301

Rural Utilities Service, USDA § 1730.4

American Wood Preservers’ Association,

P.O. Box 286, Woodstock, Maryland 21163,

Phone: (410) 456–3169.

[58 FR 41406, Aug. 3, 1993]

PART 1730—ELECTRIC SYSTEM

OPERATIONS AND MAINTENANCE

Subpart A—General

Sec.

1730.1 Introduction.

1730.2 RUS policy.

1730.3 RUS addresses.

1730.4 Definitions.

1730.5–1730.19 [Reserved]

Subpart B—Operations and Maintenance

Requirements

1730.20 General.

1730.21 Inspections and tests.

1730.22 Borrower analysis.

1730.23 Review rating summary, RUS Form

300.

1730.24 RUS review and evaluation.

1730.25 Corrective action.

1730.26 Engineer’s certification.

1730.27–1730.99 [Reserved]

APPENDIX A TO SUBPART B TO PART 1730—REVIEW RATING SUMMARY, RUS FORM 300

AUTHORITY: 7 U.S.C. 901 et seq., 1921 et seq.,

6941 et seq.

SOURCE: 63 FR 3450, Jan. 23, 1998, unless

otherwise noted.

Subpart A—General

§ 1730.1 Introduction.

(a) This part contains the policies

and procedures of the Rural Utilities

Service (RUS) related to electric borrowers’ operation and maintenance

practices and RUS’ review and evaluation of such practices.

(b) The policies and procedures included in this part apply to all electric

borrowers (both distribution borrowers

and power supply borrowers) and are

intended to clarify and implement certain provisions of the security instrument and loan contract between RUS

and electric borrowers regarding operations and maintenance. This part is

not intended to waive or supersede any

provisions of the security instrument

and loan contract between RUS and

electric borrowers.

(c) The Administrator may waive, for

good cause, on a case by case basis, certain requirements and procedures of

this part.

§ 1730.2 RUS policy.

It is RUS policy to require that all

property of a borrower be operated and

maintained properly in accordance

with the requirements of each borrower’s loan documents. It is also RUS

policy to provide financial assistance

only to borrowers whose operations

and maintenance practices and records

are satisfactory or to those who are

taking corrective actions expected to

make their operations and maintenance practices and records satisfactory to RUS.

§ 1730.3 RUS addresses.

(a) Persons wishing to obtain forms

referred to in this part should contact:

Program Support and Regulatory Analysis, Rural Utilities Service, U.S. Department of Agriculture, Stop 1522, 1400

Independence Ave., SW., Washington,

DC 20250–1522, telephone (202) 720–8674.

Borrowers or others may reproduce any

of these forms in any number required.

(b) Documents required to be submitted to RUS under this part are to

be sent to the office of the borrower’s

assigned RUS General Field Representative (GFR) or such other office as designated by RUS.

§ 1730.4 Definitions.

Terms used in this part have the

meanings set forth in 7 CFR Part

1710.2. References to specific RUS

forms and other RUS documents, and

to specific sections or lines of such

forms and documents, shall include the

corresponding forms, documents, sections and lines in any subsequent revisions of these forms and documents. In

addition to the terms defined in 7 CFR

Part 1710.2, the term Prudent Utility

Practice has the meaning set forth in

Article 1, Section 1.01 of Appendix A to

Subpart B of 7 CFR Part 1718—Model

Form of Mortgage for Electric Distribution Borrowers, for the purposes

of this Part.

302

§§ 1730.5–1730.19 7 CFR Ch. XVII (1–1–00 Edition)

§§ 1730.5–1730.19 [Reserved]

Subpart B—Operations and

Maintenance Requirements

§ 1730.20 General.

Each distribution borrower and

power supply borrower shall operate

and maintain its system in compliance

with Prudent Utility Practice, in compliance with its loan documents, and in

compliance with all applicable laws,

regulations and orders, shall maintain

its systems in good repair, working

order and condition, and shall make all

needed repairs, renewals, replacements,

alterations, additions, betterments and

improvements, in accordance with applicable provisions of the borrower’s security instrument. Each borrower is responsible for on-going operations and

maintenance programs, for maintaining records of the physical and electrical condition of its electric system

and for the quality of services provided

to its customers. The borrower is also

responsible for all necessary inspections and tests of the component parts

of its system, and for maintaining

records of such inspections and tests.

Each borrower shall budget sufficient

resources to operate and maintain its

system in accordance with the requirements of this part. For portions of the

borrower’s system that are not operated by the borrower, if any, the borrower is responsible for ensuring that

the operator is operating and maintaining the system properly in accordance with the operating agreement.

§ 1730.21 Inspections and tests.

(a) Each borrower shall conduct all

necessary inspections and tests of the

component parts of its electric system,

and maintain adequate records of such

inspections and tests.

(b) The frequency of inspection and

testing will be determined by the borrower in conformance with applicable

laws, regulations, national standards,

and Prudent Utility Practice. The frequency of inspection and testing will

be determined giving due consideration

to the type of facilities or equipment,

manufacturer’s recommendations, age,

operating environment and hazards to

which the facilities are exposed, consequences of failure, and results of previous inspections and tests. The

records of such inspections and tests

will be retained in accordance with applicable regulatory requirements and

Prudent Utility Practice. The retention period should be of a sufficient

time period to identify long-term

trends. Records must be retained at

least until the applicable inspections

or tests are repeated.

(c) Inspections of facilities must include a determination of whether the

facility complies with the National

Electrical Safety Code, National Electrical Code (as applicable), and applicable State or local regulations. Any serious or life-threatening deficiencies

shall be promptly repaired, disconnected, or isolated in accordance with

applicable codes or regulations. Any

other deficiencies found as a result of

such inspections and tests are to be recorded and those records are to be

maintained until such deficiencies are

corrected or for the retention period

required by paragraph (b) of this section, whichever is longer.

§ 1730.22 Borrower analysis.

(a) Each borrower shall periodically

analyze in writing its operations and

maintenance policies, practices, and

procedures to determine if they are appropriate and if they are being followed. The records of inspections and

tests are also to be reviewed and analyzed to identify any trends which

could indicate deterioration in the

physical condition or the operational

effectiveness of the system or suggest a

need for changes in operations or maintenance practices. For portions of the

borrower’s system that are not operated by the borrower, if any, the borrower’s written analysis would also include a review of the operator’s performance under the operating agreement.

(b) When a borrower’s operations and

maintenance policies, practices, and

procedures are to be reviewed and evaluated by RUS, the borrower shall:

(1) Conduct the analysis required by

paragraph (a) of this section not more

than 90 days prior to the scheduled

RUS review;

(2) Complete RUS Form 300, Review

Rating Summary, and other related

303

Rural Utilities Service, USDA Pt. 1730, Subpt. B, App. A

forms, prior to RUS’ review and evaluation; and

(3) Make available to RUS the borrower’s completed RUS Form 300 (including a written explanation of the

basis for each rating) and records related to the operations and maintenance of the borrower’s system.

(c) For those facilities not included

on the RUS Form 300 (e.g., generating

plants), the borrower shall prepare and

complete an appropriate supplemental

form for such facilities.

§ 1730.23 Review rating summary, RUS

Form 300.

RUS Form 300 in Appendix A shall be

used when required by this part.

§ 1730.24 RUS review and evaluation.

RUS will initiate and conduct a periodic review and evaluation of the operations and maintenance practices of

each borrower for the purpose of assessing loan security and determining

borrower compliance with RUS policy

as outlined in this part. This review

will normally be done at least once

every three years. The borrower will

make available to RUS the borrower’s

policies, procedures, and records related to the operations and maintenance of its complete system. Reports

made by other inspectors (e.g., other

Federal agencies, State inspectors,

etc.) will also be made available, as applicable. RUS will not duplicate these

other reviews but will use their reports

to supplement its own review. RUS

may inspect facilities, as well as

records, and may also observe construction and maintenance work in the

field. Key borrower personnel responsible for the facilities being inspected

are to accompany RUS during such inspections, unless otherwise determined

by RUS. RUS personnel may prepare

an independent summary of the operations and maintenance practices of

the borrower. The borrower’s management will discuss this review and evaluation with its Board of Directors.

§ 1730.25 Corrective action.

(a) For any items on the RUS Form

300 rated unsatisfactory (i.e., 0 or 1) by

the borrower or by RUS, the borrower

shall prepare a corrective action plan

(CAP) outlining the steps (both short

term and long term) the borrower will

take to improve existing conditions

and to maintain an acceptable rating.

The CAP must include a time schedule

and cost estimate for corrective actions, and must be approved by the borrower’s Board of Directors. The CAP

must be submitted to RUS for approval

within 90 days after the completion of

RUS’ evaluation noted in §1730.24.

(b) The borrower must periodically

report to RUS in writing progress

under the CAP. This report must be

submitted to RUS every six months

until all unsatisfactory items are corrected unless RUS prescribes a different reporting schedule.

§ 1730.26 Engineer’s certification.

Where provided for in the borrower’s

loan documents, RUS may require the

borrower to provide an ‘‘Engineer’s

Certification’’ as to the condition of

the borrower’s system (including, but

not limited to, all mortgaged property.) Such certification shall be in

form and substance satisfactory to

RUS and shall be prepared by a professional engineer satisfactory to RUS. If

RUS determines that the Engineer’s

Certification discloses a need for improvements to the condition of its system or any other operations of the borrower, the borrower shall, upon notification by RUS, promptly undertake to

accomplish such improvements.

§§ 1730.27–1730.99 [Reserved]

APPENDIX A TO SUBPART B TO PART

1730—REVIEW RATING SUMMARY,

RUS FORM 300

Borrower Designation llll

Date Prepared llll

Ratings on form are:

0: Unsatisfactory—no records

1: Unsatisfactory—corrective action needed

2: Acceptable, but should be improved—see

attached recommendations

3: Satisfactory—no additional action required at this time

N/A: Not applicable

PART I—TRANSMISSION and

DISTRIBUTION FACILITIES

1. Substations (Transmission and Distribution)

a. Safety, Clearance, Code Compliance—

Rating: llll

304

Pt. 1730, Subpt. B, App. A 7 CFR Ch. XVII (1–1–00 Edition)

b. Physical Condition: Structure, Major

Equipment, Appearance—

Rating: llll

c. Inspection Records Each Substation—

Rating: llll

d. Oil Spill Prevention—Rating: llll

2. Transmission Lines

a. Right-of-Way: Clearing, Erosion, Appearance, Intrusions—

Rating: llll

b. Physical Condition: Structure, Conductor, Guying—Rating: llll

c. Inspection Program and Records—Rating: llll

3. Distribution Lines—Overhead

a. Inspection Program and Records—Rating: llll

b. Compliance with Safety Codes: Clearances—Rating: llll

Compliance with Safety Codes: Foreign

Structures—Rating: llll

Compliance with Safety Codes: Attachments—Rating: llll

c. Observed Physical Condition from Field

Checking: Right-of-Way—Rating: llll

Observed Physical Condition from Field

Checking: Other—Rating: llll

4. Distribution—Underground Cable

a. Grounding and Corrosion Control—Rating: llll

b. Surface Grading, Appearance—

Rating: llll

c. Riser Poles: Hazards, Guying, Condition—Rating: llll

5. Distribution Line Equipment: Conditions

and Records

a. Voltage Regulators—Rating: llll

b. Sectionalizing Equipment—

Rating: llll

c. Distribution Transformers—

Rating: llll

d. Pad Mounted Equipment—Safety: Locking, Dead Front, Barriers—Rating:

llll

Pad Mounted Equipment—Appearance:

Settlement, Condition—Rating: llll

e. Kilowatt-hour and Demand Meter Reading and Testing—Rating: llll

PART II—OPERATION AND

MAINTENANCE

6. Line Maintenance and Work Order Procedures

a. Work Planning and Scheduling—

Rating: llll

b. Work Backlogs: Right-of-Way Maintenance—Rating: llll

Work Backlogs: Poles—Rating: llll

Work Backlogs: Retirement of Idle Services—Rating: llll

Work Backlogs: Other—Rating: llll

7. Service Interruptions

a. Average Annual Hours/Consumer by

Cause (Complete for each of the previous

5 years)

1. Power Supplier llll

2. Major Storm llll

3. Scheduled llll

4. All Other llll

5. Total llll

Rating: llll

b. Emergency Restoration Plan—Rating:llll

8. Power Quality

General Freedom from Complaints—Rating:llll

9. Loading and Load Balance

a. Distribution Transformer Loading—Rating:llll

b. Load Control Apparatus—Rating:llll

c. Substation and Feeder Loading—Rating:llll

10. Maps and Plant Records

a. Operating Maps: Accurate and Up-toDate—Rating:llll

b. Circuit Diagrams—Rating:llll

c. Staking Sheets—Rating:llll

PART III—ENGINEERING

11. System Load Conditions and Losses

a. Annual System Loses, llll%—Rating:llll

b. Annual Load Factor, llll%—Rating:llll

c. Power Factor at Monthly Peak,

llll%—Rating:llll

d. Ratio of Individual Substation Peak kW

to kVA, llll—Rating:llll

12. Voltage Conditions

a. Voltage Surveys—Rating:llll

b. Substation Transformer Output Voltage

Spread—Rating:llll

13. Load Studies and Planning

a. Long Range Engineering Plan—Rating:llll

b. Construction Work Plan—Rating:llll

c. Sectionalizing Study—Rating:llll

d. Load Data for Engineering Studies—

Rating:llll

e. Load Forecasting Data—Rating:llll

PART IV—OPERATION AND

MAINTENANCE BUDGETS

For Previous 2 Years:

Normal Operation—Actual $llll

Normal Maintenance—Actual $llll

Total—Actual $llll

For Present Year:

Normal Operation—Budget $llll

Normal Maintenance—Budget $llll

Total—Budget $llll

For Future 3 Years:

Normal Operation—Budget $llll

Normal Maintenance—Budget $llll

Additional (Deferred) Maintenance—Budget

$llll

Total—Budget $llll

14. Budgeting:

Adequacy of Budgets For Needed Work—Rating:llll

305

Rural Utilities Service, USDA § 1735.1

15. Date Discussed with Board of Directors

llll

Remarks: llll

EXPLANATORY NOTES

Item No. llll Comments llll

Rated by llll llll Title llll Date

llll

Reviewed by llll Manager llll Date

llll

Reviewed by llll RUS GFR llll Date

llll

PART 1735—GENERAL POLICIES,

TYPES OF LOANS, LOAN REQUIREMENTS—TELECOMMUNICATIONS PROGRAM

Subpart A—General

Sec.

1735.1 General statement.

1735.2 Definitions.

1735.3 Availability of forms.

1735.4—1735.9 [Reserved]

Subpart B—Loan Purposes and Basic

Policies

1735.10 General.

1735.11 Area coverage.

1735.12 Nonduplication.

1735.13 Location of facilities and service for

nonrural subscribers.

1735.14 Borrower eligibility.

1735.15 Civil rights.

1735.16 Minimum loan amount.

1735.17 Facilities financed.

1735.18 Additional equity.

1735.19 Mergers and consolidations.

1735.20 Acquisitions.

1735.21 Refinancing loans.

1735.22 Loan security.

1735.23—1735.29 [Reserved]

Subpart C—Types of Loans

1735.30 Hardship loans.

1735.31 RUS cost-of-money and RTB loans.

1735.32 Guaranteed loans.

1735.33 Variable interest rate loans.

1735.34—1735.39 [Reserved]

Subpart D—Terms of Loans

1735.40 General.

1735.41 Notes.

1735.42 [Reserved]

1735.43 Payments on loans.

1735.44 Prepayment premiums.

1735.45 Extension of payments.

1735.46 Loan security documents.

1735.47 Rescissions of loans.

1735.48—1735.49 [Reserved]

Subpart E—Basic Requirements for Loan

Approval

1735.50 Administrative findings.

1735.51 Required findings.

1735.52 Findings required for particular loan

purposes.

1735.53—1735.59 [Reserved]

Subpart F—Mortgage Controls on

Acquisitions and Mergers

1735.60 Specific provisions.

1735.61 Approval criteria.

1735.62 Approval of acquisitions and mergers.

1735.63—1735.69 [Reserved]

Subpart G—Acquisitions Involving Loan

Funds

1735.70 Use of loan funds.

1735.71 Nonrural areas.

1735.72 Acquisition agreements.

1735.73 Loan design.

1735.74 Submission of data.

1735.75 Interim financing.

1735.76 Acquisition of affiliates.

1735.77 Release of loan funds, requisitions,

advances.

1735.78—1735.79 [Reserved]

Subpart H—Acquisitions or Mergers Not

Involving Additional Loan Funds

1735.80 Submission of data.

1735.81—1735.89 [Reserved]

Subpart I—Requirements for All

Acquisitions and Mergers

1735.90 Preliminary approvals.

1735.91 Location of facilities.

1735.92 Accounting considerations.

1735.93 Notes.

1735.94 Final approval and closing procedure.

1735.95 Unadvanced loan funds.

1735.96—1735.99 [Reserved]

Subpart J—Toll Line Acquisitions

1735.100 Use of loan funds.

1735.101 With nonloan funds.

AUTHORITY: 7 U.S.C. 901 et seq., 1921 et seq.,

and 6941 et seq.

EDITORIAL NOTE: Nomenclature changes to

part 1735 appear at 55 FR 39397, Sept. 27, 1990.

Subpart A—General

§ 1735.1 General statement.

(a) Subparts A through E of this part

set forth the general policies, types of