[Federal Register Volume 62, Number 147 (Thursday, July 31, 1997)]
[Proposed Rules]
[Pages 40987-40992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20149]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

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

[Docket No. RM97-6-000]


Units of Property Accounting Regulations

July 25, 1997.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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

DATES: Comments are due on or before September 15, 1997.

ADDRESSES: File comments with the Office of the Secretary, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC 
20426.

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

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document in the Federal Register, the Commission provides all 
interested persons an opportunity to inspect or copy the contents of 
this document during normal business hours in Room 2A, 888 First 
Street, NE., Washington DC 20426.
    The Commission Issuance Posting System (CIPS), an electronic 
bulletin board service, provides access to the texts of formal 
documents issued by the Commission. CIPS is available at no charge to 
the user and may be accessed using a personal computer with a modem by 
dialing 202-208-1397 if dialing locally or 1-800-856-3920 if dialing 
long distance. To access CIPS, set your communications software to 
19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex, 
no parity, 8 data bits and 1 stop bit. The full text of this order will 
be available on CIPS in ASCII and WordPerfect 6.1 format. CIPS user 
assistance is available at 202-208-2474.
    CIPS is also available on the Internet through the Fed World 
system. Telnet software is required. To access CIPS via the Internet, 
point your browser to the URL address: http://www.fedworld.gov and 
select the ``Go to the FedWorld Telnet Site'' button. When your Telnet 
software connects you, log on to the FedWorld system, scroll down and 
select FedWorld by typing: 1 and at the command line and type: /go 
FERC. FedWorld may also be accessed by Telnet at the address 
fedworld.gov.
    Finally, the complete text on diskette in WordPerfect format may be

[[Page 40988]]

purchased from the Commission's copy contractor, La Dorn Systems 
Corporation. La Dorn Systems Corporation is also located in the Public 
Reference Room at 888 First Street, NE., Washington, DC 20426.

Federal Energy Regulatory Commission

[Docket No. RM97-6-000]

Notice of Proposed Rulemaking

July 25, 1997

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

    The Federal Energy Regulatory Commission (Commission) proposes to 
modify its regulations governing units of property to simplify the 
fixed-asset recordkeeping requirements for Public Utilities and 
Licensees (Public Utilities), Natural Gas Companies, and Oil Pipeline 
Companies. These three groups are collectively called ``Companies'' in 
this Notice of Proposed Rulemaking (NOPR).
    This NOPR proposes to remove the Commission's prescribed units of 
property listings contained in 18 CFR parts 116 and 216 and instruction 
3-14 of part 352, thereby giving Companies the flexibility to maintain 
their own property listings and corresponding fixed-asset records. The 
NOPR also proposes to require Companies to maintain their own written 
property units listing for use in accounting for additions and 
retirements of plant, apply the listing consistently, and if requested, 
furnish the Commission with the justification for any changes to the 
listing.
    The NOPR proposes to clarify existing requirements for Public 
Utilities and Natural Gas Companies, and add the requirement for Oil 
Pipelines regarding estimating property costs when it is unduly 
burdensome to determine the cost of retired property. This will permit 
Oil Pipelines, as well as Public Utilities and Natural Gas Companies, 
to use estimates, and requires that Companies furnish the basis of 
their estimate to the Commission, if requested.
    Lastly, the NOPR proposes to remove the minimum rule for Oil 
Pipelines. This rule requires that Oil Pipelines must expense additions 
and improvements of less than $500 and must seek Commission approval to 
change this amount.
    The proposed regulations will give Companies the opportunity to 
identify and maintain property unit listings that are up-to-date and 
more in harmony with the needs of their businesses. It will permit 
Companies to reduce the level and number of detailed property unit 
records that they currently maintain. Additionally, the Commission will 
not need to commit resources for maintaining and approving changes to 
the property listings.
    The elimination of parts 116, 216, and 352 (instruction 3-14) will 
not affect the information currently reported in the FERC Forms 1, 1-F, 
2, 2-A or 6.<SUP>1</SUP> These Forms do not report costs at the level 
of detail prescribed by parts 116, 216 and 352 (instruction 3-14). 
Therefore, the NOPR will not affect the information contained in these 
Forms. The elimination of parts 116, 216, and 352 (instruction 3-14) 
will not affect the manner in which costs are recognized for accounting 
or rate-making purposes. Companies will continue to treat all plant as 
consisting of retirement units and minor items of property. Under the 
proposed rule, Companies will account for the additions and retirements 
of such plant in accordance with instructions contained in the 
Commission's Uniform System of Accounts (USofA) for Public Utilities, 
Natural Gas Companies, and Oil Pipeline Companies.
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    \1\ FERC Form No. 1: Annual Report of Major Electric Utilities, 
Licensees and Others; FERC Form 1-F: Annual Report for Non-major 
Public Utilities and Licensees; FERC Form No. 2: Annual Report of 
Major Natural Gas Companies; FERC Form 2-A: Annual Report of Non-
major Natural Gas Companies; FERC Form No. 6: Annual Report of Oil 
Pipeline Companies.
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I. Background

a. Public Utilities and Natural Gas Companies

    In 1937, the Federal Power Commission (FPC) issued Order No. 45 
<SUP>2</SUP> that prescribed the USofA for Public Utilities subject to 
the Federal Power Act.<SUP>3</SUP> Order No. 45 also established the 
property unit listing for use in accounting for additions and 
retirements of electric plant.
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    \2\ 2 FR 135, January 26, 1937.
    \3\ The current version of the USofA for Public Utilities is 
found at 18 CFR, subchapter C, part 101, et seq.; for natural gas 
companies, 18 CFR, subchapter F, part 201 et seq.; and for Oil 
Pipelines, 18 CFR, subchapter Q, part 352.
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    These regulations do not permit Public Utilities to combine the 
items in the listing into fewer, higher level units without Commission 
approval. The Commission made only one significant revision to the 
electric plant property unit listing when, in 1987, it added nuclear 
plant equipment.<SUP>4</SUP>
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    \4\ List of Property for Use in Accounting for the Addition and 
Retirement of Reactor Plant Equipment, FERC Stats. & Regs., 
Regulations Preamble 1986-1990 para. 30,779 (1987).
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    Similarly, in 1939, the FPC issued Order No. 69, effective January 
1, 1940, which established the property unit listing for use in 
accounting for additions and retirements of gas plant. These 
regulations also do not permit natural gas companies to combine the 
items in the listing into fewer, higher level units without Commission 
approval.<SUP>5</SUP> The Commission made only one significant revision 
to the gas plant property unit listing when, in 1978, it added 
liquefied natural gas plant equipment.<SUP>6</SUP>
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    \5\ 4 FR 4764, December 5, 1939.
    \6\ Order Amending the Uniform System of Accounts for Natural 
Gas Companies and Related Regulations to Provide for Base Load 
Liquefied Natural Gas Facilities, FERC Stats. & Regs., Regulations 
Preamble 1977-1981, para. 30,009A (1978).
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b. Oil Pipelines

    In 1977, the Commission began regulating Oil Pipelines, with the 
implementation of the Department of Energy Organization 
Act.<SUP>7</SUP> Prior to 1977, the Interstate Commerce Commission 
(ICC) regulated interstate oil pipelines and prescribed a property 
units listing. The Commission continues to use the ICC's prescribed 
listing as identified in 18 CFR part 352 (instruction 3-14). The 
regulations do not permit Oil Pipelines to combine, add or expand the 
property items contained in the listing without Commission approval. 
Oil Pipeline plant property listings have not been revised or updated 
since the Commission began regulating Oil Pipelines.
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    \7\ 42 U.S.C.A. Sec. 7101 (1995).
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II. Proposed Changes to Regulations

    The Commission performed a review of current practices by Public 
Utilities, Natural Gas Companies, and Oil Pipelines in applying Parts 
116, 216 and 352. Between January and April 1997, Commission staff met 
with several representatives from Public Utilities, Natural Gas 
Companies, Oil Pipelines, and associated Industry Groups <SUP>8</SUP> 
to discuss the effects on Companies of identifying and tracking units 
of property at the prescribed detailed level. Based on this review, the 
Commission proposes to reduce detailed recordkeeping across all 
industry segments.
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    \8\ Edison Electric Institute, Interstate Natural Gas 
Association, American Gas Association, and Association of Oil 
Pipelines.
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    For Public Utilities and Natural Gas Companies, the Commission 
proposes to delete 18 CFR parts 116 and 216 which prescribe a units of 
property listing for the additions and retirements of electric plant 
and gas plant, respectively. The Commission proposes to modify 18 CFR 
part 101, Electric Plant Instruction 10, and 18 CFR part 201, Gas Plant 
Instruction 10, to require companies to

[[Page 40989]]

maintain a written property units listing, to apply the listing 
consistently, and to furnish the Commission with the justification for 
any changes to the listing, if requested. In addition, the Commission 
proposes to clarify 18 CFR parts 101 and 201, concerning the use of 
estimates when it is impractical or unduly burdensome for Companies to 
identify the cost of retired property.
    For Oil Pipelines, the Commission proposes to delete 18 CFR part 
352 (instruction 3-14), which prescribes a units-of-property listing. 
The Commission proposes to modify 18 CFR part 352 (instruction 3-4) to 
require Oil Pipelines to maintain a written property units listing, to 
apply the listing consistently, and to furnish the Commission with the 
justification for any changes to the listing, if requested. In 
addition, the Commission proposes to clarify 18 CFR part 352 
(instruction 3-7), concerning the use of estimates when it is 
impractical or unduly burdensome for Oil Pipelines to identify the cost 
of property retired.
    Finally, the Commission also proposes to delete 18 CFR part 352 
(instruction 3-2), which prescribes a minimum rule that requires Oil 
Pipelines to charge operating expenses for acquisitions, additions and 
improvements costing less than $500, and to delete any references to 
the minimum rule in Part 352 (instructions 3-4, 3-5, and 3-6(a)).

III. Discussion

    The USofA requires Companies to record the cost of additions and 
retirements of property and equipment in the appropriate plant 
account.<SUP>9</SUP> Additionally, Companies maintain a fixed asset 
recordkeeping system that tracks these plant account costs by property 
units. Parts 116, 216, and 352 of the Commission's regulations 
prescribe the detailed property unit listings that Companies must use 
to identify the items of property and equipment tracked by the fixed 
asset recordkeeping system.
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    \9\ 18 CFR parts 101, 201 and 352. The USofA for Public 
Utilities and Natural Gas Companies specifies in the plant 
instructions of parts 101 and 201, respectively, the type of 
information companies must keep related to their fixed assets.
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    These listings prescribe a level of detail that companies maintain 
to support the amounts in the plant accounts. However, the property 
unit listings do not reflect the technological changes that have taken 
place in the utility industry. The NOPR proposes to remove the 
prescribed property unit listings, and allow Companies to identify 
property units and maintain a level of support determined by their 
business needs. The NOPR will not eliminate the need for Companies to 
maintain a property recordkeeping system. Companies will continue to 
maintain support of the amounts shown in the plant accounts.
    As discussed below, the level of detail prescribed by the property 
unit listings and regulations place an unnecessary burden on Companies, 
are not current, are too restrictive, and appear to provide minimal 
benefit to either the Companies or to the Commission.

A. Burdens for Companies

(1) Recordkeeping Burden
    Companies are experiencing fixed asset recordkeeping burdens due to 
the level of detail currently prescribed by 18 CFR parts 116, 216, and 
352 (instruction 3-14). These regulations require companies to keep 
detailed fixed asset records for each unit of property and its 
associated cost, and track the units' costs throughout the life of the 
asset.
    For example, under the Commission's prescribed property unit 
listings, a Company may keep several fixed asset records for a 
building. These records detail the cost of the building's foundation, 
ventilating system, fire escape system, fire protection system, 
plumbing system, roof, and various other units of property, if the 
components or systems are relatively costly, and are identified in the 
List of General Retirement Units.<SUP>10</SUP>
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    \10\ The process of sub-dividing a fixed asset into its various 
major components or unit of propoerty units is also referred to as 
the ``unitization process.''
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    In April 1997, Industry Groups initiated and conducted their own 
survey of their associated companies. The survey requested Companies to 
estimate the burden associated with tracking units of property in 
accordance with parts 116, 216 and 352 (instruction 3-14). Companies' 
responses included estimated annual number of hours, labor dollars, and 
the portion of software costs used for complying with the regulations. 
Table 1 shows the estimated cost of identifying units of property in 
accordance with the current regulations, based upon meetings with the 
Industry Groups and their survey results.

  Table 1.--Average Annual Labor Costs Incurred per Surveyed Company to 
 Track Units of Property at Detailed Level Prescribed by Parts 116, 216 
                        and 352. Instruction 3-14                       
------------------------------------------------------------------------
                                                                Average 
                                                                annual  
                                                                 labor  
                           Source*                             costs per
                                                               surveyed 
                                                                company 
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Edison Electric Institute (EEI).............................    $592,000
Interstate Natural Gas Association of America (INGAA).......     122,000
American Gas Association (AGA)..............................     315,000
Association of Oil Pipelines (AOPL).........................     80,000 
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* 13 Public Utilities responded to EEI's preliminary survey; 16 Natural 
  Gas Companies responded to INGAA's preliminary survey, and 19 Oil     
  Pipelines responded to AOPL's preliminary survey. AGA did not identify
  the number of respondents.                                            

    Eliminating the property unit listings and regulations would give 
Companies the flexibility to maintain their own property listings and 
track the costs of fixed assets at the level of detail tailored to 
their business. This would reduce the burden Companies experience when 
tracking fixed assets at a level more detailed than either their 
business or the Commission needs.
(2) Software Burden
    Another burden placed on Companies is the cost of developing fixed 
asset software that is utility specific, or purchasing and modifying 
non-utility specific software. Companies often must modify the software 
in order to track units of property in the manner prescribed by the 
Commission. The preliminary surveys that were initiated and conducted 
by Industry Groups show their associated companies incur costs ranging 
from $20,000 to $2.7 million for fixed asset software.
    Based on the preliminary surveys, Companies could realize 
substantial savings if the Commission deletes unnecessary detailed 
recordkeeping requirements. The proposed changes would also eliminate 
the burden placed on the Commission to update the items in the 
listings.

B. Revamping Fixed Asset Regulations

(1) Property Units Listings
    The Commission's review of electric, gas and oil pipeline property 
listings found that the Commission's property listings do not contain 
all types of property currently used by Companies. The listings in 
Parts 116, 216, and 352 (instruction 3-14) do not include

[[Page 40990]]

property resulting from technological advances, such as scrubbers, 
microwave towers, and smart pigging equipment. Additionally, the 
property unit listings contain items of property that are no longer 
used by Companies such as telegraph and teletype equipment and gas 
storage cleaning equipment. By allowing Companies the flexibility to 
identify and maintain their own property unit listings the proposed 
revisions to the regulations will eliminate the need for the Commission 
to devote resources necessary to update the listings.
(2) Minimum Rule for Oil Pipelines
    Unlike Public Utilities and Natural Gas Companies, Oil Pipelines 
are subject to a Minimum Rule as prescribed in Part 352 (instruction 3-
2). The minimum rule requires Oil Pipelines to charge operating 
expenses for acquisitions, additions and improvements costing less than 
$500. It also requires Oil Pipelines to obtain Commission approval if 
they wish to change the minimum level.
    The Commission considers the $500 dollar threshold to be inadequate 
in today's environment. Consequently, the Commission proposes to delete 
the prescribed minimum rule, and permit Oil Pipelines to establish 
their own dollar threshold in order to avoid undue refinement in 
accounting for acquisitions, additions, and improvements.

C. Restrictions on Estimating Cost

    Carrier regulations do not permit companies to estimate property 
costs at the time of retirement when the cost is not determinable. 
However, Public Utilities and Natural Gas Companies are permitted to 
use estimates in similar circumstances.<SUP>11</SUP> Unlike Oil 
Pipelines, they may use cost trending indices to determine an estimated 
cost of retired property when it is impractical or unduly burdensome to 
identify the cost.
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    \11\ 18 CFR part 101 for Public Utilities states in electric 
plant instruction 10(D) that the ``book cost of electric plant 
retired shall be the amount at which such property is included in 
the electric plant accounts. . . The book cost shall be determined 
from the utility's records and if this cannot be done, it shall be 
estimated;'' 18 CFR part 201 for Natural Gas Companies states in gas 
plant instruction 10(D) that the ``book cost of gas plant retired 
shall be the amount at which such property is included in the gas 
plant accounts * * * The book cost shall be determined from the 
utility's records and if this cannot be done, it shall be 
estimated.''
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    Therefore, the Commission proposes to permit Oil Pipeline to use 
estimates in Oil Pipeline plant instructions when it is impractical or 
unduly burdensome to identify the cost of the property retired. The 
Commission will also require that Oil Pipelines be prepared to furnish 
the Commission with the basis of such estimates if requested.

IV. Information Collection Statement

    The following collections of information contained in this proposed 
rule are being submitted to the Office of Management and Budget (OMB) 
for review under the Paperwork Reduction Act of 1995. (See 44 U.S.C. 
3507(d)) The information provided under 18 CFR parts 101 and 116 is 
approved under OMB Control Nos. 1902-0021, 1902-0029 and 1902-0092; for 
parts 201 and 216, OMB Control Nos. 1902-0028, 1902-0030 and 1902-0092 
and for part 352 OMB Control Nos. 1902-0022. Applicants shall not be 
penalized for failure to respond to these collections of information 
unless the collection(s) of information display a valid OMB control 
number.
    The Commission's regulations governing units of property in parts 
116, 216 and 352 (instruction 3-14) require companies to keep detailed 
fixed asset records, including the costs for each unit of property, and 
then track the units' costs throughout the life of the asset. These 
regulations place recordkeeping burdens on Companies.
    Information Collection Burden and Costs: In the preliminary survey 
conducted in April 1997, Companies provided an estimate of the annual 
number of hours they incur when identifying units of property in 
accordance with parts 116, 216 and 352 (instruction 3-14) regulations. 
Table 2 displays the average number of hours spent per respondent in 
each industry group:

  Table 2.--Average Annual Labor Hours Incurred per Surveyed Company to 
        Track Units of Property at the Prescribed Detailed Level        
------------------------------------------------------------------------
                                                                Average 
                                                                Annual  
                                                                 Labor  
                           Source                              Hours per
                                                               Surveyed 
                                                                Company 
------------------------------------------------------------------------
Public Utilities (source: Edison Electric Institute)........      16,430
Natural Gas Companies (source: Interstate Natural Gas                   
 Association of America)....................................       5,863
------------------------------------------------------------------------

    Total Average Annual Labor Hours for Collection of Information for 
Public Utilities and Natural Gas Companies: 4,224,259.
    The Commission anticipates substantial savings with the proposed 
reduction of these recordkeeping requirements and, as part of the 
proposed rule, solicits comments on potential cost savings. (See 5 CFR 
1320.11)
    Comments are solicited on the Commission's continuing need for this 
information, whether the information has practical use, ways to enhance 
the quality, use and clarity of the information collected, and any 
suggested methods for minimizing the respondent's burden, including the 
use of automated information techniques.
    The Commission requires public utilities and licensees, natural gas 
companies and oil pipeline companies to identify units of property as 
listed in 18 CFR parts 116, 216 and 352 (instruction 3-14). The listing 
identifies major components of plant property each company must track 
throughout the property's life. The Commission also specifies in parts 
101 and 201 (Electric and Gas Plant Instructions), the type of 
information and level of detail Companies must keep of their fixed 
assets.
    The proposed rule seeks to modify these requirements to reduce the 
recordkeeping burden imposed on Companies and to make the regulations 
current with industry practices. Therefore, the Commission proposes to 
delete parts 116, 216 and 352 (instruction 3-14)--Property Unit 
Listings and requirements.
    The Commission's internal review determined that there is specific, 
objective support for the burden estimates associated with the 
Commission's requirements.
    Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street, NE, Washington, DC 20426, (Attention: 
Michael Miller, Division of Information Services, Phone: (202) 208-
1415, fax: (202) 273-0873, E-mail: <a href="/cdn-cgi/l/email-protection#0e63636762626b7c4e686b7c6d20686b6a207b7d"><span class="__cf_email__" data-cfemail="deb3b3b7b2b2bbac9eb8bbacbdf0b8bbbaf0abad">[email protected]</span></a>
    For submitting comments concerning the collection of information(s) 
and the associated burden estimate(s) send your comments to the contact 
listed above and to the Office of Management and Budget, Office of 
Information and Regulatory Affairs, Washington, D.C. 20503. (Attention: 
Desk Officer for the Federal Energy Regulatory Commission, phone: (202) 
395-3087, fax: (202) 395-7285)

V. Environmental Analysis

    The Commission is required to prepare an Environmental Assessment 
or an Environmental Impact Statement for any action that may have a 
significant adverse effect on the human

[[Page 40991]]

environment.<SUP>12</SUP> The Commission has categorically excluded 
certain actions from these requirements as not having a significant 
effect on the human environment.<SUP>13</SUP> The action proposed here 
is procedural in nature and therefore falls within the categorical 
exclusions provided in the Commission's regulations.<SUP>14</SUP> 
Therefore, neither an environmental impact statement nor an 
environmental assessment is necessary and will not be prepared in this 
proposed NOPR.
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    \12\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Statutes 
and Regulations, Regulations Preambles 1986-1990 para. 30,783 
(1987).
    \13\ 18 CFR 380.4.
    \14\ See 18 CFR 380.4(a)(2)(ii).
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VI. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act <SUP>15</SUP> generally requires the 
Commission to describe the impact that a proposed rule would have on 
small entities or to certify that the rule will not have a significant 
economic impact on a substantial number of small entities. An analysis 
is not required if a proposed rule will not have such an 
impact.<SUP>16</SUP>
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    \15\ 5 U.S.C. 601-612.
    \16\ 5 U.S.C. 605(b).
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    Pursuant to section 605(b), the Commission certifies that the 
proposed rule, if promulgated, will not have a significant adverse 
economic impact on a substantial number of small entities.

VII. Comment Procedures

    The Commission invites interested persons to submit written 
comments on the matters and issues proposed in this notice to be 
adopted, including any related matters or alternative proposals that 
commenters may wish to discuss. All comments must be filed with the 
Commission no later than September 15, 1997. An original and 14 copies 
of comments should be submitted to the Office of the Secretary, Federal 
Energy Regulatory Commission, 888 First Street, NE, Washington, DC 
20426, and should refer to Docket No. RM97-6-000. Additionally, 
comments should be submitted electronically. Participants can submit 
comments on computer diskette in WordPerfect<SUP></SUP> 6.1 or lower 
format or in ASCII format, with the name of the filer and Docket No. 
RM97-6-000 on the outside of the diskette.
    All written comments will be placed in the Commission's public 
files and will be available for inspection in the Commission's Public 
Reference Room at 888 First Street, NE, Washington, DC 20426, during 
regular business hours.

List of Subjects

18 CFR Part 101

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

18 CFR Part 116

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

18 CFR Part 201

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

18 CFR Part 216

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

18 CFR Part 352

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

    By direction of the Commission.
Lois D. Cashell,
Secretary.

    In consideration of the foregoing, the Commission gives notice of 
its proposal to amend Parts 101, 116, 201, 216, and 352 Chapter I, 
Title 18, Code of Federal Regulations, as set forth below.

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

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

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

    2. In Part 101, Electric Plant Instruction 10, paragraphs A and D 
are revised to read as follows:

10. Additions and Retirements of Electric Plant.

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

11. Work Order and Property Record System Required.

* * * * *
    C. In the case of Major utilities, each utility shall maintain 
records in which, for each plant account, the amounts of the annual 
additions and retirements are classified so as to show the number and 
cost of the various record units or retirement units.

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

    4. Part 116 is removed.

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

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

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

    6. In Part 201, Gas Plant Instruction 10, paragraphs A and D are 
revised to read as follows:
    10. Additions and retirements of gas plant. A. For the purpose of 
avoiding undue refinement in accounting for additions to and 
retirements and replacements of gas plant, all property shall be 
considered as consisting of (1) retirement units and (2) minor items of 
property. Each utility shall maintain a written property units listing 
for use in accounting for additions and retirements of gas plant, apply 
the listing consistently, and if requested, furnish the Commission with

[[Page 40992]]

justifications for any changes to the listing.
* * * * *
    D. The book cost of gas plant retired shall be the amount at which 
such property is included in the gas plant accounts, including all 
components of construction costs. The book cost shall be determined 
from the utility's records and if this cannot be done it shall be 
estimated. Utilities must furnish the particulars of such estimates to 
the Commission, if requested. When it is impracticable to determine the 
book cost of each unit, due to the relatively large number or small 
cost thereof, an appropriate average book cost of the units, with due 
allowance for any differences in size and character, shall be used as 
the book cost of the units retired.
* * * * *
    7. In Part 201, Gas Plant Instruction 11, paragraph C is revised to 
read as follows:
    11. Work order and property record system required.
* * * * *
    C. Each utility shall maintain records in which, for each plant 
account, the amounts of the annual additions and retirements are 
classified so as to show the number and cost of the various record 
units or retirement units.

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

    8. Part 216 is removed.

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

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

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

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

[FR Doc. 97-20149 Filed 7-30-97; 8:45 am]
BILLING CODE 6717-01-P


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