Document ID: FERC-2007-0031-0002
Agency: ferc
Document Type: Rule
Title: Accounting and Reporting Requirements for Nonoperating Public Utilities and Licensees
Posted Date: 2007-04-26T04:00Z

[Federal Register: April 26, 2007 (Volume 72, Number 80)]
[Rules and Regulations]               
[Page 20720-20723]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26ap07-6]                         

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 101 and 141

[Docket No. RM07-2-000; Order No. 694]

 
Accounting and Reporting Requirements for Nonoperating Public 
Utilities and Licensees

Issued April 19, 2007.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: In this Final Rule, the Federal Energy Regulatory Commission 
(Commission) is amending its accounting and reporting regulations 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 a Commission-
accepted tariff or rate schedule, or a Commission order. The Final Rule 
will close a gap in the Commission's regulations which apply now only 
to operating public utilities and licensees, and which provide 
information necessary to the Commission's regulatory responsibilities.

DATES: Effective Date: The rule will become effective May 29, 2007.

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.

SUPPLEMENTARY INFORMATION:
Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly; 
Marc Spitzer; Philip D. Moeller; and Jon Wellinghoff.

I. Introduction

    1. On December 21, 2006, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) that proposed 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 a Commission-accepted tariff or rate 
schedule, or a Commission order.\1\ The NOPR also sought comments 
regarding the applicability of Part 125, Preservation of Records of 
Public Utilities and Licensees, to public utilities or licensees which 
have ceased operations, but continue to collect amounts pursuant to a 
Commission-approved tariff or rate schedule, or a Commission order.
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    \1\ Accounting and Reporting Requirements For Nonoperating 
Public Utilities and Licensees, 72 FR 922 (Jan. 9, 2007), FERC 
Stats. & Regs. ] 32,610 (2006).
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    2. The Final Rule adopts the proposed revisions to Parts 101 and 
141 contained in the NOPR. The Final Rule requires that companies who 
cease operating but continue collecting amounts pursuant to a 
Commission-accepted tariff or rate schedule, or a Commission order, 
continue to comply with Parts 101 and 141. The Final Rule finds that 
there is no need to adopt changes to Part 125 of the Commission's 
regulations.

II. Discussion

    3. Parts 101 and 141 of the Commission's regulations 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. 
Under the Commission's existing regulations, public utilities and 
licensees are

[[Page 20721]]

relieved of these accounting and reporting requirements when they cease 
making sales for resale or providing transmission. This is true even 
when these nonoperating entities continue to collect amounts pursuant 
to a Commission-approved tariff or rate schedule, or a Commission 
order. Therefore, 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 under the 
existing regulations.
    4. As discussed in the NOPR,\2\ 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.\3\ The amounts collected by these 
companies are material and may span a decade or longer.\4\ 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 assured that 
these billings are just and reasonable. For these reasons, we find 
that, nonoperating entities' compliance with Part 101 and reporting 
information in these financial reports is necessary to enable the 
Commission to fulfill its statutory responsibilities under the Federal 
Power Act (FPA).\5\ In addition, the information, because it is 
publicly available, will allow customers, state commissions, and others 
to evaluate the amounts charged.
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    \2\ NOPR at P 5.
    \3\ See, e.g., Connecticut Yankee Atomic Power Company, 92 FERC 
] 61,005 (2000) (approving decommissioning cost collections.)
    \4\ 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.
    \5\ 16 U.S.C. 824 et seq.
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III. The Final Rule

    6. The Final Rule adopts the proposed changes outlined in the NOPR. 
A new category, designated nonoperating, is added to the General 
Instructions of Part 101, to the classification of utilities subject to 
compliance with the USofA. Sections 141.1, 141.2, and 141.400 of the 
Commission's regulations are revised 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.
    7. The NOPR also sought comments on the continued applicability of 
Part 125 of the Commission's regulations, which sets forth record 
retention requirements for public utilities and licensees. The NOPR 
stated that a reasonable interpretation of Part 125 is that the 
requirements of that part continue to apply to nonoperating public 
utilities and licensees who continue to collect amounts pursuant to a 
Commission-approved tariff or rate schedule, or Commission order.\6\ 
The Final Rule similarly adopts this reading of Part 125, and it is 
unnecessary to makes changes to Part 125.
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    \6\ See NOPR at P 7.
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IV. Comments

    8. Comments on the NOPR were filed jointly by Yankee Atomic 
Electric Company, Connecticut Yankee Atomic Power Company, and Maine 
Yankee Atomic Power Company (jointly, Yankee Companies), and by the 
Connecticut Department of Public Utility Control, The Maine Public 
Utilities Commission and The Maine Office of Public Advocate (jointly, 
New England Parties). Neither the Yankee Companies nor the New England 
Parties object to the proposed regulations, but both parties express 
concern regarding additional costs that might be incurred and the 
effect on consumers who will ultimately pay the costs. The New England 
Parties state that the NOPR ``may provide needed insight into the 
expenditures of non-operating plants'' but state that it might increase 
the companies' operating costs. The New England Parties request that 
the Commission exempt the Yankee Companies from the instant accounting 
requirements.
    9. The Yankee Companies also state that they concur with the 
Commission's interpretation of Part 125 and its conclusion that no 
revisions to that part are necessary. The Yankee Companies state that 
they will continue to abide by Part 125 as they have done since ceasing 
operations.
    10. Where a company ceases operations but continues to collect 
costs pursuant to a Commission-approved tariff or rate schedule, or a 
Commission order, it is only proper that the affected company be 
obligated to continue maintaining their accounts pursuant to the USofA, 
and continue filing quarterly and annual financial reports with the 
Commission.\7\ At this time, however, any costs associated with meeting 
such requirements are unknown; thus, only a potential impact on rates 
exists.\8\ Moreover, any company affected by this Final Rule would, at 
the time it ceases operations, already be in compliance with the USofA 
and the Commission's financial reporting requirements. Thus, any burden 
imposed by this Final Rule is likely to be comparatively minimal.\9\ 
Finally, given the Commission's regulatory responsibilities, the 
benefits of closing this regulatory gap far outweigh the comparatively 
minimal costs that are likely to arise from compliance.
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    \7\ Yankee Companies have agreed to file FERC Form No. 1 as part 
of a settlement recently approved by the Commission. See Connecticut 
Yankee Atomic Power Co., 117 FERC ] 61,192 (2006).
    \8\ See Virginia State Corp. Comm'n v. FERC, 468 F.3d 845, 847 
(D.C. Cir. 2006) (``Petitioners' claim of a rate effect is belied by 
the proposition that `[a]ccounting practices are not controlling for 
rate making purposes,' '' (citing Consolidated Gas Supply Corp., 14 
FERC ] 61,029 at 61,054 (1981) and Williston Basin Interstate 
Pipeline Co., 56 FERC ] 61,104 at 61,370-71 (1991)).
    \9\ Even the Yankee Companies, who would be most affected 
because they have not been operating for some time, offer an 
estimated cost of only ``at least $30,000 annually'' for each Yankee 
company. Comparatively speaking, this is not a large sum. In fact, 
moreover, they also state that what they currently report to the 
Commission does ``not differ substantially'' from what they will now 
be required to submit to the Commission. See Yankee Companies' 
comments at 2-3.
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V. Information Collection Statement

    11. The collections of information referenced in this Final Rule 
have been submitted to the Office of Management and Budget (OMB) for 
review under section 3507(d) of the Paperwork Reduction Act of 
1995.\10\ OMB's regulations require OMB to approve certain information 
collection requirements imposed by agency rule.\11\ Upon approval of a 
collection of information, OMB will assign an OMB control number and 
expiration date. Respondents subject to the filing requirements of this 
Final Rule will not be penalized for failing to respond to these 
collections of information unless the collections of information 
display a valid OMB control number or the Commission had provided a 
justification as to why the control number should be displayed.
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    \10\  See 44 U.S.C. 3507(d).
    \11\ 5 CFR 1320.11.
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    12. Persons wishing to comment on the collection of information may 
do so

[[Page 20722]]

by contacting 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.
    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, ``Preservation of Records of 
Public Utilities and Licensees, Natural Gas Companies, and Oil Pipeline 
Companies''.
    Action: Proposed information collections.
    OMB Control Nos. 1902-0021; 1902-0029; 1902-0205; and 1902-0098.
    Respondents: Business or others for profit.
    Frequency of responses: Annually and quarterly.
    Necessity of the Information: This Final Rule amends the 
Commission's accounting and reporting regulations, in Parts 101 and 
141, to require public utilities and licensees to continue to follow 
the Commission's 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 
to collect amounts pursuant to a Commission-accepted tariff or rate 
schedule, or Commission order. The Final Rule closes a gap in the 
Commission's regulations which apply now only to operating public 
utilities and licensees. Without the changes made in the Final Rule, 
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.

VI. Environmental Analysis

    13. 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.\12\ No 
environmental consideration is necessary for the promulgation of a rule 
that addresses information gathering, analysis, and dissemination,\13\ 
and, also, that addresses accounting.\14\ This Final Rule addresses 
information gathering, analysis, and accounting requirements. 
Therefore, the Final Rule falls within categorical exemptions provided 
in the Commission's regulations. Consequently, neither an Environmental 
Impact Statement nor an Environmental Assessment is required.
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    \12\ See Regulations Implementing the National Environmental 
Policy Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987) FERC Stats. & 
Regs. ] 30,783 (1987).
    \13\ See 18 CFR 380.4(a)(5).
    \14\ See 18 CFR 380.4(c)(16).
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VII. Regulatory Flexibility Act

    14. The Regulatory Flexibility Act of 1980 (RFA) \15\ generally 
requires a description and analysis of the effect that a Final Rule 
will have on small entities or a certification that a rule will not 
have a significant economic impact on a substantial number of small 
entities.
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    \15\ See 5 U.S.C. 601-12.
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    15. The Commission concludes that this Final Rule will not have 
such an impact on a substantial number of small entities. Because most 
public utilities and licensees do not fall within the definition of 
``small entity,'' the Commission certifies that this Final Rule will 
not have a significant impact on a substantial number of small 
entities.

VIII. Document Availability

    16. 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.
    17. From the Commission's Home Page on the Internet, this document 
is available in the Commission's document management system, e-Library. 
The full text of this document is available on e-Library in PDF and 
Microsoft Word format for viewing, printing, and/or downloading. To 
access this document in e-Library, type the docket number excluding the 
last three digits of this document in the docket number field.
    18. User assistance is available for e-Library and the Commission's 
Web site during normal business hours. For assistance, please contact 
FERC Online Support at 1-866-208-3676 (toll free) or 202-502-6652 (e-
mail at FERCOn-lineSupport@ferc.gov) or the Public Reference Room at 
202-502-8371, TTY 202-502-8659 (e-mail at public.reference@ferc.gov).

IX. Effective Date and Congressional Notification

    19. This Final Rule will take effect May 29, 2007.
    20. The Commission has determined with the concurrence of the 
Administrator of the Office of Information and Regulatory Affairs of 
OMB Final Rule is not a major rule within the meaning of section 251 of 
the Small Business Regulatory Enforcement Fairness Act of 1996.\16\ The 
Commission will submit the Final Rule to both houses of Congress and 
the Government Accountability Office.
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    \16\ 5 U.S.C. 801.
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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 the Commission.
Philis J. Posey,
Deputy Secretary.

0
In consideration of the foregoing, the Commission amends parts 101 and 
141 of Title 18 of the 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

0
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.

0
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

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. * * *
* * * * *

[[Page 20723]]

PART 141--STATEMENTS AND REPORTS (SCHEDULES)

0
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.

0
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.
* * * * *

0
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.
* * * * *

0
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, 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. E7-7771 Filed 4-25-07; 8:45 am]

BILLING CODE 6717-01-P