Document ID: FERC-2007-0031-0001
Agency: ferc
Document Type: Proposed Rule
Title: Accounting and Reporting Requirements for Nonoperating Public Utilities and Licensees
Posted Date: 2007-01-09T05:00Z

[Federal Register: January 9, 2007 (Volume 72, Number 5)]
[Proposed Rules]               
[Page 922-926]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09ja07-18]                         

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 101, 125 and 141

[Docket No. RM07-2-000]

 
Accounting and Reporting Requirements for Nonoperating Public 
Utilities and Licensees

Issued December 21, 2006.
AGENCY: Federal Energy Regulatory Commission, Energy.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
proposing to amend its accounting and reporting regulations, in Parts 
101 and 141, to require public utilities and licensees to continue to 
follow the Commission's Uniform System of Accounts (USofA) and to file 
annual and quarterly financial reports when they have ceased making 
jurisdictional sales of electric energy, or providing jurisdictional 
transmission service, but continue collecting amounts pursuant to

[[Page 923]]

a Commission-accepted tariff or rate schedule, or a Commission order. 
The proposed rulemaking is intended to close a gap in the Commission's 
regulations which apply now only to operating public utilities and 
licensees. Under the existing regulations, the Commission cannot 
oversee, monitor, or audit costs that provide information necessary to 
the Commission's oversight responsibilities and the protection of the 
public interest.
    The Commission also is seeking comments regarding the applicability 
of Part 125, Preservation of Records of Public Utilities and Licensees, 
to public utilities or licensees which have ceased operations, as 
described above, but continue to collect amounts pursuant to a 
Commission-approved tariff or rate schedule, or a Commission order. 
This notice of proposed rulemaking reasonably interprets the current 
language of Part 125 to require the continued application of Part 125 
to nonoperating public utilities and licensees, but seeks comments as 
to whether revisions to Part 125 may be necessary.

DATES: Comments are due February 8, 2007.

ADDRESSES: You may submit comments identified by Docket No. RM07-2-000 
by one of the following methods:
     Agency Web Site: http://www.ferc.gov. Follow the 

instructions found in the Comment Procedures Section of the preamble 
for submitting comments via the eFiling link.
     Mail: Commenters unable to file comments electronically 
must mail or hand deliver an original and 14 copies of their comments 
to the Federal Energy Regulatory Commission, Secretary of the 
Commission, 888 First Street, NE., Washington, DC 20426. Please refer 
to the Comment Procedures Section of the preamble for additional 
information on how to file paper comments.

FOR FURTHER INFORMATION CONTACT:

Jane Stelck, Office of Enforcement, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
6648, jane.stelck@ferc.gov.
Thomas Russo (Technical), Office of Enforcement, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 502-8792, thomas.russo@ferc.gov.
Michael Krauthamer, Office of the General Counsel, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 502-6159, michael.krauthamer@ferc.gov.

SUPPLEMENTARY INFORMATION:

I. Introduction

    1. The Federal Energy Regulatory Commission (Commission) is 
proposing to amend the accounting and reporting requirements in Parts 
101 and 141 of its regulations to require public utilities and 
licensees to continue to follow the Commission's Uniform System of 
Accounts (USofA) \1\ and to file quarterly and annual financial reports 
\2\ when they have ceased to make jurisdictional sales of electric 
energy or to provide jurisdictional transmission service but continue 
to collect amounts pursuant to a Commission-accepted tariff or rate 
schedule, or a Commission order. These proposed regulations are 
intended to close a gap in current accounting and reporting 
requirements that no longer apply when the operations of a public 
utility or licensee are discontinued. The resulting gap leaves 
unreported information and data which are important to the Commission's 
administration of its jurisdictional responsibilities under the Federal 
Power Act (FPA).\3\ Specifically, these changes are intended to address 
a situation, for example, in which a nuclear generating plant may shut 
down its operations but continue to collect decommissioning and other 
administrative costs pursuant to a Commission order. For this purpose, 
the Commission proposes additions and revisions to Parts 101 and 141 of 
the Commission's regulations, as follows: (1) Add a new category, 
designated ``nonoperating'' to the classification of utilities subject 
to compliance with the USofA in the General Instructions of Part 101; 
and (2) revise Sec. Sec.  141.1, 141.2 and 141.400 of Part 141 to 
require nonoperating public utilities and licensees whose operations 
have ceased but who continue to collect amounts pursuant to a 
Commission tariff or rate schedule, or a Commission order, to continue 
to comply with the Commission's reporting requirements.
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    \1\ 18 CFR Part 101.
    \2\ 18 CFR Part 141.
    \3\ 16 U.S.C. 824 et seq.
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    2. The Commission is also seeking comments on the applicability of 
Part 125, which sets forth record retention requirements for public 
utilities and licensees. This notice of proposed rulemaking reasonably 
interprets the current language of Part 125 to provide that the 
requirements of Part 125 continue to apply to nonoperating entities who 
continue to collect amounts pursuant to a Commission-approved tariff or 
rate schedule, or a Commission order. The Commission seeks comments, 
however, as to whether Part 125 may require particular revisions.

II. Background

    3. The Commission's regulations in Parts 101 and 141 require public 
utilities and licensees whose sales or transmission service exceed 
certain prescribed levels to follow the USofA and to file annual and 
quarterly financial reports, Forms No. 1, 1-F, and 3-Q, respectively. 
This information is necessary to enable the Commission to fulfill its 
statutory responsibilities under the FPA and is essential to the 
Commission's decisionmaking process. The information, which is publicly 
available, also allows customers, state commissions, and others to 
evaluate the rates charged for sales of electric energy and 
transmission of electric energy.
    4. Under the Commission's existing regulations, public utilities 
and licensees are relieved of these accounting and reporting 
requirements when they cease making sales or providing transmission. 
This is true even when these nonoperating public utilities and 
licensees continue to collect amounts pursuant to a Commission-approved 
tariff or rate schedule, or a Commission order.

III. Discussion

    5. In recent years, this accounting and reporting gap has been 
highlighted when, for example, nuclear generating plants shut down but 
continue to collect decommissioning and other administrative costs 
under a Commission-accepted tariff or rate schedule, or a Commission 
order.\4\ The amounts collected by these companies are material and may 
span a decade or longer.\5\ The occurrence of these and the potential 
occurrence of similar circumstances impede the Commission's ability to 
collect information, monitor, or audit the underlying costs when 
accounting and reporting requirements no longer apply. The Commission 
has a continuing need to have access to books and records and to 
receive periodic financial reports for any jurisdictional entity, even 
when that entity has ceased operations but continues to collect amounts 
pursuant to a Commission-accepted tariff or rate schedule, or a 
Commission order. Without Commission oversight, customers and 
ratepayers cannot be

[[Page 924]]

assured that these billings are just and reasonable.
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    \4\ See, e.g., Connecticut Yankee Atomic Power Company, 92 FERC 
] 61,005 (2000) (approving decommissioning cost collections.)
    \5\ For example, Connecticut Yankee collected $16.7 million per 
year in decommissioning funds from 2000 to 2004 and $93 million in 
2005 and 2006. Id.
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    6. To remedy this gap in the regulations and to ensure that the 
Commission has all necessary information to perform its oversight 
duties, this rulemaking proposes to add a new classification in Part 
101, General Instructions, Classification of utilities, which will 
apply the USofA to nonoperating Major and Nonmajor public utilities and 
licensees. Additionally, the Commission proposes revisions to the 
reporting requirements contained in Part 141 of its regulations to 
require that nonoperating public utilities and licensees that have 
ceased operation, but continue to collect amounts pursuant to a 
Commission-accepted tariff or rate schedule, or a Commission order, 
continue to file annual and quarterly reports pursuant to these 
regulations.
    7. At this time, the Commission is not proposing any additions or 
revisions to Part 125, which requires public utilities and licensees to 
retain records for designated periods of time. This proposed rulemaking 
is based on a reasonable reading of the current language in Part 125, 
that the requirements of Part 125 continue to apply to nonoperating 
public utilities and licensees even when their respective operations 
cease but they continue to collect amounts under a Commission-accepted 
tariff or rate schedule or a Commission order. We seek comments, 
however, as to whether revisions to Part 125 may be necessary.
    8. At this time, it is anticipated that the proposed regulations 
will affect only a few entities, and that reporting and compliance 
requirements will not be burdensome.
    9. Finally, the Commission proposes that these accounting and 
reporting requirements become effective 30 days after publication of 
the Final Rule in the Federal Register.

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 section 3507(d) of the Paperwork Reduction Act of 
1995.\6\ OMB's regulations require OMB to approve certain information 
collection requirements imposed by agency rule.\7\
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    \6\ 44 U.S.C. 3507(d).
    \7\ See 5 CFR 1320.11.
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    Comments are solicited on the need for this information, whether 
the information will have practical utility, the accuracy of the 
provided burden estimated, ways to enhance the quality, utility, 
clarity of the information to be collected, and any suggested methods 
for minimizing respondents' burden, including the use of automated 
information techniques. The Commission expects that only a very small 
number of public utilities and licensees would be affected by the 
proposed rule. The Commission also anticipates there will be a minimal 
impact, if any, on these entities.
    Information Collection Costs: The Commission seeks comments on the 
costs to comply with these requirements. The Commission anticipates 
that there will be minimal impact relative to the costs of compliance.
    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''; and FERC-555.
    Action: Proposed information collections.
    OMB Control Nos.: 1902-0021; 1902-0029; 1902-0205, and 1902-0098.
    Respondents: Businesses or other for profit.
    Frequency of responses: Annually and quarterly.
    Necessity of the Information: The information maintained and 
collected under the requirements of Parts 101 and 141 is essential to 
the Commission's oversight duties. Under the existing regulations, 
nonoperating public utilities and licensees are not required to follow 
the USofA, or submit financial reports when sales of electric energy or 
transmission of electric energy cease, even when they continue to bill 
amounts pursuant to a Commission-accepted tariff or rate schedule, or a 
Commission order. Without access to accounting books and records and 
periodic financial reports, the Commission cannot conduct rate reviews, 
audits and other oversight activities with respect to these public 
utilities and licensees.
    Internal Review: The Commission has reviewed the requirements 
pertaining to the USofA and to its financial reports and has determined 
that the proposed changes are necessary. These requirements conform to 
the Commission's plan for efficient information collection, 
communication, and management within the public industry. The 
Commission has assured itself, by means of internal review, that there 
is specific, objective support associated with the information 
requirements.
    10. 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: michael.miller@ferc.gov].
    11. To submit comments concerning the collection of information and 
the associated burden estimates, please send your comments 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) 395-4650, fax: (202) 395-7285.

V. Environmental Statement

    12. 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.\8\ The 
Commission has categorically excluded certain actions from this 
requirement as not having a significant effect on the human 
environment. Included in the exclusion are actions that involve 
accounting and financial reporting.\9\ The rules proposed here address 
the need for nonoperating utilities and licensees to continue 
compliance with the USofA and to meet the reporting requirements of 
part 141 for so long as they continue to collect amounts pursuant to a 
Commission-approved tariff or rate schedule, or a Commission order. 
Therefore, this notice of proposed rulemaking falls within the 
categorical exemptions provided in the Commission's regulations, and, 
as a result neither an environmental impact statement nor an 
environmental assessment is required.
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    \8\ Regulations Implementing the National Environmental Policy 
Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. 
] 30,783 (1987).
    \9\ 18 CFR 380.4(a)(5), (16); see also 18 CFR 380.4(a)(3).
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VI. Regulatory Flexibility Act Certification

    13. The Regulatory Flexibility Act of 1980 \10\ generally requires 
a description and analysis of final rules that will have significant 
economic impact on a substantial number of small entities. The 
Commission is not required to make such analyses if a rule would not 
have such an effect. Because most public utilities and licensees do not 
fall within the definition of ``small entity,'' \11\ the

[[Page 925]]

Commission certifies that this notice of proposed rulemaking will not 
have a significant economic impact on a substantial number of small 
entities.
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    \10\ 5 U.S.C. 601-12.
    \11\ See 5 U.S.C. 601(3).
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VII. Comment Procedures

    14. The Commission invites comments on the matters and proposals in 
this notice, including any related matters or alternative proposals 
that commenters may wish to discuss. Comments are due February 8, 2007. 
Reply comments will be due 30 days thereafter. Comments must refer to 
Docket No. RM07-2-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments. Comments may be filed either in electronic or paper format.
    15. Comments may be filed electronically via the eFiling link on 
the Commission's Web site at http://www.ferc.gov. The Commission 

accepts most standard word processing formats and commenters may attach 
additional files with supporting information in certain other file 
formats. Commenters filing electronically do not need to make a paper 
filing. Commenters that are not able to file comments electronically 
must send an original and 14 copies of their comments to: Federal 
Energy Regulatory Commission, Secretary of the Commission, 888 First 
Street, NE., Washington, DC 20426.
    16. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VIII. Document Availability

    17. 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.
    18. From the Commission's Home Page on the Internet, this 
information is available on 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.
    19. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from our Help Line at (202) 502-
8222 or the Public Reference Room at (202) 502-8371 Press 0, TTY (202) 
502-8659. E-Mail the Public Reference Room at 
public.referenceroom@ferc.gov.

List of Subjects

18 CFR Part 101

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

18 CFR Part 141

    Electric power, Reporting and recordkeeping requirements.

By direction of the Commission.
Magalie R. Salas,
Secretary.
    In consideration of the foregoing, the Commission proposes to amend 
parts 101 and 141, Chapter I, Title 18, Code of Federal Regulations, as 
follows:

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. 7101-7352, 7651-7615o.

    2. Amend Part 101, General Instructions, 1. Classification of 
utilities, to add a new paragraph A.(3) and to revise the first 
sentence in paragraph B to read as follows:

General Instructions

    1. Classification of Utilities.
    A. * * *
    (3) Nonoperating. Utilities and licensees formerly designated as 
Major or Nonmajor that have ceased operation but continue to collect 
amounts pursuant to a Commission-accepted tariff or rate schedule, or a 
Commission order.
    B. This system applies to Major, Nonmajor, and Nonoperating 
utilities and licensees. * * *
* * * * *

PART 141--STATEMENTS AND REPORTS (SCHEDULES)

    3. The authority citation for part 141 continues to read as 
follows:

    Authority: 15 U.S.C. 79; 16 U.S.C. 791a-828c, 2601-2645; 31 
U.S.C. 9701; 42 U.S.C. 7101-7352.

    4. Revise Sec.  141.1(b)(1)(i) 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 
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, 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 or Nonoperating 
(formerly designated as Major) as defined above, whether or not the 
jurisdiction of the Commission is otherwise involved, shall prepare and 
file electronically with the Commission the FERC Form No. 1 pursuant to 
the General Instructions set out in that form.
* * * * *
    5. Revise Sec.  141.2(b)(1)(i) to read as follows:

Sec.  141.2  FERC Form No. 1-F, Annual report for Nonmajor public 
utilities and licensees.

* * * * *
    (b) Filing requirements--(1) Who must file--(i) Generally. Each 
Nonmajor and each Nonoperating (formerly designated as Nonmajor) public 
utility and licensee as defined by the Federal Power Act, which is 
considered Nonmajor as defined in Part 101 of this chapter, shall 
prepare and file with the Commission an original and conformed copies 
of FERC Form No. 1-F pursuant to the General Instructions set out in 
that form.
* * * * *
    6. In Sec.  141.400, revise paragraphs (b)(1)(i), (b)(2) 
introductory text, and (b)(3) introductory text, 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 926]]

transmission, distribution, or sale of electric energy, however 
produced, throughout the United States and its possessions, having 
sales or transmission service, whether or not the jurisdiction of the 
Commission is otherwise involved, must prepare and file with the 
Commission FERC Form No. 3-Q pursuant to the General Instructions set 
out in that form.
* * * * *
    (2) Each Major and Nonoperating (formerly designated as Major) (as 
defined in Part 101 of subchapter C of this chapter) public utility and 
licensee must file the quarterly financial report form as follows:
* * * * *
    (3) Nonmajor and Nonoperating (formerly designated as Nonmajor) 
public utilities and licensees must file the quarterly financial report 
form as follows:
* * * * *
[FR Doc. E6-22692 Filed 1-8-07; 8:45 am]

BILLING CODE 6717-01-P