in 
this paragraph shall be provided on maps equivalent to those required in 
paragraph (c)(2) of this section.
    (m) Resource Report 11--Reliability and safety. This report is 
required for applications involving new or recommissioned LNG 
facilities. Information previously filed with the Commission need not be 
refiled if the applicant verifies its continued validity. This report 
shall address the potential hazard to the public from failure of 
facility components resulting from accidents or natural catastrophes, 
how these events would affect reliability, and what procedures and 
design features have been used to reduce potential hazards. Resource 
Report 11 must:
    (1) Describe measures proposed to protect the public from failure of 
the proposed facilities (including coordination with local agencies).
    (2) Discuss hazards, the environmental impact, and service 
interruptions which could reasonably ensue from failure of the proposed 
facilities.
    (3) Discuss design and operational measures to avoid or reduce risk.
    (4) Discuss contingency plans for maintaining service or reducing 
downtime.
    (5) Describe measures used to exclude the public from hazardous 
areas. Discuss measures used to minimize problems arising from 
malfunctions and accidents (with estimates of probability of occurrence) 
and identify standard procedures for protecting services and public 
safety during maintenance and breakdowns.
    (n) Resource Report 12--PCB contamination. This report is required 
for applications involving the replacement, abandonment by removal, or 
abandonment in place of pipeline facilities determined to have 
polychlorinated biphenyls (PCBs) in excess of 50 ppm in pipeline 
liquids. Resource Report 12 must:
    (1) Provide a statement that activities would comply with an 
approved EPA disposal permit, with the dates of issuance and expiration 
specified, or with the requirements of the Toxic Substances Control Act.
    (2) For compressor station modifications on sites that have been 
determined to have soils contaminated with PCBs, describe the status of 
remediation efforts completed to date.

[[Page 1099]]

    (o) Resource Report 13--Engineering and design material. This report 
is required for construction of new liquefied natural gas (LNG) 
facilities, or the recommissioning of existing LNG facilities. If the 
recommissioned facility is existing and is not being replaced, 
relocated, or significantly altered, resubmittal of information already 
on file with the Commission is unnecessary. Resource Report 13 must:
    (1) Provide a detailed plot plan showing the location of all major 
components to be installed, including compression, pretreatment, 
liquefaction, storage, transfer piping, vaporization, truck loading/
unloading, vent stacks, pumps, and auxiliary or appurtenant service 
facilities.
    (2) Provide a detailed layout of the fire protection system showing 
the location of fire water pumps, piping, hydrants, hose reels, dry 
chemical systems, high expansion foam systems, and auxiliary or 
appurtenant service facilities.
    (3) Provide a layout of the hazard detection system showing the 
location of combustible-gas detectors, fire detectors, heat detectors, 
smoke or combustion product detectors, and low temperature detectors. 
Identify those detectors that activate automatic shutdowns and the 
equipment that would shut down. Include all safety provisions 
incorporated in the plant design, including automatic and manually 
activated emergency shutdown systems.
    (4) Provide a detailed layout of the spill containment system 
showing the location of impoundments, sumps, subdikes, channels, and 
water removal systems.
    (5) Provide manufacturer's specifications, drawings, and literature 
on the fail-safe shut-off valve for each loading area at a marine 
terminal (if applicable).
    (6) Provide a detailed layout of the fuel gas system showing all 
taps with process components.
    (7) Provide copies of company, engineering firm, or consultant 
studies of a conceptual nature that show the engineering planning or 
design approach to the construction of new facilities or plants.
    (8) Provide engineering information on major process components 
related to the first six items above, which include (as applicable) 
function, capacity, type, manufacturer, drive system (horsepower, 
voltage), operating pressure, and temperature.
    (9) Provide manuals and construction drawings for LNG storage 
tank(s).
    (10) Provide up-to-date piping and instrumentation diagrams. Include 
a description of the instrumentation and control philosophy, type of 
instrumentation (pneumatic, electronic), use of computer technology, and 
control room display and operation. Also, provide an overall schematic 
diagram of the entire process flow system, including maps, materials, 
and energy balances.
    (11) Provide engineering information on the plant's electrical power 
generation system, distribution system, emergency power system, 
uninterruptible power system, and battery backup system.
    (12) Identify all codes and standards under which the plant (and 
marine terminal, if applicable) will be designed, and any special 
considerations or safety provisions that were applied to the design of 
plant components.
    (13) Provide a list of all permits or approvals from local, state, 
Federal, or Native American groups or Indian agencies required prior to 
and during construction of the plant, and the status of each, including 
the date filed, the date issued, and any known obstacles to approval. 
Include a description of data records required for submission to such 
agencies and transcripts of any public hearings by such agencies. Also 
provide copies of any correspondence relating to the actions by all, or 
any, of these agencies regarding all required approvals.
    (14) Identify how each applicable requirement will comply with 49 
CFR part 193 and the National Fire Protection Association 59A LNG 
Standards. For new facilities, the siting requirements of 49 CFR part 
193, subpart B, must be given special attention. If applicable, vapor 
dispersion calculations from LNG spills over water should also be 
presented to ensure compliance with the U.S. Coast Guard's LNG 
regulations in 33 CFR part 127.
    (15) Provide seismic information specified in Data Requirements for 
the

[[Page 1100]]

Seismic Review of LNG facilities (NBSIR 84-2833, available from FERC 
staff) for facilities that would be located in zone 2, 3, or 4 of the 
Uniform Building Code Seismic Map of the United States.

[Order 603, 64 FR 26611, May 14, 1999, as amended by Order 603-A, 64 FR 
54537, Oct. 7, 1999; Order 609, 64 FR 57392, Oct. 25, 1999; Order 699, 
72 FR 45328, Aug. 14, 2007; Order 756, 77 FR 4895, Feb. 1, 2012]



Sec. 380.13  Compliance with the Endangered Species Act.

    (a) Definitions. For purposes of this section:
    (1) Listed species and critical habitat have the same meaning as 
provided in 50 CFR 402.02.
    (2) Project area means any area subject to construction activities 
(for example, material storage sites, temporary work areas, and new 
access roads) necessary to install or abandon the facilities.
    (b) Procedures for informal consultation--(1) Designation of non-
Federal representative. The project sponsor is designated as the 
Commission's non-Federal representative for purposes of informal 
consultations with the U.S. Fish and Wildlife Service (FWS) and the 
National Marine Fisheries Service (NMFS) under the Endangered Species 
Act of 1973, as amended (ESA).
    (2) Consultation requirement. (i) Prior to the filing of the 
environmental report specified in Sec. 380.12, the project sponsor must 
contact the appropriate regional or field office of the FWS or the NMFS, 
or both if appropriate, to initiate informal consultations, unless it is 
proceeding pursuant to a blanket clearance issued by the FWS and/or NMFS 
which is less than 1 year old and the clearance does not specify more 
frequent consultation.
    (ii) If a blanket clearance is more than 1 year old or less than 1 
year old and specifies more frequent consultations, or if the project 
sponsor is not proceeding pursuant to a blanket clearance, the project 
sponsor must request a list of federally listed or proposed species and 
designated or proposed critical habitat that may be present in the 
project area, or provide the consulted agency with such a list for its 
concurrence.
    (iii) The consulted agency will provide a species and critical 
habitat list or concur with the species list provided within 30 days of 
its receipt of the initial request. In the event that the consulted 
agency does not provide this information within this time period, the 
project sponsor may notify the Director of the Office of Energy Projects 
and continue with the remaining procedures of this section.
    (3) End of informal consultation. (i) At any time during the 
informal consultations, the consulted agency may determine or confirm:
    (A) That no listed or proposed species, or designated or proposed 
critical habitat, occurs in the project area; or
    (B) That the project is not likely to adversely affect a listed 
species or critical habitat;
    (ii) If the consulted agency provides the determination or 
confirmation described in paragraph (b)(3)(i) of this section, no 
further consultation is required.
    (4) Potential impact to proposed species. (i) If the consulted 
agency, pursuant to informal consultations, initially determines that 
any species proposed to be listed, or proposed critical habitat, occurs 
in the project area, the project sponsor must confer with the consulted 
agency on methods to avoid or reduce the potential impact.
    (ii) The project sponsor shall include in its proposal, a discussion 
of any mitigating measures recommended through the consultation process.
    (5) Continued informal consultations for listed species. (i) If the 
consulted agency initially determines, pursuant to the informal 
consultations, that a listed species or designated critical habitat may 
occur in the project area, the project sponsor must continue informal 
consultations with the consulted agency to determine if the proposed 
project may affect the species or designated critical habitat. These 
consultations may include discussions with experts (including experts 
provided by the consulted agency), habitat identification, field 
surveys, biological analyses, and the formulation of mitigation 
measures. If the provided information indicates that the project is not 
likely to adversely affect a listed species or critical habitat, the 
consulting agency will

[[Page 1101]]

provide a letter of concurrence which completes informal consultation.
    (ii) The project sponsor must prepare a Biological Assessment unless 
the consulted agency indicates that the proposed project is not likely 
to adversely affect a specific listed species or its designated critical 
habitat. The Biological Assessment must contain the following 
information for each species contained in the consulted agency's species 
list:
    (A) Life history and habitat requirements;
    (B) Results of detailed surveys to determine if individuals, 
populations, or suitable, unoccupied habitat exists in the proposed 
project's area of effect;
    (C) Potential impacts, both beneficial and negative, that could 
result from the construction and operation of the proposed project, or 
disturbance associated with the abandonment, if applicable; and
    (D) Proposed mitigation that would eliminate or minimize these 
potential impacts.
    (iii) All surveys must be conducted by qualified biologists and must 
use FWS and/or NMFS approved survey methodology. In addition, the 
Biological Assessment must include the following information:
    (A) Name(s) and qualifications of person(s) conducting the survey;
    (B) Survey methodology;
    (C) Date of survey(s); and
    (D) Detailed and site-specific identification of size and location 
of all areas surveyed.
    (iv) The project sponsor must provide a draft Biological Assessment 
directly to the environmental staff of the Office of Energy Projects for 
review and comment and/or submission to the consulted agency. If the 
consulted agency fails to provide formal comments on the Biological 
Assessment to the project sponsor within 30 days of its receipt, as 
specified in 50 CFR 402.120, the project sponsor may notify the 
Director, OEP, and follow the procedures in paragraph (c) of this 
section.
    (v) The consulted agency's comments on the Biological Assessment's 
determination must be filed with the Commission.
    (c) Notification to Director. In the event that the consulted agency 
fails to respond to requests by the project sponsor under paragraph (b) 
of this section, the project sponsor must notify the Director of the 
Office of Energy Projects. The notification must include all 
information, reports, letters, and other correspondence prepared 
pursuant to this section. The Director will determine whether:
    (1) Additional informal consultation is required;
    (2) Formal consultation must be initiated under paragraph (d) of 
this section; or
    (3) Construction may proceed.
    (d) Procedures for formal consultation. (1) In the event that formal 
consultation is required pursuant to paragraphs (b)(5)(v) or (c)(2) of 
this section, the Commission staff will initiate formal consultation 
with the FWS and/or NMFS, as appropriate, and will request that the 
consulted agency designate a lead Regional Office, lead Field/District 
Office, and Project Manager, as necessary, to facilitate the formal 
consultation process. In addition, the Commission will designate a 
contact for formal consultation purposes.
    (2) During formal consultation, the consulted agency, the 
Commission, and the project sponsor will coordinate and consult to 
determine potential impacts and mitigation which can be implemented to 
minimize impacts. The Commission and the consulted agency will schedule 
coordination meetings and/or field visits as necessary.
    (3) The formal consultation period will last no longer than 90 days, 
unless the consulted agency, the Commission, and project sponsor 
mutually agree to an extension of this time period.
    (4) The consulted agency will provide the Commission with a 
Biological Opinion on the proposed project, as specified in 50 CFR 
402.14(e), within 45 days of the completion of formal consultation.

[Order 603, 64 FR 26617, May 14, 1999, as amended by Order 699, 72 FR 
45328, Aug. 14, 2007]



Sec. 380.14  Compliance with the National Historic Preservation Act.

    (a) Section 106 of the National Historic Preservation Act, as 
amended (16 U.S.C. 470(f)) (NHPA), requires the Commission to take into 
account the

[[Page 1102]]

effect of a proposed project on any historic property and to afford the 
Advisory Council on Historic Preservation (Council) an opportunity to 
comment on projects if required under 36 CFR 800. The project sponsor, 
as a non-Federal party, assists the Commission in meeting its 
obligations under NHPA section 106 and the implementing regulations at 
36 CFR part 800 by following the procedures at Sec. 380.12(f). The 
project sponsor may contact the Commission at any time for assistance. 
The Commission will review the resultant filings.
    (1) The Commission's NHPA section 106 responsibilities apply to 
public and private lands, unless subject to the provisions of paragraph 
(a)(2) of this section. The project sponsor will assist the Commission 
in taking into account the views of interested parties, Native 
Americans, and tribal leaders.
    (2) If Federal or Tribal land is affected by a proposed project, the 
project sponsor shall adhere to any requirements for cultural resources 
studies of the applicable Federal land- managing agencies on Federal 
lands and any tribal requirements on Tribal lands. The project sponsor 
must identify, in Resource Report 4 filed with the application, the 
status of cultural resources studies on Federal or Tribal lands, as 
applicable.
    (3) The project sponsor must consult with the SHPO(s) and THPOs, if 
appropriate. If the SHPO or THPO declines to consult with the project 
sponsor, the project sponsor shall not continue with consultations, 
except as instructed by the Director of the Office of Energy Projects.
    (4) If the project is covered by an agreement document among the 
Commission, Council, SHPO(s), THPO(s), land-managing agencies, project 
sponsors, and interested persons, as appropriate, then that agreement 
will provide for compliance with NHPA section 106, as applicable.
    (b) [Reserved]

[Order 603, 64 FR 26618, May 14, 1999, as amended by Order 699, 72 FR 
45329, Aug. 14, 2007; Order 756, 77 FR 4895, Feb. 1, 2012]



Sec. 380.15  Siting and maintenance requirements.

    (a) Avoidance or minimization of effects. The siting, construction, 
and maintenance of facilities shall be undertaken in a way that avoids 
or minimizes effects on scenic, historic, wildlife, and recreational 
values.
    (b) Landowner consideration. The desires of landowners should be 
taken into account in the planning, locating, clearing, and maintenance 
of rights-of-way and the construction of facilities on their property, 
so long as the result is consistent with applicable requirements of law, 
including laws relating to land-use and any requirements imposed by the 
Commission.
    (c) Safety regulations. The requirements of this paragraph do not 
affect a project sponsor's obligations to comply with safety regulations 
of the U.S. Department of Transportation and recognized safe engineering 
practices for Natural Gas Act projects and the National Electric Safety 
Code for section 216 Federal Power Act projects.
    (d) Pipeline and electric transmission facilities construction. (1) 
The use, widening, or extension of existing rights-of-way must be 
considered in locating proposed facilities.
    (2) In locating proposed facilities, the project sponsor shall, to 
the extent practicable, avoid places listed on, or eligible for listing 
on, the National Register of Historic Places; natural landmarks listed 
on the National Register of Natural Landmarks; officially designated 
parks; wetlands; and scenic, recreational, and wildlife lands. If 
rights-of-way must be routed near or through such places, attempts 
should be made to minimize visibility from areas of public view and to 
preserve the character and existing environment of the area.
    (3) Rights-of-way should avoid forested areas and steep slopes where 
practical.
    (4) Rights-of-way clearing should be kept to the minimum width 
necessary.
    (5) In selecting a method to clear rights-of-way, soil stability and 
protection of natural vegetation and adjacent resources should be taken 
into account.
    (6) Trees and vegetation cleared from rights-of-way in areas of 
public view

[[Page 1103]]

should be disposed of without undue delay.
    (7) Remaining trees and shrubs should not be unnecessarily damaged.
    (8) Long foreground views of cleared rights-of-way through wooded 
areas that are visible from areas of public view should be avoided.
    (9) Where practical, rights-of-way should avoid crossing hills and 
other high points at their crests where the crossing is in a forested 
area and the resulting notch is clearly visible in the foreground from 
areas of public view.
    (10) Screen plantings should be employed where rights-of-way enter 
forested areas from a clearing and where the clearing is plainly visible 
in the foreground from areas of public view.
    (11) Temporary roads should be designed for proper drainage and 
built to minimize soil erosion. Upon abandonment, the road area should 
be restored and stabilized without undue delay.
    (e) Right-of-way maintenance. (1) Vegetation covers established on a 
right-of-way should be properly maintained.
    (2) Access and service roads should be maintained with proper cover, 
water bars, and the proper slope to minimize soil erosion. They should 
be jointly used with other utilities and land-management agencies where 
practical.
    (3) Chemical control of vegetation should not be used unless 
authorized by the landowner or land-managing agency. When chemicals are 
used for control of vegetation, they should be approved by EPA for such 
use and used in conformance with all applicable regulations.
    (f) Construction of aboveground facilities. (1) Unobtrusive sites 
should be selected for the location of aboveground facilities.
    (2) Aboveground facilities should cover the minimum area 
practicable.
    (3) Noise potential should be considered in locating compressor 
stations, or other aboveground facilities.
    (4) The exterior of aboveground facilities should be harmonious with 
the surroundings and other buildings in the area.
    (5) For Natural Gas Act projects, the site of aboveground facilities 
which are visible from nearby residences or public areas, should be 
planted in trees and shrubs, or other appropriate landscaping and should 
be installed to enhance the appearance of the facilities, consistent 
with operating needs.

[Order 603, 64 FR 26619, May 14, 1999, as amended by Order 689, 71 FR 
69741, Dec. 1, 2006; Order 756, 77 FR 4895, Feb. 1, 2012]



Sec. 380.16  Environmental reports for section 216 Federal Power Act Permits.

    (a) Introduction. (1) The applicant must submit an environmental 
report with any application that proposes the construction or 
modification of any facility identified in Sec. 380.3(c)(3). The 
environmental report must include the 11 resource reports and related 
material described in this section.
    (2) The detail of each resource report must be commensurate with the 
complexity of the proposal and its potential for environmental impact. 
Each topic in each resource report must be addressed or its omission 
justified, unless the data is not required for that type of proposal. If 
material required for one resource report is provided in another 
resource report or in another exhibit, it may be cross referenced. If 
any resource report topic is required for a particular project but is 
not provided at the time the application is filed, the environmental 
report must explain why it is missing and when the applicant anticipates 
it will be filed.
    (b) General requirements. As appropriate, each resource report must:
    (1) Address conditions or resources that are likely to be directly 
or indirectly affected by the project;
    (2) Identify significant environmental effects expected to occur as 
a result of the project;
    (3) Identify the effects of construction, operation (including 
maintenance and malfunctions), as well as cumulative effects resulting 
from existing or reasonably foreseeable projects;
    (4) Identify measures proposed to enhance the environment or to 
avoid, mitigate, or compensate for adverse effects of the project; and
    (5) Provide a list of publications, reports, and other literature or 
communications, including agency contacts, that were cited or relied 
upon to prepare each report. This list must include the names and titles 
of the persons

[[Page 1104]]

contacted, their affiliations, and telephone numbers.
    (6) Whenever this section refers to ``mileposts'' the applicant may 
substitute ``survey centerline stationing'' if so preferred. However, 
whatever method is chosen must be used consistently throughout the 
resource reports.
    (c) Resource Report 1--General project description. This report must 
describe facilities associated with the project, special construction 
and operation procedures, construction timetables, future plans for 
related construction, compliance with regulations and codes, and permits 
that must be obtained. Resource Report 1 must:
    (1) Describe and provide location maps of all project facilities, 
include all facilities associated with the project (such as transmission 
line towers, substations, and any appurtenant facilities), to be 
constructed, modified, replaced, or removed, including related 
construction and operational support activities and areas such as 
maintenance bases, staging areas, communications towers, power lines, 
and new access roads (roads to be built or modified). As relevant, the 
report must describe the length and size of the proposed transmission 
line conductor cables, the types of appurtenant facilities that would be 
constructed, and associated land requirements.
    (2) Provide the following maps and photos:
    (i) Current, original United States Geological Survey (USGS) 7.5-
minute series topographic maps or maps of equivalent detail, covering at 
least a 0.5-mile-wide corridor centered on the electric transmission 
facility centerline, with integer mileposts identified, showing the 
location of rights-of-way, new access roads, other linear construction 
areas, substations, and construction materials storage areas. Nonlinear 
construction areas must be shown on maps at a scale of 1:3,600 or larger 
keyed graphically and by milepost to the right-of-way maps. In areas 
where the facilities described in paragraph (j)(6) of this section are 
located, topographic map coverage must be expanded to depict those 
facilities.
    (ii) Original aerial images or photographs or photo-based alignment 
sheets based on these sources, not more than one year old (unless older 
ones accurately depict current land use and development) and with a 
scale of 1:6,000, or larger, showing the proposed transmission line 
route and location of transmission line towers, substations and 
appurtenant facilities, covering at least a 0.5 mile-wide corridor, and 
including mileposts. The aerial images or photographs or photo-based 
alignment sheets must show all existing transmission facilities located 
in the area of the proposed facilities and the location of habitable 
structures, radio transmitters and other electronic installations, and 
airstrips. Older images/photographs/alignment sheets must be modified to 
show any residences not depicted in the original. In areas where the 
facilities described in paragraph (j)(6) of this section are located, 
aerial photographic coverage must be expanded to depict those 
facilities. Alternative formats (e.g., blue-line prints of acceptable 
resolution) need prior approval by the environmental staff of the Office 
of Energy Projects.
    (iii) In addition to the copies required under Sec. 50.3(b) of this 
chapter, the applicant must send three additional copies of topographic 
maps and aerial images/photographs directly to the environmental staff 
of the Commission's Office of Energy Projects.
    (3) Describe and identify by milepost, proposed construction and 
restoration methods to be used in areas of rugged topography, 
residential areas, active croplands and sites where explosives are 
likely to be used.
    (4) Identify the number of construction spreads, average workforce 
requirements for each construction spread and estimated duration of 
construction from initial clearing to final restoration, and any 
identified constraints to the timing of construction.
    (5) Describe reasonably foreseeable plans for future expansion of 
facilities, including additional land requirements and the compatibility 
of those plans with the current proposal.
    (6) Describe all authorizations required to complete the proposed 
action and the status of applications for such authorizations. Identify 
environmental mitigation requirements specified in any permit or 
proposed in any permit

[[Page 1105]]

application to the extent not specified elsewhere in this section.
    (7) Provide the names and mailing addresses of all affected 
landowners identified in Sec. 50.5(c)(4) of this chapter and certify 
that all affected landowners will be notified as required in Sec. 
50.4(c) of this chapter.
    (d) Resource Report 2--Water use and quality. This report must 
describe water quality and provide data sufficient to determine the 
expected impact of the project and the effectiveness of mitigative, 
enhancement, or protective measures. Resource Report 2 must:
    (1) Identify and describe by milepost waterbodies and municipal 
water supply or watershed areas, specially designated surface water 
protection areas and sensitive waterbodies, and wetlands that would be 
crossed. For each waterbody crossing, identify the approximate width, 
State water quality classifications, any known potential pollutants 
present in the water or sediments, and any potable water intake sources 
within three miles downstream.
    (2) Provide a description of site-specific construction techniques 
that will be used at each major waterbody crossing.
    (3) Describe typical staging area requirements at waterbody and 
wetland crossings. Also, identify and describe waterbodies and wetlands 
where staging areas are likely to be more extensive.
    (4) Include National Wetland Inventory (NWI) maps. If NWI maps are 
not available, provide the appropriate State wetland maps. Identify for 
each crossing, the milepost, the wetland classification specified by the 
U.S. Fish and Wildlife Service, and the length of the crossing. Include 
two copies of the NWI maps (or the substitutes, if NWI maps are not 
available) clearly showing the proposed route and mileposts. Describe by 
milepost, wetland crossings as determined by field delineations using 
the current Federal methodology.
    (5) Identify aquifers within excavation depth in the project area, 
including the depth of the aquifer, current and projected use, water 
quality, and known or suspected contamination problems.
    (6) Discuss proposed mitigation measures to reduce the potential for 
adverse impacts to surface water, wetlands, or groundwater quality. 
Discuss the potential for blasting to affect water wells, springs, and 
wetlands, and measures to be taken to detect and remedy such effects.
    (7) Identify the location of known public and private groundwater 
supply wells or springs within 150 feet of proposed construction areas. 
Identify locations of EPA or State-designated, sole-source aquifers and 
wellhead protection areas crossed by the proposed transmission line 
facilities.
    (e) Resource Report 3--Fish, wildlife, and vegetation. This report 
must describe aquatic life, wildlife, and vegetation in the vicinity of 
the proposed project; expected impacts on these resources including 
potential effects on biodiversity; and proposed mitigation, enhancement, 
or protection measures. Resource Report 3 must:
    (1) Describe commercial and recreational warmwater, coldwater, and 
saltwater fisheries in the affected area and associated significant 
habitats such as spawning or rearing areas and estuaries.
    (2) Describe terrestrial habitats, including wetlands, typical 
wildlife habitats, and rare, unique, or otherwise significant habitats 
that might be affected by the proposed action. Describe typical species 
that have commercial, recreational, or aesthetic value.
    (3) Describe and provide the affected acreage of vegetation cover 
types that would be affected, including unique ecosystems or communities 
such as remnant prairie or old-growth forest, or significant individual 
plants, such as old-growth specimen trees.
    (4) Describe the impact of construction and operation on aquatic and 
terrestrial species and their habitats, including the possibility of a 
major alteration to ecosystems or biodiversity, and any potential impact 
on State-listed endangered or threatened species. Describe the impact of 
maintenance, clearing and treatment of the project area on fish, 
wildlife, and vegetation. Surveys may be required to determine specific 
areas of significant habitats or communities of species of special 
concern to State, Tribal, or local agencies.

[[Page 1106]]

    (5) Identify all Federally-listed or proposed threatened or 
endangered species and critical habitat that potentially occur in the 
vicinity of the project. Discuss the results of the consultation 
requirements listed in Sec. 380.13(b) through Sec. 380.13(b)(5)(i) and 
include any written correspondence that resulted from the consultation. 
The initial application must include the results of any required surveys 
unless seasonal considerations make this impractical. If species surveys 
are impractical, there must be field surveys to determine the presence 
of suitable habitat unless the entire project area is suitable habitat.
    (6) Identify all Federally-listed essential fish habitat (EFH) that 
potentially occurs in the vicinity of the project. Provide information 
on all EFH, as identified by the pertinent Federal fishery management 
plans, that may be adversely affected by the project and the results of 
abbreviated consultations with NMFS, and any resulting EFH assessments.
    (7) Describe site-specific mitigation measures to minimize impacts 
on fisheries, wildlife, and vegetation.
    (8) Include copies of correspondence not provided under paragraph 
(e)(5) of this section, containing recommendations from appropriate 
Federal and State fish and wildlife agencies to avoid or limit impact on 
wildlife, fisheries, and vegetation, and the applicant's response to the 
recommendations.
    (f) Resource Report 4--Cultural resources. In order to prepare this 
report, the applicant must follow the principles in Sec. 380.14.
    (1) Resource Report 4 must contain:
    (i) Documentation of the applicant's initial cultural resources 
consultations, including consultations with Native Americans and other 
interested persons (if appropriate);
    (ii) Overview and Survey Reports, as appropriate;
    (iii) Evaluation Report, as appropriate;
    (iv) Treatment Plan, as appropriate; and
    (v) Written comments from State Historic Preservation Officer(s) 
(SHPO), Tribal Historic Preservation Officers (THPO), as appropriate, 
and applicable land-managing agencies on the reports in paragraphs 
(f)(1)(i) through (iv) of this section.
    (2) The initial application or pre-filing documents, as applicable, 
must include the documentation of initial cultural resource 
consultation(s), the Overview and Survey Reports, if required, and 
written comments from SHPOs, THPOs, and land-managing agencies, if 
available. The initial cultural resources consultations should establish 
the need for surveys. If surveys are deemed necessary by the 
consultation with the SHPO/THPO, the survey reports must be filed with 
the initial application or pre-filing documents.
    (i) If the comments of the SHPOs, THPOs, or land-management agencies 
are not available at the time the application is filed, they may be 
filed separately, but they must be filed before a permit is issued.
    (ii) If landowners deny access to private property and certain areas 
are not surveyed, the unsurveyed area must be identified by mileposts, 
and supplemental surveys or evaluations must be conducted after access 
is granted. In those circumstances, reports, and treatment plans, if 
necessary, for those inaccessible lands may be filed after a permit is 
issued.
    (3) The Evaluation Report and Treatment Plan, if required, for the 
entire project must be filed before a permit is issued.
    (i) In preparing the Treatment Plan, the applicant must consult with 
the Commission staff, the SHPO, and any applicable THPO and land-
management agencies.
    (ii) Authorization to implement the Treatment Plan will occur only 
after the permit is issued.
    (4) Applicant must request privileged treatment for all material 
filed with the Commission containing location, character, and ownership 
information about cultural resources in accordance with Sec. 388.112 of 
this chapter. The cover and relevant pages or portions of the report 
should be clearly labeled in bold lettering: ``CONTAINS PRIVILEGED 
INFORMATION--DO NOT RELEASE.''
    (5) Except as specified in a final Commission order, or by the 
Director of the Office of Energy Projects, construction

[[Page 1107]]

may not begin until all cultural resource reports and plans have been 
approved.
    (g) Resource Report 5--Socioeconomics. This report must identify and 
quantify the impacts of constructing and operating the proposed project 
on factors affecting towns and counties in the vicinity of the project. 
Resource Report 5 must:
    (1) Describe the socioeconomic impact area.
    (2) Evaluate the impact of any substantial immigration of people on 
governmental facilities and services and plans to reduce the impact on 
the local infrastructure.
    (3) Describe on-site manpower requirements and payroll during 
construction and operation, including the number of construction 
personnel who currently reside within the impact area, will commute 
daily to the site from outside the impact area, or will relocate 
temporarily within the impact area.
    (4) Determine whether existing housing within the impact area is 
sufficient to meet the needs of the additional population.
    (5) Describe the number and types of residences and businesses that 
will be displaced by the project, procedures to be used to acquire these 
properties, and types and amounts of relocation assistance payments.
    (6) Conduct a fiscal impact analysis evaluating incremental local 
government expenditures in relation to incremental local government 
revenues that will result from construction of the project. Incremental 
expenditures include, but are not limited to, school operating costs, 
road maintenance and repair, public safety, and public utility costs.
    (h) Resource Report 6--Geological resources. This report must 
describe geological resources and hazards in the project area that might 
be directly or indirectly affected by the proposed action or that could 
place the proposed facilities at risk, the potential effects of those 
hazards on the facility, and methods proposed to reduce the effects or 
risks. Resource Report 6 must:
    (1) Describe, by milepost, mineral resources that are currently or 
potentially exploitable.
    (2) Describe, by milepost, existing and potential geological hazards 
and areas of nonroutine geotechnical concern, such as high seismicity 
areas, active faults, and areas susceptible to soil liquefaction; 
planned, active, and abandoned mines; karst terrain; and areas of 
potential ground failure, such as subsidence, slumping, and landsliding. 
Discuss the hazards posed to the facility from each one.
    (3) Describe how the project will be located or designed to avoid or 
minimize adverse effects to the resources or risk to itself, including 
geotechnical investigations and monitoring that would be conducted 
before, during, and after construction. Discuss also the potential for 
blasting to affect structures, and the measures to be taken to remedy 
such effects.
    (4) Specify methods to be used to prevent project-induced 
contamination from surface mines or from mine tailings along the right-
of-way and whether the project would hinder mine reclamation or 
expansion efforts.
    (i) Resource Report 7--Soils. This report must describe the soils 
that will be affected by the proposed project, the effect on those 
soils, and measures proposed to minimize or avoid impact. Resource 
Report 7 must:
    (1) List, by milepost, the soil associations that would be crossed 
and describe the erosion potential, fertility, and drainage 
characteristics of each association.
    (2) Identify, by milepost, potential impact from: Soil erosion due 
to water, wind, or loss of vegetation; soil compaction and damage to 
soil structure resulting from movement of construction vehicles; wet 
soils and soils with poor drainage that are especially prone to 
structural damage; damage to drainage tile systems due to movement of 
construction vehicles and trenching activities; and interference with 
the operation of agricultural equipment due to the possibility of large 
stones or blasted rock occurring on or near the surface as a result of 
construction.
    (3) Identify, by milepost, cropland, and residential areas where 
loss of soil fertility due to construction activity can occur. Indicate 
which are classified as prime or unique farmland by the

[[Page 1108]]

U.S. Department of Agriculture, Natural Resources Conservation Service.
    (j) Resource Report 8--Land use, recreation, and aesthetics. This 
report must describe the existing uses of land on, and (where specified) 
within 0.25 mile of, the edge of the proposed transmission line right-
of-way and changes to those land uses that will occur if the project is 
approved. The report must discuss proposed mitigation measures, 
including protection and enhancement of existing land use. Resource 
Report 8 must:
    (1) Describe the width and acreage requirements of all construction 
and permanent rights-of-way required for project construction, operation 
and maintenance.
    (i) List, by milepost, locations where the proposed right-of-way 
would be adjacent to existing rights-of-way of any kind.
    (ii) Identify, preferably by diagrams, existing rights-of-way that 
will be used for a portion of the construction or operational right-of-
way, the overlap and how much additional width will be required.
    (iii) Identify the total amount of land to be purchased or leased 
for each project facility, the amount of land that would be disturbed 
for construction, operation, and maintenance of the facility, and the 
use of the remaining land not required for project operation and 
maintenance, if any.
    (iv) Identify the size of typical staging areas and expanded work 
areas, such as those at railroad, road, and waterbody crossings, and the 
size and location of all construction materials storage yards and access 
roads.
    (2) Identify, by milepost, the existing use of lands crossed by the 
proposed transmission facility, or on or adjacent to each proposed 
project facility.
    (3) Describe planned development on land crossed or within 0.25 mile 
of proposed facilities, the time frame (if available) for such 
development, and proposed coordination to minimize impacts on land use. 
Planned development means development which is included in a master plan 
or is on file with the local planning board or the county.
    (4) Identify, by milepost and length of crossing, the area of direct 
effect of each proposed facility and operational site on sugar maple 
stands, orchards and nurseries, landfills, operating mines, hazardous 
waste sites, wild and scenic rivers, designated trails, nature 
preserves, game management areas, remnant prairie, old-growth forest, 
national or State forests, parks, golf courses, designated natural, 
recreational or scenic areas, or registered natural landmarks, Native 
American religious sites and traditional cultural properties to the 
extent they are known to the public at large, and reservations, lands 
identified under the Special Area Management Plan of the Office of 
Coastal Zone Management, National Oceanic and Atmospheric 
Administration, and lands owned or controlled by Federal or State 
agencies or private preservation groups. Also identify if any of those 
areas are located within 0.25 mile of any proposed facility.
    (5) Tribal resources. Describe Indian tribes, tribal lands, and 
interests that may be affected by the project.
    (i) Identify Indian tribes that may attach religious and cultural 
significance to historic properties within the project right-of-way or 
in the project vicinity, as well as available information on Indian 
traditional cultural and religious properties, whether on or off of any 
Federally-recognized Indian reservation.
    (ii) Information made available under this section must delete 
specific site or property locations, the disclosure of which will create 
a risk of harm, theft, or destruction of archaeological or Native 
American cultural resources or to the site at which the resources are 
located, or which would violate any Federal law, including the 
Archaeological Resources Protection Act of 1979, 16 U.S.C. 470w-3, and 
the National Historic Preservation Act of 1966, 16 U.S.C. 470hh.
    (6) Identify, by milepost, all residences and buildings within 200 
feet of the edge of the proposed transmission line construction right-
of-way and the distance of the residence or building from the edge of 
the right-of-way. Provide survey drawings or alignment sheets to 
illustrate the location of the transmission facilities in relation to 
the buildings.

[[Page 1109]]

    (i) Buildings: List all single-family and multi-family dwellings and 
related structures, mobile homes, apartment buildings, commercial 
structures, industrial structures, business structures, churches, 
hospitals, nursing homes, schools, or other structures normally 
inhabited by humans or intended to be inhabited by humans on a daily or 
regular basis within a 0.5-mile-wide corridor centered on the proposed 
transmission line alignment. Provide a general description of each 
habitable structure and its distance from the centerline of the proposed 
project. In cities, towns, or rural subdivisions, houses can be 
identified in groups. Provide the number of habitable structures in each 
group and list the distance from the centerline to the closest habitable 
structure in the group.
    (ii) Electronic installations: List all commercial AM radio 
Transmitters located within 10,000 feet of the centerline of the 
proposed project and all FM radio transmitters, microwave relay 
stations, or other similar electronic installations located within 2,000 
feet of the centerline of the proposed project. Provide a general 
description of each installation and its distance from the centerline of 
the projects. Locate all installations on a routing map.
    (iii) Airstrips: List all known private airstrips within 10,000 feet 
of the centerline of the project. List all airports registered with the 
Federal Aviation Administration (FAA) with at least one runway more than 
3,200 feet in length that are located within 20,000 feet of the 
centerline of the proposed project. Indicate whether any transmission 
structures will exceed a 100:1 horizontal slope (one foot in height for 
each 100 feet in distance) from the closest point of the closest runway. 
List all airports registered with the FAA having no runway more than 
3,200 feet in length that are located within 10,000 feet of the 
centerline of the proposed project. Indicate whether any transmission 
structures will exceed a 50:1 horizontal slope from the closest point of 
the closest runway. List all heliports located within 5,000 feet of the 
centerline of the proposed project. Indicate whether any transmission 
structures will exceed a 25:1 horizontal slope from the closest point of 
the closest landing and takeoff area of the heliport. Provide a general 
description of each private airstrip, registered airport, and registered 
heliport, and state the distance of each from the centerline of the 
proposed transmission line. Locate all airstrips, airports, and 
heliports on a routing map.
    (7) Describe any areas crossed by or within 0.25 mile of the 
proposed transmission project facilities which are included in, or are 
designated for study for inclusion in: The National Wild and Scenic 
Rivers System (16 U.S.C. 1271); The National Trails System (16 U.S.C. 
1241); or a wilderness area designated under the Wilderness Act (16 
U.S.C. 1132).
    (8) For facilities within a designated coastal zone management area, 
provide a consistency determination or evidence that the applicant has 
requested a consistency determination from the State's coastal zone 
management program.
    (9) Describe the impact the project will have on present uses of the 
affected areas as identified above, including commercial uses, mineral 
resources, recreational areas, public health and safety, and the 
aesthetic value of the land and its features. Describe any temporary or 
permanent restrictions on land use resulting from the project.
    (10) Describe mitigation measures intended for all special use areas 
identified under this section.
    (11) Describe the visual characteristics of the lands and waters 
affected by the project. Components of this description include a 
description of how the transmission line project facilities will impact 
the visual character of project right-of-way and surrounding vicinity, 
and measures proposed to lessen these impacts. Applicants are encouraged 
to supplement the text description with visual aids.
    (12) Demonstrate that applications for rights-of-way or other 
proposed land use have been or soon will be filed with Federal land-
management agencies with jurisdiction over land that would be affected 
by the project.
    (k) Resource Report 9--Alternatives. This report must describe 
alternatives to the project and compare the environmental impacts of 
such alternatives

[[Page 1110]]

to those of the proposal. It must discuss technological and procedural 
constraints, costs, and benefits of each alternative. The potential for 
each alternative to meet project purposes and the environmental 
consequences of each alternative must be discussed. Resource Report 9 
must:
    (1) Discuss the ``no action'' alternative and other alternatives 
given serious consideration to achieve the proposed objectives.
    (2) Provide an analysis of the relative environmental benefits and 
impacts of each such alternative, including but not limited to:
    (i) For alternatives considered in the initial screening for the 
project but eliminated, describe the environmental characteristics of 
each alternative, and the reasons for rejecting it. Where applicable, 
identify the location of such alternatives on maps of sufficient scale 
to depict their location and relationship to the proposed action, and 
the relationship of the transmission facilities to existing rights-of-
way; and
    (ii) For alternatives that were given more in-depth consideration, 
describe the environmental characteristics of each alternative and the 
reasons for rejecting it. Provide comparative tables showing the 
differences in environmental characteristics for the alternative and 
proposed action. The location, where applicable, of any alternatives in 
this paragraph shall be provided on maps equivalent to those required in 
paragraph (c)(2) of this section.
    (l) Resource Report 10--Reliability and Safety. This report must 
address the potential hazard to the public from facility components 
resulting from accidents or natural catastrophes, how these events will 
affect reliability, and what procedures and design features have been 
used to reduce potential hazards. Resource Report 10 must:
    (1) Describe measures proposed to protect the public from failure of 
the proposed facilities (including coordination with local agencies).
    (2) Discuss hazards, the environmental impact, and service 
interruptions which could reasonably ensue from failure of the proposed 
facilities.
    (3) Discuss design and operational measures to avoid or reduce risk.
    (4) Discuss contingency plans for maintaining service or reducing 
downtime.
    (5) Describe measures used to exclude the public from hazardous 
areas. Discuss measures used to minimize problems arising from 
malfunctions and accidents (with estimates of probability of occurrence) 
and identify standard procedures for protecting services and public 
safety during maintenance and breakdowns.
    (6) Provide a description of the electromagnetic fields to be 
generated by the proposed transmission lines, including their strength 
and extent. Provide a depiction of the expected field compared to 
distance horizontally along the right-of-way under the conductors, and 
perpendicular to the centerline of the right-of-way laterally.
    (7) Discuss the potential for acoustic and electrical noise from 
electric and magnetic fields, including shadowing and reradiation, as 
they may affect health or communication systems along the transmission 
right-of-way. Indicate the noise level generated by the line in both dB 
and dBA scales and compare this to any known noise ordinances for the 
zoning districts through which the transmission line will pass.
    (8) Discuss the potential for induced or conducted currents along 
the transmission right-of-way from electric and magnetic fields.
    (m) Resource Report 11--Design and Engineering. This report consists 
of general design and engineering drawings of the principal project 
facilities described under Resource Report 1--General project 
description. If the version of this report submitted with the 
application is preliminary in nature, applicant must state that in the 
application. The drawings must conform to the specifications determined 
in the initial consultation meeting required by Sec. 50.5(b) of this 
chapter.
    (1) The drawings must show all major project structures in 
sufficient detail to provide a full understanding of the project 
including:
    (i) Plans (overhead view);
    (ii) Elevations (front view);
    (iii) Profiles (side view); and
    (iv) Sections.
    (2) The applicant may submit preliminary design drawings with the 
pre-

[[Page 1111]]

filing documents or application. The final design drawings may be 
submitted during the construction permit process or after the Commission 
issues a permit and must show the precise plans and specifications for 
proposed structures. If a permit is granted on the basis of preliminary 
designs, the applicant must submit final design drawings for written 
approval by the Director of the Office of Energy Project's prior to 
commencement of any construction of the project.
    (3) Supporting design report. The applicant must submit, at a 
minimum, the following supporting information to demonstrate that 
existing and proposed structures are safe and adequate to fulfill their 
stated functions and must submit such information in a separate report 
at the time the application is filed:
    (i) An assessment of the suitability of the transmission line towers 
and appurtenant structures locations based on geological and subsurface 
investigations, including investigations of soils and rock borings and 
tests for the evaluation of all foundations and construction materials 
sufficient to determine the location and type of transmission line tower 
or appurtenant structures suitable for the site;
    (ii) Copies of boring logs, geology reports, and laboratory test 
reports;
    (iii) An identification of all borrow areas and quarry sites and an 
estimate of required quantities of suitable construction material;
    (iv) Stability and stress analyses for all major transmission 
structures and conductors under all probable loading conditions, 
including seismic, wind, and ice loading, as appropriate, in sufficient 
detail to permit independent staff evaluation.
    (4) The applicant must submit two copies of the supporting design 
report described in paragraph (m)(3) of this section at the time 
preliminary and final design drawings are filed. If the report contains 
preliminary drawings, it must be designated a ``Preliminary Supporting 
Design Report.''

[Order 689, 71 FR 69471, Dec. 1, 2006]



      Sec. Appendix A to Part 380--Minimum Filing Requirements for 

             Environmental Reports Under the Natural Gas Act

            Environmental Reports Under the Natural Gas Act.

             Resource Report 1--General Project Description

    1. Provide a detailed description and location map of the project 
facilities. (Sec. 380.12(c)(1)).
    2. Describe any nonjurisdictional facilities that would be built in 
association with the project. (Sec. 380.12(c)(2)).
    3. Provide current original U.S. Geological Survey (USGS) 7.5-
minute-series topographic maps with mileposts showing the project 
facilities; (Sec. 380.12(c)(3)).
    4. Provide aerial images or photographs or alignment sheets based on 
these sources with mileposts showing the project facilities; (Sec. 
380.12(c)(3)).
    5. Provide plot/site plans of compressor stations showing the 
location of the nearest noise-sensitive areas (NSA) within 1 mile. 
(Sec. 380.12(c)(3,4)).
    6. Describe construction and restoration methods. (Sec. 
380.12(c)(6)).
    7. Identify the permits required for construction across surface 
waters. (Sec. 380.12(c)(9)).
    8. Provide the names and address of all affected landowners and 
certify that all affected landowners will be notified as required in 
Sec. 157.6(d). (Sec. Sec. 380.12(c)(10))

                Resource Report 2--Water Use and Quality

    1. Identify all perennial surface waterbodies crossed by the 
proposed project and their water quality classification. (Sec. 
380.12(d)(1)).
    2. Identify all waterbody crossings that may have contaminated 
waters or sediments. (Sec. 380.12(d)(1)).
    3. Identify watershed areas, designated surface water protection 
areas, and sensitive waterbodies crossed by the proposed project. (Sec. 
380.12(d)(1)).
    4. Provide a table (based on NWI maps if delineations have not been 
done) identifying all wetlands, by milepost and length, crossed by the 
project (including abandoned pipeline), and the total acreage and 
acreage of each wetland type that would be affected by construction. 
(Sec. 380.12(d)(1 & 4)).
    5. Discuss construction and restoration methods proposed for 
crossing wetlands, and compare them to staff's Wetland and Waterbody 
Construction and Mitigation Procedures; (Sec. 380.12(d)(2)).
    6. Describe the proposed waterbody construction, impact mitigation, 
and restoration methods to be used to cross surface waters and compare 
to the staff's Wetland

[[Page 1112]]

and Waterbody Construction and Mitigation Procedures. (Sec. 
380.12(d)(2)).
    7. Provide original National Wetlands Inventory (NWI) maps or the 
appropriate state wetland maps, if NWI maps are not available, that show 
all proposed facilities and include milepost locations for proposed 
pipeline routes. (Sec. 380.12(d)(4)).
    8. Identify all U.S. Environmental Protection Agency (EPA)- or 
state- designated aquifers crossed. (Sec. 380.12(d)(9)).

               Resource Report 3--Vegetation and Wildlife

    1. Classify the fishery type of each surface waterbody that would be 
crossed, including fisheries of special concern. (Sec. 380.12(e)(1)).
    2. Describe terrestrial and wetland wildlife and habitats that would 
be affected by the project. (Sec. 380.12(e)(2)).
    3. Describe the major vegetative cover types that would be crossed 
and provide the acreage of each vegetative cover type that would be 
affected by construction. (Sec. 380.12(e)(3)).
    4. Describe the effects of construction and operation procedures on 
the fishery resources and proposed mitigation measures. (Sec. 
380.12(e)(4)).
    5. Evaluate the potential for short-term, long-term, and permanent 
impact on the wildlife resources and state-listed endangered or 
threatened species caused by construction and operation of the project 
and proposed mitigation measures. (Sec. 380.12(e)(4)).
    6. Identify all federally listed or proposed endangered or 
threatened species that potentially occur in the vicinity of the project 
and discuss the results of the consultations with other agencies. 
Include survey reports as specified in Sec. 380.12(e)(5).
    7. Identify all federally listed essential fish habitat (EFH) that 
potentially occurs in the vicinity of the project and the results of 
abbreviated consultations with NMFS, and any resulting EFH assessments. 
(Sec. 380.12(e)(6))
    8. Describe any significant biological resources that would be 
affected. Describe impact and any mitigation proposed to avoid or 
minimize that impact. (Sec. Sec. 380.12(e)(4 & 7))

                  Resource Report 4--Cultural Resources

    See Sec. 380.14 and ``OPR's Guidelines for Reporting on Cultural 
Resources Investigations'' for further guidance.
    1. Initial cultural resources consultation and documentation, and 
documentation of consultation with Native Americans. (Sec. 
380.12(f)(1)(i) & (2)).
    2. Overview/Survey Report(s). (Sec. 380.12(f)(1)(ii) & (2)).

                    Resource Report 5--Socioeconomics

    1. For major aboveground facilities and major pipeline projects that 
require an EIS, describe existing socioeconomic conditions within the 
project area. (Sec. 380.12(g)(1)).
    2. For major aboveground facilities, quantify impact on employment, 
housing, local government services, local tax revenues, transportation, 
and other relevant factors within the project area. (Sec. 380.12(g)(2-
6)).

                 Resource Report 6--Geological Resources

    1. Identify the location (by milepost) of mineral resources and any 
planned or active surface mines crossed by the proposed facilities. 
(Sec. 380.12(h)(1 & 2)).
    2. Identify any geologic hazards to the proposed facilities. (Sec. 
380.12(h)(2))
    3. Discuss the need for and locations where blasting may be 
necessary in order to construct the proposed facilities. (Sec. 
380.12(h)(3))
    4. For LNG projects in seismic areas, the materials required by 
``Data Requirements for the Seismic Review of LNG Facilities,'' NBSIR84-
2833. (Sec. 380.12(h)(5))
    5. For underground storage facilities, how drilling activity by 
others within or adjacent to the facilities would be monitored, and how 
old wells would be located and monitored within the facility boundaries. 
(Sec. 380.12(h)(6))

                        Resource Report 7--Soils

    1. Identify, describe, and group by milepost the soils affected by 
the proposed pipeline and aboveground facilities. (Sec. 380.12(i)(1))
    2. For aboveground facilities that would occupy sites over 5 acres, 
determine the acreage of prime farmland soils that would be affected by 
construction and operation. (Sec. 380.12(i)(2))
    3. Describe, by milepost, potential impacts on soils. (Sec. 
380.12(i)(3,4))
    4. Identify proposed mitigation to minimize impact on soils, and 
compare with the staff's Upland Erosion Control, Revegetation, and 
Maintenance Plan. (Sec. 380.12(i)(5))

         Resource Report 8--Land Use, Recreation and Aesthetics

    1. Classify and quantify land use affected by: (Sec. 380.12(j)(1))
    a. Pipeline construction and permanent rights-of-way (Sec. 
380.12(j)(1));
    b. Extra work/staging areas (Sec. 380.12(j)(1));
    c. Access roads (Sec. 380.12(j)(1));
    d. Pipe and contractor yards (Sec. 380.12(j)(1)); and
    e. Aboveground facilities (Sec. 380.12(j)(1)).
    2. Identify by milepost all locations where the pipeline right-of-
way would at least partially coincide with existing right-of-way, where 
it would be adjacent to existing rights-of-way, and where it would be 
outside of existing right-of-way. (Sec. 380.12(j)(1))
    3. Provide detailed typical construction right-of-way cross-section 
diagrams showing information such as widths and relative locations of 
existing rights-of-way, new permanent right-of-way, and temporary 
construction right-of-way. (Sec. 380.12(j)(1))

[[Page 1113]]

    4. Summarize the total acreage of land affected by construction and 
operation of the project. (Sec. 380.12(j)(1))
    5. Identify by milepost all planned residential or commercial/
business development and the time frame for construction. (Sec. 
380.12(j)(3))
    6. Identify by milepost special land uses (e.g., sugar maple stands, 
specialty crops, natural areas, national and state forests, conservation 
land, etc.). (Sec. 380.12(j)(4))
    7. Identify by beginning milepost and length of crossing all land 
administered by Federal, state, or local agencies, or private 
conservation organizations. (Sec. 380.12(j)(4))
    8. Identify by milepost all natural, recreational, or scenic areas, 
and all registered natural landmarks crossed by the project. (Sec. 
380.12(j)(4 & 6))
    9. Identify all facilities that would be within designated coastal 
zone management areas. Provide a consistency determination or evidence 
that a request for a consistency determination has been filed with the 
appropriate state agency. ((Sec. 380.12(j)(4 & 7))
    10. Identify by milepost all residences that would be within 50 feet 
of the construction right-of-way or extra work area. (Sec. 
380.12(j)(5))
    11. Identify all designated or proposed candidate National or State 
Wild and Scenic Rivers crossed by the project. (Sec. 380.12(j)(6))
    12. Describe any measures to visually screen aboveground facilities, 
such as compressor stations. (Sec. 380.12(j)(11))
    13. Demonstrate that applications for rights-of-way or other 
proposed land use have been or soon will be filed with Federal land-
managing agencies with jurisdiction over land that would be affected by 
the project. (Sec. 380.12(j)(12))

                Resource Report 9--Air and Noise Quality

    1. Describe existing air quality in the vicinity of the project. 
(Sec. 380.12(k)(1))
    2. Quantify the existing noise levels (day-night sound level 
(Ldn) and other applicable noise parameters) at noise-
sensitive areas and at other areas covered by relevant state and local 
noise ordinances. (Sec. 380.12(k)(2))
    3. Quantify existing and proposed emissions of compressor equipment, 
plus construction emissions, including nitrogen oxides (NOX) 
and carbon monoxide (CO), and the basis for these calculations. 
Summarize anticipated air quality impacts for the project. (Sec. 
380.12(k)(3))
    4. Describe the existing compressor units at each station where new, 
additional, or modified compressor units are proposed, including the 
manufacturer, model number, and horsepower of the compressor units. For 
proposed new, additional, or modified compressor units include the 
horsepower, type, and energy source. (Sec. 380.12(k)(4)).
    5. Identify any nearby noise-sensitive area by distance and 
direction from the proposed compressor unit building/enclosure. (Sec. 
380.12(k)(4))
    6. Identify any applicable state or local noise regulations. (Sec. 
380.12(k)(4))
    7. Calculate the noise impact at noise-sensitive areas of the 
proposed compressor unit modifications or additions, specifying how the 
impact was calculated, including manufacturer's data and proposed noise 
control equipment. (Sec. 380.12(k)(4))

                    Resource Report 10--Alternatives

    1. Address the ``no action'' alternative. (Sec. 380.12(l)(1))
    2. For large projects, address the effect of energy conservation or 
energy alternatives to the project. (Sec. 380.12(l)(1))
    3. Identify system alternatives considered during the identification 
of the project and provide the rationale for rejecting each alternative. 
(Sec. 380.12(l)(1))
    4. Identify major and minor route alternatives considered to avoid 
impact on sensitive environmental areas (e.g., wetlands, parks, or 
residences) and provide sufficient comparative data to justify the 
selection of the proposed route. (Sec. 380.12(l)(2)(ii))
    5. Identify alternative sites considered for the location of major 
new aboveground facilities and provide sufficient comparative data to 
justify the selection of the proposed site. (Sec. 380.12(l)(2)(ii))

               Resource Report 11--Reliability and Safety

    Describe how the project facilities would be designed, constructed, 
operated, and maintained to minimize potential hazard to the public from 
the failure of project components as a result of accidents or natural 
catastrophes. (Sec. 380.12(m))

                  Resource Report 12--PCB Contamination

    1. For projects involving the replacement or abandonment of 
facilities determined to have PCBs, provide a statement that activities 
would comply with an approved EPA disposal permit or with the 
requirements of the TSCA. (Sec. 380.12(n)(1))
    2. For compressor station modifications on sites that have been 
determined to have soils contaminated with PCBs, describe the status of 
remediation efforts completed to date. (Sec. 380.12(n)(2))

    Resource Report 13--Additional Information Related to LNG Plants

    Provide all the listed detailed engineering materials. (Sec. 
380.12(o))

[Order 603, 64 FR 26619, May 14, 1999, as amended by Order 603-A, 64 FR 
54537, Oct. 7, 1999; Order 609, 64 FR 57392, Oct. 25, 1999; Order 609-A, 
65 FR 15238, Mar. 22, 2000]

[[Page 1114]]



PART 381_FEES--Table of Contents



                      Subpart A_General Provisions

Sec.
381.101 Purpose.
381.102 Definitions.
381.103 Filings.
381.104 Annual adjustment of fees.
381.105 Method of payment.
381.106 Waivers.
381.107 Direct billing.
381.108 Exemptions.
381.109 Refunds.
381.110 Fees for substantial amendments.

Subpart B_Fees Applicable to the Natural Gas Act and Related Authorities

381.207 Pipeline certificate applications.

             Subpart C_Fees Applicable to General Activities

381.302 Petition for issuance of a declaratory order (except under Part 
          I of the Federal Power Act).
381.303 Review of a Department of Energy remedial order.
381.304 Review of Department of Energy denial of adjustment.
381.305 Interpretations by the Office of the General Counsel.

     Subpart D_Fees Applicable to the Natural Gas Policy Act of 1978

381.401 Review of jurisdictional agency determinations.
381.403 Petitions for rate approval pursuant to Sec. 284.123(b)(2).
381.404 [Reserved]

 Subpart E_Fees Applicable to Certain Matters Under Parts II and III of 
  the Federal Power Act and the Public Utility Regulatory Policies Act

381.501 Applicability.
381.505 Certification of qualifying status as a small power production 
          facility or cogeneration facility.

Subpart F [Reserved]

Subpart G--Fees Applicable to the Interstate Commerce Act and Related 
Authorities [Reserved]

    Authority: 15 U.S.C. 717-717w; 16 U.S.C. 791-828c, 2601-2645; 31 
U.S.C. 9701; 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C. 1-85.

    Source: Order 360, 49 FR 5081, Feb. 10, 1984, unless otherwise 
noted.



                      Subpart A_General Provisions



Sec. 381.101  Purpose.

    The purpose of this part is to set forth the fees charged by the 
Commission for services and benefits provided by the Commission.



Sec. 381.102  Definitions.

    For purposes of this part, the following definitions apply.
    (a) Person means any person, group, association, organization, 
partnership, corporation, or business, except those authorized to engage 
in the transaction of official business for the United States 
Government.
    (b) Work year cost means the ratio of the Commission's budgeted 
expenses during any given fiscal year to the authorized staff level for 
that fiscal year.
    (c) Work-month means the amount of work represented by one 
employee's devotion of 100 percent of his or her time for one month.
    (d) Filing means any application, tariff or rate filing, 
intervention, complaint, petition, request, or motion submitted to the 
Commission in connection with any of the services or benefits for which 
a fee is established in this part.



Sec. 381.103  Filings.

    (a) Submittal of fees. Except as provided in Sec. Sec. 274.201(e) 
and 381.106, a fee in the amount set forth in this part shall accompany 
each filing for which a fee has been established.
    (b) Deficiencies. (1) Any filing that is not accompanied by either 
the fee established for that filing or a petition for waiver in 
accordance with Sec. 381.106(b) is deficient.
    (2) The Secretary will inform any person submitting a deficient 
filing that:
    (i) Such filing will be rejected unless the appropriate fee is 
submitted within a time specified by the Secretary;
    (ii) The Commission will not process any filing that is deficient 
under this paragraph; and
    (iii) The date of filing is the date on which the Commission 
receives the appropriate fee.
    (3) This provision does not preclude a determination that a filing 
is deficient for any other reason.

[[Page 1115]]

    (c) Choice of two or more fees. If a filing for one service or 
benefit may be considered as falling within two or more categories or 
services for which a fee is established, that filing must be accompanied 
by the higher or highest of the applicable fees.

[Order 360, 49 FR 5081, Feb. 10, 1984, as amended by Order 394, 49 FR 
35365, Sept. 7, 1984]



Sec. 381.104  Annual adjustment of fees.

    (a) Update and publication. The Commission, by its designee the 
Executive Director, will update its fees each fiscal year according to 
the formula in paragraph (c) of this section. The Executive Director 
will publish the fees in the Federal Register.
    (b) Payment of updated fees. Any person who submits a filing for 
which a fee is established in this part must pay the currently effective 
fee unless a waiver is granted.
    (c) Formula. (1) Except as provided in paragraph (c)(2) of this 
section, the formula for determining each fee is the work months 
dedicated to the given fee category for the six fiscal years 1987 
through 1992 or all years prior to FY 93 for which data are available 
divided by the number of actual completions in the six fiscal years 1987 
through 1992 or all years prior to FY 93 for which data are available 
multiplied by the average monthly employee cost in the most recent 
fiscal year for which data are available.
    (2) With respect to the fees charged to pipelines filing pursuant to 
Sec. 381.207(a), the fee for the first year will be $1,000. The formula 
for the fee in future years will be the work months from the immediately 
prior year divided by the number of actual completions in that year 
multiplied by the average monthly employee cost in the most recent 
fiscal year for which data are available. With the addition of future 
years, the formula for Sec. 381.207(a) fees will be updated to include 
that year as part of the base period.
    (d) Effective date of fee. Any fee updated under this section is 
effective on the thirtieth day after publication in the Federal Register 
of the revised sections in this part, unless otherwise specified in the 
Federal Register notice.

[Order 360, 49 FR 5081, Feb. 10, 1984, as amended by Order 494, 53 FR 
15382, Apr. 29, 1988; Order 521, 55 FR 12171, Apr. 2, 1990; 58 FR 2975, 
Jan. 7, 1993]



Sec. 381.105  Method of payment.

    Fee payment shall be made by check or money order payable to the 
Treasurer of the United States. The check should state the nature of the 
filing and the docket number where applicable so that the fee category 
for which the check is being submitted is clearly identifiable.



Sec. 381.106  Waivers.

    (a) Filing of petition. If an applicant is suffering from severe 
economic hardship at the time of filing an application which makes the 
applicant economically unable to pay the appropriate fee for the 
application, rate change, tariff, petition, request or other filing 
requiring a fee, the applicant may submit an original and two copies of 
a petition for waiver with the application in lieu of the applicable 
fee. The petition for waiver must include evidence, such as a financial 
statement, clearly showing either that the applicant does not have the 
money to pay all or part of the fee, or that if the applicant does pay 
the fee, the applicant will be placed in financial distress or 
emergency.
    (b) Decision on petition. The Commission or its designee will 
analyze each petition to determine whether the applicant has met the 
standards for waiver and then will notify the applicant of its grant or 
denial, in whole or in part. If the petition is denied, the applicant 
will have 30 days from the date of notification of the denial to submit 
the appropriate fee to the Commission.

[Order 360, 49 FR 5081, Feb. 10, 1984, as amended by Order 395, 49 FR 
35356, Sept. 7, 1984]



Sec. 381.107  Direct billing.

    (a) Applicability. If a filing presents an issue of fact, law, 
policy, procedural difficulty, or technical complexity that requires an 
extraordinary amount of expense to process, the Commission may institute 
a direct billing procedure for the direct and indirect costs of 
processing that filing. The Commission

[[Page 1116]]

will make a direct billing determination under this paragraph not later 
than one year after receiving a complete filing from an applicant.
    (b) Procedures. (1) Direct billing will not be instituted with 
respect to any filing until the person who submitted the filing is 
notified that direct billing will be applied to the filing in lieu of 
the fees established under this part.
    (2) Any fee submitted with the filing will be applied, as a credit, 
to the amount billed directly for processing costs. The Secretary will 
thereafter periodically bill the person who submitted the filing for the 
actual direct and indirect costs of processing the filing.
    (3) If the Commission institutes a direct billing for the costs of a 
hearing and reduces the fee to the applicant to less than full cost 
recovery due to the presence of intervenors, the Commission will 
consider, on a case-by-case basis, direct billing the intervenors for 
all or part of the reduced portion.

[Order 360, 49 FR 5081, Feb. 10, 1984, as amended by Order 433, 50 FR 
40346, Oct. 3, 1985; 58 FR 2975, Jan. 7, 1993]



Sec. 381.108  Exemptions.

    (a) Filing of petition. States, municipalities and anyone who is 
engaged in the official business of the Federal Government are exempt 
from the fees required by this part and may file a petition for 
exemption in lieu of the applicable fee.
    (b) Decision on petition. A petitioner may claim this exemption by 
filing an original and two copies of a petition for exemption that 
includes evidence that the petitioner is a State or municipality, or is 
engaged in the official business of the Federal Government. The 
Commission or its designee will analyze each petition to determine 
whether the petition has met the standards for exemption and will notify 
the petitioner whether it is granted or denied. If the petition is 
denied, the person will have thirty days from the date of notification 
of the denial to submit the appropriate fee to the Commission.

[Order 395, 49 FR 35356, Sept. 7, 1984]



Sec. 381.109  Refunds.

    Fees established under this part may be refunded only if the related 
filing is withdrawn within fifteen (15) days of the date of filing or, 
if applicable, before the filing is noticed in the Federal Register or, 
if the fee is inappropriately paid for a filing for which no fee is 
established. Fees paid in excess of the fees established under this part 
may be refunded to the extent of the amount paid in excess. To obtain a 
refund, the applicant must file a motion requesting refund with the 
Commission.

[Order 433, 50 FR 40346, Oct. 3, 1985, as amended by Order 433-A, 51 FR 
43607, Dec. 3, 1986]



Sec. 381.110  Fees for substantial amendments.

    Fees established under this part for any filing will also be 
charged, as appropriate, for any substantial amendment to a pending 
filing. An amendment is considered substantial if it changes the 
character, nature, or the magnitude of the proposed activity or rate in 
the pending filing. For purposes of this section, an application for a 
temporary certificate is not considered to be an amendment to a pending 
certificate application.

[Order 433-A, 51 FR 43607, Dec. 3, 1986]



Subpart B_Fees Applicable to the Natural Gas Act and Related Authorities



Sec. 381.207  Pipeline certificate applications.

    (a) Definition. For purposes of this section, ``pipeline certificate 
application'' means any application for authorization or exemption, any 
substantial amendment to such an application, and any application, other 
than an application for a temporary certificate, for authorization to 
amend an outstanding authorization or exemption, by any person, made 
pursuant to section 7(c) of the Natural Gas Act filed in accordance with 
Sec. 284.224 of this chapter.
    (b) Fee. Unless the Commission orders direct billing under Sec. 
381.107 or otherwise, the fee established for a blanket certificate 
application is

[[Page 1117]]

$1,000. The fee filed under this paragraph must be submitted in 
accordance with Sec. 284.224 of this chapter.
    (c) Effective date. Any pipeline certificate application filed with 
the Commission prior to November 4, 1985, is subject to the fees 
established by part 159 of this chapter to the extent that part 159 
applies to such an application.

[Order 433, 50 FR 40346, Oct. 3, 1985, as amended by Order 433-A, 51 FR 
43607, Dec. 3, 1986; 52 FR 10367, Apr. 1, 1987; 53 FR 15384, Apr. 29, 
1988; 54 FR 12901, Mar. 29, 1989; 55 FR 13901, Apr. 13, 1990; 56 FR 
15497, Apr. 17, 1991; 58 FR 2975, Jan. 7, 1993]



             Subpart C_Fees Applicable to General Activities



Sec. 381.302  Petition for issuance of a declaratory order (except under Part 

I of the Federal Power Act.)

    (a) Except as provided in paragraph (b) of this section, the fee 
established for filing a petition for issuance of a declaratory order 
under Sec. 385.207 of this chapter is $24,860. The fee must be 
submitted in accordance with subpart A of this part.
    (b) No fee is necessary to file a petition for issuance of a 
declaratory order that solely concerns the investigation, issuance, 
transfer, renewal, revocation, and enforcement of licenses and permits 
for the construction, operation, and maintenance of dams, water 
conduits, reservoirs, powerhouses, transmission lines, or other works 
for the development and improvement of navigation and for the 
development and utilization of power across, along, from, or in 
navigable waters under Part I of the Federal Power Act.
    (c) A person claiming the exemption provided in paragraph (b) of 
this section must file an original and two copies of a petition for 
exemption in lieu of a fee along with its petition for issuance of a 
declaratory order. The petition for exemption should summarize the 
issues raised in the petition for issuance of a declaratory order and 
explain why the exemption is applicable. The Commission or its designee 
will analyze each petition to determine whether the petition has met the 
standards for exemption and will notify the applicant whether it is 
granted or denied. If the petition is denied, the petitioner will have 
thirty days from the date of notification of the denial to submit the 
appropriate fee to the Commission.

[Order 395, 49 FR 35356, Sept. 7, 1984]

    Editorial Note: For Federal Register citations affecting Sec. 
381.302, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 381.303  Review of a Department of Energy remedial order.

    (a) Except as provided in Sec. 381.303(b), the fee established for 
an answer to a Department of Energy remedial order under subpart I of 
the Commission's Rules of Practice and Procedure, 18 CFR part 385, 
subpart I (1983), is $36,290. The fee must be submitted in accordance 
with subpart A of this part.
    (b) If the amount in controversy is below $30,000, then the fee to 
file a petition for review of a DOE remedial order is reduced as 
follows:

------------------------------------------------------------------------
                                                                    Fee
------------------------------------------------------------------------
Amount in controversy:
  $0 to $9,999...................................................   $100
  $10,000 to $29,999.............................................    600
------------------------------------------------------------------------

    (c) In order to qualify for the fees in paragraph (b) of this 
section, the check must be accompanied by an affidavit by the petitioner 
that states the amount in controversy.

[Order 395, 49 FR 35356, Sept. 7, 1984]

    Editorial Note: For Federal Register citations affecting Sec. 
381.303, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 381.304  Review of Department of Energy denial of adjustment.

    (a) Except as provided in Sec. 381.304(b), the fee established for 
filing a petition for review of a Department of Energy denial of an 
adjustment request under subpart J of the Commission's Rules of Practice 
and Procedure, 18 CFR part 385, subpart J (1983), is $19,030. The fee 
must be submitted in accordance with subpart A of this part.
    (b) If the amount in controversy is below $30,000, then the fee to 
file a petition for review of a DOE denial of an adjustment is reduced 
as follows:

[[Page 1118]]



------------------------------------------------------------------------
                                                                    Fee
------------------------------------------------------------------------
Amount in controversy:
  $0 to $9,999...................................................   $100
  $10,000 to $29,999.............................................    600
------------------------------------------------------------------------

    (c) In order to qualify for the fees in paragraph (b) of this 
section, the check must be accompanied by an affidavit by the petitioner 
that states the amount in controversy.

[Order 395, 49 FR 35356, Sept. 7, 1984]

    Editorial Note: For Federal Register citations affecting Sec. 
381.304, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 381.305  Interpretations by the Office of the General Counsel.

    (a) Except as provided in paragraph (b) of this section, the fee 
established for a written interpretation by the Office of the General 
Counsel of any statute or implementing regulation under the jurisdiction 
of the Commission is $7,130. The fee must be submitted in accordance 
with subpart A of this part and Sec. 385.1901 or Sec. 388.104 of this 
chapter.
    (b) No fee is necessary to file a request for a written 
interpretation by the Office of the General Counsel that solely concerns 
matters under Part I of the Federal Power Act.
    (c) A person claiming the exemption provided in paragraph (b) of 
this section must file an original and two copies of a petition for 
exemption in lieu of a fee along with the request for a written 
interpretation. The petition for exemption should summarize the issues 
raised in the request for a legal opinion and explain why the exemption 
is applicable. The Commission or its designee will analyze each petition 
to determine whether the petition has met the standards for exemption 
and will notify the applicant whether it is granted or denied. If the 
petition is denied, the applicant will have 30 days from the date of 
notification of the denial to submit the appropriate fee to the 
Commission.

[Order 494, 53 FR 15382, Apr. 29, 1988]

    Editorial Note: For Federal Register citations affecting Sec. 
381.305, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



     Subpart D_Fees Applicable to the Natural Gas Policy Act of 1978



Sec. 381.401  Review of jurisdictional agency determinations.

    The fee established for review of a jurisdictional agency 
determination is $115. The fee must be submitted in accordance with 
subpart A of this part and Sec. 270.301(c) of this chapter.

[Order 616, 65 FR 45872, July 26, 2000]



Sec. 381.403  Petitions for rate approval pursuant to Sec. 284.123(b)(2).

    The fee established for a petition for rate approval pursuant to 
Sec. 284.123(b)(2) is $12,370. Such fee must be submitted in accordance 
with subpart A of this part and Sec. 284.123(b)(2).

[Order 394, 49 FR 35365, Sept. 7, 1984]

    Editorial Note: For Federal Register citations affecting Sec. 
381.403, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 381.404  [Reserved]



 Subpart E_Fees Applicable to Certain Matters Under Parts II and III of 

  the Federal Power Act and the Public Utility Regulatory Policies Act



Sec. 381.501  Applicability.

    The fees set forth in this subpart apply to filings submitted on or 
after November 4, 1985.

[Order 435, 50 FR 40358, Oct. 3, 1985]



Sec. 381.505  Certification of qualifying status as a small power production 

facility or cogeneration facility.

    (a) Unless the Commission orders direct billing under Sec. 381.107 
of this chapter or otherwise, the fee established for an application for 
Commission certification as a qualifying small power production 
facility, as defined in section 3(17) of the Federal Power Act, is 
$21,380 and the fee established for an application for Commission 
certification as a qualifying cogeneration facility, as defined in 
section 3(18) of the Federal Power Act, is $24,200.
    (b) The fee filed under this section must be submitted in accordance 
with

[[Page 1119]]

subpart A of this part and Sec. 292.207(b)(2) of this chapter.

[Order 494, 53 FR 15382, Apr. 29, 1988]

    Editorial Note: For Federal Register citations affecting Sec. 
381.505, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.

Subpart F [Reserved]

Subpart G--Fees Applicable to the Interstate Commerce Act and Related 
Authorities [Reserved]



PART 382_ANNUAL CHARGES--Table of Contents



                      Subpart A_General Provisions

Sec.
382.101 Purpose.
382.102 Definitions.
382.103 Payment.
382.104 Enforcement.
382.105 Waiver.
382.106 Accounting for annual charges paid under part 382.

                        Subpart B_Annual Charges

382.201 Annual charges under Parts II and III of the Federal Power Act 
          and related statutes.
382.202 Annual charges under the Natural Gas Act and Natural Gas Policy 
          Act of 1978 and related statutes.
382.203 Annual charges under the Interstate Commerce Act.

    Authority: 5 U.S.C 551-557; 15 U.S.C 717-717w, 3301-3432; 16 U.S.C. 
791a-825r, 2601-2645; 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. 
U.S.C. 1-85.

    Source: Order 472, 52 FR 21292, June 5, 1987, unless otherwise 
noted.



                      Subpart A_General Provisions



Sec. 382.101  Purpose.

    The purpose of this part is to establish procedures for calculating 
and assessing annual charges to reimburse the United States for all of 
the costs incurred by the Commission, other than costs incurred in 
administering Part I of the Federal Power Act and costs recovered 
through the Commission's filing fees.



Sec. 382.102  Definitions.

    For the purpose of this part:
    (a) Natural gas pipeline company means any person:
    (1) Engaged in natural gas sales for resale or natural gas 
transportation subject to the jurisdiction of the Commission under the 
Natural Gas Act whose sales for resale and transportation exceed 200,000 
Mcf at 14.73 psi (60 [deg]F) in any of the three calendar years 
immediately preceding the fiscal year for which the Commission is 
assessing annual charges; and
    (2) Not engaged solely in ``first sales'' of natural gas as that 
term is defined in section 2(21) of the Natural Gas Policy Act of 1978; 
and
    (3) To whom the Commission has not issued a Natural Gas Act Section 
7(f) declaration; and
    (4) Not holding a limited jurisdiction certificate.
    (b) Public utility means any person who owns or operates facilities 
subject to the jurisdiction of the Commission under Parts II and III of 
the Federal Power Act, and who has rate schedule(s) on file with the 
Commission and who is not a ``qualifying small power producer'' or a 
``qualifying cogenerator'', as those terms are defined in section 3 of 
the Federal Power Act, or the United States or a state, or any political 
subdivision of the United States or a state, or any agency, authority, 
or instrumentality of the United States, a state, political subdivision 
of the United States, or political subdivision of a state.
    (c) Oil pipeline company means any person engaged in the 
transportation of crude oil and petroleum products subject to the 
Commission's jurisdiction under the Interstate Commerce Act with annual 
operating revenues greater than $350,000 in any of the three calendar 
years immediately preceding the fiscal year for which the Commission is 
assessing annual charges.
    (d) Natural gas regulatory program is the Commission's regulation of 
the natural gas industry under the Natural Gas Act; Natural Gas Policy 
Act of 1978; Alaska Natural Gas Transportation Act; Public Utility 
Regulatory Policies Act; Department of Energy Organization Act; Outer 
Continental Shelf Lands Act; Energy Security Act;

[[Page 1120]]

Regulatory Flexibility Act; Crude Oil Windfall Profit Tax Act; National 
Environmental Policy Act; National Historic Preservation Act.
    (e) Electric regulatory program is the Commission's regulation of 
the electric industry under Parts II and III of the Federal Power Act; 
Public Utility Regulatory Policies Act; Powerplant and Industrial Fuel 
Use Act; Department of Energy Organization Act; Energy Security Act; 
Regulatory Flexibility Act; Pacific Northwest Electric Power Planning 
and Conservation Act; Flood Control and River and Harbor Acts; 
Bonneville Project Act; Federal Columbia River Transmission Act; 
Reclamation Project Act; Nuclear Waste Policy Act; National 
Environmental Policy Act; and the Public Utility Holding Company Act.
    (f) Oil regulatory program is the Commission's regulation of the oil 
pipeline industry under the Interstate Commerce Act; Department of 
Energy Organization Act; Regulatory Flexibility Act; Outer Continental 
Shelf Lands Act; and the Crude Oil Windfall Profit Tax Act.
    (g) Person means an individual, partnership, corporation, 
association, joint stock company, public trust, or organized group of 
persons, whether incorporated or not.
    (h) Operating revenues means the monies:
    (1) Received by an oil pipeline company for providing interstate 
common carrier services regulated by the Commission, and
    (2) Included in FERC Account No. 200, 210, or 220 in FERC Annual 
Report Form No. 6, page 301, lines 1, 2 and 3, column d, under part 352 
of the Commission's regulations.
    (i) Fiscal year means the twelve-month period that begins on the 
first day of October and ends on the last day of September.
    (j) Preceding calendar year means the twelve-month period that 
begins on the first day of January and ends the last day of December and 
immediately precedes the end of the fiscal year for which the Commission 
is assessing annual charges.
    (k) Adjusted costs of administration means the difference between 
the estimated costs of administering a regulatory program for each 
fiscal year adjusted to reflect any overcollection or undercollection of 
cost attributable to that regulatory program in the annual charge 
assessment for the preceding fiscal year, and the estimated amount of 
filing fees collected during that fiscal year under the provisions of 
parts 346 and 381 of the Commission's regulations for activities that 
relate to that regulatory program.
    (l) Power Marketing Agencies means the Bonneville Power 
Administration, the Alaska Power Administration, the Southeastern Power 
Administration, the Southwestern Power Administration, and the Western 
Area Power Administration.

[Order 472, 52 FR 21292, June 5, 1987, as amended by Order 472-B, 52 FR 
36022, Sept. 25, 1987; Order 529, 55 FR 47321, Nov. 13, 1990; Order 575, 
60 FR 4859, Jan. 25, 1995; Order 583, 60 FR 53117, Oct. 12, 1995; Order 
641, 65 FR 65768, Nov. 2, 2000]



Sec. 382.103  Payment.

    (a) Annual charges assessed under this part must be paid within 45 
days of the issuance of the bill by the Commission, unless a petition 
for waiver has been filed under Sec. 382.105 of this part.
    (b) Payment must be made by check, draft, or money order, payable to 
the United States Treasury.
    (c) If payment is not made within 45 days of issuance of a bill, 
interest will be assessed. Interest will be computed in accordance with 
Sec. 154.501(d) of this chapter, from the date on which the bill 
becomes delinquent.

[Order 472, 52 FR 21292, June 5, 1987, as amended at 61 FR 13421, Mar. 
27, 1996]



Sec. 382.104  Enforcement.

    The Commission may refuse to process any petition, application, or 
other filing submitted by or on the behalf of any person that does not 
pay the annual charge assessed when due, or may take any other 
appropriate action permitted by law.



Sec. 382.105  Waiver.

    (a) Filing of petition. Any annual charges bill recipient may submit 
a petition for waiver of the regulations in this part. An original and 
two copies of a petition for waiver must include evidence, such as a 
financial statement,

[[Page 1121]]

clearly showing either that the petitioner does not have the money to 
pay all or part of the annual charge, or, if the petitioner does pay the 
annual charge, that the petitioner will be placed in financial distress 
or emergency. Petitions for waiver must be filed with the Office of the 
Secretary of the Commission within 15 days of issuance of the bill.
    (b) Decision on petition. The Commission or its designee will review 
the petition for waiver and then will notify the applicant of its grant 
or denial, in whole or in part. If the petition is denied in whole or in 
part, the annual charge becomes due 30 days from the date of 
notification of the denial.



Sec. 382.106  Accounting for annual charges paid under part 382.

    (a) Any natural gas pipeline company subject to the provisions of 
this part must account for annual charges paid by charging the account 
to Account No. 928, Regulatory Commission Expenses, of the Commission's 
Uniform System of Accounts.
    (b) Any public utility subject to the provisions of this part must 
account for annual charges paid by charging the amount to Account No. 
928, Regulatory Commission Expenses, of the Commission's Uniform System 
Accounts.
    (c) Any oil pipeline company subject to the provisions of this part 
must account for annual charges paid by charging the amount to Account 
No. 510, Supplies and Expenses, of the Commission's Uniform System of 
Accounts.

[Order 472, 52 FR 21292, June 5, 1987, as amended by Order 472-B, 52 FR 
36022, Sept. 25, 1987]



                        Subpart B_Annual Charges



Sec. 382.201  Annual charges under Parts II and III of the Federal Power Act 

and related statutes.

    (a) Determination of costs to be assessed to public utilities. The 
adjusted costs of administration of the electric regulatory program, 
excluding the costs of regulating the Power Marketing Agencies, will be 
assessed to public utilities that provide transmission service 
(measured, as discussed in paragraph (c) of this section, by the sum of 
the megawatt-hours of all unbundled transmission and the megawatt-hours 
of all bundled wholesale power sales (to the extent these latter 
megawatt-hours were not separately reported as unbundled transmission)).
    (b) Determination of annual charges to be assessed to public 
utilities. The costs determined under paragraph (a) of this section will 
be assessed as annual charges to each public utility providing 
transmission service based on the proportion of the megawatt-hours of 
transmission of electric energy in interstate commerce of each such 
public utility in the immediately preceding reporting year (either a 
calendar year or fiscal year, depending on which accounting convention 
is used by the public utility to be charged) to the sum of the megawatt-
hours of transmission of electric energy in interstate commerce in the 
immediately preceding reporting year of all such public utilities.
    (c) Reporting requirement. (1) For purposes of computing annual 
charges, as of January 1, 2002, a public utility, as defined in Sec. 
382.102(b), that provides transmission service must submit under oath to 
the Office of the Secretary by April 30 of each year an original and 
conformed copies of the following information (designated as FERC 
Reporting Requirement No. 582 (FERC-582)): The total megawatt-hours of 
transmission of electric energy in interstate commerce, which for 
purposes of computing the annual charges and for purposes of this 
reporting requirement, will be measured by the sum of the megawatt-hours 
of all unbundled transmission (including MWh delivered in wheeling 
transactions and MWh delivered in exchange transactions) and the 
megawatt-hours of all bundled wholesale power sales (to the extent these 
latter megawatt-hours were not separately reported as unbundled 
transmission). This information must be reported to 3 decimal places; 
e.g., 3,105 KWh will be reported as 3.105 MWh.
    (2) Corrections to the information reported on FERC-582, as of 
January 1, 2002, must be submitted under oath to the Office of the 
Secretary on or before the end of each calendar year in which

[[Page 1122]]

the information was originally reported (i.e., on or before the last day 
of the year that the Commission is open to accept such filings).
    (d) Determination of annual charges to be assessed to power 
marketing agencies. The adjusted costs of administration of the electric 
regulatory program as it applies to Power Marketing Agencies will be 
assessed against each power marketing agency based on the proportion of 
the megawatt-hours of sales of each power marketing agency in the 
immediately preceding reporting year (either a calendar year or fiscal 
year, depending on which accounting convention is used by the power 
marketing agency to be charged) to the sum of the megawatt-hours of 
sales in the immediately preceding reporting year of all power marketing 
agencies being assessed annual charges.

[Order 641, 65 FR 65768, Nov. 2, 2000]



Sec. 382.202  Annual charges under the Natural Gas Act and Natural Gas Policy 

Act of 1978 and related statutes.

    The adjusted costs of administration of the natural gas regulatory 
program will be assessed against each natural gas pipeline company based 
on the proportion of the total gas subject to Commission regulation 
which was sold and transported by each company in the immediately 
preceding calendar year to the sum of the gas subject to the Commission 
regulation which was sold and transported in the immediately preceding 
calendar year by all natural gas pipeline companies being assessed 
annual charges.

[Order 472-B, 52 FR 36022, Sept. 25, 1987]



Sec. 382.203  Annual charges under the Interstate Commerce Act.

    (a) The adjusted costs of administration of the oil regulatory 
program will be assessed against each oil pipeline company based on the 
proportion of the total operation revenues of each oil pipeline company 
for the immediately preceding calendar year to the sum of the operating 
revenues for the immediately preceding calendar year of all oil pipeline 
companies being assessed annual charges.
    (b) No oil pipeline company's annual charge may exceed a maximum 
charge established each year by the Commission to equal 6.339 percent of 
the adjusted costs of administration of the oil regulatory program. The 
maximum charge will be rounded to the nearest $1000. For every company 
with an annual charge determined to be above the maximum charge, that 
company's annual charge will be set at the maximum charge, and any 
amount above the maximum charge will be reapportioned to the remaining 
companies. The reapportionment will be computed using the method 
outlined in paragraph (a) of this section (but excluding any company 
whose annual charge is already set at the maximum amount). This 
procedure will be repeated until no company's annual charge exceeds the 
maximum charge.

[[Page 1123]]



                      SUBCHAPTER X_PROCEDURAL RULES



PART 385_RULES OF PRACTICE AND PROCEDURE--Table of Contents



                 Subpart A_Applicability and Definitions

Sec.
385.101 Applicability (Rule 101).
385.102 Definitions (Rule 102).
385.103 References to rules (Rule 103).
385.104 Rule of construction (Rule 104).

Subpart B_Pleadings, Tariff and Rate Filings, Notices of Tariff or Rate 
Examination, Orders To Show Cause, Intervention, and Summary Disposition

385.201 Applicability (Rule 201).
385.202 Types of pleadings (Rule 202).
385.203 Content of pleadings and tariff or rate filings (Rule 203).
385.204 Applications (Rule 204).
385.205 Tariff or rate filings (Rule 205).
385.206 Complaints (Rule 206).
385.207 Petitions (Rule 207).
385.208 [Reserved]
385.209 Notices of tariff or rate examination and orders to show cause 
          (Rule 209).
385.210 Method of notice; dates established in notice (Rule 210).
385.211 Protests other than under Rule 208 (Rule 211).
385.212 Motions (Rule 212).
385.213 Answers (Rule 213).
385.214 Intervention (Rule 214).
385.215 Amendment of pleadings and tariff or rate filings (Rule 215).
385.216 Withdrawal of pleadings and tariff or rate filings (Rule 216).
385.217 Summary disposition (Rule 217).
385.218 Simplified procedure for complaints involving small 
          controversies (Rule 218).

Subpart C [Reserved]

Subpart D_Discovery Procedures for Matters Set for Hearing Under Subpart 
                                    E

385.401 Applicability (Rule 401).
385.402 Scope of discovery (Rule 402).
385.403 Methods of discovery; general provisions (Rule 403).
385.404 Depositions during proceedings (Rule 404).
385.405 Use of depositions (Rule 405).
385.406 Data requests, interrogatories, and requests for production of 
          documents or things (Rule 406).
385.407 Inspection of documents and other property (Rule 407).
385.408 Admissions (Rule 408).
385.409 Subpoenas (Rule 409).
385.410 Objections to discovery, motions to quash or to compel, and 
          protective orders (Rule 410).
385.411 Sanctions (Rule 411).

                           Subpart E_Hearings

385.501 Applicability (Rule 501).
385.502 Initiation of a hearing (Rule 502).
385.503 Consolidation, severance and extension of close-of-record date 
          by Chief Administrative Law Judge (Rule 503).
385.504 Duties and powers of presiding officers (Rule 504).
385.505 Right of participants to present evidence (Rule 505).
385.506 Examination of witnesses during hearing (Rule 506).
385.507 Prepared written testimony (Rule 507).
385.508 Exhibits (Rule 508).
385.509 Admissibility of evidence (Rule 509).
385.510 Miscellaneous provisions (Rule 510).

          Subpart F_Conferences, Settlements, and Stipulations

385.601 Conferences (Rule 601).
385.602 Submission of settlement offers (Rule 602).
385.603 Settlement of negotiations before a settlement judge (Rule 603).
385.604 Alternative means of dispute resolution (Rule 604).
385.605 Arbitration (Rule 605).
385.606 Confidentiality in dispute resolution proceedings (Rule 606).

                           Subpart G_Decisions

385.701 Applicability (Rule 701).
385.702 Definitions (Rule 702).
385.703 Contents of decisions (Rule 703).
385.704 Rights of participants before initial decision (Rule 704).
385.705 Additional powers of presiding officer with respect to briefs 
          (Rule 705).
385.706 Initial and reply briefs before initial decision (Rule 706).
385.707 Oral argument before initial decision (Rule 707).
385.708 Initial decisions by presiding officer (Rule 708).
385.709 Other types of decisions (Rule 709).
385.710 Waiver of the initial decision (Rule 710).
385.711 Exceptions and briefs on and opposing exceptions after initial 
          decision (Rule 711).
385.712 Commission review of initial decisions in the absence of 
          exceptions (Rule 712).
385.713 Request for rehearing (Rule 713).
385.714 Certified questions (Rule 714).

[[Page 1124]]

385.715 Interlocutory appeals to the Commission from rulings of 
          presiding officers (Rule 715).
385.716 Reopening (Rule 716).

                     Subpart H_Shortened Procedures

385.801 Waiver of hearing (Rule 801).
385.802 Noncontested proceedings (Rule 802).

             Subpart I_Commission Review of Remedial Orders

385.901 Scope (Rule 901).
385.902 Definitions (Rule 902).
385.903 Request for nondisclosure of information (Rule 903).
385.904 Commencement of proceeding (Rule 904).
385.905 Stay of contested order (Rule 905).
385.906 Pleadings (Rule 906).
385.907 New facts and issues (Rule 907).
385.908 Discovery (Rule 908).
385.909 Hearing (Rule 909).
385.910 Conduct of the hearing (Rule 910).
385.911 Burden of proof (Rule 911).
385.912 Proposed findings of fact, conclusions of law, and comments 
          (Rule 912).
385.913 Proposed order (Rule 913).
385.914 Commission action (Rule 914).
385.915 Off-the-record communications (Rule 915).
385.916 Withdrawal of petition for review (Rule 916).
385.917 Sanctions (Rule 917).

        Subpart J_Commission Review of Adjustment Request Denials

385.1001 Scope (Rule 1001).
385.1002 Definitions (Rule 1002).
385.1003 Request for nondisclosure of information (Rule 1003).
385.1004 Commencement of proceedings (Rule 1004).
385.1005 Replies (Rule 1005).
385.1006 Request for hearing (Rule 1006).
385.1007 Presiding officer (Rule 1007).
385.1008 Hearings (Rule 1008).
385.1009 Proof (Rule 1009).
385.1010 Certification of the record (Rule 1010).
385.1011 Final order (Rule 1011).
385.1012 Off-the-record communications (Rule 1012).
385.1013 Attachments to pleadings (Rule 1013).

           Subpart K_Petitions for Adjustments Under the NGPA

385.1101 Applicability (Rule 1101).
385.1102 Definitions (Rule 1102).
385.1103 Commencement of proceeding (Rule 1103).
385.1104 Initial petition (Rule 1104).
385.1105 Intervention (Rule 1105).
385.1106 Other filings (Rule 1106).
385.1107 Evaluations (Rule 1107).
385.1108 Criteria (Rule 1108).
385.1109 Orders (Rule 1109).
385.1110 Review of initial decision and order for adjustment (Rule 
          1110).
385.1111 Conferences (Rule 1111).
385.1112 Requests for confidential treatment (Rule 1112).
385.1113 Interim relief (Rule 1113).
385.1114 Motions (Rule 1114).
385.1115 Procedural rulings (Rule 1115).
385.1116 Appeals (Rule 1116).
385.1117 Petition for adjustment treated as request for interpretation 
          (Rule 1117).

Subpart L [Reserved]

         Subpart M_Cooperative Procedure with State Commissions

385.1301 Policy (Rule 1301).
385.1302 Notice (Rule 1302).
385.1303 Conferences (Rule 1303).
385.1304 Procedure governing matters referred to a board (Rule 1304).
385.1305 Joint and concurrent hearings (Rule 1305).
385.1306 Intervention by State commissions (Rule 1306).

                   Subpart N_Oil Pipeline Proceedings

385.1401 Applicability (Rule 1401).
385.1402 Subscriber lists (Rule 1402).
385.1403 Petitions seeking institution of rulemaking proceedings (Rule 
          1404).

Subpart O_Procedures for the Assessment of Civil Penalties Under Section 
                       31 of the Federal Power Act

385.1501 Scope (Rule 1501).
385.1502 Persons subject to civil penalties (Rule 1502).
385.1503 Actions subjecting persons to civil penalties (Rule 1503).
385.1504 Maximum civil penalty (Rule 1504).
385.1505 Determination of proposed penalty amount (Rule 1505).
385.1506 Notice of proposed penalty (Rule 1506).
385.1507 Election of procedures and answer (Rule 1507).
385.1508 Commission administrative procedures (Rule 1508).
385.1509 District court procedures (Rule 1509).
385.1510 Modification of civil penalty (Rule 1510).
385.1511 Collection of civil penalties (Rule 1511).

          Subpart P_Civil Monetary Penalty Inflation Adjustment

385.1601 Scope and purpose (Rule 1601).

[[Page 1125]]

385.1602 Civil penalties, as adjusted (Rule 1602)

Subparts Q-R [Reserved]

                         Subpart S_Miscellaneous

385.1901 Interpretations and interpretive rules under the NGPA (Rule 
          1901).
385.1902 Appeals from action of staff (Rule 1902).
385.1903 Notice in rulemaking proceedings (Rule 1903).
385.1904 Copies of transcripts (Rule 1904).
385.1907 Reports of compliance (Rule 1907).

  Subpart T_Formal Requirements for Filings in Proceedings Before the 
                               Commission

385.2001 Filings (Rule 2001).
385.2002 Caption of filings (Rule 2002).
385.2003 Specifications (Rule 2003).
385.2004 Originals and copies of filings (Rule 2004).
385.2005 Subscription and verification (Rule 2005).
385.2006 Docket system (Rule 2006).
385.2007 Time (Rule 2007).
385.2008 Extensions of time (Rule 2008).
385.2009 Notice (Rule 2009).
385.2010 Service (Rule 2010).
385.2011 Procedures for filing on electronic media (Rule 2011).
385.2012 Petitions for review of Commission Orders (Rule 2012).
385.2013 Notification of requests for Federal authorizations and 
          requests for further information (Rule 2013).
385.2014 Petitions for appeal or review of Federal authorizations (Rule 
          2014).
385.2015 Videotapes (Rule 2015).

         Subpart U_Appearance and Practice Before the Commission

385.2101 Appearances (Rule 2101).
385.2102 Suspension (Rule 2102).
385.2103 Appearance of former employees (Rule 2103).

    Subpart V_Off-the-Record Communications; Separation of Functions

385.2201 Rules governing off-the-record communications (Rule 2201).
385.2202 Separation of functions (Rule 2202).

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717z, 3301-3432; 16 
U.S.C. 792-828c, 2601-2645; 28 U.S.C. 2461; 31 U.S.C. 3701, 9701; 42 
U.S.C. 7101-7352, 16441, 16451-16463; 49 U.S.C. 60502; 49 App. U.S.C. 1-
85 (1988).

    Source: Order 225, 47 FR 19022, May 3, 1982, unless otherwise noted.



                 Subpart A_Applicability and Definitions



Sec. 385.101  Applicability (Rule 101).

    (a) General rules. Except as provided in paragraph (b) of this 
section, this part applies to:
    (1) Any filing or proceeding under this chapter; and
    (2) Any oil pipeline filing or proceeding under this chapter or 49 
CFR Chapter X and replaces the Interstate Commerce Commission General 
Rules of Practice (49 CFR part 1100) with respect to any oil pipeline 
filing or proceeding.
    (b) Exceptions. (1) This part does not apply to investigations under 
part 1b of this chapter.
    (2) If any provision of this part is inconsistent with any provision 
of another part of this chapter, the provision of this part is 
inapplicable and the provision of the other part governs to the extent 
of the inconsistency.
    (3) If any provision of this part is inconsistent with any provision 
of 49 CFR Chapter X that is not otherwise replaced by this part or 
Commission rule or order, the provision of this part is inapplicable and 
the provision of 49 CFR Chapter X governs to the extent of the 
inconsistency.
    (c) Transitional provisions. (1) This part applies to any filing 
submitted on or after and to any proceeding pending on or initiated 
after, August 26, 1982.
    (2) A decisional authority may, in the interest of justice:
    (i) Apply the appropriate provisions of the prior Rules of Practice 
and Procedure (18 CFR part 1) to any filing submitted after, or to any 
proceeding or part of a proceeding pending on August 26, 1982;
    (ii) Apply the provisions of this part to any filing submitted, or 
any proceeding or part of a proceeding initiated, after April 28, 1982 
but before August 26, 1982.
    (d) [Reserved]
    (e) Waiver. To the extent permitted by law, the Commission may, for 
good cause, waive any provision of this part or prescribe any 
alternative procedures that it determines to be appropriate.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 376, 49 FR 
21705, May 23, 1984; Order 607, 65 FR 51234, Sept. 22, 1999]

[[Page 1126]]



Sec. 385.102  Definitions (Rule 102).

    For purposes of this part--
    (a) Decisional authority means the Commission or Commission employee 
that, at the time for decision on a question, has authority or 
responsibility under this chapter to decide that particular question.
    (b) Participant means:
    (1) Any party; or
    (2) Any employee of the Commission assigned to present the position 
of the Commission staff in a proceeding before the Commission.
    (c) Party means, with respect to a proceeding:
    (1) A person filing any application, petition, tariff or rate 
filing, complaint, or any protest under section 19a(i) of the Interstate 
Commerce Act (49 U.S.C. 19a(i));
    (2) Any respondent to a proceeding; or
    (3) Any person whose intervention in a proceeding is effective under 
Rule 214.
    (d) Person means an individual, partnership, corporation, 
association, joint stock company, public trust, an organized group of 
persons, whether incorporated or not, a receiver or trustee of the 
foregoing, a municipality, including a city, county, or any other 
political subdivision of a State, a State, the District of Columbia, any 
territory of the United States or any agency of any of the foregoing, 
any agency, authority, or instrumentality of the United States (other 
than the Commission), or any corporation which is owned directly or 
indirectly by the United States, or any officer, agent, or employee of 
any of the foregoing acting as such in the course of his or her official 
duty. The term also includes a foreign government or any agency, 
authority, or instrumentality thereof.
    (e) Presiding officer means:
    (1) With respect to any proceeding set for hearing under subpart E 
of this part, one or more Members of the Commission, or any 
administrative law judge, designated to preside at such hearing, or, if 
no Commissioner or administrative law judge is designated, the Chief 
Administrative Law Judge; or
    (2) With respect to any proceeding not set for hearing under subpart 
E, any employee designated by rule or order to conduct the proceeding.
    (f) Respondent means any person:
    (1) To whom an order to show cause or notice of tariff or rate 
examination is issued by the Commission;
    (2) Against whom a complaint is directed; or
    (3) Designated as a respondent by the Commission or by the terms of 
this chapter.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 606, 64 FR 
44405, Aug. 16, 1999]



Sec. 385.103  References to rules (Rule 103).

    This part cross-references its sections according to rule number, as 
indicated by the section titles. Any filing with the Commission may 
refer to any section of this part by rule number; for example, ``Rule 
103.''



Sec. 385.104  Rule of construction (Rule 104).

    To the extent that the text of a rule is inconsistent with its 
caption, the text of the rule controls.

[Order 376, 49 FR 21705, May 23, 1984]



Subpart B_Pleadings, Tariff and Rate Filings, Notices of Tariff or Rate 

Examination, Orders To Show Cause, Intervention, and Summary Disposition



Sec. 385.201  Applicability (Rule 201).

    This subpart applies to any pleading, tariff or rate filing, notice 
of tariff or rate examination, order to show cause, intervention, or 
summary disposition.



Sec. 385.202  Types of pleadings (Rule 202).

    Pleadings include any application, complaint, petition, protest, 
notice of protest, answer, motion, and any amendment or withdrawal of a 
pleading. Pleadings do not include comments on rulemakings or comments 
on offers of settlement.



Sec. 385.203  Content of pleadings and tariff or rate filings (Rule 203).

    (a) Requirements for a pleading or a tariff or rate filing. Each 
pleading and

[[Page 1127]]

each tariff or rate filing must include, as appropriate:
    (1) If known, the reference numbers, docket numbers, or other 
identifying symbols of any relevant tariff, rate, schedule, contract, 
application, rule, or similar matter or material;
    (2) The name of each participant for whom the filing is made or, if 
the filing is made for a group of participants, the name of the group, 
provided that the name of each member of the group is set forth in a 
previously filed document which is identified in the filing being made;
    (3) The specific authorization or relief sought;
    (4) The tariff or rate sheets or sections;
    (5) The name and address of each person against whom the complaint 
is directed;
    (6) The relevant facts, if not set forth in a previously filed 
document which is identified in the filing being made;
    (7) The position taken by the participant filing any pleading, to 
the extent known when the pleading is filed, and the basis in fact and 
law for such position;
    (8) Subscription or verification, if required;
    (9) A certificate of service under Rule 2010(h), if service is 
required;
    (10) The name, address, and telephone number of an individual who, 
with respect to any matter contained in the filing, represents the 
person for whom filing is made; and
    (11) Any additional information required to be included by statute, 
rule, or order.
    (b) Requirement for any initial pleading or tariff or rate filing. 
The initial pleading or tariff or rate filing submitted by a participant 
or a person seeking to become a party must conform to the requirements 
of paragraph (a) of this section and must include:
    (1) The exact name of the person for whom the filing is made;
    (2) The location of that person's principal place of business; and
    (3) The name, address, and telephone number of at least one, but not 
more than two, persons upon whom service is to be made and to whom 
communications are to be addressed in the proceeding.
    (c) Combined filings. If two or more pleadings, or one or more 
pleadings and a tariff or rate filing are included as items in a single 
filing each such item must be separately designated and must conform to 
the requirements which would be applicable to it if filed separately.
    (d) Form of notice. If a pleading or tariff or rate filing must 
include a form of notice suitable for publication in the Federal 
Register, the company shall submit the draft notice in accordance with 
the form of notice specifications prescribed by the Secretary and posted 
under the Filing Procedures link at http://www.ferc.gov and available in 
the Commission's Public Reference Room.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 647, 69 FR 
32439, June 10, 2004; Order 663, 70 FR 55725, Sept. 23, 2005; 71 FR 
14642, Mar. 23, 2006; Order 714, 73 FR 57538, Oct. 3, 2008]



Sec. 385.204  Applications (Rule 204).

    Any person seeking a license, permit, certification, or similar 
authorization or permission, must file an application to obtain that 
authorization or permission.



Sec. 385.205  Tariff or rate filings (Rule 205).

    A person must make a tariff or rate filing in order to establish or 
change any specific rate, rate schedule, tariff, tariff schedule, fare, 
charge, or term or condition of service, or any classification, 
contract, practice, or any related regulation established by and for the 
applicant.



Sec. 385.206  Complaints (Rule 206).

    (a) General rule. Any person may file a complaint seeking Commission 
action against any other person alleged to be in contravention or 
violation of any statute, rule, order, or other law administered by the 
Commission, or for any other alleged wrong over which the Commission may 
have jurisdiction.
    (b) Contents. A complaint must:
    (1) Clearly identify the action or inaction which is alleged to 
violate applicable statutory standards or regulatory requirements;
    (2) Explain how the action or inaction violates applicable statutory 
standards or regulatory requirements;

[[Page 1128]]

    (3) Set forth the business, commercial, economic or other issues 
presented by the action or inaction as such relate to or affect the 
complainant;
    (4) Make a good faith effort to quantify the financial impact or 
burden (if any) created for the complainant as a result of the action or 
inaction;
    (5) Indicate the practical, operational, or other nonfinancial 
impacts imposed as a result of the action or inaction, including, where 
applicable, the environmental, safety or reliability impacts of the 
action or inaction;
    (6) State whether the issues presented are pending in an existing 
Commission proceeding or a proceeding in any other forum in which the 
complainant is a party, and if so, provide an explanation why timely 
resolution cannot be achieved in that forum;
    (7) State the specific relief or remedy requested, including any 
request for stay or extension of time, and the basis for that relief;
    (8) Include all documents that support the facts in the complaint in 
possession of, or otherwise attainable by, the complainant, including, 
but not limited to, contracts and affidavits;
    (9) State
    (i) Whether the Enforcement Hotline, Dispute Resolution Service, 
tariff-based dispute resolution mechanisms, or other informal dispute 
resolution procedures were used, or why these procedures were not used;
    (ii) Whether the complainant believes that alternative dispute 
resolution (ADR) under the Commission's supervision could successfully 
resolve the complaint;
    (iii) What types of ADR procedures could be used; and
    (iv) Any process that has been agreed on for resolving the 
complaint.
    (10) Include a form of notice of the complaint suitable for 
publication in the Federal Register in accordance with the 
specifications in Sec. 385.203(d) of this part. The form of notice 
shall be on electronic media as specified by the Secretary.
    (11) Explain with respect to requests for Fast Track processing 
pursuant to section 385.206(h), why the standard processes will not be 
adequate for expeditiously resolving the complaint.
    (c) Service. Any person filing a complaint must serve a copy of the 
complaint on the respondent, affected regulatory agencies, and others 
the complainant reasonably knows may be expected to be affected by the 
complaint. Service must be simultaneous with filing at the Commission 
for respondents. Simultaneous or overnight service is permissible for 
other affected entities. Simultaneous service can be accomplished by 
electronic mail in accordance with Sec. 385.2010(f)(3), facsimile, 
express delivery, or messenger.
    (d) Notice. Public notice of the complaint will be issued by the 
Commission.
    (e) Privileged treatment. (1) If a complainant seeks privileged 
treatment for any documents submitted with the complaint, the 
complainant must submit, with its complaint, a request for privileged 
treatment of documents and information under section 388.112 of this 
chapter and a proposed form of protective agreement. In the event the 
complainant requests privileged treatment under section 388.112 of this 
chapter, it must file the original and three copies of its complaint 
with the information for which privileged treatment is sought and 11 
copies of the pleading without the information for which privileged 
treatment is sought. The original and three copies must be clearly 
identified as containing information for which privileged treatment is 
sought.
    (2) A complainant must provide a copy of its complaint without the 
privileged information and its proposed form of protective agreement to 
each entity that is to be served pursuant to section 385.206(c).
    (3) The respondent and any interested person who has filed a motion 
to intervene in the complaint proceeding may make a written request to 
the complainant for a copy of the complete complaint. The request must 
include an executed copy of the protective agreement and, for persons 
other than the respondent, a copy of the motion to intervene. Any person 
may file an objection to the proposed form of protective agreement.
    (4) A complainant must provide a copy of the complete complaint to 
the requesting person within 5 days after

[[Page 1129]]

receipt of the written request that is accompanied by an executed copy 
of the protective agreement.
    (f) Answers, interventions and comments. Unless otherwise ordered by 
the Commission, answers, interventions, and comments to a complaint must 
be filed within 20 days after the complaint is filed. In cases where the 
complainant requests privileged treatment for information in its 
complaint, answers, interventions, and comments are due within 30 days 
after the complaint is filed. In the event there is an objection to the 
protective agreement, the Commission will establish when answers will be 
due.
    (g) Complaint resolution paths. One of the following procedures may 
be used to resolve complaints:
    (1) The Commission may assign a case to be resolved through 
alternative dispute resolution procedures in accordance with Sec. Sec. 
385.604-385.606, in cases where the affected parties consent, or the 
Commission may order the appointment of a settlement judge in accordance 
with Sec. 385.603;
    (2) The Commission may issue an order on the merits based upon the 
pleadings;
    (3) The Commission may establish a hearing before an ALJ;
    (h) Fast Track processing. (1) The Commission may resolve complaints 
using Fast Track procedures if the complaint requires expeditious 
resolution. Fast Track procedures may include expedited action on the 
pleadings by the Commission, expedited hearing before an ALJ, or 
expedited action on requests for stay, extension of time, or other 
relief by the Commission or an ALJ.
    (2) A complainant may request Fast Track processing of a complaint 
by including such a request in its complaint, captioning the complaint 
in bold type face ``COMPLAINT REQUESTING FAST TRACK PROCESSING,'' and 
explaining why expedition is necessary as required by section 
385.206(b)(11).
    (3) Based on an assessment of the need for expedition, the period 
for filing answers, interventions and comments to a complaint requesting 
Fast Track processing may be shortened by the Commission from the time 
provided in section 385.206(f).
    (4) After the answer is filed, the Commission will issue promptly an 
order specifying the procedure and any schedule to be followed.
    (i) Simplified procedure for small controversies. A simplified 
procedure for complaints involving small controversies is found in 
section 385.218 of this subpart.
    (j) Satisfaction. (1) If the respondent to a complaint satisfies 
such complaint, in whole or in part, either before or after an answer is 
filed, the complainant and the respondent must sign and file:
    (i) A statement setting forth when and how the complaint was 
satisfied; and
    (ii) A motion for dismissal of, or an amendment to, the complaint 
based on the satisfaction.
    (2) The decisional authority may order the submission of additional 
information before acting on a motion for dismissal or an amendment 
under paragraph (c)(1)(ii) of this section.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 602, 64 FR 
17097, Apr. 8, 1999; Order 602-A, 64 FR 43608, Aug. 11, 1999; Order 647, 
69 FR 32440, June 10, 2004]



Sec. 385.207  Petitions (Rule 207).

    (a) General rule. A person must file a petition when seeking:
    (1) Relief under subpart I, J, or K of this part;
    (2) A declaratory order or rule to terminate a controversy or remove 
uncertainty;
    (3) Action on appeal from a staff action, other than a decision or 
ruling of a presiding officer, under Rule 1902;
    (4) A rule of general applicability; or
    (5) Any other action which is in the discretion of the Commission 
and for which this chapter prescribes no other form of pleading.
    (b) Declarations of intent under the Federal Power Act. For purposes 
of this part, a declaration of intent under section 23(b) of the Federal 
Power Act is treated as a petition for a declaratory order.

[[Page 1130]]

    (c) Except as provided in Sec. 381.302(b), each petition for 
issuance of a declaratory order must be accompanied by the fee 
prescribed in Sec. 381.302(a).

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 395, 49 FR 
35357, Sept. 7, 1984]



Sec. 385.208  [Reserved]



Sec. 385.209  Notices of tariff or rate examination and orders to show cause 

(Rule 209).

    (a) Issuance. (1) If the Commission seeks to determine the validity 
of any rate, rate schedule, tariff, tariff schedule, fare, charge, or 
term or condition of service, or any classification, contract, practice, 
or any related regulation established by and for the applicant which is 
demanded, observed, charged, or collected, the Commission will initiate 
a proceeding by issuing a notice of tariff or rate examination.
    (2) The Commission may initiate a proceeding against a person by 
issuing an order to show cause.
    (b) Contents. A notice of examination or an order to show cause will 
contain a statement of the matters about which the Commission is 
inquiring, and a statement of the authority under which the Commission 
is acting. The statement is tentative and sets forth issues to be 
considered by the Commission.
    (c) Answers. A person who is ordered to show cause must answer in 
accordance with Rule 213.



Sec. 385.210  Method of notice; dates established in notice (Rule 210).

    (a) Method. When the Secretary gives notice of tariff or rate 
filings, applications, petitions, notices of tariff or rate 
examinations, and orders to show cause, the Secretary will give such 
notice in accordance with Rule 2009.
    (b) Dates for filing interventions and protests. A notice given 
under this section will establish the dates for filing interventions and 
protests. Only those filings made within the time prescribed in the 
notice will be considered timely.



Sec. 385.211  Protests other than under Rule 208 (Rule 211).

    (a) General rule. (1) Any person may file a protest to object to any 
application, complaint, petition, order to show cause, notice of tariff 
or rate examination, or tariff or rate filing.
    (2) The filing of a protest does not make the protestant a party to 
the proceeding. The protestant must intervene under Rule 214 to become a 
party.
    (3) Subject to paragraph (a)(4) of this section, the Commission will 
consider protests in determining further appropriate action. Protests 
will be placed in the public file associated with the proceeding.
    (4) If a proceeding is set for hearing under subpart E of this part, 
the protest is not part of the record upon which the decision is made.
    (b) Service. (1) Any protest directed against a person in a 
proceeding must be served by the protestant on the person against whom 
the protest is directed.
    (2) The Secretary may waive any procedural requirement of this 
subpart applicable to protests. If the requirement of service under this 
paragraph is waived, the Secretary will place the protest in the public 
file and may send a copy thereof to any person against whom the protest 
is directed.



Sec. 385.212  Motions (Rule 212).

    (a) General rule. A motion may be filed:
    (1) At any time, unless otherwise provided;
    (2) By a participant or a person who has filed a timely motion to 
intervene which has not been denied;
    (3) In any proceeding except an informal rulemaking proceeding.
    (b) Written and oral motions. Any motion must be filed in writing, 
except that the presiding officer may permit an oral motion to be made 
on the record during a hearing or conference.
    (c) Contents. A motion must contain a clear and concise statement 
of:
    (1) The facts and law which support the motion; and
    (2) The specific relief or ruling requested.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 225-A, 47 FR 
35956, Aug. 18, 1982; Order 376, 49 FR 21705, May 23, 1984]



Sec. 385.213  Answers (Rule 213).

    (a) Required or permitted. (1) Any respondent to a complaint or 
order to

[[Page 1131]]

show cause must make an answer, unless the Commission orders otherwise.
    (2) An answer may not be made to a protest, an answer, a motion for 
oral argument, or a request for rehearing, unless otherwise ordered by 
the decisional authority. A presiding officer may prohibit an answer to 
a motion for interlocutory appeal. If an answer is not otherwise 
permitted under this paragraph, no responsive pleading may be made.
    (3) An answer may be made to any pleading, if not prohibited under 
paragraph (a)(2) of this section.
    (4) An answer to a notice of tariff or rate examination must be made 
in accordance with the provisions of such notice.
    (b) Written or oral answers. Any answer must be in writing, except 
that the presiding officer may permit an oral answer to a motion made on 
the record during a hearing conducted under subpart E or during a 
conference.
    (c) Contents. (1) An answer must contain a clear and concise 
statement of:
    (i) Any disputed factual allegations; and
    (ii) Any law upon which the answer relies.
    (2) When an answer is made in response to a complaint, an order to 
show cause, or an amendment to such pleading, the answerer must, to the 
extent practicable:
    (i) Admit or deny, specifically and in detail, each material 
allegation of the pleading answered; and
    (ii) Set forth every defense relied on.
    (3) General denials of facts referred to in any order to show cause, 
unsupported by the specific facts upon which the respondent relies, do 
not comply with paragraph (a)(1) of this section and may be a basis for 
summary disposition under Rule 217, unless otherwise required by 
statute.
    (4) An answer to a complaint must include documents that support the 
facts in the answer in possession of, or otherwise attainable by, the 
respondent, including, but not limited to, contracts and affidavits. An 
answer is also required to describe the formal or consensual process it 
proposes for resolving the complaint.
    (5)(i) A respondent must submit with its answer any request for 
privileged treatment of documents and information under Sec. 388.112 of 
this chapter and a proposed form of protective agreement. In the event 
the respondent requests privileged treatment under Sec. 388.112 of this 
chapter, it must file the original and three copies of its answer with 
the information for which privileged treatment is sought and 11 copies 
of the pleading without the information for which privileged treatment 
is sought. The original and three copies must be clearly identified as 
containing information for which privileged treatment is sought.
    (ii) A respondent must provide a copy of its answer without the 
privileged information and its proposed form of protective agreement to 
each entity that has either been served pursuant to Sec. 385.206 (c) or 
whose name is on the official service list for the proceeding compiled 
by the Secretary.
    (iii) The complainant and any interested person who has filed a 
motion to intervene may make a written request to the respondent for a 
copy of the complete answer. The request must include an executed copy 
of the protective agreement and, for persons other than the complainant, 
a copy of the motion to intervene. Any person may file an objection to 
the proposed form of protective agreement.
    (iv) A respondent must provide a copy of the complete answer to the 
requesting person within 5 days after receipt of the written request and 
an executed copy of the protective agreement.
    (d) Time limitations. (1) Any answer to a motion or to an amendment 
to a motion must be made within 15 days after the motion or amendment is 
filed, unless otherwise ordered.
    (2) Any answer to a pleading or amendment to a pleading, other than 
a complaint or an answer to a motion under paragraph (d)(1) of this 
section, must be made:
    (i) If notice of the pleading or amendment is published in the 
Federal Register, not later than 30 days after such publication, unless 
otherwise ordered; or
    (ii) If notice of the pleading or amendment is not published in the 
Federal Register, not later than 30

[[Page 1132]]

days after the filing of the pleading or amendment, unless otherwise 
ordered.
    (e) Failure to answer. (1) Any person failing to answer a complaint 
may be considered in default, and all relevant facts stated in such 
complaint may be deemed admitted.
    (2) Failure to answer an order to show cause will be treated as a 
general denial to which paragraph (c)(3) of this section applies.

[Order 225, 47 FR 19022, May 3, 1982; 48 FR 786, Jan. 7, 1983, as 
amended by Order 376, 49 FR 21705, May 23, 1984; Order 602, 64 FR 17099, 
Apr. 8, 1999; Order 602-A, 64 FR 43608, Aug. 11, 1999]



Sec. 385.214  Intervention (Rule 214).

    (a) Filing. (1) The Secretary of Energy is a party to any proceeding 
upon filing a notice of intervention in that proceeding. If the 
Secretary's notice is not filed within the period prescribed under Rule 
210(b), the notice must state the position of the Secretary on the 
issues in the proceeding.
    (2) Any State Commission, the Advisory Council on Historic 
Preservation, the U.S. Departments of Agriculture, Commerce, and the 
Interior, any state fish and wildlife, water quality certification, or 
water rights agency; or Indian tribe with authority to issue a water 
quality certification is a party to any proceeding upon filing a notice 
of intervention in that proceeding, if the notice is filed within the 
period established under Rule 210(b). If the period for filing notice 
has expired, each entity identified in this paragraph must comply with 
the rules for motions to intervene applicable to any person under 
paragraph (a)(3) of this section including the content requirements of 
paragraph (b) of this section.
    (3) Any person seeking to intervene to become a party, other than 
the entities specified in paragraphs (a)(1) and (a)(2) of this section, 
must file a motion to intervene.
    (4) No person, including entities listed in paragraphs (a)(1) and 
(a)(2) of this section, may intervene as a matter of right in a 
proceeding arising from an investigation pursuant to Part 1b of this 
chapter.
    (b) Contents of motion. (1) Any motion to intervene must state, to 
the extent known, the position taken by the movant and the basis in fact 
and law for that position.
    (2) A motion to intervene must also state the movant's interest in 
sufficient factual detail to demonstrate that:
    (i) The movant has a right to participate which is expressly 
conferred by statute or by Commission rule, order, or other action;
    (ii) The movant has or represents an interest which may be directly 
affected by the outcome of the proceeding, including any interest as a:
    (A) Consumer,
    (B) Customer,
    (C) Competitor, or
    (D) Security holder of a party; or
    (iii) The movant's participation is in the public interest.
    (3) If a motion to intervene is filed after the end of any time 
period established under Rule 210, such a motion must, in addition to 
complying with paragraph (b)(1) of this section, show good cause why the 
time limitation should be waived.
    (c) Grant of party status. (1) If no answer in opposition to a 
timely motion to intervene is filed within 15 days after the motion to 
intervene is filed, the movant becomes a party at the end of the 15 day 
period.
    (2) If an answer in opposition to a timely motion to intervene is 
filed not later than 15 days after the motion to intervene is filed or, 
if the motion is not timely, the movant becomes a party only when the 
motion is expressly granted.
    (d) Grant of late intervention. (1) In acting on any motion to 
intervene filed after the period prescribed under Rule 210, the 
decisional authority may consider whether:
    (i) The movant had good cause for failing to file the motion within 
the time prescribed;
    (ii) Any disruption of the proceeding might result from permitting 
intervention;
    (iii) The movant's interest is not adequately represented by other 
parties in the proceeding;
    (iv) Any prejudice to, or additional burdens upon, the existing 
parties might result from permitting the intervention; and

[[Page 1133]]

    (v) The motion conforms to the requirements of paragraph (b) of this 
section.
    (2) Except as otherwise ordered, a grant of an untimely motion to 
intervene must not be a basis for delaying or deferring any procedural 
schedule established prior to the grant of that motion.
    (3)(i) The decisional authority may impose limitations on the 
participation of a late intervener to avoid delay and prejudice to the 
other participants.
    (ii) Except as otherwise ordered, a late intervener must accept the 
record of the proceeding as the record was developed prior to the late 
intervention.
    (4) If the presiding officer orally grants a motion for late 
intervention, the officer will promptly issue a written order confirming 
the oral order.

[Order 225, 47 FR 19022, May 3, 1982; 48 FR 786, Jan. 7, 1983, as 
amended by Order 376, 49 FR 21705, May 23, 1984; Order 2002, 68 FR 
51142, Aug. 25, 2003; Order 718, 73 FR 62886, Oct. 22, 2008]



Sec. 385.215  Amendment of pleadings and tariff or rate filings (Rule 215).

    (a) General rules. (1) Any participant, or any person who has filed 
a timely motion to intervene which has not been denied, may seek to 
modify its pleading by filing an amendment which conforms to the 
requirements applicable to the pleading to be amended.
    (2) A tariff or rate filing may be amended or modified only as 
provided in the regulations under this chapter. A tariff or rate filing 
may not be amended, except as allowed by statute. The procedures 
provided in this section do not apply to amendment of tariff or rate 
filings.
    (3)(i) If a written amendment is filed in a proceeding, or part of a 
proceeding, that is not set for hearing under subpart E, the amendment 
becomes effective as an amendment on the date filed.
    (ii) If a written amendment is filed in a proceeding, or part of a 
proceeding, which is set for hearing under subpart E, that amendment is 
effective on the date filed only if the amendment is filed more than 
five days before the earlier of either the first prehearing conference 
or the first day of evidentiary hearings.
    (iii) If, in a proceeding, or part of a proceeding, that is set for 
hearing under subpart E, a written amendment is filed after the time for 
filing provided under paragraph (a)(3)(ii) of this section, or if an 
oral amendment is made to a presiding officer during a hearing or 
conference, the amendment becomes effective as an amendment only as 
provided under paragraph (d) of this section.
    (b) Answers. Any participant, or any person who has filed a timely 
motion to intervene which has not been denied, may answer a written or 
oral amendment in accordance with Rule 213.
    (c) Motion opposing an amendment. Any participant, or any person who 
has filed a timely motion to intervene which has not been denied, may 
file a motion opposing the acceptance of any amendment, other than an 
amendment under paragraph (a)(3)(i) of this section, not later than 15 
days after the filing of the amendment.
    (d) Acceptance of amendments. (1) An amendment becomes effective as 
an amendment at the end of 15 days from the date of filing, if no motion 
in opposition to the acceptance of an amendment under paragraph 
(a)(3)(iii) of this section is filed within the 15 day period.
    (2) If a motion in opposition to the acceptance of an amendment is 
filed within 15 days after the filing of the amendment, the amendment 
becomes effective as an amendment on the twentieth day after the filing 
of the amendment, except to the extent that the decisional authority, 
before such date, issues an order rejecting the amendment, wholly or in 
part, for good cause.
    (e) Directed amendments. A decisional authority, on motion or 
otherwise, may direct any participant, or any person seeking to be a 
party, to file a written amendment to amplify, clarify, or technically 
correct a pleading.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 714, 73 FR 
57538, Oct. 3, 2008]



Sec. 385.216  Withdrawal of pleadings and tariff or rate filings (Rule 216).

    (a) Filing. Any participant, or any person who has filed a timely 
motion to intervene which has not been denied,

[[Page 1134]]

may seek to withdraw a pleading by filing a notice of withdrawal. The 
procedures provided in this section do not apply to withdrawals of 
tariff or rate filings, which may be withdrawn only as provided in the 
regulations under this chapter.
    (b) Action on withdrawals. (1) The withdrawal of any pleading is 
effective at the end of 15 days from the date of filing of a notice of 
withdrawal, if no motion in opposition to the notice of withdrawal is 
filed within that period and the decisional authority does not issue an 
order disallowing the withdrawal within that period. The decisional 
authority may disallow, for a good cause, all or part of a withdrawal.
    (2) If a motion in opposition to a notice of withdrawal is filed 
within the 15 day period, the withdrawal is not effective until the 
decisional authority issues an order accepting the withdrawal.
    (c) Conditional withdrawal. In order to prevent prejudice to other 
participants, a decisional authority may, on motion or otherwise, 
condition the withdrawal of any pleading upon a requirement that the 
withdrawing party leave material in the record or otherwise make 
material available to other participants.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 714, 73 FR 
57538, Oct. 3, 2008]



Sec. 385.217  Summary disposition (Rule 217).

    (a) Applicability. This section applies to:
    (1) Any proceeding, or any part of a proceeding, while the 
Commission is the decisional authority; and
    (2) Any proceeding, or part of a proceeding, which is set for 
hearing under subpart E.
    (b) General rule. If the decisional authority determines that there 
is no genuine issue of fact material to the decision of a proceeding or 
part of a proceeding, the decisional authority may summarily dispose of 
all or part of the proceeding.
    (c) Procedures. (1) Any participant may make a motion for summary 
disposition of all or part of a proceeding.
    (2) If a decisional authority, other than the Commission, is 
considering summary disposition of a proceeding, or part of a 
proceeding, in the absence of a motion for summary disposition by a 
participant, the decisional authority will grant the participants an 
opportunity to comment on the proposed disposition prior to any summary 
disposition, unless, for good cause shown, the decisional authority 
provides otherwise.
    (3) If, prior to setting a matter for hearing, the Commission is 
considering summary disposition of a proceeding or part of a proceeding 
in the absence of a motion for summary disposition by any participant 
and the Commission determines that notice and comment on summary 
disposition are practicable and necessary, the Commission may notify the 
participants and afford them an opportunity to comment on any proposed 
summary disposition.
    (d) Disposition. (1)(i) If a decisional authority, other than the 
Commission, summarily disposes of an entire proceeding, the decisional 
authority will issue an initial decision for the entire proceeding.
    (ii) Except as provided under paragraph (d)(1)(iii) of this section, 
a decisional authority, other than the Commission, which summarily 
disposes of part of a proceeding may:
    (A) Issue a partial initial decision; or
    (B) Postpone issuing an initial decision on the summarily disposed 
part and combine it with the initial decision on the entire proceeding 
or other appropriate part of the proceeding.
    (iii) If the decisional authority, other than the Commission, 
summarily disposes of part of a proceeding and such disposition requires 
the filing of new tariff or rate schedule sheets or sections, the 
decisional authority will issue an initial decision on that part of the 
proceeding.
    (2) Any initial decision issued under paragraph (d)(1) of this 
section is considered an initial decision issued under subpart G of this 
part, except that the following rules do not apply: Rule 704 (rights of 
participants before initial decision), Rule 705 (discretion of presiding 
officer before initial decision), Rule 706 (initial and reply briefs 
before

[[Page 1135]]

initial decision), Rule 707 (oral argument before initial decision), and 
Rule 709 (other types of decisions).

[Order 225, 47 FR 19022, May 3, 1982; Order 225-A, 47 FR 35956, Aug. 18, 
1982, as amended by Order 714, 73 FR 57538, Oct. 3, 2008]



Sec. 385.218  Simplified procedure for complaints involving small 

controversies (Rule 218).

    (a) Eligibility. The procedures under this section are available to 
complainants if the amount in controversy is less than $100,000 and the 
impact on other entities is de minimis.
    (b) Contents. A complaint filed under this section must contain:
    (1) The name of the complainant;
    (2) The name of the respondent;
    (3) A description of the relationship to the respondent;
    (4) The amount in controversy;
    (5) A statement why the complaint will have a de minimis impact on 
other entities;
    (6) The facts and circumstances surrounding the complaint, including 
the legal or regulatory obligation breached by the respondent; and
    (7) The requested relief.
    (c) Service. The complainant is required to simultaneously serve the 
complaint on the respondent and any other entity referenced in the 
complaint.
    (d) Notice. Public notice of the complaint will be issued by the 
Commission.
    (e) Answers, interventions and comments. (1) An answer to a 
complaint is required to conform to the requirements of Sec. 
385.213(c)(1), (2), and (3).
    (2) Answers, interventions and comments must be filed within 10 days 
after the complaint is filed. In cases where the complainant requests 
privileged treatment for information in its complaint, answers, 
interventions, and comments must be filed within 20 days after the 
complaint is filed. In the event there is an objection to the protective 
agreement, the Commission will establish when answers, interventions, 
and comments are due.
    (f) Privileged treatment. If a complainant seeks privileged 
treatment for any documents submitted with the complaint, a complainant 
must use the procedures described in section 385.206(e). If a respondent 
seeks privileged treatment for any documents submitted with the answer, 
a respondent must use the procedures described in section 385.213(c)(5).

[Order 602, 64 FR 17099, Apr. 8, 1999]

Subpart C [Reserved]



Subpart D_Discovery Procedures for Matters Set for Hearing Under Subpart 

                                    E

    Source: Order 466, 52 FR 6966, Mar. 6, 1987, unless otherwise noted.



Sec. 385.401  Applicability (Rule 401).

    (a) General rule. Except as provided in paragraph (b) of this 
section, this subpart applies to discovery in proceedings set for 
hearing under subpart E of this part, and to such other proceedings as 
the Commission may order.
    (b) Exceptions. Unless otherwise ordered by the Commission, this 
subpart does not apply to:
    (1) Requests for information under the Freedom of Information Act, 5 
U.S.C. 552, governed by Part 388 of this chapter; or,
    (2) Requests by the Commission or its staff who are not participants 
in a proceeding set for hearing under subpart E of this part to obtain 
information, reports, or data from persons subject to the Commission's 
regulatory jurisdiction; or
    (3) Investigations conducted pursuant to Part 1b of this chapter.



Sec. 385.402  Scope of discovery (Rule 402).

    (a) General. Unless otherwise provided under paragraphs (b) and (c) 
of this section or ordered by the presiding officer under Rule 410(c), 
participants may obtain discovery of any matter, not privileged, that is 
relevant to the subject matter of the pending proceeding, including the 
existence, description, nature, custody, condition, and location of any 
books, documents, or other tangible things, and the identity and 
location of persons having any knowledge of any discoverable matter. It 
is not ground for objection that the information sought will be 
inadmissible in the Commission proceeding if

[[Page 1136]]

the information sought appears reasonably calculated to lead to the 
discovery of admissible evidence.
    (b) Material prepared for litigation. A participant may not obtain 
discovery of material prepared in anticipation of litigation by another 
participant, unless that participant demonstrates a substantial need for 
the material and that substantially equivalent material cannot be 
obtained by other means without undue hardship. In ordering any such 
discovery, the presiding officer will prevent disclosure of the mental 
impressions, conclusions, opinions, or legal theories of an attorney.
    (c) Expert testimony. Unless otherwise restricted by the presiding 
officer under Rule 410(c), a participant may discover any facts known or 
opinions held by an expert concerning any relevant matters, not 
privileged. Such discovery will be permitted only if:
    (1) The expert is expected to be a witness at hearing; or
    (2) The expert is relied on by another expert who is expected to be 
a witness at hearing, and the participant seeking discovery shows a 
compelling need for the information and it cannot practicably be 
obtained by other means.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 466-A, 52 FR 
35909, Sept. 24, 1987]



Sec. 385.403  Methods of discovery; general provisions (Rule 403).

    (a) Discovery methods. Participants may obtain discovery by data 
requests, written interrogatories, and requests for production of 
documents or things (Rule 406), depositions by oral examination (Rule 
404), requests for inspection of documents and other property (Rule 
407), and requests for admission (Rule 408).
    (b) Discovery conferences. (1) The presiding officer may direct the 
participants in a proceeding or their representatives to appear for one 
or more conferences, either separately or as part of any other 
prehearing conference in the proceeding under Rule 601(a), for the 
purpose of scheduling discovery, identifying discovery issues, and 
resolving discovery disputes. Except as provided in paragraph (b)(2) of 
this section, the presiding officer, upon the conclusion of a 
conference, will issue an order stating any and all decisions made and 
agreements reached during the conference.
    (2) The Chief Administrative Law Judge may, upon a showing of 
extraordinary circumstances, waive the requirement to issue an order 
under paragraph (b)(1) of this section.
    (c) Identification and certification of preparer. Each response to 
discovery under this subpart must:
    (1) Identify the preparer or person under whose direct supervision 
the response was prepared; and
    (2) Be under oath or, for representatives of a public or private 
corporation or a partnership or association or a governmental agency, be 
accompanied by a signed certification of the preparer or person 
supervising the preparation of the response on behalf of the entity that 
the response is true and accurate to the best of that person's 
knowledge, information, and belief formed after a reasonable inquiry.
    (d) Supplementation of responses. (1) Except as otherwise provided 
by this paragraph, a participant that has responded to a request for 
discovery with a response that was complete when made is not under a 
continuing duty to supplement that response to include information later 
acquired.
    (2) A participant must make timely amendment to any prior response 
if the participant obtains information upon the basis of which the 
participant knows that the response was incorrect when made, or though 
correct when made is now incorrect in any material respect.
    (3) A participant may be required to supplement a response by order 
of the presiding officer or by agreement of all participants.
    (4) A participant may request supplementation of prior responses, if 
such request is permitted under the procedural schedule.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 466-A, 52 FR 
35909, Sept. 24, 1987]



Sec. 385.404  Depositions during proceedings (Rule 404).

    (a) In general. (1) A participant may obtain the attendance for a 
deposition by oral examination of any other participant, an employee or 
agent of that

[[Page 1137]]

participant, or a person retained by that participant as a potential 
witness, by providing a notice of intent to depose.
    (2) Any participant may obtain the attendance of a nonparticipant 
for a deposition by oral examination by obtaining a subpoena, in 
accordance with Rule 409. For purposes of this rule, a Commission 
decisional employee, as defined in Rule 2201(a), is a nonparticipant.
    (b) Notice. (1) A participant seeking to take a deposition under 
this section must provide to all other participants written notice 
reasonably in advance of the deposition. The notice must be filed with 
the Commission and served on all participants. An original must be 
served on each person whose deposition is sought.
    (2) A notice of intent under this section must:
    (i) State the time and place at which the deposition will be taken, 
the name and address of each person to be examined, and the subject 
matter of the deposition; and
    (ii) If known at the time that the deposition is noticed that its 
purpose is to preserve testimony, state that the deponent will be unable 
to testify at the hearing.
    (3)(i) A notice of intent under this section or a subpoena under 
Rule 409 may name as the deponent a public or private corporation or a 
partnership or association or a governmental agency, and describe with 
reasonable particularity the matters on which examination is requested. 
Such organization must, in response, designate one or more officers, 
directors, or managing agents, or other persons to testify on its 
behalf, and set forth, for each person designated, the matters on which 
that person will testify.
    (ii) A subpoena must advise any organization that is named as a 
deponent but is not a participant that it has a duty to designate a 
person to testify. Any person designated under this section must testify 
on matters known by, or reasonably available to, the organization.
    (c) Taking of deposition. (1) Each deponent must swear to or affirm 
the truth of the testimony given before any testimony is taken.
    (2) Any participant may examine and cross-examine a deponent.
    (3) Any objection made during the examination must be noted by the 
officer taking the deposition. After the objection is noted, the 
deponent must answer the question, unless a claim of privilege is 
asserted or the presiding officer rules otherwise.
    (4) The deposition must be transcribed verbatim.
    (d) Nonstenographic means of recording; telephonic depositions. 
Testimony at a deposition may be recorded by means other than 
stenography if all participants so stipulate or if the presiding 
officer, upon motion, so orders. Such stipulation or order shall 
designate the person before whom the deposition. will be taken, and the 
manner in which the deposition will be preserved, filed, and certified. 
Depositions may also be taken by telephone, if all participants so 
stipulate or the presiding officer, upon motion, orders.
    (e) Officer taking deposition. Depositions must be taken before an 
officer authorized to administer oaths or affirmations by the laws of 
the United States or of the place where the deposition is held. A 
deposition may not be taken before an officer who is a relative or 
employee or attorney of any of the participants, or is financially or in 
any other way interested in the action.
    (f) Submission to deponent. (1) Unless examination is waived by the 
deponent, the transcription of the deposition must be submitted to the 
deponent for examination.
    (2) If the deponent requests any changes in form or substance, the 
officer must enter the changes on the deposition transcript with a 
statement of the witness' reasons for the changes. The deponent must 
sign the deposition within 30 days after submittal to the deponent, 
unless the participants by stipulation waive the signing or the deponent 
cannot or will not sign. By signing the deposition the deponent 
certifies that the transcript is a true record of the testimony given.
    (3) The officer who took the deposition must sign any deposition not 
signed by the deponent in accordance with this section and must state on 
the record that the signature is waived or that the deponent cannot or 
will not

[[Page 1138]]

sign, accompanied by any reason given for a deponent's refusal to sign. 
If the officer complies with this paragraph, a deposition that is 
unsigned by the deponent may be used as though signed, unless the 
presiding officer rules otherwise.
    (g) Certification and copies. (1) The officer must certify on the 
transcript of the deposition that the deponent swore to or affirmed the 
truth of the testimony given and the deposition transcript is a true 
record of the testimony given by the deponent. The officer must provide 
the participant conducting the deposition with a copy of the 
transcription.
    (2) Documents and things produced for inspection during the 
examination of the witness will, upon the request of a participant, be 
marked for identification and annexed to the deposition and the officer 
will certify the document or thing as the original offered during the 
deposition, or as a true and correct copy of the original offered.
    (3) Copies of the transcript of a deposition may be purchased from 
the reporting service that made the transcription, subject to 
protections established by the presiding officer.



Sec. 385.405  Use of depositions (Rule 405).

    (a) In general. During a hearing, the hearing of a motion, or an 
interlocutory proceeding under Rule 715, any part or all of a deposition 
taken pursuant to Rule 404, so far as admissible as though the witness 
were then present and testifying, may be used against any participant 
who was present or represented at the taking of the deposition or who 
had reasonable notice thereof, in accordance with any of the provisions 
of this section.
    (1) If the deponent is a witness at a hearing, any participant may 
use the deposition of that witness at the time of the witness' 
examination to contradict, impeach, or complete the testimony of that 
witness.
    (2) The deposition of a participant or of any person who, at the 
time of taking the deposition, was an officer, director, or managing 
agent of a participant, or a person designated under Rule 404(b)(3) to 
testify on behalf of a participant may be used by another participant 
for any purpose.
    (3) The deposition of any witness, whether or not a participant, may 
be used by a participant for any purpose, if the presiding officer finds 
that:
    (i) The witness is dead;
    (ii) The witness is unable to attend or testify because of age, 
illness, infirmity or imprisonment;
    (iii) The participant offering the deposition is unable after the 
exercise of due diligence to procure the attendance of the witness by 
subpoena; or
    (iv) Exceptional circumstances make it necessary in the interest of 
fairness with due regard to the importance of presenting the witness in 
open hearing, to allow use of the deposition.
    (4) If only part of a deposition is offered in evidence by a 
participant, a participant may require the introduction of any other 
part which ought, in fairness, to be considered with the part 
introduced, and any adverse participant may introduce any other part.
    (b) Objections to admissibility. No part of a deposition will 
constitute a part of the record in the proceeding, unless received in 
evidence by the Commission or presiding officer. Subject to paragraph 
(c) of this section, a participant may object to receiving into evidence 
all or part of any deposition for any reason that the evidence would be 
excluded if the deponent were present and testifying.
    (c) Effect of errors and irregularities in depositions. (1) Any 
objection to the taking of a deposition based on errors or 
irregularities in notice of the deposition is waived, unless written 
objection is promptly served on the participant giving the notice.
    (2) Any objection to the taking of a deposition based on the 
disqualification of the officer before whom it is to be taken is waived, 
unless the objection is made before the deposition begins or as soon 
thereafter as the disqualification becomes known or could be discovered 
with reasonable diligence.
    (3) Any objection to the competency of the witness or the 
competency, relevancy, or materiality of testimony is not waived by 
failure to make the objection before or during the taking of the 
deposition, unless the basis for the objection might have been removed 
if

[[Page 1139]]

the objection had been presented at the taking of the deposition.
    (4) Any objection to errors and irregularities occurring at the oral 
examination in the manner of taking the deposition, in the form of the 
questions and answers, in the oath or affirmation, or in the conduct of 
participants, and errors of any kind that might be obviated, removed or 
cured if presented at the deposition, is waived unless objection is made 
at the taking of the deposition.
    (5) Any objection based on errors or irregularities in the manner in 
which the testimony is transcribed or the deposition is prepared, 
signed, certified, endorsed, or otherwise dealt with by the officer is 
waived, unless the objection is made with reasonable promptness after 
the defect is, or with due diligence should have been, ascertained.



Sec. 385.406  Data requests, interrogatories, and requests for production of 

documents or things (Rule 406).

    (a) Availability. Any participant may serve upon any other 
participant a written request to supply information, such as responses 
to data requests and interrogatories, or copies of documents.
    (b) Procedures. (1) A request under this section must identify with 
specificity the information or material sought and will specify a 
reasonable time within which the matter sought must be furnished.
    (2) Unless provided otherwise by the presiding officer, copies of 
any discovery request must be served upon the presiding officer and on 
all participants to the proceeding.
    (3) Each discovery request must be answered separately and fully in 
writing.
    (4) Responses to discovery requests are required to be served only 
on the participant requesting the information, Commission trial staff, 
and any other participant that specifically requests service. The 
presiding officer may direct that a copy of any responses be furnished 
to the presiding officer. Responses must be served within the time limit 
specified in the request or otherwise provided by the presiding officer.
    (5) If the matter sought is not furnished, the responding 
participant must provide, in accordance with Rule 410, written 
explanation of the specific grounds for the failure to furnish it.



Sec. 385.407  Inspection of documents and other property (Rule 407).

    (a) Availability. On request, the presiding officer may order any 
other participant to:
    (1) Permit inspection and copying of any designated documents 
(including writings, drawings, graphs, charts, photographs, sound 
recordings, computer tapes or other compilations of data from which 
information can be obtained) that are not privileged and that are in the 
possession, custody, or control of the participant to whom the order is 
directed;
    (2) Permit inspection, copying or photographing, testing, or 
sampling of any tangible thing that is not privileged and that is in the 
possession, custody, or control of the participant to whom the order is 
directed; and
    (3) Permit entry upon or into designated land, buildings, or other 
property in the possession, custody, or control of the participant to 
whom the order is directed for the purpose of inspecting, measuring, 
surveying, or photographing the property or any activity or operation 
that is not privileged and that is conducted in or upon the property.
    (b) Procedures. A request for inspection of documents or property 
under this section must describe with reasonable particularity the 
documents or other property to which access is sought. The request must 
also specify a reasonable time, place, and manner of making the 
inspection.



Sec. 385.408  Admissions (Rule 408).

    (a) General rule. A participant may serve upon any other participant 
a written request for admission of the genuineness of any document or 
the truth of any matter of fact. The request must be served upon all 
participants.
    (b) Procedures. (1) Any request for admission of the genuineness of 
a document must be accompanied by a legible copy of the document, unless 
it was

[[Page 1140]]

previously furnished, is in the possession of the recipient of the 
request, or is readily available for inspection and copying.
    (2) The truth of specified matters of fact or the genuineness of the 
documents described in a request are deemed admitted unless, within 20 
days after service of the request or any longer period designated in the 
request, the participant that receives the request serves upon the 
requesting participant a written answer or objection addressed to the 
matters in the request.
    (3) An answer must specifically admit or deny the truth of the 
matters in the request or set forth in detail the reasons why the 
answering participant cannot admit or deny the truth of each matter. A 
denial of the truthfulness of the requested admission must fairly 
discuss the substance of the requested admission and, when good faith 
requires that a participant qualify the answer or deny only a part of 
the matter of which an admission is requested, the participant must 
specify that which is true and qualify or deny the remainder. The answer 
must be served on all participants.
    (c) Effect of admission. Any admission made by a participant under 
this section is for the purpose of the pending proceeding only, is not 
an admission for any other purpose, and may not be used against the 
participant in any other proceeding. Any matter admitted under this rule 
is conclusively established unless the presiding officer, on motion, 
permits withdrawal or amendment of the admission. The presiding officer 
may permit withdrawal or amendment of an admission, if the presiding 
officer finds that the presentation of the merits of the proceeding will 
be promoted and the participant who obtained the admission has failed to 
satisfy the presiding officer that withdrawal or amendment of the 
admission will prejudice that participant in maintaining his position in 
the proceeding.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 466-A, 52 FR 
35909, Sept. 24, 1987]



Sec. 385.409  Subpoenas (Rule 409).

    (a) Issuance. On request, the presiding officer may issue a subpoena 
for the attendance of a witness at a deposition or hearing or for the 
production of documents. A request for a subpoena must be served on all 
participants.
    (b) Service and return. A subpoena issued under this section must be 
served by personal service, substituted service, registered mail, or 
certified mail. A subpoena may be served by the marshal, by his deputy, 
or by any other person who is not a party or an employee of a party and 
is at least 18 years of age. If personal service is made by any person 
other than a United States marshal or deputy marshal, return of service 
must be accompanied by an affidavit to the Secretary or the presiding 
officer and must state the time and manner of service of the subpoena.
    (c) Fees. Fees paid to subpoenaed persons will be in accordance with 
Rule 510(e).
    (d) Objections. Objections to subpoenas must be made in accordance 
with Rule 410.



Sec. 385.410  Objections to discovery, motions to quash or to compel, and 

protective orders (Rule 410).

    (a) Objection to discovery--(1) Notice of objections or motion to 
quash. A participant, or a recipient of a subpoena, who does not intend 
to comply with a discovery request must notify in writing the 
participant seeking discovery within a reasonable time in advance of the 
date on which a response or other action in conformance with the 
discovery request is due. A recipient of a subpoena may either provide a 
notice of objection or file a motion to quash.
    (2) Objections to production of documents. (i) Unless an objection 
to discovery under this section is based on the ground that production 
would impose an undue burden, the objecting participant must provide the 
participant seeking discovery with a schedule of items withheld and a 
statement of:
    (A) The character and specific subject matter of each item; and
    (B) The specific objection asserted for each item.
    (ii) If an objection under this section is based on the ground that 
production

[[Page 1141]]

of the requested material would impose an undue burden, the objecting 
participant must provide the participant seeking discovery with a 
description of the approximate number of documents that would have to be 
produced and a summary of the information contained in such documents.
    (3) Objections to other discovery requests. If the discovery to 
which objection is made is not a request for documents, the objection 
must clearly state the grounds on which the participant bases its 
objection.
    (4) Objections to compile or process information. The fact that 
information has not been compiled or processed in the form requested is 
not a basis for objection unless the objection presents grounds for 
limiting discovery under paragraph (c) of this section.
    (b) Motions to compel. Any participant seeking discovery may file a 
motion to compel discovery, if:
    (1) A participant to whom a data request is made or upon whom an 
interrogatory is served under Rule 406 fails or refuses to make a full, 
complete, and accurate response;
    (2) A person named in a notice of intent to take a deposition or a 
subpoena fails or refuses to appear for the deposition;
    (3) An organization named in a notice of intent to take a deposition 
fails or refuses to designate one or more persons to testify on its 
behalf under Rule 404(b)(3);
    (4) A deponent fails or refuses to answer fully, completely, and 
accurately a question propounded or to sign the transcript of the 
testimony as required by Rule 404(f)(2);
    (5) A participant upon whom a request for admissions is served fails 
or refuses to respond to the request in accordance with Rule 408(b); or
    (6) A participant upon whom an order to produce or to permit 
inspection or entry is served under Rule 407 fails or refuses to comply 
with that order.
    (c) Orders limiting discovery. A presiding officer may, by order, 
deny or limit discovery or restrict public disclosure of discoverable 
matter in order to:
    (1) Protect a participant or other person from undue annoyance, 
burden, harassment or oppression;
    (2) Prevent undue delay in the proceeding;
    (3) Preserve a privilege of a participant, person, or governmental 
agency;
    (4) Prevent a participant from requiring another participant to 
provide information which is readily available to the requesting 
participant from other sources with a reasonable expenditure of effort 
given the requesting participant's position and resources;
    (5) Prevent unreasonably cumulative or duplicative discovery 
requests; or
    (6) Provide a means by which confidential matters may be made 
available to participants so as to prevent public disclosure. Material 
submitted under a protective order may nevertheless be subject to 
Freedom of Information Act requests and review.
    (d) Privilege--1) In general. (i) In the absence of controlling 
Commission precedent, privileges will be determined in accordance with 
decisions of the Federal courts with due consideration to the 
Commission's need to obtain information necessary to discharge its 
regulatory responsibilities.
    (ii) A presiding officer may not quash a subpoena or otherwise deny 
or limit discovery on the ground of privilege unless the presiding 
officer expressly finds that the privilege claimed is applicable. If a 
presiding officer finds that a qualified privilege has been established, 
the participant seeking discovery must make a showing sufficient to 
warrant discovery despite the qualified privilege.
    (iii) A presiding officer may issue a protective order under Rule 
410(c) to deny or limit discovery in order to preserve a privilege of a 
participant, person, or governmental agency.
    (2) Of the Commission. (i) If discovery under this subpart would 
require the production of Commission information, documents, or other 
matter that might fall within a privilege, the Commission trial staff 
must identify in writing the applicable privilege along with the matters 
claimed to be privileged or the individuals from whom privileged 
information is sought, to the presiding officer and the parties.
    (ii) If the presiding officer determines that the privilege claimed 
for the Commission is applicable, the Commission

[[Page 1142]]

information, documents, or other matter may not be produced. If the 
presiding officer determines that no privilege is applicable, that a 
privilege is waived, or that a qualified privilege is overcome, the 
presiding officer will certify the matter to the Commission in 
accordance with Rule 714. Certification to the Commission under this 
paragraph must describe the material to be disclosed and the reasons 
which, in the presiding officer's view, justify disclosure. The 
information will not be disclosed unless the Commission affirmatively 
orders the material disclosed.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 466-A, 52 FR 
35910, Sept. 24, 1987]



Sec. 385.411  Sanctions (Rule 411).

    (a) Disobedience of order compelling discovery. If a participant or 
any other person fails to obey an order compelling discovery, the 
presiding officer may, after notice to the participant or person and an 
opportunity to be heard, take one or more of the following actions, but 
may not dismiss or otherwise terminate the proceeding:
    (1) Certify the matter to the Commission with a recommendation for 
dismissal or termination of the proceeding, termination of that 
participant's right to participate in the proceeding, institution of 
civil action, or any other sanction available to the Commission by law;
    (2) Order that the matters to which the order compelling discovery 
relates are taken as established for the purposes of the proceeding in 
accordance with the position of the participant obtaining the order;
    (3) Order that a participant be precluded from supporting or 
opposing such positions or introducing such matters in evidence as the 
presiding officer designates;
    (4) Order that all or part of any pleading by a participant be 
struck or that the proceeding or a phase of the proceeding be stayed 
until the order compelling discovery is obeyed; and
    (5) Recommend to the Commission that it take action under Rule 2102 
against a representative of the participant if the presiding officer 
believes that the representative has engaged in unethical or improper 
professional conduct.
    (b) Against representative of a participant. If the person 
disobeying an order compelling discovery is an agent, officer, employee, 
attorney, partner, or director of a participant, the presiding officer 
may take any of the actions described in paragraph (a) against that 
participant.



                           Subpart E_Hearings



Sec. 385.501  Applicability (Rule 501).

    This subpart applies to any proceeding, or part of a proceeding, 
that the Commission or the Secretary under delegated authority sets for 
a hearing to be conducted in accordance with this subpart.

[Order 492, 53 FR 16067, May 5, 1988]



Sec. 385.502  Initiation of hearing (Rule 502).

    (a) Notice or order initiating hearing. A hearing under this subpart 
will be initiated by:
    (1) Order of the Commission; or
    (2) Notice by the Secretary at the direction of the Commission or 
under delegated authority.
    (b) Contents of notice or order initiating hearing. Any order or 
notice under paragraph (a) of this section will set forth:
    (1) The authority and jurisdiction under which the hearing is to be 
held;
    (2) The nature of the proceeding;
    (3) The final date for the filing of interventions, if the dates 
were not fixed by an earlier notice;
    (4) The presiding officer, if designated at that time; and
    (5) The date, time, and location of the hearing or prehearing 
conference, if known; and
    (6) Any other appropriate matter.
    (c) Consolidation, severance, and phasing. Any notice or order under 
this section may direct consolidation of proceedings, phasing of a 
proceeding, or severance of proceedings or issues in a proceeding.

[Order 225, 47 FR 19022, May 3, 1982, as amended at Order 492, 53 FR 
16067, May 5, 1988; Order 606, 64 FR 44405, Aug. 16, 1999]

[[Page 1143]]



Sec. 385.503  Consolidation, severance and extension of close-of-record date 

by Chief Administrative Law Judge (Rule 503).

    (a) The Chief Administrative Law Judge may, on motion or otherwise, 
order proceedings pending under this subpart consolidated for hearing 
on, or settlement of, any or all matters in issue in the proceedings, or 
order the severance of proceedings or issues in a proceeding. The order 
may be appealed to the Commission pursuant to Rule 715.
    (b) If the Commission orders that the presiding officer close the 
record in any proceeding by a specific date, the Chief Administrative 
Law Judge may, upon motion or otherwise, extend the close-of-record date 
for good cause. This staff action may be appealed to the Commission only 
under Rule 1902.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 376, 49 FR 
21705, May 23, 1984; Order 437, 50 FR 48183, Nov. 22, 1985; Order 578, 
60 FR 19505, Apr. 19, 1995]



Sec. 385.504  Duties and powers of presiding officers (Rule 504).

    (a) Duties. (1) It shall be the duty of the presiding officer to 
conduct a fair and impartial hearing and to determine the matter justly 
under the law.
    (2) The presiding officer will cause all appearances during a 
hearing to be entered on the record with a notation in whose behalf each 
appearance is made.
    (3) The presiding officer will establish the order of presentation 
of the cases of all participants in the hearing.
    (4) The presiding officer will assure that the taking of evidence 
and subsequent matters proceed with all reasonable diligence and with 
the least delay practicable.
    (5) The presiding officer will prepare and certify an initial 
decision or a revised initial decision, whichever is appropriate, to the 
Commission as provided in Subpart G of this part.
    (b) Powers. Except as otherwise ordered by the Commission or 
provided by law, the presiding officer may:
    (1) Schedule and otherwise regulate the course of the hearing;
    (2) Recess, reconvene, postpone, or adjourn the hearing;
    (3) Administer oaths;
    (4) Rule on and receive evidence;
    (5) Cause Discovery to be conducted;
    (6) Exercise powers granted a presiding officer under Subpart D;
    (7) Hold conferences of the participants, as provided in Subpart F 
of this part, including for the purpose of considering the use of 
alternative dispute resolution procedures;
    (8) Rule on, and dispose of, procedural matters, including oral or 
written motions;
    (9) Summarily dispose of a proceeding or part of a proceeding, as 
provided in Rule 217;
    (10) Certify a question to the Commission, as provided in Rule 714;
    (11) Permit or deny appeal of an interlocutory ruling, as provided 
in Rule 715;
    (12) Rule on motions to intervene, as provided in Rule 214;
    (13) Separate any issue or group of issues from other issues in a 
proceeding and treat such issue or group of issues as a separate phase 
of the proceeding;
    (14) Maintain order, as follows:
    (i) Ensure that any disregard by any person of rulings on matters of 
order and procedure is noted on the record or, if appropriate, is made 
the subject of a special written report to the Commission;
    (ii) In the event any person engages in disrespectful, disorderly, 
or contumacious language or conduct in connection with the hearing, 
recess the hearing for such time as necessary to regain order;
    (iii) Request that the Commission take appropriate action, including 
removal from the proceeding, against a participant or counsel, if 
necessary to maintain order.
    (15) Modify any time period, if such modification is in the interest 
of justice and will result in no undue prejudice to any participant;
    (16) Limit the number of expert witnesses who may testify on any 
issue, consistent with the rule against repetitious testimony in Rule 
509(a);
    (17) Limit the number of persons, other than staff, representing a 
similar interest who may examine witnesses or make or argue motions or 
objections;
    (18) Require; or authorize the admission of, further evidence upon 
any issue at any time before the close of the evidentiary record;

[[Page 1144]]

    (19) Rule on motions for reconsideration of an initial decision as 
provided in Rule 717;
    (20) Take any other action necessary or appropriate to the discharge 
of the duties of a presiding officer, consistent with applicable law and 
policy.
    (c) Disqualification. (1) A presiding officer may withdraw from a 
proceeding, if that officer believes himself or herself disqualified.
    (2) The Commission may, for good cause, order the removal of any 
presiding officer from a proceeding, on motion filed with the Commission 
or otherwise.

[Order 225, 47 FR 19022, May 3, 1982; 48 FR 786, Jan. 7, 1983, as 
amended by Order 375, 49 FR 21315, May 21, 1984; Order 466, 52 FR 6970, 
Mar. 6, 1987; Order 578, 60 FR 19505, Apr. 19, 1995]



Sec. 385.505  Right of participants to present evidence (Rule 505).

    Consistent with the provisions of this part, a participant has the 
right to present such evidence, including rebuttal evidence, to make 
such objections and arguments, and to conduct such cross-examination, as 
may be necessary to assure true and full disclosure of the facts.



Sec. 385.506  Examination of witnesses during hearing (Rule 506).

    (a) Prepared written direct and rebuttal testimony. Unless the 
presiding officer orders such testimony to be presented orally, direct 
and rebuttal testimony of a witness in a hearing must be prepared and 
submitted in written form, as required by Rule 507. Any witness 
submitting written testimony must be available for cross-examination, as 
provided in this subpart.
    (b) Oral testimony during hearing. Oral examination of a witness in 
a hearing must be conducted under oath and in the presence of the 
presiding officer, with opportunity for all participants to question the 
witness to the extent consistent with Rules 504(b)(17), 505, and 509(a).



Sec. 385.507  Prepared written testimony (Rule 507).

    (a) Offered as an exhibit. The prepared written testimony of any 
witness must be offered as an exhibit. The presiding officer will allow 
a reasonable period of time for the preparation of such written 
testimony.
    (b) Time for filing. Any prepared written testimony must be filed 
and served within the time provided by the presiding officer, in no case 
later than 10 days before the session of the hearing at which such 
exhibit is offered, unless a shorter period is permitted under paragraph 
(c) of this section.
    (c) Late-filed testimony. (1) If all participants in attendance at 
the hearing agree, the 10-day requirement for filing any written 
testimony under paragraph (b) of this section is waived.
    (2) The presiding officer may permit the introduction of any 
prepared written testimony without compliance with paragraph (b) of this 
section, if the presiding officer determines that the introduction of 
the testimony:
    (i) Is necessary for a full disclosure of the facts or is warranted 
by any other showing of good cause; and
    (ii) Would not be unduly prejudicial to any participant.
    (3) If any written testimony is served and filed within the 10 day 
period provided in paragraph (b) of this section, the presiding officer 
will provide the participants in attendance with a reasonable 
opportunity to inspect the testimony.
    (d) Form; authentication. Prepared written testimony must have line 
numbers inserted in the left-hand margin of each page and must be 
authenticated by an affidavit of the witness.



Sec. 385.508  Exhibits (Rule 508).

    (a) General rules. (1) Except as provided in paragraphs (b) through 
(e) of this section, any material offered in evidence, other than oral 
testimony, must be offered in the form of an exhibit.
    (2) Any participant who seeks to have an exhibit admitted into 
evidence must provide one copy of the exhibit to the presiding officer 
and two copies to the reporter, not later than the time that the exhibit 
is marked for identification.
    (3) The presiding officer will cause each exhibit offered by a 
participant to be marked for identification.
    (b) Designation and treatment of matter sought to be admitted. (1) 
If a document offered as an exhibit contains material

[[Page 1145]]

not offered as evidence, the participant offering the exhibit must:
    (i) Plainly designate the matter offered as evidence; and
    (ii) Segregate and exclude the material not offered in evidence, to 
the extent practicable.
    (2) If, in a document offered as an exhibit, material not offered in 
evidence is so extensive as to unnecessarily encumber the record, the 
material offered in evidence will be marked for identification. The 
remainder of the document will be considered not to have been offered in 
evidence.
    (3) Copies of any document offered as an exhibit under paragraph 
(b)(2) of this section must be delivered to the other participants 
appearing at the hearing by the participant offering the exhibit in 
evidence. The participants will be offered an opportunity to inspect the 
entire document and to offer as an exhibit in evidence, in like manner, 
any other portions of the document.
    (c) Public document items by reference. If all or part of a public 
document is offered in evidence and the participant offering the 
document shows that all or the pertinent part of the document, is 
reasonably available to the public, the document need not be produced or 
marked for identification but may be offered in evidence as a public 
document by identifying all or the relevant part of the document to be 
offered.
    (d) Official notice of facts. (1) A presiding officer may take 
official notice of any matter that may be judicially noticed by the 
courts of the United States, or of any matter about which the 
Commission, by reason of its functions, is expert.
    (2) The presiding officer must afford any participant, making a 
timely request, an opportunity to show the contrary of an officially 
noticed fact.
    (3) Any participant requesting official notice of facts after the 
conclusion of the hearing must set forth reasons to justify the failure 
to request official notice prior to the close of the hearing.
    (e) Stipulations. (1) Participants in a proceeding may stipulate to 
any relevant matters of fact or the authenticity of any relevant 
documents.
    (2) A stipulation may be received in evidence at the hearing and, if 
received in evidence, the stipulation is binding on the stipulating 
participants with respect to any matter stipulated.
    (3) A stipulation may be written or made orally at the hearing.



Sec. 385.509  Admissibility of evidence (Rule 509).

    (a) General standard. The presiding officer should exclude from 
evidence any irrelevant, immaterial, or unduly repetitious material. The 
presiding officer may also exclude from evidence any other material 
which the presiding officer determines is not of the kind which would 
affect reasonable and fair-minded persons in the conduct of their daily 
affairs.
    (b) Ruling on evidence. (1) The presiding officer will rule on the 
admissibility of any evidence offered.
    (2) If any participant objects to the admission or exclusion of 
evidence, the participant must state briefly the grounds for the 
objection.
    (3) The presiding officer will not permit formal exceptions to any 
ruling on evidence. This prohibition against formal exceptions does not 
preclude a participant from raising, as an issue, the validity of any 
ruling on evidence later in the proceeding, consistent with Rule 711.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 225-A, 47 FR 
35956, Aug. 18, 1982]



Sec. 385.510  Miscellaneous provisions (Rule 510).

    (a) Transcript. (1) Any statement made at a hearing session will be 
transcribed in a verbatim report, with nothing omitted except as 
directed by the presiding officer on the record. A statement at a 
hearing may not occur off-the-record, except as otherwise directed by 
the presiding officer.
    (2) After the closing of a record, changes in the transcript are not 
permitted, except as provided in paragraph (b) of this section.
    (b) Transcript corrections. (1) Any correction in the transcript of 
a hearing may be made only if the correction conforms the transcript to 
the evidence presented at the hearing and to the truth.
    (2) A transcript correction may be incorporated in the record, in 
accordance

[[Page 1146]]

with a ruling of the presiding officer, if:
    (i) Agreed to by all participants and approved by the presiding 
officer; or
    (ii) The presiding officer requests submittal of transcript 
corrections and rules on the corrections submitted.
    (3) Transcript corrections may be made at any time during the 
hearing or after the close of evidence, as the presiding officer 
determines appropriate, but only if the correction is made not less than 
10 days before the time for filing final briefs.
    (c) Close of evidentiary record. The presiding officer will 
designate the time at which the evidentiary record is closed. Evidence 
may not be added to the evidentiary record after the record is closed, 
unless the record is reopened under Rule 716.
    (d) Copies of exhibits and motions to participants. Except as 
otherwise provided in this subpart, copies of exhibits and motions will 
be provided at the hearing to any participants who have not been 
provided copies.
    (e) Fees of subpoenaed witnesses. (1) Any witnesses subpoenaed by 
the Commission must be paid the same fees and mileage provided for 
similar services in the district courts of the United States.
    (2) Any fees and mileage paid to a subpoenaed witness under 
paragraph (e)(1) of this section will be paid by the Commission, unless 
the witness is subpoenaed at the instance of a party.
    (3) If the witness is subpoenaed at the instance of a party, any 
fees and mileage paid to the witness under paragraph (e)(1) of this 
section must be paid by the party. The Commission, before issuing any 
subpoena at the instance of the party, may require the party to deposit 
an amount adequate to cover the witness probable fees and mileage under 
paragraph (e)(1) of this section. The deposit will be refunded when the 
party pays the witness in full.
    (f) Offers of proof. (1) Any offer of proof made in connection with 
a ruling of the presiding officer rejecting or excluding proffered oral 
testimony must consist of a statement of the substance of the evidence 
which the participant claims would be adduced by the testimony.
    (2) If any excluded evidence is in the form of an exhibit or is a 
public document, a copy of such exhibit will constitute the offer of 
proof or the public document will be specified for identification.



          Subpart F_Conferences, Settlements, and Stipulations



Sec. 385.601  Conferences (Rule 601).

    (a) Convening. The Commission or other decisional authority, upon 
motion or otherwise, may convene a conference of the participants in a 
proceeding at any time for any purpose related to the conduct or 
disposition of the proceeding, including submission and consideration of 
offers of settlement or the use of alternative dispute resolution 
procedures.
    (b) General requirements. (1) The participants in a proceeding must 
be given due notice of the time and place of a conference under 
paragraph (a) of this section and of the matters to be addressed at the 
conference. Participants attending the conference must be prepared to 
discuss the matters to be addressed at the conference, unless there is 
good cause for a failure to be prepared.
    (2) Any person appearing at the conference in a representative 
capacity must be authorized to act on behalf of that person's principal 
with respect to matters to be addressed at the conference.
    (3) If any party fails to attend the conference such failure will 
constitute a waiver of all objections to any order or ruling arising out 
of, or any agreement reached at, the conference.
    (c) Powers of decisional authority at conference. (1) The decisional 
authority, before which the conference is held or to which the 
conference reports, may dispose, during a conference, of any procedural 
matter on which the decisional authority is authorized to rule and which 
may appropriately and usefully be disposed of at that time.
    (2) If, in a proceeding set for hearing under subpart E, the 
presiding officer determines that the proceeding would be substantially 
expedited by distribution of proposed exhibits, including written 
prepared testimony and other documents, reasonably in advance of

[[Page 1147]]

the hearing session, the presiding officer may, with due regard for the 
convenience of the participants, direct advance distribution of the 
exhibits by a prescribed date. The presiding officer may also direct the 
preparation and distribution of any briefs and other documents which the 
presiding officer determines will substantially expedite the proceeding.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 578, 60 FR 
19505, Apr. 19, 1995]



Sec. 385.602  Submission of settlement offers (Rule 602).

    (a) Applicability. This section applies to written offers of 
settlement filed in any proceeding pending before the Commission or set 
for hearing under subpart E. For purposes of this section, the term 
``offer of settlement'' includes any written proposal to modify an offer 
of settlement.
    (b) Submission of offer. (1) Any participant in a proceeding may 
submit an offer of settlement at any time.
    (2) An offer of settlement must be filed with the Secretary. The 
Secretary will transmit the offer to:
    (i) The presiding officer, if the offer is filed after a hearing has 
been ordered under subpart E of this part and before the presiding 
officer certifies the record to the Commission; or
    (ii) The Commission.
    (3) If an offer of settlement pertains to multiple proceedings that 
are in part pending before the Commission and in part set for hearing, 
any participant may by motion request the Commission to consolidate the 
multiple proceedings and to provide any other appropriate procedural 
relief for purposes of disposition of the settlement.
    (c) Contents of offer. (1) An offer of settlement must include:
    (i) The settlement offer;
    (ii) A separate explanatory statement;
    (iii) Copies of, or references to, any document, testimony, or 
exhibit, including record citations if there is a record, and any other 
matters that the offerer considers relevant to the offer of settlement; 
and
    (2) If an offer of settlement pertains to a tariff or rate filing, 
the offer must include any proposed change in a form suitable for 
inclusion in the filed rate schedules or tariffs, and a number of copies 
sufficient to satisfy the filing requirements applicable to tariff or 
rate filings of the type at issue in the proceeding.
    (d) Service. (1) A participant offering settlement under this 
section must serve a copy of the offer of settlement:
    (i) On every participant in accordance with Rule 2010;
    (ii) On any person required by the Commission's rules to be served 
with the pleading or tariff or rate schedule filing, with respect to 
which the proceeding was initiated.
    (2) The participant serving the offer of settlement must notify any 
person or participant served under paragraph (d)(1) of this section of 
the date on which comments on the settlement are due under paragraph (f) 
of this section.
    (e) Use of non-approved offers of settlement as evidence. (1) An 
offer of settlement that is not approved by the Commission, and any 
comment on that offer, is not admissible in evidence against any 
participant who objects to its admission.
    (2) Any discussion of the parties with respect to an offer of 
settlement that is not approved by the Commission is not subject to 
discovery or admissible in evidence.
    (f) Comments. (1) A comment on an offer of settlement must be filed 
with the Secretary who will transmit the comment to the Commission, if 
the offer of settlement was transmitted to the Commission, or to the 
presiding officer in any other case.
    (2) A comment on an offer of settlement may be filed not later than 
20 days after the filing of the offer of settlement and reply comments 
may be filed not later than 30 days after the filing of the offer, 
unless otherwise provided by the Commission or the presiding officer.
    (3) Any failure to file a comment constitutes a waiver of all 
objections to the offer of settlement.
    (4) Any comment that contests an offer of settlement by alleging a 
dispute as to a genuine issue of material fact must include an affidavit 
detailing any genuine issue of material fact by specific reference to 
documents, testimony, or other items included in the

[[Page 1148]]

offer of settlement, or items not included in the settlement, that are 
relevant to support the claim. Reply comments may include responding 
affidavits.
    (g) Uncontested offers of settlement. (1) If comments on an offer 
are transmitted to the presiding officer and the presiding officer finds 
that the offer is not contested by any participant, the presiding 
officer will certify to the Commission the offer of settlement, a 
statement that the offer of settlement is uncontested, and any hearing 
record or pleadings which relate to the offer of settlement.
    (2) If comments on an offer of settlement are transmitted to the 
Commission, the Commission will determine whether the offer is 
uncontested.
    (3) An uncontested offer of settlement may be approved by the 
Commission upon a finding that the settlement appears to be fair and 
reasonable and in the public interest.
    (h) Contested offers of settlement. (1)(i) If the Commission 
determines that any offer of settlement is contested in whole or in 
part, by any party, the Commission may decide the merits of the 
contested settlement issues, if the record contains substantial evidence 
upon which to base a reasoned decision or the Commission determines 
there is no genuine issue of material fact.
    (ii) If the Commission finds that the record lacks substantial 
evidence or that the contesting parties or contested issues can not be 
severed from the offer of settlement, the Commission will:
    (A) Establish procedures for the purpose of receiving additional 
evidence before a presiding officer upon which a decision on the 
contested issues may reasonably be based; or
    (B) Take other action which the Commission determines to be 
appropriate.
    (iii) If contesting parties or contested issues are severable, the 
contesting parties or uncontested portions may be severed. The 
uncontested portions will be decided in accordance with paragraph (g) of 
this section.
    (2)(i) If any comment on an offer of settlement is transmitted to 
the presiding officer and the presiding officer determines that the 
offer is contested, whole or in part, by any participant, the presiding 
officer may certify all or part of the offer to the Commission. If any 
offer or part of an offer is contested by a party, the offer may be 
certified to the Commission only if paragraph (h)(2)(ii) or (iii) of 
this section applies.
    (ii) Any offer of settlement or part of any offer may be certified 
to the Commission if the presiding officer determines that there is no 
genuine issue of material fact. Any certification by the presiding 
officer must contain the determination that there is no genuine issue of 
material fact and any hearing record or pleadings which relate to the 
offer or part of the offer being certified.
    (iii) Any offer of settlement or part of any offer may be certified 
to the Commission, if:
    (A) The parties concur on a motion for omission of the initial 
decision as provided in Rule 710, or, if all parties do not concur in 
the motion, the presiding officer determines that omission of the 
initial decision is appropriate under Rule 710(d), and
    (B) The presiding officer determines that the record contains 
substantial evidence from which the Commission may reach a reasoned 
decision on the merits of the contested issues.
    (iv) If any contesting parties or contested issues are severable, 
the uncontested portions of the settlement may be certified immediately 
by the presiding officer to the Commission for decision, as provided in 
paragraph (g) of this section.
    (i) Reservation of rights. Any procedural right that a participant 
has in the absence of an offer of settlement is not affected by 
Commission disapproval, or approval subject to condition, of the 
uncontested portion of the offer of settlement.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 541, 57 FR 
21734, May 22, 1992; Order 578, 60 FR 19505, Apr. 19, 1995]



Sec. 385.603  Settlement of negotiations before a settlement judge (Rule 603).

    (a) Applicability. This section applies to any proceeding set for 
hearing under subpart E of this part and to any other proceeding in 
which the Commission

[[Page 1149]]

has ordered the appointment of a settlement judge.
    (b) Definition. For purposes of this section, settlement judge means 
the administrative law judge appointed by the Chief Administrative Law 
Judge to conduct settlement negotiations under this section.
    (c) Requests for appointment of settlement judges. (1) Any 
participant may file a motion requesting the appointment of a settlement 
judge with the presiding officer, or, if there is no presiding officer 
for the proceeding, with the Commission.
    (2) A presiding officer may request the Chief Administrative Law 
Judge to appoint a settlement judge.
    (3) A motion under paragraph (c)(1) of this section may be acted 
upon at any time, and the time limitations on answers in Rule 213(d) do 
not apply.
    (4) Any answer or objection filed after a motion has been acted upon 
will not be considered.
    (d) Commission order directing appointment of settlement judge. The 
Commission may, on motion or otherwise, order the Chief Administrative 
Law Judge to appoint a settlement judge.
    (e) Appointment of settlement judge by Chief Administrative Law 
Judge. The Chief Administrative Law Judge may appoint a settlement judge 
for any proceeding, if requested by the presiding officer under 
paragraph (c)(2) of this section or if the presiding officer concurs in 
a motion made under paragraph (c)(1) of this section.
    (f) Order appointing settlement judge. The Chief Administrative Law 
Judge will appoint a settlement judge by an order, which specifies 
whether, and to what extent, the proceeding is suspended pending 
termination of settlement negotiations conducted in accordance with this 
section. The order may confine the scope of any settlement negotiations 
to specified issues.
    (g) Powers and duties of settlement judge. (1) A settlement judge 
will convene and preside over conferences and settlement negotiations 
between the participants and assess the practicalities of a potential 
settlement.
    (2)(i) A settlement judge will report to the Chief Administrative 
Law Judge or the Commission, as appropriate, describing the status of 
the settlement negotiations and evaluating settlement prospects.
    (ii) In any such report, the settlement judge may recommend the 
termination or continuation of settlement negotiations conducted under 
this section.
    (iii) The first report by the settlement judge will be made not 
later than 30 days after the appointment of the settlement judge. The 
Commission or the Chief Administrative Law Judge may order additional 
reports at any time.
    (h) Termination of settlement negotiations before a settlement 
judge. Unless an order of the Commission directing the appointment of a 
settlement judge provides otherwise, settlement negotiations conducted 
under this section will terminate upon the order of the Chief 
Administrative Law Judge issued after consultation with the settlement 
judge.
    (i) Non-reviewability. Any decision concerning the appointment of a 
settlement judge or the termination of any settlement negotiations is 
not subject to review by, appeal to, or rehearing by the presiding 
officer, Chief Administrative Law Judge, or the Commission.
    (j) Multiple settlement negotiations. If settlement negotiations are 
terminated under paragraph (h) of this section, the Chief Administrative 
Law Judge may subsequently appoint a settlement judge in the same 
proceeding to conduct settlement negotiations in accordance with this 
section.



Sec. 385.604  Alternative means of dispute resolution (Rule 604).

    (a) Applicability. (1) Participants may, subject to the limitations 
of paragraph (a)(2) of this section, use alternative means of dispute 
resolution to resolve all or part of any pending matter if the 
participants agree. The alternative means of dispute resolution 
authorized under subpart F of this part will be voluntary procedures 
that supplement rather than limit other available dispute resolution 
techniques.
    (2) Except as provided in paragraph (a)(3) of this section, the 
decisional authority will not consent to use of an alternative dispute 
resolution proceeding if:

[[Page 1150]]

    (i) A definitive or authoritative resolution of the matter is 
required for precedential value;
    (ii) The matter involves or may bear upon significant questions of 
policy that require additional procedures before a final resolution may 
be made, and the proceeding would not likely serve to develop a 
recommended policy;
    (iii) Maintaining established policies is of special importance;
    (iv) The matter significantly affects persons or organizations who 
are not parties to the proceeding;
    (v) A full public record of the proceeding is important, and a 
dispute resolution proceeding cannot provide a record; or
    (vi) The Commission must maintain continuing jurisdiction over the 
matter with authority to alter the disposition of the matter in the 
light of changed circumstances, and a dispute resolution proceeding 
would interfere with the Commission's fulfilling that requirement.
    (3) If one or more of the factors outlined in paragraph (a)(2) of 
this section is present, alternative dispute resolution may nevertheless 
be used if the alternative dispute resolution proceeding can be 
structured to avoid the identified factor or if other concerns 
significantly outweigh the identified factor.
    (4) A determination to use or not to use a dispute resolution 
proceeding under subpart F of this part is not subject to judicial 
review.
    (5) Settlement agreements reached through the use of alternative 
dispute resolution pursuant to subpart F of this part will be subject to 
the provisions of Rule 602, unless the decisional authority, upon motion 
or otherwise, orders a different procedure.
    (b) Definitions. For the purposes of subpart F of this part:
    (1) Alternative means of dispute resolution means any procedure that 
is used, in lieu of an adjudication, to resolve issues in controversy, 
including but not limited to, settlement negotiations, conciliation, 
facilitation, mediation, factfinding, minitrials, and arbitration, or 
any combination thereof;
    (2) Award means any decision by an arbitrator resolving the issues 
in controversy;
    (3) Dispute resolution communication means any oral or written 
communication prepared for the purposes of a dispute resolution 
proceeding, including any memoranda, notes or work product of the 
neutral, parties or non-party participant. A written agreement to enter 
into a dispute resolution proceeding, or a final written agreement or 
arbitral award reached as a result of a dispute resolution proceeding, 
is not a dispute resolution communication;
    (4) Dispute resolution proceeding means any alternative means of 
dispute resolution that is used to resolve an issue in controversy in 
which a neutral may be appointed and specified parties participate;
    (5) In confidence means information is provided:
    (i) With the expressed intent of the source that it not be 
disclosed, or
    (ii) Under circumstances that create a reasonable expectation on 
behalf of the source that the information will not be disclosed;
    (6) Issue in controversy means an issue which is or is anticipated 
to be material to a decision in a proceeding before the Commission and 
which is the subject of disagreement between participants who would be 
substantially affected by the decision or between the Commission and any 
such participants;
    (7) Neutral means an individual who, with respect to an issue in 
controversy, functions specifically to aid the parties in resolving the 
controversy;
    (8) Participants in a dispute resolution proceeding that is used to 
resolve an issue in controversy in a proceeding involving an application 
for a license or exemption to construct, operate, and maintain a 
hydroelectric project pursuant to the Federal Power Act or the Public 
Utility Regulatory Policies Act shall include such state and federal 
agencies and Indian tribes as have statutory roles or a direct interest 
in such hydroelectric proceedings.
    (c) Neutrals. (1) A neutral may be a permanent or temporary officer 
or employee of the Federal Government (including an administrative law 
judge), or any other individual who is acceptable to the participants to 
a dispute resolution proceeding. A neutral must have no official, 
financial, or personal conflict of interest with respect to the

[[Page 1151]]

issues in controversy, except that a neutral who is not a government 
employee may serve if the interest is fully disclosed in writing to all 
participants and all participants agree.
    (2) A neutral serves at the will of the participants, unless 
otherwise provided.
    (3) Neutrals may be selected from among the Commission's 
administrative law judges or other employees, from rosters kept by the 
Federal Mediation and Conciliation Service, the Administrative 
Conference of the United States, the American Arbitration Association, 
or from any other source.
    (d) Submission of proposal to use alternative means of dispute 
resolution. (1) The participants may at any time submit a written 
proposal to use alternative means of dispute resolution to resolve all 
or part of any matter in controversy or anticipated to be in controversy 
before the Commission.
    (2) For matters set for hearing under subpart E of this part, a 
proposal to use alternative means of dispute resolution must be filed 
with the presiding administrative law judge.
    (3) For all other matters, a proposal to use alternative means of 
dispute resolution may be filed with the Secretary for consideration by 
the appropriate decisional authority.
    (4) The appropriate decisional authority will issue an order, 
approving or denying, under the guidelines in Rule 604(a) (2) and (3), a 
proposal to use alternative means of dispute resolution. Denial of a 
proposal to use alternative dispute resolution will be in the form of an 
order and will identify the specific reasons for the denial. A proposal 
to use alternative dispute resolution is deemed approved unless an order 
denying approval is issued within 30 days after the proposal is filed.
    (5) Any request to modify a previously-approved ADR proposal must 
follow the same procedure used for the initial approval.
    (e) Contents of proposal. A proposal to use alternative means of 
dispute resolution must be in writing and include:
    (1) A general identification of the issues in controversy intended 
to be resolved by the proposed alternative dispute resolution method,
    (2) A description of the alternative dispute resolution method(s) to 
be used,
    (3) The signatures of all participants or evidence otherwise 
indicating the consent of all participants; and
    (4) A certificate of service pursuant to Rule 2010(h).
    (f) Monitoring the alternative dispute resolution proceeding. The 
decisional authority may order reports on the status of the alternative 
dispute resolution proceeding at any time.

[Order 578, 60 FR 19506, Apr. 19, 1995, as amended by Order 602, 64 FR 
17099, Apr. 8, 1999]



Sec. 385.605  Arbitration (Rule 605).

    (a) Authorization of arbitration. (1) The participants may at any 
time submit a written proposal to use binding arbitration under the 
provisions of Rule 605 to resolve all or part of any matter in 
controversy, or anticipated to be in controversy, before the Commission.
    (2) The proposal must be submitted as provided in Rule 604(d).
    (3) The proposal must be in writing and contain the information 
required in Rule 604(e).
    (4) An arbitration proceeding under this rule may be monitored as 
provided in Rule 604(f).
    (5) No person may be required to consent to arbitration as a 
condition of entering into a contract or obtaining a benefit. All 
interested parties must expressly consent before arbitration may be 
used.
    (b) Arbitrators. (1) The participants to an arbitration proceeding 
are entitled to select the arbitrator.
    (2) The arbitrator must be a neutral who meets the criteria of a 
neutral under Rule 604(c).
    (c) Authority of arbitrator. An arbitrator to whom a dispute is 
referred under this section may:
    (1) Regulate the course of and conduct arbitral hearings;
    (2) Administer oaths and affirmations;
    (3) Compel the attendance of witnesses and the production of 
evidence to the extent the Commission is authorized by law to do so; and
    (4) Make awards.
    (d) Arbitration proceedings. (1) The arbitrator will set a time and 
place for

[[Page 1152]]

the hearing on the dispute and must notify the participants not less 
than 5 days before the hearing.
    (2) Any participant wishing that there be a record of the hearing 
must:
    (i) Prepare the record;
    (ii) Notify the other participants and the arbitrator of the 
preparation of the record;
    (iii) Furnish copies to all identified participants and the 
arbitrator; and
    (iv) Pay all costs for the record, unless the participants agree 
otherwise or the arbitrator determines that the costs should be 
apportioned.
    (3)(i) Participants to the arbitration are entitled to be heard, to 
present evidence material to the controversy, and to cross-examine 
witnesses appearing at the hearing to the same extent as in a proceeding 
under Subpart E of this part;
    (ii) The arbitrator may, with the consent of the participants, 
conduct all or part of the hearing by telephone, television, computer, 
or other electronic means, if each participant has an opportunity to 
participate.
    (iii) The hearing must be conducted expeditiously and in an informal 
manner.
    (iv) The arbitrator may receive any oral or documentary evidence, 
except that irrelevant, immaterial, unduly repetitious, or privileged 
evidence may be excluded by the arbitrator.
    (v) The arbitrator will interpret and apply relevant statutory and 
regulatory requirements, legal precedents, and policy directives.
    (4) No interested person will make or knowingly cause to be made to 
the arbitrator an unauthorized ex parte communication relevant to the 
merits of the proceeding, unless the participants agree otherwise. If a 
communication is made in violation of this prohibition, the arbitrator 
will ensure that a memorandum of the communication is prepared and made 
a part of the record, and that an opportunity for rebuttal is allowed. 
Upon receipt of such communication, the arbitrator may require the 
offending participant to show cause why the claim of the participant 
should not be resolved against the participant as a result of the 
improper conduct.
    (5) The arbitrator will make the award within 30 days after the 
close of the hearing or the date of the filing of any briefs authorized 
by the arbitrator, whichever date is later, unless the participants and 
the arbitrator agree to some other time limit.
    (e) Arbitration awards. (1)(i) The award in an arbitration 
proceeding under Subpart F of this chapter will include a brief, 
informal discussion of the factual and legal basis for the award.
    (ii) The prevailing participants must file the award with the 
Commission, along with proof of service on all participants.
    (2) The award in an arbitration proceeding will become final 30 days 
after it is served on all parties.
    (3) A final award is binding on the participants to the arbitration 
proceeding.
    (4) An award may not serve as an estoppel in any other proceeding 
for any issue that was resolved in the proceeding. The award also may 
not be used as precedent or otherwise be considered in any factually 
unrelated proceeding or in any other arbitration proceeding.

[Order 578, 60 FR 19507, Apr. 19, 1995, as amended by Order 602, 64 FR 
17099, Apr. 8, 1999]



Sec. 385.606  Confidentiality in dispute resolution proceedings (Rule 606).

    (a) Except as provided in paragraphs (d) and (e) of this section, a 
neutral in a dispute resolution proceeding shall not voluntarily 
disclose, or through discovery or compulsory process be required to 
disclose, any information concerning any dispute resolution 
communication or any communication provided in confidence to the 
neutral, unless:
    (1) All participants in the dispute resolution proceeding and the 
neutral consent in writing;
    (2) The dispute resolution communication has otherwise already been 
made public;
    (3) The dispute resolution communication is required by statute to 
be made public, but a neutral should make the communication public only 
if no other person is reasonably available to disclose the 
communication; or

[[Page 1153]]

    (4) A court determines that the testimony or disclosure is necessary 
to:
    (i) Prevent a manifest injustice;
    (ii) Help establish a violation of law; or
    (iii) Prevent harm to the public health or safety of sufficient 
magnitude in the particular case to outweigh the integrity of dispute 
resolution proceedings in general by reducing the confidence of 
participants in future cases that their communications will remain 
confidential.
    (b) A participant in a dispute resolution proceeding shall not 
voluntarily disclose, or through discovery or compulsory process be 
required to disclose, any information concerning any dispute resolution 
communication, unless:
    (1) All participants to the dispute resolution proceeding consent in 
writing;
    (2) The dispute resolution communication has otherwise already been 
made public;
    (3) The dispute resolution communication is required by statute to 
be made public;
    (4) A court determines that the testimony or disclosure is necessary 
to:
    (i) Prevent a manifest injustice;
    (ii) Help establish a violation of law; or
    (iii) Prevent harm to the public health and safety of sufficient 
magnitude in the particular case to outweigh the integrity of dispute 
resolution proceedings in general by reducing the confidence of 
participants in future cases that their communications will remain 
confidential; or
    (5) The dispute resolution communication is relevant to determining 
the existence or meaning of an agreement or award that resulted from the 
dispute resolution proceeding or to the enforcement of the agreement or 
award.
    (c) Any dispute resolution communication that is disclosed in 
violation of paragraphs (a) or (b) of this section shall not be 
admissible in any proceeding.
    (d)(1) The participants may agree to alternative confidential 
procedures for disclosures by a neutral. The participants must inform 
the neutral before the commencement of the dispute resolution proceeding 
of any modifications to the provisions of paragraph (a) of this section 
that will govern the confidentiality of the dispute resolution 
proceeding. If the participants do not so inform the neutral, paragraph 
(a) of this section shall apply.
    (2) To qualify for the exemption established under paragraph (l) of 
this section, an alternative confidential procedure under this paragraph 
may not provide for less disclosure than confidential procedures 
otherwise provided under this rule.
    (e) If a demand for disclosure, by way of discovery request or other 
legal process, is made upon a participant regarding a dispute resolution 
communication, the participant will make reasonable efforts to notify 
the neutral and the other participants of the demand. Any participant 
who receives the notice and within 15 calendar days does not offer to 
defend a refusal of the neutral to disclose the requested information 
waives any objection to the disclosure.
    (f) Nothing in Rule 606 prevents the discovery or admissibility of 
any evidence that is otherwise discoverable, merely because the evidence 
was presented in the course of a dispute resolution proceeding. See 
sections 385.410 and 388.112 of this chapter.
    (g) Paragraphs (a) and (b) of this section do not preclude 
disclosure of information and data that are necessary to document an 
agreement reached or order issued pursuant to a dispute resolution 
proceeding.
    (h) Paragraphs (a) and (b) of this section do not prevent the 
gathering of information for research and educational purposes, in 
cooperation with other agencies, governmental entities, or dispute 
resolution programs, so long as the participants and the specific issues 
in controversy are not identifiable.
    (i) Paragraphs (a) and (b) of this section do not prevent use of a 
dispute resolution communication to resolve a dispute between the 
neutral in a dispute resolution proceeding and a participant in the 
proceeding, so long as the communication is disclosed only to the extent 
necessary to resolve the dispute.
    (j) Nothing in this section precludes parties from seeking 
privileged treatment for documents under section 388.112 of this 
chapter.

[[Page 1154]]

    (k) Where disclosure is authorized by this section, nothing in this 
section precludes use of a protective agreement or protective orders.
    (l) A dispute resolution communication that may not be disclosed 
under this rule shall also be exempt from disclosure under 5 U.S.C. 
552(b)(3).

[Order 578, 60 FR 19508, Apr. 19, 1995, as amended by Order 602, 64 FR 
17099, Apr. 8, 1999]



                           Subpart G_Decisions



Sec. 385.701  Applicability (Rule 701).

    This subpart applies to decisions in proceedings set for hearing 
under subpart E of this part, including any decision on a certified 
question, interlocutory appeal, or reopening, and to any decision on 
rehearing, except that:
    (a) The provisions of this subpart, other than those relating to 
rehearing or reopening, do not apply to consideration of an offer of 
settlement; and
    (b) This subpart applies to summary disposition only to the extent 
provided in Rule 217.



Sec. 385.702  Definitions (Rule 702).

    For purposes of this subpart:
    (a) Initial decision means any decision rendered by a presiding 
officer in accordance with Rule 708;
    (b) Final decision means any decision referred to in Rule 713.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 375, 49 FR 
21315, May 21, 1984; Order 575, 60 FR 4860, Jan. 25, 1995]



Sec. 385.703  Contents of decisions (Rule 703).

    Any decision in a proceeding is part of the record of that 
proceeding and will contain:
    (a) A ruling on each exception presented and any finding or 
conclusion, with supporting reasons, on any material issue of fact, law, 
or discretion presented on the record; and
    (b) The appropriate rule, order, sanction, relief, or a denial of 
any rule, order, motion, or relief.



Sec. 385.704  Rights of participants before initial decision (Rule 704).

    After testimony is taken in a proceeding, or phase of a proceeding, 
the presiding officer will afford every participant an opportunity to:
    (a) Submit written initial briefs in accordance with Rule 706, 
except that the presiding officer may provide an opportunity for oral 
argument in lieu of, or in addition to, initial briefs; and
    (b) Submit written reply briefs in accordance with Rule 706, except 
that the presiding officer may:
    (1) Provide an opportunity for oral reply argument in lieu of, or in 
addition to, reply briefs; or
    (2) For good cause, deny opportunity for reply or limit the issues 
which may be addressed in any reply.



Sec. 385.705  Additional powers of presiding officer with respect to briefs 

(Rule 705).

    (a) Limitations on briefs. A presiding officer, with due regard to 
the nature of the proceeding, may limit the length of any brief to be 
filed under Rule 706.
    (b) Additional briefs and other filings. If appropriate, the 
presiding officer may permit or require briefs or other filings in 
addition to those provided for in Rule 706.



Sec. 385.706  Initial and reply briefs before initial decision (Rule 706).

    (a) When filed. The presiding officer will prescribe a time for 
filing initial or reply briefs and for service of such briefs, giving 
due regard to the nature of the proceeding, the extent of the record, 
and the number and complexity of the issues. Unless the presiding 
officer otherwise orders, the time prescribed in a proceeding for filing 
briefs will be the same for all initial briefs and the same for all 
reply briefs.
    (b) Contents. (1) An initial brief filed with the presiding officer 
must include:
    (i) A concise statement of the case;
    (ii) A separate section containing proposed findings and 
conclusions, unless waived by the presiding officer;
    (iii) Arguments in support of the participant's position; and
    (iv) Any other matter required by the presiding officer.
    (2)(i) A reply brief filed with the presiding officer must be 
limited to a response to any arguments and issues raised in the initial 
briefs.
    (ii) The presiding officer may impose limits on the reply brief in 
addition to

[[Page 1155]]

any prescribed under paragraph (b)(2)(i) of this section.
    (c) Form. (1) An exhibit admitted in evidence or marked for 
identification in the record may not be reproduced in the brief, but may 
be reproduced, within reasonable limits, in an appendix to the brief. 
Any pertinent analysis of an exhibit may be included in a brief.
    (2) If a brief exceeds 20 pages, the brief must be accompanied by a 
table of contents and of points made, including page references, and an 
alphabetical list of citations, with page references.
    (d) Record. All initial and reply briefs will accompany the record 
and be available to the Commission and the presiding officer for 
consideration in deciding the case.



Sec. 385.707  Oral argument before initial decision (Rule 707).

    (a) Procedure. The presiding officer will designate the order of any 
oral argument to be held, set a time limit on each argument, and make 
any other procedural rulings.
    (b) Scope. (1) If oral argument is held without an initial brief, 
each participant must be given the opportunity to present orally the 
information required or permitted to be included in initial briefs under 
Rule 706(b).
    (2) If oral argument is held in addition to an initial or reply 
brief, oral argument may be limited to issues considered by the 
presiding officer to be appropriate issues for oral argument.
    (c) Inclusion of transcript of oral argument. All oral arguments 
will be transcribed and included in the record and will be available to 
the Commission and the presiding officer in deciding the case.



Sec. 385.708  Initial decisions by presiding officer (Rule 708).

    (a) Applicability. This section applies to any proceeding in which a 
presiding officer, other than the Commission, presided over the 
reception of the evidence.
    (b) General rule. (1) Except as otherwise ordered by the Commission 
or provided in paragraph (b)(2) of this section, the presiding officer 
will prepare a written initial decision.
    (2)(i) If time and circumstances require, the presiding officer may 
issue an order stating that an oral initial decision will be issued.
    (ii) An oral decision is considered served upon all participants 
when the decision is issued orally on the record. Promptly after service 
of the oral decision, the presiding officer will prepare the oral 
initial decision contained in the transcript in the format of a written 
initial decision.
    (3) Any initial decision prepared under paragraph (b)(1) or (b)(2) 
of this section will be certified to the Commission by the presiding 
officer with a copy of the record in the proceeding.
    (4) Not later than 35 days after the certification of an initial 
decision, under paragraph (b)(3) of this section, the presiding officer, 
after notifying the participants and receiving no objection from them, 
may make technical corrections to the initial decision.
    (c) Initial decision prepared and certified by presiding officer. 
(1) The presiding officer who presides over the reception of evidence 
will prepare and certify the initial decision, if any, unless the 
officer is unavailable or the Commission provides otherwise in 
accordance with 5 U.S.C. 557(b).
    (2) If the presiding officer who presided over the reception of 
evidence becomes unavailable, the Chief Administrative Law Judge may 
issue an order designating another qualified presiding officer to 
prepare and certify the initial decision.
    (d) Finality of initial decision. For purposes of requests for 
rehearing under Rule 713, an initial decision becomes a final Commission 
decision 10 days after exceptions are due under Rule 711 unless:
    (1) Exceptions are timely filed under Rule 711; or
    (2) The Commission issues an order staying the effectiveness of the 
decision pending review under Rule 712.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 375, 49 FR 
21315, May 21, 1984; Order 575, 60 FR 4860, Jan. 25, 1995]



Sec. 385.709  Other types of decisions (Rule 709).

    In lieu of an initial decision under Rule 708, the Commission may 
order

[[Page 1156]]

any type of decision as provided by 5 U.S.C. 557(b), or permit waiver of 
the initial decision as provided by Rule 710.



Sec. 385.710  Waiver of the initial decision (Rule 710).

    (a) General rule. Any participant may file a motion requesting the 
Commission to issue a final decision without any initial decision. If 
all participants join in the motion, the motion is granted, unless the 
Commission denies the motion within 10 days after the date of filing of 
the motion or, in the case of an oral motion under paragraph (c)(2) of 
this section, within 10 days after the motion is transmitted to the 
Commission. If all participants do not join in the motion, the motion is 
denied unless the Commission grants the motion within 30 days of filing 
of the motion or, in the case of an oral motion under paragraph (c)(2) 
of this section, within 30 days after the motion is transmitted to the 
Commission.
    (b) Content. Any motion to waive the initial decision filed with the 
Commission must specify:
    (1) Whether any participant waives any procedural right;
    (2) Whether all participants concur in the request to waive the 
initial decision;
    (3) The reasons that waiver of the initial decision is in the 
interest of parties and the public interest;
    (4) Whether any participant desires an opportunity for filing 
briefs; and
    (5) Whether any participant desires an opportunity for oral argument 
before the presiding officer, the Commission, or an individual 
Commissioner.
    (c) How and when made. (1) Any written motion under this section may 
be filed at any time, but not later than the fifth day following the 
close of the hearing conducted under subpart E of this part.
    (2) An oral motion under this section may be made during a hearing 
session, in which case the presiding officer will transmit to the 
Commission the relevant portions of the transcript of the hearing in 
which the motion was made.
    (d) Waiver by presiding officer. A motion for waiver of the initial 
decision, requested for the purpose of certification of a contested 
settlement pursuant to Rule 602(h)(2)(iii)(A), may be filed with, and 
decided by, the presiding officer. If all parties join in the motion, 
the presiding officer will grant the motion. If not all parties join in 
the motion, the motion is denied unless the presiding officer grants the 
motion within 30 days of filing the written motion or presenting an oral 
motion. The contents of any motion filed under paragraph (d) of this 
section must comply with the requirements in paragraph (b) of this 
section. A motion may be oral or written, and may be made whenever 
appropriate for the consideration of the presiding officer.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 376, 49 FR 
21705, May 23, 1984; Order 578, 60 FR 19508, Apr. 19, 1995]



Sec. 385.711  Exceptions and briefs on and opposing exceptions after initial 

decision (Rule 711).

    (a) Exceptions. (1)(i) Any participant may file with the Commission 
exceptions to the initial decision in a brief on exceptions not later 
than 30 days after service of the initial decision.
    (ii) Not later than 20 days after the latest date for filing a brief 
on exceptions, any participant may file a brief opposing exceptions in 
response to a brief on exceptions.
    (iii) A participant may file, within the time set for filing briefs 
opposing exceptions, a brief on exceptions solely for the purpose of 
incorporating by reference one or more numbered exceptions contained in 
the brief of another participant. A brief filed under this clause need 
not comply with the requirements set forth in paragraph (b) of this 
section.
    (2) A brief on exceptions or a brief opposing exceptions may not 
exceed 100 pages, unless the Chief Administrative Law Judge, upon 
motion, changes the page limitation.
    (3) The Secretary may extend, on motion or upon direction of the 
Commission, the time limits for any brief on or opposing exceptions. No 
additional briefs are permitted, unless specifically ordered by the 
Commission.
    (4) A participant may not attach to, or incorporate by reference in, 
any brief on exceptions or brief opposing exceptions any portion of an 
initial or reply brief filed in the proceeding.

[[Page 1157]]

    (b) Nature of briefs on exceptions and of briefs opposing 
exceptions. (1) Any brief on exceptions and any brief opposing 
exceptions must include:
    (i) If the brief exceeds 10 pages in length, a separate summary of 
the brief not longer than five pages; and
    (ii) A presentation of the participant's position and arguments in 
support of that position, including references to the pages of the 
record or exhibits containing evidence and arguments in support of that 
position.
    (2) Any brief on exceptions must include, in addition to matters 
required by paragraph (b)(1) of this section:
    (i) A short statement of the case;
    (ii) A list of numbered exceptions, including a specification of 
each error of fact or law asserted; and
    (iii) A concise discussion of the policy considerations that may 
warrant full Commission review and opinion.
    (3) A brief opposing exceptions must include, in addition to matters 
required by paragraph (b)(1) of this section:
    (i) A list of exceptions opposed, by number; and
    (ii) A rebuttal of policy considerations claimed to warrant 
Commission review.
    (c) Oral argument. (1) Any participant filing a brief on exceptions 
or brief opposing exceptions may request, by written motion, oral 
argument before the Commission or an individual Commissioner.
    (2) A motion under paragraph (c)(1) of this section must be filed 
within the time limit for filing briefs opposing exceptions.
    (3) No answer may be made to a motion under paragraph (c)(1) and, to 
that extent, Rule 213(a)(3) is inapplicable to a motion for oral 
argument.
    (4) A motion under paragraph (c)(1) of this section may be granted 
at the discretion of the Commission. If the motion is granted, any oral 
argument will be limited, unless otherwise specified, to matters 
properly raised by the briefs.
    (d) Failure to take exceptions results in waiver--(1) Complete 
waiver. If a participant does not file a brief on exceptions within the 
time permitted under this section, any objection to the initial decision 
by the participant is waived.
    (2) Partial waiver. If a participant does not object to a part of an 
initial decision in a brief on exceptions, any objections by the 
participant to that part of the initial decision are waived.
    (3) Effect of waiver. Unless otherwise ordered by the Commission for 
good cause shown, a participant who has waived objections under 
paragraph (d)(1) or (d)(2) of this section to all or part of an initial 
decision may not raise such objections before the Commission in oral 
argument or on rehearing.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 375, 49 FR 
21316, May 21, 1984; Order 575, 60 FR 4860, Jan. 25, 1995]



Sec. 385.712  Commission review of initial decisions in the absence of 

exceptions (Rule 712).

    (a) General rule. If no briefs on exceptions to an initial decision 
are filed within the time established by rule or order under Rule 711, 
the Commission may, within 10 days after the expiration of such time, 
issue an order staying the effectiveness of the decision pending 
Commission review.
    (b) Briefs and argument. When the Commission reviews a decision 
under this section, the Commission may require that participants file 
briefs or present oral arguments on any issue.
    (c) Effect of review. After completing review under this section, 
the Commission will issue a decision which is final for purposes of 
rehearing under Rule 713.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 375, 49 FR 
21316, May 21, 1984; Order 575, 60 FR 4860, Jan. 25, 1995]



Sec. 385.713  Request for rehearing (Rule 713).

    (a) Applicability. (1) This section applies to any request for 
rehearing of a final Commission decision or other final order, if 
rehearing is provided for by statute, rule, or order.
    (2) For the purposes of rehearing under this section, a final 
decision in any proceeding set for hearing under subpart E of this part 
includes any Commission decision:
    (i) On exceptions taken by participants to an initial decision;
    (ii) When the Commission presides at the reception of the evidence;

[[Page 1158]]

    (iii) If the initial decision procedure has been waived by consent 
of the participants in accordance with Rule 710;
    (iv) On review of an initial decision without exceptions under Rule 
712; and
    (v) On any other action designated as a final decision by the 
Commission for purposes of rehearing.
    (3) For the purposes of rehearing under this section, any initial 
decision under Rule 709 is a final Commission decision after the time 
provided for Commission review under Rule 712, if there are no 
exceptions filed to the decision and no review of the decision is 
initiated under Rule 712.
    (b) Time for filing; who may file. A request for rehearing by a 
party must be filed not later than 30 days after issuance of any final 
decision or other final order in a proceeding.
    (c) Content of request. Any request for rehearing must:
    (1) State concisely the alleged error in the final decision or final 
order;
    (2) Conform to the requirements in Rule 203(a), which are applicable 
to pleadings, and, in addition, include a separate section entitled 
``Statement of Issues,'' listing each issue in a separately enumerated 
paragraph that includes representative Commission and court precedent on 
which the party is relying; any issue not so listed will be deemed 
waived; and
    (3) Set forth the matters relied upon by the party requesting 
rehearing, if rehearing is sought based on matters not available for 
consideration by the Commission at the time of the final decision or 
final order.
    (d) Answers. (1) The Commission will not permit answers to requests 
for rehearing.
    (2) The Commission may afford parties an opportunity to file briefs 
or present oral argument on one or more issues presented by a request 
for rehearing.
    (e) Request is not a stay. Unless otherwise ordered by the 
Commission, the filing of a request for rehearing does not stay the 
Commission decision or order.
    (f) Commission action on rehearing. Unless the Commission acts upon 
a request for rehearing within 30 days after the request is filed, the 
request is denied.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 375, 49 FR 
21316, May 21, 1984; Order 575, 60 FR 4860, Jan. 25, 1995; 60 FR 16567, 
Mar. 31, 1995; Order 663, 70 FR 55725, Sept. 23, 2005; 71 FR 14642, Mar. 
23, 2006]



Sec. 385.714  Certified questions (Rule 714).

    (a) General rule. During any proceeding, a presiding officer may 
certify or, if the Commission so directs, will certify, to the 
Commission for consideration and disposition any question arising in the 
proceeding, including any question of law, policy, or procedure.
    (b) Notice. A presiding officer will notify the participants of the 
certification of any question to the Commission and of the date of any 
certification. Any such notification may be given orally during the 
hearing session or by order.
    (c) Presiding officer's memorandum; views of the participants. (1) A 
presiding officer should solicit, to the extent practicable, the oral or 
written views of the participants on any question certified under this 
section.
    (2) The presiding officer must prepare a memorandum which sets forth 
the relevant issues, discusses all the views of participants, and 
recommends a disposition of the issues.
    (3) The presiding officer must append to any question certified 
under this section the written views submitted by the participants, the 
transcript pages containing oral views, and the memorandum of the 
presiding officer.
    (d) Return of certified question to presiding officer. If the 
Commission does not act on any certified question within 30 days after 
receipt of the certification under paragraph (a) of this section, the 
question is deemed returned to the presiding officer for decision in 
accordance with the other provisions of this subpart.
    (e) Certification not suspension. Unless otherwise directed by the 
Commission or the presiding officer, certification under this section 
does not suspend the proceeding.

[[Page 1159]]



Sec. 385.715  Interlocutory appeals to the Commission from rulings of 

presiding officers (Rule 715).

    (a) General rule. A participant may not appeal to the Commission any 
ruling of a presiding officer during a proceeding, unless the presiding 
officer under paragraph (b) of this section, or the motions 
Commissioner, under paragraph (c) of this section, finds extraordinary 
circumstances which make prompt Commission review of the contested 
ruling necessary to prevent detriment to the public interest or 
irreparable harm to any person.
    (b) Motion to the presiding officer to permit appeal. (1) Any 
participant in a proceeding may, during the proceeding, move that the 
presiding officer permit appeal to the Commission from a ruling of the 
presiding officer. The motion must be made within 15 days of the ruling 
of the presiding officer and must state why prompt Commission review is 
necessary under the standards of paragraph (a) of this section
    (2) Upon receipt of a motion to permit appeal under subparagraph 
(a)(1) of this section, the presiding officer will determine, according 
to the standards of paragraph (a) of this section, whether to permit 
appeal of the ruling to the Commission. The presiding officer need not 
consider any answer to this motion.
    (3) Any motion to permit appeal to the Commission of an order issued 
under Rule 604, or appeal of a ruling under paragraph (a) or (b) of Rule 
905, must be granted by the presiding officer.
    (4) A presiding officer must issue an order, orally or in writing, 
containing the determination made under paragraph (b)(2) of this 
section, including the date of the action taken.
    (5) If the presiding officer permits appeal, the presiding officer 
will transmit to the Commission:
    (i) A memorandum which sets forth the relevant issues and an 
explanation of the rulings on the issues; and
    (ii) the participant's motion under paragraph (b)(1) of this section 
and any answer permitted to the motion.
    (6) If the presiding officer does not issue an order under paragraph 
(b)(1) of this section within 15 days after the motion is filed under 
paragraph (b)(1) of this section, the motion is denied.
    (c) Appeal of a presiding officer's denial of motion to permit 
appeal. (1) If a motion to permit appeal is denied by the presiding 
officer, the participant who made the motion may appeal the denial to 
the Commissioner who is designated Motions Commissioner, in accordance 
with this paragraph. For purposes of this section, ``Motions 
Commissioner'' means the Chairman or a member of the Commission 
designated by the Chairman to rule on motions to permit interlocutory 
appeal. Any person filing an appeal under this paragraph must serve 
separate copies of the appeal on the Motions Commissioner and on the 
General Counsel by Express Mail or by hand delivery.
    (2) A participant must submit an appeal under this paragraph not 
later than 7 days after the motion to permit appeal under paragraph (b) 
of this section is denied. The appeal must state why prompt Commission 
review is necessary under the standards set forth in paragraph (c)(5) of 
this section. The appeal must be labeled in accordance with Sec. 
385.2002(b) of this chapter.
    (3) A participant who appeals under this paragraph must file with 
the appeal a copy of the written order denying the motion or, if the 
denial was issued orally, the relevant portions of the transcript.
    (4) The Motions Commissioner may, in considering an appeal under 
this paragraph, order the presiding officer or any participant in the 
proceeding to provide additional information.
    (5) The Motions Commissioner will permit an appeal to the Commission 
under this paragraph only if the Motions Commissioner finds 
extraordinary circumstances which make prompt Commission review of the 
contested ruling necessary to prevent detriment to the public interest 
or to prevent irreparable harm to a person. If the Motions Commissioner 
makes no determination within 7 days after filing the appeal under this 
paragraph or within the time the Motions Commissioner otherwise provides 
to receive and consider information under this paragraph, the appeal to 
the Commission under paragraph (b) of this section will not be 
permitted.

[[Page 1160]]

    (6) If appeal under paragraph (b) of this section is not permitted, 
the contested ruling of the presiding officer will be reviewed in the 
ordinary course of the proceeding as if the appeal had not been made.
    (7) If the Motions Commissioner permits an appeal to the Commission, 
the Secretary will issue an order containing that decision.
    (d) Commission action. Unless the Commission acts upon an appeal 
permitted by a presiding officer under paragraph (b) of this section, or 
by the Motions Commissioner under paragraph (c) of this section, within 
15 days after the date on which the presiding officer or Motions 
Commissioner permits appeal, the ruling of the presiding officer will be 
reviewed in the ordinary course of the proceeding as if the appeal had 
not been made.
    (e) Appeal not to suspend proceeding. Any decision by a presiding 
officer to permit appeal under paragraph (b) of this section or by the 
Motions Commissioner to permit an appeal under paragraph (c) of this 
section will not suspend the proceeding, unless otherwise ordered by the 
presiding officer or the Motions Commissioner.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 376, 49 FR 
21705, May 23, 1984; Order 402, 49 FR 39539, Oct. 9, 1984; Order 725, 74 
FR 41039, Aug. 14, 2009]



Sec. 385.716  Reopening (Rule 716).

    (a) General rule. To the extent permitted by law, the presiding 
officer or the Commission may, for good cause under paragraph (c) of 
this section, reopen the evidentiary record in a proceeding for the 
purpose of taking additional evidence.
    (b) By motion. (1) Any participant may file a motion to reopen the 
record.
    (2) Any motion to reopen must set forth clearly the facts sought to 
be proven and the reasons claimed to constitute grounds for reopening.
    (3) A participant who does not file an answer to any motion to 
reopen will be deemed to have waived any objection to the motion 
provided that no other participant has raised the same objection.
    (c) By action of the presiding officer or the Commission. If the 
presiding officer or the Commission, as appropriate, has reason to 
believe that reopening of a proceeding is warranted by any changes in 
conditions of fact or of law or by the public interest, the record in 
the proceeding may be reopened by the presiding officer before the 
initial or revised initial decision is served or by the Commission after 
the initial decision or, if appropriate, the revised initial decision is 
served.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 375, 49 FR 
21316, May 21, 1984]



                     Subpart H_Shortened Procedures



Sec. 385.801  Waiver of hearing (Rule 801).

    In any proceeding in which the Commission is authorized to act after 
opportunity for hearing, if the parties waive hearing, such opportunity 
will be deemed to have been afforded by service or publication in the 
Federal Register of notice of the application or other initial pleading, 
request, or other filing, such notice fixing a reasonable period of time 
within which any person desiring to be heard may file a protest or 
petition. Upon the expiration of such period of time, in the absence of 
a request for hearing, the Commission may forthwith dispose of the 
matter upon the basis of the pleadings and other submittals and the 
studies and recommendations of the staff. A party not requesting oral 
hearing in its pleadings will be deemed to have waived a hearing for the 
purpose of such disposition, but will not be bound by such a waiver for 
the purposes of any request for rehearing with respect to an order so 
entered.



Sec. 385.802  Noncontested proceedings (Rule 802).

    Noncontested proceedings. In any proceeding required by statute to 
be set for hearing, the Commission, when it appears to be in the public 
interest and to be in the interest of the parties to grant the relief or 
authority requested in the initial pleading, and to omit the 
intermediate decision procedure, may, after a hearing during which no 
opposition or contest develops, forthwith dispose of the proceedings 
upon consideration of the pleadings and other evidence filed and 
incorporated in the record: Provided, (a) The applicant or

[[Page 1161]]

other initial pleader requests that the intermediate decision procedure 
be omitted and waives oral hearing and opportunity for filing exceptions 
to the decision of the Commission; and (b) no issue of substance is 
raised by any request to be heard, protest or petition filed subsequent 
to publication in the Federal Register of the notice of the filing of an 
initial pleading and notice or order fixing of hearing, which notice or 
order will state that the Commission considers the proceeding a proper 
one for disposition under the provisions of this subpart. Requests for 
the procedure provided by this subpart may be contained in the initial 
pleading or subsequent request in writing to the Commission. The 
decision of the Commission in such proceeding after noncontested 
hearing, will be final, subject to reconsideration by the Commission 
upon request for rehearing as provided by statute.



             Subpart I_Commission Review of Remedial Orders



Sec. 385.901  Scope (Rule 901).

    (a) Proceedings to which applicable. The provisions of this subpart 
apply to proceedings of the Commission held in accordance with section 
503(c) of the Department of Energy Organization Act (42 U.S.C. 7193(c)) 
to review orders issued by the Secretary of Energy pursuant to section 
503(a) of the Department of Energy Organization Act (42 U.S.C. 7193(c)), 
and initiated by notices of probable violation, proposed remedial 
orders, or other formal administrative initiating documents issued on or 
after October 1, 1977, which are contested by the recipient.
    (b) Relationship to other rules. (1) Where a provision of this 
subpart is inconsistent with a provision in any other subpart of this 
part, the provision in this subpart controls.
    (2) Subpart F of this part, except Rule 601, does not apply to 
proceedings under this subpart.



Sec. 385.902  Definitions (Rule 902).

    For purposes of this subpart:
    (a) Contested order means the remedial order, interim remedial order 
for immediate compliance or order of disallowance being contested in 
proceeding pursuant to this subpart;
    (b) Interim remedial order for immediate compliance means an interim 
remedial order for immediate compliance issued pursuant to 10 CFR 
205.199D (interim remedial order of immediate compliance);
    (c) Order of disallowance means an order of disallowance issued 
pursuant to 10 CFR 205.199E (disallowance);
    (d) Participant means, as appropriate, the Secretary, the 
petitioner, and intervenors;
    (e) Petitioner means a person who has received a remedial order, 
interim remedial order for immediate compliance, or order of 
disallowance who notifies the Secretary that he intends to contest the 
order;
    (f) Remedial order means a remedial order issued pursuant to 10 CFR 
205.199B (remedial orders);
    (g) Secretary means the Secretary of Energy or his delegate.



Sec. 385.903  Request for nondisclosure of information (Rule 903).

    (a) For purposes of this section, nondisclosure means nondisclosure 
except as to the participants in the proceeding under conditions 
provided in paragraphs (d) and (e) of this section.
    (b) If any person filing under this subpart claims that some or all 
of the information contained in a document is exempt from the mandatory 
public disclosure requirements of the Freedom of Information Act (5 
U.S.C. 552), is information referred to in section 1905 of title 18 of 
the United States Code (18 U.S.C. 1905) (disclosure of confidential 
information), or is otherwise exempt by law from public disclosure, the 
person:
    (1) Must request the presiding officer not to disclose such 
information, except to the participants in the proceeding under the 
conditions provided in paragraphs (d) and (e) of this section, which 
request the person must serve upon the participants in the proceeding;
    (2) Must file, together with the document, a second copy of the 
document from which has been deleted the information for which the 
person requests nondisclosure and must indicate in the original document 
that the original

[[Page 1162]]

document is exempt, or contains information which is exempt, from 
disclosure;
    (3) Must include a statement specifying why the information is 
privileged or confidential, if the information for which nondisclosure 
is requested is claimed to come within the exception in 5 U.S.C. 
552(b)(4) for trade secrets and commercial or financial information;
    (4) Must include a statement specifying the justification for 
nondisclosure, if the information for which nondisclosure is requested 
is not within the exception in 5 U.S.C. 552(b)(4).
    (c) If the person filing a document does not submit a second copy of 
the document from which the appropriate information has been deleted, 
the presiding officer may assume that there is no objection to public 
disclosure of the document in its entirety.
    (d) If information is submitted in accordance with paragraph (b) of 
this section, the information will not be disclosed except as provided 
in the Freedom of Information Act, in accordance with part 388 of this 
subchapter and upon request in accordance with paragraph (e) of this 
section, to participants in the proceeding under the restrictions that 
the participants may not use or disclose the information except in the 
context of the proceeding conducted pursuant to this subpart and that 
the participants must return all copies of the information at the 
conclusion of the proceeding to the person who submitted the information 
under paragraph (b) of this section.
    (e) At any time, a participant may request the presiding officer to 
direct a person submitting information under paragraph (b) of this 
section to provide that information to the participant requesting the 
information under this paragraph. The presiding officer will so direct 
if the participant requesting the information agrees:
    (1) Not to use or disclose the information except in the context of 
the proceeding conducted pursuant to this subpart; and
    (2) To return all copies of the information, at the conclusion of 
the proceeding, to the person submitting the information under paragraph 
(b) of this section.
    (f) At any time, a participant may request the presiding officer to 
direct that the complete record of prior proceedings, including 
information determined by the Secretary to be exempt from disclosure, be 
made available to that participant by the Secretary. The presiding 
officer will so direct if the participant requesting the complete record 
agrees:
    (1) Not to use or disclose the information determined to be exempt 
except in the context of the proceeding conducted pursuant to this 
subpart, and
    (2) To return all copies of the information determined to be exempt 
to the presiding officer at the conclusion of the proceeding.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 416, 50 FR 
15733, Apr. 22, 1985]



Sec. 385.904  Commencement of proceeding (Rule 904).

    (a) Except as provided in paragraph (b) of this section, the 
proceeding pursuant to this subpart will be commenced by filing with the 
Secretary of the Commission either an answer by a petitioner pursuant to 
Rule 906(b)(1), or a written notice by the Secretary that a petitioner 
has filed a notice of intent to contest an order reviewable under this 
subpart, whichever is filed first. The Secretary must file written 
notice that a petitioner has filed a notice of intent to contest an 
order reviewable under this subpart within 15 days of the Secretary's 
receipt of such notice of intent. When the Secretary files the written 
notice, the Secretary must serve a copy of the contested order upon 
other participants in the prior proceedings and upon persons denied 
intervention in the prior proceedings, and must certify to the 
Commission that such service has been made, stating the names and 
addresses of persons served.
    (b) The proceeding pursuant to this subpart with respect to an 
interim remedial order for immediate compliance will be commenced by a 
petitioner's filing with the Secretary of the Commission, for the 
Commission, and serving on other participants in the prior proceedings, 
if any, a notice of petition for review of an interim remedial order for 
immediate compliance pursuant to 10 CFR 205.199D(i)(1) (interim remedial

[[Page 1163]]

order of immediate compliance). The Commission will defer consideration 
of the merits of the order until a final remedial order is issued by the 
Secretary.
    (c) Upon commencement of a proceeding, the Commission or its 
designee will designate a presiding officer for the proceeding, and the 
Commission or its designee will notify participants in the prior 
proceedings and persons denied intervention in the prior proceedings of 
such designation.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 416-A, 50 FR 
36053, Sept. 5, 1985]



Sec. 385.905  Stay of contested order (Rule 905).

    (a) Upon commencement of a proceeding, the contested order will be 
automatically stayed pending review pursuant to this subpart unless and 
until, upon request of the Secretary or other participant, the presiding 
officer finds that the public interest requires immediate compliance 
with the contested order.
    (b) The Secretary or other participants may at any time prior to the 
hearing under Rule 909 (Hearing), if requested; or, if there is no 
hearing, within 30 days of the commencement of the proceeding under Rule 
904 (Commencement of proceeding); file a petition requesting that the 
contested order not be stayed, or that the stay be lifted, and setting 
forth the legal and factual basis for the request.
    (c) The presiding officer may request a written statement of the 
views of participants regarding whether the contested order should be 
stayed or continue to be stayed and may convene an expedited hearing or 
conference on a petition under paragraph (b) of this section.
    (d) The presiding officer may grant the petition requesting 
immediate compliance where he finds that the public interest so requires 
and will notify the participants of the determination.
    (e) If the presiding officer does not grant the petition under 
paragraph (b) of this section within 10 days after it is filed, the 
petition is denied. Prior to the expiration of the 10-day period the 
presiding officer may extend the period for decision for up to 7 days. 
At the end of the extension, the petition, if not granted, is denied.
    (f) If the petition under paragraph (b) of this section is denied, 
the presiding officer will notify the participants of such denial.
    (g) A grant or denial of petition under paragraphs (b) or (c) of 
this section may be appealed, within 10 days after the grant or denial, 
to the Commission in accordance with Rule 715 (relating to interlocutory 
appeals). The contested order will remain stayed pending the 
Commission's disposition of the appeal.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 416, 50 FR 
15733, Apr. 22, 1985; Order 416-A, 50 FR 36054, Sept. 5, 1985]



Sec. 385.906  Pleadings (Rule 906).

    (a) By the Secretary. (1) Within 20 days after the commencement of a 
proceeding, the Secretary:
    (i) Will file with the Secretary for the presiding officer a copy of 
the contested order; and
    (ii) May, in addition, elect to file a statement setting forth the 
factual elements of the alleged violation, which statement the Secretary 
will serve on all participants in the proceeding.
    (2) If the petitioner requests permission to raise new facts or 
issues pursuant to Rule 907(a) (new facts and issues), the Secretary may 
file, within 10 days after the filing of the petitioner's answer, a 
reply responding to the petitioner's request to raise new facts or 
issues. In the reply, the Secretary may also request the permission of 
the presiding officer to raise new facts or issues under the criteria 
set forth in Rule 907(b) (new facts and issues) and to conduct discovery 
relating to the new facts or issues he may raise pursuant to Rule 907(b) 
(new facts and issues). Failure by the Secretary to request permission 
to raise new facts or issues or to conduct discovery in this reply 
constitutes a waiver of the opportunity to do so at a later time in the 
proceeding.
    (3) The Secretary will file with the Secretary of the Commission, 
for the presiding officer, and serve upon other participants in the 
proceedings, a brief in support of the affirmative case, which will set 
forth:

[[Page 1164]]

    (i) The elements of the alleged violation, including references to 
the authorities upon which the Secretary relies, including but not 
limited to regulations, rulings, interpretations and decisions on 
appeals and exceptions issued by the Department or its predecessor 
agencies and precedents established by the Commission; and
    (ii) A complete statement of the factual and legal basis of the 
contested order.
    (4) The Secretary's brief will be filed according to the following 
time period appropriate to the particular proceeding:
    (i) If no participant (including persons requesting intervention) 
has requested permission to raise new facts or issues or to conduct 
discovery pursuant to paragraphs (a)(2), (b)(2), (c)(7), and (c)(8) of 
this section, within 20 days after the filing of the petitioner's answer 
under paragraph (b)(1) of this section;
    (ii) If the presiding officer has determined, under Rule 908(d) 
(discovery) that no discovery shall be permitted, within 20 days after 
the presiding officer's determination under such rule;
    (iii) If discovery is permitted under Rule 908(d) (discovery) within 
20 days after the conclusion of the time period set for discovery under 
such rule;
    (b) By the petitioner. (1) Within 15 days after petitioner gives 
written notice to the Office of Hearings and Appeals of the Department 
of Energy pursuant to 10 CFR 205.199C(b) that petitioner wishes to 
appeal the remedial order, the petitioner must file with the Secretary 
of the Commission, for the presiding officer, and serve upon the 
Secretary and other participants in the proceedings, an answer to the 
contested order admitting or denying each of the Secretary's findings in 
the contested order and setting forth affirmative defenses, if any. Each 
answer filed with the Secretary of the Commission by the petitioner, in 
accordance with this paragraph, must be accompanied by the fee 
prescribed by Sec. 381.303 of this chapter.
    (2) In the answer, the petitioner may:
    (i) Contest any part of the record;
    (ii) Request permission to raise new facts or issues not raised in 
the prior proceedings if the new facts or issues meet the criteria set 
forth in Rule 907(a) (new facts and issues); and
    (iii) Request permission to conduct discovery, subject to criteria 
provided in Rule 908(a) (discovery). Failure by the petitioner to 
contest the record or to request permission to raise new facts or issues 
or to conduct discovery in this answer constitutes a waiver of the 
opportunity to do so at a later time in the proceeding.
    (3) Within 15 days after filing of the Secretary's brief under 
paragraph (a)(3) of this section, the petitioner shall file with the 
Secretary of the Commission, for the presiding officer, and serve upon 
other participants in the proceeding, a brief stating fully the 
objections to the contested order, including references to the 
authorities upon which the petitioner relies, including but not limited 
to regulations, rulings, interpretations, and decisions on appeals and 
exceptions issued by the Department or its predecessor agencies and 
precedents established by the Commission.
    (c) By interveners. (1) A person qualifying under paragraph (c)(2) 
of this section, may request the presiding officer to permit 
intervention in the proceeding under this subpart in accordance with the 
procedures described in this paragraph.
    (2) A motion to intervene may be filed by any person claiming:
    (i) An interest which may be directly affected and which is not 
adequately protected by existing parties and as to which the persons 
requesting intervention may be bound by the Commissions action in the 
proceeding; or
    (ii) Any other interest of such nature that participation by the 
person requesting intervention may be in the public interest.
    (3) A motion to intervene must set forth clearly and concisely the 
facts from which the nature of the requester's alleged right or interest 
can be determined, the grounds of the proposed intervention, and the 
position of the intervener in the proceeding, so as fully and completely 
to advise the participants and the presiding officer as to the specific 
issues of fact or law to be raised or controverted, by admitting, 
denying, or otherwise answering, specifically and in detail, each 
material

[[Page 1165]]

allegation of fact or law raised or controverted, including references 
to the authorities upon which the requester relies, including, but not 
limited to, regulations, rulings, interpretations, and decisions on 
appeals and exceptions issued by the Department or its predecessor 
agencies and precedents established by the Commission.
    (4) Motions to intervene may be filed with the Secretary of the 
Commission, for the presiding officer, within 20 days after the 
commencement of the proceeding under Rule 904 (commencement of 
proceedings) unless, in extraordinary circumstances and for good cause 
shown, the presiding officer authorizes a late filing. A person 
requesting intervention must serve the motion to intervene on the 
participants in the proceeding at the same time the request is filed 
with the Secretary of the Commission.
    (5) A participant in the proceedings may file an answer to a motion 
to intervene. Failure to object constitutes a waiver of any objection to 
the granting of such request. If made, answers must be filed within 15 
days after the filing of the request to intervene.
    (6) After expiration of the time for filing answers to requests to 
intervene or default thereof, as provided in paragraph (c)(5) of this 
section, the presiding officer will grant or deny such request, in whole 
or in part, or may, if found to be appropriate, authorize limited 
participation. The presiding officer will serve the determination on a 
motion to intervene upon the participants in the proceeding and upon the 
person requesting intervention. A person wholly or partially denied 
intervention may take an interlocutory appeal of the order denying 
intervention, under Rule 715 (interlocutory appeals to the Commission 
from rulings of presiding officers), and will be considered a 
``participant'' (as that term is defined in Rule 102(b) (definitions)) 
for the limited purpose of permitting that person to file an 
interlocutory appeal under Rule 715 (interlocutory appeals to the 
Commission from rulings of presiding officers) contesting denial, in 
whole or in part, of that person's motion to intervene.
    (7) A person filing a motion to intervene, may request therein the 
permission of the presiding officer to raise new facts or issues not 
raised in the prior proceedings on the contested order, if the new facts 
or issues meet the criteria set forth in Rule 903(c) (request for 
nondisclosure of information). Failure by the person requesting 
permission to intervene to request permission to raise new facts or 
issues in the motion to intervene constitutes a waiver of the 
opportunity to do so at a later time in the proceeding.
    (8) A person filing a motion to intervene may request the permission 
of the presiding officer to conduct discovery, subject to the conditions 
set forth in Rule 908(c) (discovery). Failure by the person requesting 
permission to intervene to request permission to conduct discovery in 
the motion to intervene constitutes a waiver of the opportunity to do so 
at a later time in the proceeding.
    (d) Attachments of pleadings. (1) Each party will file, as an 
appendix to each pleading which cites documents in the record developed 
in the prior proceedings on the remedial order, one copy of each such 
document in its entirety and, if any such document contains information 
exempt from public disclosure pursuant to Rule 903, a second copy of 
such document with such information deleted. The top of the first page 
of each such document will contain the word ``PUBLIC'' or ``NONPUBLIC,'' 
to indicate whether it contains such exempt information.
    (2) One copy of each version shall be served on counsel for the 
petitioner and/or the Secretary, and one copy of the PUBLIC version 
shall be served on counsel for each other participant separately 
represented unless the conditions of Rule 903 are met, in which 
situation such counsel shall be served with copies of both versions.
    (3) In compiling their appendices, the parties will include only 
documents specifically cited and relied upon in their pleadings. They 
will have regard for the fact that the Secretary's entire

[[Page 1166]]

administrative record is always available to the Commission and will not 
include irrelevant or duplicative documents in the appendices.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 395, 49 FR 
35357, Sept. 7, 1984; Order 416, 50 FR 15733, Apr. 22, 1985; Order 416-
A, 50 FR 36054, Sept. 5, 1985]



Sec. 385.907  New facts and issues (Rule 907).

    (a) Raised by the petitioner. In the answer, as provided in Rule 
906(b)(2)(ii) (new facts and issues) the petitioner may request 
permission of the presiding officer to raise new facts or issues not 
raised in prior proceedings on the contested order that:
    (1)(i) Are facts or issues that were not known and could not, with 
the exercise of due care, have been known to the petitioner at the time 
they would otherwise have been raised during the prior proceedings;
    (ii) Are facts or issues that the petitioner was unable to raise at 
the time they could have been raised during the prior proceedings 
because of unduly restrictive time limits imposed by the Secretary; or
    (iii) Are facts or issues that the petitioner was not permitted to 
raise in the prior proceedings due to erroneous adverse procedural 
rulings; and
    (2) Are necessary for a full and true disclosure of the facts.
    (b) Raised by the Secretary. In the reply under Rule 906(a)(2) 
(pleadings), the Secretary may request permission of the presiding 
officer to raise new facts or issues not raised in prior proceedings on 
the contested order that:
    (1) Are necessary to support the Secretary's case as a result of new 
facts or issues raised by the petitioner under Rule 906(b)(2)(ii) 
(pleadings) and this section; and
    (2) Are necessary for a full and true disclosure of the facts.
    (c) Raised by interveners. In the motion to intervene under Rule 
906(c)(3) (pleadings) and this section, an intervener may request 
permission of the presiding officer to raise new facts or issues not 
raised in prior proceedings on the contested order that:
    (1) If the intervener did not participate in the prior proceeding, 
meet the criteria of paragraphs (a)(1) and (a)(2) of this section; or
    (2) If the intervener participated in the prior proceedings, are:
    (i)(A) Facts or issues that were not known and could not, with the 
exercise of due care, have been known to the intervener at the time they 
would otherwise have been raised during the prior proceedings;
    (B) Facts or issues that the intervener was unable to raise at the 
time they could have been raised during the prior proceedings because of 
unduly restrictive time limits imposed by the Secretary; or
    (C) Facts or issues that the intervener was not permitted to raise 
in the prior proceedings due to erroneous adverse procedural rulings; 
and
    (ii) Are necessary for a full and true disclosure of the facts.
    (d) Determination by the presiding officer. The presiding officer 
will determine whether to grant or deny, in whole or in part, the 
requests of the participants to raise new facts or issues and will serve 
those determinations on the participants in the proceeding.



Sec. 385.908  Discovery (Rule 908).

    (a) By petitioner. In the answer under Rule 906(b)(2) (pleadings), 
the petitioner may request permission of the presiding officer to 
conduct discovery, where such discovery:
    (1) Relates to new facts or issues raised in accordance with Rule 
907(a) (new facts and issues); or
    (2)(i) Was not permitted in the prior proceedings on the contested 
order due to erroneous adverse procedural rulings; and
    (ii) Is necessary for a full and true disclosure of the facts.
    (b) By the Secretary. In the reply under Rule 906(a)(2) (pleadings), 
the Secretary may request permission of the presiding officer to conduct 
discovery where such discovery relates to new facts or issues raised in 
accordance with Rule 907(b) (new facts and issues).
    (c) By interveners. In a motion to intervene under Rule 906(c)(8) 
(pleadings) an intervener may request permission of the presiding 
officer to conduct discovery where such discovery:

[[Page 1167]]

    (1) Relates to new facts or issues raised in accordance with Rule 
907(c) (new facts and issues); or
    (2) If the intervener participated in the prior proceedings,
    (i) Such discovery was not permitted in prior proceedings on the 
contested order due to erroneous adverse procedural rulings; and
    (ii) Such discovery is necessary for a full and true disclosure of 
the facts.
    (d) Determinations by the presiding officer. The presiding officer 
will determine whether to grant or deny, in whole or in part, the 
requests of the participants for discovery and will set a time limit 
within which discovery must be conducted.
    (e) Interrogatories. In addition to discovery devices applicable to 
this subpart under other subparts of this part, participants may conduct 
discovery by means of written interrogatories under conditions 
determined by the presiding officer.



Sec. 385.909  Hearing (Rule 909).

    (a) Participant may file, within 20 days after the commencement of 
the proceeding under Rule 904 (Commencement of proceeding), a request 
for a hearing or a motion for the opportunity for cross-examination 
including the reasons why cross-examination is necessary for a full and 
true disclosure of the facts.
    (b) If a participant has filed a request for a hearing, the 
presiding officer will grant the request for a hearing. The hearing will 
include an opportunity for the submission of oral or documentary 
evidence and oral arguments.
    (c) The presiding officer may at any time, convene a hearing.
    (d) As soon as practicable after receiving a request for hearing 
under paragraph (a) of this section or after determination that a 
hearing will be held under paragraph (c) of this section, the presiding 
officer will give notice to the participants of the time and place of 
the hearing.
    (e) The presiding officer will determine the issues to be resolved 
in the proceeding, may specify the time available for oral argument, and 
will give notice thereof to the participants. The presiding officer may 
require additional information from the participants, and may convene a 
prehearing conference for the purpose of determining the issues or the 
nature of the proceeding to be held.
    (f) If at any time prior to the certification of the record by the 
presiding officer under Rule 913 (Certification of the record), with or 
without a motion of a participant, the presiding officer determines that 
it is necessary for a full and true disclosure of the facts, the 
presiding officer may order that the participants be afforded the 
opportunity for cross-examination on any facts or issues raised in the 
proceeding.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 416, 50 FR 
15733, Apr. 22, 1985; Order 416-A, 50 FR 36054, Sept. 5, 1985]



Sec. 385.910  Conduct of the hearing (Rule 910).

    The presiding officer is responsible for conduct of the hearing, 
including the order of procedure.



Sec. 385.911  Burden of proof (Rule 911).

    (a) The Secretary has the burden of going forward and must sustain 
the burden of proof with respect to disputed elements of affirmative 
case of the Secretary.
    (b) The Commission order will be based on a preponderance of the 
evidence.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 416, 50 FR 
15733, Apr. 22, 1985]



Sec. 385.912  Proposed findings of fact, conclusions of law, and comments 

(Rule 912).

    (a) Within 10 days after the conclusion of the hearing, or, if no 
hearing is held, within 20 days after the filing of the petitioner's 
brief under Rule 906(b)(3) (pleadings), a participant may file with the 
Secretary of the Commission for the presiding officer, and serve upon 
the other participants proposed findings of fact and conclusions of law, 
comments in support thereof and any objections with respect to 
procedural rulings of the presiding officer.
    (b) Within 10 days after the filing of proposed findings of fact and 
conclusions of law under paragraph (a) of this section, a participant 
may file, and must serve on other participants, a reply thereto.

[[Page 1168]]



Sec. 385.913  Proposed order (Rule 913).

    (a) After the conclusion of the hearing and after the filings under 
Rule 912 (a) and (b), (proposed findings of fact, conclusions of law, 
and comments) the presiding officer will issue a decision and proposed 
order based on findings of fact affirming, modifying, or vacating the 
contested order or directing other appropriate relief. The proposed 
order will be based on the entire record before the presiding officer, 
including the record of prior proceedings certified by the Secretary.
    (b) Participants may file with the Secretary of the Commission, 
within 15 days of issuance of the proposed order of the presiding 
officer, written comments on the presiding officer's decision and 
proposed order.
    (c) Participants may file with the Secretary of the Commission, 
within seven days of the end of comment period prescribed in paragraph 
(b) of this section, reply comments limited to a response to any 
arguments and issues raised in the written comment.
    (d) The presiding officer will certify and file with the Secretary 
of the Commission a copy of the record in the proceedings and copies of 
the written and reply comments filed pursuant to paragraphs (b) and (c) 
of this section.
    (e) Unless otherwise ordered by the Chief Administrative Law Judge, 
written comments and reply comments must be limited to 15 pages, 
doublespaced.

[Order 495, 53 FR 16408, May 9, 1988, as amended at 58 FR 1629, Jan. 12, 
1994]



Sec. 385.914  Commission action (Rule 914).

    The Commission will upon consideration of the entire record, issue a 
final order affirming, modifying, or vacating the contested order or 
directing other appropriate relief. The Commission will serve the final 
order on the participants.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 416, 50 FR 
15733, Apr. 22, 1985]



Sec. 385.915  Off-the-record communications (Rule 915).

    The provisions of Rule 2201 (prohibited communications and other 
communications requiring disclosure) apply to proceedings pursuant to 
this subpart, commencing at the time the Secretary issues a proposed 
remedial order under 10 CFR 205.192, an interim remedial order for 
immediate compliance under 10 CFR 205.199D, or a proposed order of 
disallowance under 10 CFR 205.199E.

[Order 607, 64 FR 51234, Sept. 22, 1999]



Sec. 385.916  Withdrawal of petition for review (Rule 916).

    (a) At any time, including after a hearing has been held or 
convened, the petitioner may submit to the presiding officer, and serve 
on other participants in the proceeding, a withdrawal of the petition 
for review of the contested order. The presiding officer will thereupon 
issue, and serve the participants, an order terminating the proceeding 
conducted pursuant to this subpart, which order will be effective 10 
days after issuance.
    (b) Termination of the proceeding under paragraph (a) of this 
section, may be appealed to the Commission, within 10 days after 
issuance of the termination order, except that if the Commission does 
not act on an appeal within 30 days, it is deemed denied. The 
termination order is stayed pending the appeal. If the Commission 
rescinds the termination order, the proceeding will continue in 
accordance with this subpart.



Sec. 385.917  Sanctions (Rule 917).

    Whenever it appears to the Commission that a person is engaged or 
about to engage in any act or practice which constitutes or will 
constitute a violation of rule, regulation, or order, made or imposed by 
the Commission or the presiding officer under this subpart, it may bring 
an action in the proper court of the United States to enjoin that act or 
practice and to enforce compliance with the order, and upon a proper 
showing, a permanent or temporary injunction or decree or restraining 
order will be granted without bond. The Commission may transmit such 
evidence as may be available concerning that act or practice to the 
Attorney General, who may institute the necessary criminal proceedings.

[[Page 1169]]



        Subpart J_Commission Review of Adjustment Request Denials



Sec. 385.1001  Scope (Rule 1001).

    (a) Applicability. This subpart applies to proceedings of the 
Commission held in accordance with section 504(b) of the Department of 
Energy Organization Act, 42 U.S.C. 719(b), to review orders issued by 
the Secretary of Energy pursuant to section 504(a) of the Department of 
Energy Organization Act denying, in whole or in part, requests for 
adjustments.
    (b) Relationship to other rules. When a provision of this subpart is 
inconsistent with a provision of any other subpart of this part, the 
former provision controls.



Sec. 385.1002  Definitions (Rule 1002).

    For purposes of this subpart:
    (a) Commission includes an officer or employee designated as 
presiding officer in a proceeding under this subpart.
    (b) Petitioner means a person who is aggrieved or adversely affected 
by a contested order, as defined in this section, and who requests a 
review, pursuant to this subpart, by the Commission of the denial by the 
Secretary.
    (c) Secretary means the Secretary of Energy or his delegate.
    (d) Contested order means the decision or order issued by the 
Secretary denying, in whole or in part, a request for adjustment.
    (e) Participant means, as appropriate, the petitioner, the 
Secretary, or an intervener.



Sec. 385.1003  Request for nondisclosure of information (Rule 1003).

    (a) For purposes of this section, nondisclosure means nondisclosure 
except to the participants in the proceedings and under the conditions 
as provided in paragraph (e) of this section.
    (b) If a person filing under this subpart claims that some or all of 
the information contained in a document is exempt from the mandatory 
public disclosure requirements of the Freedom of Information Act (5 
U.S.C. 552), is information referred to in 18 U.S.C. 1905, or is 
otherwise exempt by law from public disclosure, the person:
    (1) Will request the presiding officer not to disclose such 
information, except to the participants in the proceedings and under the 
conditions as provided in paragraph (e) of this section, which request 
the person must serve upon the participants in the proceedings;
    (2) Will file, together with the document, a second copy of the 
document from which has been deleted the information for which the 
person requests nondisclosure and must indicate in the original document 
that the original document is confidential or contains confidential 
information;
    (3) If the information is claimed to come within the exception in 5 
U.S.C. 552(b)(4), for trade secrets and commercial or financial 
information, it must include a statement specifying why the information 
is privileged or confidential;
    (4) If the information for which nondisclosure is requested is not 
within the exception in 5 U.S.C. 552(b)(4), it must include a statement 
specifying the justification for nondisclosure.
    (c) If the person filing a document does not submit a second copy of 
the document from which the appropriate information has been deleted, 
the presiding officer may assume that there is no objection to public 
disclosure of the document in its entirety.
    (d) If information is submitted in accordance with paragraph (b) of 
this section, the information will not be disclosed except as provided 
in the Freedom of Information Act, in accordance with Part 388 of this 
subchapter and upon request in accordance with paragraph (e) of this 
section, to participants in the proceeding under the restrictions that 
the participants may not use or disclose the information except in the 
context of the proceeding conducted pursuant to this subpart and that 
the participants must return all copies of the information at the 
conclusion of the proceeding to the person who submitted the information 
under paragraph (b) of this section.
    (e) At any time, a participant may request the presiding officer to 
direct a person submitting information under paragraph (b) of this 
section to provide that information to the participant requesting the 
information under this paragraph. The presiding officer will so

[[Page 1170]]

direct if the participant requesting the information agrees:
    (1) Not to use or disclose the information except in the context of 
the proceeding conducted pursuant to this subpart; and
    (2) To return all copies of the information, at the conclusion of 
the proceeding, to the person submitting the information under paragraph 
(b) of this section.
    (f) At any time, a participant may request the presiding officer to 
direct that the complete record of prior proceedings, including 
information determined by the Secretary to be exempt from disclosure, be 
made available to that participant. The presiding officer will so direct 
if the participant requesting the complete record agrees:
    (1) Not to use or disclose the information determined to be exempt 
except in the context of the proceeding conducted pursuant to this 
subpart, and
    (2) To return all copies of the information determined to be exempt 
to the presiding officer at the conclusion of the proceeding.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 422, 50 FR 
21600, May 28, 1985]



Sec. 385.1004  Commencement of proceedings (Rule 1004).

    (a) A petitioner commences proceedings, pursuant to this subpart, by 
filing with the Commission and serving upon the Secretary and any other 
participants in prior proceedings on the contested order a petition for 
review, which must contain:
    (1) A copy of the decision or order denying, in whole or in part, 
request for adjustment (the contested order); and
    (2) A complete statement of the petitioner's objections factual or 
legal to the contested order, including references to all authorities 
upon which the petitioner relies including but not limited to 
regulations, rulings, interpretations, and decisions on exceptions and 
appeals issued by the Department or its predecessor agencies and 
precedents established by the Commission.
    (b) A petition for review must be filed within 30 days of issuance 
by the Secretary of the order to be contested pursuant to this subpart.
    (c) Each petition for review filed with the Secretary of the 
Commission must be accompanied by the fee prescribed by Sec. 381.304 of 
this chapter.
    (d) Upon receiving a petition for review and the fee required by 
paragraph (c), of this section, the Commission or its designee will 
designate a presiding officer for the proceedings.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 395, 49 FR 
35357, Sept. 7, 1984]



Sec. 385.1005  Replies (Rule 1005).

    (a) By the Secretary. Within 20 days of service of the petition for 
review, the Secretary will file with the Commission and serve on the 
petitioners and the other participants in prior proceedings on the 
contested order, a reply to the petition for review stating fully his or 
her position supported by arguments to the petition for review.
    (b) By other participants. A person who participated in prior 
proceedings on the contested order may be a participant in the 
proceedings pursuant to this subpart and may make filings and submittals 
as determined by the presiding officer.
    (c) By interveners. A person who was denied the opportunity to 
participate in prior proceedings on the contested order or who is 
aggrieved or adversely affected by the contested order may move to 
intervene in accordance with Rule 214 (intervention). In order that the 
motion be granted, the movant must show, as appropriate, that denial of 
participation in prior proceedings was wrongful or why he or she is 
aggrieved or adversely affected by the contested order. If the presiding 
officer grants the motion, the person submitting the motion to intervene 
may make filings and submittals as determined by the presiding officer.
    (d) A participant may request interim relief in a proceeding 
pursuant to this subpart.
    (e) The presiding officer may require such other filings by the 
participants as he or she deems necessary in the conduct of the 
proceedings.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 422, 50 FR 
21600, May 28, 1985]

[[Page 1171]]



Sec. 385.1006  Request for hearing (Rule 1006).

    A participant may file with the Commission and serve on the other 
participants a request for hearing, which will be deemed granted. Such 
request must be filed concurrently with participant's first pleading.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 422, 50 FR 
21600, May 28, 1985]



Sec. 385.1007  Presiding officer (Rule 1007).

    (a) The presiding officer will determine the issues to be resolved 
in the proceeding and will give notice thereof to the participants. The 
presiding officer may require additional information from the 
participants and convene a prehearing conference for the purpose of 
determining the issues to be considered at a hearing, if one is to be 
held. The presiding officer may also specify the time available for oral 
argument and determine the nature of the hearing to be held.
    (b) The presiding officer may determine, upon request by a 
participant, whether to permit the participant to raise new facts or 
issues not raised in prior proceedings on the contested order. Such a 
request may be granted if the facts or issues are facts or issues that:
    (1)(i) Were not known and could not, with the exercise of due care, 
have been known to the participant at the time they could have been 
raised in prior proceedings; or
    (ii) Are facts or issues that the participant was not permitted to 
raise in prior proceedings on the contested order due to an adverse 
procedural ruling alleged to be erroneous; and
    (2) Are necessary for a full and true disclosure of the facts.
    (c) The petitioner must file a request to raise new facts or issues 
simultaneously with its petition for review. The Secretary must file 
such a request simultaneously with its reply to the petition for review. 
A third party must make such a request by the filing deadline set by the 
presiding officer.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 422, 50 FR 
21600, May 28, 1985]



Sec. 385.1008  Hearings (Rule 1008).

    As soon as practicable, after receiving any request for hearing and 
all the pleadings under Rules 1004 (commencement of proceedings) and 
1005 (replies), the presiding officer will give notice to the 
participants as to the time and place of the hearing.



Sec. 385.1009  Proof (Rule 1009).

    (a) A participant seeking relief from the Secretary's denial of a 
request for adjustment has the burden of demonstrating the participant's 
entitlement to the relief sought.
    (b) Relief will be granted under this subpart if a participant 
demonstrates, by a preponderance of the evidence, that such relief is 
warranted.



Sec. 385.1010  Certification of the record (Rule 1010).

    The presiding officer will certify and file with the Office of the 
Secretary of the Commission, for the Commission, a copy of the record in 
the proceeding.

[Order 422, 50 FR 21600, May 28, 1985]



Sec. 385.1011  Final order (Rule 1011).

    The Commission will issue a final order, affirming, modifying or 
vacating the contested order or directing other appropriate relief.



Sec. 385.1012  Off-the-record communications (Rule 1012).

    The provisions of Rule 2201 (prohibited communications and other 
communications requiring disclosure) apply to proceedings pursuant to 
this subpart, commencing at the time a petitioner files a petition for 
review under Rule 1004 (commencement of proceedings).

[Order 607, 64 FR 51234, Sept. 22, 1999]



Sec. 385.1013  Attachments to pleadings (Rule 1013).

    (a) Each party will file, as an appendix to each pleading which 
cites documents in the record developed in the prior proceedings on the 
adjustment request, one copy of each such document in its entirety and, 
if such document contains information exempt from public disclosure 
pursuant to rule 1003, a second copy of such document with such 
information deleted. The top of

[[Page 1172]]

the first page of each such document will contain the word ``PUBLIC'' or 
``NON-PUBLIC,'' to indicate whether it contains exempt information.
    (b) One copy of the PUBLIC and NON-PUBLIC versions must be served on 
counsel for the petitioner and/or the Secretary, and one copy of the 
PUBLIC version must be served on counsel for each other participant 
separately represented unless the conditions of Rule 1003 are met, in 
which situation such counsel must be served with copies of both 
versions.
    (c) In compiling appendices, the parties will include only documents 
specifically cited and relied upon in their pleadings. In light of the 
fact that the Commission always has access to the Secretary's entire 
administrative record, the parties must not include irrelevant or 
repetitive documents in the appendices.

[Order 422, 50 FR 21601, May 28, 1985]



           Subpart K_Petitions for Adjustments Under the NGPA



Sec. 385.1101  Applicability (Rule 1101).

    (a) Proceedings to which applicable. Except as provided in paragraph 
(b) of this section, this subpart applies to proceedings of the 
Commission held in accordance with section 502(c) of the NGPA to provide 
for adjustments of:
    (1) Commission rules, and
    (2) Commission orders having the applicability and effect of a rule 
as defined in section 551(4) of title 5 of the United States Code (5 
U.S.C. 551(4)) and issued under the NGPA, except orders issued under 
sections 301, 302, and 303 of the NGPA.
    (b) This subpart does not apply to:
    (1) Proceedings wherein the Commission by order grants an adjustment 
on its own motion or;
    (2) Proceedings for which the Commission by order waives the 
provision of this subpart.
    (c) Relationship to other rules. (1) Where a provision of this 
subpart is inconsistent with a provision in another subpart of this 
part, the former provision controls.
    (2) When provisions of other subparts of this part require 
Commission action, such provisions as applied under this subpart shall 
be deemed to require staff action. This subpart does not require a 
hearing to which subpart E applies.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 478, 52 FR 
28467, July 30, 1987]



Sec. 385.1102  Definitions (Rule 1102).

    For purposes of this subpart:
    (a) Adjustment means an order issued by Staff under Rule 1109 
(orders):
    (1) Granting relief from an order or rule issued by the Commission 
under the NGPA,
    (i) Including exceptions, exemptions, modification, and rescissions 
of rules and orders have the effect of rule as defined in section 551 of 
title 5 of the United States Code (5 U.S.C. 551(4)) and issued under the 
NGPA; but
    (ii) Excluding requests for just and reasonable rates under sections 
104, 106, and 109 of the NGPA; and
    (2) Granting an exemption, in whole or in part, for incrementally 
priced industrial boiler fuel facilities from section 201 of the NGPA, 
under the authority of section 206(d) of the NGPA and Sec. 282.206 
(industrial boiler fuel facilities exemption);
    (b) Petitioner means a person who files a petition for adjustment 
under paragraph (c) of this section;
    (c) Petition means a petition for adjustment filed under Rule 1103 
(commencement of adjustment proceedings);
    (d) NGPA means the Natural Gas Policy Act of 1978;
    (e) Party means, with respect to a particular petition for 
adjustment, the person making the petition, and intervener, or a person 
who has moved to intervene but whose motion has not been granted or 
denied under Rule 1105(b) (intervention in adjustment proceedings).
    (f) Staff means the Director of the Office of Producer and Pipeline 
Regulation, or a person who is designated by the Director and who is an 
employee of the Commission.



Sec. 385.1103  Commencement of proceeding (Rule 1103).

    A person commences a proceeding for an adjustment by filing a 
petition for adjustment with the Commission.

[[Page 1173]]



Sec. 385.1104  Initial petition (Rule 1104).

    (a) Content. (1) The petition must contain:
    (i) A full and complete statement of the relevant facts, including 
the documentary support pertaining to the circumstances, act or 
transaction that is the subject of the petition;
    (ii) A complete statement of the business reasons why the relief 
should be granted and the business consequences that will result if the 
relief is denied; and
    (iii) A statement specifying how the denial of relief will cause the 
applicant to suffer special hardship, inequity, or unfair distribution 
of burdens.
    (2) The petition must contain a complete statement of the legal 
basis of the relief requested including citations to authorities relied 
upon to support the petition.
    (3) The petition must specify the exact nature of the relief sought.
    (4) The certificate of service required under Rule 2010(h) 
(certificate of service) must indicate the names and addresses of all 
persons served.
    (5) The petition must include a form of notice suitable for 
publication in the Federal Register in accordance with the 
specifications in Sec. 385.203(d) of this part.
    (6) The petition must be accompanied by the fee prescribed in Sec. 
381.401 of this chapter or by a petition for waiver pursuant to Sec. 
381.106 of this chapter.
    (b) Service. (1) The petitioner must serve a copy of the petition, 
or a copy from which confidential information has been deleted in 
accordance with Rule 1112 (requests for confidential treatment) on each 
person who is reasonably ascertainable by the petitioner as a person who 
may suffer direct and measurable economic impact if the relief is 
granted.
    (2) Notwithstanding paragraph (b)(1) of this section, if a 
petitioner determines that compliance with such paragraph of this 
section would be impracticable, the petitioner must:
    (i) Comply with the requirements of such paragraph with regard to 
those persons whom it is reasonable and practicable to serve; and
    (ii) Include with the petition a description of the persons or class 
or classes of persons to whom notice was not sent.
    (3) Staff may require the petitioner to provide alternate or 
additional service and will cause notice of the application to be 
published in the Federal Register.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 394, 49 FR 
35365, Sept. 7, 1984; Order 647, 69 FR 32440, June 10, 2004]



Sec. 385.1105  Intervention (Rule 1105).

    (a) A motion to intervene in an adjustment proceeding, in conformity 
with Rule 214 (intervention) must be filed within 15 days after 
publication in the Federal Register of notice of the petition for 
adjustment.
    (b) A motion to intervene is granted unless it is denied by staff 
within 75 days after the day on which it was filed.



Sec. 385.1106  Other filings (Rule 1106).

    (a) Interveners. Responses to the petition must be filed at the time 
the motion to intervene is filed.
    (b) Petitioner. The petitioner may respond to filings of another 
party within 15 days after service of such filings. Amended pleadings 
may be filed under Rule 215 (amendments) if the petitioner discovers 
facts unavailable at the time the initial petition was filed, or if such 
pleadings are requested or permitted by Staff under Rule 1107 
(evaluations).



Sec. 385.1107  Evaluations (Rule 1107).

    (a) Staff will consider the filings made in connection with the 
petition for adjustment. Staff may also consider information received 
under paragraph (b) of this section. If Staff obtains information under 
paragraphs (b)(1) or (b)(3) of this section and relies upon such 
information, the petitioner will be advised of such information and will 
be given 15 days to respond to such information.
    (b)(1) Staff may initiate an investigation of any statement in a 
petition and use in its evaluation any relevant fact obtained in such an 
investigation.
    (2) Staff may request additional information from the petitioner.
    (3) Staff may solicit and accept submissions from interveners or 
third persons relevant to the petition.

[[Page 1174]]

    (4) Staff may consider information obtained in informal conferences 
held under Rule 1111 (adjustment conferences).

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 24-C, 50 FR 
21596, May 28, 1985]



Sec. 385.1108  Criteria (Rule 1108).

    (a) Staff will grant a petition where there are sufficient facts to 
make a determination on the merits and where Staff determines that an 
adjustment is necessary to prevent or alleviate:
    (1) Special hardship;
    (2) Inequity; or
    (3) An unfair distribution of burdens.
    (b) When there are not sufficient facts to make a determination on 
the merits, the Staff may dismiss the petition without prejudice; 
except, that when Staff has requested additional material information 
under Rule 1107 (adjustment evaluations) of this section and the 
petitioner has failed to provide the requested information, Staff may 
deny the petition if the requested information was reasonably available 
to the petitioner.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 24-C, 50 FR 
21596, May 28, 1985]



Sec. 385.1109  Orders (Rule 1109).

    (a) Staff will issue a decision and an order granting or denying the 
petition in whole or in part. The order will articulate the basis for 
the decision, noting any dispute with the factual assertions of the 
petitioner.
    (b) In addition to service otherwise required under this subpart, 
Staff will serve the decision and order on the persons who sought and 
were denied an opportunity to participate in the proceeding under this 
subpart.
    (c) If Staff fails to issue an order granting or denying the 
petition for adjustment within the determination period, the petitioner 
may treat the application as having been denied and may, within 30 days 
after the close of the determination period, request review thereof as 
prescribed in Rule 1110(a) (review of denials). For purposes of this 
paragraph, ``determination period'' means the 150 days commencing with 
the filing of the petition, unless Staff for good cause extends such 
period.
    (d) An order of Staff issued under paragraph (a) of this section 
granting an adjustment, in whole or in part, is final 30 days after it 
is issued, unless, during such 30-day period:
    (1) A petition for review is filed under subpart J of this 
subchapter in accordance with Rule 1110(a) (review of denials) in which 
case the order is final when the review process under subpart J has been 
completed; or
    (2) The Commission directs that the order be reviewed under subpart 
J in accordance with Rule 1110(b), in which case the order is final when 
the review process under subpart J has been completed unless the 
Commission expressly states that the order shall be effective pending 
review proceeding.



Sec. 385.1110  Review of initial decision and order for adjustment (Rule 

1110).

    (a) General rule. (1) Within 30 days after the issuance by Staff of 
an order granting or denying, in whole or in part, a petition for 
adjustment relief under this subpart, a person may file a petition for 
Commission review of that order in accordance with subpart J of this 
subchapter, if the person:
    (i) Is aggrieved or adversely affected by that order; and
    (ii) Participated, or sought and was denied an opportunity to 
participate, in the proceeding under this subpart.
    (2) Except as otherwise provided in this paragraph, the provisions 
of subpart J other than Rule 1013 (attachments to pleadings) shall apply 
to Commission review of both grants and denials of adjustment petitions 
under this subpart.
    (i) Contested order in subpart J means the order issued by Staff 
granting or denying, in whole or in part, a petition for adjustment 
under this subpart.
    (ii) ``Staff'' is substituted for ``Secretary'' in subpart J. With 
respect to review of an order denying a petition for adjustment under 
this subpart, Staff may participate in the proceeding in the same manner 
prescribed for the Secretary in Rule 1005 (replies in reviews of 
adjustment denials). With respect to review of an order granting a

[[Page 1175]]

petition for adjustment under this subpart, Staff may not participate in 
the proceeding except to the extent necessary to file the list 
identifying the documents in the record as prescribed in paragraph 
(a)(2)(iii). With respect to review of an order granting in part and 
denying in part a petition for adjustment under this subpart, Staff may 
participate as prescribed in Rule 1005(a)(1) (replies), only if a 
petition for review has been filed which specifically seeks review of 
the portion of the order denying the petition for adjustment.
    (iii) Within 15 days of service of the petition for review, Staff 
must file with the Commission a list identifying each document in the 
record developed in the prior proceedings on the contested order, who 
filed the document, and the date it was filed.
    (3) A motion to intervene under Rule 1005(c) (interventions in 
adjustment proceedings) may be filed only by a person who sought and was 
denied an opportunity to participate, in the proceeding under this 
section. A person who did not file a motion to intervene in the Staff 
proceeding may file a motion for late intervention under Rule 214(d) 
(grant of late intervention).
    (4) There is no exhaustion of administrative remedies until a 
request for review is filed under subpart J in accordance with this 
section and the review process under subpart J is completed by the 
issuance of an order granting or denying, in whole or in part, the 
relief requested.
    (b) Review initiated by the Commission. Within 30 days after the 
issuance by Staff of an order granting, in whole or in part, a petition 
for adjustment relief under this subpart, the Commission may direct that 
the order be reviewed in a proceeding which, insofar as practicable, 
will conform to proceedings under subpart J. The order directing such 
review will specify the manner in which such proceeding will be 
conducted and the extent to which subpart J apply.
    (c) Separation of functions. Any person who participated in the 
proceeding to review the grant or denial of that adjustment under this 
Rule as a witness or counsel may not advise the Commission concerning 
the review of the grant or denial of that adjustment.

[Order 225, 47 FR 19022, May 3, 1982; 48 FR 786, Jan. 7, 1983, as 
amended by Order 24-C, 50 FR 21596, May 28, 1985]



Sec. 385.1111  Conferences (Rule 1111).

    Staff may direct that a conference be convened. The conference will 
be conducted by Staff in accordance with procedures Staff determines 
will most expeditiously further the purpose of the conference. A 
conference will be convened only after actual notice of the time, place 
and nature of the conference is provided to the parties. All parties may 
attend the conference. However, if a party wishes to present 
confidential information at the conference, Staff may exclude the other 
parties from that part of the conference when the confidential 
information is presented.



Sec. 385.1112  Requests for confidential treatment (Rule 1112).

    (a) If a person filing a document under this subpart claims that 
some or all of the information contained in a document is exempt from 
the mandatory disclosure requirements of the Freedom of Information Act, 
or is otherwise exempt by law from public disclosure, that person may 
request confidential treatment of such information. At the time request 
is made for confidential treatment, the person must submit a copy of the 
document which contains the confidential information and two copies of 
the document which exclude the information for which confidential 
treatment is requested. The request for confidential treatment must 
describe the information deleted and specify the grounds for the claim 
for confidential treatment. The service requirements of Rule 2010 
(service) are deemed satisfied if a copy of the document with the 
confidential information deleted is served.
    (b) If a determination to disclose the information is made under 
part 388 (public information and requests), the person who has requested 
confidential treatment will be given notice thereof and will be afforded 
no less than 10 days to respond to such determination before the 
information is disclosed.

[[Page 1176]]



Sec. 385.1113  Interim relief (Rule 1113).

    (a) The petitioner may at any time file a request for interim relief 
in a proceeding under this subpart, setting forth the legal and factual 
basis for the request. Service of such request must comply with the 
service requirements set forth in Rule 1104(b) (initial petition of 
adjustment request) and must be made on each person described in such 
rule as well as on any other party to the proceeding.
    (b) The grounds for granting interim relief are:
    (1)(i) A showing that irreparable injury will result in the event 
the interim relief is denied; and
    (ii) A showing that denial of the interim relief requested will 
result in a more immediate special hardship or inequity to the person 
requesting the interim relief than the consequences that would result to 
other persons if the interim relief were granted; or
    (2) A showing that it will be in the public interest to grant the 
interim relief.
    (c) A party may within 10 days after the filing of the request for 
interim relief file a reply to the request for interim relief.
    (d) Staff may request a written statement of the views of a party 
regarding whether the interim relief should be granted and may convene 
an expedited conference on the request for interim relief.
    (e) If Staff has not granted the request for interim relief within 
30 days after it is filed, the request is denied.
    (f)(1) Subject to paragraph (f)(2) of this section, Staff will issue 
an order granting or denying the request for interim relief and will 
notify the parties. Any grant of interim relief is subject to further 
modification in the order issued under Rule 1109 (orders).
    (2) The Commission may, on its own motion, at any time revoke, 
modify, rescind, stay or take any other appropriate action concerning 
the order granting interim relief.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 24-C, 50 FR 
21596, May 28, 1985]



Sec. 385.1114  Motions (Rule 1114).

    A party may file a motion at any time. Motions must set forth the 
ruling or relief requested and must state the grounds therefor and the 
statutory or other authority relied upon. Staff will rule on all 
motions.



Sec. 385.1115  Procedural rulings (Rule 1115).

    Staff may make any procedural rule or provide any procedural relief.



Sec. 385.1116  Appeals (Rule 1116).

    All actions under this subpart are taken by Staff, except with 
respect to requests for public information under part 388. Except as 
provided in Rule 1110 (review of initial adjustment decision) of this 
section, there are no appeals to the Commission from Staff action taken 
under this section.



Sec. 385.1117  Petition for adjustment treated as request for interpretation (Rule 1117).

    (a) Staff may, if appropriate, treat a petition filed under Rule 
1103 (petition for adjustment) as a request for an interpretation under 
section 502(c) of the NGPA, or rule or order issued under that Act.
    (b) If the Staff exercises its discretion under paragraph (a) of 
this section to treat a petition for adjustment as a request for an 
interpretation, then:
    (1) Staff will notify the parties to the proceeding that the 
petition is being treated as a request for an interpretation under Rule 
1901; and
    (2) The time limits in this section are stayed pending issuance of 
the interpretation.
    (c) After the interpretation is issued, if the petitioner wishes to 
reinstate the adjustment proceeding, the petitioner may do so by 
notifying the Commission in writing that the petition should be 
reinstated.

Subpart L [Reserved]



         Subpart M_Cooperative Procedure with State Commissions



Sec. 385.1301  Policy (Rule 1301).

    (a) The Federal Power and Natural Gas Acts, sections 209 and 17, 
respectively, authorize cooperation between the Federal Energy 
Regulatory Commission and the State commissions of

[[Page 1177]]

the several States in the administration of said Acts, which include 
authorization for:
    (1) Reference of any matter arising in the administration of these 
Acts to a board to be composed of a member or members from a State or 
States affected, or to be affected, by the particular matters pending 
before the Commission;
    (2) Conferences with State commissions regarding the relationship 
between rate structures, costs, accounts, charges, practices, 
classifications, and regulations of public utilities or natural gas 
companies subject to the jurisdiction of such State commissions and of 
the Commission; and
    (3) Joint hearings with State commissions in connection with any 
matter with respect to which the Commission is authorized to act.
    (b) The matters that should be the subject of a conference referred 
to a board, or heard at a joint hearing of State commissions and the 
Commission, obviously, cannot be determined in advance. It is 
understood, therefore, that the Commission or any State commission will 
freely suggest cooperation with respect to any proceeding or matter 
affecting any public utility or natural gas company subject to the 
jurisdiction of the Commission and of a State commission, and concerning 
which it is believed that cooperation will be in the public interest.



Sec. 385.1302  Notice (Rule 1302).

    (a) By Commission. (1) Whenever there is instituted before the 
Commission any proceeding under either the Federal Power Act or the 
Natural Gas Act, the State commission or commissions of the State or 
States affected thereby will be given notice thereof immediately by the 
Commission. As deemed necessary for an understanding of the subject 
matter, each such notice will be supplemented by copies of applications, 
complaints, petitions, or orders instituting proceedings. Each such 
notice given to a State commission will request that the Commission be 
notified within a reasonable time whether the proceeding is deemed one 
that should be considered under the cooperative provisions of this 
subpart, and, if so, to advise the Commission as to the nature of its 
interest in the matter, and further, to specify whether it desires a 
conference, the creation of a board, or a joint or concurrent hearing, 
as defined in this subpart and the reasons for such request.
    (2) Any commission suggesting some form of such cooperative 
procedure should also state whether there is pending, or will be pending 
before it, a proceeding in which a concurrent hearing might 
appropriately be held and whether its proposal is for such hearing 
covering such proceeding and the proceeding pending before the 
Commission.
    (3) A State commission recommending to the Commission reference of a 
proceeding to a board, under either the Federal Power Act or the Natural 
Gas Act, should state with fullness the reasons which led it to believe 
that such reference is desirable and in the public interest.
    (4) Upon the receipt from a State commission of a communication 
suggesting cooperation, the Commission will consider the same, and may 
confer with the commission making the request and with other interested 
commissions, if any, in such manner as may be most suitable, and, if 
cooperation in the manner proposed, or in any other manner, appears to 
be practicable and desirable, will so advise each interested State 
commission, and will invite it to participate therein.
    (b) By State commission. (1) Each State commission should, in like 
manner, notify the Commission of any proceeding instituted before it the 
subject matter of which is also subject to the jurisdiction of the 
Commission, or in which it believes the Commission is interested. Such 
notice should be supplemented by copies of applications, petitions, 
complaints, or orders instituting proceedings which may be necessary to 
an understanding of the subject matter. Such notice should include the 
suggestions which the State commission may wish to make concerning 
cooperative procedure.
    (2) Upon receipt of such notice, the Commission will consider the 
same and will promptly notify the State commission whether or not in its 
opinion cooperation in the manner proposed, or in any other manner, 
appears to be

[[Page 1178]]

practicable and desirable. The Commission is free to propose cooperative 
procedures whether or not such proposal of cooperation has been made by 
the State commission first giving notice of the proceeding.
    (c) Commission or State commissions to invite participation in 
cooperative procedure. In the event that cooperation in a particular 
proceeding has been determined upon, the Commission or a State 
commission before which the proceeding is pending will so advise each 
interested State commission and will invite it to take part therein.



Sec. 385.1303  Conferences (Rule 1303).

    Inasmuch as experience has proved that informal conferences are the 
means most often used to enable commissions to work together to promote 
good regulation, affording means whereby common understandings may be 
reached, and the imposition of inconsistent or conflicting regulations 
upon companies subject to both Federal and State control may be avoided 
and means whereby State commissions may secure the assistance in State 
regulatory work which sections 209 and 17, respectively, of the Federal 
Power and Natural Gas Acts authorize the Commission to extend, any 
commission, Federal or State, should always feel free to suggest a 
conference to another commission, concerning any matter of regulation 
subject to the jurisdiction of either, with respect to which it is 
believed that a cooperative conference may be in the public interest. 
The commission desiring a conference upon any such matter should notify 
other interested commissions without delay, and thereupon the Commission 
or a State commission, as may be agreed, will promptly arrange for a 
conference in which all interested commissions will be invited to be 
represented.



Sec. 385.1304  Procedure governing matters referred to a board (Rule 1304).

    (a) It is believed that the statutory provisions of sections 209 and 
17, respectively, of the Federal Power and Natural Gas Acts, for the 
reference of a proceeding to a board constituted as therein provided, 
were designed for use in unusual cases, and as a means of relief to the 
Commission when it might find itself unable to hear and determine cases 
before it, in the usual course, without undue delay.
    (b) Whenever the Commission, either upon its own motion or upon the 
suggestion of a State commission or at the request of any interested 
party, determines that it is desirable to refer a matter arising in the 
administration either of the Natural Gas Act or Part II of the Federal 
Power Act, to a board to be composed of a member or members from the 
State or States affected or to be affected by such matter, the procedure 
will be as follows: The Commission will send a request to each 
interested State commission to nominate a specified number of members to 
serve on such board. Whenever more than one State is involved, the 
representation of each State concerned shall be equal, unless one or 
more of the States affected chooses to waive such right of equal 
representation. The Commission will specify the functions to be 
performed by such board in each instance. When the member or members of 
any board have been nominated and appointed in accordance with the 
provisions of either section 209 of the Federal Power Act or section 17 
of the Natural Gas Act, the Commission will issue an order referring the 
particular matter to such board, and such order will fix the time and 
place of hearing, define the ``force and effect'' which an action of the 
board will have, the manner in which the proceedings will be conducted, 
and specify the allowances to be made for the expense of the members of 
the board. As far as applicable, the rules of practice and procedure as 
from time to time adopted or prescribed by the Commission will govern 
such board. The board will have authority to adjourn the hearing from 
day to day, subpoena witnesses, rule on the relevancy, competency, and 
materiality of evidence, and will, after hearing all interested parties, 
submit its report to the Commission.



Sec. 385.1305  Joint and concurrent hearings (Rule 1305).

    (a) The term ``joint hearing'' used in sections 209 and 17, 
respectively, of the Federal Power and Natural Gas Acts is understood to 
cover any hearing in which members of the Commission and

[[Page 1179]]

members of one or more State commissions may sit together in a 
proceeding pending before one such commission, whether or not a 
proceeding or proceedings involving similar or corresponding issues be 
pending before any other commission.
    (b) Two different types of proceedings have been called ``joint 
hearings''. One is that type of proceeding where members of one or more 
State commissions sit with members of the Commission for information or 
in an advisory capacity. The State commissioners in such case do not 
develop a record for their respective commissions and may not, at their 
own discretion, make a recommendation to the Commission. The other type 
of joint hearing is often referred to as a ``concurrent hearing''. Under 
this procedure the Commission and one or more State commissions sit 
together to hear and jointly make a record upon a matter over which all 
of the participating commissions have jurisdiction and responsibility 
for action.
    (c) The Commission or any State commission or commissions should 
feel free to suggest or request a joint or concurrent hearing at any 
time. It is believed that the concurrent hearing is the type of 
cooperative hearing which is likely to be most useful and effective.
    (d) Whenever a concurrent hearing has been agreed upon by the 
Commission and one or more State commissions, the procedure will be:
    (1) Each commission will designate the representative or 
representatives of such commission to sit at such concurrent hearing, 
and will designate the representative who will be the presiding officer 
for such commission.
    (2) It will be understood that participation in such concurrent 
hearing will in no way affect the complete control by each commission of 
the proceeding before it. It will be understood, also, that 
participation in either a joint or concurrent hearing will in no way 
preclude any commission from causing to be presented in any such case 
pertinent evidence with respect to matters in issue.
    (3) The representative designated by the Commission will be the 
presiding officer to announce rulings with respect to which there is no 
disagreement; and such rulings will be considered concurrent rulings. 
However, the presiding officer for any commission which does not concur 
in any ruling may announce a divergent ruling and such divergent ruling, 
whether with respect to the admissibility of evidence or any other 
matter, will be considered the ruling for his or her commission.
    (4) The record of the concurrent hearing will be the record of each 
commission participating, except that, if divergent rulings are made, 
the rulings will be reported so as to separate and distinguish clearly 
the record of the respective participating commissions and the evidence 
admitted in each record, in accordance with the rulings of the 
respective commissions. If, in any proceeding, the ruling of one 
presiding officer has the effect of admitting any voluminous exhibit or 
testimony which is excluded by the ruling of another presiding officer, 
the taking of such evidence, whenever possible, will be deferred until 
after the completion of the proceedings which can be conducted under 
concurrent rulings. When such testimony is taken, the transcript of such 
evidence will be made available to the participating commissions, if 
desired.
    (5) In all respects concerning which there is no divergence of 
ruling, the hearing will be conducted in accordance with the rules of 
practice and procedure prescribed by the Commission, subject to the 
express understanding that each participating State commission will 
control its own record and make its own rulings as to the admissibility 
of evidence and as to other matters affecting its proceedings, and will 
make its own separate final decision or order therein.
    (e) Before either the Commission or a participating State commission 
will enter any order or orders in a concurrent proceeding, opportunity 
will be afforded for conference between the Commission and the State 
commissions participating.
    (f) Whenever a joint hearing other than a concurrent hearing is 
agreed upon, the commissioners which take part therein will agree upon 
the procedure to be followed in such hearing in advance of the opening 
of the same.

[[Page 1180]]

With respect to any concurrent hearing, a special agreement may be made 
by the commissions taking part therein for a procedure or action 
differing from that outlined in this plan.
    (g) Cooperation between two or more commissions in a concurrent 
hearing will preclude either from taking the position of an advocate or 
a litigant. If a commission wishes to take such a position, it will not 
be a cooperating participant in that proceeding. In such situation the 
appropriate method of procedure will be intervention under Rule 214.



Sec. 385.1306  Intervention by State commissions (Rule 1306).

    Any interested State commission may intervene in any proceeding 
before the Federal Energy Regulatory Commission, as provided in Rule 
214.



                   Subpart N_Oil Pipeline Proceedings

    Authority: Administrative Procedure Act, 5 U.S.C. 551-557; 
Department of Energy Organization Act, 42 U.S.C. 7101-7352, E.O. 12,009, 
3 CFR 142 (1978); Interstate Commerce Act, 49 U.S.C. 1, et seq.



Sec. 385.1401  Applicability (Rule 1401).

    (a) This subpart applies to oil pipeline proceedings.
    (b) If any provision of this subpart is inconsistent with any 
provision of another subpart of this part, the provision of this subpart 
governs and the provision of the other subpart is inapplicable to the 
extent of the inconsistency.

[Order 312, 48 FR 29479, June 27, 1983]



Sec. 385.1402  Subscriber lists (Rule 1402).

    (a) Not later than December 31 of each year, an oil pipeline must 
request, in writing, each of its subscribers and each person who has 
been served under any of its tariffs during the preceding twelve months 
to notify the pipeline as to whether the subscriber or person wishes to 
be included on the subscriber list for any of the oil pipeline's 
integrated pipeline systems.
    (b) The oil pipeline must immediately add to the specified 
subscriber list any subscriber or person which responds in writing 
within 30 days of receipt of the oil pipeline request and which 
indicates in that response that it wishes to be included on the 
specified list.

[Order 312, 48 FR 29479, June 27, 1983]



Sec. 385.1403  Petitions seeking institution of rulemaking proceedings (Rule 

1404).

    Any person may file a petition requesting the Commission to 
institute a proceeding for the purpose of issuing statements, rules, or 
regulations of general applicability and significance designed to 
implement or interpret law, or to formulate general policy for future 
effect. No reply to such a petition may be filed. Whether a proceeding 
shall be instituted as requested is within the discretion of the 
Commission and the ruling on the petition will be final. In the event a 
rulemaking proceeding is instituted by the Commission, the procedure to 
be employed for the taking of evidence or the receipt of views and 
comments will be designated by Commission order.

[Order 276, at 49 FR 21705, May 23, 1984. Redesignated by Order 606, 64 
FR 44405, Aug. 16, 1999]



Subpart O_Procedures for the Assessment of Civil Penalties Under Section 

                       31 of the Federal Power Act



Sec. 385.1501  Scope (Rule 1501).

    The rules in this subpart apply to and govern proceedings for the 
assessment of civil penalties pursuant to section 31 of the Federal 
Power Act, 16 U.S.C. 823b.



Sec. 385.1502  Persons subject to civil penalties (Rule 1502).

    (a) Any licensee or permittee under the Federal Power Act, or 
exemptee from any requirement of Part I of the Federal Power Act, may be 
subject to civil penalties; and
    (b) Any person who must have a license under, or exemption from, the 
Federal Power Act, but does not, may be subject to civil penalties.

[[Page 1181]]



Sec. 385.1503  Actions subjecting persons to civil penalties (Rule 1503).

    (a) The actions that subject persons to civil penalties are 
violations of:
    (1) Any rule or regulation issued under Part I of the Federal Power 
Act;
    (2) Any term or condition of a license or permit issued under Part I 
of the Federal Power Act or an exemption issued from any provision of 
Part I of the Federal Power Act;
    (3) Any compliance order issued under section 31(a) of the Federal 
Power Act; or
    (4) Any requirement of Part I of the Federal Power Act.
    (b) Only actions occurring on or after October 16, 1986, may subject 
a person to civil penalties.



Sec. 385.1504  Maximum civil penalty (Rule 1504).

    (a) Except as provided in paragraph (b) of this section, the 
Commission may assess a civil penalty of up to $10,000 for each day that 
the violation continues.
    (b) No civil penalty may be assessed where a license or exemption is 
ordered revoked.



Sec. 385.1505  Determination of proposed penalty amount (Rule 1505).

    (a) In determining the amount of a proposed penalty, the Commission 
will consider the nature and seriousness of the violation, and the 
efforts of the licensee, exemptee, permittee or one who should possess 
appropriate authority but does not, to remedy the violation in a timely 
manner.
    (b) In making its determination under paragraph (a), the Commission 
will consider the following factors:
    (1) Whether the person had actual knowledge of the violation;
    (2) Whether the person had constructive knowledge of the violation 
deemed to be possessed by a reasonable individual acting under similar 
circumstances;
    (3) Whether the person has a history of previous violations;
    (4) Whether the violation caused loss of life or injury to persons;
    (5) Whether economic benefits were derived because of the violation;
    (6) Whether the violation caused damage to property or the 
environment;
    (7) Whether the violation endangered persons, property or the 
environment;
    (8) Whether there were timely remedial efforts;
    (9) Whether there were untimely remedial efforts;
    (10) Whether there were no remedial efforts; and
    (11) Whether there are any other pertinent considerations.



Sec. 385.1506  Notice of proposed penalty (Rule 1506).

    (a) Before issuing an order assessing a civil penalty under this 
subpart against any person, the Commission will provide to the person 
notice of the proposed penalty.
    (b) The notice of proposed penalty will:
    (1) Include the amount of the proposed penalty;
    (2) Include a statement of the material facts constituting the 
alleged violation; and
    (3)(i) Inform the person of the opportunity to elect in writing 
within 30 days of receipt of the notice to have the procedures of Rule 
1509 (in lieu of those of Rule 1508) apply with respect to the 
assessment, or,
    (ii) If a final compliance order is issued under section 31(a) of 
the Federal Power Act, no notice of election will be provided for a 
violation of, or a failure or refusal to comply with, the final order.



Sec. 385.1507  Election of procedures and answer (Rule 1507).

    (a) If the respondent receiving the notice of proposed penalty 
wishes to have the procedures of Rule 1509 apply, then the respondent 
must file with the Commission, within 30 days of receipt of the notice, 
a notification of the election in accordance with subpart T, part 385 of 
this chapter. The notification may include an answer setting forth 
factual or legal reasons why the proposed assessment order should not be 
issued, should be reduced in amount, or should otherwise be modified. If 
a person fails to file an answer within the 30-day time limit, all 
material facts

[[Page 1182]]

stated in the Commission's notice will be deemed admitted.
    (b) Any election to have the procedures of Rule 1509 apply may not 
be revoked after the 30-day election period in paragraph (a) of this 
section, without the consent of the Commission.



Sec. 385.1508  Commission administrative procedures (Rule 1508).

    (a) If the respondent is not entitled to an election pursuant to 
Rule 1506(b)(3)(ii) or does not timely elect to have the procedures of 
Rule 1509 apply, the Commission will commence a proceeding in accordance 
with the provisions of subpart E of this chapter.
    (b) The Commission's Rules of Practice and Procedure in part 385 of 
this chapter will apply, as appropriate, to any evidentiary proceeding 
to assess a civil penalty.
    (c) An assessment order under this section shall include the 
administrative law judge's findings and the basis for such assessment.



Sec. 385.1509  District court procedures (Rule 1509).

    (a) After receipt of the notification of election to apply the 
provisions of this section pursuant to Rule 1507, the Commission will 
promptly assess the penalty it deems appropriate, in accordance with 
Rule 1505.
    (b) If the civil penalty is not paid within 60 calendar days after 
the assessment order is issued under paragraph (a) of this section, the 
General Counsel, unless otherwise directed by the Commission, will 
institute an action in the appropriate United States District Court for 
an order affirming the assessment of the civil penalty.



Sec. 385.1510  Modification of civil penalty (Rule 1510).

    (a) The Commission may compromise, modify, or remit, with or without 
conditions, any civil penalty (with leave of court if necessary).
    (b) In exercising its authority under paragraph (a) of this section, 
the Commission may consider the nature and seriousness of the violation, 
and the efforts of the licensee, exemptee, permittee, or one who should 
possess appropriate authority but does not, to remedy the violation in a 
timely manner.
    (c) The Commission's authority to compromise, modify or remit a 
civil penalty may be exercised at any time prior to a final decision by 
the United States Court of Appeals if Rule 1508 procedures are utilized, 
or prior to a final decision by the United States District Court if Rule 
1509 procedures are utilized.



Sec. 385.1511  Collection of civil penalties (Rule 1511).

    If any person fails to pay a civil penalty assessment, the 
Commission will seek to recover the amount of the penalty plus interest 
in any appropriate District Court of the United States. Interest will 
begin to accrue on the date the Commission issues a final order under 
Rule 1508 or the date on which the appropriate District Court enters 
final judgment in favor of the Commission under Rule 1509.

[Order 502, 53 FR 32039, Aug. 23, 1988]



          Subpart P_Civil Monetary Penalty Inflation Adjustment

    Source: Order 891, 67 FR 52412, Aug. 12, 2002, unless otherwise 
noted.



Sec. 385.1601  Scope and purpose (Rule 1601).

    The purpose of this subpart is to make inflation adjustments to the 
civil monetary penalties provided by law within the jurisdiction of the 
Commission. These penalties shall be subject to review and adjustment as 
necessary at least every four years in accordance with the Federal Civil 
Penalties Inflation Act of 1990, as amended.



Sec. 385.1602  Civil penalties, as adjusted (Rule 1602).

    The civil monetary penalties provided by law within the jurisdiction 
of the Commission are:
    (a) 15 U.S.C. 3414(b)(6)(A)(1), Natural Gas Policy Act: from $5,000 
to $5,500.
    (b) 16 U.S.C. 823b(c), Federal Power Act: from $10,000 to $11,000.
    (c) 16 U.S.C. 825n(a), Federal Power Act: from $1,000 to $1,100.
    (d) 16 U.S.C. 825(o)-1(b), Federal Power Act: from $10,000 to 
$11,000.

[[Page 1183]]

Subparts Q-R [Reserved]



                         Subpart S_Miscellaneous



Sec. 385.1901  Interpretations and interpretative rules under the NGPA (Rule 

1901).

    (a) Purpose and applicability--1) Purpose. The purpose of this 
section is to provide procedures by which:
    (i) A person may seek a written interpretation from the General 
Counsel construing a provision of the NGPA, or clarifying a rule issued 
by the Commission under the NGPA; and
    (ii) The Commission may publish an interpretative rule that will 
have general applicability and effect.
    (2) Applicability. (i) This section applies to requests under 
section 502(c) of the NGPA for interpretations of the NGPA or of rules 
or of orders, having the applicability and effect of a rule as defined 
in 5 U.S.C. 551(4), issued under the NGPA. It does not apply to orders 
issued under sections 301, 302, and 303 of the NGPA.
    (ii) This section applies to requests for interpretations to 
prospective, existing or completed facts, acts, or transactions. 
Interpretations based on hypothetical facts, acts, or transactions will 
not be considered.
    (b) Definitions. For the purpose of this section, the following 
definitions apply.
    (1) Direct participant means any person or legal entity who is, or 
plans to be an actual party in the act, transaction, or circumstance 
presented, and who has an immediate or direct financial interest in the 
act, transaction, or circumstance.
    (2) Interpretation means a written statement of the General Counsel 
which applies a particular rule to a particular set of facts, acts, 
circumstances or transactions. In the discretion of General Counsel, the 
interpretation may contain a detailed factual and legal analysis, a 
summary of the facts or the law, or both, or it may be a conclusory 
statement.
    (3) Interpretative rule means an official interpretative statement 
of general applicability issued by the Commission and published in the 
Federal Register that applies the NGPA or rules issued thereunder to a 
specific set of facts, acts, circumstances and transactions.
    (4) NGPA means the Natural Gas Policy Act of 1978.
    (5) Request means a request for an interpretation.
    (6) Rule means a rule or an order having the effect of a rule as 
defined in 5 U.S.C. 551(4).
    (c) Persons who may request an interpretation--1) Any person who is 
or will be a direct participant in an act, transaction, or circumstance 
affected by the NGPA or a rule issued by the Commission under the NGPA 
may file with the Office of the General Counsel a request for an 
interpretation.
    (2) Requests for interpretations must be addressed to the Office of 
the General Counsel as follows:

Federal Energy Regulatory Commission, Interpretations Section, Office of 
the General Counsel, 888 First Street, NE., Washington, D.C. 20426.

    (3) Requests for interpretation under this paragraph need not be 
filed with the Secretary.
    (d) Content of request--1) Facts. A request for interpretation must 
contain a full and complete statement of the relevant and material facts 
pertaining to the act, transaction, or circumstance that is the subject 
of the request for interpretation. When the request pertains to only one 
step of a larger integrated transaction, the facts, circumstances, and 
other relevant information pertaining to the entire transaction must be 
included in the request.
    (2) Statement of the question. The request must clearly designate 
the section of the statute, regulation, rule, or part thereof which the 
person making the request seeks to have interpreted and must set forth 
clearly and concisely the question for which an interpretation is 
sought. The request may also set forth a proposed answer to the 
question.
    (3) Analysis. If the request proposes a particular answer:
    (i) The request must set forth a legal analysis in support of the 
proposed answer and cite relevant authorities in support thereof.
    (ii) The request must set forth the legal and business consequences 
which will flow from the proposed answer.

[[Page 1184]]

    (4) Factual statements. (i) The request must be accompanied by a 
statement that to the best of the applicant's personal information, 
knowledge, and belief there is no untrue statement of a material or 
relevant fact and there is no omission of a material or relevant fact 
made in the request.
    (ii) Any untrue statement or omission of a material or relevant fact 
upon which the Office of the General Counsel relied in a request for an 
interpretation is deemed to be a statement or entry under section 1001 
of Title 18, United States Code.
    (5) Notification of other parties. (i) A person submitting a request 
must specify each person who is a direct participant in the 
circumstance, act or transaction; must notify them in writing of the 
request for an interpretation; and must send them a copy of such 
request. Such notification and the addresses of the persons notified 
must be included in a request to the General Counsel.
    (ii) Each person notified pursuant to paragraph (d)(5)(i) of this 
section may submit information regarding any fact provided in the 
request of which it has personal knowledge, if such fact is different 
from the facts presented by the applicant. Such fact must be presented 
to the Office of the General Counsel as set forth in paragraph (d)(4) of 
this section.
    (6) The request must be accompanied by the fee prescribed in Sec. 
381.405 of this chapter or by a petition for waiver pursuant to Sec. 
381.106 of this chapter.
    (e) Additional information. The General Counsel may request 
additional information, documentation or legal analysis in connection 
with any request for any interpretation.
    (f) Referral of information. Information submitted in a request for 
interpretation may be used by the Commission or its Staff in their 
official capacity. Any information received will be placed in a public 
file in the Commission's Office of Public Information.
    (g) The interpretation--1) Except as provided in paragraph (g)(2) of 
this section, the General Counsel will provide a copy of his or her 
written interpretation of the NGPA or rule as applied to the act, 
transaction, or circumstance presented upon the person who made the 
request for the interpretation and upon persons named in the request as 
direct participants in the act, transaction, or circumstance.
    (2) The General Counsel may determine not to issue an 
interpretation, in which case the person who made the request and direct 
participants as specified in the request will be notified in writing of 
the decision not to issue an interpretation, and the reason for the 
decision.
    (3) Only those persons to whom an interpretation is specifically 
addressed and other persons who are named in the request, who have been 
informed by the applicant for an interpretation of the pendency of the 
request and who are direct participants in the act, transaction or 
circumstance presented, may rely upon it. The effectiveness of an 
interpretation depends entirely on the accuracy of the facts presented 
to the General Counsel. If a material or relevant fact has been 
misrepresented or omitted or if any material or relevant fact changes 
after an interpretation is issued or if the action taken differs from 
the facts presented in the request, the interpretation may not be relied 
upon by any person.
    (4) An interpretation may be rescinded or modified prospectively at 
any time. A rescission or modification is effected by notifying persons 
entitled to rely on the interpretation at the address contained in the 
original request.
    (5) Any interpretation based on the NGPA or a rule issued thereunder 
in effect at the time of issuance may be relied upon only to the extent 
such law or rule remains in effect.
    (6) Except as provided in paragraphs (g)(3), (g)(4) and (g)(5) of 
this section, the Staff will not recommend any action to the Commission 
which is inconsistent with the position espoused in the interpretation. 
The interpretation of the General Counsel is not the interpretation of 
the Commission. An interpretation provided by the General Counsel is 
given without prejudice to the Commission's authority to consider the 
same or like question and to issue a declaratory order to take other 
action which has the effect of rescinding, revoking, or modifying the 
interpretation of the General Counsel.

[[Page 1185]]

    (h) Appeal. There is no appeal to the Commission of an 
interpretation.
    (i) Interpretative rules. Upon the petition of any person or upon 
its own motion, the Commission may publish in the Federal Register an 
interpretative rule regarding any question arising under the NGPA or a 
rule promulgated thereunder. Any person is entitled to rely upon an 
interpretative rule.
    (j) Applications for adjustments treated as requests for 
interpretations. Except for the notification provisions of paragraph 
(d)(5) of this section, the provisions of this section apply to any 
petition for an adjustment which is deemed a request for an 
interpretation under Rule 1117. Notice to all parties to an adjustment 
proceeding under subpart K of this part that is deemed to be a request 
for an interpretation will be given under Rule 1117(d)(1).

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 394, 49 FR 
35366, Sept. 7, 1984; Order 737, 75 FR 43405, July 26, 2010]



Sec. 385.1902  Appeals from action of staff (Rule 1902).

    (a) Any staff action (other than a decision or ruling of presiding 
officer, as defined in Rule 102(e)(1), made in a proceeding set for 
hearing under subpart E of this part) taken pursuant to authority 
delegated to the staff by the Commission is a final agency action that 
is subject to a request for rehearing under Rule 713 (request for 
rehearing).
    (b) All appeals of staff action that were timely filed prior to 
December 3, 1990 and that had not been acted upon by the Commission on 
their substantive merits are deemed to be timely filed requests for 
rehearing of final agency action. All notices issued by the Commission 
prior to December 3, 1990 stating the Commission's intent to act on 
appeals of staff action such that they are not deemed denied by the 
expiration of a 30-day period after the filing of the appeal, are deemed 
to be orders granting rehearing of final agency action for the sole 
purpose of further consideration, unless the Commission issued an order 
on the substantive merits of the appeal prior to December 3, 1990. No 
later than January 2, 1991, persons who had timely filed appeals of 
staff action prior to December 3, 1990 which were pending before the 
Commission on that date may file additional pleadings to update or 
supplement those appeals.

[Order 530, 55 FR 50682, Dec. 10, 1990, as amended by Order 606, 64 FR 
44405, Aug. 16, 1999]



Sec. 385.1903  Notice in rulemaking proceedings (Rule 1903).

    Before the adoption of rule of general applicability or the 
commencement of hearing on such a proposed rulemaking, the Commission 
will cause general notice to be given by publication in the Federal 
Register, such notice to be published therein not less than 15 days 
prior to the date fixed for the consideration of the adoption of a 
proposed rule or rules or for the commencement of the hearing, if any, 
on the proposed rulemaking, except where a shorter period is reasonable 
and good cause exists therefor; Provided however, That:
    (a) When the Commission, for good cause, finds it impracticable, 
unnecessary, or contrary to the public interest to give such notice, it 
may proceed with the adoption of rules without notice by incorporating 
therein a finding to such effect and a concise statement of the reasons 
therefor;
    (b) Except when notice or hearing is required by statute, the 
Commission may issue at any time rules of organization, procedure or 
practice, or interpretative rules, or statements of policy, without 
notice or public proceedings; and
    (c) This section is not to be construed as applicable to the extent 
that there may be involved any military, naval, or foreign affairs 
function of the United States, or any matter relating to the 
Commission's management or personnel, or to United States property, 
loans, grants, benefits, or contracts.



Sec. 385.1904  Copies of transcripts (Rule 1904).

    The Commission will cause to be made a stenographic record of public 
hearings and such copies of the transcript thereof as it requires for 
its own purposes. Participants desiring copies of such transcript may 
obtain the same

[[Page 1186]]

from the official reporter upon payment of the fees fixed therefor.



Sec. 385.1907  Reports of compliance (Rule 1907).

    When any licensee, permittee, or any other person subject to the 
jurisdiction of the Commission is required to do or perform any act by 
Commission order, permit, or license provision, there must be filed with 
the Commission within 30 days following the date when such requirement 
became effective, a notice, under oath, stating that such requirement 
has been met or complied with; Provided, however, That the Commission, 
by rule or order, or by making specific provision therefor in a license 
or permit, may provide otherwise for the giving of such notice of 
compliance. Five conformed copies of such notice must be filed in lieu 
of the fourteen conformed copies required by Rule 2004 (copies of 
filings).



  Subpart T_Formal Requirements for Filings in Proceedings Before the 

                               Commission



Sec. 385.2001  Filings (Rule 2001).

    (a) Filings with the Commission. (1) Except as otherwise provided in 
this chapter, any document required to be filed with the Commission must 
comply with Rules 2001 to 2005 and must be submitted to the Secretary 
by:
    (i) Mailing the document to the Secretary, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426;
    (ii) Hand delivering the document to Room 1A, 888 First Street, NE., 
Washington, DC; or
    (iii) By filing via the Internet pursuant to Rule 2003 through the 
links provided at http://www.ferc.gov.

    Note to paragraph (a)(1): Assistance for filing via the Internet is 
available by calling (202) 502-6652 or 1-866-208-3676 (toll free), or by 
e-mail to [email protected].

    (2) Any document is considered filed, if in paper form, on the date 
stamped by the Secretary or, in the case of a document filed via the 
Internet, on the date indicated in the acknowledgment that will be sent 
immediately upon the Commission's receipt of a submission, unless the 
document is subsequently rejected. Any document received after regular 
business hours is considered filed on the next regular business day.
    (b) Rejection. (1) If any filing does not comply with any applicable 
statute, rule, or order, the filing may be rejected, unless the filing 
is accompanied by a motion requesting a waiver of the applicable 
requirement of a rule or order and the motion is granted.
    (2) If any filing is rejected, the document is deemed not to have 
been filed with the Commission.
    (3) Where a document is rejected under paragraph (b)(1) of this 
section, the Secretary, or the office director to whom the filing has 
been referred, will notify the submitter and indicate the deficiencies 
in the filing and the reason for the rejection.
    (4) If a filing does not comply with any applicable requirement, all 
or part of the filing may be stricken. Any failure to reject a filing 
which is not in compliance with an applicable statute, rule, or order 
does not waive any obligation to comply with the requirements of this 
chapter.

[Order 619, 65 FR 57091, Sept. 21, 2000, as amended by Order 2002, 68 FR 
51143, Aug. 25, 2003; Order 647, 69 FR 32440, June 10, 2004; Order 703, 
72 FR 65664, Nov. 23, 2007]



Sec. 385.2002  Caption of filings (Rule 2002).

    A filing must begin with a caption that sets forth:
    (a) The docket designation, if any;
    (b) The words ``INTERLOCUTORY APPEAL'' underneath the docket 
designation if the filing is an appeal under Rule 715(c) of a presiding 
officer's denial of a motion for an interlocutory appeal;
    (c) The title of the proceeding if a proceeding has been initiated;
    (d) A heading which describes the filing; and
    (e) The name of the participant for whom the filing is made, or a 
shortened designation for the participant.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 402, 49 FR 
39539, Oct. 9, 1984]



Sec. 385.2003  Specifications (Rule 2003).

    (a) All filings. Any filing with the Commission must be:

[[Page 1187]]

    (1) Typewritten, printed, reproduced, or prepared using a computer 
or other word or data processing equipment;
    (2) Have double-spaced lines with left margins not less than 1\1/2\ 
inch wide, except that any tariff or rate filing may be single-spaced;
    (3) Have indented and single-spaced any quotation that exceeds 50 
words; and
    (4) Use not less than 10 point font.
    (b) Filing by paper. (1) Any filing with the Commission made in 
paper form must be:
    (i) Printed or reproduced, with each copy clearly legible;
    (ii) On letter-size unglazed paper that is 8 to 8\1/2\ inches wide 
and 10\1/2\ to 11 inches long; and
    (iii) Bound or stapled at the left side only, if the filing exceeds 
one page.
    (2) Any log, graph, map, drawing, or chart submitted as part of a 
filing will be accepted on paper larger than provided in paragraph 
(b)(1) of this section, if it cannot be provided legibly on letter-size 
paper.
    (c) Filing via the Internet. (1) All documents filed under this 
Chapter may be filed via the Internet except those listed by the 
Secretary. Except as otherwise specifically provided in this Chapter, 
filing via the Internet is in lieu of other methods of filing. Internet 
filings must be made in accordance with instructions issued by the 
Secretary and made available online at http://www.ferc.gov. Provisions 
of this chapter or directions from the Commission containing 
requirements as to the content and format of specific types of filings 
remain applicable.
    (2) The Secretary will make available on the Commission's Web site a 
list of document types that may not be filed via the Internet, as well 
as instructions pertaining to allowable electronic file and document 
formats, the filing of complex documents, whether paper copies are 
required, and procedural guidelines.
    (3) For purposes of statutes or regulations governing timeliness, a 
document filed via the Internet will be deemed to have been received by 
the Commission at the time the last byte of the document is received by 
the Commission.
    (d) Citation form. Any filing with the Commission should comply with 
the rules of citation, except Rule 1.1, set forth in the most current 
edition of A Uniform System of Citation, published by The Harvard Law 
Review Association. Citations to specific pages of documents filed via 
the Internet should use the page numbers appearing in the PDF (Portable 
Document Format) version of the document available on the Commission's 
web site.

[Order 619, 65 FR 57091, Sept. 21, 2000, as amended by Order 2002, 68 FR 
51143, Aug. 25, 2003; Order 647, 69 FR 32440, June 10, 2004; Order 703, 
72 FR 65664, Nov. 23, 2007]



Sec. 385.2004  Originals and copies of filings (Rule 2004).

    The requirements for making filings under this chapter are posted on 
the Commission's Web site at http://www.ferc.gov. The requirements cover 
documents and forms submitted on paper, on electronic media, or via the 
Commission's electronic filing systems.

[Order 737, 75 FR 43405, July 26, 2010]



Sec. 385.2005  Subscription and verification (Rule 2005).

    (a) Subscription. (1) Any filing with the Commission must be signed.
    (2) The signature on a filing constitutes a certificate that:
    (i) The signer has read the filing signed and knows its contents;
    (ii) The contents are true as stated, to the best knowledge and 
belief of the signer; and
    (iii) The signer possesses full power and authority to sign the 
filing.
    (3) A filing must be signed by:
    (i) The person on behalf of whom the filing is made;
    (ii) Any officer of the corporation, trust, association, or other 
organized group, on behalf of which the filing is made;
    (iii) Any officer, agent, or employee of the governmental authority, 
agency, or instrumentality on behalf of which the filing is made; or
    (iv) A representative qualified to practice before the Commission 
under Rule 2101 who possesses authority to sign.
    (4) The signer of any filing may be required to submit evidence of 
authority to sign the filing.

[[Page 1188]]

    (b) Verification. (1) The facts alleged in any filing need not be 
verified, unless verification is required by statute, rule, or order.
    (2) If verification of any filing is required, the verification must 
be under oath by a person having knowledge of the matters set forth in 
the filing. If any verification is made by a person other than the 
signer, a statement must be attached to the verification explaining why 
a person other than the signer provides verification.
    (3) Any requirement that a filing include or be supported by a sworn 
declaration, verification, certificate, statement, oath, or affidavit 
may be satisfied by compliance with the provisions of 28 U.S.C. 1746, 
provided that the filer, or an authorized representative of the filer, 
maintains a copy of the document bearing an original, physical signature 
until after such time as all administrative and judicial proceedings in 
the relevant matter are closed and all deadlines for further 
administrative or judicial review have passed.
    (c) Electronic signature. In the case of any document filed in 
electronic form under the provisions of this Chapter, the typed 
characters representing the name of a person shall be sufficient to show 
that such person has signed the document for purposes of this section.

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 619, 65 FR 
57092, Sept. 21, 2000; Order 653, 70 FR 8724, Feb. 23, 2005]



Sec. 385.2006  Docket system (Rule 2006).

    (a) The Secretary will maintain a system for docketing proceedings.
    (b) Any public information in any docket is available for inspection 
and copying by the public during the office hours of the Commission, to 
the extent that such availability is consistent with the proper 
discharge of the Commission's duties and in conformity with part 388 of 
this chapter.

[Order 226, 47 FR 19022, May 3, 1982; 48 FR 786, Jan. 7, 1983]



Sec. 385.2007  Time (Rule 2007).

    (a) Computation. (1) Except as otherwise required by law, any period 
of time prescribed or allowed by statute or Commission rule or order is 
computed to exclude the day of the act or event from which the time 
period begins to run.
    (2) The last day of any time period is included in the time period, 
unless it is a Saturday, Sunday, day on which the Commission closes due 
to adverse conditions and does not reopen prior to its official close of 
business, part-day holiday that affects the Commission, or legal public 
holiday as designated in section 6103 of title 5, U.S. Code, in which 
case the period does not end until the close of the Commission business 
of the next day which is not a Saturday, Sunday, day on which the 
Commission closes due to adverse conditions and does not reopen prior to 
its official close of business, part-day holiday that affects the 
Commission, or legal public holiday.
    (b) Date of issuance of Commission rules or orders. (1) Any 
Commission rule or order is deemed issued when the Secretary does the 
earliest of the following:
    (i) Posts a full-text copy in the Division of Public Information;
    (ii) Mails or delivers copies of the order to the parties; or
    (iii) Makes such copies public.
    (2) Any date of issuance specified in a rule or order need not be 
the date on which the rule or order is adopted by the Commission.
    (c) Effective date of Commission rules or orders. (1) Unless 
otherwise ordered by the Commission, rules or orders are effective on 
the date of issuance.
    (2) Any initial or revised initial decision issued by a presiding 
officer is effective when the initial or revised initial decision is 
final under Rule 708(d).

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 375, 49 FR 
21316, May 21, 1984; Order 376, 49 FR 21707, May 23, 1984; Order 645, 69 
FR 2504, Jan. 16, 2004]



Sec. 385.2008  Extensions of time (Rule 2008).

    (a) Except as otherwise provided by law, the time by which any 
person is required or allowed to act under any statute, rule, or order 
may be extended by the decisional authority for good cause, upon a 
motion made before the expiration of the period prescribed or previously 
extended.

[[Page 1189]]

    (b) If any motion for extension of time is made after the expiration 
of a specified time period, the decisional authority may permit 
performance of the act required or allowed, if the movant shows 
extraordinary circumstances sufficient to justify the failure to act in 
a timely manner.



Sec. 385.2009  Notice (Rule 2009).

    Unless actual notice is given or unless newspaper notice is given as 
required by law, notice by the Commission is provided by the Secretary 
only by publication in the Federal Register. Actual notice is usually 
given by service under Rule 2010.



Sec. 385.2010  Service (Rule 2010).

    (a) By participants. (1) Any participant filing a document in a 
proceeding must serve a copy of the document on:
    (i) Each person whose name is on the official service list, or 
applicable restricted service list, for the proceeding or phase of the 
proceeding; and
    (ii) Any other person required to be served under Commission rule or 
order or under law.
    (2) If any person receives a rejection letter or deficiency letter 
from the Commission, the person must serve a copy of the letter on any 
person previously served copies of the rejected or deficient filing.
    (b) By the Secretary. The Secretary will serve, as appropriate:
    (1) A copy of any complaint on any person against whom the complaint 
is directed;
    (2) A copy of any notice of tariff or rate examination or order to 
show cause, on any person to whom the notice or order is issued;
    (3) A copy of any rule or any order by a decisional authority in a 
proceeding on any person included on the official service list, or 
applicable restricted service list, for the proceeding or phase of the 
proceeding, provided that such person has complied with paragraph (g) of 
this section.
    (c) Official service list. (1) The official service list for any 
proceeding will contain:
    (i) The name, address and, for proceedings commenced on or after 
March 21, 2005, e-mail address of any person designated for service in 
the initial pleading, other than a protest, or in the tariff or rate 
filing which is filed by any participant; and
    (ii) The name of counsel for the staff of the Commission.
    (2) Any designation of a person for service may be changed by 
following the instructions for the Commission's electronic registration 
system, located on its Web site at http://www.ferc.gov or, in the event 
that the proceeding was commenced prior to March 21, 2005, or the person 
designated for service is unable to use the electronic registration 
system, by filing a notice with the Commission and serving the notice on 
each person whose name is included on the official service list.
    (d) Restricted service list. (1) For purposes of eliminating 
unnecessary expense or improving administrative efficiency, the 
Secretary, an office director, or the presiding officer may establish, 
by order, a restricted service list for an entire proceeding, a phase of 
a proceeding, one or more issues in a proceeding, or one or more cases 
in a consolidated proceeding.
    (2) Any restricted service list will contain the names of each 
person on the official service list, or the person's representative, 
who, in the judgment of the decisional authority establishing the list, 
is an active participant with respect to the proceeding or consolidated 
proceeding, any phase of the proceeding, or any issue in the proceeding, 
for which the list is established.
    (3) Any restricted service list is maintained in the same manner as, 
and in addition to, the official service list under paragraph (c) of 
this section.
    (4) Before any restricted service list is established, each person 
included on the official service list will be given notice of any 
proposal to establish a restricted service list and an opportunity to 
show why that person should also be included on the restricted service 
list or why a restricted service list should not be established.
    (5) Any designation of a person for service on a restricted service 
list may be changed by filing written notice with the Commission and 
serving that notice on each person whose name is on the applicable 
restricted service list.
    (e) Intervenors. If a motion to intervene or any notice of 
intervention is

[[Page 1190]]

filed, the name, address and, for proceedings commenced on or after 
March 21, 2005, e-mail address of any person designated for service in 
the motion or notice are placed on the official service list or any 
applicable restricted service list, provided that such person has 
complied with paragraph (g) of this section. Any person placed on the 
official service list under this paragraph is entitled to service in 
accordance with this section. If a motion to intervene is denied, the 
name, address and e-mail address of each person designated for service 
pursuant to that motion will be removed from the official service list.
    (f) Methods of service. (1) Except as provided in paragraph (g) of 
this section, service of any document in proceedings commenced prior to 
March 21, 2005, must be made by:
    (i) Electronic means where the sender and recipient agree to such 
means;
    (ii) United States mail, first class or better; or
    (iii) Delivery in a manner that, and to a place where, the person on 
whom service is required may reasonably be expected to obtain actual and 
timely receipt.
    (2) Except as provided in paragraph (g) of this section, service of 
any document in proceedings commenced on or after March 21, 2005, must 
be made by electronic means unless the sender and recipient agree 
otherwise or the recipient's e-mail address is unavailable from the 
official service list, except in the case of a recipient who has secured 
a waiver under the provisions of Sec. 390.3 of this chapter, or is 
exempt under the provisions of Sec. 390.4 of this chapter, or in the 
case of a protected or confidential document the security of which might 
be jeopardized by electronic service, in which case service upon that 
recipient or of that document only shall be made by:
    (i) United States mail, first class or better; or
    (ii) Delivery in a manner that, and to a place where, the person on 
whom service is required may reasonably be expected to obtain actual and 
timely receipt.
    (3) Service of a document by electronic means shall be made by the 
transmission of a link to that document in the Commission's eLibrary 
system or by alternate means reasonably calculated to make the document 
available to required recipients. Alternate means may include but are 
not limited to, attachment of an electronic copy of the document to an 
e-mail or transmission of a link to an Internet site containing the 
document. It is the sender's responsibility to take reasonable steps to 
ensure that the means employed for service will be within the 
technological capabilities of the recipients.
    (g) Methods of Service by the Secretary. Service by the Secretary 
shall be made by electronic means, unless such means are impractical, in 
which case service shall be made by United States mail.
    (h) Electronic registration. In the case of proceedings commenced on 
or after March 21, 2005, any person, to be included on a service list, 
must have complied with the procedures for electronic registration made 
available on the Commission's Web site, at http://www.ferc.gov, unless 
such person has secured a waiver under the provisions of Sec. 390.3 of 
this Chapter, or is exempt under the provisions of Sec. 390.4 of this 
Chapter.
    (i) Timing of service. (1) Service is made under this section when 
the document served is deposited in the mail or is delivered in another 
manner.
    (2) Service of any document must be made not later than the date of 
the filing of the document.
    (3) In the case of a document served through a link to the 
Commission's eLibrary system, as specified in paragraph (f)(2) of this 
section, if a link to the document does not become available in eLibrary 
within two business days after the document is filed, the person 
responsible for serving the document must immediately serve the document 
by other means, as specified in paragraph (f)(1) or (f)(2) of this 
section.
    (j) Certification. (1) At the time any document required to be 
served is filed with the Commission, the original of a certificate of 
service must be attached to the document and a copy of the certificate 
must be attached to each copy of the document filed with the Commission.
    (2) The certificate of service must conform to the following format:


[[Page 1191]]


    I hereby certify that I have this day served the foregoing document 
upon each person designated on the official service list [or the 
restricted service list, if applicable] compiled by the Secretary in 
this proceeding.
Dated at this
day of , 19 .

________________________________________________________________________
Name____________________________________________________________________
________________________________________________________________________

(if applicable)

Address_________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Telephone No.___________________________________________________________

    (k) Designation of corporate officials to receive service. (1) Any 
entity subject to regulation by the Commission must designate at least 
one, but not more than two, corporate officials or other persons to 
receive service of complaints, petitions for declaratory order, show 
cause orders, data requests, investigatory letters or other documents 
where a person to receive service has not otherwise been designated 
under Commission regulations. Each entity must file with the Secretary 
of the Commission:
    (i) The name of the corporate official or person that is to receive 
service;
    (ii) The title of the corporate official or person, if applicable;
    (iii) The address of the corporate official or person, including, 
where applicable, department, room number, or mail routing code;
    (iv) The telephone number of the corporate official or person;
    (v) The facsimile number of the corporate official or person, if 
applicable; and
    (vi) The electronic mail address of the corporate official or 
person, if applicable.
    (2) Each regulated entity has a continuing obligation to file with 
the Secretary of the Commission updated information concerning the 
corporate official or person designated to receive service.
    (3) A list of corporate officials and persons designated to receive 
service pursuant to this paragraph will be maintained by the Secretary 
of the Commission and will be made available to the public in hard copy 
upon request and through the Commission's web site at http://
www.ferc.gov.
    (4) Any person who wishes to serve a complaint or petition for 
declaratory order on any entity regulated by the Commission must serve 
the corporate official or person designated pursuant to this paragraph 
(i).
    (5) The Commission will serve show cause orders, data requests, 
investigatory letters or other documents on the corporate official or 
person designated under this paragraph (i).

[Order 225, 47 FR 19022, May 3, 1982, as amended by Order 604, 64 FR 
31496, June 11, 1999; Order 610, 64 FR 62582, Nov. 17, 1999; Order 647, 
69 FR 32440, June 10, 2004; Order 653, 70 FR 8725, Feb. 23, 2005; 70 FR 
21332, Apr. 26, 2005]



Sec. 385.2011  Procedures for filing on electronic media (Rule 2011).

    (a) FERC Forms subject to the procedures provided in this section 
include:
    (1) FERC Form No. 2, Annual report for major natural gas companies.
    (2) FERC Form No. 2-A, Annual report for nonmajor natural gas 
companies.
    (3) FERC Form No. 8, Underground gas storage report.
    (4) FERC Form No. 11, Natural gas pipeline monthly statement.
    (5) FERC Form No. 14, Annual report for importers and exporters of 
natural gas.
    (6) FERC Form No. 1, Annual report of Major electric utilities, 
licensees and others.
    (7) FERC Form No. 6, Annual Report of Oil Pipeline Companies.
    (8) [Reserved]
    (9) FERC Form No. 60, Annual report of centralized service 
companies.
    (10) FERC Form No. 714, Annual Electric Balancing Authority Area and 
Planning Area Report.
    (11) FERC Form No. 552, Annual Report of Natural Gas Transactions.
    (b) These procedures also apply to:
    (1) [Reserved]
    (2) Certificate and abandonment applications filed under subparts A, 
E, and F of part 157 of this chapter.
    (3) Blanket certificate applications filed under subpart G of part 
284 of this chapter.
    (c) What to file. (1) Except as provided in paragraph (e) of this 
section, any filing of a schedule or an update described in paragraphs 
(a) or (b) of this

[[Page 1192]]

section must be submitted on electronic media.
    (2) Electronic media suitable for Commission filings are listed in 
the instructions for each form and filings. Additionally, lists of 
suitable electronic media are available upon request from the 
Commission.
    (3) With the exception of the FERC Form Nos. 1, 2, 2-A, 6, 60, and 
714, the electronic media must be accompanied by the traditional 
prescribed number of paper copies.
    (4) The formats for the electronic filing and the paper copy can be 
obtained at the Federal Energy Regulatory Commission, Public Reference 
and Files Maintenance Branch, Division of Information Services, 
Washington, DC 20426.
    (5) The subscription required by Sec. 385.2005(a) must state that 
the paper copies contain the same information as contained on the 
electronic media, that the signer knows the contents of the paper copies 
and electronic media, and that the contents as stated in the copies and 
on the electronic media are true to the best knowledge and belief of the 
signer.
    (d)(1) Where to file. The electronic media, the paper copies, and 
accompanying cover letter must be submitted to: Office of the Secretary, 
Federal Energy Regulatory Commission, Washington, DC 20426.
    (2) EDI data submissions must be made as indicated in the electronic 
filing instructions and formats for the particular form or filing, and 
the paper copies and accompanying cover letter must be submitted to: 
Office of the Secretary, Federal Energy Regulatory Commission, 
Washington, DC 20426.
    (e) Waiver--(1) Filing of petition. If a natural gas company, 
electric utility, licensee or other entity does not have and is unable 
to acquire the computer capability to file the information required to 
be filed on electronic media, the company may request waiver from the 
requirement of this part, by filing an original and two copies of a 
petition. The natural gas company, electric utility, licensee or other 
entity may renew the waiver if the company can continue to show that it 
does not have and is unable to acquire the computer capability for 
electric filing.
    (2) Standard for waiver. The petition for waiver must show that the 
natural gas company, electric utility, licensee or other entity does not 
have the computer capability to file the information required under this 
section on electronic media and that acquisition of the capability would 
cause the company severe economic hardship. This waiver may be granted 
for up to one year.
    (3) Timing. The petition for waiver must be filed by the date on 
which the information in the manner affected by the petition is required 
to be initially filed.
    (4) Decision on petition. The Commission or its designee will review 
a petition for waiver and notify the applicant of its grant or denial. 
Once the petition is decided, the natural gas company, electric utility, 
licensee or other entity will have 30 days from the date of notification 
of the decision to submit any information, in the manner specified by 
the Commission in the decision on the waiver petition, that was required 
to be filed while the petition was pending.

[53 FR 15032, Apr. 27, 1988]

    Editorial Note: For Federal Register citations affecting Sec. 
385.2011, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 385.2012  Petitions for review of Commission Orders (Rule 2012).

    When a petition for review of an order issued by the Commission is 
filed in a United States Court of Appeals, a copy of the petition which 
has been stamped by the court with the date of filing must be mailed or 
hand delivered to the Office of the Secretary, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426. If within ten 
days after issuance of the Commission order, the Office of the Secretary 
has physically received court-stamped copies of petitions for review of 
the same order, which petitions have been filed in two or more

[[Page 1193]]

U.S. Courts of Appeals, the Commission will forward copies of those 
petitions to the Judicial Panel on Multidistrict Litigation pursuant to 
28 U.S.C. 2112(a).

[Order 504, 53 FR 37546, Sept. 27, 1988, as amended by Order 737, 75 FR 
43405, July 26, 2010]



Sec. 385.2013  Notification of requests for Federal authorizations and 

requests for further information (Rule 2013).

    (a) For each Federal authorization--i.e., permit, special use 
authorization, certification, concurrence, opinion, or other approval--
required under Federal law with respect to a natural gas project for 
which an application has been filed under section 3 of the Natural Gas 
Act for a certificate of public convenience and necessity under section 
7 of the Natural Gas Act, each Federal agency or officer, or State 
agency or officer acting pursuant to delegated Federal authority, 
responsible for a Federal authorization must file with the Commission 
within 30 days of the date of receipt of a request for a Federal 
authorization, notice of the following:
    (1) Whether the application is ready for processing, and if not, 
what additional information or materials will be necessary to assess the 
merits of the request;
    (2) The time the agency or official will allot the applicant to 
provide the necessary additional information or materials;
    (3) What, if any, studies will be necessary in order to evaluate the 
request;
    (4) The anticipated effective date of the agency's or official's 
decision; and
    (5) If applicable, the schedule set by Federal law for the agency or 
official to act.
    (b) A Federal agency or officer, or State agency or officer acting 
pursuant to delegated Federal authority, considering a request for a 
Federal authorization that submits a data request to an applicant must 
file a copy of the data request with the Commission within 10 business 
days.

[Order 687, 71 FR 62921, Oct. 27, 2006]



Sec. 385.2014  Petitions for appeal or review of Federal authorizations (Rule 

2014).

    (a) For each Federal authorization--i.e., permit, special use 
authorization, certification, concurrence, opinion, or other approval--
required under Federal law with respect to a natural gas project for 
which an application has been filed for authorization under section 3 of 
the Natural Gas Act for a certificate of public convenience and 
necessity under section 7 of the Natural Gas Act, the Federal agency or 
officer, or State agency or officer acting pursuant to delegated Federal 
authority, responsible for each Federal authorization must file with the 
Commission within 30 days of the effective date of a final decision or 
action on a request for a Federal authorization or the expiration of the 
time provided by the Commission or by Federal law for a final decision 
or action, the following:
    (1) A copy of any final decision or action;
    (2) An index identifying all documents and materials--including 
pleadings, comments, evidence, exhibits, testimony, project 
alternatives, studies, and maps--relied upon by the agency or official 
in reaching a decision or action; and
    (3) The designation ``Consolidated Record'' and the docket number 
for the Commission proceeding applicable to the requested Federal 
authorization.
    (b) The agencies' and officers' decisions, actions, and indices, and 
the Commission's record in each proceeding, constitute the complete 
consolidated record. The original documents and materials that make up 
the complete consolidated record must be retained by agencies, officers, 
and the Commission for at least three years from the effective date of a 
decision or action or until an appeal or review is concluded.
    (c) Upon appeal or review of a Federal authorization, agencies, 
officers, and the Commission will transmit to the reviewing authority, 
as requested, documents and materials that constitute the complete 
consolidated record.

[Order 687, 71 FR 62921, Oct. 27, 2006]

[[Page 1194]]



Sec. 385.2015  Videotapes (Rule 2015).

    Any person may file a videotape that portrays the site of, or some 
physical aspect of, an energy project, such as a waterfall or flood 
waters at the site of an existing or proposed hydroelectric project, or 
construction activities at the site of a natural gas pipeline. The 
filing must include a written statement describing the place, date, and 
time at which the videotape was filmed, who filmed it, what it purports 
to depict, and the caption and docket number of the proceeding (if any) 
in which it is to be filed. Any person who files a videotape and who is 
also a party (either as an applicant or as an intervenor) to a docketed 
proceeding in which the videotape is filed must file four copies of the 
videotape with the Commission's Secretary, in VHS format with voice-over 
or pictorial inclusion of the data contained in the accompanying written 
statement, serve copies of the videotape on all of the other parties to 
the proceeding, and include a certificate of service with the filing.

[Order 573, 59 FR 63247, Dec. 8, 1994. Redesignated by Order 687, 71 FR 
62921, Oct. 27, 2006]



         Subpart U_Appearance and Practice Before the Commission



Sec. 385.2101  Appearances (Rule 2101).

    (a) A participant may appear in a proceeding in person or by an 
attorney or other qualified representative. An individual may appear in 
his or her own behalf, a member of a partnership may represent the 
partnership, a bona-fide officer of a corporation, trust, association or 
organized group may represent the corporation, trust, association or 
group, and an officer or employee of a State commission, of a department 
or political subdivision of a State or other governmental authority, may 
represent the State commission or the department or political 
subdivision of the State or other governmental authority, in any 
proceeding.
    (b) A person compelled to appear or voluntarily testifying or making 
a statement before the Commission or the presiding officer, may be 
accompanied, represented, and advised by an attorney or other qualified 
representative.
    (c) A person appearing before the Commission or the presiding 
officer must conform to the standards of ethical conduct required of 
practitioners before the Courts of the United States, and where 
applicable, to the requirements of Section 12(i) of the Public Utility 
Holding Company Act of 1935 (15 U.S.C. 791(i)).



Sec. 385.2102  Suspension (Rule 2102).

    (a) After a hearing the Commission may disqualify and deny, 
temporarily or permanently, the privilege of appearing or practicing 
before it in any way to a person who is found:
    (1) Not to possess the requisite qualifications to represent others, 
or
    (2) To have engaged in unethical or improper professional conduct, 
or
    (3) Otherwise to be not qualified.
    (b) Contumacious conduct in a hearing before the Commission or a 
presiding officer will be grounds for exclusion of any person from such 
hearing and for summary suspension for the duration of the hearing by 
the Commission or the presiding officer.



Sec. 385.2103  Appearance of former employees (Rule 2103).

    (a) No person having served as a member, officer, expert, 
administrative law judge, attorney, accountant, engineer, or other 
employee of the Commission may practice before or act as attorney, 
expert witness, or representative in connection with any proceeding or 
matter before the Commission which such person has handled, 
investigated, advised, or participated in the consideration of while in 
the service of the Commission.
    (b) No person having been so employed may within 1 year after his or 
her employment has ceased, practice before or act as attorney, expert 
witness, or representative in connection with any proceeding or matter 
before the Commission which was under the official responsibility of 
such person, as defined in 18 U.S.C. 202, while in the service of the 
Commission.
    (c) Nothing in paragraphs (a) and (b) of this section prevents a 
former member, officer, expert, administrative law judge, attorney, 
accountant, engineer,

[[Page 1195]]

or other employee of the Commission with outstanding scientific or 
technological qualifications from practicing before or acting as an 
attorney or representative in connection with a particular matter in a 
scientific or technological field if the Chairman of the Commission 
makes a certification in writing, published in the Federal Register, 
that the national interest would be served by such action or 
representation.



    Subpart V_Off-the-Record Communications; Separation of Functions



Sec. 385.2201  Rules governing off-the-record communications (Rule 2201).

    (a) Purpose and scope. This section governs off-the-record 
communications with the Commission in a manner that permits fully 
informed decision making by the Commission while ensuring the integrity 
and fairness of the Commission's decisional process. This rule will 
apply to all contested on-the-record proceedings, except that the 
Commission may, by rule or order, modify any provision of this subpart, 
as it applies to all or part of a proceeding, to the extent permitted by 
law.
    (b) General rule prohibiting off-the-record communications. Except 
as permitted in paragraph (e) of this section, in any contested on-the-
record proceeding, no person outside the Commission shall make or 
knowingly cause to be made to any decisional employee, and no decisional 
employee shall make or knowingly cause to be made to any person outside 
the Commission, any off-the-record communication.
    (c) Definitions. For purposes of this section:
    (1) Contested on-the-record proceeding means
    (i) Except as provided in paragraph (c)(1)(ii) of this section, any 
proceeding before the Commission to which there is a right to intervene 
and in which an intervenor disputes any material issue, any proceeding 
initiated pursuant to rule 206 by the filing of a complaint with the 
Commission, any proceeding initiated by the Commission on its own motion 
or in response to a filing, or any proceeding arising from an 
investigation under part 1b of this chapter beginning from the time the 
Commission initiates a proceeding governed by part 385 of this chapter.
    (ii) The term does not include notice-and-comment rulemakings under 
5 U.S.C. 553, investigations under part 1b of this chapter, proceedings 
not having a party or parties, or any proceeding in which no party 
disputes any material issue.
    (2) Contractor means a direct Commission contractor and its 
subcontractors, or a third-party contractor and its subcontractors, 
working subject to Commission supervision and control.
    (3) Decisional employee means a Commissioner or member of his or her 
personal staff, an administrative law judge, or any other employee of 
the Commission, or contractor, who is or may reasonably be expected to 
be involved in the decisional process of a proceeding, but does not 
include an employee designated as part of the Commission's trial staff 
in a proceeding, a settlement judge appointed under Rule 603, a neutral 
(other than an arbitrator) under Rule 604 in an alternative dispute 
resolution proceeding, or an employee designated as being non-decisional 
in a proceeding.
    (4) Off-the-record communication means any communication relevant to 
the merits of a contested on-the-record proceeding that, if written, is 
not filed with the Secretary and not served on the parties to the 
proceeding in accordance with Rule 2010, or if oral, is made without 
reasonable prior notice to the parties to the proceeding and without the 
opportunity for such parties to be present when the communication is 
made.
    (5) Relevant to the merits means capable of affecting the outcome of 
a proceeding, or of influencing a decision, or providing an opportunity 
to influence a decision, on any issue in the proceeding, but does not 
include:
    (i) Procedural inquiries, such as a request for information relating 
solely to the status of a proceeding, unless the inquiry states or 
implies a preference for a particular party or position, or is otherwise 
intended, directly or indirectly, to address the merits or influence the 
outcome of a proceeding;

[[Page 1196]]

    (ii) A general background or broad policy discussion involving an 
industry or a substantial segment of an industry, where the discussion 
occurs outside the context of any particular proceeding involving a 
party or parties and does not address the specific merits of the 
proceeding; or,
    (iii) Communications relating to compliance matters not the subject 
of an ongoing proceeding.
    (d) Applicability of prohibitions. (1) The prohibitions in paragraph 
(b) of this section apply to:
    (i) Proceedings initiated by the Commission from the time an order 
initiating the proceeding is issued;
    (ii) Proceedings returned to the Commission on judicial remand from 
the date the court issues its mandate;
    (iii) Complaints initiated pursuant to rule 206 from the date of the 
filing of the complaint with the Commission, or from the date the 
Commission initiates an investigation (other than an investigation under 
part 1b of this chapter) on its own motion; and
    (iv) All other proceedings from the time of the filing of an 
intervention disputing any material issue that is the subject of a 
proceeding.
    (2) The prohibitions remain in force until:
    (i) A final Commission decision or other final order disposing of 
the merits of the proceeding is issued; or, when applicable, after the 
time for seeking rehearing of a final Commission decision, or other 
final order disposing of the merits, expires;
    (ii) The Commission otherwise terminates the proceeding; or
    (iii) The proceeding is no longer contested.
    (e) Exempt off-the-record communications. (1) Except as provided by 
paragraph (e)(2), the general prohibitions in paragraph (b) of this 
section do not apply to:
    (i) An off-the-record communication permitted by law and authorized 
by the Commission;
    (ii) An off-the-record communication related to any emergency 
concerning a facility regulated by the Commission or a facility that 
provides Commission-regulated services, involving injury or threat of 
injury to persons, property, or the environment, subject to disclosure 
under paragraph (g) of this section;
    (iii) An off-the-record communication provided for in a written 
agreement among all parties to a proceeding that has been approved by 
the Commission;
    (iv) An off-the-record written communication from a non-party 
elected official, subject to disclosure under paragraph (g) of this 
section;
    (v) An off-the-record communication to or from a Federal, state, 
local or Tribal agency that is not a party in the Commission proceeding, 
subject to disclosure under paragraph (g) of this section, if the 
communication involves:
    (A) an oral or written response to a request for information made by 
the Commission or Commission staff; or
    (B) a matter before the Commission in which a Federal, state, local, 
or Tribal agency has regulatory responsibilities, including authority to 
impose or recommend conditions in connection with a Commission license, 
certificate, or exemption;
    (vi) An off-the-record communication, subject to disclosure under 
paragraph (g) of this section, that relates to:
    (A) The preparation of an environmental impact statement if 
communications occur prior to the issuance of the final environmental 
impact statement; or
    (B) The preparation of an environmental assessment where the 
Commission has determined to solicit public comment on the environmental 
assessment, if such communications occur prior to the issuance of the 
final environmental document.
    (vii) An off-the-record communication involving individual 
landowners who are not parties to the proceeding and whose property 
would be used or abuts property that would be used by the project that 
is the subject of the proceeding, subject to disclosure under paragraph 
(g) of this section.
    (viii) An off-the-record communication from any person related to 
any national security-related issue concerning a facility regulated by 
the Commission or a facility that provides Commission-regulated 
services.
    (2) Except as may be provided by Commission order in a proceeding to

[[Page 1197]]

which this subpart applies, the exceptions listed under paragraph (e)(1) 
will not apply to any off-the-record communications made to or by a 
presiding officer in any proceeding set for hearing under subpart E of 
this part.
    (f) Treatment of prohibited off-the-record communications--(1) 
Commission consideration. Prohibited off-the-record communications will 
not be considered part of the record for decision in the applicable 
Commission proceeding, except to the extent that the Commission by order 
determines otherwise.
    (2) Disclosure requirement. Any decisional employee who makes or 
receives a prohibited off-the-record communication will promptly submit 
to the Secretary that communication, if written, or a summary of the 
substance of that communication, if oral. The Secretary will place the 
communication or the summary in the public file associated with, but not 
part of, the decisional record of the proceeding.
    (3) Responses to prohibited off-the-record communications. Any party 
may file a response to a prohibited off-the-record communication placed 
in the public file under paragraph (f)(2) of this section. A party may 
also file a written request to have the prohibited off-the-record 
communication and the response included in the decisional record of the 
proceeding. The communication and the response will be made a part of 
the decisional record if the request is granted by the Commission.
    (4) Service of prohibited off-the-record communications. The 
Secretary will instruct any person making a prohibited written off-the-
record communication to serve the document, pursuant to Rule 2010, on 
all parties listed on the Commission's official service list for the 
applicable proceeding.
    (g) Disclosure of exempt off-the-record communications. (1) Any 
document, or a summary of the substance of any oral communication, 
obtained through an exempt off-the-record communication under paragraphs 
(e)(1)(ii), (iv), (v), (vi) or (vii) of this section, promptly will be 
submitted to the Secretary and placed in the decisional record of the 
relevant Commission proceeding, unless the communication was with a 
cooperating agency as described by 40 CFR 1501.6, made under paragraph 
(e)(1)(v) of this section.
    (2) Any person may respond to an exempted off-the-record 
communication.
    (3) Any document, or a summary of the substance of any oral 
communications, obtained through an exempt off-the-record communication 
under paragraphs (e)(1)(viii) of this section, will be submitted 
promptly to the Secretary and placed in a non-public decisional file of 
the relevant Commission proceeding and made available to parties to the 
proceeding, subject to their signing a non-disclosure agreement. 
Responses will also be placed in the non-public decisional file and held 
confidential. If the Commission determines that the communication does 
not contain sensitive national security-related information, it will be 
placed in the decisional file.
    (h) Public notice requirement of prohibited and exempt off-the-
record communications. (1) The Secretary will, not less than every 14 
days, issue a public notice listing any prohibited off-the-record 
communications or summaries of the communication received by his or her 
office. For each prohibited off-the-record communication the Secretary 
places in the non-decisional public file under paragraph (f)(2) of this 
section, the notice will identify the maker of the off-the-record 
communication, the date the off-the-record communication was received, 
and the docket number to which it relates.
    (2) The Secretary will not less than every 14 days, issue a public 
notice listing any exempt off-the-record communications or summaries of 
the communication received by the Secretary for inclusion in the 
decisional record and required to be disclosed under paragraph (g)(1) of 
this section.
    (3) The public notice required under this paragraph (h) will be 
posted in accordance with Sec. 388.106 of this chapter, as well as 
published in the Federal Register, and disseminated through any other 
means as the Commission deems appropriate.
    (i) Sanctions. (1) If a party or its agent or representative 
knowingly makes or causes to be made a prohibited off-the-record 
communication, the Commission may require the party, agent, or 
representative to show cause

[[Page 1198]]

why the party's claim or interest in the proceeding should not be 
dismissed, denied, disregarded, or otherwise adversely affected because 
of the prohibited off-the-record communication.
    (2) If a person knowingly makes or causes to be made a prohibited 
off-the-record communication, the Commission may disqualify and deny the 
person, temporarily or permanently, the privilege of practicing or 
appearing before it, in accordance with Rule 2102 (Suspension).
    (3) Commission employees who are found to have knowingly violated 
this rule may be subject to the disciplinary actions prescribed by the 
agency's administrative directives.
    (j) Section not exclusive. (1) The Commission may, by rule or order, 
modify any provision of this section as it applies to all or part of a 
proceeding, to the extent permitted by law.
    (2) The provisions of this section are not intended to limit the 
authority of a decisional employee to decline to engage in permitted 
off-the-record communications, or where not required by any law, statute 
or regulation, to make a public disclosure of any exempted off-the-
record communication.

[Order 607-A, 65 FR 71254, Nov. 30, 2000, as amended by Order 623, 66 FR 
67482, Dec. 31, 2001; Order 699, 72 FR 45328, Aug. 14, 2007; Order 718, 
73 FR 62886, Oct. 22, 2008; Order 756, 77 FR 4895, Feb. 1, 2012]



Sec. 385.2202  Separation of functions (Rule 2202).

    In any proceeding in which a Commission adjudication is made after 
hearing, or in any proceeding arising from an investigation under part 
1b of this chapter beginning from the time the Commission initiates a 
proceeding governed by part 385 of this chapter, no officer, employee, 
or agent assigned to work upon the proceeding or to assist in the trial 
thereof, in that or any factually related proceeding, shall participate 
or advise as to the findings, conclusion or decision, except as a 
witness or counsel in public proceedings.

[Order 718, 73 FR 62886, Oct. 22, 2008]



PART 388_INFORMATION AND REQUESTS--Table of Contents



Sec.
388.101 Scope.
388.102 Notice of proceedings.
388.103 Notice and publication of decisions, rules, statements of 
          policy, organization and operations.
388.104 Informal advice from Commission staff.
388.105 Procedures for press, television, radio, and photographic 
          coverage.
388.106 Requests for Commission records available in the Public 
          Reference Room and from the Commission's web site, http://
          www.ferc.gov.
388.107 Commission records exempt from public disclosure.
388.108 Requests for Commission records not available through the Public 
          Reference Room (FOIA requests).
388.109 Fees for record requests.
388.110 Procedure for appeal of denial of requests for Commission 
          records not publicly available or not available through the 
          Public Reference Room, denial of requests for fee waiver or 
          reduction, and denial of requests for expedited processing.
388.111 Procedures in event of subpoena.
388.112 Requests for special treatment of documents submitted to the 
          Commission.
388.113 Accessing critical energy infrastructure information.

    Authority: 5 U.S.C. 301-305, 551, 552 (as amended), 553-557; 42 
U.S.C. 7101-7352.

    Source: Order 488, 53 FR 1473, Jan. 20, 1988, unless otherwise 
noted.



Sec. 388.101  Scope.

    This part prescribes the rules governing public notice of 
proceedings, publication of decisions, requests for informal advice from 
Commission staff, procedures for press, television, radio and 
photographic coverage, requests for Commission records, requests for 
confidential treatment of documents submitted to the Commission, 
procedures for responding to subpoenas seeking documents or testimony 
from Commission employees or former employees, fees for various requests 
for documents, and requests for reduction or waiver of these fees.



Sec. 388.102  Notice of proceedings.

    (a) Public sessions of the Commission for taking evidence or hearing 
argument; public conferences and hearings before a presiding officer; 
and public

[[Page 1199]]

conferences or hearings in substantive rulemaking proceedings, will not 
be held except upon notice.
    (b) Notice of applications, complaints, and petitions, is governed 
by Rule 2009 (notice) in part 385 of this chapter. Notice of 
applications for certificates of public convenience and necessity under 
section 7 of the Natural Gas Act is governed by Sec. 157.9 of this 
chapter (notice of application). Notice of public sessions and 
proceedings and of meetings of the Commission is governed by Rule 2009 
(notice) in part 385 of this chapter. Notice of hearings and of 
initiation or pendency of rulemaking proceedings is governed by Rule 
1903 (notice in rulemaking proceedings) in part 385 of this chapter. 
Notice of application under Part I of the Federal Power Act for 
preliminary permits and licenses is governed by Sec. Sec. 4.31 and 4.81 
of this chapter (acceptance or rejection and contents). Notice of 
proposed alterations or surrenders of license under section 6 of the 
Federal Power Act may be given by filing and publication in the Federal 
Register as stated in Rule 1903 (notice in rulemaking proceedings) in 
part 385 of this chapter, and where deemed desirable by the Commission, 
by local newspaper advertisement. Notice of rates charged and changes 
therein is governed by the filing requirements of subchapters B and E of 
this chapter (regulations under the Federal Power Act and regulations 
under the Natural Gas Act). Other notice required by statute, rule, 
regulation, or order, or deemed desirable, may be given by filing and 
publication in the Federal Register as governed by Rule 1903 in part 385 
of this chapter (notice in rulemaking proceedings) or by service as 
governed by Rule 2010 (service) in part 385 of this chapter.



Sec. 388.103  Notice and publication of decisions, rules, statements of 

policy, organization and operations.

    Service of intermediate and final decisions upon parties to the 
proceedings is governed by Rule 2010 (service) in part 385 of this 
chapter. Descriptions of the Commission's organization, its methods of 
operation, statements of policy and interpretations, procedural and 
substantive rules, and amendments thereto will be filed with and 
published in the Federal Register. Commission opinions together with 
accompanying orders, Commission orders, and intermediate decisions will 
be released to the press and made available to the public promptly. 
Copies of Commission opinions, orders in the nature of opinions, 
rulemakings and selected procedural orders, and intermediate decisions 
which have become final are published in the Federal Energy Guidelines 
and upon payment of applicable charges, may be obtained from: Commerce 
Clearing House, Inc. 4025 West Peterson Avenue, Chicago, Illinois 60646. 
Attention: Order Department.



Sec. 388.104  Informal advice from Commission staff.

    (a) The Commission staff provides informal advice and assistance to 
the general public and to prospective applicants for licenses, 
certificates, and other Commission authorizations. Opinions expressed by 
the staff do not represent the official views of the Commission, but are 
designed to aid the public and facilitate the accomplishment of the 
Commission's functions. Inquiries may be directed to the chief of the 
appropriate office or division.
    (b) Any inquiry directed to the Chief Accountant that requires a 
written response must be accompanied by the fee prescribed in Sec. 
381.301 of this chapter.
    (c) A request directed to the Office of the General Counsel for a 
legal interpretation of any statute or implementing regulation under the 
jurisdiction of the Commission must be accompanied by the fee prescribed 
in Sec. 381.305 of this chapter.

[53 FR 15383, Apr. 29, 1988]



Sec. 388.105  Procedures for press, television, radio, and photographic 

coverage.

    (a) The Commission issues news releases on major applications, 
decisions, opinions, orders, rulemakings, new publications, major 
personnel changes, and other matters of general public interest. 
Releases are issued by and available to the media from the Office of 
External Affairs. Releases may be obtained by the public through the 
Public Reference Room.

[[Page 1200]]

    (b) Press, television, radio and photographic coverage of Commission 
proceedings is permitted as follows:
    (1) Press tables are located in each hearing room, and all sessions 
of hearings are open to the press, subject to standards of conduct 
applicable to all others present;
    (2) Television, movie and still cameras, and recording equipment are 
permitted in hearing rooms prior to the opening of a hearing or oral 
arguments, and during recesses, upon prior arrangement with the 
Commission or presiding administrative law judge. All equipment must be 
removed from the room before hearings or oral arguments begin or resume;
    (3) Television, movie and still cameras, and recording equipment may 
not be used while hearings and oral arguments before administrative law 
judges are in progress;
    (4) Television and press cameras and recording equipment may be used 
at Commission press conferences under prior arrangement with the Office 
of External Affairs, provided their use does not interfere with the 
orderly conduct of the press conference;
    (5) Regulations pertaining to the use of television, movie and still 
cameras, and recording equipment in connection with the Commission's 
open public meetings under the Government in the Sunshine Act are found 
in Sec. 375.203 of this chapter.



Sec. 388.106  Requests for Commission records available in the Public 

Reference Room and from the Commission's web site, http://www.ferc.gov.

    (a)(1) A Public Reference Room is maintained at the Commission's 
headquarters and is open during regular business hours as provided in 
Sec. 375.101(c) of this chapter. Publicly available documents may be 
obtained in person or in writing from the Public Reference Room by 
reasonably describing the records sought. Additional information on 
charges and services is available on the Web site and in the Public 
Reference Room.
    (2) Documents created by or received by FERC on or after November 
1981 also are available on the Commission's Web site through its 
document management system. These may also be accessed in person using a 
personal computer in the Public Reference Room.
    (b) The public records of the Commission that are available for 
inspection and copying upon request in the Public Reference Room, or are 
otherwise available under paragraph (a)(2) of this section, include:
    (1) Applications, declarations, complaints, petitions, and other 
papers seeking Commission action;
    (2) Financial, statistical, and other reports to the Commission, 
power system statements of claimed cost of licensed projects, original 
cost and reclassification studies, proposed accounting entries, 
certificates of notification (under section 204(e) of the Federal Power 
Act), rates or rate schedules and related data and concurrences, and 
other filings and submittals to the Commission in compliance with the 
requirements of any statute, executive order, or Commission rule, 
regulation, order, license, or permit;
    (3) Answers, replies, responses, objections, protests, motions, 
stipulations, exceptions, other pleadings, notices, certificates, proofs 
of service, transcripts of oral arguments, and briefs in any matter of 
proceeding;
    (4) Exhibits, attachments and appendices to, amendments and 
corrections of, supplements to, or transmittals or withdrawals of any of 
the foregoing;
    (5) All parts of the formal record in any matter or proceeding set 
for formal or statutory hearing, and any Commission correspondence 
related thereto;
    (6) Presiding officer actions, correspondence, and memoranda to or 
from others, with the exception of internal communications within the 
Office of Administrative Law Judges:
    (7) Commission orders, notices, findings, opinions, determinations, 
and other actions in a matter or proceeding;
    (8) Commission correspondence relating to any furnishing of data or 
information, except to or by another branch, department, or agency of 
the Government;

[[Page 1201]]

    (9) Commission correspondence with respect to the furnishing of 
data, information, comments, or recommendations to or by another branch, 
department, or agency of the Government where furnished to satisfy a 
specific requirement of a statute or where made public by that branch, 
department or agency;
    (10) Staff reports on statements of claimed cost by licensees when 
such reports have been served on the licensee;
    (11) Commission correspondence on interpretation of the Uniform 
System of Accounts and letters on such interpretation signed by the 
Chief Accountant and sent to persons outside the Commission;
    (12) Commission correspondence on the interpretation or 
applicability of any statute, rule, regulation, order, license, or 
permit issued or administered by the Commission, and letters of opinion 
on that subject signed by the General Counsel and sent to persons 
outside the Commission;
    (13) Copies of the filings, certifications, pleadings, records, 
briefs, orders, judgments, decrees, and mandates in court proceedings to 
which the Commission is a party and the correspondence with the courts 
or clerks of court;
    (14) The Commission's Directives System;
    (15) The Commission's opinions, decisions, orders and rulemakings;
    (16) Reports, decisions, maps, and other information on electric 
power and natural gas industries;
    (17) Subject index of major Commission actions;
    (18) Annual report to Congress in which the Commission's operations 
during a past fiscal year are described; and
    (19) Statements of policy and interpretations which have been 
adopted by the Commission and are not published in the Federal Register;
    (20) Administrative staff manuals and instructions to staff that 
affect a member of the public;
    (21)(i) Copies of all records released under Sec. 388.108, which, 
because of their nature and subject, the Director of the Office of 
External Affairs has determined are likely to be requested again, and
    (ii) An index of the records so designated;
    (22) Reference materials and guides for requesting Commission 
records as required by 5 U.S.C. Sec. 552(g), as amended; and
    (23) Commission correspondence relating to the foregoing.
    (c) For purposes of this section,
    (1) Commission correspondence includes written communications and 
enclosures, in hard copy or electronic format, received from others 
outside the staff and intended for the Commission or sent to others 
outside the staff and signed by the Chairman, a Commissioner, the 
Secretary, the Executive Director, or other authorized official, except 
those which are personal.
    (2) Formal record includes:
    (i) Filings and submittals in a matter or proceeding,
    (ii) Any notice or Commission order initiating the matter or 
proceeding, and
    (iii) If a hearing is held, the designation of the presiding 
officer, transcript of hearing, exhibits received in evidence, exhibits 
offered but not received in evidence, offers of proof, motions, 
stipulations, subpoenas, proofs or service, references to the 
Commission, and determinations made by the Commission thereon, 
certifications to the Commission, and anything else upon which action of 
the presiding officer or the Commission may be based.

The formal record does not include proposed testimony or exhibits not 
offered or received in evidence.
    (3) Matter or proceeding means the Commission's elucidation of the 
relevant facts and applicable law, consideration thereof, and action 
thereupon with respect to a particular subject within the Commission's 
jurisdiction, initiated by a filing or submittal or a Commission notice 
or order.

[Order 488, 53 FR 1473, Jan. 20, 1988, as amended by Order 597, 63 FR 
5453, Feb. 3, 1998; Order 647, 69 FR 32440, June 10, 2004]



Sec. 388.107  Commission records exempt from public disclosure.

    The following records are exempt from disclosure.

[[Page 1202]]

    (a)(1) Records specifically authorized under criteria established by 
an Executive order to be kept secret in the interest of national defense 
or foreign policy, and
    (2) Those records are in fact properly classified pursuant to such 
Executive order;
    (b) Records related solely to the internal personnel rules and 
practices of an agency;
    (c) Records specifically exempted from disclosure by statute, 
provided that such statute:
    (1) Requires that the matters be withheld from the public in such a 
manner as to leave no discretion on the issue, or
    (2) Establishes particular criteria for withholding or refers to 
particular types of matters to be withheld;
    (d) Trade secrets and commercial or financial information obtained 
from a person and privileged or confidential;
    (e) Interagency or intraagency memoranda or letters which would not 
be available by law to a party other than an agency in litigation with 
the agency;
    (f) Personnel and medical files and similar files the disclosure of 
which would constitute a clearly unwarranted invasion of personal 
privacy;
    (g) Records or information compiled for law enforcement purposes, 
but only to the extent that the production of such law enforcement 
records or information:
    (1) Could reasonably be expected to interfere with enforcement 
proceedings,
    (2) Would deprive a person of a right to a fair trial or an 
impartial adjudication,
    (3) Could reasonably be expected to constitute an unwarranted 
invasion of personal privacy,
    (4) Could reasonably be expected to disclose the identity of a 
confidential source, including a state, local, or foreign agency or 
authority or any private institution which furnished information on a 
confidential basis, and, in the case of a record or information compiled 
by a criminal law enforcement authority in the course of a criminal 
investigation, or by an agency conducting a lawful national security 
intelligence investigation, information furnished by a confidential 
source,
    (5) Would disclose techniques and procedures for law enforcement 
investigations or prosecutions, or would disclose guidelines for law 
enforcement investigations or prosecutions if such disclosure could 
reasonably be expected to risk circumvention of the law, or
    (6) Could reasonably be expected to endanger the life or physical 
safety of any individual;
    (h) Geological and geophysical information and data, including maps, 
concerning wells.

[Order 488, 53 FR 1473, Jan. 20, 1988, as amended by Order 597, 63 FR 
5453, Feb. 3, 1998]



Sec. 388.108  Requests for Commission records not available through the Public 

Reference Room (FOIA requests).

    (a)(1) Except as provided in paragraph (a)(2) of this section, a 
person may request access to Commission records, including records 
maintained in electronic format, that are not available through the 
Public Reference Room, by using the following procedures:
    (i) The request must be in writing, addressed to the Director, 
Office of External Affairs, and clearly marked ``Freedom of Information 
Act Request.''
    (ii) The request must include:
    (A) A statement by the requester of a willingness to pay a 
reasonable fee or fees not to exceed a specific amount, or
    (B) A request for waiver or reduction or fees.
    (iii) The request must identify the fee category of the request, 
consistent with the provisions of Sec. 388.109(b) (1) and (2).
    (2) A request that fails to provide the identification required in 
paragraph (a)(1)(iii) of this section will not be processed until the 
Director, Office of External Affairs, can ascertain the requester's fee 
category.
    (3) A request for records received by the Commission not addressed 
and marked as indicated in paragraph (a)(1)(i) of this section will be 
so addressed and marked by Commission

[[Page 1203]]

personnel as soon as it is properly identified, and forwarded 
immediately to the Director, Office of External Affairs.
    (4) Requests made pursuant to this section will be considered to be 
received upon actual receipt by the Director, Office of External 
Affairs, unless otherwise indicated in paragraph (a)(5) of this section.
    (5) Except for the purpose of making a determination regarding 
expedited processing under paragraph (d)(3) of this section, no request 
will be deemed received while there is an unresolved fee waiver issue 
under Sec. 388.109(b)(6), unless the requester has provided a written 
statement agreeing to pay some or all fees pending the outcome of the 
waiver question.
    (b)(1) Multitrack processing. Upon receipt of a request, the 
Director, Office of External Affairs, will place the request in one of 
three tracks for processing:
    (i) Track One--records that are readily identifiable and were 
previously cleared for release (including those subject to multiple 
requests and placed in the Public Reference Room);
    (ii) Track Two--records that are readily identifiable, and require 
limited review; and
    (iii) Track Three--complex and/or voluminous records requiring a 
significant search and/or review.
    (2) Each track specified in paragraph (b)(1) of this section will be 
processed on a first in, first out basis, where practicable. A requester 
may modify a request to obtain processing on a faster track.
    (c)(1) Timing of response. Except as provided in paragraphs (c)(4) 
and (d)(3) of this section, within 20 working days after receipt of the 
request for agency records, the Director, Office of External Affairs, 
will comply with the request or deny the request in whole or in part, 
and will notify the requester of the determination, of the reasons for a 
decision to withhold any part of a requested document, and of the right 
of the requester to appeal any adverse determination in writing to the 
General Counsel or General Counsel's designee.
    (2) The Director, Office of External Affairs, will attempt to 
provide records in the form or format requested, where feasible, but 
will not provide more than one copy of any record to a requester.
    (3) Any determination by the Director, Office of External Affairs, 
to withhold information will, where feasible, indicate the approximate 
volume of information withheld, and will indicate, for partially-
released materials, where redactions have been made, unless to do so 
would harm an interest protected by a FOIA exemption.
    (4) The time limit for the initial determination required by 
paragraph (c)(1) of this section may be extended as set forth in Sec. 
388.110(b).
    (d)(1) Expedited processing. A requester may seek expedited 
processing on the basis of a compelling need. Expedited processing will 
be granted if the requester demonstrates that:
    (i) Failure to obtain the records on an expedited basis can 
reasonably be expected to pose an imminent threat to the life or 
physical safety of an individual, or
    (ii) In the case of a requester primarily engaged in the 
dissemination of information, there is an urgency to inform the public 
concerning Federal Government activity.
    (2) A request for expedited processing under this section must be 
supported with detailed credible documentation, including a statement 
certified to be true and correct to the requester's best knowledge and 
belief.
    (3) The Director, Office of External Affairs, will decide within 10 
calendar days of receipt of the request whether it is eligible for 
expedited processing. The Director will notify the requester of the 
reasons for denial of expedited processing and of the right of the 
requester to appeal to the General Counsel or General Counsel's 
designee.
    (e) The procedure for appeal of denial of a request for Commission 
records, or denial of a request for expedited processing, is set forth 
in Sec. 388.110.

[Order 488, 53 FR 1473, Jan. 20, 1988, as amended by Order 562, 58 FR 
62521, Nov. 29, 1993; Order 597, 63 FR 5453, Feb. 3, 1998]



Sec. 388.109  Fees for record requests.

    (a) Fees for records available through the Public Reference Room--1) 
General rule. The fee for finding and duplicating records available in 
the Commission's

[[Page 1204]]

Public Reference Room will vary depending on the size and complexity of 
the request. A person can obtain a copy of the schedule of fees in 
person or by mail from the Public Reference Room. This schedule is also 
available on the Commission's Web site. Copies of documents also may be 
made on self-service duplicating machines located in the Public 
Reference Room. In addition, copies of data extracted from the 
Commission's files through electronic media are available on a 
reimbursable basis, upon written request to the Public Reference Room.
    (2) Stenographic reports of Commission hearings are made by a 
private contractor. Interested persons may obtain copies of public 
hearing transcripts from the contractor at prices set in the contract, 
or through the search and duplication service noted above. Copies of the 
contract are available for public inspection in the Public Reference 
Room.
    (3) Copies of transcripts, electronic recordings, or minutes of 
Commission meetings closed to public observation containing material 
nonexempt pursuant to Sec. 375.206(f) of this chapter are also 
available at the actual cost of duplication or transcription.
    (b) Fees for records not available through the Public Reference Room 
(FOIA or CEII requests). The cost of duplication of records not 
available in the Public Reference Room will depend on the number of 
documents requested, the time necessary to locate the documents 
requested, and the category of the persons requesting the records. The 
procedures for appeal of requests for fee waiver or reduction are set 
forth in Sec. 388.110.
    (1) Definitions: For the purpose of paragraph (b) of this section.
    (i) Commercial use request means a request from or on behalf of one 
who seeks information for a use or purpose that furthers commercial 
trade, or profit interests as these phrases are commonly known or have 
been interpreted by the courts in the context of the Freedom of 
Information Act.
    (ii) Educational institution refers to a preschool, a public or 
private elementary or secondary school, an institution of graduate 
higher education, an institution of undergraduate higher education, an 
institution of professional education, and an institution of vocational 
education, which operates a program of scholarly research.
    (iii) Noncommercial scientific institution refers to an installation 
that is not operated on a commercial basis and which is operated solely 
for the purpose of conducting scientific research the results of which 
are not intended to promote any particular product or industry.
    (iv) Representatives of the news media refers to any person actively 
gathering news for an entity that is organized and operated to publish 
or broadcast news to the public. The term news means information that is 
about current events that would be of current interest to the public. 
Examples of news media entities include television or radio stations 
broadcasting to the public at large, and publishers of periodicals (but 
only in those instances when the periodicals can qualify as 
disseminations of ``news'') who make their products available for 
purchase or subscription by the general public. These examples are not 
intended to be all-inclusive. Moreover, as traditional methods of news 
delivery evolve (e.g. electronic dissemination of newspapers through 
telecommunication services), such alternative media may be included in 
this category. A freelance journalist may be regarded as working for a 
news organization if the journalist can demonstrate a solid basis for 
expecting publication through that organization, even though the 
journalist is not actually employed by the news organization. A 
publication contract would be the clearest proof, but the Commission may 
also look to the past publication record of a requester in making this 
determination.
    (2) Fees. (i) If documents are requested for commercial use, the 
Commission will charge the employee's hourly pay rate plus 16% for 
benefits for document search time and for document review time, and 15 
cents per page for duplication. Commercial use requests are not entitled 
to two hours of free search time or 100 free pages of reproduction of 
documents.
    (ii) If documents are not sought for commercial use and the request 
is

[[Page 1205]]

made by an educational or non-commercial scientific institution, whose 
purpose is scholarly or scientific research, or a representative of the 
news media, the Commission will charge 15 cents per page for 
duplication. There is no charge for the first 100 pages.
    (iii) For a request not described in paragraphs (b)(2)(i) or (ii) of 
this section, the Commission will charge the employees hourly pay rate 
plus 16 percent for benefits for document search and 15 cents per page 
for duplication. There is no charge for the first 100 pages of 
reproduction and the first two hours of search time will be furnished 
without charge.
    (iv) The Director, Office of External Affairs, will normally provide 
documents by regular mail, with postage prepaid by the Commission. 
However, the requester may authorize special delivery, such as express 
mail, at the requester's own expense.
    (v) The Commission, or its designee, may establish minimum fees 
below which no charges will be collected, if it determines that the 
costs of routine collection and processing of the fees are likely to 
equal or exceed the amount of the fees. If total fees assessed by 
Commission staff for a Freedom of Information Act request are less than 
the appropriate threshold, the Commission may not charge the requesters.
    (vi) Payment of fees must be by check or money order made payable to 
the U.S. Treasury.
    (vii) Requesters may not file multiple requests at the same time, 
each seeking portions of a document or documents, solely in order to 
avoid payment of fees. When the Commission reasonably believes that a 
requester, or a group of requesters acting in concert, is attempting to 
break a request down into a series of requests for the purpose of 
evading assessment of fees, or otherwise reasonably believes that two or 
more requests constitute a single request, the Commission may aggregate 
any such requests accordingly. The Commission will not aggregate 
multiple requests on unrelated subjects from a requester. Aggregated 
requests may qualify for an extension of time under Sec. 388.110(b).
    (3) Fees for unsuccessful search. The Commission may assess charges 
for time spent searching, even if it fails to locate the records, or if 
records located are determined to be exempt from disclosure. If the 
Commission estimates that search charges are likely to exceed $25, it 
will notify the requester of the estimated amount of search fees, unless 
the requester has indicated in advance willingness to pay fees as high 
as those anticipated. The requester can meet with Commission personnel 
with the object of reformulating the request to meet his or her needs at 
a lower cost.
    (4) Interest--notice and rate. The Commission will assess interest 
charges on an unpaid bill starting on the 31st day following the day on 
which the billing was sent. Interest will be at the rate prescribed in 
31 U.S.C. 3717 and will accrue from the date of the billing.
    (5) Advance payments. The Commission will require a requester to 
make an advance payment, i.e., payments before work is commenced or 
continued on a request, if:
    (i) The Commission estimates or determines that allowable charges 
that a requester may be required to pay are likely to exceed $250. The 
Commission will notify the requester of the estimated cost and either 
require satisfactory assurance of full payment where the requester has a 
history of prompt payment of fees, or require advance payment of charges 
if a requester has no history of payment; or
    (ii) A requester has previously failed to pay a fee charged in a 
timely fashion. The Commission will require the requester to pay the 
full amount owed plus any applicable interest, and to make an advance 
payment of the full amount of the estimated fee before the Commission 
will begin to process a new request or a pending request from that 
requester. When the Commission requires advance payment or an agreement 
to pay under this paragraph, or under Sec. 388.108(a)(5), the 
administrative time limits prescribed in this part will begin only after 
the Commission has received the required payments, or agreements.

[[Page 1206]]

    (c) Fee reduction or waiver. (1) Any fee described in this section 
may be reduced or waived if the requester demonstrates that disclosure 
of the information sought is:
    (i) In the public interest because it is likely to contribute 
significantly to public understanding of the operations or activities of 
the government, and
    (ii) Not primarily in the commercial interest of the requester.
    (2) The Commission will consider the following criteria to determine 
the public interest standard:
    (i) Whether the subject of the requested records concerns the 
operations or activities of the government;
    (ii) Whether the disclosure is likely to contribute to an 
understanding of government operations or activities;
    (iii) Whether disclosure of the requested information will 
contribute to public understanding; and
    (iv) Whether the disclosure is likely to contribute significantly to 
public understanding of government operations or facilities.
    (3) The Commission will consider the following criteria to determine 
the commercial interest of the requester:
    (i) Whether the requester has a commercial interest that would be 
furthered by the requested disclosure; and, if so
    (ii) Whether the magnitude of the identified commercial interest of 
the requester is sufficiently large, in comparison with the public 
interest in disclosure, that disclosure is primarily in the commercial 
interest of the requester.
    (4) This request for fee reduction or waiver must accompany the 
initial request for records and will be decided under the same 
procedures used for record requests.
    (d) Debt collection. The Commission will use the authorities 
mandated in the Debt Collection Act of 1982, 31 U.S.C. 3711, 3716-3719 
(1982), including disclosure to consumer reporting agencies and use of 
collection agencies, where appropriate, to encourage payment of 
outstanding unpaid FOIA invoices.
    (e) Annual adjustment of fees--1) Update and publication. The 
Commission, by its designee, the Executive Director, will update the 
fees established in this section each fiscal year. The Executive 
Director will publish the fees in the Federal Register.
    (2) Payment of updated fees. The fee applicable to a particular 
Freedom of Information Act request will be the fee in effect on the date 
that the request is received.

[Order 488, 53 FR 1473, Jan. 20, 1988, as amended by Order 597, 63 FR 
5454, Feb. 3, 1998; Order 640, 65 FR 33448, May 24, 2000; Order 625, 67 
FR 21996, May 2, 2002; Order 648, 69 FR 41191, July 8, 2004; 72 FR 
63985, Nov. 14, 2007; 73 FR 45609, Aug. 6, 2008]



Sec. 388.110  Procedure for appeal of denial of requests for Commission 

records not publicly available or not available through the Public Reference 

Room, denial of requests for fee waiver or reduction, and denial of 

requests for expedited processing.

    (a)(1) A person whose request for records, request for fee waiver or 
reduction, or request for expedited processing is denied in whole or 
part may appeal that determination to the General Counsel or General 
Counsel's designee within 45 days of the determination. Appeals filed 
pursuant to this section must be in writing, addressed to the General 
Counsel of the Commission, and clearly marked ``Freedom of Information 
Act Appeal.'' Such an appeal received by the Commission not addressed 
and marked as indicated in this paragraph will be so addressed and 
marked by Commission personnel as soon as it is properly identified and 
then will be forwarded to the General Counsel. Appeals taken pursuant to 
this paragraph will be considered to be received upon actual receipt by 
the General Counsel.
    (2) The General Counsel or the General Counsel's designee will make 
a determination with respect to any appeal within 20 working days after 
the receipt of such appeal. An appeal of the denial of expedited 
processing will be considered as expeditiously as possible within the 20 
working day period. If, on appeal, the denial of the request for 
records, fee reduction, or expedited processing is upheld in whole or in 
part, the General Counsel or the General Counsel's designee will notify 
the

[[Page 1207]]

person making the appeal of the provisions for judicial review of that 
determination.
    (b)(1) Extension of time. In unusual circumstances, the time limits 
prescribed for making the initial determination pursuant to Sec. 
388.108 and for deciding an appeal pursuant to this section may be 
extended by up to 10 working days, by the Secretary, who will send 
written notice to the requester setting forth the reasons for such 
extension and the date on which a determination or appeal is expected to 
be dispatched.
    (2) The extension permitted by paragraph (b)(1) of this section may 
be made longer than 10 working days when the Commission notifies the 
requester within the initial response time that the request cannot be 
processed in the specified time, and the requester is provided an 
opportunity to limit the scope of the request to allow processing within 
20 working days; or to arrange with the Commission an alternative time 
frame.
    (3) Two or more requests aggregated into a single request under 
Sec. 388.109(b)(2)(vii) may qualify for an extension of time if the 
requests, as aggregated, otherwise satisfy the unusual circumstances 
specified in this section.
    (4) Unusual circumstances means:
    (i) The need to search for and collect the requested records from 
field facilities or other establishments that are separate from the 
office processing the requests;
    (ii) The need to search for, collect, and appropriately examine a 
voluminous amount of separate and distinct records which are demanded in 
a single request; or
    (iii) The need for consultation, which will be conducted with all 
practicable speed, with another agency having a substantial interest in 
the determination of the request or among two or more components of the 
agency having substantial subject-matter interest therein.

[Order 488, 53 FR 1473, Jan. 20, 1988, as amended by Order 597, 63 FR 
5455, Feb. 3, 1998]



Sec. 388.111  Procedures in event of subpoena.

    (a)(1) The procedures specified in this section will apply to all 
subpoenas directed to Commission employees that relate in any way to the 
employees' official duties. These procedures will also apply to 
subpoenas directed to former Commission employees if the subpoenas seek 
nonpublic materials or information acquired during Commission 
employment. The provisions of paragraph (c) of this section will also 
apply to subpoenas directed to the Commission.
    (2) For purposes of this section,
    (i) Employees, except where otherwise specified, includes ``special 
government employees'' and other Commission employees; and
    (ii) Nonpublic includes any material or information which is exempt 
from availability for public inspection and copying;
    (iii) Special government employees includes consultants and other 
employees as defined by section 202 of Title 18 of the United States 
Code.
    (iv) Subpoena means any compulsory process in a case or matter, 
including a case or matter to which the Commission is not a party;
    (b) Any employee who is served with a subpoena must promptly advise 
the General Counsel of the Commission of the service of the subpoena, 
the nature of the documents or information sought, and all relevant 
facts and circumstances. Any former employee who is served with a 
subpoena that concerns nonpublic information shall promptly advise the 
General Counsel of the Commission of the service of the subpoena, the 
nature of the documents or information sought, and all relevant facts 
and circumstances.
    (c) A party causing a subpoena to be issued to the Commission or any 
employee or former employee of the Commission must furnish a statement 
to the General Counsel of the Commission. This statement must set forth 
the party's interest in the case or matter, the relevance of the desired 
testimony or documents, and a discussion of whether the desired 
testimony or documents are reasonably available from other sources. If 
testimony is desired,

[[Page 1208]]

the statement must also contain a general summary of the testimony and a 
discussion of whether Commission records could be produced and used in 
lieu of testimony. Any authorization for testimony will be limited to 
the scope of the demand as summarized in such statement.
    (d) Commission records or information which are not part of the 
public record will be produced only upon authorization by the 
Commission.
    (e) The Commission or its designee will consider and act upon 
subpoenas under this section with due regard for statutory restrictions, 
the Commission's Rules of Practice and Procedure, and the public 
interest, taking into account factors such as applicable privileges 
including the deliberative process privilege; the need to conserve the 
time of employees for conducting official business; the need to avoid 
spending the time and money of the United States for private purposes; 
the need to maintain impartiality between private litigants in cases 
where a substantial government interest is not involved; and the 
established legal standards for determining whether justification exists 
for the disclosure of confidential information and records.
    (f) The Commission authorizes the General Counsel or the General 
Counsel's designee to make determinations under this section.



Sec. 388.112  Requests for special treatment of documents submitted to the 

Commission.

    (a) Scope. (1) Any person submitting a document to the Commission 
may request privileged treatment by claiming that some or all of the 
information contained in a particular document is exempt from the 
mandatory public disclosure requirements of the Freedom of Information 
Act, 5 U.S.C. 552, and should be withheld from public disclosure.
    (2) Any person submitting documents containing critical energy 
infrastructure information (CEII) as defined in Sec. 388.113 should 
follow the procedures specified in this section.
    (b) Procedures. A person claiming that information warrants special 
treatment as CEII or privileged must file a statement requesting CEII or 
privileged treatment for some or all of the information in a document, 
and the justification for special treatment of the information, in 
accordance with filing procedures posted on the Commission's Web site at 
http://www.ferc.gov.
    (c) Effect of privilege or CEII claim. (1) For documents filed with 
the Commission:
    (i) The Secretary of the Commission will place documents for which 
privileged or CEII treatment is sought in accordance with paragraph (b) 
of this section in a nonpublic file while the request for privileged or 
CEII treatment is pending. By placing the documents in a nonpublic file, 
the Commission is not making a determination on any claim of privilege 
or CEII status. The Commission retains the right to make determinations 
with regard to any claim of privilege or CEII status, and the discretion 
to release information as necessary to carry out its jurisdictional 
responsibilities.
    (ii) The Secretary of the Commission will place the request for 
privileged or CEII treatment and a copy of the original document without 
the privileged or CEII information in a public file while the request is 
pending.
    (2) For documents submitted to Commission staff. The notification 
procedures of paragraphs (d), (e), and (f) of this section will be 
followed by staff before making a document public.
    (d) Notification of request and opportunity to comment. When a FOIA 
or CEII requester seeks a document for which privilege or CEII status 
has been claimed, or when the Commission itself is considering release 
of such information, the Commission official who will decide whether to 
release the information or any other appropriate Commission official 
will notify the person who submitted the document and give the person an 
opportunity (at least five calendar days) in which to comment in writing 
on the request. A copy of this notice will be sent to the requester.
    (e) Notification before release. Notice of a decision by the 
Commission, the Chairman of the Commission, the Director, Office of 
External Affairs, the General Counsel or General Counsel's designee, a 
presiding officer in a proceeding under part 385 of this chapter,

[[Page 1209]]

or any other appropriate official to deny a claim of privilege, in whole 
or in part, or to make a limited release of CEII, will be given to any 
person claiming that the information is privileged or CEII no less than 
5 calendar days before disclosure. The notice will briefly explain why 
the person's objections to disclosure are not sustained by the 
Commission. A copy of this notice will be sent to the FOIA or CEII 
requester.
    (f) Notification of suit in Federal courts. When a FOIA requester 
brings suit to compel disclosure of information for which a person has 
claimed privileged treatment, the Commission will notify the person who 
submitted the documents of the suit.

[Order 630, 68 FR 9869, Mar. 3, 2003, as amended by Order 630-A, 68 FR 
46459, Aug. 6, 2003; 72 FR 63985, Nov. 14, 2007; Order 737, 75 FR 43405, 
July 26, 2010]



Sec. 388.113  Accessing critical energy infrastructure information.

    (a) Scope. This section governs access to critical energy 
infrastructure information (CEII). The rules governing submission of 
CEII are contained in 18 CFR 388.112(b). The Commission reserves the 
right to restrict access to previously filed documents as well as 
Commission-generated documents containing CEII.
    (b) Purpose. The procedures in this section are available at the 
requester's option as an alternative to the FOIA procedures in Sec. 
388.108 where the information requested is exempted from disclosure 
under the FOIA and contains CEII.
    (c) Definitions. For purposes of this section:
    (1) Critical energy infrastructure information means specific 
engineering, vulnerability, or detailed design information about 
proposed or existing critical infrastructure that:
    (i) Relates details about the production, generation, 
transportation, transmission, or distribution of energy;
    (ii) Could be useful to a person in planning an attack on critical 
infrastructure;
    (iii) Is exempt from mandatory disclosure under the Freedom of 
Information Act, 5 U.S.C. 552; and
    (iv) Does not simply give the general location of the critical 
infrastructure.
    (2) Critical infrastructure means existing and proposed systems and 
assets, whether physical or virtual, the incapacity or destruction of 
which would negatively affect security, economic security, public health 
or safety, or any combination of those matters.
    (d) Accessing critical energy infrastructure information. (1) An 
Owner/operator of a facility, including employees and officers of the 
owner/operator, may obtain CEII relating to its own facility directly 
from Commission staff without going through the procedures outlined in 
paragraph (d)(3) of this section. Non-employee agents of an owner/
operator of such facility may obtain CEII relating to the owner/
operator's facility in the same manner as owner/operators as long as 
they present written authorization from the owner/operator to obtain 
such information.
    (2) An employee of a federal agency acting within the scope of his 
or her federal employment may obtain CEII directly from Commission staff 
without following the procedures outlined in paragraph (d)(3) of this 
section. Any Commission employee at or above the level of division 
director or its equivalent may rule on federal agency representatives' 
requests for access to CEII.
    (3) A landowner whose property is crossed by or in the vicinity of a 
project may receive detailed alignment sheets containing CEII directly 
from Commission staff without submitting a non-disclosure agreement as 
outlined in paragraph (d)(4) of this section. A landowner must provide 
Commission staff with proof of his or her property interest in the 
vicinity of a project.
    (4) If any other requester has a particular need for information 
designated as CEII, the requester may request the information using the 
following procedures:
    (i) File a signed, written request with the Commission's CEII 
Coordinator. The request must contain the following: Requester's name 
(including any other name(s) which the requester has used and the dates 
the requester used such name(s)), title, address, and telephone number; 
the name, address, and telephone number of the person or entity on whose 
behalf the information

[[Page 1210]]

is requested; a detailed statement explaining the particular need for 
and intended use of the information; and a statement as to the 
requester's willingness to adhere to limitations on the use and 
disclosure of the information requested. A requester shall provide his 
or her date and place of birth upon request, if it is determined by the 
CEII Coordinator that this information is necessary to process the 
request. Unless otherwise provided in Section 113(d)(3), a requester 
must also file an executed non-disclosure agreement.
    (ii) A requester who seeks the information on behalf of all 
employees of an organization should clearly state that the information 
is sought for the organization, that the requester is authorized to seek 
the information on behalf of the organization, and that all the 
requesters agree to be bound by a non-disclosure agreement that must be 
executed by and will be applied to all individuals who have access to 
the CEII.
    (iii) After the request is received, the CEII Coordinator will 
determine if the information is CEII, and, if it is, whether to release 
the CEII to the requester. The CEII Coordinator will balance the 
requester's need for the information against the sensitivity of the 
information. If the requester is determined to be eligible to receive 
the information requested, the CEII Coordinator will determine what 
conditions, if any, to place on release of the information.
    (iv) If the CEII Coordinator determines that the CEII requester has 
not demonstrated a valid or legitimate need for the CEII or that access 
to the CEII should be denied for other reasons, this determination may 
be appealed to the General Counsel pursuant to Sec. 388.110 of this 
Chapter. The General Counsel will decide whether the information is 
properly classified as CEII, which by definition is exempt from release 
under FOIA, and whether the Commission should in its discretion make 
such CEII available to the CEII requester in view of the requester's 
asserted legitimacy and need.
    (v) Once a CEII requester has been verified by Commission staff as a 
legitimate requester who does not pose a security risk, his or her 
verification will be valid for the remainder of that calendar year. Such 
a requester is not required to provide detailed information about him or 
herself with subsequent requests during the calendar year. He or she is 
also not required to file a non-disclosure agreement with subsequent 
requests during the calendar year because the original non-disclosure 
agreement will apply to all subsequent releases of CEII.
    (vi) If an organization is granted access to CEII as provided by 
paragraph (d)(4)(iii) of this section, and later seeks to add additional 
individuals to the non-disclosure agreement, the names of these 
individuals must be sent to the CEII Coordinator with certification that 
notice has been given to the submitter. Any newly added individuals must 
execute a supplement to the original non-disclosure agreement indicating 
their acceptance of its terms. If there is no written opposition within 
five (5) days of notifying the CEII Coordinator and the submitter 
concerning the addition of any newly-named individuals, the CEII 
Coordinator will issue a standard notice accepting the addition of names 
to the non-disclosure agreement. If the submitter files a timely 
opposition with the CEII Coordinator, the CEII Coordinator will issue a 
formal determination addressing the merits of such opposition.
    (e) Fees for processing CEII requests will be determined in 
accordance with 18 CFR 388.109.

[Order 630, 68 FR 9870, Mar. 3, 2003, as amended by Order 630-A, 68 FR 
46460, Aug. 6, 2003; Order 649, 69 FR 48391, Aug. 10, 2004; Order 662, 
70 FR 37036, June 28, 2005; 71 FR 58276, Oct. 3, 2006; 72 FR 63985, Nov. 
14, 2007]



PART 389_OMB CONTROL NUMBERS FOR COMMISSION INFORMATION COLLECTION 

REQUIREMENTS--Table of Contents



    Authority: 44 U.S.C. 3501-3520.



Sec. 389.101  OMB control numbers assigned pursuant to the Paperwork Reduction 

Act.

    (a) Purpose. This part collects and displays control numbers 
assigned to information collection requirements of

[[Page 1211]]

the Commission by the Office of Management and Budget (OMB) pursuant to 
the Paperwork Reduction Act of 1980. This part fulfills the requirements 
of section 3507(f) of the Paperwork Reduction Act, which requires that 
agencies display a current control number assigned by the Director of 
OMB for each agency information collection requirement.
    (b) Display.

------------------------------------------------------------------------
                                                   Current OMB control
  18 CFR part or section where the information     number (all numbers
       collection requirement is located            begin with 1902-)
------------------------------------------------------------------------
2.19...........................................               0058, 0015
2.55...........................................                     0161
2.56a..........................................                     0055
2.69...........................................                     0060
2.75...........................................                     0052
2.76...........................................         0051, 0052, 0055
2.77...........................................         0051, 0052, 0055
2.78...........................................                     0066
2.79...........................................                     0060
2.80...........................................                     0128
Part 4 Subpart D...............................                     0073
Part 4 Subpart E...............................                     0058
Part 4 Subpart F...............................                     0058
Part 4 Subpart G...............................                     0115
Part 4 Subpart H...............................                     0115
Part 4 Subpart J...............................                     0115
Part 4 Subpart L...............................                     0058
Part 4 Subpart L...............................                     0115
Part 4 Subpart M...............................                     0136
4.30...........................................                     0073
4.31...........................................                     0073
4.32...........................................   0058, 0073, 0115, 0136
4.33...........................................                     0073
4.34...........................................                     0073
4.80...........................................                     0073
4.81...........................................                     0073
4.82...........................................                     0073
Part 6.........................................                     0068
Part 9.........................................                     0069
11.3(c)........................................                     0136
11.3(d)........................................                     0136
11.4(b)........................................                     0136
11.16..........................................                     0087
16.1...........................................               0058, 0115
16.14..........................................               0058, 0115
16.15..........................................               0058, 0115
16.16..........................................               0058, 0115
24.1...........................................                     0079
Part 33........................................                     0082
Part 34........................................                     0043
Part 35 Subpart A..............................                     0096
35.12..........................................                     0096
35.13..........................................                     0096
35.26..........................................                     0096
35.27..........................................                     0096
35.30..........................................                     0096
Part 45........................................                     0083
46.3...........................................                     0114
46.6...........................................                     0099
Part 101.......................................               0021, 0029
Part 116.......................................                     0021
Part 125.......................................                     0098
141.1..........................................                     0021
141.2..........................................                     0029
141.14.........................................                     0106
141.51.........................................                     0140
141.61.........................................                     0024
Part 152.......................................                     0116
Part 153.......................................                     0062
Part 154.......................................                     0052
154.38.........................................                     0070
154.52.........................................                     0070
154.61.........................................                     0070
154.62.........................................                     0070
154.63.........................................                     0070
154.64.........................................                     0070
154.65.........................................                     0070
154.66.........................................                     0070
154.67.........................................                     0070
154.91.........................................                     0055
154.92.........................................                     0055
154.93.........................................                     0055
154.94.........................................                     0055
154.94(k)......................................                     0057
154.95.........................................                     0055
154.96.........................................                     0055
154.97.........................................                     0055
154.98.........................................                     0055
154.99.........................................                     0055
154.100........................................                     0055
154.101........................................                     0055
154.102........................................                     0055
154.103........................................                     0055
154.104........................................                     0055
154.105........................................                     0055
154.106........................................                     0055
154.107........................................                     0055
154.108........................................                     0055
154.109........................................                     0055
154.110........................................                     0055
154.111(a)(3)..................................                     0070
154.301........................................                     0070
154.303........................................                     0070
154.304........................................                     0070
154.305........................................                     0070
154.306........................................                     0070
154.308........................................                     0070
154.309........................................                     0070
154.310........................................                     0070
Part 156.......................................                     0061
Part 157.......................................                     0052
157.5..........................................                     0060
157.6..........................................                     0060
157.7..........................................                     0060
157.8..........................................                     0060
157.9..........................................                     0060
157.10.........................................                     0060
157.11.........................................                     0060
157.12.........................................                     0060
157.13.........................................                     0060
157.14.........................................                     0128
157.15.........................................                     0060
157.16.........................................                     0060
157.17.........................................                     0060
157.18.........................................                     0060
157.20.........................................                     0060
157.21.........................................               0051, 0060
157.23.........................................                     0052
157.24.........................................                     0052
157.25.........................................                     0052
157.26.........................................                     0052
157.27.........................................                     0052
157.28.........................................                     0052
157.30.........................................                     0051
157.40.........................................                     0052
157.100........................................         0005, 0051, 0052
157.102........................................                     0060
157.103........................................               0060, 0070
157.201........................................                     0060
157.202........................................                     0060

[[Page 1212]]

 
157.203........................................                     0060
157.204........................................                     0060
157.205........................................                     0060
157.206........................................                     0060
157.207........................................                     0060
157.208........................................                     0060
157.209 (e)(3), (e)(4).........................                     0060
157.210........................................                     0060
157.211........................................                     0060
157.212........................................                     0060
157.213........................................                     0060
157.214........................................                     0060
157.215........................................                     0060
157.216........................................                     0060
157.217........................................                     0060
157.218........................................                     0060
157.301........................................                     0055
Part 158.......................................                     0098
159.1..........................................                     0060
160.1..........................................                     0098
161.3..........................................                     0157
Part 201.......................................               0028, 0030
Part 216.......................................                     0028
Part 225.......................................                     0098
Part 250.......................................                     0052
250.5..........................................                     0055
250.7..........................................                     0051
250.8..........................................                     0055
250.9..........................................                     0055
250.10.........................................                     0052
250.13.........................................                     0008
250.14.........................................               0036, 0055
250.15.........................................                     0086
250.16.........................................                     0157
260.1..........................................                     0028
260.2..........................................                     0030
260.3..........................................                     0032
260.4..........................................                     0027
260.7..........................................                     0037
260.8..........................................                     0005
260.9..........................................                     0004
260.11.........................................                     0026
260.12.........................................                     0025
260.15.........................................                     0101
Part 270.......................................                     0057
270.101........................................                     0070
Part 271 Subpart K.............................                     0057
271.503........................................                     0124
271.603........................................                     0124
271.703(c).....................................                     0112
271.903........................................                     0124
Part 273.......................................                     0111
273.302........................................               0070, 0084
Part 274.......................................                     0112
Part 274 Subpart B.............................                     0038
275.204........................................                     0093
276.108........................................                     0098
277.210........................................                     0098
Part 281.......................................                     0066
Part 282.......................................                     0110
282.502........................................                     0028
Part 284.......................................                     0086
284.7..........................................                     0086
284.8..........................................               0060, 0086
284.9..........................................               0060, 0086
284.10.........................................               0060, 0086
284.11.........................................               0086, 0161
284.12.........................................                     0005
284.102........................................                     0086
284.105........................................                     0086
284.106........................................                     0086
284.122........................................                     0086
284.125........................................                     0086
284.126........................................                     0086
Part 284 Subpart D.............................                     0086
Part 284 Subpart E.............................                     0086
284.221........................................                     0060
284.222........................................                     0060
284.223........................................         0060, 0086, 0160
284.224........................................                     0060
284.226(d).....................................                     0086
Part 284 Subpart H.............................               0060, 0086
Part 284 Subpart I.............................                     0144
Part 290.......................................                     0042
Part 292.......................................                     0075
292.209........................................               0058, 0115
300.10.........................................                     0088
300.11.........................................                     0088
Part 340.......................................                     0089
Part 341.......................................                     0089
Part 342.......................................                     0089
Part 343.......................................                     0089
Part 344.......................................                     0089
Part 345.......................................                     0089
Part 346.......................................                     0089
Part 347.......................................                     0089
Part 351.......................................                     0022
Part 352.......................................                     0022
Part 356.......................................                     0098
Part 360.......................................                     0003
382.105(a).....................................                     0132
382.201(b)(4)..................................                     0132
360.100........................................                     0015
360.101........................................                     0016
360.102........................................                     0017
360.103........................................                     0014
360.104........................................                     0013
361.100........................................                     0011
361.101........................................                     0018
361.102........................................                     0010
361.103........................................                     0009
Part 380.......................................                     0128
381.106(b).....................................                     0132
381.108........................................                     0132
381.302........................................                     0132
381.303........................................                     0132
381.304........................................                     0132
382.105(a).....................................                     0132
382.201(b).....................................                     0132
Part 385 Subpart N.............................                     0089
------------------------------------------------------------------------


[49 FR 12692, Mar. 30, 1984]

    Editorial Note: For Federal Register citations affecting Sec. 
389.101, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



PART 390_ELECTRONIC REGISTRATION--Table of Contents



Sec.
390.1 Electronic registration.
390.2 Activities requiring registration.
390.3 Waiver applications.
390.4 Exemptions.

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717z, 3301-3432; 16 
U.S.C. 791a-825r, 2601-2645;

[[Page 1213]]

31 U.S.C. 9701; 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C. 1-
85 (1988).

    Source: Order 891, 67 FR 52410, Aug. 12, 2002, unless otherwise 
noted.



Sec. 390.1  Electronic registration.

    Any person who wishes to engage in any of the activities listed in 
Sec. 390.2 must register electronically through the Commission's web 
site, in compliance with instructions located on the Web site, at http:/
/www.ferc.gov.

    Editorial Note: At 68 FR 7416, Feb. 14, 2003, Sec. 390.1 was 
suspended, effective Jan. 7, 2003.



Sec. 390.2  Activities requiring registration.

    (a) Electronic registration is a requirement for the following 
activities:
    (1) Submission of all documents in proceedings governed by 18 CFR 
part 385;
    (2) Submission of Forms 1, 2, 6 and 423 pursuant to 18 CFR 141.1, 
141.61, 260.1, and 357.2.
    (3) Submission of reports in compliance with Order No. 2001.
    (4) Filing of tariffs pursuant to 18 CFR 385.205.
    (5) Receipt of service pursuant to 18 CFR 385.2010(a) or (b).
    (b) Any person who wishes to subscribe to the Commission's automated 
document delivery system may register electronically but is not required 
to do so.



Sec. 390.3  Waiver applications.

    (a) A person may satisfy the requirement of Sec. 390.1 by submitting 
a written statement showing good cause why the person is unable to 
register electronically, and including the name and address of the 
person serving as a contact. The statement must be mailed to the 
Secretary, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, or hand delivered to Room 1A at the same address.
    (b) Persons who register pursuant to paragraph (a) of this section 
will receive a unique numeric identifier that must appear on all paper 
submissions to the Commission. A submission that does not include the 
identifier will be rejected. Notification of such rejection will be sent 
to the submitter at the address indicated on the paper submission. A 
request for a waiver may be submitted simultaneously with a document 
submitted for filing. If the waiver is granted, the Secretary will add 
the assigned numeric identifier to the submitted document(s), but will 
not do so for subsequent submissions.
    (c) A waiver under paragraph (a) of this section will be valid for 
one year from the date of issuance by the Secretary. The Secretary will 
send notice of the pending expiration to the registered person's address 
of record approximately three months prior to the expiration of the 
waiver. After the waiver expires, a person wishing to engage in any of 
the activities listed in Sec. 390.2 must comply with Sec. 390.1, or 
must apply for another waiver under paragraph (a) of this section.

[Order 891, 67 FR 52410, Aug. 12, 2002, as amended at 70 FR 21332, Apr. 
26, 2005]



Sec. 390.4  Exemptions.

    In instances in which the Commission receives communications from 
persons who are not registered under this part that relate to docketed 
proceedings and in which it appears that registration under this part 
offers no value to the person submitting the communication, the 
Commission may accept the communication for filing without requiring the 
person to comply with Sec. 390.1 or Sec. 390.3.

                        PARTS 391-399 [RESERVED]


[[Page 1215]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 1217]]



                    Table of CFR Titles and Chapters




                      (Revised as of April 1, 2012)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
       III  Administrative Conference of the United States (Parts 
                300--399)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 2--199)
        II  Office of Management and Budget Circulars and Guidance 
                (200--299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300-- 
                399)
        IV  Department of Agriculture (Parts 400--499)
        VI  Department of State (Parts 600--699)
       VII  Agency for International Development (Parts 700--799)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
        XI  Department of Defense (Parts 1100--1199)
       XII  Department of Transportation (Parts 1200--1299)
      XIII  Department of Commerce (Parts 1300--1399)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1800--1899)
        XX  United States Nuclear Regulatory Commission (Parts 
                2000--2099)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Housing and Urban Development (Parts 2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)
     XXVII  Small Business Administration (Parts 2700--2799)
    XXVIII  Department of Justice (Parts 2800--2899)

[[Page 1218]]

       XXX  Department of Homeland Security (Parts 3000--3099)
      XXXI  Institute of Museum and Library Services (Parts 3100--
                3199)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
     XXXIV  Department of Education (Parts 3400--3499)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
    XXXVII  Peace Corps (Parts 3700--3799)
     LVIII  Election Assistance Commission (Parts 5800--5899)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--199)
        II  Recovery Accountability and Transparency Board (Parts 
                200--299)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600-- 3699)
    XXVIII  Department of Justice (Parts 3800--3899)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)

[[Page 1219]]

    XXXIII  Overseas Private Investment Corporation (Parts 4300--
                4399)
     XXXIV  Securities and Exchange Commission (Parts 4400--4499)
      XXXV  Office of Personnel Management (Parts 4500--4599)
    XXXVII  Federal Election Commission (Parts 4700--4799)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
      XLIX  Federal Labor Relations Authority (Parts 5900--5999)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
    LXVIII  Commission on Civil Rights (Parts 7800--7899)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
       LXX  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 8000--8099)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)
     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)
     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
      LXXX  Federal Housing Finance Agency (Parts 9000--9099)
    LXXXII  Special Inspector General for Iraq Reconstruction 
                (Parts 9200--9299)

[[Page 1220]]

     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 1--99)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)

[[Page 1221]]

       XXV  Office of Advocacy and Outreach, Department of 
                Agriculture (Parts 2500--2599)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  National Institute of Food and Agriculture (Parts 
                3400--3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

[[Page 1222]]

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1300--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)
        II  Election Assistance Commission (Parts 9400--9499)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
         X  Bureau of Consumer Financial Protection (Parts 1000--
                1099)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XII  Federal Housing Finance Agency (Parts 1200--1299)
      XIII  Financial Stability Oversight Council (Parts 1300--
                1399)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
       XVI  Office of Financial Research (Parts 1600--1699)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

[[Page 1223]]

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--1199)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

[[Page 1224]]

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  U.S. Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  U.S. Immigration and Customs Enforcement, Department 
                of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

[[Page 1225]]

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Millennium Challenge Corporation (Parts 1300--1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)

[[Page 1226]]

         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XV  Emergency Mortgage Insurance and Loan Programs, 
                Department of Housing and Urban Development (Parts 
                2700--2799)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
      XXIV  Board of Directors of the HOPE for Homeowners Program 
                (Parts 4000--4099)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Parts 1200--1299)

[[Page 1227]]

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--End)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)

[[Page 1228]]

     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Bureau of Safety and Environmental Enforcement, 
                Department of the Interior (Parts 200--299)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
         V  Bureau of Ocean Energy Management, Department of the 
                Interior (Parts 500--599)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)
       XII  Office of Natural Resources Revenue, Department of the 
                Interior (Parts 1200--1299)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)
         X  Financial Crimes Enforcement Network, Department of 
                the Treasury (Parts 1000--1099)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense

[[Page 1229]]

       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education [Reserved]
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)

[[Page 1230]]

        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
        VI  [Reserved]
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Parts 1500--
                1599)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                300--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--199)
        II  Armed Forces Retirement Home (Parts 200--299)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

[[Page 1231]]

          Title 41--Public Contracts and Property Management

            Subtitle A--Federal Procurement Regulations System 
                [Note]
            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
    62-100  [Reserved]
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
   103-104  [Reserved]
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
   129-200  [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--599)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

[[Page 1232]]

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 400--999)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10099)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899) 
                [Reserved]
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)

[[Page 1233]]

     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)
        IV  National Telecommunications and Information 
                Administration, Department of Commerce, and 
                National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 400--499)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Health and Human Services (Parts 300--399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  Agency for International Development (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)

[[Page 1234]]

        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement [Reserved]
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  Civilian Board of Contract Appeals, General Services 
                Administration (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)

[[Page 1235]]

       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR

[[Page 1237]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of April 1, 2012)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Administrative Conference of the United States    1, III
Advisory Council on Historic Preservation         36, VIII
Advocacy and Outreach, Office of                  7, XXV
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              2, VII; 22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            2, IV; 5, LXXIII
  Advocacy and Outreach, Office of                7, XXV
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Economic Research Service                       7, XXXVII
  Energy Policy and New Uses, Office of           2, IX; 7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  National Institute of Food and Agriculture      7, XXXIV
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII, L
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV, L
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII, L
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I

[[Page 1238]]

Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase from People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Bureau of Ocean Energy Management, Regulation,    30, II
     and Enforcement
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chemical Safety and Hazardous Investigation       40, VI
     Board
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       5, LXVIII; 45, VII
Civil Rights, Office for                          34, I
Court Services and Offender Supervision Agency    5, LXX
     for the District of Columbia
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               2, XIII; 44, IV; 50, VI
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III, IV
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Financial Protection Bureau              12, X
Consumer Product Safety Commission                5, LXXI; 16, II
Copyright Office                                  37, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    5, LXX; 28, VIII
   for the District of Columbia
[[Page 1239]]

Customs and Border Protection                     19, I
Defense Contract Audit Agency                     32, I
Defense Department                                2, XI; 5, XXVI; 32, 
                                                  Subtitle A; 40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          5, LXX; 28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          2, XXXIV; 5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Election Assistance Commission                    2, LVIII; 11, II
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             2, IX; 5, XXIII; 10, II, 
                                                  III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   2, XV; 5, LIV; 40, I, IV, 
                                                  VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV

[[Page 1240]]

  Environmental Quality, Council on               40, V
  Management and Budget, Office of                2, Subtitle A; 5, III, 
                                                  LXXVII; 14, VI; 48, 99
  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       5, XXXVII; 11, I
Federal Emergency Management Agency               44, I
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Agency                    5, LXXX; 12, XII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority                 5, XIV, XLIX; 22, XIV
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Financial Crimes Enforcement Network              31, X
Financial Research Office                         12, XVI
Financial Stability Oversight Council             12, XIII
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX

[[Page 1241]]

Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          2, III; 5, XLV; 45, 
                                                  Subtitle A,
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  2, XXX; 6, I; 8, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection                   19, I
  Federal Emergency Management Agency             44, I
  Human Resources Management and Labor Relations  5, XCVII
       Systems
  Immigration and Customs Enforcement Bureau      19, IV
  Transportation Security Administration          49, XII
HOPE for Homeowners Program, Board of Directors   24, XXIV
     of
Housing and Urban Development, Department of      2, XXIV; 5, LXV; 24, 
                                                  Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV

[[Page 1242]]

Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII, XV
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department                               2, XIV
  American Indians, Office of the Special         25, VII
       Trustee
  Bureau of Ocean Energy Management, Regulation,  30, II
       and Enforcement
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Natural Resource Revenue, Office of             30, XII
  Ocean Energy Management, Bureau of              30, V
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
Investment Security, Office of                    31, VIII
Iraq Reconstruction, Special Inspector General    5, LXXXVII
     for
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                2, XXVIII; 5, XXVIII; 28, 
                                                  I, XI; 40, IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII

[[Page 1243]]

  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Office of Workers' Compensation Programs        20, VII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
  Copyright Royalty Board                         37, III
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Millennium Challenge Corporation                  22, XIII
Mine Safety and Health Administration             30, I
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
Museum and Library Services, Institute of         2, XXXI
National Aeronautics and Space Administration     2, XVIII; 5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   2, XXII; 45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Food and Agriculture        7, XXXIV
National Institute of Standards and Technology    15, II
National Intelligence, Office of Director of      32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
National Mediation Board                          29, X

[[Page 1244]]

National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       2, XXV; 5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III, IV
     Administration
National Transportation Safety Board              49, VIII
Natural Resources Conservation Service            7, VI
Natural Resource Revenue, Office of               30, XII
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     2, XX; 5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Ocean Energy Management, Bureau of                30, V
Offices of Independent Counsel                    28, VI
Office of Workers' Compensation Programs          20, VII
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       2, XXXVII; 22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Regulatory Commission                      5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Recovery Accountability and Transparency Board    4, II
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII, L
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV, L

[[Page 1245]]

Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII, L
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                5, XXXIV; 17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     2, XII; 5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 47, IV; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection                   19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Financial Crimes Enforcement Network            31, X
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  Investment Security, Office of                  31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII

[[Page 1246]]

United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       2, VIII; 38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 1247]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations that were 
made by documents published in the Federal Register since January 1, 
2001, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 2001, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972, 1973-1985, and 1986-2000'' published in 
11 separate volumes.

                                  2001

18 CFR
                                                                   66 FR
                                                                    Page
Chapter I
11 Appendix A revised..............................................59361
33 Policy statement................................................11536
    Order..........................................................16121
141.61 Revised.....................................................67078
157.207 (f) and (g) redesignated as (g) and (h); new (f) added.....15347
157.208 (d) Table I revised........................................14486
157.215 (a) Table II revised.......................................14486
Notice.............................................................10980
352 Policy statement...............................................10573
357 Policy statement...............................................10573
357.2 Regulation at 65 FR 81342 and 81343 eff. date delayed 
        confirmed..................................................11537
381.302 (a) amended..........................................3452, 63163
381.303 (a) amended..........................................3452, 63163
381.304 (a) amended..........................................3452, 63163
381.305 (a) amended..........................................3452, 63163
381.403 Amended..............................................3452, 63163
381.505 (a) amended..........................................3452, 63163
381.801 Amended..............................................3452, 63163
382 Order..........................................................15793
385 Policy statement...............................................10573
385.2011 Regulation at 65 FR 81344 eff. date confirmed.............11537
    (a)(8) added...................................................67078
385.2201 (e)(1)(viii) and (g)(3) added.............................67482

                                  2002

18 CFR
                                                                   67 FR
                                                                    Page
Chapter I
2.8 Removed........................................................31069
2.65 Removed.......................................................12470
11 Appendix A revised..............................................70159
35 Heading revised.................................................31069
    Order..........................................................39272
35.1 Heading revised; (g) added....................................31069
35.10a Added.......................................................31069
35.10b Added.......................................................31069
35.25 (c)(1)(ii)(C) removed; (c)(1)(ii)(D) redesignated as new 
        (c)(1)(ii)(C)..............................................36096
101 Amended........................................................67701
    Regulation at 67 FR 67701 eff. date corrected..................70007
141.1 (b)(1)(i) and (2) revised....................................36096
157.208 (d) Table I revised.........................................6168
157.215 (a) Table II revised........................................6168
201 Amended........................................................67703
    Regulation at 67 FR 67703 eff. date corrected..................70007
284 Policy statement...............................................37669
    Order...................................................44529, 49564
284.12 (b) heading, (1) and (2) amended; (b)(1)(v) and (c)(1)(ii) 
        heading revised; (c)(1)(ii) text designated as 
        (c)(1)(ii)(A); (c)(1)(ii)(B) added.........................11916
    (a) removed; (b) and (c) redesignated as new (a) and (b); new 
(a)(1)(i) through (v) amended......................................30794
284.241--284.242 (Subpart H) Removed...............................72099
352 Amended........................................................67706
    Regulation at 67 FR 67706 eff. date corrected..................70007
375.302 (x) added..................................................52410
381.302 (a) amended................................................54087

[[Page 1248]]

381.303 (a) amended................................................54087
381.304 (a) amended................................................54087
381.305 (a) amended................................................54087
381.403 Amended....................................................54087
381.505 (a) amended................................................54087
381.801 Amended....................................................54087
385 Authority citation revised.....................................52412
385.1601--385.1602 (Subpart P) Added...............................52412
385.2011 (c)(3) revised............................................36096
388 Comment period extended........................................11229
388.109 (a)(4)(i) revised..........................................21996
390 Added..........................................................52410

                                  2003

18 CFR
                                                                   68 FR
                                                                    Page
Chapter I
2.1 (a)(1)(xi)(K) redesignated as (a)(1)(xi)(L); new (a)(1)(xi)(K) 
        added......................................................51115
2.1c Added.........................................................46455
2.7 (b) amended....................................................51115
4.30 (a) revised; (b)(9)(ii) and (23) amended......................51115
4.32 Amended; (b)(2) revised.......................................51115
    (k) added......................................................52094
    (a)(5)(vi), (b)(2) and (h) corrected amended...................61742
4.33 (a)(2) redesignated as (a)(3); new (a)(2) added; (b) revised 
                                                                   51116
4.34 (b)(1), (4)(i) and (h) amended; (b)(5) added; (e) and (i)(5) 
        revised; (i)(9) removed....................................51116
    (i)(9) added...................................................52094
    (b)(5)(ii) and (iii) correctly designated as (b)(5)(iii) and 
(iv); new (b)(5)(ii) correctly added...............................61742
4.35 (f)(1)(iii) amended...........................................51117
4.37 Introductory text and (b)(1) amended..........................51117
4.38 Amended; (f)(7) and (h) removed; (a)(2) through (7), (f)(8) 
        and (9) redesignated as (a)(4) through (9), (f)(7) and 
        (8); new (a)(2), (3) and (e)(4) added; new (a)(4), (b) and 
        (g)(2) revised.............................................51117
    (h) added......................................................52094
    (a)(4) and (b) corrected.......................................61742
4.39 (a) and (b) introductory text revised; (e) added..............51119
    (a) corrected..................................................61742
4.40 (b) amended...................................................51119
4.41 (c)(4)(i), (iii), (e)(4)(iii), (iv), (7), (8), (f)(9)(i) and 
        (h)(2) amended; (e)(4)(v), (9), (10) and (h)(3)(iv) added; 
        (h) introductory text and (4)(ii) revised..................51119
    (h) introductory text corrected.........................61742, 63194
    (h) corrected..................................................69957
4.51 (c)(2)(i) and (iii) amended; (e)(4), (g) and (h) revised; 
        (e)(7), (8) and (9) added..................................51120
    (e)(7) corrected...............................................61742
4.60 (b) amended...................................................51120
4.61 (c)(1)(vii) amended; (c)(1)(x) and (3) through (9) added; (e) 
        and (f) revised............................................51120
    (c)(4) corrected...............................................61742
4.70 Amended.......................................................51120
    Corrected......................................................61742
4.81 (b)(5) revised................................................51120
4.90 Amended.......................................................51121
4.92 Amended; (a)(2), (d) and (f) revised..........................51121
4.93 (a) amended...................................................51121
4.101 Amended......................................................51121
4.107 (d) and (f) revised..........................................51121
4.200 (c) amended..................................................51121
5 Added............................................................51121
5.1 (d)(1) correced................................................61742
    (b) corrected..................................................69957
5.3 (c)(1)(ii)(F) corrected........................................61742
5.5 (b) introductory text and (c) corrected........................69957
5.6 (a)(1) and (d)(4) corrected....................................69957
5.7 Corrected......................................................61742
5.9 (c) corrected...........................................61742, 69957
5.15 (c)(7) and (f) corrected......................................61742
5.18 (a)(3)(i)(A) corrected........................................61742
    (a)(5)(iii) corrected..........................................69957
5.19 (d) corrected.................................................61743
    (d) correctly removed; (e) correctly redesignated as new (d) 
                                                                   69957
5.20 (b)(2)(iii) correctly redesignated as (b)(3)..................61743
5.22 (a) introductory text and (1) corrected.......................61743
5.24 (c) corrected.................................................61743
5.27 (d) corrected.................................................61743
5.28 (c) corrected.................................................61743
9.1 Amended........................................................51139
9.10 Amended.......................................................51139
11 Appendix A revised..............................................67592
16 Nomenclature change.............................................51139
16.1 (c) added.....................................................51139

[[Page 1249]]

16.6 (b)(9), (10)(ii), (iii)(B), (iv) amended; (b)(10)(v) added; 
        (d) revised................................................51139
16.7 (d) revised; (e)(1), (3) and (g) amended......................51139
    (d)(7) added...................................................52095
16.8 (c)(1), (ii), (2), (4)(ii), (d)(1), (h), (i)(1), (2)(i) and 
        (iii) amended; (f)(7) and (j) removed; (a)(2), (3) and 
        (f)(8) redesignated as (a)(4), (5) and (f)(7); new (a)(2), 
        (3) and (e)(4) added; new (a)(4) and (b) revised...........51140
    (j) added......................................................52095
    (b)(2) and (c)(2) corrected....................................61743
16.9 (d)(1)(iii) amended...........................................51142
16.10 (d) and (f) removed; (e) redesignated as new (d); new (d) 
        revised....................................................51142
16.11 (a)(2) removed...............................................51142
16.19 (b)(3) and (4) removed; (b)(5) redesignated as (b)(3)........51142
16.20 (c) revised..................................................51142
35.18 Added........................................................19619
35.28 (d) introductory text amended; (f) added.....................49929
    Compliance deadline date extended..............................69599
37 Heading revised.................................................69157
37.4 Removed.......................................................69157
37.6 (g)(3) and (4) amended........................................69157
101 Amended..........................................19619, 19620, 19621
    Amended; interim...............................................40508
    Regulation at 68 FR 40508 confirmed; amended...................62002
141.300 (d) added..................................................52095
141.500 Added; interim.............................................40508
    Regulation at 68 FR 40508 confirmed; revised...................62003
153.13 Added.......................................................31604
154.312 (d) introductory text amended..............................19622
154.315 Added......................................................19622
157.6 (d)(6) added.................................................52095
157.10 (d) added...................................................52095
157.14 (a) introductory text amended...............................52096
157.16 Introductory text amended...................................52096
157.22 (e)(9) added................................................52096
157.202 (b)(2)(i) amended; (b)(2)(ii)(C) revised; (b)(13) added....31604
157.203 (d)(1) amended.............................................31605
    (d)(4) added...................................................52096
157.205 (a) introductory text revised..............................31605
157.207 Introductory text revised..................................31605
157.208 (d) Table I revised.........................................8711
    (a) revised....................................................31605
157.215 (a) Table II revised........................................8711
161 Removed........................................................69157
201 Amended...................................19622, 19623, 19624, 34795
    Amended; interim...............................................40509
    Regulation at 68 FR 40509 confirmed; amended...................62003
250.16 (a) and (e) amended.........................................69157
260.1 (b) revised....................................................269
260.2 (b) revised....................................................269
260.400 Added; interim.............................................40509
    Regulation at 68 FR 40509 confirmed; revised...................62003
284.12 (a)(1)(i), (ii), (iii), (iv), and (v) revised; eff. 4-21-03
                                                                   13819
284.13 (a) amended.................................................69157
284.286 (c) amended................................................69157
284.288 Added......................................................66336
284.402 (a) amended................................................66337
284.403 Added......................................................66337
346.3 Added........................................................19625
352 Amended.................................................19625, 19626
    Amended; interim...............................................40509
    Regulation at 68 FR 40509 confirmed; amended...................62004
357.2 (c)(3) revised.................................................269
357.5 Added; interim...............................................40510
    Regulation at 68 FR 40510 confirmed; revised...................62004
358 (Subchapter S) Added...........................................69157
375.303 Introductory text added; (a) revised.......................25816
375.304 (b)(1)(iv) revised; (b)(1)(v) added.........................6609
375.307 (f)(3) revised.............................................25816
375.308 (w)(3), (4), (x)(5) and (6) amended; (w)(5) and (x)(7) 
        added......................................................31605
    (c)(11), (k)(1), (2)(ii) and (3) amended; (aa) added...........51142
375.312 Heading and introductory text revised......................25816
375.313 Added; eff. 4-2-03..........................................9869
375.314 Added......................................................25816
376.204 (b)(2)(i), (v) and (x) revised.............................25816
381.302 (a) amended................................................50697
381.303 (a) amended................................................50697
381.304 (a) amended................................................50697
381.305 (a) amended................................................50697
381.403 Amended....................................................50697

[[Page 1250]]

381.505 (a) amended................................................50697
381.801 Amended....................................................50697
385.214 (a)(2) and (3) revised.....................................51142
385.2001 Amended...................................................51143
385.2003 Amended...................................................51143
385.2011 (c)(3) revised..............................................269
388.112 Revised; eff. 4-2-03........................................9869
    Heading and (b) through (e) revised; (a)(3) added..............46459
388.113 Added; eff. 4-2-03..........................................9870
    (d)(3)(i) and (ii) revised.....................................46460
390.1 Eff. date extended............................................1964
    Regulation at 67 FR 52410 correctly suspended...................7416
Chapter I Form 1-F corrected..........................................45

                                  2004

18 CFR
                                                                   69 FR
                                                                    Page
Title 18 Nomenclature change.......................................18803
Chapter I
1b.21 (f) revised..................................................32438
2 Policy statement..................................................5268
4 Policy statement..................................................5268
4.303 (a)(2) and (e)(2) amended....................................32438
5 Policy statement..................................................5268
9 Policy statement..................................................5268
11.3 (d) amended...................................................32438
11 Appendix A revised..............................................71364
12 Authority citation revised......................................32438
12 Nomenclature change.............................................32438
12.3 (b)(10) amended...............................................32438
16 Policy statement.................................................5268
33.6 Revised.......................................................32438
34.3 (k) revised...................................................32438
35 Policy statement................................................15932
35.8 (b) revised...................................................32438
36.1 (b)(1) revised................................................32438
141.1 (b)(2) revised................................................9043
141.2 (b)(2) revised................................................9043
141.400 Added.......................................................9043
    (b)(2)(iv) and (3)(iv) redesignated as (b)(2)(vii) and 
(3)(vii); new (b)(2)(iv), (v), (vi), (3)(iv), (v) and (vi) added 
                                                                   32443
    (b)(3)(i) corrected............................................34568
141.500 Heading revised; (a) designation, (b), (c) and (d) removed
                                                                    9044
154.209 Revised....................................................32438
157.6 (b)(7) revised...............................................32439
157.205 (b)(5) revised.............................................32439
157.208 (d) Table I revised.........................................9206
157.215 (a) Table II revised........................................9206
260.1 (b) revised...................................................9044
260.2 (b) revised...................................................9044
260.300 Added.......................................................9044
    (b)(2)(iv) and (3)(iv) redesignated as (b)(2)(vii) and 
(3)(vii); (b)(2)(iv), (v), (vi), (3)(iv), (v) and (vi) added.......32443
260.400 Heading revised; (a) designation, (b), (c) and (d) removed
                                                                    9044
292.207 (b)(4) revised.............................................32439
300.10 (a)(1) revised..............................................32439
330 (Subchapter O) Removed.........................................12540
342.3 (d)(2) amended...............................................53801
357.2 (b) revised...................................................9044
357.4 Added.........................................................9045
    (b)(2)(iv) redesignated as (b)(2)(vii); new (b)(2)(iv), (vi) 
and (viii) added...................................................32444
357.5 Heading revised; (a) designation, (b), (c) and (d) removed 
                                                                    9045
358.1 (c) amended..................................................23587
358.2 Revised......................................................23587
358.3 (d)(5) redesignated as (d)(6); (a)(3), new (d)(5) and (k) 
        added; (b)(1), new (d)(6)(ii) and (v) revised;.............23587
    (d)(5) and (6)(iv) revised; (d)(6)(v) amended; (d)(6)(vi) 
added..............................................................48386
358.4 (a)(5) and (6) added; (b)(1), (2), (3)(i), (iii), (iv), (v), 
        (c), (e)(3) and (5) revised................................23588
    (a)(5), (e)(2) and (3) amended; (e)(5) revised.................48386
358.5 (a)(1), (2), (b)(1), (2), (4), (7), (8), (c)(5) and (d) 
        revised....................................................23588
365.3 (c) revised..................................................32439
375 Policy statement................................................5268
375.101 (b) revised................................................32439
375.105 (c) revised................................................32439
375.303 (d) and (e) added...........................................9045
    (a) through (e) redesignated as (c) through (g); new (a), (b) 
and (h) added......................................................64660
375.312 (a) through (e) removed; (f) through (n) redesignated as 
        (a) through (i)............................................64661
375.314 (i) and (k) amended; (j) revised; (l) added................64661
381.302 (a) amended................................................27834
381.303 (a) amended................................................27834
381.304 (a) amended................................................27834
381.305 (a) amended................................................27834
381.403 Amended....................................................27834
381.505 (a) amended................................................27834
381.801 Amended....................................................27834
385 Policy statement................................................5268

[[Page 1251]]

385.203 (d) added..................................................32439
385.206 (b)(10) revised............................................32440
385.1104 (a)(5) revised............................................32440
385.2001 (a)(1)(iii) and note revised..............................32440
385.2003 (c)(1)(ii) revised; (c)(3) and (4) removed; (c)(5) 
        redesignated as (c)(3).....................................32440
385.2007 (a)(2) revised.............................................2504
385.2010 (i)(3) amended............................................32440
385.2011 (b)(6) removed............................................12540
388.106 Heading and (a) revised....................................32440
388.109 (a)(1) revised; (a)(4), (5) and (6) removed................41191
388.113 (d)(1) revised; (d)(2) removed; (d)(3) redesignated as new 
        (d)(2).....................................................48391

                                  2005

18 CFR
                                                                   70 FR
                                                                    Page
Chapter I
4.81 (d)(3) removed; (d) introductory text, (1), (2) and (e) 
        redesignated as (c)(4) introductory text, (i), (ii) and 
        (d); new (c)(4) and (d) introductory text amended..........33828
5.4 (b)(1)(iii) revised.............................................8724
5.8 (e)(3) revised..................................................8724
5.19 (c)(2) revised.................................................8724
16.6 (d)(1)(iii) revised............................................8724
16.9 (d)(1)(iii) and (2)(ii) revised................................8724
34.7 Revised (effective date pending)..............................35375
34.8 Revised (effective date pending)..............................35375
34.9 Revised (effective date pending)..............................35375
35 Policy statement.............................265, 37661, 38757, 71760
35.27 (c) added.....................................................8269
35.28 (f) revised..................................................34240
    (f)(1) revised..........................................35009, 75014
    Regulation at 70 FR 35009 eff. date delayed....................47093
35.33 (d)(2) revised; (d)(4) added.................................34343
45 Authority citation revised......................................55723
45.3 Revised.......................................................55723
45.9 (b) revised; (c)(5) added.....................................55723
    101 Amended..................................................77638--
                                                                   77640
131.43 Introductory text revised (effective date pending)..........35375
131.50 (a) and (b) revised (effective date pending)................35375
153.2 (d), (e) and (f) added.......................................60440
153.6 (c) added....................................................60440
153.12 Revised.....................................................60440
156.8 Revised.......................................................8724
157 Authority citation revised.....................................35026
157.1 Amended......................................................60440
157.9 Revised.......................................................8724
157.21 Added.......................................................60440
157.22 Removed.....................................................60442
157.30--157.39 (Subpart B) Added; eff. 5-19-05......................8286
157.33 (b) revised.................................................35026
157.34 (a), (c)(9), (15), (18) and (d)(2) revised..................35026
157.35 (c) revised; (d) amended....................................35026
157.36 Revised.....................................................35026
157.38 Revised.....................................................35026
157.208 (d) Table I revised.........................................6340
157.215 (a)(5) Table II revised.....................................6340
284.12 (a)(2) amended; (a)(1)(i) through (v) revised; (a)(i)(vi) 
        added......................................................28210
294.101 (e) revised................................................35028
347 Form No. 73 revised............................................34345
357 Form No. 73 revised............................................34345
358.3 (d)(6)(vi) amended.............................................291
358.4 (b)(3)(vi) amended.............................................291
358.5 (d) amended....................................................291
365 (Subchapter T) Removed.........................................75630
366 (Subchapter U) Added...........................................75630
375.307 (f)(3) and (k)(4) revised; (f)(4) added....................34652
375.308 (z) revised................................................60442
375.311 Revised....................................................34652
381.302 (a) amended; eff. 4-21-05..................................14394
381.303 (a) amended; eff. 4-21-05..................................14394
381.304 (a) amended; eff. 4-21-05..................................14394
381.305 (a) amended; eff. 4-21-05..................................14394
381.403 Amended; eff. 4-21-05......................................14394
381.505 (a) amended; eff. 4-21-05..................................14394
381.801 Amended; eff. 4-21-05......................................14394
385.203 (a)(7) revised.............................................55725
385.713 (c)(2) revised.............................................55725
385.2005 (b)(3) added; (c) revised..................................8724
385.2010 (a) through (g) revised; (h) and (i) redesignated as (j) 
        and (k); new (h) and (i) added..............................8725
    (c)(2) amended; (f) revised....................................21332

[[Page 1252]]

388.113 (d)(2) redesignated as (d)(3); (d) heading, (1) and new 
        (3)(i) revised; new (d)(2) added...........................37036
390.3 (a) revised; amended.........................................21332

                                  2006

18 CFR
                                                                   71 FR
                                                                    Page
Chapter I
1c Added............................................................4258
2 Authority citation revised.................................1373, 28443
    Policy statement...............................................42579
2.26 (e) revised; (f) added.........................................1373
    (e) and (f) revised............................................28443
11 Appendix A revised...............................................2864
33 Heading and authority citation revised....................1374, 28443
33.1 Revised.................................................1374, 28443
33.2 (j) added......................................................1375
    (j) revised....................................................28446
    (j)(1) introductory text revised...............................42586
    (j)(1) introductory text corrected.............................45736
33.11 Added.........................................................1375
    Revised........................................................28446
35 Technical correction.....................................13000, 53965
    Policy statement...............................................42587
35.28 (c)(1)(vi) added.............................................26212
35.34 (e) removed..................................................43338
35.35 (Subpart G) Added............................................43338
35.36--35.37 (Subpart H) Added......................................9698
    Regulation at 71 FR 9698 eff. date corrected...................11304
35.37 (d) amended..................................................30287
37.5 (b) revised...................................................26212
38 Added...........................................................26212
39 Added............................................................8736
39.6 (a) corrected.................................................11505
    (b)(1) and (c) revised.........................................19823
41 Heading revised..................................................9706
41.1--41.3 Undesignated center heading revised......................9706
41.1 Revised.................................................9706, 29784
41.2 Revised........................................................9706
41.3 Revised........................................................9706
42 Added...........................................................43619
    Technical correction...........................................46078
    Order..........................................................68440
50 Added...........................................................69465
101 Amended........................................................28515
131.80 Amended......................................................7867
153.4 Added........................................................62920
153.8 (a)(7) and (8) amended; (a)(9) added.........................62920
157.6 (d)(2)(i) revised............................................63692
157.9 Heading revised; existing text designated as (a); (b) added 
                                                                   62920
157.14 (a)(12) added...............................................62921
157.22 Added.......................................................62921
157.203 (d)(1)(iii) and (2)(iv) redesignated as (d)(1)(iv) and 
        (2)(vi); (b), (c), (d)(1) introductory text, (ii), 
        (2)(iii) and new (vi) amended; (d)(2)(i) and (ii) revised; 
        new (d)(1)(iii), (2)(iv), (v) and (vii) added..............63692
157.205 (a) introductory text and (d)(1) amended...................63693
157.206 (b)(5) revised.............................................63693
157.207 (c) through (h) redesignated as (d) through (i); new (c) 
        added......................................................63693
157.208 (d) Table I revised.........................................8202
    (c)(9) revised; (d) Table I amended; (e)(4) redesignated as 
(e)(4)(i); (c)(10) and (e)(4)(ii), (iii) and (iv) added............63693
157.210 Added......................................................63693
157.212 Added......................................................63693
157.213 Added......................................................63693
157.215 (a)(5) Table II revised.....................................8202
157.216 (a)(2), (b)(2) and (c)(5) amended..........................63694
158 Heading revised.................................................9706
158.1--158.3 Undesignated center heading revised....................9706
158.1 Revised................................................9706, 29784
158.2 Revised.......................................................9706
158.3 Revised.......................................................9706
260.9 Heading, (a), (b), (d) and (e) revised.......................51104
284.126 (d) correctly removed......................................38066
284.288 (a), (d) and (e) removed; (b) and (c) redesignated as new 
        (a) and (b).................................................9716
    (b) amended....................................................30287
284.403 (a), (d) and (e) removed; (b) and (c) redesignated as new 
        (a) and (b).................................................9716
    (b) amended....................................................30287
284.501--284.505 (Subpart M) Added.................................36636
286 Authority citation and heading revised..........................9707
    Authority citation revised.....................................29784
286.103--286.109 Undesignated center heading added..................9707

[[Page 1253]]

286.103 Added.......................................................9707
    Revised........................................................29785
286.104 Added.......................................................9707
286.105 Added.......................................................9707
286.106 Added.......................................................9707
286.107 Added.......................................................9707
286.108 Added.......................................................9707
286.109 Added.......................................................9707
292.203 (a) and (b) revised.........................................7868
292.205 (d) added...................................................7868
292.206 Removed.....................................................7868
292.207 (a)(1)(iv) and (d)(1)(iii) revised..........................7868
292.303 Revised....................................................64372
    (c)(1) and (d) corrected.......................................75662
292.309 Added......................................................64372
    (f)(2) corrected...............................................75662
292.310 Added......................................................64372
292.311 Added......................................................64372
292.312 Added......................................................64372
    (b) corrected..................................................75662
292.313 Added......................................................64372
292.314 Added......................................................64372
292.601 (c) revised.................................................7868
292.602 (b) and (c) revised.........................................7869
    (b) revised....................................................30589
342 Order..........................................................15329
349 Added...........................................................9708
    Authority citation revised.....................................29785
349.1 Revised......................................................29785
358 Policy statement.........................................9446, 30056
366 (Subchapter U) Revised.........................................28457
    Authority citation revised..............................65051, 65226
    Policy statement...............................................76126
366.1 Amended......................................................42755
366.3 (a) introductory text, (b)(2) introductory text, (c) 
        introductory text and (1) revised; (b)(2)(vii) added.......42755
366.7 (a) and (b) revised; (e) added...............................42756
366.21 (b) revised.................................................65226
366.22 (a)(1), (2), (b)(1) and (2) revised.........................65226
366.23 Heading and (a)(1) revised..................................65051
    Heading, (a)(1) and (b) revised................................65226
367 Added..........................................................65226
368 Added..........................................................65262
369 Added..........................................................65267
375.303 (c) through (h) revised....................................65267
375.308 (bb) added.................................................62921
376.201 (a)(3) revised; (a)(4) added...............................42595
376.204 (b)(2)(ii), (v), (vi), (viii), (ix) and (x) revised........42595
376.206 Revised....................................................42595
376.209 Added......................................................42595
380.3 (c)(3) added.................................................69470
380.5 (b)(11), (12) and (13) revised; (b)(14) added................69470
380.6 (a)(3) and (4) revised; (a)(5) added.........................69470
380.8 Revised......................................................69471
380.10 (a)(2)(iii) added...........................................69471
380.15 (c), (d) heading and (f)(5) revised.........................69471
380.16 Added.......................................................69471
381.302 (a) amended; eff. 4-17-06..................................13757
381.303 (a) amended; eff. 4-17-06..................................13757
381.304 (a) amended; eff. 4-17-06..................................13757
381.305 (a) amended; eff. 4-17-06..................................13757
381.403 Amended; eff. 4-17-06......................................13757
381.505 (a) amended; eff. 4-17-06..................................13757
381.801 Amended; eff. 4-17-06......................................13757
385 Authority citation revised.....................................65051
    Policy statement...............................................76126
385.203 (a)(7) revised.............................................14642
385.713 (c)(2) revised.............................................14642
385.2011 (a)(9) added; (c)(3) revised..............................65051
385.2013 Redesignated as 385.2015; new 385.2013 added..............62921
385.2014 Added.....................................................62921
385.2015 Redesignated from 385.2013; heading revised...............62921
388.113 (c)(1), (d)(3)(i) and (ii) revised.........................58276

                                  2007

18 CFR
                                                                   72 FR
                                                                    Page
Chapter I
2.9 (c) amended....................................................45323
3c Authority citation revised......................................45323
3c.2 (a) revised...................................................45323
4.30 (b)(6)(ii) and (28)(iii) amended..............................45323
4.32 (h) amended...................................................45324
4.33 (b)(2) amended................................................45324
4.41 (f)(4)(vii) and (6)(v) amended................................45324
4.71 (a)(6)(i) amended.............................................45324
4.81 (d) amended...................................................45324
4.92 (b) amended...................................................45324
4.96 (c) amended...................................................45324
4.104 (c) amended..................................................45324

[[Page 1254]]

4.107 (a) amended..................................................45324
5.9 (b)(3) and (6) amended.........................................45324
5.18 (a)(5)(i) amended.............................................45324
6.1 Amended........................................................45324
8.11 (a)(1) and (2) amended; (a)(3) removed; (a)(4) redesignated 
        as new (a)(3)..............................................45324
11 Appendix A revised...............................................1453
11.10 (c)(5) amended...............................................45324
16.12 (b) amended..................................................45324
16.16 (a) amended..................................................45324
16.19 (c)(2) amended...............................................45324
16.22 (b) amended..................................................45324
33 Policy statement................................................42277
33.10 Amended...............................................45324, 61053
35 Policy statement.........................................18569, 72239
    Meetings.......................................................18880
35.2 (c) amended............................................45325, 61054
35.5 (b) amended............................................45325, 61054
35.13 (a)(3) amended........................................45325, 61054
35.27 Revised......................................................40038
35.28 Regulation at 72 FR 12492 compliance date extended...........19112
    (d)(i) and (ii) redesignated as (d)(1) and (2); (c), new 
(d)(1), (e)(1) introductory text and (ii) revised; eff. 5-14-07....12492
35.35 (Subpart G) (d)(1) introductory text and (i) amended; (j) 
        added.......................................................1172
    (h)(3) revised..................................................5174
35.36--35.42 (Subpart H) Revised...................................40038
37 Policy statement................................................18569
    Meetings.......................................................18880
37.6 Regulation at 72 FR 12492 compliance date extended............19112
    (a)(1), (b) introductory text, (2)(i), (ii), (iii), (3), 
(c)(2), (5), (e)(1), (2)(ii) and (3)(ii) revised; (b)(1)(v) 
through (viii), (h), (i) and (j) added; eff. 5-14-07...............12493
37.7 Regulation at 72 FR 12493 compliance date extended............19112
    (b) revised; eff. 5-14-07......................................12496
38.1 Revised.......................................................38767
38.2 (a)(4) revised................................................21099
    (a)(8) added...................................................38767
40 Added...........................................................16598
    Regulation at 72 FR 16598 eff. date stayed to 6-18-07..........31452
    Order..........................................................40717
50 Workshops........................................................5613
101 Correctly amended..............................................16716
    Form filing date extended......................................17393
    Amended........................................................20722
131.20 (5) amended.................................................45325
141.1 (b)(1)(i) revised............................................20723
141.2 (b)(1)(i) revised............................................20723
141.51 Heading, (a)(1) and (c) revised.............................20725
141.400 (b)(1)(i), (2) introductory text and (3) introductory text 
        revised....................................................20723
153.8 (a)(5) and (6) amended.......................................45325
153.21 (b) amended.................................................45325
154.5 Amended...............................................45325, 61054
154.302 (b) amended.........................................45325, 61054
157.6 (d)(2)(iii) revised..........................................59942
157.8 (a) and (c) amended...................................45325, 61054
157.14 (a) amended.................................................45325
157.203 (d)(1) introductory text, (iii)(C), (D) and (2) amended....37436
157.205 (c), (f) and (g) amended...................................45325
157.206 (b)(5)(i) revised..........................................37436
    (c) amended....................................................45325
    (b)(5)(ii) redesignated as (b)(5)(iii); new (b)(5)(ii) added 
                                                                   59942
157.207 (a) revised; (c) removed; (d) through (i) redesignated as 
        new (c) through (h)........................................37436
157.208 (d) Table I revised.........................................5614
    (e) amended....................................................37436
    (d) and (g) amended............................................45325
157.209 (a) amended................................................45325
157.213 (b) and (c) introductory text revised......................37436
157.215 (a) Table II revised........................................5614
157.216 (a)(2), (b)(2), (c)(1) and (d)(1) revised..................54820
157.201--157.218 (Subpart F) Appendix II amended...................45325
250 Technical correction.............................................198
284.12 (a)(1)(i) revised...........................................38767
292.210 (e)(3) amended.............................................45325
292.211 (f) and (g) amended........................................45325
292.310 (c) introductory text and (d)(3) revised...................35892
292.601 (c)(3) revised.............................................29063
300.10 (h)(2) amended.......................................45325, 61054
300.20 (b)(1)(i) amended....................................45326, 61054
358 Revised; interim................................................2432
358.1 (a) revised..................................................14238
358.3 (k) revised..................................................14238
365 Policy statement................................................8277
366 (Subchapter U) Policy statement.................................8277
366.4 (b)(1) and (c)(1) revised....................................45326
366.23 (a)(3) revised...............................................5174
375.302 (y) and (z) added..........................................45326
    (z) revised....................................................65664

[[Page 1255]]

375.303 (f) and (g) revised.........................................5174
375.307 (a), (c), (d) and (i)(8) removed; (b) and (e) through (p) 
        redesignated as (a) through (m); new (h)(3) revised.........5174
    Revised........................................................45326
    Heading revised; (a)(2) removed; (a)(3) through (11) 
redesignated as new (a)(2) through (10); (b)(1)(i), (2)(i) and 
(3)(ii) amended....................................................61054
375.308 (a) amended................................................45328
375.311 Removed; new 375.311 redesignated from 375.14..............45328
375.314 Heading, (b), (c) and (d) amended...........................5174
    Redesignated as 375.311........................................45328
    Added..........................................................61054
376.204 (b)(2)(x) amended..........................................45328
    (b)(2) revised.................................................61055
376.207 Amended....................................................45328
380 Technical correction.............................................198
    Workshops.......................................................5613
380.12 (a)(3), (ii), (iii), (f) and (5) amended....................45328
380.13 (b)(2)(iii), (5)(iv) and (c) amended........................45328
380.14 (a)(3) amended..............................................45328
381.302 (a) amended................................................19117
381.303 (a) amended................................................19117
381.304 (a) amended................................................19117
381.305 (a) amended................................................19117
381.403 Amended....................................................19117
381.505 (a) amended................................................19117
381.801 (Subpart H) Removed........................................19117
382 Order..........................................................13442
385 Policy statement...............................................11287
385.2001 (a)(1)(iii) revised.......................................65664
385.2003 (c)(1) and (2) revised....................................65664
385.2011 (a)(10) added; (c)(3) revised.............................20725
385.2201 (h)(1) amended............................................45328
388 Order..........................................................18572
388.109 (b) revised................................................63985
388.112 (a)(3) removed; (b) and (d) revised........................63985
388.113 (d)(3) redesignated as (d)(4); new (d)(4) revised; new 
        (d)(3) and (e) added.......................................63985

                                  2008

18 CFR
                                                                   73 FR
                                                                    Page
Chapter I
Chapter I Forms review.............................................79316
1b.19 Revised......................................................29433
11 Appendix A revised...............................................3627
33.1 (b)(5) revised; (c)(12) through (15) added....................11013
    (c)(12) revised; (c)(16) added.................................43072
35 Order....................................................17246, 65526
35.1 Heading revised; (a) through (d) and (g) amended..............57530
    (b) and (c) amended............................................57533
35.2 (c), (d) and (e) redesignated as (d), (e) and (f); new (c) 
        added; new (d) and (f) amended; (b) and new (e) revised....57530
35.3 (a) revised; (b) amended......................................57531
35.4 Amended................................................57531, 57533
35.6 Amended................................................57531, 57533
35.7 Revised.......................................................57531
35.8 Heading revised; (a) designation and heading and (b) removed 
                                                                   57531
35.9 Revised.......................................................57531
35.10 Heading, (b) and (c) revised; (a) amended....................57532
35.10a (b) amended.................................................57532
35.11 Amended...............................................57532, 57533
35.12 Heading revised; (a), (b)(2)(i), (ii), (4) and (5)(ii) 
        amended....................................................57532
    (a) amended....................................................57533
35.13 Heading and (a) introductory text revised; (a)(1), (2)(iii), 
        (iv), (A), (B), (b)(1) through (6), (c) introductory text 
        heading, (1) introductory text, (i), (ii)(A), (B), (2), 
        (3), (d)(1)(ii) introductory text, (3)(i), (ii)(A), (B), 
        (5), (e)(1)(i) and (f) amended; (b)(8) removed.............57532
    (a), (1), (2)(iii), (b)(1) and (c)(1) amended..................57533
    (b)(3) correctly amended.......................................63886
35.14 (a) introductory text and (7) amended........................57532
    (a) introductory text correctly amended........................63886
35.15 (a) revised..................................................57532
35.16 Amended......................................................57533
35.17 Heading revised; (a), (b) and (c) redesignated as (c), (d) 
        and (e); new (a) and (b) added; new (c), (d) and (e) 
        amended....................................................57533
35.18 (a) amended..................................................57533
35.21 Footnote 5 amended...........................................57533
35.22 Heading, (a), (f) heading and (1) amended....................57533
35.23 (b)(1)(ii) amended...........................................57533

[[Page 1256]]

35.28 (b)(4) through (8) and (g) added.............................64167
35.36 (a)(4) and (6) revised; (a)(9) added.........................25912
    (a)(9) revised.................................................79627
35.37 (e)(3) revised...............................................79627
35.39 (b) and (d)(1) revised.......................................25912
35.42 (a)(1) revised...............................................25913
35.36--35.42 (Subpart H) Appendix A revised........................25913
35.43--35.44 (Subpart I) Added.....................................11025
35.44 (a) amended; (b)(1) and (2) revised; (b)(4) and (c) added....43083
37 Order...........................................................39092
37.6 (b)(3)(iv), (h)(1) introductory text, (3) introductory text 
        and (i) revised.............................................3111
38 Order..............................................................38
38.2 (a)(1) through (8) revised; (a)(9), (10) and (11) added.......43860
39 Policy statement................................................21814
40 Order..............................................1770, 43613, 63770
    Policy statement; eff. 4-7-08...................................7368
    Technical correction...........................................67387
41.11 Revised......................................................58736
131.51 Removed.....................................................57533
131.52 Amended.....................................................57533
131.53 Removed.....................................................57533
141 Authority citation revised.....................................58736
141.1 (b)(1)(i) revised............................................58736
141.61 Removed; eff. 4-16-08.......................................14177
141.400 (b)(1)(i) revised..........................................58736
154.2 (b) amended; (d) revised.....................................57533
154.4 Revised......................................................57533
154.5 Amended......................................................57534
154.7 (b) revised..................................................57534
    (a)(5) amended.................................................57535
154.101 Removed....................................................57534
154.102 Revised....................................................57534
154.104 Revised....................................................57534
154.106 (b) removed................................................57534
154.107 (d) and (e) amended........................................57534
154.111 (c) amended................................................57534
154.112 (a) and (b) amended........................................57534
154.201 (a) revised................................................57534
154.202 (b) amended................................................57535
154.205 Heading revised; (a), (b) and (c) redesignated as (c), (d) 
        and (e); new (a) and (b) added.............................57534
154.206 (a) amended................................................57535
154.208 Heading and (d) revised; (a) amended; (e) and (f) added....57535
154.209 Removed....................................................57535
154.402 (b) introductory text, (1) and (3) amended.................57535
154.403 (b) amended................................................57535
154.602 Amended....................................................57535
154.603 Revised....................................................57535
157.208 (d) Table I revised.........................................8191
157.215 (a) Table II revised........................................8191
157.217 (a)(4) amended.............................................57535
158 Order..........................................................36416
158.11 Revised.....................................................19399
250.2 Removed......................................................57535
250.3 Removed......................................................57535
250.4 Removed......................................................57535
260 Order..........................................................36416
260.3 Removed......................................................19399
260.401 Added.......................................................1031
    (a), (b)(1) introductory text and (i) amended; (b)(1)(ii) 
revised; (b)(1)(iii) added.........................................55739
281.204 (a) amended................................................57535
281.212 Heading, (a), (b) and (c) amended..........................57535
281.213 (b), (d) and (e) amended...................................57535
284 Order.............................................................38
284.1 (d) added....................................................73517
284.8 (b) and (e) amended; (h) revised.............................37092
    (b) and (h) revised............................................72714
    (h)(1)(i) and (ii) corrected...................................79628
284.13 (b)(1)(x) and (xi) added....................................37092
    (d) heading revised; (d)(1) amended............................73517
284.14 Added.......................................................73517
284.123 (e) revised; (f) added.....................................57535
284.224 (e)(5) revised.............................................57536
284.288 (a) revised.................................................1032
284.403 (a) revised.................................................1032
    (a) amended....................................................55739
300.10 (a)(4) added................................................57536
301 Revised; interim...............................................60108
341.0 (a)(11) revised; (a)(13) added...............................57536
341.1 Revised......................................................57536
341.2 (a) and (c)(2) revised; (c)(1) amended; (c)(3) removed.......57536
341.3 (a), (b)(6)(ii) and (10)(i) revised; (b)(10)(vi) added.......57536
341.4 (c) removed..................................................57537
341.13 (a) and (b) introductory text revised.......................57537
344.2 (a) and (c) revised; (b) removed.............................57537
346.1 Introductory text revised....................................57537
347.1 (a) and (c) amended; (b) revised.............................57537
348.2 (a) and (c) revised..........................................57537
358 Revised........................................................63829
    Order..........................................................78183

[[Page 1257]]

375.307 (b)(1)(i) and (ii) amended; (b)(1)(iii) added..............57537
381.302 (a) amended................................................23947
381.303 (a) amended................................................23947
381.304 (a) amended................................................23947
381.305 (a) amended................................................23947
381.403 Amended....................................................23947
381.505 (a) amended................................................23947
385 Technical correction...........................................64518
385.203 (a)(4) amended.............................................57538
385.214 (a)(4) added...............................................62886
385.215 (s)(2) amended.............................................57538
385.216 Heading and (a) revised....................................57538
385.217 (d)(1)(iii) amended........................................57538
385.2011 (a)(11) added..............................................1032
    (a)(8) removed; eff. 4-16-08...................................14177
    (b)(1), (4) and (5) removed....................................57538
385.2201 (c)(1) revised............................................62886
385.2202 Revised...................................................62886
388.109 (b)(1) through (5) correctly added.........................45609

                                  2009

18 CFR
                                                                   74 FR
                                                                    Page
Chapter I
11 Appendix A revised...............................................8185
33.1 (c)(12) revised; (c)(17) added................................25413
35.1 (b) and (c) correctly revised.................................55770
35.17 Heading, (c) and (d) correctly revised.......................55770
35.19a (a)(2)(iii)(A) amended......................................54463
35.28 (g)(1)(iii) revised..........................................37801
35.42 Revised......................................................30934
37 Order....................................................12540, 61511
38 Order...........................................................15374
38.2 (a)(1) through (5) and (7) through (11) revised; (b) amended 
                                                                   63306
40 Order.....................................................8747, 12544
    Policy statement; eff. 4-23-09.................................12256
    Policy statement...................14008, 25413, 25422, 64884, 68372
    Technical corrections..........................................18290
42 Order...........................................................13103
157.208 (d) Table I revised.........................................6539
157.215 (a)(5) Table II revised.....................................6539
284 Order..........................................................18127
284.1 Regulation at 73 FR 73517 compliance date extended............5103
284.12 (a)(1)(i) through (vi) and (b) introductory text revised; 
        (a)(1)(vii) added; eff. 4-2-09..............................9165
284.13 Regulation at 73 FR 73517 compliance date extended...........5103
284.14 Regulation at 73 FR 73517 compliance date extended..........73517
301 Revised........................................................47059
358 Order..........................................................60155
358.2 Revised......................................................54482
358.3 (c)(2)(v) revised............................................54482
366--369 (Subchapter U) Heading revised............................68529
366 Heading and authority citation revised.........................68529
366.1--366.7 (Subpart A) Heading revised...........................68529
366.1 Amended......................................................68529
366.21--366.23 (Subpart B) Heading revised.........................68529
366.23 (a)(1) revised..............................................68529
367 Heading and authority citation revised.........................68529
367.1 (a)(45) revised..............................................68529
367.2 (a) revised..................................................68529
375.302 (aa) added.................................................57248
375.303 Removed; new 375.303 redesignated from 375.314..............6541
375.311 (m) through (t) added.......................................6541
    (u) and (v) added..............................................57248
375.314 Redesignated as new 375.303.................................6541
381.302 (a) amended................................................37933
381.303 (a) amended................................................37933
381.304 (a) amended................................................37933
381.305 (a) amended................................................37933
381.403 Amended....................................................37933
381.505 (a) amended................................................37933
385.715 (c)(1) revised.............................................41039

                                  2010

18 CFR
                                                                   75 FR
                                                                    Page
Chapter I
1 Technical correction.............................................24392
1b.21 (b) revised; (g) and (h) added...............................21505
2.1 (a) introductory text and (b) amended..........................43402
2.9 (b) amended....................................................43402
2.13 (b) amended...................................................43402
2.55 (b)(4) amended................................................43402
2.57 Amended.......................................................43402
3b.1 Amended.......................................................43402
3b.203 (b) and (c) amended.........................................43402
3b.221 (d)(2) amended..............................................43402
3b.224 (c)(2) amended..............................................43402
4.4 Amended........................................................43402
4.12 Amended.......................................................43402

[[Page 1258]]

4.22 Amended.......................................................43402
4.32 (b)(1), (2) and (e)(1)(i) amended.............................43402
5.3 (d)(2)(vi) revised.............................................43402
5.5 (b) introductory text amended..................................43402
5.6 (a)(1) amended.................................................43402
8.11 (a)(1) amended................................................43403
9.10 Revised.......................................................43403
11.6 (i) amended...................................................43403
11 Appendix A revised..............................................44094
    Appendix A correctly amended...................................48553
16.6 (b) introductory text amended.................................43403
24.1 Amended.......................................................43403
32 Authority citation revised......................................43403
32.1 Heading revised; introductory text amended....................43403
32.4 Revised.......................................................43403
33 Authority citation revised......................................43403
33.6 Removed.......................................................43403
33.8 Amended.......................................................43403
34.3 (k) removed...................................................43403
34.7 Revised.......................................................43403
34.9 Removed; new 34.9 redesignated from 34.10.....................43403
34.10 Redesignated as 34.9.........................................43403
35 Order.....................................................4689, 58293
35.0 Removed.......................................................43403
35.33 (c) amended..................................................43404
35.42 Revised; eff. 4-26-10........................................14351
35.45--35.47 (Subpart J) Added.....................................65962
38 Order...........................................................43059
38.2 (a)(10), (11) and (b) revised; (a)(12) added..................20908
39.7 (d)(6) removed; (d)(7) redesignated as new (d)(6).............43404
40 Order........................16914, 26057, 43059, 65964, 72664, 72910
45.7 Revised.......................................................43404
45.8 Heading and introductory text revised.........................43404
46 Authority citation revised......................................43404
46.3 (a) amended...................................................43404
46.4 Introductory text amended.....................................43404
46.6 Heading revised; (d)(3) amended...............................43404
131 Order...........................................................4689
131.80 Revised; eff. 6-1-10........................................15965
152.2 Revised......................................................43404
152.3 Heading revised; introductory text amended...................43404
152.5 Amended......................................................43404
153.20 (a) revised.................................................43404
154 Order...........................................................4689
156 Authority citation revised.....................................43404
156.3 Heading and (a) revised; (b) introductory text amended.......43404
157 Order...........................................................4689
157 Technical correction...........................................24392
157.6 (a)(5) removed; (a)(6) redesignated as new (a)(5); (b) 
        introductory text amended..................................43405
157.34 (c)(19), (20) and (21) revised; eff. 4-28-10................15342
157.35 (c) and (d) revised; eff. 4-28-10...........................15342
157.203 (d)(1)(iii)(D) revised; (d)(1)(iv) removed.................21505
157.208 (d) Table I revised.........................................8246
157.215 (a)(5) revised..............................................8246
260.401 (b)(1)(i) removed; (b)(1)(ii) and (iii) redesignated as 
        new (b)(1)(i) and (ii).....................................35643
250 Order...........................................................4689
281 Order...........................................................4689
284 Order...........................................................4689
284.1 (d) revised...................................................5201
284.12 (a)(1)(i) through (vii) and (2) revised; eff. 5-3-10........16344
284.13 (d)(1) amended..............................................44900
284.14 Revised......................................................5201
    (a)(5) added...................................................44900
284.126 (b) revised................................................29419
292.203 Revised; eff. 6-1-10.......................................15965
292.204 (a)(1) revised; (a)(4) added; eff. 6-1-10..................15966
292.205 (d) revised; eff. 6-1(ii)10................................15966
292.207 (a) through (d)(1)(i) revised; eff. 6-1-10.................15966
292.601 (a) revised; eff. 6-1-10...................................15966
292.602 Heading and (c)(1) revised; eff. 6-1-10....................15966
300 Order...........................................................4689
341 Order...........................................................4689
342 Order..........................................................80300
344 Order...........................................................4689
346 Order...........................................................4689
347 Order...........................................................4689
348 Order...........................................................4689
358 Order..........................................................20909
375 Order...........................................................4689
375.315 Added......................................................32658
376.209 (c)(11) and (12) revised; (c)(13) added....................48555
381 Fee schedule....................................................3987
385 Order...........................................................4689
385.1901 (c)(2) amended............................................43405
385.2004 Revised...................................................43405
385.2012 Amended...................................................43405

[[Page 1259]]

388.112 (b) revised................................................43405

                                  2011

18 CFR
                                                                   76 FR
                                                                    Page
Chapter I
35.2 (g) added.....................................................67285
35.28 (g)(1)(v) added; eff. 4-25-11................................16678
    (c)(1) through (iii), (vi), (3), (i), (ii), (4), (i), (ii), 
(d)(1) and (e)(1) revised..........................................49963
    (g)(7) added...................................................67285
35.47 (a) revised..................................................10498
40 Order; eff. 5-23-11...............................16240, 16250, 16277
    Order.........16263, 16691, 23171, 23470, 23690, 42534, 58101, 58716
157.208 (d) Table I revised.........................................8293
157.215 (a)(5) Table II revised.....................................8294
260 Policy statement................................................4516
    Order..........................................................52253
284.15 Added.......................................................72306
284.126 (b)(1)(vi), (viii) and (2) revised.........................80697
292.205 (d)(1) through (5) correctly added.........................50663
358 Order..........................................................20838
381.302 (a) amended.................................................9642
381.303 (a) amended.................................................9642
381.304 (a) amended.................................................9642
381.305 (a) amended.................................................9642
381.403 Amended.....................................................9642
381.505 (a) amended.................................................9642

                                  2012

   (Regulations published from January 1, 2012, through April 1, 2012)

18 CFR
                                                                   77 FR
                                                                    Page
Chapter I
1b Authority citation revised.......................................4893
1b.11 Amended.......................................................4893
1b.12 Amended.......................................................4893
1b.14 (a) amended...................................................4893
2 Authority citation revised........................................4893
2.1 (a)(1)(xi)(E) and (F) amended...................................4893
2.9 (a) amended; (b) revised; (c) removed...........................4893
2.13 (c) redesignated as (b); new (b) amended.......................4893
    First (b) correctly removed.....................................8095
2.55 (a)(2)(iii) correctly amended..................................8095
3a Authority citation revised.......................................4893
3a.1 Amended........................................................4893
3a.12 (c)(2) and (e) amended........................................4893
3a.13 (a) and (f) amended...........................................4893
3a.22 (a), (c), (d), (f) introductory text, (2) and (g)(3)(i) 
        amended.....................................................4893
3a.23 (a), (b), (c), (e), (f), (g), (h) and (i) amended.............4893
3a.41 (d) amended...................................................4893
3a.51 (a) amended...................................................4893
3a.61 (c)(3) amended................................................4893
3a.71 (c), (d) introductory text and (3) amended....................4893
3a.81 (a), (c), (d), (e) introductory text and (g) amended..........4893
4 Authority citation revised........................................4893
4.32 (a)(4)(i) and (c)(1) corrected.................................4893
4.34 (b)(5)(iv) removed.............................................4893
4.35 (a) corrected..................................................4893
4.38 (a)(1) corrected...............................................4894
4.39 (b) introductory text amended..................................4894
4.81 (b)(5) amended.................................................4894
4.106 (h) introductory text and (i) amended; (h)(1) through (h)(5) 
        removed.....................................................4894
4.201 (d)(1) corrected..............................................4894
4.301 (b) corrected.................................................4894
5 Authority citation revised........................................4894
5.17 (e)(1) corrected...............................................4894
5.18 (2) following (b)(5)(ii)(H) redesignated as (b)(5)(iii)........4894
11 Authority citation revised.......................................4894
11.2 (b) amended....................................................4894
11 Appendix A removed...............................................4894
12 Authority citation revised.......................................4894
12.4 (a) corrected..................................................4894
39 Order; eff. 5-7-12..............................................16435
40 Order............................................................7526
49 Order; eff. 5-7-12..............................................16435
131 Authority citation revised......................................4894
131.70 Corrected....................................................4894
157 Authority citation revised......................................4894
157.6 (a)(5) corrected..............................................4894
157.21 (a)(1) corrected.............................................4894
157.37 Corrected....................................................4894
157.205 (e)(1) corrected............................................4894
157.208 (d) Table I revised.........................................8724
157.215 (a)(5) Table II revised.....................................8725
284 Authority citation revised......................................4894
284.13 (e) removed; (f) redesignated as new (e).....................4224
284.102 (c) amended.................................................4894
284.122 (a) corrected...............................................4894

[[Page 1260]]

284.126 (c) removed.................................................4224
284.270 (a) introductory text, (b) introductory text and