[Federal Register Volume 63, Number 28 (Wednesday, February 11, 1998)]
[Rules and Regulations]
[Pages 6847-6852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3457]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 101, 116, 201, 216 and 352

[Docket No. RM97-6-000; Order No. 598]


Units of Property Accounting Regulations

Issued February 5, 1998.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission is amending its units 
of property and oil pipeline regulations to require companies to 
maintain a written property units listing, to apply the listing 
consistently, and to furnish the Commission with a justification of any 
changes in the listing, if requested, and to clarify that companies may 
use estimates when it is impractical or unduly burdensome for companies 
to identify the cost of retired property. In addition, the Commission 
is removing certain regulations which prescribe unit-of-property 
listings for jurisdictional companies. These changes will allow 
companies additional flexibility in maintaining their records of units 
of property. Finally, the Commission also is removing the regulation 
which prescribes a minimum rule that requires oil pipelines to charge 
operating expenses for acquisitions, additions and improvements costing 
less than $500.

EFFECTIVE DATE: March 13, 1998.

FOR FURTHER INFORMATION CONTACT:
Harris S. Wood, Office of the General Counsel, Federal Energy 
Regulatory Commission, 888 First Street, N.E., Washington, DC 20426 
(202) 208-0224
Mark Klose, Office of the Chief Accountant, Federal Energy Regulatory 
Commission, 888 First Street, N.E., Washington, DC 20426, (202) 219-
2595

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document in the Federal Register, the Commission provides all 
interested persons an opportunity to inspect or copy the contents of 
this document during normal business hours in Room 2-A, 888 First 
Street, N.E., Washington, D.C. 20426. The complete text on diskette in 
WordPerfect format may be purchased from the Commission's copy 
contractor, La Dorn Systems Corporation. La Dorn Systems Corporation is 
located in the Public Reference Room at 888 First Street, N.E., 
Washington, D.C. 20426.
    The Commission Issuance Posting System (CIPS), an electronic 
bulletin board service, also provides access to the texts of formal 
documents issued by the Commission. CIPS is available at no charge to 
the user. CIPS can be accessed over the Internet by pointing your 
browser to the URL address: http://www.ferc.fed.us. Select the link to 
CIPS. The full text of this document can be viewed, and saved, in ASCII 
format and an entire day's documents can be downloaded in WordPerfect 
6.1 format by searching the miscellaneous file for the last seven days. 
CIPS also may be accessed using a personal computer with a modem by 
dialing 202-208-1397 if dialing locally or 1-800-856-3920 if dialing 
long distance. To access CIPS, set your communications software to 
19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex, 
no parity, 8 data bits and 1 stop bit. The full text of this order will 
be available on CIPS in ASCII and WordPerfect 6.1 format. CIPS user 
assistance is available at 202-208-2474.

    Before Commissioners: James J. Hoecker, Chairman; Vicky A. 
Bailey, William L. Massey, Linda Breathitt, and Curt Hebert, Jr.

Recordkeeping for Units of Property Accounting Regulations for Public 
Utilities and Licensees, Natural Gas Companies and Oil Pipeline 
Companies

    The Federal Energy Regulatory Commission (Commission) here adopts a 
final rule, amending its regulations, which require jurisdictional 
public utilities and licensees, natural gas companies and oil pipeline 
companies to maintain a written listing of Units of Property and to 
apply the listing consistently. These three groups are collectively 
called ``Companies'' in this final rule.
    Under the final rule, Companies will have the opportunity to 
identify and maintain Units of Property listings that are up-to-date 
and more in harmony with the needs of their businesses. Companies may 
reduce the level and number of detailed Units of Property records that 
they currently maintain.
    The final rule eliminates Title 18, Code of Federal Regulations (18 
CFR), Parts 116, 216, and 352 (instruction 3-14). Elimination of these 
parts will not affect the information currently reported in the FERC 
Forms 1, 1-F, 2, 2-A or 6.1 These Forms do not report costs 
at the level of detail prescribed by Parts 116, 216 and 352 
(instruction 3-14). Therefore, the final rule would not affect the 
information contained in these forms.
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    \1\ FERC Form No. 1, Annual Report of Major Electric Utilities, 
Licensees and Others; FERC Form 1-F: Annual Report for Non-major 
Public Utilities and Licensees; FERC Form No. 2, Annual Report of 
Major Natural Gas Companies; FERC Form 2-A, Annual Report of Non-
major Natural Gas Companies; FERC Form No. 6, Annual Report of Oil 
Pipeline Companies.
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    The elimination of these regulations would not affect the manner in 
which costs are recognized for accounting or rate-making purposes. 
Companies will continue to treat all plant as consisting of retirement 
units and minor items of property. Under the final rule, Companies will 
account for the additions and retirements of such plant in accordance 
with instructions contained in 18 CFR under the Commission's Uniform 
System of Accounts (USofA) for public utilities and licensees, natural 
gas companies, and oil pipeline companies. 2
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    \2\ See 18 CFR Part 101, USofA prescribed for Public Utilities 
and Licensees, Part 201, USofA prescribed for Natural Gas Companies, 
and Part 352, USofA prescribed for Oil Pipeline Companies (1996)
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    Additionally, the final rule clarifies that Companies may use 
estimates when it is either impractical or unduly burdensome for 
Companies to identify the cost of retired property, and it removes the 
minimum rule requiring oil pipelines to charge operating expenses for 
acquisitions, additions and improvements costing less than $500.

I. Public Reporting Burden

    The Commission estimates that this final rule will reduce the 
public reporting burden by an annual average of 29,768 hours, for 
public utilities and licensees, natural gas companies, and oil pipeline 
companies. The average costs associated with these hours, across all 
regulated companies, total $5,153,563.
    Comments regarding these burden estimates or any other aspect of 
these collections of information, including suggestions for reducing 
this burden, can be sent to the Federal Energy Regulatory Commission, 
888 First Street, N.E., Washington, DC 20426 [Attention: Michael 
Miller, Information Services Division, (202) 208-1415]; and to the 
Office of Information and

[[Page 6848]]

Regulatory Affairs of the Office of Management and Budget (OMB) 
(Attention: Desk Officer for Federal Energy Regulatory Commission), 
FAX: (202) 395-5167.

II. Background

    On July 25, 1997, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) 3/ that proposed to amend the Commission's 
regulations relating to Units of Property listings. The Commission 
noted that the USofA requires Companies to record the cost of additions 
and retirements of property and equipment in the appropriate plant 
accounts.4 Additionally, Companies maintain a fixed asset 
recordkeeping system that tracks these plant account costs by property 
units. Parts 116, 216, and 352 of the Commission's regulations 
prescribe the detailed property unit listings that Companies must use 
to identify the items of property and equipment tracked by the fixed 
asset recordkeeping system.
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    \3\ Units of Property Accounting Regulations, Docket No. RM97-6-
000, FERC Stats. & Regs para. 61,113 (1997), 62 FR 40987 (July 31, 
1997).
    \4\ 18 CFR Parts 101, 201 and 352. The USofA for public 
utilities and natural gas companies specifies in the plant 
instructions of Parts 101 and 201, respectively, the type of 
information companies must keep related to their fixed assets.
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    These listings prescribe a level of detail that companies maintain 
to support the amounts in the plant accounts. However, the property 
unit listings do not reflect the technological changes that have taken 
place in the utility industry. The NOPR proposed to remove the 
prescribed property unit listings, and allow Companies to identify 
property units and maintain a level of support determined by their 
business needs. This would not eliminate the need for Companies to 
maintain a property recordkeeping system. Companies would continue to 
maintain support of the amounts shown in the plant accounts.
    The Commission observed that the level of detail prescribed by the 
current property unit listings and regulations place an unnecessary 
burden on Companies, are not current, are too restrictive, and appear 
to provide minimal benefit to either the Companies or to the 
Commission.
    For public utilities and natural gas companies, the NOPR proposed 
to delete 18 CFR Parts 116 and 216 which prescribe a units of property 
listing for the additions and retirements of electric plant and gas 
plant, respectively. The NOPR proposed to modify 18 CFR Part 101, 
Electric Plant Instruction 10, and 18 CFR Part 201, Gas Plant 
Instruction 10, to require Companies to maintain a written property 
units listing, to apply the listing consistently, and to furnish the 
Commission with the justification for any changes to the listing, if 
requested. In addition, the NOPR proposed to clarify 18 CFR Parts 101 
and 201, concerning the use of estimates when it is impractical or 
unduly burdensome for Companies to identify the cost of retired 
property.
    In the NOPR the Commission concluded that eliminating the property 
unit listings and regulations would give Companies the flexibility to 
maintain their own property listings and track the costs of fixed 
assets at the level of detail tailored to their business. This in turn 
would reduce the burden Companies experience when tracking fixed assets 
at a level more detailed than either their business or the Commission 
needs, and also eliminate the burden placed on the Commission to update 
the items in the listings to take account of technological advances and 
items of property that are no longer used by Companies.
    For oil pipelines, the NOPR proposed to delete 18 CFR Part 352 
(instruction 3-14), which prescribes a units-of-property listing. The 
NOPR proposed to modify 18 CFR Part 352 (instruction 3-4) to require 
oil pipelines to maintain a written property units listing, to apply 
the listing consistently, and to furnish the Commission with the 
justification for any changes to the listing, if requested. In 
addition, the NOPR proposed to clarify 18 CFR Part 352 (instruction 3-
7), concerning the use of estimates when it is impractical or unduly 
burdensome for oil pipelines to identify the cost of property retired. 
This proposal was intended to bring oil pipeline regulations into line 
with those for public utilities and natural gas companies, which are 
permitted to use estimates in similar circumstances.
    Finally, the NOPR also proposed to delete as inadequate in today's 
environment 18 CFR Part 352 (instruction 3-2), which prescribes a 
minimum rule that requires oil pipelines to charge operating expenses 
for acquisitions, additions and improvements costing less than $500, 
and to delete any references to the minimum rule in Part 352 
(instructions 3-4, 3-5, and 3-6(a)). As a consequence, oil pipelines 
would be permitted to establish their own dollar threshold in order to 
avoid undue refinement in accounting for acquisitions, additions, and 
improvements.
    The Commission requested that interested persons submit written 
comments no later than September 15, 1997. Twenty-one entities 
submitted comments. 5 All the commenters were supportive of 
the rulemaking, particularly the proposal to remove the Commission's 
prescribed Units of Property listing and permit Companies to maintain 
their own written Units of Property listing.
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    \5\ See Appendix.
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III. Discussion

    Upon review of the comments submitted, the Commission concludes 
that the rule proposed in the NOPR should be adopted with minor 
modifications. Specifically, the final rule does not adopt the proposed 
language requiring Companies, when requested, to furnish justification 
for any changes to their Units of Property listings, since the USofA 
already contains instructions requiring Companies to maintain the 
necessary information to support amounts included in their books and 
records. Other matters as raised in the comments to the NOPR are 
discussed below.

A. Clarification of Electric and Gas Plant Instruction 11, Paragraph C

    The Commission proposed a minor revision of the language contained 
in Electric and Gas Plant Instruction 11, Paragraph C, by removing the 
phrase ``* * * subsequent to the effective date of this system of 
accounts. * * *''
    While no party objected to or commented upon the specific change 
the Commission proposed, a large number of commenters requested 
clarification of revised Electric and Gas Plant Instruction (EPI and 
GPI) 11, Paragraph C. They believe the latter instruction is ambiguous 
and could be interpreted to require Companies to maintain quantity and 
cost detail for each separate retirement unit. To remedy this 
ambiguity, EEI and Ohio Edison recommend that this instruction be 
clarified to specifically not require detail at the retirement unit 
level. AGA and CINergy recommend that, to provide more clarity, 
Paragraph C should be revised to read: ``each utility shall maintain 
records for each plant account such that the amounts of annual 
additions and retirements can be audited as to consistent application 
of the capitalization policy.''
    AEP urges that Paragraph C be eliminated, arguing that it is not 
necessary to require the number and cost of annual additions and 
retirements for each retirement unit. AEP states that permitting 
utilities to account for additions to plant following their Units of 
Property listing while not requiring that they keep individual property 
cost records for each retirement unit would

[[Page 6849]]

provide for the appropriate treatment of asset additions and 
retirements without the burden of keeping separate continuing property 
records for each retirement unit.
    The Electric and Gas Plant instructions read that Companies shall 
maintain fixed asset records at a detailed retirement unit level or at 
a higher record unit level.6 The Commission has never 
specifically defined a record unit. The most predominant interpretation 
of the term record unit is that it is synonymous with the term 
retirement unit. For the purpose of the rulemaking and in the future, 
we define a record unit as two or more related retirement units. 
Therefore, the existing plant instructions permit Companies to maintain 
fixed asset records at a higher level if they so choose. Consequently, 
Companies need not maintain cost records at the detail retirement unit 
level and therefore, it is unnecessary to remove EPI and GPI 11, 
paragraph C at this time in order to adopt the changes contained in the 
final rule.
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    \6\ 18 CFR, Part 101, Electric Plant Instruction and Part 201, 
Gas Plant Instruction paragraph 11(C) read, ``Each utility shall 
maintain records in which, for each plant account, the amounts of 
the annual additions and retirements, subsequent to the effective 
date of this system of accounts, are classified so as to show the 
number and cost of the various record units or retirement units 
(emphasis added).
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B. Adoption of a Capitalization Policy

    The NOPR proposed to remove the prescribed Units of Property 
listings contained in Parts 116, 216 and 352 (instruction 3-14); 
requiring Companies to maintain their own written Units of Property 
Listing for use in accounting for additions and retirements of plant.
    AGA, CINergy and PECO Energy state that the new wording requiring 
Companies to maintain a written Units of Property listing misses the 
intended purpose for change, which was to have a written capitalization 
policy of which a property listing would be a by-product. Companies 
also state that the capitalization policy would establish guidelines 
that define their assets.
    CINergy and PECO Energy suggest that Electric and Gas Plant 
Instruction 10, paragraph A, requires a written capitalization policy 
which would establish the guidelines by which a company would define 
its assets rather than requiring Companies to maintain a written Units 
of Property listing. Therefore, a Units of Property listing would be a 
part of the capitalization policy.
    The purpose of the proposed rule was not to change the existing 
accounting framework for additions and retirements to the plant 
accounts, but it was to reduce the recordkeeping burden placed on 
Companies. Companies will continue to treat all utility plant as 
consisting of retirement units and minor items of property. The 
Commission will continue to require Companies to account for the 
additions and retirements of such plant in accordance with instructions 
contained in the Commission's USofA.
    The final rule results in Companies having the flexibility to 
maintain their fixed asset records at a level of detail that meets 
their business needs. The Commission will no longer prescribe a 
detailed Units of Property listing for Companies to use in conjunction 
with their fixed asset accounting systems.

C. Changes to Units of Property Listing

    The Commission proposed in the NOPR to require Companies, if 
requested, to furnish the Commission with a justification for any 
changes made to their Unit of Property listings.
    Four commenters expressed a concern about how far back Companies 
must keep the justifications for changes they made to their Units of 
Property listings, as proposed in Electric and Gas Plant Instruction 
10, paragraph A. Commonwealth Edison and NYSEG asked whether the time 
frame would mean changes since Part 116 was eliminated or changes 
during the past year or changes since the Commission last requested the 
Company's listing. EEI recommends that the Commission clarify that only 
changes made during the 12 months before the Commission's request for 
justification should have to be justified. OG&E recommends that the 
Commission indicate whether a certain time frame was intended for such 
a request, or will it be determined on an individual basis.
    The Commission's USofA requires Companies to maintain their books 
and records in such a manner as to be able to furnish information as to 
any item included in any account.7 This would also include 
amounts recorded in Companies' fixed asset record keeping system. We, 
therefore, do not believe it is necessary to include the proposed 
language contained in the NOPR that would have required Companies to 
furnish us with a justification for any changes to their Units of 
Property listings since the USofA already contains instructions 
requiring Companies to maintain the necessary information to support 
amounts included in their books and records.
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    \7\ 18 CFR Parts 101 and 201, Electric and Gas General 
Instructions 2(A), respectively and Part 352, Carrier General 
Instructions (1-2), Records, reads, ``Each utility/carrier shall 
keep its books of account * * * which support the entries in such 
books of account so as to be able to furnish readily full 
information as to any item included in any account. Each entry shall 
be supported by such detailed information as will permit ready 
identification, analysis, and verification of all facts relevant 
thereto. 2(b) The books and records referred to herein include not 
only accounting records in a limited technical sense, but all other 
records, such as minute books, stock books, reports, correspondence, 
memoranda, etc., which may be useful in developing the history of or 
facts regarding any transaction.''
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    Furthermore, a Company's Units of Property listing is an integral 
part of its entire fixed asset recordkeeping system. Therefore, we 
would anticipate that Companies would maintain the necessary records, 
including changes to their Units of Property listings, in order to 
develop the history or facts surrounding transactions recorded in their 
fixed asset recordkeeping systems.

D. Estimating the Cost of Plant Retirements

    The NOPR proposed to clarify existing requirements for public 
utilities and licensees and natural gas companies that permit the use 
of estimates for the purpose of determining the actual cost of retired 
property. The NOPR would also allow oil pipelines to use such 
estimates.
    AGA, CINergy, PECO Energy, OG&E, and Consumers Energy expressed 
concern that the last sentence of Electric and Gas Plant Instruction 
10, paragraph D requires a specific method of retirement cost 
estimation. They believe that Companies should be able to choose the 
method of retirement estimation that is appropriate for them.
    Even though there is a specific estimation method mentioned in 
paragraph D, the Commission did not intend it to be the only method a 
company may use to determine the cost of plant retirements. We believe 
that Companies should use an appropriate estimation method that would 
provide a reasonable estimate of the cost of plant retirements based 
upon the nature of the property involved and information available.

E. Accounting Requirements for Minor Items of Property

    The Commission stated in the NOPR that Companies would continue to 
treat all plant as consisting of retirement units and minor items of 
property, and account for the additions and retirements of such plant 
in accordance with instructions contained in 18 CFR under the 
Commission's USofA for public utilities and licensees, natural

[[Page 6850]]

gas companies, and oil pipeline companies.8
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    \8\ See 18 CFR Part 101, USofA prescribed for Public Utilities 
and Licensees, Part 201, USofA prescribed for Natural Gas Companies, 
and Part 352, USofA prescribed for Oil Pipeline Companies (1996).
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    PSColorado and Cheyenne state that another cause of fixed asset 
recordkeeping burden is the Commission's prescribed treatment of minor 
items in Electric and Gas Plant Instruction 10, paragraph C. They say 
it has created detailed plant ledger unit entries to identify the major 
parts or components of a retirement unit. Then, when one of these units 
needs to be replaced, it can be replaced by charging capital for the 
entire replacement cost rather than charging expense or just the 
incremental materials cost of replacement in the case of a betterment. 
They recommend revising paragraph C to allow Companies to capitalize 
the replacement of major components of a retirement unit without having 
to use betterment accounting or without having to break down the 
retirement unit into its component pieces in the fixed asset records.
    As previously mentioned, it was not our intention to change the 
requirements contained in electric and gas plant instructions 
concerning the accounting for additions or replacements of minor items 
of property, including the use of betterment accounting. Therefore, we 
decline to make any changes to our accounting instructions for 
additions and replacements of minor items of property at this time. 
Furthermore, the detailed fixed asset recordkeeping requirements 
contained in Parts 116, 216 and 352 relate only to retirement units and 
not to minor items of property. Consequently, any additional 
recordkeeping burdens incurred to track minor items of property, or 
components of retirement units, should not be attributed to our plant 
accounting regulations.

F. Other Issues

1. Effective Date
    PECO Energy and NEES expressed concern that the NOPR does not give 
an effective date for implementation of the proposed changes. PECO 
Energy recommends that the final document provide a reasonable time 
frame for implementation.
    Companies may begin implementing their own Units of Property 
listings for calendar year 1998.
2. Commenters' Suggestions for Related Changes to Other Sections
    Santa Fe suggested that the Commission should revise 18 CFR Part 
362--Uniform System of Records and Reports of Property Changes, 
concerning valuation in regards to the changes proposed in the NOPR.
    Marathon expressed disappointment that the Commission took no 
action to permit alternate methods of depreciation other than the 
present group depreciation methodology, which it claims is cumbersome 
when dealing with year 2000 issues as well as implementation of new 
accounting software.
    Although these suggested changes to other sections of the 
Commission's regulations may have merit, they were not the focus of 
this rulemaking, and we decline to make changes to Part 362 at this 
time. Additionally, in the context of this rulemaking, it was not the 
Commission's intent to permit alternate depreciation methodology, and 
therefore, the Commission declines making any judgment regarding 
Marathon's comments.

IV. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires agencies to prepare 
certain statements, descriptions, and analyses of proposed rules that 
will have a significant economic impact on a substantial number of 
small entities.9 The Commission is not required to make such 
analyses if a rule would not have such an effect.
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    \9\ 5 U.S.C. 601-612.
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    The Commission does not believe that this rule would have such an 
impact on small entities. Most filing companies regulated by the 
Commission do not fall within the RFA's definition of small 
entity.10 Further, the recordkeeping requirements of small 
entities are reduced by the rule. Therefore, the Commission certifies 
that this rule will not have a significant economic impact on a 
substantial number of small entities. Therefore, no regulatory 
flexibility analysis is required.
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    \10\ 5 U.S.C. 601(3) citing to section 3 of the Small Business 
Act, 15 U.S.C. 632. Section 3 of the Small Business Act defines a 
``small business concern'' as a business which is independently 
owned and operated and which is not dominant in its field of 
operation.
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V. Environmental Statement

    The Commission excludes certain actions not having a significant 
effect on the human environment from the requirement to prepare an 
environmental assessment or an environmental impact 
statement.11 The promulgation of a rule that is procedural 
or that does not substantially change the effect of legislation or 
regulations being amended raises no environmental 
consideration.12 The instant rule amends Parts 101 and 201 
regulations, eliminates Parts 116, 216 and instruction 3-14 of Part 352 
and does not substantially change the effect of the underlying 
legislation or the regulations being revised or eliminated. 
Accordingly, no environmental consideration is necessary.
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    \11\ 18 CFR 380.4.
    \12\ 18 CFR 380.4(a)(2)(ii).
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VI. Information Collection Statement

    OMB's regulations in 5 CFR 1320.11 require that it approve certain 
reporting and recordkeeping (collections of information) imposed by 
agency rule. The Commission is submitting a copy of this Final Rule to 
OMB for informational purposes only because the Final Rule is not 
significantly different from the NOPR. Moreover, the Final Rule 
eliminates sections of the Commission's regulations which had required 
reporting and recordkeeping requirements.

Public Reporting Burden

    The Commission estimates that this final rule will reduce the 
public reporting burden by an annual average of 29,768 hours, for 
public utilities and licensees, natural gas companies, and oil pipeline 
companies. The Commission received 21 comments on its NOPR and none on 
its reporting burden or cost estimates. The Discussion portion (Part 
III) of this Final Rule addresses the Commission's responses to the 
comments.
    This final rule removes the Commission's requirements governing 
prescribed Units of Property listings contained in Parts 116, 216 and 
instructions 3-14 of Part 352. This gives companies the flexibility to 
maintain their own lists and also removes the requirement of the 
minimum rule for Oil Pipelines, eliminating the need to make expense 
additions and improvements of less than $500 and then seek the 
Commission's approval to change this amount. The final rule also amends 
Parts 101 and 201 by requiring regulated entities to maintain their own 
Units of Property listings for use in accounting for additions and 
retirements of plant and apply these listings consistently.
    Title: Units of Property.
    Respondents: Public utilities and licensees, Interstate natural gas 
pipeline companies, oil pipeline companies (Business or other for-
profit).
    Frequency of Responses: On occasion.

[[Page 6851]]

    Necessity of Information: The final rule proposes to provide 
companies the ability to identify and maintain their units of property 
records at a level of detail better suited to their own business 
practices by reducing the level of detail. In addition, oil pipeline 
companies will no longer be required to charge operating expenses for 
acquisitions, additions and improvements costing less than $500, or 
notify and seek Commission approval for using thresholds less than that 
amount. The Commission requires that Companies maintain this 
information in order that it may ensure that Companies' financial 
records and reports comply with Commission's accounting and reporting 
requirements. These requirements have been established in response to 
mandates of the Federal Power Act, the Natural Gas Act and the 
Interstate Commerce Act. Through these requirements, the Commission is 
able to establish the reliability of financial data of jurisdictional 
companies and the extent of conformance by the companies to the USofA 
and other Commission regulations. The Commission has assured itself, by 
means of its internal review, that there is specific, objective support 
for the burden estimates associated with the information requirements.

VII. Effective Date and Congressional Notification

    This final rule is effective March 13, 1998. The Small Business 
Regulatory Enforcement Fairness Act of 1996 requires agencies to report 
to Congress on the promulgation of certain final rules prior to their 
effective dates.13 That reporting requirement applies to 
this Final Rule. The Commission has determined, with the concurrence of 
the Administrator of the Office of Information and Regulatory Affairs 
of the Office of Management and Budget, that this rule is not a ``major 
rule'' as defined in section 251 of the Small Business Regulatory 
Enforcement Fairness Act of 1996.
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    \13\ Pub. L. No. 104-121, 110 Stat. 847(1996).
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List of Subjects

18 CFR Part 101

    Electric power, Electric utilities, Reporting and recordkeeping 
requirements, Uniform System of Accounts.

18 CFR Part 116

    Electric power plants, Electric utilities, Reporting and 
recordkeeping requirements, Uniform System of Accounts.

18 CFR Part 201

    Natural gas, Reporting and recordkeeping requirements, Uniform 
System of Accounts.

18 CFR Part 216

    Natural gas, Reporting and recordkeeping requirements, Uniform 
System of Accounts.

18 CFR Part 352

    Pipelines, Reporting and recordkeeping requirements, Uniform System 
of Accounts.

    By the Commission.
David P. Boergers,
Acting Secretary.
    In consideration of the foregoing, the Commission amends Parts 101, 
116, 201, 216, and 352 Chapter I, Title 18, Code of Federal 
Regulations, as set forth below.

PART 101--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR PUBLIC 
UTILITIES AND LICENSEES SUBJECT TO THE PROVISIONS OF THE FEDERAL 
POWER ACT

    1. The authority citation for Part 101 continues to read as 
follows:

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 
U.S.C. 7102-7352, 7651-7651o.

    2. In part 101, Electric Plant Instruction 10, paragraphs A and D 
are revised to read as follows:
    10. Additions and Retirements of Electric Plant.
    A. For the purpose of avoiding undue refinement in accounting for 
additions to and retirements and replacements of electric plant, all 
property will be considered as consisting of (1) retirement units and 
(2) minor items of property. Each utility shall maintain a written 
property units listing for use in accounting for additions and 
retirements of electric plant and apply the listing consistently.
* * * * *
    D. The book cost of electric plant retired shall be the amount at 
which such property is included in the electric plant accounts, 
including all components of construction costs. The book cost shall be 
determined from the utility's records and if this cannot be done it 
shall be estimated. Utilities must furnish the particulars of such 
estimates to the Commission, if requested. When it is impracticable to 
determine the book cost of each unit, due to the relatively large 
number or small cost thereof, an appropriate average book cost of the 
units, with due allowance for any differences in size and character, 
shall be used as the book cost of the units retired.
* * * * *
    3. In Part 101, Electric Plant Instruction 11, paragraph C is 
revised to read as follows:
    11. Work Order and Property Record System Required.
* * * * *
    C. In the case of Major utilities, each utility shall maintain 
records in which, for each plant account, the amounts of the annual 
additions and retirements are classified so as to show the number and 
cost of the various record units or retirement units.

PART 116--UNITS OF PROPERTY FOR USE IN ACCOUNTING FOR ADDITIONS TO 
AND RETIREMENTS OF ELECTRIC PLANT

    4. Part 116 is removed.

PART 201--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR NATURAL GAS 
COMPANIES SUBJECT TO THE PROVISIONS OF THE NATURAL GAS ACT

    5. The authority citation for Part 201 continues to read as 
follows:

    Authority: 15 U.S.C. 717-717W, 3301-3432; 42 U.S.C. 7101-7352, 
7651-7651o.

    6. In Part 201, Gas Plant Instruction 10, paragraphs A and D are 
revised to read as follows:
    10. Additions and Retirements of Gas Plant.
    A. For the purpose of avoiding undue refinement in accounting for 
additions to and retirements and replacements of gas plant, all 
property shall be considered as consisting of (1) retirement units and 
(2) minor items of property. Each utility shall maintain a written 
property units listing for use in accounting for additions and 
retirements of gas plant and apply the listing consistently.
* * * * *
    D. The book cost of gas plant retired shall be the amount at which 
such property is included in the gas plant accounts, including all 
components of construction costs. The book cost shall be determined 
from the utility's records and if this cannot be done it shall be 
estimated. Utilities must furnish the particulars of such estimates to 
the Commission, if requested. When it is impracticable to determine the 
book cost of each unit, due to the relatively large number or small 
cost thereof, an appropriate average book cost of the units, with due 
allowance for any differences in size and character, shall

[[Page 6852]]

be used as the book cost of the units retired.
* * * * *
    7. In Part 201, Gas Plant Instruction 11, paragraph C is revised to 
read as follows:
    11. Work Order and Property Record System Required.
* * * * *
    C. Each utility shall maintain records in which, for each plant 
account, the amounts of the annual additions and retirements are 
classified so as to show the number and cost of the various record 
units or retirement units.

PART 216--UNITS OF PROPERTY FOR USE IN ACCOUNTING FOR ADDITIONS TO 
AND RETIREMENTS OF GAS PLANT

    8. Part 216 is removed.

PART 352--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR OIL PIPELINE 
COMPANIES SUBJECT TO THE PROVISIONS OF THE INTERSTATE COMMERCE ACT

    9. The authority citation for Part 352 continues to read as 
follows:

    Authority: 49 U.S.C. 60502, 49 App. U.S.C. 1-85.

    10. In Part 352, Instructions for Carrier Property Accounts, 
instruction 3-2, Minimum rule is removed. In instructions 3-5, 
introductory text, and 3-6(a) the phrase ``subject to the minimum 
rule'' is removed.
    11. In Part 352, Instructions for Carrier Property Accounts, 
instruction 3-4 Additions is revised to read as follows:
    3-4  Additions. Each carrier shall maintain a written property 
units listing for use in accounting for additions and retirements of 
carrier plant and apply the listing consistently. When property units 
are added to Carrier plant, the cost thereof shall be added to the 
appropriate carrier plant account as set forth in the policy.
    12. In Part 352, Instructions for Carrier Property Accounts, 
instruction 3-7 Retirements introductory text and paragraph (b)(1) are 
revised and new paragraph (c) is added to read as follows:
    3-7  Retirements. When property units are retired from carrier 
plant, with or without replacement, the cost thereof and the cost of 
minor items of property retired and not replaced shall be credited to 
the carrier plant account in which it is included. The retirement of 
carrier property shall be accounted for as follows:
    (a) * * *
    (b) Property. (1) The book cost, as set forth in paragraph c below, 
of units of property retired and of minor items of property retired and 
not replaced shall be written out of the property account as of date of 
retirement, and the service value shall be charged to account 31, 
Accrued Depreciation--Carrier Property.
* * * * *
    (c) The book cost of carrier property retired shall be determined 
from the carrier's records and if this cannot be done it shall be 
estimated. When it is impracticable to determine the book cost of each 
unit, due to the relatively large number or small cost thereof, an 
appropriate average book cost of the units, with due allowance for any 
differences in size and character, shall be used as the book cost of 
the units retired. Oil pipelines must furnish the particulars of such 
estimates to the Commission, if requested.
    13. In Part 352, Instructions for Carrier Property Accounts, 
instruction 3-14 Accounting units of property is deleted.

Recordkeeping for Units of Property Accounting Regulations for Public 
Utilities and Licensees, Natural Gas Companies and Oil Pipeline 
Companies

Docket No. RM97-6-000

Appendix

    The commenters on the NOPR are:
1. American Electric Power System (AEP),
2. American Gas Association (AGA),
3. Cinergy Corporation (CINergy),
4. Colonial Pipeline Company (Colonial),
5. Commonwealth Edison Company (Commonwealth Edison),
6. Consumers Energy Company (Consumers Energy),
7. Duke Power Company (Duke),
8. Edison Electric Institute (EEI),
9. Explorer Pipeline Company (Explorer),
10. Interstate Natural Gas Association of America (INGAA),
11. Lakehead Pipe Line Company, Limited Partnership (Lakehead),
12. Marathon Pipe Line Company (Marathon),
13. Minnesota Power & Light Company (Minnesota P & L),
14. New England Electric System (NEES),
15. New York State Electric & Gas Corporation (NSYEG),
16. Ohio Edison Company (Ohio Edison),
17. Oklahoma Gas & Electric Company (OG&E),
18. PECO Energy Company (PECO Energy),
19. Joint comments of Public Service Company of Colorado 
(PSColorado) and Cheyenne Light, Fuel and Power Company (Cheyenne),
20. SFPP, L.P. (SFPP), and
21. Virginia Electric & Power Company (VEPCO).

[FR Doc. 98-3457 Filed 2-10-98; 8:45 am]
BILLING CODE 6717-01-P