[Federal Register Volume 73, Number 195 (Tuesday, October 7, 2008)]
[Rules and Regulations]
[Pages 58720-58769]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-23458]



[[Page 58719]]

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

Part II





Department of Energy





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



Federal Energy Regulatory Commission



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



18 CFR Parts 41 and 141



Revisions to Forms, Statements and Reporting Requirements for Electric 
Utilities and Licensees; Final Rule

  Federal Register / Vol. 73, No. 195 / Tuesday, October 7, 2008 / 
Rules and Regulations  

[[Page 58720]]


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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 41 and 141

[Docket No. RM08-5-000; Order No. 715]


Revisions to Forms, Statements and Reporting Requirements for 
Electric Utilities and Licensees

Issued September 19, 2008.

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final Rule.

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

SUMMARY: This Final Rule amends the Federal Energy Regulatory 
Commission's reporting requirements for public utilities and licensees 
to file financial forms, reports, and statements, including FERC Form 
No. 1, FERC Form No. 1-F, and FERC Form No. 3-Q. These changes will 
improve the forms, reports and statements to provide, in fuller detail, 
the information the Commission needs to carry out its responsibilities 
under the Federal Power Act to ensure that rates remain just and 
reasonable. In addition, the changes will help provide public utility 
customers, state commissions, and the public information to assess the 
justness and reasonableness of electric rates.

DATES: Effective Date: This rule will become effective January 1, 2009.

FOR FURTHER INFORMATION CONTACT: David Lengenfelder (Technical 
Information), Forms Administration and Data Branch, Division of 
Financial Regulation, Office of Enforcement, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, Telephone: 
(202) 502-8351, e-mail: [email protected], Richard M. 
Wartchow (Legal Information), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC 
20426, Telephone: (202) 502-8744, e-mail: [email protected].

SUPPLEMENTARY INFORMATION: 

                               Final Rule
------------------------------------------------------------------------
                                                              Paragraph
                                                               Numbers
------------------------------------------------------------------------
I. Introduction............................................            1
II. Background.............................................            6
III. Notice of Inquiry.....................................           10
IV. Notice of Proposed Rulemaking..........................           11
V. Discussion..............................................           12
    A. Notice of Inquiry...................................           12
    B. Notice of Proposed Rulemaking.......................           13
    C. Effective Date......................................           19
    D. Proposed Revisions..................................           21
        1. Formula Rates...................................           21
        2. Filing Thresholds for Form 1....................           51
        3. Affiliate Transactions..........................           56
        4. CPA Certification for a Non-Calendar Fiscal Year           74
        5. ``Other Revenues'' (Pages 300-301)..............           78
        6. Increases to Threshold Reporting Levels.........           91
        7. Proposed Technical Corrections..................           94
        8. Additional Technical Revisions..................           98
    E. Miscellaneous.......................................          103
        1. Retaining Form 3-Q..............................          103
        2. Confidentiality Concerns........................          107
        3. Requests To Reconsider Rejected Revisions.......          111
        4. Requests for Additional Cost Data...............          116
    F. Reporting Burden....................................          121
VI. Information Collection Statement.......................          129
VII. Environmental Analysis................................          130
VIII. Regulatory Flexibility Act...........................          131
IX. Document Availability..................................          132
X. Effective Date and Congressional Notification...........          135
Revised Regulatory Text--18 CFR Parts 41 and 141.
Appendix A: Revised Form 1 Pages.
Appendix B: List of Proposed Technical Changes and
 Responses.
Appendix C: List of Commenters.
------------------------------------------------------------------------

I. Introduction

    1. This Final Rule amends the Federal Energy Regulatory 
Commission's (Commission) reporting requirements for public utilities 
\1\ and licensees to file financial forms, reports, and statements, 
including FERC Form No. 1 (Form 1), FERC Form No. 1-F (Form 1-F), and 
FERC Form No. 3-Q (Form 3-Q). These changes will improve the forms, 
reports and statements to provide, in fuller detail, the information 
the Commission needs to carry out its responsibilities under the 
Federal Power Act (FPA) to ensure that rates remain just and 
reasonable. In addition, the changes will help provide public utility 
customers, state commissions, and the public the information they need 
to assess the justness and reasonableness of electric rates.
---------------------------------------------------------------------------

    \1\ While 18 CFR 141.1 nominally refers to ``electric 
utilities,'' this regulation in fact applies to ``public 
utilities.'' See 16 U.S.C. 824; accord 18 CFR Part 101, Definitions 
29 and 40. The reference in 18 CFR 141.1 to ``electric utilities'' 
predates the 1978 addition of separate statutorily defined 
``electric utilities,'' see 16 U.S.C. 796(22), when the only 
utilities that were Commission regulated under the Federal Power Act 
were the statutorily-defined public utilities, see 16 U.S.C. 824. 
See, e.g., 18 CFR 141.1 (1977).
---------------------------------------------------------------------------

    2. This Final Rule complements the Commission's recent revisions to 
the reporting requirements for natural gas

[[Page 58721]]

companies; \2\ it revises the financial forms filed by public utilities 
and licensees--specifically, Form 1, Annual report for major electric 
utilities, licensees, and others; Form 1-F, Annual report for nonmajor 
public utilities, licensees and others; and Form 3-Q, Quarterly report 
of electric utilities, licensees, and natural gas companies.
---------------------------------------------------------------------------

    \2\ 18 CFR Parts 158 and 260; Revisions to Forms, Statements, 
and Reporting Requirements for Natural Gas Pipelines, Order No. 710, 
Docket No. RM07-9-000, 73 FR 19389 (Apr. 10, 2008), FERC Stats. & 
Regs. ] 31,267, order on reh'g, Order No. 710-A, 123 FERC ] 61,278 
(2008).
---------------------------------------------------------------------------

    3. Specifically, the Final Rule adopts revised reporting 
requirements which will enhance the Commission's and customers' review 
of formula rates; permit better understanding of non-power goods and 
services transactions with affiliates, and provide additional detail of 
revenues not previously specified in Form 1. In addition, the Final 
Rule will expedite reporting by clarifying Form 1 instructions and 
cross-references and making certain technical improvements in the form. 
Finally, the Final Rule responds to the burdens faced by filers by 
adopting minimum reporting thresholds for certain accounting data, 
eliminating the reporting requirement for certain utilities that are 
not otherwise subject to this Commission's reporting obligations or 
jurisdiction, and accommodating filers whose fiscal year does not fall 
in the calendar year that is used for reporting purposes.
    4. This Final Rule does not convert the submission of Form 1 and 
other data into a FPA section 205 \3\ rate case filing or a cost-and-
revenue study, but is instead intended to better ensure a ready source 
of data to assist the Commission and interested parties in evaluating 
the justness and reasonableness of a utility's rates. The revised forms 
do not limit or change an entity's rights or obligations under the FPA 
and our regulations, and this Final Rule is not intended to change our 
obligation to rule on complaints, petitions, or other requests for 
relief based on a full record and substantial evidence.
---------------------------------------------------------------------------

    \3\ 16 U.S.C. 824d.
---------------------------------------------------------------------------

    5. The proposed effective date for implementation of these changes 
is calendar year 2009. Accordingly, companies subject to the new 
requirements would file their new Form 3-Qs following the first 
calendar quarter of 2009 and their new Forms 1 and 1-F in April 2010 
for calendar year 2009. In addition, this Final Rule eliminates the 
filing requirement for utilities not subject to the Commission's 
jurisdiction under section 201 of the FPA \4\ but required to file Form 
1 solely because they met the reporting threshold in the regulations.
---------------------------------------------------------------------------

    \4\ 16 U.S.C. 824.
---------------------------------------------------------------------------

II. Background

    6. Under the Commission's regulations, entities classified as major 
electric utilities are required to file Form 1. Entities classified as 
nonmajor electric utilities are required to file Form 1-F.\5\ Sections 
304, 307 and 309 of the FPA authorize the Commission to collect such 
data.\6\ Form 1, in particular, requires information to be filed on an 
annual basis by public utilities (and certain hydroelectric production 
sources) under the Commission's jurisdiction. Form 1 collects corporate 
information, summary financial information and balance sheet and income 
information, as well as electric plant, sales, operating and 
statistical data. Since its inception, Form 1 has been amended by the 
Commission on numerous occasions to address and keep pace with the 
transformation of the utility industry.
---------------------------------------------------------------------------

    \5\ A major electric utility is one that had, in the last three 
consecutive years, sales or transmission services that exceeded (1) 
one million megawatt-hours of total sales; (2) 100 megawatt-hours of 
sales for resale; (3) 500 megawatt-hours of power exchanges 
delivered; or (4) 500 megawatt-hours of wheeling for others 
(deliveries plus losses). Utilities and licensees that are not 
classified as major and had total sales in each of the last three 
consecutive years of 10,000 megawatt-hours or more are classified as 
nonnmajor. See 18 CFR Part 101.
    \6\ 16 U.S.C. 825a, 825f, 825h; see also 16 U.S.C. 825j.
---------------------------------------------------------------------------

    7. In 1990, the Commission issued Order No. 529, which modified 
Form 1 to improve reporting of bulk power transactions.\7\ In 1993, the 
Commission issued Order No. 552, which revised the Uniform System of 
Accounts (USofA) to account for allowances under the 1990 Clean Air Act 
Amendments, and adopted corresponding reporting schedules for Forms 1 
and 1-F.\8\
---------------------------------------------------------------------------

    \7\ Amendments to FERC Form Nos. 1 and 1-F, and Annual Charges, 
and Fuel Cost and Purchased Economic Power Adjustment Clauses, Order 
No. 529, FERC Stats. & Regs. ] 30,904 (1990).
    \8\ Revisions to Uniform System of Accounts to Account for 
Allowances under the Clean Air Act Amendments of 1990 and 
Regulatory-Created Assets and Liabilities and to Form Nos. 1, 1-F, 2 
and 2-A, Order No. 552, FERC Stats. & Regs. ] 30,967 (1993).
---------------------------------------------------------------------------

    8. In 1994, the Commission issued Order No. 574, which required the 
filing of an electronic version of Form 1, along with the paper 
version. The electronic version was prepared pursuant to a computer 
program supplied by the Commission.\9\ In 2002, the Commission issued 
Order No. 626, which eliminated the paper filing requirement, relying 
solely on electronic filing of Form 1.\10\ Also in 2002, the Commission 
expanded USofA accounting requirements to include monitoring for the 
fair value of certain security investments, derivative instruments, and 
hedging activities, and added new schedules and accounts to Forms 1 and 
1-F.\11\
---------------------------------------------------------------------------

    \9\ Electronic Filing of FERC Form No. 1 and Delegation to Chief 
Accountant, Order No. 574, FERC Stats. & Regs. ] 31,013 (1994) 
(establishing the Form 1 Submission Software (FOSS)).
    \10\ Electronic Filing of FERC Form No. 1, and Elimination of 
Certain Designated Schedules in Form Nos. 1 and 1-F, Order No. 626, 
FERC Stats. & Regs. ] 31,130 (2002).
    \11\ Accounting and Reporting of Financial Instruments, 
Comprehensive Income, Derivatives and Hedging Activities, Order No. 
627, FERC Stats. & Regs. ] 31,134 (2002).
---------------------------------------------------------------------------

    9. Order No. 646 implemented quarterly reporting for entities that 
filed Forms 1 and 1-F and added annual reporting requirements for 
ancillary services and electric transmission peak loads.\12\ In 2005, 
Order No. 668 updated the Commission's accounting requirements for 
utilities and licensees, including independent system operators (ISOs) 
and regional transmission organizations (RTOs).\13\ The Commission also 
revised its USofA and Forms 1 and 1-F to accommodate industry 
restructuring under the Commission's open-access transmission policies 
and increased competition in wholesale bulk power markets.\14\
---------------------------------------------------------------------------

    \12\ Quarterly Financial Reporting and Revisions to the Annual 
Reports, Order No. 646, FERC Stats. & Regs. ] 31,158, order on 
reh'g, Order No. 646-A, FERC Stats. & Regs. ] 31,163 (2004).
    \13\ Accounting and Financial Reporting for Public Utilities 
Including RTOs, Order No. 668, FERC Stats. & Regs. ] 31,199 (2005), 
reh'g denied, Order No. 668-A, FERC Stats. & Regs. ] 31,215 (2006).
    \14\ Id.
---------------------------------------------------------------------------

III. Notice of Inquiry

    10. As part of Commission staff's ongoing comprehensive review of 
the Commission's financial data requirements, a series of public 
meetings were held in Fall 2006 with both filers and users of FERC's 
financial reports (Forms 1, 1-F, 2, 2-A and 3-Q). On February 15, 2007, 
the Commission issued a Notice of Inquiry (NOI) in response to those 
discussions.\15\ The NOI sought comments on the need for changes or 
additions to the financial information reported on these forms. In 
response to the comments received, the Commission determined that each 
of the forms, representing different industries subject to the 
Commission's jurisdiction, merited its own separate review. 
Accordingly, the Commission established a separate proceeding in Docket 
No. RM07-9-000, addressing only changes, additions, and

[[Page 58722]]

amendments to the forms applicable to interstate natural gas 
companies.\16\
---------------------------------------------------------------------------

    \15\ Assessment of Information Requirements for FERC Financial 
Forms, Notice of Inquiry, FERC Stats. & Regs. ] 35,554 (2007).
    \16\ Revisions to Forms. Statements, and Reporting Requirements 
for Natural Gas Pipelines, Order No. 710, FERC Stats. & Regs. ] 
31,267, order on reh'g, Order No. 710-A, 123 FERC ] 61,278 (2008).
---------------------------------------------------------------------------

IV. Notice of Proposed Rulemaking

    11. On January 18, 2008, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) that proposed to revise the Form 1 (and Forms 1-F and 
3-Q) and requested comments on several issues, including: (1) 
Differences between Form 1 data and costs that are reflected in formula 
rate inputs, (2) the non-jurisdictional utility requirements and 
revising the Form 1-F reporting threshold for nonmajor utilities, (3) 
reporting for affiliate transactions, (4) filers whose reporting and 
accounting systems are based on a non-calendar fiscal year, (5) 
reporting for ``Other Revenues,'' and (6) the minimum threshold 
reporting levels for certain line-item information.\17\ In addition, 
the NOPR proposed two non-form related rule changes, concerning 
notification of non-filing status and grants of extension of time for 
good cause. The NOPR also invited comments on software updates, 
revisions to the filing instructions, requests for additional 
information for particular accounts or schedules, and suggestions to 
improve the quality, completeness and consistency of data 
submissions.\18\
---------------------------------------------------------------------------

    \17\ Revisions to Forms, Statements, and Reporting Requirements 
for Electric Utilities and Licensees, Notice of Proposed Rulemaking, 
73 FR 5136 (Jan. 29, 2008), FERC Stats. & Regs. ] 32,627 (Jan. 18, 
2008) (NOPR).
    \18\ These proposals were listed in an appendix to the NOPR, 
which is updated here with Commission responses and provided in 
Appendix B to this Final Rule.
---------------------------------------------------------------------------

V. Discussion

A. Notice of Inquiry

    12. In responding to the NOI, Form 1 public utility filers 
generally emphasized the difficulty and expense of Form 1 preparation, 
stated that the current scope of information sought is sufficient to 
evaluate jurisdictional rates, and objected to particular filing 
requirements as burdensome. In contrast, Form 1 users, including 
nonprofit publicly-owned utilities and state commissions, disagree--
requesting that Form 1 provide additional information to permit more 
effective review to determine whether current and proposed rates are 
just and reasonable.

B. Notice of Proposed Rulemaking

    13. In the NOPR, the Commission affirmed that the information 
reported in Forms 1, 1-F and 3-Q is critical to the work of the 
Commission and stated its expectation that all filers would continue to 
follow the instructions and submit properly completed forms. The NOPR 
emphasized the importance of Form 1 data to the Commission, state 
commissions, utility customers and other interested persons as an 
important and primary source of information to assess whether rates 
charged remain just and reasonable or may be unjust and unreasonable. 
The NOPR stated that the purpose of Form 1, in particular, is to 
provide basic financial and operational information to allow the 
Commission, customers, and competitors to monitor a utility's rates for 
jurisdictional services. Form 1 is an essential tool in the 
Commission's regulatory program. Form 1 makes publicly available the 
financial information upon which cost-based rates are developed and 
provides information on the financial operations of utilities. Form 1 
and the underlying data are used in ratemaking and for customer rate 
and cost monitoring. In addition, because it reflects the Commission's 
USofA, Form 1 ensures that such data is uniform and comparable between 
companies and reporting periods. Form 1 is not a substitute for a rate 
case filing or a projection of future financial performance, however. 
Instead the data enables the form's users to monitor and assess a 
utility's rates.
    14. Pursuant to the Commission's comprehensive review of its 
financial reporting forms and based on the responses to the NOI, the 
Commission determined that wholesale changes were not justified, and 
instead proposed targeted adjustments to the existing reporting 
requirements.
    15. In response to the NOPR, the Commission received 13 timely 
comments, one motion to submit comments out-of-time, and one set of 
reply comments.\19\ These comments are summarized in the remainder of 
the discussion section.
---------------------------------------------------------------------------

    \19\ A list of commenters is attached as Appendix C.
---------------------------------------------------------------------------

    16. After careful consideration of the comments received, the 
Commission is adopting changes and revisions proposed in the NOPR with 
certain modifications and clarifications, as discussed below.
    17. No comments were filed objecting to the NOPR's proposals 
concerning (i) accommodating filers whose books close on a non-calendar 
fiscal year, (ii) filing notifications of changes to non-filing status, 
(iii) adopting a good cause requirement for reviewing requests for 
extension of time, and (iv) providing for separate reporting of 
emissions allowances, such as nitrogen oxide (NOX) and 
sulfur dioxide (SO2). In fact, comments were received 
supporting several of these proposals, including the non-calendar year 
accommodation and emission allowances. Therefore, we adopt the 
proposals as set forth in the NOPR.
    18. In addition, several commenters proposed additional reporting 
requirements or modifications to the proposals made in the NOPR. To the 
extent such comments proposed revisions that were feasible and in 
keeping with the goals expressed in the NOPR, the Commission has 
attempted to incorporate commenters' suggestions as discussed below. 
The discussion in the ``Commission Determination'' sections addressing 
each NOPR proposal provides additional detail to clarify those 
proposals and respond to the comments.

C. Effective Date

    19. The NOPR proposed calendar year 2009 as the effective date to 
implement these changes to the reporting requirements, stating:

    Accordingly, companies subject to the new requirements would 
file their new Form 3-Qs beginning with the Form 3-Q for the first 
calendar quarter of 2009 and their new Forms 1 and 1-F in April 2010 
for calendar year 2009.

    20. The Commission believes that this effective date provides 
sufficient time for filing companies to collect the information needed 
to fulfill the reporting obligations proposed in the NOPR and adopted 
in this Final Rule. Because the changes adopted here are limited in 
scope, filers have sufficient opportunity to make the necessary changes 
to their reporting systems to capture the necessary data in the detail 
needed to complete the new requirements contained in this Final Rule. 
This proposed effective date thus provides an adequate time for 
utilities to revise their information collection procedures, and filers 
will have several additional months before the first reporting deadline 
to implement the changes needed because the first report due is the 
Form 3-Q, a quarterly report, due in May 2009. Therefore, the 
Commission adopts the changes provided for in this Final Rule effective 
calendar year 2009, consistent with the date proposed in the NOPR.

D. Proposed Revisions

1. Formula Rates
    21. In response to comments requesting additional information to 
accommodate formula rate review, the NOPR proposed the addition of

[[Page 58723]]

explanatory information when formula rate inputs deviate from data 
reported in Form 1. Specifically, the NOPR proposed to revise the Form 
1 to require that, if the inputs to a formula rate deviate from what is 
currently shown in the Form 1, the filer must provide an explanation 
for the deviation in a footnote to the corresponding page, line and 
column where the specific data is reported. The Commission sought 
comment on this proposal.\20\
---------------------------------------------------------------------------

    \20\ NOPR at P 46.
---------------------------------------------------------------------------

Comments
    22. Several commenters support the Commission's proposal for filing 
utilities to explain departures from Form 1 data in formula rates. 
SDG&E, for example, notes that many utilities with formula rates 
already make periodic informational filings to explain the use of 
modified Form 1 data. SDG&E supports the NOPR proposal and 
characterizes the proposal as a pragmatic and narrowly-tailored effort 
to provide additional information that does not duplicate publicly 
available material, while avoiding a ``one size fits all'' modification 
to Form 1 that does not address the varieties of formula rates 
currently in effect or utilities' uses of variations from Form 1 data.
    23. APPA also supports the Commission's intent that utilities 
provide all information necessary for calculating formula rates, but 
questions whether the Commission's proposal will achieve the desired 
effect. APPA states that the requirement that filers describe in 
footnotes details on how formula rates deviate from Form 1 information 
may be difficult to monitor because staff may lack the means to 
identify utilities subject to the formula rate information requirement. 
APPA suggests that the Commission require a new schedule for filers to 
identify their status in regard to formula rates, which would require a 
filer to indicate (1) whether it has formula rates; and (2) where to 
find all explanations for deviations between formula rates and Form 1 
information (either informational filings or footnotes in connection 
with specific page, line and column numbers of Form 1). Such a schedule 
would ensure that a utility does not omit a necessary footnote and 
would also locate deviations from Form 1 data. APPA predicts that such 
a schedule would not change any Form 1 references currently contained 
in formula rates and should not add any substantial burden to 
respondents, because it would not repeat the information, but would 
simply reference the location of the information already compiled.
    24. BPA agrees that since formula rates routinely cite specific 
accounts and page numbers, the Commission should not revise Form 1 
accounts or page numbers, so as to necessitate amendments to existing 
formula rates. BPA supports the use of explanatory footnotes, stating 
that the footnotes are an essential aspect of Form 1 and may provide 
the only means for a utility to explain, and Form 1 user to understand, 
the data. BPA suggests the need for additional enforcement of Form 1 
requirements, including penalties for failure to meet footnote 
requirements.
    25. In addition, BPA requests clarification that a statement made 
in paragraph 41 of the NOPR, ``[t]he annual rate adjustment may not 
initiate a rate proceeding and the customer's recourse, if it believes 
the resulting rates are unjust and unreasonable, is to file a complaint 
under section 206 of the FPA,'' is not intended to change the burden of 
proof in a section 206 proceeding involving a formula rate. 
Specifically, BPA requests the Commission clarify that the statement 
does not shift the burden of proof from the utility to establish that 
the formula is correctly applied or that the correct data is being used 
to populate the formula.\21\
---------------------------------------------------------------------------

    \21\ BPA states its understanding that the burden of proof 
otherwise remains on the party challenging a Commission-approved 
formula.
---------------------------------------------------------------------------

    26. Nevada Companies suggests that a transmission provider should 
post the reasons for changes in formula rates on its Web site within a 
prescribed period of time, which would provide immediate information to 
customers on changes in rates rather than having to wait for a 
quarterly or annual filing.
    27. TAPS strongly supports the NOPR's effort to further the goal of 
timely transparency through inclusion of the relevant information in 
Form 1. TAPS questions the level of detail in an informational filing 
that would relieve a utility of the requirement to describe formula 
rate differences in Form 1. TAPS states that the rule should require 
that the transparency information be included in Form 1 submissions of 
each utility whose Form 1 data is input into a formula rate. TAPS 
proposes that waivers be considered where the utility can show that it 
is legally committed to make annual informational filings that will 
provide all of the data, of the same quality and reliability, that 
would otherwise have to be included in its Form 1, and will do so in 
time to facilitate rate monitoring by customers, regulators, and the 
public. TAPS also requests that the Final Rule require annual reporting 
of all historical cost, load, and revenue information that is an input 
into a Form 1 filing utility's formula rate.
    28. The Michigan Commission requests that the Commission initiate a 
process to address problems associated with its review of utility 
transmission investment in conjunction with formula rates. The Michigan 
Commission states that a lack of necessary data reporting in 
combination with formula rates can shield utility investment decisions 
from review. The Michigan Commission suggests that the Commission 
initiate an inquiry, possibly a technical conference, to explore ways 
that formula rates can be reviewed.
    29. Several utility commenters object to the requirement to add 
footnotes to discuss differences between Form 1 financial information 
and formula rate inputs for wholesale rates.\22\ AEP believes that the 
Form 1 is a financial report and should continue to be a financial 
report and not a rate verification report. AEP claims that footnoting 
differences between Form 1 data and formula rate inputs would, for some 
filers like AEP, be extensive, voluminous and burdensome to comply 
with. AEP suggests that multiple rates will require reconciliation, 
including separate wholesale customer service rates and some regional 
transmission organization rates. AEP states that the Commission should 
obtain such information from the seller when needed on a case-by-case 
basis. AEP suggests that the additional detail need not be made public, 
and states that the information is better provided as a separate rate 
filing to be made whenever the formula rate is being changed or 
supported.
---------------------------------------------------------------------------

    \22\ See AEP, EEI, FirstEnergy, and Duke comments.
---------------------------------------------------------------------------

    30. EEI encourages the Commission not to add a requirement to Form 
1 to explain departures from Form 1 information used as inputs to 
formula rates. EEI argues that companies should not be required to 
footnote Form 1 data to explain differences in formula rates, so long 
as they document changes to formula rate inputs, adhere to the approved 
formula rate tariffs, and provide information to the Commission and 
affected customers on request or via informational filings.
    31. EEI suggests that the Commission adopt an alternate policy, 
under which companies adopting formula rates would provide information 
to customers about rate inputs, including underlying costs and cost 
increases, in sufficient detail to enable the customers to understand 
the basis for their rates. EEI states that if the Commission does

[[Page 58724]]

impose a formula rate footnote requirement in Form 1, the Commission 
should: (1) Clarify that the footnote is necessary only to explain 
departures from Form 1 data when a formula rate tariff calls for 
specific Form 1 data as inputs and different input data are used; (2) 
clarify that the footnote requirement applies only to cost-based rates, 
not to market-based rates (MBR); (3) specify that, if a seller files 
informational filings containing information about inputs to its 
formula rates, a footnote is not required; (4) specify that if 
customers have audit rights under a formula rate tariff, a footnote is 
not required; (5) specify that if a company has explained departures 
from Form 1 data as inputs to a formula rate elsewhere in information 
available to the Commission and customers on request, it is not 
required to do so again in Form 1; (6) specify that, if the footnote 
cannot be added before Form 1 is filed, it can be added at the next 
reporting cycle; and (7) address how the footnote should be prepared 
when multiple operating companies or gas and electric companies are 
involved and not all of those companies are reflected in a given Form 
1.
    32. FirstEnergy requests that the Commission clarify that its 
proposal is not a blanket requirement on companies filing the Form 1 to 
include any changes on inputs to formula rates in a footnote to the 
relevant page in Form 1. Similarly, the Commission should also clarify 
that its proposed requirement would not preclude companies from 
submitting the formula input information in filings other than Form 1.
    33. FirstEnergy states that companies should not be required to 
submit informational filings or otherwise report situations in which 
formula rate inputs differ slightly from what is shown in Form 1, and 
requests the Commission to clarify whether such disclosures will now be 
required. To the extent that such information will be required, 
FirstEnergy does not believe that Form 1 is an appropriate vehicle for 
reporting information concerning a utility's formula rates. FirstEnergy 
states that Forms 1 and 3-Q are financial statements providing 
information in accordance with the USofA and argues that the forms are 
not, and should not be, considered ratemaking documents to be used for 
ratemaking purposes.
Commission Determination
    34. In this Final Rule, as we explain below, we adopt the NOPR 
proposal that Form 1 filers should provide explanatory information when 
formula rate inputs differ from Form 1 reported amounts.\23\ That is, 
with regard to formula rates for which no informational filings are 
required to be regularly submitted to this Commission, we revise the 
Form 1 to require that, if the formula rate relies on Form 1 data and 
if the input amounts to that formula rate differ from what is shown in 
the Form 1, the filer must provide a narrative explaining the reason 
for the difference. The explanation must be provided in a footnote on 
the same page, line and column where the specific data is reported.
---------------------------------------------------------------------------

    \23\ Other than comprehensive formula rates, the Commission's 
regulations provide for automatic adjustment of only those costs 
specified in section 35.14 of our regulations (fuel adjustment 
clause). See Public Service Company of Oklahoma, 40 FERC ] 61,215, 
at 61,733 (1987).
---------------------------------------------------------------------------

    35. As described above, EEI states that companies which provide 
service under formula rates should make additional information 
available if requested by customers, on an as-needed basis, if such 
information is not already being provided in the informational filings. 
EEI recommends that the Commission adopt an alternative policy, under 
which companies using formula rates would provide information to 
customers about rate inputs, including underlying costs and cost 
increases, in sufficient detail to enable the customers to understand 
any deviations to the inputs used in calculating the formula rates.
    36. With respect to EEI's requests for various clarifications, we 
adopt portions of EEI's recommendations as follows. Consistent with the 
NOPR proposal we limit the footnoting requirement so that it will only 
apply to utilities with formula rates that do not make regular (i.e., 
at least annual) informational filings of cost data with the Commission 
pursuant to the requirements of their formula rates (or for example, 
pursuant to the requirements of a Commission-approved settlement or a 
Commission directive). We believe it is unnecessary to require 
companies that are required to make regular informational filings to 
include a footnote in Form 1 because any difference from any Form 1 
inputs used in formula rates should already be described in sufficient 
detail in their informational filings.\24\
---------------------------------------------------------------------------

    \24\ Thus, utilities that are required to make regular 
informational filings by their formula rates, a Commission-approved 
settlement, or other Commission order need not provide footnotes. 
These filers must nevertheless complete the new schedule provided in 
page 106.
---------------------------------------------------------------------------

    37. In addition, EEI requests clarification of the treatment of 
formula rates accepted under our MBR policies. We clarify that a rate 
is subject to the footnoting requirement if it relies on Form 1 data 
and is on file with the Commission. Such rates may be featured in 
tariffs of general applicability or individual rate schedules.\25\ We 
further adopt EEI's suggestion that, if companies have formula rates 
but do not make such informational filings with the Commission, they 
must maintain sufficient records that explain the changes made to those 
inputs \26\ (and, of course, must adhere to the approved formula rate 
tariffs on file) and provide that information to the Commission, state 
commissions and affected customers on request. Furthermore, we clarify 
that if customers have audit rights under a formula rate, a footnote is 
still required, so that utilities can describe how the rate was derived 
(as described herein).
---------------------------------------------------------------------------

    \25\ We clarify that we do not seek the explanatory information 
for fuel adjustment clauses, which are governed by separate policies 
established in the Commission's regulations and which typically 
would not reference Form 1. See 18 CFR 35.14.
    \26\ This recordkeeping requirement is in addition to any other 
Commission recordkeeping requirement, see, e.g., 18 CFR Parts 101, 
125, including the footnoting requirement adopted in this Final 
Rule.
---------------------------------------------------------------------------

    38. With respect to EEI's request that the Commission specify that 
footnote information that cannot be added before Form 1 is filed may be 
added at the next reporting cycle, we clarify that if the necessary 
information is not available at the time for filing (given that Form 1 
is an annual report), the utility must provide the information in its 
next Form 1 filing.
    39. As stated in the NOPR, we do not propose to convert the Form 1 
filing process into a rate proceeding. As noted by several commenters, 
Form 1 is an historical financial reporting document. However, Form 1 
provides cost and revenue data that aids in evaluating the justness and 
reasonableness of rates in a ratemaking proceeding, and Form 1 serves 
as a ready source of public information to assess on an ongoing basis 
the justness and reasonableness of utility rates. In particular, for a 
formula rate, Form 1 identifies costs that result in annual 
fluctuations in rates as costs rise and fall. Thus, Form 1 plays an 
important role in the Commission's rate review process.
    40. A key component of this rate review process is the transparency 
provided by requiring utilities to make information on costs underlying 
rates publicly available. This cost information is, in turn, used by 
the Commission, state commissions, and customers to review and monitor 
a utility's rates, which, as appropriate, may ultimately result in an 
investigation or a complaint proceeding. Thus, Form 1 is a valuable 
tool. Commenters' attempts to establish a bright line between financial 
reporting

[[Page 58725]]

and rate making are insufficient for the Commission to withdraw its 
proposals to seek information that will assist the Commission in 
carrying out its statutory obligations to ensure that rates are just 
and reasonable, and to assist others--including customers--with 
monitoring rates charged.
    41. The NOPR did not propose to revise the Commission's USofA 
accounting requirements to track specific costs or cost estimates for 
future projects as suggested by TAPS and the Michigan Commission. 
Therefore, we will not adopt proposals to track additional costs that 
would require changes to the Commission's accounting requirements.
    42. In response to APPA's comments concerning how Commission staff 
will determine whether a utility is subject to a regular informational 
filing requirement for its formula rate, we note that the existence of 
such a filing requirement is a matter of public record for each formula 
rate. That is, the requirement that a utility make a regular 
informational filing describing the information that will be used to 
populate the formula rate is typically established in the rate 
proceeding accepting the formula rate. If an interested entity believes 
that a utility has failed to include the required footnotes, or that a 
utility has not responded in a timely manner to a request for an 
explanation of the applicable formula rate and the inputs to that rate, 
it should discuss the matter with the utility and, if not satisfied, 
may, among other things, notify the Commission through our enforcement 
Hotline and the Commission's Office of Enforcement will take 
appropriate action.
    43. Based on the record in this proceeding, the Commission does not 
anticipate that this reporting requirement will be unduly burdensome 
because the information is already available and can be transposed to a 
footnote.
    44. Several filing utilities request the Commission to clarify the 
scope of the formula rate footnoting requirement. Initially, as noted 
above, the Commission clarifies that a filing company should footnote 
differences from Form 1 data in formula rates that are on file with 
this Commission and that rely on Form 1 data, and that such rates may 
be featured in tariffs of general applicability or individual rate 
schedules.\27\ The Commission also clarifies that it is not necessary 
to provide a detailed reconciliation. The Commission anticipates that 
the footnotes would contain a simple narrative explaining how the 
``rate'' (or billing) was derived if different from the reported amount 
in the Form 1. For instance, differences could be due to: (i) 
Application of a percent allocation factor for gross transmission plant 
that is OATT related; (ii) excluding particular items such as step-up 
transformer investment; (iii) deducting amounts for transmission for 
others from total transmission expenses or applying an OATT 
transmission factor; or (iv) excluding particular cost items from 
administrative and general expenses or application of an OATT labor 
factor. This list is not exhaustive, we caution, but is strictly for 
illustration purposes; the Commission anticipates that similar issues 
would be footnoted in Form 1. The description should describe the 
difference, including any reference to a Commission proceeding 
approving the difference. Such an explanation should be sufficient to 
alert interested parties of the deviation and to permit them to 
estimate and evaluate the impact of the departure on rates.\28\ In this 
fashion, interested entities should be able to, with reasonable 
accuracy, monitor rates in light of current costs and available 
financial data.
---------------------------------------------------------------------------

    \27\ As noted above, we do not seek the explanatory information 
for fuel adjustment clauses, which are governed by separate polices 
under the Commission's regulations and typically do not reference 
Form 1. See 18 CFR 35.14.
    \28\ The information contained in a formula rate footnote (as 
for any Form 1 footnote) should be specific to the data provided in 
the form, and not simply transferred from consolidated financial 
statements that may reflect different assumptions and reporting 
requirements.
---------------------------------------------------------------------------

    45. In response to suggestions that formula rate information be 
centralized, a new schedule (page 106) will be incorporated in Form 1 
on which filers will (1) indicate whether they have formula rates; (2) 
provide details about the formula rates; (3) indicate whether the filer 
makes regular informational filings and the location of the filings 
(e.g., accession numbers) on the Commission's eLibrary Web site; and 
(4) summarize, if required,\29\ the differences between the Form 1 
amounts and any amounts included in a formula rate as described 
above.\30\
---------------------------------------------------------------------------

    \29\ Whether or not a public utility or licensee must provide 
this information is addressed above.
    \30\ Revised Form 1 pages affected by this Final Rule are 
provided in Appendix A.
---------------------------------------------------------------------------

    46. AEP is concerned that reporting may be difficult because of the 
number and variety of rate schedules and tariffs that may be covered by 
this requirement. As stated above, we do not anticipate that this 
requirement need rise to the level of an accounting reconciliation; a 
narrative description (with reference to a rate proceeding adopting the 
difference) may suffice.
    47. In addition, a utility is not precluded from filing 
modifications to its formula rates to make cost references consistent 
with Form 1 reporting requirements as they are updated.\31\
---------------------------------------------------------------------------

    \31\ The Commission reiterates that utilities that are required 
to make regular informational filings by their formula rates, a 
Commission-approved settlement, or other Commission requirement 
(e.g., a Commission requirement imposed as a condition of acceptance 
of the formula rates) need not provide footnotes. These filers must 
nevertheless complete the new schedule provided in page 106.
---------------------------------------------------------------------------

    48. In response to BPA and the Michigan Commission, we clarify that 
this Final Rule does not change our policies with respect to the burden 
of proof associated with challenges to previously approved formula 
rates under section 206.\32\ Form 1 is not filed pursuant to sections 
205 or 206 of the FPA and, therefore, its submittal will not initiate a 
rate proceeding or investigation. A rate proceeding is initiated by a 
rate filing under section 205, or an investigation initiated either in 
response to a complaint or pursuant to a notice of Commission 
investigation under section 206. Additional information to assess 
jurisdictional rates may be requested from the utility or sought 
through discovery in an appropriate proceeding; the Commission's 
actions here do not, for example, affect the scope of discovery in 
litigated proceedings.
---------------------------------------------------------------------------

    \32\ See Order No. 710 at P 12 (noting that despite changes made 
to gas reporting forms, a party filing a complaint has the burden to 
show why the information in the Commission's financial forms 
supports an allegation that the existing rates are not just and 
reasonable, and that the changes adopted in Order No. 710 do not 
limit an entity's rights under governing law and the Commission's 
regulations, nor change the Commission's obligation to rule on 
complaints, petitions, or other requests for relief based on a full 
record and substantial evidence).
---------------------------------------------------------------------------

    49. In addition, we reject TAPS' proposals to change the 
Commission's accounting as beyond the scope of this proceeding, which 
relates to reporting requirements for the various accounts defined by 
the USofA, and we reject the Nevada Companies' proposal to revise our 
OASIS Web site posting requirements; both should be addressed in more 
appropriate proceedings reviewing the Commission's accounting and OASIS 
regulations.
    50. With respect to the Michigan Commission's suggestion that the 
Commission initiate an inquiry into the Commission's formula rate 
policies and whether formula rates can shield future utility investment 
decisions from review, the Commission declines to initiate such an 
investigation. The NOPR rejected calls for reporting

[[Page 58726]]

information on future transmission investments, stating that Form 1 is 
intended to provide information on a utility's financial activities for 
the reporting year, but does not include projections of future 
costs.\33\ Comments filed in response to the NOPR have not persuaded us 
to change our views. Should an entity desire to question the prudence 
of a utility's transmission investment decisions, it may file a 
complaint with the Commission.\34\
---------------------------------------------------------------------------

    \33\ NOPR at P 54.
    \34\ Preventing Undue Discrimination and Preference in 
Transmission Service, Order No. 890, 72 FR 12,266 (March 15, 2007), 
FERC Stats. & Regs. ] 31,241 at P 435 (2007), order on reh'g, Order 
No. 890-A, 73 FR 2984 (Jan. 16, 2008), FERC Stats. & Regs. ] 31,261 
(2007), order on reh'g, Order No. 890-B, 123 FERC ] 61,299 (2008).
---------------------------------------------------------------------------

2. Filing Thresholds for Form 1
    51. The NOPR proposed to eliminate the filing requirement for 
utilities that are not subject to the Commission's jurisdiction because 
they are not public utilities under Part II of the FPA, but make sales 
that meet or exceed the threshold for meeting the Commission's Forms 1 
and 3-Q reporting requirements.\35\ The NOPR also sought comment on 
whether to revise the definitions for major and nonmajor utilities, 
inviting specific suggestions for how this might be done with 
justifications for proposed thresholds.\36\ The NOPR mentioned that the 
Commission was aware of five non-jurisdictional utilities that 
otherwise met or exceeded the threshold for reporting: Alaska Electric 
and Power Co.; CenterPoint Energy Houston Electric, LLC; Hawaii 
Electric Light Co., Inc.; Hawaiian Electric Co., Inc.; and Maui 
Electric Co., Ltd.
---------------------------------------------------------------------------

    \35\ NOPR at P 50.
    \36\ Id. P 48.
---------------------------------------------------------------------------

    52. The NOPR cited an order where the Commission recently granted 
waiver of the financial form filing requirements under such 
circumstances. In Morenci Water and Electric Co., the Commission 
granted a waiver from the requirement of Sec. Sec.  141.1 and 141.400 
of the Commission's regulations that utilities who are not public 
utilities under Part II of the FPA but who otherwise meet the threshold 
filing requirements for Forms 1, 1-F and 3-Q must comply with the 
reporting requirements established in the regulations.\37\
---------------------------------------------------------------------------

    \37\ Morenci Water and Electric Co., 121 FERC ] 61,024 (2007).
---------------------------------------------------------------------------

Comments
    53. No commenter objected to these proposals. International 
Transmission proposes, however, that non-major electric utilities and 
non-jurisdictional utilities that belong to a joint rate zone be 
required to file Form 1 and that, for purposes of the filing 
thresholds, all of the electric utilities in a joint rate zone should 
be deemed major electric utilities. International Transmission thus 
proposes that, in addition to the numerical filing thresholds, the 
General Instructions to Part 101 be revised to require that: (1) 
Nonmajor electric utilities in joint rate zones with major electric 
utilities be required to file Form 1; and (2) non-jurisdictional 
utilities in joint rate zones with jurisdictional public utilities also 
be required to file Form 1.
Commission Determination
    54. In this Final Rule we are removing the words ``whether or not 
the jurisdiction of the Commission is otherwise involved'' from 
Sec. Sec.  141.1(b) and 141.400(b), which establish the filing 
requirements for Form 1 and Form 3-Q, respectively. With this change, 
companies that are not subject to the Commission's jurisdiction because 
they are not public utilities (or licensees) need no longer file Form 1 
or 3-Q. If a company is concerned that it may still fall within the 
revised requirements of Sec. Sec.  141.1(b) or 141.400(b), but 
nevertheless should be exempted from filing Forms 1 and 3-Q, it may 
continue to seek an individual waiver from the Commission. No 
commenter, we add, objected to the proposal to cease requiring filing 
by companies that do not otherwise fall under the Commission's 
jurisdiction, but meet the minimum filing requirements found in 
Sec. Sec.  141.1 and 141.400 of the Commission's regulations.
    55. The Commission rejects International Transmission's proposal to 
revise the definitions that distinguish major and nonmajor utilities, 
to require utilities that participate in joint rate zones with major 
utilities to also file Form 1. International Transmission's proposal 
expands the reporting requirement so that it would apply to non-
jurisdictional entities and also would require small utilities to file 
Form 1, regardless of the reporting threshold. International 
Transmission's proposal would unreasonably increase the reporting 
burdens on small utilities. Therefore, we reject the proposal.
3. Affiliate Transactions
    56. To provide further transparency and improve the detection of 
cross-subsidization, the NOPR proposed to add a new schedule and page 
429, ``Transactions with Associated (Affiliated) Companies,'' providing 
information concerning affiliate transactions. The NOPR proposed that 
filers would report the following: (1) A description of the good or 
service charged or credited; (2) the name of the associated 
(affiliated) company; (3) the USofA account charged or credited; and 
(4) the amount charged or credited.\38\
---------------------------------------------------------------------------

    \38\ NOPR at P 51-52.
---------------------------------------------------------------------------

Comments
    57. Several commenters support the proposal,\39\ and some include 
proposals to expand the reporting requirement.\40\ Others object to the 
affiliate transaction reporting requirement \41\ or argue that such a 
requirement would be duplicative of other reporting obligations, 
unnecessary and burdensome.\42\
---------------------------------------------------------------------------

    \39\ APPA and Michigan Commission comments.
    \40\ International Transmission, and SDG&E comments.
    \41\ See AEP, EEI, MidAmerican, and Nevada Companies comments.
    \42\ FirstEnergy and Duke comments.
---------------------------------------------------------------------------

    58. APPA supports the Commission's proposal to add the new schedule 
to collect information on affiliate transactions. The Michigan 
Commission states that detailed descriptions of costs allocated to 
jurisdictional operations from affiliates are essential to detect 
cross-subsidization. It also requests clarification whether the 
Commission intends that an allocation for common facilities that are 
billed to one or more affiliates be reported as an affiliate 
transaction. The Michigan Commission requests that the Commission 
require additional detail, consisting of a description of all 
allocation factors used by the utility and its affiliates and an 
explanation of how ``direct'' and ``common'' costs are defined and 
implemented.
    59. Nevada Companies states that affiliate transactions should be 
reported by type of service provided and goods transferred. The Nevada 
Companies note that reporting amounts by types of services provided 
would link this report to master service agreements entered into by 
many affiliated companies. They also request a definition of good or 
service.
    60. SDG&E recommends that the Commission clarify that the affiliate 
transaction information required to be provided is limited to 
transactions between a jurisdictional utility and its affiliates and 
does not include transactions solely between or among the affiliates.
    61. Nevada Companies requests that affiliate transaction 
information only be reported annually for companies that prepare 
similar information to fulfill state requirements, suggesting the 
proposed reporting requirement could be met by state oversight. AEP 
objects to an affiliate transaction reporting

[[Page 58727]]

requirement and suggests that the issue is a state regulatory 
matter.\43\
---------------------------------------------------------------------------

    \43\ See also Nevada Companies comments.
---------------------------------------------------------------------------

    62. Duke requests that the Commission clarify that the new page 429 
is not intended to require the reporting of affiliate transactions 
between the electric utility and centralized service companies, as this 
information is already reported in FERC Form No. 60 (Form 60). 
FirstEnergy states that the new page would result in a duplication of 
effort since the same information is already reported to the Commission 
in other FERC forms, including the Form 60, and other places in Form 1, 
such as page 332, Transmission of Electricity by Others and pages 326-
327, Purchased Power. At a minimum, FirstEnergy requests that a set of 
parameters be established for reporting the information requested, and 
suggests filers be permitted to report the information by general 
category rather than by individual transactions.
    63. MidAmerican objects to detailed reporting of each affiliate 
transaction as unnecessarily burdensome and states that the information 
is already being provided in other publicly available documents. 
MidAmerican requests that the Commission limit any affiliate 
transaction reporting requirement and (1) establish an aggregate annual 
transaction reporting threshold of the greater of (a) $250,000 per 
affiliate or (b) one one-hundredth of one percent (.01%) of the 
electric utility's operating revenues \44\ and (2) exempt transactions 
based on regulator-approved tariffs.\45\ The Nevada Companies request 
that $100,000 be set as a reasonable minimum amount to report the 
transfer of a good, or an aggregate amount of service.
---------------------------------------------------------------------------

    \44\ SDG&E also supports a $250,000 reporting threshold for 
affiliate transactions.
    \45\ In particular, MidAmerican notes that it is bound to serve 
affiliates due to its provision of service to 2.5 million retail 
customers. MidAmerican argues that provision of service in 
accordance with a state-regulator-approved tariff precludes the 
opportunity for cross-subsidization or preferential service. 
MidAmerican states that the same holds true where MidAmerican 
purchases tariff services from an affiliate of its parent (Berkshire 
Hathaway).
---------------------------------------------------------------------------

    64. EEI states that the affiliate transaction reporting proposal is 
inconsistent with the Commission's decisions in Orders No. 707 and 708 
not to require additional reporting.\46\ International Transmission and 
Nevada Companies object to an affiliate reporting requirement that 
would apply to transactions between regulated public utilities. 
International Transmission cites the Commission's proposal that page 
429 is to ``provide further transparency and improve the detection of 
cross-subsidization.'' \47\ International Transmission states that a 
broad, one-size-fits-all requirement that includes reporting of 
transactions between affiliated regulated public utilities would not 
produce useful information for detecting improper cross-subsidization 
for the benefit of non-utility affiliates. International Transmission 
argues that the regulated affiliates' Form 1 filings already provide 
ample transparency and that the affiliate transaction reporting 
requirement is therefore not necessary for affiliate transactions 
between regulated public utilities.
---------------------------------------------------------------------------

    \46\ Cross-Subsidization Restrictions on Affiliate Transactions, 
Order No. 707, 73 FR 11013 (Feb. 29, 2008), FERC Stats. & Regs. ] 
31,264, order on reh'g, Order No. 707-A, 73 FR 43072 (Jul. 24, 
2008), FERC Stats. & Regs. ] 31,272 (2008); Blanket Authorization 
Under FPA Section 203, Order No. 708, 73 FR 11003 (Feb. 29, 2008), 
FERC Stats. & Regs. ] 31,265, order on reh'g, Order No. 708-A, 73 FR 
43066 (Jul. 24, 2008), FERC Stats. & Regs. ] 31,273 (2008).
    \47\ Citing NOPR at P 52.
---------------------------------------------------------------------------

Commission Determination
    65. Consistent with our natural gas reporting requirements 
established in Order No. 710, we will adopt the NOPR proposal and 
incorporate new page 429, Transactions with Associated (Affiliated) 
Companies. Consistent with the reporting threshold established in Order 
No. 710, the schedule instructions incorporate a $250,000 threshold for 
reporting individual transactions. While some commenters suggested 
alternative thresholds, we find that the threshold we adopt here 
reasonably balances the burden while still reporting needed 
information. Therefore, we will not adopt the suggested alternative 
proposals.
    66. In response to requests that the Commission specify the 
affiliated or associated company transactions to which new page 429 
applies, we clarify that the schedule applies to all affiliated/
associated company non-power goods and services transactions including 
those with other regulated public utilities, centralized and other 
service companies, and other affiliated or associated companies 
providing non-power goods and services to the respondent or receiving 
non-power goods or services from the respondent. However, we also 
clarify that page 429 does not apply to transactions between affiliate 
or associate companies that do not include the respondent utility.
    67. We disagree with EEI that the ``affiliate transaction reporting 
proposal is inconsistent with the Commission's decisions in Orders No. 
707 and 708 not to require additional reporting.'' We note that, 
although Order No. 707 did not adopt a reporting requirement, at the 
same time the NOPR in this proceeding alerted interested persons that 
the Commission was separately proposing the additional affiliate 
transaction reporting requirements that are adopted in this Final Rule. 
Order No. 707 was intended to update our rate filing regulations to 
reflect our expanded authority following the repeal of the Public 
Utility Holding Company Act of 1935 (PUHCA 1935).\48\ In Order No. 707, 
the Commission codified in its rate regulations \49\ restrictions on 
affiliate transactions between franchised public utilities that have 
captive customers or that own or provide transmission service over 
jurisdictional transmission facilities, on the one hand, and their 
market-regulated power sales affiliates or non-utility affiliates, on 
the other. Order No. 707 addressed both power and non-power goods and 
services transactions between the utility and its affiliates and 
specifically power sales affiliates. This proceeding provides expanded 
affiliate/associate transaction reporting to facilitate monitoring 
affiliate/associate non-power goods and services transactions as part 
of a comprehensive proceeding to update our reporting requirements. 
Thus, while Order No. 707 did not expand reporting to implement the 
revised rate filing regulations adopted in the wake of the repeal of 
PUHCA 1935, this proceeding is based on the need for data to monitor on 
an ongoing basis utility rates to ensure that they remain just and 
reasonable. On the basis of the record in this proceeding, we find that 
the additional reporting requirement adopted here is appropriate 
because it will assist the Commission and the public in monitoring a 
utility's rates.
---------------------------------------------------------------------------

    \48\ 15 U.S.C. 79a, et seq.
    \49\ 18 CFR Part 35.
---------------------------------------------------------------------------

    68. Order No. 708 adopted a blanket authorization permitting 
certain dispositions under section 203, such as the disposition of less 
than 10 percent of public utility voting securities to a holding 
company that does not thereby exceed certain voting interest 
thresholds. The requirements in Order No. 708 to report security 
dispositions made pursuant to blanket authorizations were designed to 
implement the new authorizations. Order No. 708 does not establish 
general reporting requirements or policies and the requirements 
established there are not relevant to the proposal adopted in this 
Final Rule.
    69. The Form 60 requirements are limited to total direct costs, 
total indirect costs and total costs of goods and services provided to 
each associate company by centralized service

[[Page 58728]]

companies. The new reporting requirement provides more detailed 
information (in the form of individual transactions) about non-power 
goods and services provided by utilities to other affiliated/associated 
companies and non-power goods and services provided by affiliated/
associated companies to utilities which is lacking in the Form 60 
requirements. While the proposed Form 1 information requirement might 
be part of the total reported in Form 60, at least for transactions 
where centralized service companies provide non-power goods and 
services to the respondent utility, it is not duplicative. As compared 
to the other information in Form 1, we clarify that the new 
requirements apply only to non-power goods and services and thus do not 
apply to power sales. Therefore, we find that the new reporting 
requirements have not been shown to be duplicative of other 
requirements.
    70. The Michigan Commission requests clarification whether the 
Commission intends that an allocation of common facilities that are 
billed to one or more affiliates be reported as an associate/affiliate 
transaction. We clarify that apportionment of costs of a common 
facility should be reflected on page 429. Some examples of items that 
could be reported as an associate/affiliate transaction include the 
amount of rent or property apportioned to a utility for a common 
building; the apportioned cost of a computer network along with costs 
to maintain such network, the apportioned cost of a garage used to 
house common trucks; the apportioned cost of phone networks and other 
phone costs. The allocation should also be disclosed as required in 
Instruction 3 of page 429 which requires the basis of the allocation.
    71. Nevada Companies requests that affiliate transaction 
information need only be reported annually for companies that prepare 
similar information to fulfill state requirements, suggesting the 
proposed reporting requirement could be met by state oversight. AEP 
objects to an affiliate transaction reporting requirement and suggests 
that the issue is a state regulatory matter. We disagree that this 
information is a state regulatory matter; the information is needed for 
monitoring Commission-jurisdictional rates. Also, more generally, not 
all states provide oversight. Furthermore, as noted above, this action 
is consistent with the Commission's adoption of a similar requirement 
for natural gas companies in Order No. 710.
    72. International Transmission asserts that a broad, one-size-fits-
all requirement that includes reporting of transactions between 
affiliated, regulated public utilities would not produce useful 
information for detecting improper cross-subsidization for the benefit 
of non-utility affiliates. While the Commission appreciates that 
additional requirements may be useful to address concerns in particular 
cases, the Commission believes that the reporting requirement adopted 
here will provide useful information and will aid in detecting improper 
cross-subsidization.
    73. We clarify, for purposes of page 429, that by ``goods'' we mean 
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. Similarly, 
for purposes of page 429, by ``service,'' we mean 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.\50\ These definitions should address the concerns of commenters 
who are uncertain whether a particular charge or arrangement need be 
reported as an affiliate transaction.
---------------------------------------------------------------------------

    \50\ See 18 CFR 366.1; 18 CFR 367.1(a)(20) and (44); Repeal of 
the Public Utility Holding Company Act of 1935 and Enactment of the 
Public Utility Holding Company Act of 2005, Order No. 667, FERC 
Stats. & Regs. ] 31,197 (2005), order on reh'g, Order No. 667-A, 
FERC Stats. & Regs. ] 31,213, order on reh'g, Order No. 667-B, FERC 
Stats. & Regs. ] 31,224 (2006), order on reh'g, Order No. 667-C, 118 
FERC ] 61,133 (2007) (incorporating definitions from Securities and 
Exchange Commission, Public Utility Holding Company Act of 1935 
Release No. 125 (1936) (codified at 17 CFR 250.80)).
---------------------------------------------------------------------------

4. CPA Certification for a Non-Calendar Fiscal Year
    74. The NOPR noted that, although Form 1 is filed on a calendar 
year basis, some reporting companies operate on a non-calendar fiscal 
year. In response to comments describing the burden to prepare two sets 
of audited statements faced by companies that do not use a calendar 
fiscal year, the NOPR proposed to eliminate the burden by requiring 
public utilities using non-calendar fiscal years to continue to file 
annual reports each April, and file a certified set of financial 
statements following the end of the fiscal year.\51\ The second, 
certified set of financial statements is to be independently audited 
and accompanied by a certified public accountant (CPA) certification as 
required by the Commission's regulations.\52\ This revision will permit 
non-calendar year public utilities to avoid duplicative audits.
---------------------------------------------------------------------------

    \51\ NOPR at P 56.
    \52\ 18 CFR 41.11.
---------------------------------------------------------------------------

    75. This approach is consistent with the Commission's existing 
practice; i.e., the Commission's historical practice of granting 
individual requests for waiver of the CPA certification requirement for 
Forms 1 and 1-F filers so long as the certification accompanies the 
fiscal year-end financial information filed after the annual Form 1 or 
1-F is submitted.\53\
---------------------------------------------------------------------------

    \53\ See, e.g., PacifiCorp, Docket Nos. AC00-20-000 and AC00-20-
001 (Apr. 14, 2000) (unpublished letter order).
---------------------------------------------------------------------------

Comments
    76. No commenter objects to the proposal. EEI encourages the 
Commission to clarify that, with adoption of the NOPR's proposed 
amendment to 18 CFR 41.11, companies will no longer need to seek a 
waiver, or if a company must continue to seek a waiver they need do so 
only once and the waiver would then apply in perpetuity barring a 
subsequent filing by the company or notice by the Commission.
Commission Determination
    77. We adopt the NOPR proposal to revise Sec.  41.11 to accommodate 
filing parties who follow accounting and reporting practices under 
which their fiscal year does not match the calendar year. Companies 
seeking waiver of the calendar-year independent accountant 
certification requirement must request authority to file the 
independent accountant certification based on their fiscal year 
information. Once the request is granted, however, we will not require 
the company to annually renew the request. Instead, the company must 
annually notify the Commission in writing at the time that it files its 
initial annual report that it will continue to file the certification 
based on fiscal year information (or is returning to a calendar year 
reporting). The certification for fiscal year companies must be filed 
no later than 150 days after the end of their fiscal year which is a 
period comparable to calendar year filers.
5. ``Other Revenues'' (Pages 300-301)
    78. The NOPR proposed to expand the reporting of ``Other Revenue'' 
data referenced in pages 300 and 301 to enable the Commission and the 
forms' users to achieve a meaningful understanding of the nature of the 
business activities from which the

[[Page 58729]]

revenues are derived.\54\ Greater detail concerning these revenue 
accounts could provide data that would enable the Commission and 
utility customers to identify revenues received by the filing companies 
and to understand how these transactions may affect the companies' cost 
of service. To that end, the NOPR proposed to revise the instructions 
on page 300 to require that details of items included in Other Revenues 
be reported in a footnote to pages 300-301.
---------------------------------------------------------------------------

    \54\ NOPR at P 57. NOI commenters coined the phrase ``Other 
Revenue'' to refer to the unspecified revenues referenced on pages 
300 and 301. In response to comments on the NOPR proposal, the scope 
of the Other Revenue reporting requirement is more precisely defined 
in the discussion below.
---------------------------------------------------------------------------

    79. Page 300 itemizes total electric operating revenues, composed 
of various types of sales of electricity (consisting of accounts 440-
449), less provision for rate refunds, in addition to Other Operating 
Revenue. The data provided on page 300 on Other Operating Revenue 
includes accounts 450 (forfeited discounts), 451 (miscellaneous service 
revenues) and 453-457.2 (including water and water power sales, rents, 
other electric revenues, regional control service revenues and 
miscellaneous revenues). Because Form 1 contains only a cumulative 
total for the reporting year of the various Other Revenues, the NOPR 
proposed that filers include a detailed breakdown of the various 
sources of other revenues in a footnote to page 300 for any revenues 
not otherwise specified on pages 328-330, Transmission of Electricity 
for Others (including transactions referred to as ``wheeling'').
    80. Form 1 reports Total Other Operating Revenues (page 300, line 
26), which include Revenues from Transmission of Electricity for Others 
(page 300, line 22, account 456.1). The details of account 456.1 are 
reported on pages 328-330, (Transmission of Electricity for Others 
(including transactions referred to as ``wheeling'')). The NOPR 
proposed two changes and requested comment. First, the NOPR proposed to 
revise the instructions on page 300 to require that for any revenues 
reported on line 26, excluding amounts reported on line 22, the filer 
must in a footnote report details on the other line items to page 
300.\55\ Second, the NOPR asked for specific comment on a New York 
Commission proposal to clarify the instructions on pages 300-301 to 
indicate that delivery-only revenues shall be recorded as Other 
Electric Revenues (Account 456), while sales of electricity shall be 
recorded on a full-service basis (Accounts 440 through 448), to reflect 
that the USofA does not unbundle electric operating revenues.\56\
---------------------------------------------------------------------------

    \55\ Id.
    \56\ The New York Commission proposal is provided as line item 
36 of Appendix B (corresponding to Appendix C of the NOPR).
---------------------------------------------------------------------------

Comments
    81. The New York Commission supports the proposal, stating that the 
Commission should require electric utilities to report other income and 
other income deductions in order to assess whether rates are just and 
reasonable. The Michigan Commission also supports the proposal, 
describing Form 1 as currently reporting a cumulative total for only 
two broad categories of revenue: ``Revenue from Transmission of 
Electricity for Others'' and ``Other Electric Revenues.'' The Michigan 
Commission requests that the Commission require filers to provide 
additional details, i.e., revenue for wholesale distribution, retail 
distribution, opportunity sales, and retail sales (with a breakout of 
bundled and customer choice sales); breakouts by state jurisdiction and 
rate schedule; and reporting of the value of ``unbilled sales.'' The 
Michigan Commission also requests that the Commission require a 
breakout of ``Revenue from Transmission for Others'' by rate schedule.
    82. Nevada Companies suggest $500,000 as a reasonable minimum 
threshold for reporting Other Revenues and also suggests, as with 
affiliate transactions, that the items be reported by category and not 
by transaction.
    83. EEI requests that the Commission clarify that the requirement 
for additional details on page 300 applies only to FERC account 456, 
Other Electric Operating Revenues, and specify whether the requirement 
applies to account 457.2, Miscellaneous Revenues used by RTOs and ISOs. 
EEI requests that the Commission establish a threshold of $500,000 or 
10 percent of the balance in the FERC account, whichever is greater.
    84. Duke is opposed to the Commission's proposal to add a footnote 
to page 300 in order to provide users with additional detail related to 
all Other Revenues not otherwise specified on pages 328-330, arguing 
that the benefit from the proposed requirement is outweighed by the 
additional burden placed on filers. Duke proposes that any breakout 
requirement should only apply to the two accounts that are truly 
``miscellaneous'' in nature, account 451, Miscellaneous Service 
Revenues, and account 456, Other Electric Operating Revenues, and 
should only require categorization of the types of charges included in 
these two accounts.
    85. FirstEnergy objects to the New York Commission's proposed 
revision. FirstEnergy generally notes that reporting practices should 
follow accounting practices. If, however, the Commission is proposing a 
change in accounting practice, FirstEnergy submits that this proceeding 
is not the appropriate forum to propose such a change, which should be 
addressed in a separate rulemaking preceding that does not relate 
solely to proposals on reporting requirements.
    86. APPA supports the proposal to clarify the pages 300-301 
instructions to distinguish unbundled, delivery-only transactions from 
the remainder of the transactions and provide consistency in filer 
data. Cogentrix supports the New York Commission proposal that 
delivery-only revenues be recorded in Other Electric Revenues (account 
456), while sales of electricity (including bundled sales) be recorded 
in accounts 440 through 448.
Commission Determination
    87. In this Final Rule, we adopt the NOPR proposals to revise the 
instructions on pages 300 and 301. Several commenters requested 
clarifications to the scope of the additional reporting requirement for 
Other Revenues. In response, we clarify that a filing company shall 
provide in a footnote information on ``any revenues'' not otherwise 
specified in the breakdowns of Other Revenues provided on page 300 or 
on pages 328-330.\57\ The Commission clarifies that the information 
provided on these pages should be comprehensive, meaning that any and 
all revenues should be described for each source of income in the same 
degree of detail as for the specific items for which a breakout is 
already required. For example account 456, Other Electric Revenues 
would include, among other items, commission on sale or distribution of 
electricity of others when sold under rates filed by such others; 
compensation for minor or incidental services provided for others such 
as customer billing, engineering,

[[Page 58730]]

etc.; profit or loss on sale of material; and supplies not ordinarily 
purchased for resale and not handled through merchandising and jobbing 
accounts. The Commission anticipates that the additional information 
should provide details on the amounts included in the general accounts 
(account 451, Miscellaneous Service Revenues, line 17 of page 300; 
account 456, Other Electric Revenues, line 21; and account 457.2, 
Miscellaneous Revenues, line 24) and that such reporting, along with 
the detail on page 300, should account for all sources of the filing 
company's other revenue.
---------------------------------------------------------------------------

    \57\ Page 300 already tracks various specific sources of other 
revenue, including Forfeited Discounts (account 450), Sales of Water 
and Water Power (account 453), Rent from Electric Property (account 
454), Interdepartmental Rents (account 455), Revenues from 
Transmission of Electricity of Others (account 456.1) and Regional 
Control Service Revenues (account 457.1). These accounts are not 
subject to the additional reporting requirement (or the $250,000 
reporting threshold). Page 300 also incorporates three general 
accounts, Miscellaneous Service Revenues (account 451), Other 
Electric Revenues (account 456), and Miscellaneous Revenues (account 
457.2).
---------------------------------------------------------------------------

    88. In the NOPR, the Commission did not propose a threshold for 
disclosing ``Other Revenues.'' Nevada Companies suggest $500,000 as a 
reasonable minimum threshold guideline for reporting Other Revenues. 
EEI requests that the Commission establish a threshold of $500,000 or 
10% of the balance in the USofA account, whichever is greater. 
Consistent with the statements the Commission made in Order No. 710-A 
when adopting the threshold amounts for grouping natural gas items, we 
find that the absence of a minimum threshold could add a substantial 
burden to the forms' filers.\58\ We find that an alternative threshold 
of $250,000 is reasonable and not unduly burdensome, and will, 
nevertheless, provide meaningful data to this Commission, state 
commissions, and customers. We also note that the threshold here is 
consistent with that used in FERC Form No. 2 (Form 2). In keeping with 
this analysis, the Commission adopts a minimum threshold of $250,000 
per source of income, consistent with the amounts reported on page 308 
of Form 2, which reports other operating revenues.
---------------------------------------------------------------------------

    \58\ See Order No. 710-A at P 7.
---------------------------------------------------------------------------

    89. The Michigan Commission requests that the Commission require 
filers to provide additional breakouts of revenue for wholesale 
distribution, retail distribution, opportunity sales, and retail sales 
(with a breakout of bundled and customer choice sales); breakouts by 
state jurisdiction and rate schedule; and reporting of the value of 
``unbilled sales.'' Michigan Commission also requests that the 
Commission require a breakout of ``Revenue from Transmission for 
Others'' by rate schedule. The requests by Michigan Commission would 
require changes to the Commission's accounting requirements. We are not 
prepared to, and did not propose in the NOPR to, revise our accounting 
requirements at this time; the Michigan Commission proposals are beyond 
the scope of our original proposal and so we decline to adopt them at 
this time.
    90. With regard to commenters' suggestions that a delivery-only 
transaction be separately disclosed, rather than included in electric 
sales (accounts 440-447), such an accounting requirement would require 
revision to the USofA, which is beyond the scope of this proceeding and 
which we decline to do at this time. Therefore, we will not require 
companies to separate out delivery-only transactions in their Form 1.
6. Increases to Threshold Reporting Levels
    91. The NOPR found that it is reasonable to increase certain 
threshold levels for reporting specific cost items and invited comment. 
Specifically, the NOPR proposed to increase the threshold reporting 
levels for (i) page 216 (Construction Work in Progress) to $1 million, 
(ii) pages 232, 233 and 278 (Other Regulatory Assets, Miscellaneous 
Deferred Debits and Other Regulatory Liabilities) to group items 
featuring an aggregate outstanding balance of $100,000 or less, (iii) 
page 269 (Other Deferred Credits) to $100,000, and (iv) pages 352 and 
353 (Research and Development) to $50,000.\59\
---------------------------------------------------------------------------

    \59\ NOPR at P 60.
---------------------------------------------------------------------------

Comments
    92. Several commenters support the proposals to increase the 
threshold reporting levels.\60\ BPA, however, states that Form 1 should 
contain more information and detail rather than less and that no 
accounts or level of detail should be removed from the current Form 1 
requirements. Duke and Nevada Companies each proposes alternative 
thresholds as detailed in the following table.
---------------------------------------------------------------------------

    \60\ See AEP, EEI, and FirstEnergy comments.

 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Page No.            Title of schedule        NOPR proposal               Duke             Nevada companies
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................  216...................  Construction Work in    $1,000,000 or less     Graduated scale based  Report projects
                                                              Progress--Electric      may be grouped.        on total assets base.  $10,000,000 or more.
                                                              (Account 107).
2..................................  232...................  Other Regulatory        Amounts less than      $1,000,000, or a       $1,000,000.
                                                              Assets (Account         $100,000 may be        graduated scale
                                                              182.3).                 grouped by classes.    based on total asset
                                                                                                             base.
3..................................  233...................  Miscellaneous Deferred  Amounts less than      $1,000,000, or a       $1,000,000.
                                                              Debits (Account 186).   $100,000 may be        graduated scale
                                                                                      grouped by classes.    based on total asset
                                                                                                             base.
4..................................  269...................  Other Deferred Credits  Amounts less than      $1,000,000, or a       $100,000.
                                                              (Account 253).          $100,000 may be        graduated scale
                                                                                      grouped by classes.    based on total asset
                                                                                                             base.
5..................................  278...................  Other Regulatory        Amounts less than      $1,000,000, or a       $1,000,000.
                                                              Liabilities (Account    $100,000 may be        graduated scale
                                                              254).                   grouped by classes.    based on total asset
                                                                                                             base.
6..................................  353...................  Research, Development,  Group items under      Graduated scale based  n.a.
                                                              and Demonstration       $50,000.               on total asset base.
                                                              Activities.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Commission Determination
    93. We are not persuaded to adopt the alternate thresholds or 
graduated reporting requirements proposed by some commenters. The 
Commission believes that the proposed thresholds are reasonable and not 
unduly burdensome. The thresholds balance the burden on utilities, and, 
in fact, in raising the thresholds, lessen the burden while continuing 
to provide meaningful data to this Commission, state commissions, and 
customers that wish to review a utility's rates. Furthermore, the 
uniformity of the reporting

[[Page 58731]]

requirement helps ensure that comparable data is available for all 
major utilities. Therefore, we adopt the revised reporting thresholds 
proposed in the NOPR \61\ and reject the alternative threshold 
reporting levels and proposals for graduated reporting requirements.
---------------------------------------------------------------------------

    \61\ Filers that use Form 1 to meet more specific reporting 
requirements for incentive rate treatment for construction work in 
progress (CWIP) or other costs must continue to meet the obligations 
arising with the approval of such incentive rates, despite these 
thresholds. Cf., e.g., Potomac-Appalachian Transmission Highline, 
LLC, 122 FERC ] 61,188, at P 155-56 (2008); Trans-Allegheny 
Interstate Line Co., 119 FERC ] 61,219, at P 45 (2007) (requiring 
reporting of financial details in Form 1 footnotes as condition of 
approval for CWIP rate incentive).
---------------------------------------------------------------------------

7. Proposed Technical Corrections
    94. In response to the NOI, the Commission received a number of 
suggested technical changes and instruction revisions. The Commission 
listed the suggestions that showed merit in the NOPR, Appendix C and 
invited comment on specific proposals. The proposals are reproduced in 
Appendix B to this Final Rule along with the Commission's responses. 
The NOPR specifically sought comment on the proposals in Appendix C, 
line 25 (RTO accounting on pages 310-311, 326-327, 332, 397-398), line 
32 (measuring sales for resale as financial transactions, pages 310 and 
326), line 34 (designating reporting hours and accounting for financial 
transactions, page 401A), and line 35 (utility of column (b), pages 301 
and 326).\62\
---------------------------------------------------------------------------

    \62\ An additional proposal concerning consistency in 
distinguishing delivery revenues and electricity sales (pages 300-
301) has already been addressed in the discussion of Other Revenues, 
above.
---------------------------------------------------------------------------

Comments
    95. SDG&E believes many of the proposed revisions and technical 
corrections are appropriate and provide needed information for rate 
review without imposing undue burdens on the filer.\63\
---------------------------------------------------------------------------

    \63\ BPA and FirstEnergy also generally support the corrections.
---------------------------------------------------------------------------

    96. In regard to the proposal to measure sales for resale as 
financial transactions (pages 310 and 326) on line 32 of Appendix C, 
APPA supports providing guidelines on how to report volume information 
on the sales for resale and purchased power schedule on pages 310 and 
326. The proposal asks the Commission to address the reporting of 
financial transactions; APPA believes that the Commission should also 
address the reporting of negative volumes on these schedules.
Commission Determination
    97. The comments received did not offer specifics in response to 
the NOPR requests for comments on the proposals in Appendix C, line 25 
(RTO accounting on pages 310-311, 326-327, 332, 397-398), line 34 
(designating reporting hours and accounting for financial transactions, 
page 401A), or line 35 (utility of column (b), pages 301 and 326). In 
addition, with respect to APPA's proposal to address reporting of 
negative volumes, we decline to adopt such a proposal at this time; 
APPA has not adequately explained how negative volumes arise in 
purchase or sales transactions. Due to the lack of specific proposals, 
the Commission will not implement the remainder of these changes at 
this time. In addition, for Appendix C, line 32, no commenter provided 
a specific proposal for reporting volume information; consequently, we 
will not revise our reporting requirements at this time.
8. Additional Technical Revisions
    98. EEI's comments include a number of additional suggested 
improvements, clarifications and corrections to the forms and software: 
(1) General--on various pages, EEI requests the Commission to ensure 
that all data, descriptions, and amounts roll over from one period to 
the next, to avoid companies having to re-enter the data; (2) General--
standardize the number formats used to represent credits throughout the 
form--for example, on page 119, column (c), the format is ``-50,500,'' 
while in column (d) the format is ``(50,500);'' (3) pages 120-121--EEI 
requests a correction to ensure that all footnotes print to identify 
which column is involved when footnotes are added to columns (b) or 
(c); (4) pages 122a-122b and 231-EEI requests the instructions be 
revised to reflect Commission staff guidance that these schedules are 
to be presented on a year-to-date basis; (5) pages 122a-122b--EEI 
requests the row heights on the two pages be adjusted to be the same, 
making information easier to follow; (6) pages 329-330--EEI states that 
the page title should reference account 456.1, not 456; (7) pages 352-
353--correct the printing parameters so that the dollars for line 47 
print on the same page as the description for that line; (8) page 398--
clarify whether a standard unit of measure should be applied to Number 
of Units Sold in column (e), and, if not, how dissimilar units of 
measure are to be totaled on line 8; and (9) pages 426-427--the Form 1 
submission software (FOSS) should calculate totals for column (f) by 
Substation Classification.
    99. In addition, EEI supplements the technical revisions proposed 
in the NOPR and requests that the Commission address the following 
issues: \64\ (a) The ability to load data more cleanly into the 
software, including Excel data; (b) the ability to copy and paste 
information from Microsoft Word and other native-format documents 
without losing formatting such as underlines, paragraphs, and headers; 
(c) the ability to print preview for Notes to Financials and Important 
Changes pages; (d) corrections to the ``total amount'' functions in the 
software, in particular on pages 224, 320-323, 336, 354-355; (e) 
corrections to improper page references, in particular on pages with 
footnotes; (f) corrections to the software's cross-checking function; 
and (g) corrections to text on various pages of the forms, as noted in 
NOI comments.
---------------------------------------------------------------------------

    \64\ AEP supports the software improvements proposed by EEI to 
enable them to load data efficiently into the FERC software.
---------------------------------------------------------------------------

Commission Determination
    100. With respect to EEI's new suggestions, the Commission 
confirms: (1) The copy forward feature is available for many page 
schedules, and if additional pages need such a feature, filers may make 
requests to [email protected] (copying on these pages is an 
option and not mandated); (2) the printing of negative numbers on page 
119, column (d) will be corrected; (3) the footnote printing issues on 
pages 120-121 will be addressed; (4) the instructions on pages 122a, 
122b and 231 will be updated; (5) the row heights on pages 122a and 
122b will be changed, as requested; (6) the page title on pages 329 and 
330 will be corrected (consistent with page 328); and (7) printing 
parameters on pages 352-353 will be corrected to address text 
continuity. As for the two remaining suggestions from the list, we 
clarify: (8) that a standard unit of measure on page 398 is not 
appropriate, because the unit of measure should instead be that used in 
the filer's billing determinants; \65\ and (9) consistent with EEI's 
request the software already permits filers to calculate totals on 
pages 426-427, column (f) by substation.\66\
---------------------------------------------------------------------------

    \65\ To facilitate reporting, we will revise the software so 
that a total can be entered on line 8, columns (b) and (e), number 
of units, if filers wish to use a standard unit of measure 
(otherwise there will be no total).
    \66\ This feature can be accomplished by entering either 
``Subtotal'' or ``Total'' as the first characters in column (a), 
which will result in the system calculating values for other 
columns, accordingly.
---------------------------------------------------------------------------

    101. With respect to EEI's request that the Commission ensure 
compatibility between the Form 1 reporting software and commonly used 
commercial products such as spreadsheet, word processing and accounting 
software, the

[[Page 58732]]

Commission is mindful of the continual upgrading of commercial software 
and strives to ensure that the Commission's forms can accommodate the 
changes. However, we note that several comments concerning the eForm 
software (FOSS) appear to be based on a misunderstanding of the 
software's capability. The Commission encourages filing companies to 
contact the Commission's Online Support (via e-mail or phone) to 
resolve technical issues concerning the FOSS software. Through calls to 
Online Support, issues may be addressed in a direct and timely manner 
that is specific to an individual filing company's concerns. In this 
manner, the Commission, the regulated entities, and the public in 
general will be best and most efficiently served.
    102. As to the specific issues described in the comments, the 
Commission notes that the software incorporates the ability to import 
data from any spreadsheet program (including Excel or Open Office) that 
is able to export the data using the ``dbf'' format. Many schedules 
support this capability and also support (but do not require) data 
roll-over from past reports. If importing or data roll-over capability 
is desired for other pages, filing companies should contact 
[email protected]. In addition, the software includes the 
capability to import word processing files in the Word format into Form 
1, Notes to the Financial Statements. It is possible compatibility 
issues with specific versions of word processing software (such as 
Microsoft Word) may result in some formatting being lost. Users 
experiencing technical difficulties may contact the Commission at 
[email protected]. The software also features print preview 
capability and data roll-over functions. As for corrections to the 
``total amount'' functions on various pages, we have been unable to 
duplicate the errors referred to in the comments. If a filing company 
is having difficulty with a particular calculation, assistance is 
available by contacting [email protected]. Finally, steps have 
been taken to include data cross-checking in the 2008 Form 1 submission 
software, and we will make corrections to the text on various pages of 
the forms to address EEI's suggested editorial changes.\67\
---------------------------------------------------------------------------

    \67\ Absent reference to particular pages, the Commission is 
unable to address EEI's remaining request that the Commission 
correct unspecified improper page references and footnotes.
---------------------------------------------------------------------------

E. Miscellaneous

1. Retaining Form 3-Q
    103. In the NOPR, we rejected requests that the Commission 
eliminate Form 3-Q as being unnecessary. The Commission believes that 
the quarterly reports are important because they allow more timely 
evaluations of existing rates and improve the transparency and currency 
of financial information.
Comments
    104. AEP, EEI, and Nevada Companies suggest that the Commission 
reconsider whether the burden of completing the Form 3-Q is warranted 
when compared to the limited value of data it provides.

Commission Determination

    105. We decline to adopt this change for the reasons stated in the 
NOPR: \68\
---------------------------------------------------------------------------

    \68\ NOPR at P 61.

    The Commission believes that the increased frequency of 
financial information provided in Form 3-Q is important. The 
quarterly reports allow for more timely evaluations of existing 
rates and improve the transparency and currency of financial 
---------------------------------------------------------------------------
information submitted to the Commission.

    106. The comments provide no compelling reason to eliminate Form 3-
Q.
2. Confidentiality Concerns
    107. In response to NOI comments, the NOPR rejected calls that 
certain financial data should be considered confidential because of 
concerns raised regarding competitive risks and harm to critical 
infrastructure. The NOPR affirmed the Commission's commitment to 
maintaining the public availability of financial data filed in Form 1 
and other reports and found that additional precautions or protection 
of financial data are not necessary.
Comments
    108. APPA commends the Commission for continuing to improve its 
collection of financial data and for its commitment to maintaining the 
public availability of the data. AEP recommends the Commission 
reconsider its position and cease to require the release of what it 
characterizes as competitively sensitive commercial information to 
potential competitors that could disadvantage sellers in competitive 
markets.
    109. EEI encourages the Commission to protect commercially 
sensitive information, in the interest of promoting fair competition 
and the development of robust competitive markets. EEI further 
encourages the Commission to reconsider its handling of commercially 
sensitive information in the financial forms, to ensure that 
information is not released at a plant or company level if such 
information may harm companies, either in their competition with others 
or in their negotiations with suppliers. In particular, EEI requests, 
as it has done in previous efforts to revise the reporting requirements 
that the Commission cease releasing in discrete form individual 
generating plant costs and operating performance information, and 
instead release such information only in aggregated form that, 
according to EEI, avoids commercial harm.
Commission Determination
    110. As stated in the NOPR and elsewhere, the Commission remains 
committed to the public availability of cost-of-service data for public 
utilities. Since 1937, Form 1 data have provided a critical component 
of the Commission's regulatory program and that of its predecessor, the 
Federal Power Commission.\69\ While the electricity market is changing, 
regulated public utilities still provide jurisdictional power and 
transmission services for which information is needed in connection 
with the Commission fulfilling its statutory responsibilities. Because 
transmission service is a critical component in electricity service and 
most transmission rates are cost-based, Form 1 data are critical to 
evaluating the underlying costs of providing transmission service and 
the resulting rates. In addition, Form 1 data provide the basis for 
many rates for generation service (both cost-based and market-based), 
which may be determined on a unit by unit basis. Making this cost data 
publicly available provides customers with a means to monitor the 
reasonableness of their rates, and thus assists the Commission's 
efforts to ensure that rates remain just and reasonable. The Commission 
also has previously reviewed and rejected suggestions that it should 
adopt non-public status for Form 1 data.\70\ Consistent with our long-
standing precedent, and in light of the commenters' failure to convince 
us

[[Page 58733]]

otherwise, we decline to adopt non-public status for such data here.
---------------------------------------------------------------------------

    \69\ See generally Connecticut Light and Power Co., 2 FPC 853 
(1944).
    \70\ See PECO Energy Co., et al., 88 FERC ] 61,330 (1999); 
Consolidated Edison Co., 72 FERC ] 61,184 (1995). See also Alabama 
Power Company v. FPC, 511 F.2d 383, 390-91 (DC Cir. 1974) (upholding 
fuel purchases reporting requirement, and rejecting claims that 
disclosure would lead to bargaining disadvantages in future fuel 
contract negotiations as outweighed by benefits of disclosure).
---------------------------------------------------------------------------

3. Requests To Reconsider Rejected Revisions
    111. Duke suggests that the Commission misconstrued its proposal in 
Docket No. RM07-9-000, proposing to eliminate the requirement to report 
executive officers' salaries on page 104 and argues that the 
information is not relevant and may be obtained elsewhere.\71\ Duke 
also renews its objection that the requirement to footnote amounts 
reported in pages 328-330, column (m), is unduly burdensome, because 
the detail largely concerns ancillary services data and filers must 
insert repetitive footnotes that do little to further the user's 
understanding of the charges.
---------------------------------------------------------------------------

    \71\ See NOPR at P 14 (summarizing Duke's comments responding to 
the NOI).
---------------------------------------------------------------------------

    112. Further, Duke believes the Commission misinterpreted Duke's 
suggested revisions related to pages 422-425. Duke does not request 
eliminating the pages, but states rather that it is proposing a means 
by which the burden on the filer could be reduced, without diminishing 
the usefulness of the data reported. Duke believes that reporting miles 
of transmission lines by state and legal entity, as well as the totals 
of the different type of supporting structures by voltage, would be 
sufficient and far less burdensome for filers than current practice. 
Duke questions the claim, cited in the NOPR, stating that pages 422-425 
(as well as pages 426 and 427) provide valuable information on 
transmission lines and substations that allows commenters to track rate 
base amounts on a facility-by-facility basis. Duke disagrees and 
questions the necessity of the ``to'' and ``from'' level of detail.\72\ 
According to Duke, the necessary data to calculate transmission rates 
for RTO members that file Form 1 is already largely available in 
various RTO filings or available upon request. Second, Duke states that 
the ``to'' and ``from'' level of detail for filers that are not members 
of RTOs is insignificant because transmission rates for these filers 
are based on average system cost.
---------------------------------------------------------------------------

    \72\ Duke comments at 5. Pages 422-425, col. (a) and (b) provide 
information on transmission lines (132 kV and above), which are 
designated as running ``from'' location A ``to'' their destination 
at location B. Transmission lines below 132 kV are grouped together 
by voltage.
---------------------------------------------------------------------------

    113. Duke proposes that the information contained on pages 426 and 
427 be updated in its entirety every three years, and that in all other 
years a filer only be required to report additions, retirements and 
changes to the substations. Duke believes that typically there are few 
changes year-by-year to the amount of information presented on pages 
426 and 427. According to Duke, this change would be beneficial not 
only to filers, but also to users because the changes would be more 
apparent to users.
    114. APPA supports the Commission's determination that pages 422-
423 and 426-427 should remain in Form 1. BPA states that Form 1 should 
contain more information rather than less, and that no accounts or 
level of detail should be removed from the current Form 1 requirements.
Commission Determination
    115. The Commission affirms its decision to retain the existing 
requirements. The information is useful to the Commission's oversight, 
and is relied upon for the monitoring, review and modification of 
rates. The Commission disagrees that alternate approaches of seeking 
the information, i.e., on request or seeking comparable information in 
various rate, tariff and informational filings, are a substitute for 
consistent and uniform reporting of the data in Form 1. The Form 1 
format ensures that the data is available, is consistent from year to 
year and is comparable among filing utilities. In addition, this 
information is valuable because of the increasing demand, and 
accompanying scrutiny, being placed on the transmission grid; there is 
a continuing need for information to assess changes and improvements 
(both existing and new) to transmission infrastructure.
4. Requests for Additional Cost Data
    116. In the NOPR, we rejected requests for the collection of 
additional Form 1 data, finding that additional detail may be 
unnecessary. In light of the comments received and given the 
Commission's experience with reporting requirements, the Commission 
determined that wholesale changes to Form 1 were unnecessary especially 
in light of the targeted changes proposed. Therefore, the NOPR did not 
propose that filers provide a cost and revenue study or the type of 
detailed information needed in a rate case, or detailed information on 
pensions and other employment benefits.\73\
---------------------------------------------------------------------------

    \73\ NOPR at P 35.
---------------------------------------------------------------------------

Comments
a. Pension Information
    117. The New York Commission renews its request that the Commission 
require electric utilities to file information regarding pensions and 
other employee benefits in order to assess whether rates are just and 
reasonable, and states that this need outweighs the burden of imposing 
an incremental reporting requirement upon utilities. The New York 
Commission indicates that the Commission's proposal appears 
inconsistent with its position in Order No. 710.
b. Transmission Investment
    118. The Michigan Commission requests that the Commission clarify 
whether additional detail on new transmission plant in service is 
required. TAPS proposes that the Commission require subdivision of 
account 353 in order to distinguish account 353 costs associated with 
the transmission and generator step-up functions. This requirement 
would apply irrespective of whether a Form 1 filing utility uses a 
formula rate. TAPS states that for the Form 1 to work as a basis for a 
preliminary rate assessment and serve its other rate-regulatory 
purposes, it should break out the costs of facilities associated with 
generator step-up transformation and report any methodology used to 
divide account 353 between the transformation and transmission 
functions. According to TAPS, the Commission's accounting practices 
should reflect rate functionalization for both stated and formulaic 
rates so that customers and regulators may monitor rates and understand 
how the utility functionalizes costs.
Commission Determination
    119. Contrary to the New York Commission's view, our decision to 
rely on existing reporting requirements with respect to pension 
information in this proceeding is not inconsistent with our 
determination in Order No. 710. In that proceeding, which adopted 
changes to our reporting requirements in Form 2 for gas pipelines, we 
found that insufficient information was available because details about 
the types and costs of employee benefits were not readily available due 
to the pipelines' participation in multi-employer benefit plans in 
which they are assigned a portion of the total cost and there was 
flexibility in the way in which information was described in a footnote 
disclosure.\74\ However, in contrast, there was no evidence of a 
widespread impediment to understanding public utilities' pension 
obligations. Therefore, we will not impose similar reporting 
requirements here, but instead will rely on our existing reporting 
requirements.
---------------------------------------------------------------------------

    \74\ Order No. 710 at P 38.

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

[[Page 58734]]

    120. As stated in the NOPR, we are not persuaded to expand the 
scope of this proceeding, as would be necessary to grant TAPS' request 
to revise our accounting requirements and provide in this Final Rule 
the additional information requested. This determination is consistent 
with our holdings elsewhere in this Final Rule with respect to requests 
for additional information related to formula rates and, in particular, 
transmission investment.

F. Reporting Burden

    121. In the NOPR, the Commission estimated that the proposed new 
affiliate transaction and other information will take respondents 14 
hours to collect and report on an average annual basis per 
respondent.\75\
---------------------------------------------------------------------------

    \75\ NOPR at P 66.
---------------------------------------------------------------------------

Comments
    122. EEI comments that, recognizing that reporting does involve 
substantial costs, the Paperwork Reduction Act (PRA) requires federal 
agencies to strive to minimize the reporting burden and avoid 
duplicative reporting requirements.\76\ In prior triennial reviews, EEI 
has asked the Commission to review the Forms 1, 1-F, and 3-Q as well as 
other FERC forms to determine if all the information contained in the 
forms is truly needed and whether it is needed in as much detail.\77\ 
EEI reiterates that general request here and encourages the Commission 
to minimize the reporting burden to the maximum extent possible.
---------------------------------------------------------------------------

    \76\ EEI cites 44 U.S.C. 3501, et seq.
    \77\ EEI states that the Paperwork Reduction Act requires each 
agency to undertake a triennial review in consultation with the 
Office of Management and Budget (OMB) to demonstrate that 
information collections are as reasonable and streamlined as 
possible. EEI comments at 2-3.
---------------------------------------------------------------------------

    123. Duke estimates a burden greater than 14 hours to meet the 
requirements associated with the proposed Form 1, page 429 alone; 
similarly, EEI suggests that compiling the proposed affiliate 
transaction information will take longer than 14 hours.\78\ MidAmerican 
suggests that the proposed Form 1 affiliate transaction reporting 
requirement is duplicative of existing federal and state affiliate 
reporting requirements.
---------------------------------------------------------------------------

    \78\ EEI estimates that the proposed affiliate transaction 
schedule alone would require on the order of 100 to 300 hours per 
company to compile in the proposed format. AEP similarly argues that 
the affiliate transaction reporting would be voluminous and 
burdensome.
---------------------------------------------------------------------------

    124. SDG&E on the other hand believes that the proposed revisions 
to the financial reporting obligations in the NOPR generally are 
appropriately balanced to fulfill the Commission's stated goal of 
obtaining necessary information without imposing undue burdens on the 
filer.
Commission Determination
    125. The Commission's estimate of the reporting burden refers to 
the Commission's estimate of the additional amount of time needed to 
comply with the Form 1 revisions on an annual basis, over and above the 
time needed to prepare the Form 1 under existing requirements. Thus, 
while the Commission is sensitive to filing parties' individual 
expectations that becoming familiar with the new reporting 
requirements, compiling and reporting certain information may initially 
take more time than the annual estimate, these parties will not need to 
invest a similar effort in subsequent years. Furthermore, the revisions 
adopted in this Final Rule are not extensive, and largely consist of 
material that is already required to be maintained for other purposes. 
Therefore, although the initial preparation to meet new reporting 
requirements established in this Final Rule may be greater, the 
Commission believes that the total increase in the time to meet all of 
the Form 1 requirements, existing as well as those adopted in this 
rule, is not unduly burdensome. Furthermore, the Final Rule also 
relieves some parties of their reporting obligations, and lessens the 
reporting burden for all parties through the increase in the threshold 
reporting requirements for certain items.
    126. FirstEnergy, AEP, MidAmerican, and SDG&E comment on the 
estimated burden of the affiliate transaction reporting requirement; 
however, they do not offer an alternative estimate. Likewise, 
International Transmission and MidAmerican challenge the total 14 hour 
estimate but fail to offer alternative estimated burden hours.
    127. While Duke cites how they would have to review 187,700 lines 
of accounting related to transactions for its four respondent 
companies, Duke does not specify what such a ``review'' would entail, 
nor what the estimated burden would be. Nevada Companies argue that 40 
hours per quarter would be needed or 160 hours annually for the 
affiliate transaction reporting requirement. EEI states it would take 
anywhere from 100 to 300 hours, according to its members, to fulfill 
the affiliated transaction requirement.
    128. In response to Nevada Companies' burden estimate, the 
Commission notes that the Final Rule only requires a reporting of 
transactions on an annual basis, not quarterly. Therefore, we believe 
that Nevada Companies' have overestimated the amount of time needed to 
comply with the requirements. In addition, EEI's estimate likewise 
appears to be excessive and does not take into account clarifications 
made in this Final Rule. EEI makes several assumptions that have been 
resolved in a manner that would significantly decrease its estimate, 
including: (1) Similar to Nevada Companies, EEI assumes that the 
revised reporting requirements are to be met on a quarterly basis, 
while the Final Rule largely imposes annual reporting requirements;\79\ 
(2) EEI assumes that power transactions are included, while the Final 
Rule clarifies, that power transactions are excluded from the new page 
429 affiliated transaction reporting requirement; \80\ (3) EEI requests 
reporting by service type category rather than by transaction; \81\ and 
(4) EEI's estimate does not account for the $250,000 affiliate 
transaction reporting threshold of transaction/service type adopted in 
response to comments. In response to concerns raised by the commenters, 
however, the Commission has adjusted its estimate as reflected below.
---------------------------------------------------------------------------

    \79\ See EEI comments at 6.
    \80\ EEI comments at 10.
    \81\ The Commission does not object so long as the service is 
ongoing, and is not undertaken in response to a particular, non-
recurring event.
---------------------------------------------------------------------------

VI. Information Collection Statement

    129. The collections of information contained in this Final Rule 
have been submitted to the Office of Management and Budget for review 
under section 3507(d) of the Paperwork Reduction Act of 1995; \82\ the 
Commission is revising the reporting requirements for public utilities 
and licensees (and for Form 3-Q, also natural gas companies) contained 
in the above financial and operational information collections.
---------------------------------------------------------------------------

    \82\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    Title: FERC Form No. 1, ``Annual Report of Major Electric 
Utilities, Licensees, and Others''; FERC Form No. 1-F, ``Annual Report 
for Nonmajor Public Utilities and Licensees; FERC Form No. 3-Q, 
``Quarterly Financial Report of Electric Utilities, Licensees, and 
Natural Gas Companies.''
    Action: Final Rule.
    OMB Control Nos. 1902-0021 (Form 1); 1902-0029 (Form 1-F); 1902-
0205 (Form 3-Q).
    Respondents: Businesses or other for profit.
    Frequency of responses: Annually and quarterly.
    Necessity of the information: The information collected under the 
requirements of Part 141 is essential to the Commission's fulfilling 
its statutory responsibilities under the FPA. The information collected 
is used in

[[Page 58735]]

ratemaking and rate monitoring, for oversight of company finances and 
operations, and for adjudication and regulation. The data currently 
reported in the forms lack the information that would allow the 
Commission to assess and keep pace with changes in the industry and the 
changes adopted here better permit the Commission and the public to 
evaluate the filers' jurisdictional rates and operations. The 
additional information to be collected by the Final Rule will increase 
the forms' usefulness to both the Commission and the public. Without 
this information, it would be more difficult for the Commission and the 
public to assess costs and operations, and thereby ensure that rates 
are just and reasonable.
    Burden Statement: In light of comments from larger transmission-
owning public utilities that it may take additional time to comply with 
the new affiliate transaction reporting requirement added to Form 1 in 
this Final Rule, the Commission is revising its information collection 
estimates. Taking into account the comments received, the Commission 
estimates that on average it will take large respondents 28 hours 
annually to comply with the requirements adopted in the Final Rule and 
smaller respondents 11 hours. There are an estimated 211 major and 4 
nonmajor electric utilities that will be affected by the changes 
adopted for Form 1 in the Final Rule, for a total of 215 
respondents.\83\ Larger utilities with more affiliate transactions may 
face a greater burden in reporting affiliate transaction, other 
revenues and formula rate information. However, the Commission believes 
that most of the additional information required to be reported is 
already maintained by the utilities.
---------------------------------------------------------------------------

    \83\ These numbers are based on the most recent filings.
---------------------------------------------------------------------------

    The Commission's estimate has taken into account the commenters' 
proposed burden estimates. However, the Commission has adjusted these 
numbers to reflect the clarifications made in the Final Rule. Thus, 
commenters' proposed affiliated transaction burden estimates of 100 to 
300 hours are better considered to be 25 to 75 hours, to account for 
the fact that quarterly reporting is not required. Furthermore, because 
the Final Rule does not require reporting of affiliate power 
transactions on new page 429, the affiliate transaction reporting 
estimate was halved to reflect the Commission's estimate of the 
transactions to be reported. In addition, the Final Rule adopts the 
$250,000 threshold for affiliate transaction reporting, which will 
result in a further reduction of the initial estimates. The Commission 
finds that a range of 8 to 20 hours is appropriate to estimate the 
annual burden of affiliate transaction reporting, and, based on its 
understanding that smaller entities will face a lower burden, estimates 
the typical burden to prepare the affiliate transaction schedule to be 
12 hours. Assuming a similar burden for the formula rate footnote 
disclosure, the Commission estimates the total burden, including other 
reporting, for the revised Form 1 reporting requirements adopted in 
this Final Rule to be 25 hours. The Commission adopts the Form 3-Q 
burden of one hour as proposed in the NOPR, since neither the formula 
rate or affiliate transaction reporting requirements are adopted for 
Form 3-Q.
    The resulting total hours for the following collections of 
information will be:

----------------------------------------------------------------------------------------------------------------
                                                       Change in the
       Data collection form            Number of     number of  hours   Filing  periods    Change in the  total
                                      respondents     per  respondent                         annual  hours
(a)                                             (b)               (c)               (d)    (e) = (b) x (c) x (d)
----------------------------------------------------------------------------------------------------------------
FERC Form 1......................               211                25                 1                    5,275
FERC Form 3-Q....................               199                 1                 3                      597
FERC Form 1-F....................                 4                11                 1                       44
----------------------------------
----------------------------------------------------------------------------------------------------------------

    Total Annual Hours for Collection: (Est. Reporting + Recordkeeping 
(if appropriate)) = 5,916.
    Information Collection Costs: The Commission estimates the costs to 
comply with these requirements as follows:
    The Commission estimates that the additional hours to complete the 
additional reporting requirements will be divided among a utility's 
accounting and internal and outside legal services and support staff. 
The total annualized costs for the information collection is $538,356. 
This number is reached by multiplying the total hours to prepare 
responses (total: 5,916) by an hourly wage estimate of $91 (an average 
that incorporates senior accountant ($50), financial analyst ($40), 
support staff rates ($25) and legal ($250)) (salary information source: 
Bureau of Labor Statistics and market research). These costs will be 
spread over 215 utilities, however. On balance, the Commission finds 
that the collection costs will not be unduly burdensome.
    Interested persons may obtain information on the reporting 
requirements by contacting: Federal Energy Regulatory Commission, 888 
First Street, NE., Washington, DC 20426 [Attention: Michael Miller, 
Office of the Chief Information Officer, phone: (202) 502-8415, fax: 
(202) 273-0873, e-mail: [email protected]]. Comments concerning 
the collection of information and the associated burden estimates, 
should be sent to the contact listed above and to the Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
Washington, DC 20503 [Attention: Desk Officer for the Federal Energy 
Regulatory Commission, phone (202) 395-7345; fax (202) 395-7285].

VII. Environmental Analysis

    130. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\84\ No 
environmental consideration is needed for the promulgation of a rule 
that addresses information gathering, analysis, and dissemination,\85\ 
or that addresses accounting.\86\ This Final Rule involves information 
gathering, analysis, and

[[Page 58736]]

dissemination, and accounting. Consequently, neither an Environmental 
Impact Statement nor an Environmental Assessment is required.
---------------------------------------------------------------------------

    \84\ See Regulations Implementing the National Environmental 
Policy Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783 
(1987).
    \85\ See 18 CFR 380.4(a)(5).
    \86\ See 18 CFR 380.4(a)(16).
---------------------------------------------------------------------------

VIII. Regulatory Flexibility Act

    131. The Regulatory Flexibility Act of 1980 (RFA) \87\ requires 
rulemakings to contain either a description or analysis of the effect 
that the rule will have on small entities or a certification that the 
rule will not have a significant economic impact on a substantial 
number of small entities.\88\ Most utilities regulated by the 
Commission do not fall within the RFA's definition of a small 
entity.\89\ Thus, most utilities to which the rules adopted herein 
apply would not fall within the RFA's definition of small entities. As 
noted above, the Commission has also sought to alleviate the burden 
imposed on small entities by (a) eliminating a non-jurisdictional 
utility reporting requirement; (b) accommodating non-calendar fiscal 
year accounting; and (c) increasing the minimum threshold reporting 
levels for certain line-item information. In creating the Form 1 and 
the Form 1-F, moreover, the Commission established two different 
reporting thresholds so that smaller utilities would not be encumbered 
with having to provide the information necessary to comply with the 
Form 1. Consequently, the Final Rule adopted here will not have a 
significant economic effect on a substantial number of small entities.
---------------------------------------------------------------------------

    \87\ 5 U.S.C. 601-12.
    \88\ Id.
    \89\ 5 U.S.C. 601(3).
---------------------------------------------------------------------------

IX. Document Availability

    132. In addition to publishing the full text of this document in 
the Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through the Commission's home page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A, 
Washington, DC 20426.
    133. From the Commission's home page on the Internet, this 
information is available in the Commission's document management 
system, eLibrary. The full text of this document is available on 
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or 
downloading. To access this document in eLibrary, type the docket 
number excluding the last three digits of this document in the docket 
number field.
    134. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours. For assistance, please contact 
FERC Online Support at 1-866-208-3676 (toll free) or 202-502-6652 or e-
mail at [email protected], or the Public Reference Room at 
(202) 502-8371, TTY (202) 502-8659. E-mail at 
[email protected].

X. Effective Date and Congressional Notification

    135. These regulations are effective for calendar year 2009, i.e., 
as of January 1, 2009. The first report, the Form 3-Q for the first 
quarter of 2009, will be due in May 2009. The Commission has 
determined, with the concurrence of the Administrator of the Office of 
Information and Regulatory Affairs of OMB, that this rule is not a 
``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.

List of Subjects

18 CFR Part 41

    Administrative practice and procedures, Electric utilities, 
Reporting and recordkeeping requirements, Uniform System of Accounts.

18 CFR Part 141

    Electric utilities and licensees, Reporting requirements.

    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

0
In consideration of the foregoing, the Commission amends parts 41 and 
141 of Title 18 of the Code of Federal Regulations, as set forth below:

PART 41--ACCOUNTS, RECORDS, MEMORANDA AND DISPOSITION OF CONTESTED 
AUDIT FINDINGS AND PROPOSED REMEDIES

0
1. The authority citation for part 41 continues to read as follows:

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


0
2. Section 41.11 is revised to read as follows:


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.

PART 141--STATEMENTS AND REPORTS (SCHEDULES)

0
3. The authority citation for part 141 is revised to read as follows:

    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.


0
4. In Sec.  141.1, paragraph (b)(1)(i) is revised to read as follows:


Sec.  141.1  FERC Form No. 1, Annual report of Major electric 
utilities, licensees and others.

* * * * *
    (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.
* * * * *

0
5. In Sec.  141.400, paragraph (b)(1)(i) is revised to read as follows:


Sec.  141.400  FERC Form No. 3-Q, Quarterly financial report of 
electric utilities, licensees, and natural gas companies.

* * * * *
    (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,

[[Page 58737]]

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.
* * * * *
BILLING CODE 6717-01-P
[GRAPHIC] [TIFF OMITTED] TR07OC08.000


[[Page 58738]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.001


[[Page 58739]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.002


[[Page 58740]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.003


[[Page 58741]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.004


[[Page 58742]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.005


[[Page 58743]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.006


[[Page 58744]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.007


[[Page 58745]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.008


[[Page 58746]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.009


[[Page 58747]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.010


[[Page 58748]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.011


[[Page 58749]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.012


[[Page 58750]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.013


[[Page 58751]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.014


[[Page 58752]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.015


[[Page 58753]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.016


[[Page 58754]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.017


[[Page 58755]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.018


[[Page 58756]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.019


[[Page 58757]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.020


[[Page 58758]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.021


[[Page 58759]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.022


[[Page 58760]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.023


[[Page 58761]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.024


[[Page 58762]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.025


[[Page 58763]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.026


[[Page 58764]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.027


[[Page 58765]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.028


[[Page 58766]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.029


[[Page 58767]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.030


[[Page 58768]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.031


[[Page 58769]]


[GRAPHIC] [TIFF OMITTED] TR07OC08.032

 [FR Doc. E8-23458 Filed 10-6-08; 8:45 am]
BILLING CODE 6717-01-C