[Federal Register Volume 62, Number 73 (Wednesday, April 16, 1997)]
[Proposed Rules]
[Pages 18544-18547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9849]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 62, No. 73 / Wednesday, April 16, 1997 / 
Proposed Rules

[[Page 18544]]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1730

RIN 0572--AA74


Electric System Operations and Maintenance

AGENCY: Rural Utilities Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: The Rural Utilities Service (RUS), successor to the Rural 
Electrification Administration (REA), proposes to amend its regulations 
by adding a new part concerning electric system operations and 
maintenance. These new regulations would codify and clarify RUS policy 
relating to the operations and maintenance of electric systems by RUS 
electric borrowers. Also included is RUS policy relating to the review 
and evaluation of borrowers' electric systems and facilities operations 
and maintenance practices. These policies are presently contained in 
RUS/REA Bulletin 161-5, which will be rescinded when the final rule 
becomes effective. This proposed action is intended to clarify the 
policies, procedures, and requirements, facilitate understanding and 
compliance, and improve program effectiveness with respect to electric 
system operations and maintenance.

DATES: Written comments must be received by RUS, or bear a postmark or 
equivalent, no later than June 16, 1997.

ADDRESSES: Submit written comments to George J. Bagnall, Director, 
Electric Staff Division, Rural Utilities Service, U.S. Department of 
Agriculture, Stop 1569, 1400 Independence Ave, SW., Washington, DC 
20250-1569. RUS requires a signed original and 3 copies of all comments 
(Sec. 1700.30(e)). Comments will be made available for public 
inspection at room 4034 South Building between 8:30 a.m. and 5 p.m. on 
official work days (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT: Mr. Fred J. Gatchell, Deputy Director, 
Electric Staff Division, Rural Utilities Service, U.S. Department of 
Agriculture, Stop 1569, 1400 Independence Ave, SW., Washington, DC 
20250-1569, telephone (202) 720-1398.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed rule has been determined to be not significant for 
the purposes of Executive Order 12866 and therefore has not been 
reviewed by the Office of Management and Budget (OMB).

Regulatory Flexibility Act Certification

    The Administrator of RUS has determined that a rule relating to the 
RUS electric loan program is not a rule as defined in the Regulatory 
Flexibility Act (5 U.S.C. et seq.), and therefore, the Regulatory 
Flexibility Act does not apply to this proposed rule.

Information Collection and Recordkeeping Requirements

    The recordkeeping and reporting burdens contained in this rule were 
approved by OMB pursuant to the Paperwork Reduction Act of 1995 (44 
U.S.C. Chapter 35, as amended) under control number 0572-0025.

National Environmental Policy Act Certification

    The Administrator has determined that this proposed rule will not 
significantly affect the quality of the human environment as defined by 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 
Therefore, this action does not require an environmental impact 
statement or assessment.

Catalog of Federal Domestic Assistance

    The program described by this proposed rule is listed in the 
Catalog of Federal Domestic Assistance programs under No. 10.850, Rural 
Electrification Loans and Loan Guarantees. This catalog is available on 
a subscription basis from the Superintendent of Documents, the United 
States Government Printing Office, Washington, DC 20402, telephone 
(202) 512-1800.

Executive Order 12372

    This proposed rule is excluded from the scope of Executive Order 
12372, Intergovernmental Consultation, which may require consultation 
with State and local officials. A Notice of Final Rule entitled 
Department Programs and Activities Excluded from Executive Order 12372 
(50 FR 47034) exempts RUS loans and loan guarantees from coverage under 
this order.

National Performance Review

    This regulatory action is being taken as part of the National 
Performance Review program to eliminate unnecessary regulations and 
improve those that remain in force.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. RUS has determined that this proposed rule meets 
the applicable standards in Section 3 of the Executive Order.

Background

    RUS has promulgated policies and procedures regarding the review 
and evaluation of the operations and maintenance practices of RUS 
financed electric systems. These policies and procedures are presently 
contained in RUS/REA Bulletin 161-5, Electric System Review and 
Evaluation. The mortgage and loan contract between RUS and electric 
borrowers set certain standards for the operation and maintenance of 
each borrower's electric system. The purpose of this proposed rule is 
to implement the operations and maintenance provisions of the mortgage 
and loan contract between RUS and electric borrowers and to consolidate 
and clarify RUS policies and procedures with respect to electric system 
operations and maintenance. Most of the provisions of this proposed 
rule represent policies and requirements that have been in effect for 
some time, whereas other provisions are an explicit statement of 
policies and procedures that formerly were implicit. One new provision 
will expand the requirement for electric system review and evaluation 
to include power supply borrowers in addition to the distribution 
borrowers presently covered by Bulletin 161-5. Proper operation and 
maintenance practices are equally significant for power supply 
borrowers, so RUS believes that power supply borrowers' operation and 
maintenance practices should be covered under the review and evaluation 
requirements of this rule. RUS Form 300, Review Rating Summary, has 
also been updated and

[[Page 18545]]

revised based on RUS' experience using this form.

List of Subjects in 7 CFR Part 1730

    Electric power, Loan programs--energy, Reporting and recordkeeping 
requirements, Rural areas.

    In view of the above, RUS proposes to amend 7 CFR chapter XVII by 
adding part 1730 to read as follows:

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 of Part 1730--Review Rating Summary, RUS Form 
300

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart A--General


Sec. 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 thereof.
    (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 mortgage 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 mortgage 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.


Sec. 1730.2  RUS policy.

    It is RUS policy to require that all borrower property be operated 
and maintained properly in accordance with the requirements of the 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.


Sec. 1730.3  RUS addresses.

    (a) Persons wishing to obtain forms referred to in this part should 
contact: Rural Utilities Service, U.S. Department of Agriculture, Stop 
1522, 1400 Independence Ave, SW, Washington, DC 20250-1533, 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.


Sec. 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.


Secs. 1730.5-1730.19  [Reserved]

Subpart B--Operations and Maintenance Requirements


Sec. 1730.20  General.

    Each distribution borrower and power supply borrower must 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, must maintain its systems in 
good repair, working order and condition, and must make all needed 
repairs, renewals, replacements, alterations, additions, betterments 
and improvements, in accordance with applicable provisions of the 
borrower's mortgage. 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 must budget sufficient resources to operate 
and maintain its system in accordance with the requirements of this 
part.


Sec. 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, manufacturer's recommendations, and Prudent Utility 
Practice. The frequency of inspection and testing will be determined 
giving due consideration to the type of facilities or equipment, 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 legal requirements and Prudent Utility 
Practice. The retention period will be sufficient 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 the 
facility's compliance with the National Electrical Safety Code, 
National Electrical Code, and applicable local regulations. Any serious 
or life-threatening deficiencies must 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.


Sec. 1730.22  Borrower analysis.

    (a) Each borrower must periodically analyze 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 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.
    (b) When a borrower's operations and maintenance policies, 
practices, and procedures are to be reviewed and evaluated by RUS, the 
borrower shall:

[[Page 18546]]

    (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 
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.


Sec. 1730.23  Review rating summary, RUS Form 300.

    RUS Form 300 in appendix A shall be used when required by this 
part.


Sec. 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 system. 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.


Sec. 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 must 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 
Sec. 1730.24.
    (b) The borrower must periodically report to RUS 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.


Sec. 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.


Secs. 1730.27--1730.99  [Reserved].

Appendix A to Subpart B of Part 1730--Review Rating Summary, RUS Form 
300

Borrower Designation ____
    Date Prepared ____
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: ____
b. Physical Condition: Structure, Major Equipment, Appearance 
Rating: ____
c. Inspection Records Each Substation Rating: ____
d. Oil Spill Prevention Rating: ____

2. Transmission Lines

a. Right-of-Way: Clearing, Erosion, Appearance, Intrusions Rating: 
____
b. Physical Condition: Structure, Conductor, Guying Rating: ____
c. Inspection Program and Records Rating: ____

3. Distribution Lines--Overhead

a. Inspection Program and Records Rating: ____
b. Compliance with Safety Codes: Clearances Rating: ____
Compliance with Safety Codes: Foreign Structures Rating: ____
Compliance with Safety Codes: Attachments Rating: ____
c. Observed Physical Condition from Field Checking: Right-of-Way 
Rating: ____
    Observed Physical Condition from Field Checking: Other Rating: 
____

4. Distribution--Underground Cable

a. Grounding and Corrosion Control Rating: ____
b. Surface Grading, Appearance Rating: ____
c. Riser Poles: Hazards, Guying, Condition Rating: ____

5. Distribution Line Equipment: Conditions and Records

a. Voltage Regulators Rating: ____
b. Sectionalizing Equipment Rating: ____
c. Distribution Transformers Rating:____
d. Pad Mounted Equipment--Safety: Locking, Dead Front, Barriers 
Rating:____
    Pad Mounted Equipment--Appearance: Settlement, Condition 
Rating:____
e. Kilowatt-hour and Demand Meter Reading and Testing Rating:____

Part II--Operation and Maintenance

6. Line Maintenance and Work Order Procedures

a. Work Planning and Scheduling Rating:____
b. Work Backlogs: Right-of-Way Maintenance Rating:____
    Work Backlogs: Poles Rating:____
    Work Backlogs: Retirement of Idle Services Rating:____
    Work Backlogs: Other Rating:____

7. Service Interruptions

a. Average Annual Hours/Consumer by Cause (Complete for each of the 
previous 5 years)
1. Power Supplier ____
2. Major Storm ____
3. Scheduled ____
4. All Other ____
5. Total ____
    Rating:____
b. Emergency Restoration Plan Rating:____

8. Power Quality

General Freedom from Complaints Rating:____

9. Loading and Load Balance

a. Distribution Transformer Loading Rating:____
b. Load Control Apparatus Rating:____
c. Substation and Feeder Loading Rating:____

10. Maps and Plant Records

a. Operating Maps: Accurate and Up-to-Date Rating:____
b. Circuit Diagrams Rating:____
c. Staking Sheets Rating:____

Part III--Engineering

11. System Load Conditions and Losses

a. Annual System Loses, ____ % Rating:____
b. Annual Load Factor, ____ % Rating:____
c. Power Factor at Monthly Peak, ____ % Rating: ____
d. Ratio of Individual Substation Peak kW to kVA, ____ Rating:____

12. Voltage Conditions

a. Voltage Surveys Rating:____
b. Substation Transformer Output Voltage Spread Rating:____

13. Load Studies and Planning

a. Long Range Engineering Plan Rating:____
b. Construction Work Plan Rating:____
c. Sectionalizing Study Rating:____

[[Page 18547]]

d. Load Data for Engineering Studies Rating:____
e. Power Requirements Data Rating:____

Part IV--Operation and Maintenance Budgets

For Previous 2 Years:

Normal Operation--Actual $____
Normal Maintenance--Actual $____
Total--Actual $____

For Present Year:

Normal Operation
    Budget $____
    Staff Hours ____
Normal Maintenance
    Budget $____
    Staff Hours ____
Total
    Budget $____
    Staff Hours ____

For Future 3 Years:

Normal Operation
    Budget $____
    Staff Hours ____
Normal Maintenance
    Budget $____
    Staff Hours ____
Additional (Deferred) Maintenance
    Budget $____
    Staff Hours ____
Total
    Budget $____
    Staff Hours ____

14. Budgeting

Adequacy of Budgets For Needed Work Rating:____

15. Date Discussed with Board of Directors ____

Remarks: ____

Explanatory Notes

Item No. ____
Comments ____
Rated by ____
Title ____
Date ____
Reviewed by ____
Manager ____
Date ____
Reviewed by ____
RUS GFR ____
Date ____

    Dated: April 10, 1997.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 97-9849 Filed 4-15-97; 8:45 am]
BILLING CODE 3410-15-P