Document ID: FERC-2023-1297-0001
Agency: ferc
Document Type: Rule
Title: Accounting and Reporting Treatment of Certain Renewable Energy Assets
Posted Date: 2023-10-05T04:00Z

[Federal Register Volume 88, Number 192 (Thursday, October 5, 2023)]
[Rules and Regulations]
[Pages 69294-69388]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14994]

[[Page 69293]]

Vol. 88

Thursday,

No. 192

October 5, 2023

Part II

 Department of Energy

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Federal Energy Regulatory Commission

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18 CFR Part 101

Accounting and Reporting Treatment of Certain Renewable Energy Assets; 
Final Rule

  Federal Register / Vol. 88 , No. 192 / Thursday, October 5, 2023 / 
Rules and Regulations  

[[Page 69294]]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 101

[Docket No. RM21-11-000; Order No. 898]

Accounting and Reporting Treatment of Certain Renewable Energy 
Assets

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: In this final rule, the Federal Energy Regulatory Commission 
(Commission or FERC) is amending the Uniform System of Accounts (USofA) 
for public utilities and licensees to: create new accounts for wind, 
solar, and other renewable generating assets; create a new functional 
class for energy storage accounts; codify the accounting treatment of 
environmental credits; and create new accounts within existing 
functions for computer hardware, software, and communication equipment. 
We also amend the relevant FERC forms to accommodate these changes.

DATES: Effective date: This rule is effective January 1, 2025.

FOR FURTHER INFORMATION CONTACT: 

Daniel Birkam (Technical Information), Office of Enforcement, Federal 
Energy Regulatory Commission, 888 First Street NE, Washington, DC 
20426, (202) 502-8035, [email protected]
Todd Kuzniewski (Technical Information), Office of Enforcement, Federal 
Energy Regulatory Commission, 888 First Street NE, Washington, DC 
20426, (202) 502-6381, [email protected]
Nathan Lobel (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE, Washington, 
DC 20426, (202) 502-8456, [email protected]

SUPPLEMENTARY INFORMATION:

Table of Contents

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                                                               Paragraph
                                                                numbers
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I. Introduction.............................................           1
II. Background..............................................           4
    A. Previous Changes to the USofA........................           4
    B. Locke Lord Petition..................................           9
    C. Notice of Inquiry....................................          12
    D. Notice of Proposed Rulemaking........................          16
III. Need for Reform........................................          17
IV. Proposed Reforms........................................          22
    A. Creation of New Subfunctions and Accounts for Non-             22
     Hydro Renewables.......................................
    1. NOPR.................................................          22
    2. Comments.............................................          31
    3. Commission Determination.............................          47
    B. Creation of Energy Storage Function and Accounts.....          66
    1. NOPR.................................................          66
    2. Comments.............................................          68
    3. Commission Determination.............................          72
    C. Accounting Treatment for Renewable Energy Credits....          76
    1. NOPR.................................................          76
    2. Comments.............................................          78
    3. Commission Determination.............................          87
    D. Creation of Computer Hardware, Software, and                   99
     Communication Equipment Accounts.......................
    1. NOPR.................................................          99
    2. Comments.............................................         103
    3. Commission Determination.............................         110
    E. Reporting............................................         117
    1. NOPR.................................................         117
    2. Comments.............................................         122
    3. Commission Determination.............................         125
    F. Other Issues.........................................         129
    1. Account Numbering....................................         129
    a. Comments.............................................         129
    b. Commission Determination.............................         130
    2. Issues Beyond the Scope of This Rulemaking...........         131
    a. Comments.............................................         131
    b. Commission Determination.............................         132
    G. Proposed Compliance Procedures.......................         133
    1. Comments.............................................         133
    2. Commission Determination.............................         136
V. Information Collection Statement.........................         139
VI. Environmental Analysis..................................         148
VII. Regulatory Flexibility Act.............................         149
VIII. Document Availability.................................         152
IX. Effective Date and Congressional Notification...........         155
X. Appendix A: New and Amended Form 1/1F/3-Q (Electric).....
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[[Page 69295]]

I. Introduction

    1. In this final rule, the Commission is revising the Uniform 
System of Accounts (USofA) \1\ to account for rapid changes in 
technology and resource mix in the U.S. energy industry over recent 
decades. The reforms adopted in this final rule will add functional 
detail to the USofA in order to provide uniformity, consistency, and 
transparency in accounting and reporting for investments in these 
technologies, and to assist the Commission in fulfilling its 
responsibilities under the Federal Power Act (FPA) to ensure that rates 
remain just and reasonable. Therefore, pursuant to the Commission's 
authority to prescribe accounting and financial reporting requirements 
for jurisdictional companies under section 301 of the FPA,\2\ we modify 
part 101 \3\ of the Commission's regulations to: (1) create new 
subfunctions and accounts for wind, solar, and other renewable 
generating assets; (2) establish a new functional class and accounts 
for energy storage assets; (3) create new accounts and codify 
accounting treatment for environmental credits; and (4) create new 
accounts for computer hardware, software, and communication equipment 
within existing functions that do not already include them. The final 
rule also makes corresponding changes to the following FERC Forms to 
implement the USofA changes: FERC Form Nos. 1, 1-F, 3-Q (electric), and 
60.\4\
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    \1\ Uniform System of Accounts Prescribed for Public Utilities & 
Licensees Subject to the Provisions of the Federal Power Act, 18 CFR 
part 101. Unless otherwise indicated, references to the USofA in 
this final rule refer to the USofA for public utilities and 
licensees.
    \2\ 16 U.S.C. 825.
    \3\ 18 CFR part 101.
    \4\ Edits to the FERC Form No. 60 Annual Report of Centralized 
Service Companies, governed under the Public Utility Holding Company 
Act, are the result of changes to the FERC forms for public 
utilities and licensees from which FERC Form No. 60 summarily 
references accounts.
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    2. Generally, we are adopting the specific reforms proposed in the 
Notice of Proposed Rulemaking (NOPR) (87 FR 59870 (Oct. 3, 2022)), but 
with certain revisions based on the record in this proceeding. In 
particular, certain proposals in the NOPR have been altered in this 
final rule to effectuate the Commission's intent, better address the 
needs of different stakeholders, and facilitate solutions to potential 
technical challenges.
    3. As discussed further below in section IV.G (Proposed Compliance 
Procedures), each utility must implement the requirements of this final 
rule by January 1, 2025.

II. Background

A. Previous Changes to the USofA

    4. The USofA was created by the Federal Power Commission to 
facilitate the Commission's ratemaking responsibilities and uniformly 
capture financial and operational information for, first, traditional 
public utilities, and then natural gas pipelines.\5\ The USofA has been 
modified over time to account for changing technological, legal, and 
market conditions.
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    \5\ 18 CFR part 101.
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    5. For example, in Order No. 552, the Commission revised the USofA 
to account for sulfur dioxide emissions allowances under the 1990 Clean 
Air Act Amendments.\6\ In that order, the Commission created new 
inventory Accounts 158.1 (Allowance Inventory) and 158.2 (Allowances 
Withheld) and new expense Account 509 (Allowances) to accommodate the 
new sulfur dioxide emissions allowances. The Commission noted that some 
commenters sought to classify allowances in existing accounts to 
facilitate a desired ratemaking result; however, the Commission found 
these comments unpersuasive because accounting rules provide sound and 
uniform accounting rather than dictating particular ratemaking 
results.\7\
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    \6\ Revisions to Uniform System of Accounts to Account for 
Allowances under the Clean Air Act Amendments of 1990 & Regulatory-
Created Assets & Liabilities & to Form Nos. 1, 1-F, 2 & 2-A, Order 
No. 552, 62 FR 61299 (Nov. 17, 1997), FERC Stats. & Regs. ] 30,967 
(1993) (cross-referenced at 62 FERC ] 61,299).
    \7\ Id. at 30,799.
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    6. In 2013, the Commission issued Order No. 784, which revised the 
USofA and related forms to codify accounting treatment for energy 
storage.\8\ The Commission created: (1) new electric plant and 
associated operating and maintenance expense accounts (O&M accounts) to 
record investments in, and operations and maintenance costs associated 
with, energy storage assets; (2) a new purchased power account to 
record the cost of power purchased for use in storage operations; and 
(3) new FERC Form Nos. 1 and 1-F schedules.\9\ Order No. 784 also 
amended existing schedules in FERC Form Nos. 1, 1-F, and 3-Q (electric) 
to report operational and statistical data on storage assets.
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    \8\ Third-Party Provision of Ancillary Services; Accounting & 
Financial Reporting for New Electric Storage Technologies, Order No. 
784, 78 FR 46178 (July 30, 2013), 144 FERC ] 61,056 (2013), order on 
clarification, Order No. 784-A, 146 FERC ] 61,114 (2014).
    \9\ Id. P 123.
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    7. Specifically, the Commission created electric plant accounts for 
energy storage assets within the existing USofA functions: Account 348 
(Energy Storage Equipment--Production), Account 351 (Energy Storage 
Equipment--Transmission), and Account 363 (Energy Storage Equipment--
Distribution).\10\ The Commission created corresponding new O&M 
accounts: Account 548.1 (Operation of Energy Storage Equipment) and 
Account 553.1 (Maintenance of Energy Storage Equipment) for energy 
storage plant classified as production; Account 562.1 (Operation of 
Energy Storage Equipment) and Account 570.1 (Maintenance of Energy 
Storage Equipment) for energy storage plant classified as transmission; 
and Account 582.1 (Operation of Energy Storage Equipment) and Account 
592.2 (Maintenance of Energy Storage Equipment) for energy storage 
plant classified as distribution.\11\
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    \10\ Id. P 141.
    \11\ Id. P 147.
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    8. In these energy storage accounts, the installed cost of energy 
storage assets is recorded based on the function or purpose the assets 
serve. Where an energy storage asset performs more than one purpose or 
function, Order No. 784 requires the cost of the asset to be allocated 
among the accounts based on the functions performed and approved rate 
recovery.\12\ While some commenters argued that the requirement to 
allocate energy storage assets that perform multiple functions across 
the relevant accounts places an undue administrative burden on 
utilities, the Commission nevertheless provided for functional 
recording because utilities that recover the costs of storage 
operations on a cost of service basis must already maintain cost 
allocation information on the assets.\13\ Furthermore, the Commission 
in Order No. 784 found that the alternative of recording all costs of 
energy storage assets in a single plant account would result in less 
transparent reporting.\14\
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    \12\ Id. P 126.
    \13\ Id. P 133.
    \14\ Id. P 135.
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B. Locke Lord Petition

    9. In Docket No. AC20-103, Locke Lord submitted a petition to the 
Chief Accountant requesting confirmation that the costs of certain wind 
and solar generating assets should be booked to Other Production 
Accounts 343 (Prime Movers), 344 (Generators), and 345 (Accessory 
Electric Equipment).\15\ Specifically, Locke Lord proposed to record: 
(1) wind turbines, solar modules, combiner circuits, and inverters to 
Account 343 (Prime

[[Page 69296]]

Movers); (2) wind turbine generators to Account 344 (Generators); and 
(3) DC conductors, individual low-voltage step-up transformers, AC 
conductors (34.5 kV) associated with collector systems, power cables, 
conduit and underground duct banks, circuit breakers, disconnect 
switches and accessories, grounding conductors and grounding 
transformers, collector system buses, main and/or auxiliary transfer 
buses, collector system control systems, Supervisory Control and Data 
Acquisition (SCADA) systems, static capacitors and reactors, and 
collector system substations to Account 345 (Accessory Electric 
Equipment).
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    \15\ Locke Lord LLP, 174 FERC ] 61,033, at P 1 (2021).
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    10. Some commenters in that proceeding argued that the petition 
proposed recording inappropriate costs, including costs related to the 
collector system and SCADA,\16\ into Account 345 (Accessory Electric 
Equipment), which would implicate broader issues of compensation for 
reactive power.\17\ Some commenters, including Edison Electric 
Institute (EEI), suggested that the Commission consider creating new 
accounts for wind, solar, and other non-hydro renewables to resolve 
this dispute.\18\
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    \16\ Id. P 6.
    \17\ Id. PP 10, 13. Specifically, the AEP Methodology identifies 
costs associated with four groups of plant investment: (1) the 
generators/exciters; (2) generator step-up transformers; (3) 
accessory electric equipment; and (4) the remaining production plant 
investment. These costs are then allocated between real and reactive 
power using an allocation factor. Id. P 10 n.12.
    \18\ Id. PP 8, 13, 16.
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    11. The Commission denied the petition, noting that the record 
reflected substantial disagreement about equipment functions and 
categorizations.\19\ In so doing, the Commission also noted that it 
would concurrently issue a Notice of Inquiry (NOI) to consider creating 
separate categories of accounts in the USofA for wind and solar 
generating assets.\20\ The Commission has since opened a separate 
proceeding under Docket No. RM22-2-000 to gather comments and 
information about potential alternative reactive power compensation.
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    \19\ Id. P 19.
    \20\ Id. P 20.
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C. Notice of Inquiry

    12. On January 19, 2021, the Commission issued an NOI in the 
instant docket seeking comment on the appropriate accounting treatment 
for certain renewable generating assets.\21\ Specifically, the 
Commission sought comment on: (1) whether to create new accounts within 
the USofA for non-hydro renewable energy generating assets; \22\ (2) 
what modifications to FERC Form No. 1 are needed to reflect these 
changes; (3) whether to codify the proper accounting treatment of the 
purchase, generation, and use of renewable energy credits (REC); and 
(4) whether there are rate-setting implications for these accounting 
and reporting changes.
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    \21\ Accounting & Reporting Treatment of Certain Renewable 
Energy Assets, Notice of Inquiry, 86 FR 7086, 174 FERC ] 61,032 
(2021) (NOI).
    \22\ The NOI defined non-hydro renewable generating assets as 
production assets other than hydroelectric generators (such as 
solar, wind energy, geothermal, biomass, etc.) that rely on the heat 
or motion of the earth or the sun's radiation to produce energy. 
These assets are denoted as renewable because the power production 
is based on a fuel source that is not consumed or destroyed by the 
generation process, such as buried hydrocarbons (coal, oil, natural 
gas) or the decay of rare irradiated heavy metals (nuclear). Biomass 
(trees, nut shells, grain husks and stalks, etc.) is considered 
renewable, despite consumption of its hydrocarbon source, because 
the carbon it releases is offset by regrowth of carbon capturing 
equivalent biomass. Id. P 1.
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    13. The Commission explained that the USofA contains discrete 
production accounts for Steam, Nuclear, Hydraulic, and Other 
Production, but does not contain accounts specifically designated for 
solar, wind, or other non-hydro renewable generating assets.\23\ The 
Commission noted that companies record non-hydro renewable generating 
assets in the USofA's Other Production accounts, but that parties have 
disagreed which Other Production accounts are appropriate for these 
assets.\24\ For example, the Commission noted that no plant account 
definition clearly describes solar panels, PV inverters, wind 
generation towers, or the computer hardware and software required to 
operate wind and solar generators.\25\ Similarly, the Commission 
explained that the related O&M accounts do not uniquely accommodate 
costs to maintain wind and solar facilities.\26\
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    \23\ Id. P 2.
    \24\ Id. PP 2-3.
    \25\ Id. PP 6-9.
    \26\ Id. P 9.
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    14. The Commission also explained that USofA accounts do not 
explicitly address the purchase, generation, or use of RECs.\27\ The 
Commission found in Ameren Illinois Co. that RECs are analogous to 
sulfur dioxide emission allowances, accounting treatment for which was 
codified in Order No. 552.\28\ The Commission noted that Order No. 552 
classified emission allowances as inventory and established new 
inventory and expense accounts to record the allowances and associated 
activities.\29\ In keeping with Order No. 552, the Commission has found 
that RECs that are purchased or generated should be recorded in Account 
158.1 (Allowance Inventory) and expensed to Account 509 (Allowances) as 
they are utilized.\30\
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    \27\ Id. PP 4, 13.
    \28\ Ameren Illinois Co., 170 FERC ] 61,267, at P 52 (2020).
    \29\ NOI, 174 FERC ] 61,032 at P 13 (citing Order No. 552, FERC 
Stats. & Regs. ] 30,967).
    \30\ Id. PP 4, 13-14 (citing Ameren Illinois Co., 170 FERC ] 
61,267 at P 52).
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    15. The Commission also noted that any proposed additions and 
modifications to its USofA would require corresponding changes to FERC 
Form No. 1, and could have a significant and measurable impact on 
rates.\31\
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    \31\ Id. PP 12, 16.
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D. Notice of Proposed Rulemaking

    16. On July 28, 2022, the Commission issued a NOPR in the same 
proceeding.\32\ In the NOPR, the Commission proposed, as discussed in 
greater detail below, to: (1) create new subfunctions and accounts for 
wind, solar, and other non-hydro renewable generating assets; (2) 
establish a new functional class and accounts for energy storage 
accounts; (3) create new accounts and codify the accounting treatment 
of RECs; and (4) create new accounts for computer hardware, software, 
and communication equipment within existing functions that do not 
already include them. The Commission received seven comments from a 
diverse set of stakeholders.\33\
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    \32\ See Accounting & Reporting Treatment of Certain Renewable 
Energy Assets, Notice of Proposed Rulemaking, 87 FR 59870 (Oct. 3, 
2022), 180 FERC ] 61,050, at P 28 (2022) (NOPR).
    \33\ See American Clean Power Association (ACP) and Solar Energy 
Industries Association (SEIA) (collectively Clean Energy 
Associations) NOPR Comments; Carl Pechman NOPR Comments; Dominion 
Energy, Inc. (Dominion) NOPR Comments; EEI and American Gas 
Association (AGA) (collectively Utility Associations) NOPR Comments; 
Liquid Energy Pipeline Association (LEPA) NOPR Comments; Pacific Gas 
and Electric (PG&E) and San Diego Gas and Electric (SDG&E) NOPR 
Comments; Retail Energy Supply Association (RESA) NOPR Comments.
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III. Need for Reform

    17. In the NOPR, the Commission noted that the USofA has not been 
significantly modified since the Commission issued Order No. 784 in 
2013 and does not provide clear accounting treatment for activities 
related to many technological and economic developments in the U.S. 
energy industry of recent decades, like the growth of investments into 
renewable generating facilities, battery storage, and RECs, among 
others.\34\ By adding functional detail to the USofA, these reforms 
will provide uniformity, consistency, and transparency in

[[Page 69297]]

accounting and reporting for investments into these assets, and assist 
the Commission in fulfilling its responsibilities under the FPA to 
ensure that rates remain just and reasonable.
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    \34\ NOPR, 180 FERC ] 61,050 at P 27.
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    18. As discussed in the NOPR and NOI, the USofA contains discrete 
production accounts for Steam, Nuclear, Hydraulic, and a catch-all 
category for Other Production.\35\ However, the USofA does not have 
production accounts designated specifically for solar, wind, or other 
renewable generating assets; public utilities instead record non-hydro 
renewable generating assets in the Other Production accounts. Given the 
rapid expansion and development of wind, solar, and other renewable 
generation technologies, and the record in Docket No. AC20-103 and the 
instant rulemaking proceeding, we conclude that the USofA must be 
modified to clarify how public utilities should account for non-hydro 
renewable generating assets, to avoid inconsistencies in accounting and 
reporting, and to facilitate the ratemaking process. NOI and NOPR 
commenters also generally agreed that these accounts are needed given 
non-hydro renewables' varied and distinct characteristics from existing 
electric production subfunctions within the USofA.\36\
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    \35\ 18 CFR part 101.
    \36\ See ACP NOI Comments at 16; Alliant Energy NOI Comments at 
3; Dominion NOPR Comments at 3; EEI NOI Comments at 4; Utility 
Associations NOPR Comments at 7. But see Clean Energy Associations 
NOPR Comments at 6 (contending that confusion and inconsistency in 
recording renewable energy assets can be resolved at lesser cost by 
clarifying that specific existing USofA accounts should be used).
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    19. Our reporting requirements for energy storage also need 
revision. In Order No. 784, the Commission created accounts for energy 
storage assets and related operations and maintenance expenses within 
different functions, but underestimated the additional burden that 
functional reporting, along with frequent reclassification of plant 
assets and associated accumulated depreciation, imposes on 
utilities.\37\ Since the issuance of Order No. 784, and based on 
experience and industry input since the issuance of Order No. 784, the 
Commission now recognizes the need for revisions to its USofA for 
energy storage accounting. Today, it is clear that frequently changing 
functionalization imposes significant recordkeeping and reporting 
burden on utilities, which increases internal control risks for 
reporting errors in our forms.\38\ Consequently, NOI commenters 
requested the Commission to create, and NOPR commenters supported the 
proposed creation of, a new energy storage function in this 
proceeding.\39\ We are now persuaded that this new function is needed 
to simplify and improve recording and reporting of energy storage 
assets and related expenses.
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    \37\ See Order No. 784, 144 FERC ] 61,056 at P 133.
    \38\ EEI NOI Comments at 6-9.
    \39\ Clean Energy Associations NOPR Comments at 5; EEI NOI 
Comments at 6-9; Energy Storage Association (ESA) NOI Comments at 1-
2; Utility Associations NOPR Comments at 11.
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    20. Similarly, the Commission has concluded that USofA revision is 
needed to formalize accounting treatment for the purchase, generation, 
and use of environmental credits. While the Commission explained in 
2020 that RECs should be treated analogously to the accounting 
treatment for sulfur dioxide emission allowances addressed in Order No. 
552,\40\ not all utilities follow this approach.\41\ In addition, 
utilities are increasingly using a variety of environmental crediting 
items.\42\ As such, codifying environmental credit treatment will 
promote consistent treatment of these items in Commission accounting 
and reporting.
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    \40\ Ameren Illinois Co., 170 FERC ] 61,267 at P 52.
    \41\ EEI NOI Comments at 10.
    \42\ See Carl Pechman NOPR Comments at 4; Utility Associations 
NOPR Comments at 19.
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    21. Lastly, designated computer hardware, software, and 
communication equipment accounts for all functions and plant 
subfunctions are needed to eliminate ambiguity and improve consistency 
in accounting and reporting. Currently, the USofA includes designated 
computer hardware, software, and computer equipment accounts in some 
functions and subfunctions but not others. Specifically, the Regional 
Transmission and Market Operation Plant function includes plant 
accounts for computer hardware, software, and communication equipment, 
and the Transmission and Regional Market functions contain maintenance 
accounts for these assets, but no other plant or maintenance function 
includes such specificity.\43\ USofA revisions are therefore needed to 
provide for consistent treatment of these assets and costs.
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    \43\ See 18 CFR part 101.
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IV. Proposed Reforms

A. Creation of New Subfunctions and Accounts for Non-Hydro Renewables

1. NOPR
    22. The Commission proposed three new subfunctions within the 
Production Plant function of the USofA: D. Solar Production, E. Wind 
Production, and F. Other Non-Hydro Renewable Production.\44\ Consistent 
with all other production subfunctions (e.g., Steam Production, Nuclear 
Production, and Hydraulic Production), the Commission proposed the 
following five accounts within each of these three new subfunctions: 
(1) Accounts 338.1, 338.20, and 339.1 (Land and Land Rights); (2) 
Accounts 338.2, 338.21, and 339.2 (Structures and Improvements); (3) 
Accounts 338.8, 338.29, and 339.8 (Other Accessory Electrical 
Equipment); (4) Accounts 338.12, 338.33, and 339.12 (Miscellaneous 
Power Plant Equipment); and (5) Accounts 338.13, 338.34, and 339.13 
(Asset Retirement Costs).\45\ These accounts are similar in description 
and instruction to the existing accounts of the same title in each of 
the other production subfunctions.
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    \44\ NOPR, 180 FERC ] 61,050 at P 33.
    \45\ Id. P 35. The three accounts under each number represent 
the three new subfunctions: Solar, Wind, and Non-Hydro Renewable 
Production, respectively.
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    23. The Commission also proposed to create three additional 
accounts for the new Solar Production and Wind Production subfunctions: 
(1) Accounts 338.5 and 338.26 (Collector System); (2) Accounts 338.6 
and 338.27 (Generation Step-up Transformers (GSU)); and (3) Accounts 
338.7 and 338.28 (Inverters).\46\ Similar to distribution system 
accounts, the Collector System accounts list many of the same items 
included in the accounts for Poles, Towers and Fixtures (Account 364) 
and Overhead Conductors and Devices (Account 365).\47\ The GSU accounts 
are intended to record transformers that are directly connected to 
generator terminal tips and supporting equipment. The inverter accounts 
are intended to record equipment that converts power from direct 
current to alternating current.
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    \46\ Id. P 36.
    \47\ For example, Account 364 listed, among others, poles, 
towers, anchors, and extension arms. Account 365 listed, among 
others, circuit breakers, conductors, and lightning arrestors.
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    24. Additionally, the Commission proposed unique generating 
accounts for all three subfunctions: (1) Account 338.4 (Solar Panels) 
for Solar Production; (2) Account 338.23 (Wind Turbines) and Account 
338.24 (Wind Towers and Fixtures) for Wind Production; and (3) Account 
339.3 (Fuel Holders), Account 339.4 (Boilers), and Account 339.6 
(Generators) for Other Non-Hydro Renewable Production.\48\ The solar 
panels account is designated to record panels and support equipment 
that change solar energy into electricity and related supporting 
structures such as racks and gears. The wind turbines

[[Page 69298]]

account includes components that are located from the top of the tower 
to the end of the turbine blades. The wind towers and fixtures account 
includes the tower and the components contained within the tower that 
are located from the top of the foundation to the base of the nacelle. 
The three accounts to record fuel holders, boilers, and generators that 
are included in Other Non-Hydro Renewable Production capture renewable 
generation assets that use any fuel source or method (e.g., steam or 
direct burning). These accounts allow for recording biofuels, hydrogen, 
geothermal, and other types of generation in this subfunction. Many of 
the items listed in these account descriptions are the same as those 
accounts listed in the Steam and Other Production subfunctions.\49\
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    \48\ NOPR, 180 FERC ] 61,050 at P 37.
    \49\ See, e.g., Account 342 (Fuel Holders, Producers, and 
Accessories); Account 312 (Boiler Plant Equipment); Account 344 
(Generators).
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    25. Similar to the new plant accounts for non-hydro renewables, the 
Commission proposed new O&M accounts for these subfunctions, titled F. 
Solar Generation, G. Wind Generation, and H. Other Non-Hydro Renewable 
Generation.\50\ All three subfunctions include the following seven 
accounts consistent with the other subfunctions (e.g., Steam, Nuclear, 
and Hydraulic): (1) Accounts 558.1, 558.20, and 559.1 (Operation 
Supervision and Engineering); (2) Accounts 558.4, 558.23, and 559.4 
(Rents); (3) Accounts 558.5, 558.24, and 559.5 (Operation Supplies and 
Expenses (Nonmajor only)); (4) Accounts 558.6, 558.25, and 559.6 
(Maintenance Supervision and Engineering (Major only)); (5) Accounts 
558.7, 558.26, and 559.7 (Maintenance of Structures (Major only)); (6) 
Accounts 558.16, 558.36, and 559.15 (Maintenance of Miscellaneous 
(Solar, Wind, or Other Non-Hydro Renewable) Generation Plant (Major 
only)); and (7) Accounts 558.17, 558.37, and 559.16 (Maintenance of 
(Solar, Wind, or Other Non-Hydro Renewable) Generation Plant (Nonmajor 
only)).\51\ These accounts have similar descriptions, items, and 
instructions to existing accounts.
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    \50\ NOPR, 180 FERC ] 61,050 at P 38.
    \51\ Item 7 includes three accounts that are designated as 
nonmajor only. Nonmajor entities would therefore record all 
maintenance activities in these accounts without the added 
granularity required for major entities (Items 1-6).
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    26. The Commission also proposed four additional maintenance 
accounts for Solar and Wind Generation subfunctions, but not for the 
Other Non-Hydro Renewable Production subfunction: \52\ (1) Accounts 
558.9 and 558.29 (Maintenance of Collector Systems (Major only)); (2) 
Accounts 558.10 and 558.30 (Maintenance of Generator Step-up 
Transformers (Major only)); (3) Accounts 558.11 and 558.31 (Maintenance 
of Inverter Expenses (Major only)); and (4) Accounts 558.12 and 558.32 
(Maintenance of Other Accessory Electrical Equipment (Major only)).\53\ 
These accounts allow for recording maintenance expenses for the 
associated plant accounts for Solar and Wind Production. The proposed 
list of items for Accounts 558.9 and 558.29 (Maintenance of Collector 
Systems (Major only)) are similar to the list of items for Account 593 
(Maintenance of Overhead Lines (Major only)) in the Distribution 
Expenses function.
---------------------------------------------------------------------------

    \52\ While wind and solar are distributive in design (i.e., with 
a collector system spread across a comparatively wide area), other 
renewables are, as currently conceived, unlikely to be distributive 
in design. These non-distributive renewable plants, similar to 
existing coal, oil, nuclear, and gas plants, do not have collector 
systems. In addition, their generator step-up transformers and 
inverters are comparatively minor integrated parts.
    \53\ NOPR, 180 FERC ] 61,050 at P 39.
---------------------------------------------------------------------------

    27. The Commission also proposed new operating expense accounts for 
the main operating costs of the new production subfunctions: for Solar 
Generation, Account 558.2 (Solar Panel Generation and Other Plant 
Operating Expenses (Major only)); for Wind Generation, Account 558.21 
(Wind Turbine Generation and Other Plant Operating Expenses (Major 
only)); and for Other Non-Hydro Renewable Generation, Account 559.2 
(Other Miscellaneous Generation and Other Plant Operating Expenses 
(Major only)), and Account 559.3 (Fuel).\54\
---------------------------------------------------------------------------

    \54\ Id. P 40.
---------------------------------------------------------------------------

    28. In addition, the Commission proposed new maintenance accounts 
for specific generation assets: for Solar Generation, Account 558.8 
(Maintenance of Solar Panels (Major only)); for Wind Generation, 
Account 558.27 (Maintenance of Wind Turbines, Towers and Fixtures 
(Major only)); and for Other Non-Hydro Renewable Generation, Account 
559.9 (Maintenance of Boilers (Major only)), and Account 559.10 
(Maintenance of Generating and Electric Equipment (Major only)).\55\ 
These new accounts have similar descriptions and instructions to 
maintenance accounts for generation equipment in the other 
subfunctions. The Commission proposed to designate an account for 
maintenance of electrical equipment separate from the maintenance of 
generation equipment for the new Solar and Wind Generation 
subfunctions.
---------------------------------------------------------------------------

    \55\ Id. P 41.
---------------------------------------------------------------------------

    29. Further, the Commission proposed new accounts for the 
Maintenance of Computer Hardware (Major only), the Maintenance of 
Computer Software (Major only), and Maintenance of Communication 
Equipment (Major only) for the three new plant subfunctions (Solar, 
Wind, and Other Non-Hydro Renewable Generation) corresponding to the 
plant accounts, as discussed further below.\56\
---------------------------------------------------------------------------

    \56\ Id. P 42.
---------------------------------------------------------------------------

    30. Lastly, the Commission sought comment on several topics.\57\ 
First, to avoid confusion with the existing ``Other Production'' 
generation subfunction, the Commission sought comment on whether to 
retitle that subfunction to ``Prime Mover Production'' because the 
current instructions to the ``Other Production'' subfunction only 
describe prime mover-type generation assets.\58\ Second, noting that 
the USofA does not currently address kinetic energy from the ocean to 
generate electricity,\59\ the Commission sought comment on whether to 
include both tidal and wave energy as part of the existing Hydraulic 
Production function, rather than in the newly proposed other non-hydro 
renewable asset accounts. Third, the Commission sought comment on 
whether the Commission's Chief Accountant should issue accounting 
guidance for hydrogen, and whether it would be helpful to propose 
revisions to the USofA for natural gas pipelines to account for 
hydrogen activities.
---------------------------------------------------------------------------

    \57\ Id. PP 34, 43, 68.
    \58\ A prime mover electric generator is one where the fuel 
source directly moves the electric turbine rather than using a 
boiler or other secondary energy transfer.
    \59\ See EEI NOI Comments at 4-5.
---------------------------------------------------------------------------

2. Comments
    31. Dominion and Utility Associations support the addition of new 
accounts for non-hydro renewable generating assets.\60\ Clean Energy 
Associations contend that confusion and inconsistency in recording 
renewable energy assets could be resolved at lesser cost by clarifying 
that specific existing USofA accounts should be used, but support the 
Commission's proposed accounts for wind turbines (Account 338.23); 
solar panels and related racking and trackers (Account 338.4); 
inverters and converters (Account 338.28); individual, low-voltage 
step-up transformers (Accounts 338.6 and 338.26); AC collector systems 
(Accounts

[[Page 69299]]

338.5 and 338.26); and Static capacitors (Account 338.5).\61\
---------------------------------------------------------------------------

    \60\ Dominion NOPR Comments at 3; Utility Associations NOPR 
Comments at 7.
    \61\ Clean Energy Associations NOPR Comments at 6.
---------------------------------------------------------------------------

    32. Commenters also suggest specific revisions to the NOPR 
proposal. First, Clean Energy Associations raise concerns that the NOPR 
proposed separate accounts for some equipment that is infrequently 
itemized by manufacturers and typically retired together.\62\ For wind 
facilities, Clean Energy Associations accordingly recommend that the 
Commission consolidate proposed Account 338.23 (Wind Turbines) and 
Account 338.24 (Wind Towers and Fixtures) into a single account for the 
wind turbine generator, tower, pad-mounted or nacelle-mounted 
transformer, and foundation. Further, they argue that reporting wind 
towers and turbines together would be consistent with Electric Plant 
Instruction No. 3, Item 8, Part B, which states ``[t]he cost of 
specially provided foundations not intended to outlast the machinery or 
apparatus for which provided, and the cost of angle irons, castings, 
etc., installed at the base of an item of equipment, shall be charged 
to the same account as the cost of the machinery, apparatus, or 
equipment.'' \63\ For solar facilities, Clean Energy Associations 
suggest that the Commission consolidate solar inverter and power 
station transformer costs into the same account.\64\ In the 
alternative, Clean Energy Associations request that the Commission 
specify how costs should be recorded when manufacturers or contractors 
do not itemize them separately.
---------------------------------------------------------------------------

    \62\ Id. at 13-14, 19.
    \63\ 18 CFR part 101, Electric Plant Instruction No. 3, Item 8, 
Part B.
    \64\ Clean Energy Associations NOPR Comments at 13-14.
---------------------------------------------------------------------------

    33. Next, Clean Energy Associations make several comments related 
to recording collector system costs.\65\ First, Clean Energy 
Associations note inconsistencies in the collector system definitions 
for Solar Production and Wind Production subfunction accounts, Account 
338.5 and Account 338.26, respectively--both between the two and 
compared with conventional generation accounts. Between the two new 
Collector System account definitions, Clean Energy Associations suggest 
revising the definition of the collector system for wind generation in 
Account 338.26 to mirror the proposed definition for solar generation, 
which reads: ``This account shall include all cost of cabling, junction 
boxes, connection cabinets, and all facilities and devices (such as 
static capacitors) that are used to transport and consolidate the power 
fed from individual wind turbine generators, once it has been stepped-
up, to the substation prior to interconnection to the grid.''
---------------------------------------------------------------------------

    \65\ Id. at 11-12.
---------------------------------------------------------------------------

    34. Further, Clean Energy Associations request that the Commission 
identify an account for collector system substation costs.\66\ Clean 
Energy Associations recommend that the Commission adopt a separate 
Production Plant account for the substation similar to the collector 
system or clarify the definition of the collector system to include the 
specific items that are part of the collector system substation.
---------------------------------------------------------------------------

    \66\ Id. at 7-8.
---------------------------------------------------------------------------

    35. Clean Energy Associations also suggest that the Commission 
consolidate treatment of static capacitors and reactors in the same 
account.\67\ While the NOPR proposed requiring solar system capacitor 
reporting in Account 338.5 (Collector System) and reactor reporting in 
Account 338.8 (Other Accessory Electrical Equipment), Clean Energy 
Associations suggest that no distinction between the two technologies 
is needed. Specifically, Clean Energy Associations suggest that if the 
Commission intends to include all of the plant from the high side of 
the individual, low-voltage step-up transformers located at the 
inverter power stations and/or the wind turbines to the low side of the 
Main Power Transformer (MPT) at the substation (for a transmission 
interconnection) or interconnection with the grid (for a distribution 
interconnection), it should include both capacitors and reactors 
connected to the collector system in the definition for the Collector 
System account. Further, Clean Energy Associations note the need for 
the Commission to make the same determination for wind generation, 
which also may use static capacitors and reactors, but is not included 
in the proposed amendment to the USofA.
---------------------------------------------------------------------------

    \67\ Id. at 6-7.
---------------------------------------------------------------------------

    36. Clean Energy Associations next suggest that the Commission 
clarify the end-point of the collector system and adopt definitions 
that run from inverters or wind turbines up to but not including the 
MPT, consistent with comparable equipment for conventional 
generation.\68\ According to Clean Energy Associations, the NOPR's 
solar and wind collector system definitions appear to go beyond the 
MPT, while conventional generation connects generators to the MPT via 
connection facilities that end at the low side of the MPT.
---------------------------------------------------------------------------

    \68\ Id. at 12.
---------------------------------------------------------------------------

    37. In addition, Clean Energy Associations request that the 
Commission establish a separate Production Plant account to house the 
installed cost of the DC collector system, or clarify that the cost 
should be reported to Other Accessory Electric Equipment in proposed 
Account 338.8.\69\ According to Clean Energy Associations, the DC 
collector system does not fit within the NOPR's definitions for 
proposed Account 338.4 (Solar Panels) nor Account 338.5 (Collector 
System), which they understand to be limited to the AC collector system 
connected to the high side of the inverter power station transformer.
---------------------------------------------------------------------------

    \69\ Id. at 8-9.
---------------------------------------------------------------------------

    38. Clean Energy Associations further request that the Commission 
clarify the exact equipment that should be included in the Other 
Accessory Equipment accounts for both solar and wind, especially given 
overlap with the proposed Collector System accounts.\70\
---------------------------------------------------------------------------

    \70\ Id. at 17-18.
---------------------------------------------------------------------------

    39. The Commission also received comments on the NOPR's proposed 
accounts for GSU. Utility Associations note a potential inconsistency 
between the NOPR's proposed GSU definition and Kentucky Utilities 
Company's instruction that ``GSU transformers are not used in the 
generation of power and thus should not be booked to production plant 
accounts'' (although their costs may be assigned to production through 
the ratemaking process).\71\ The Commission proposed to include GSU 
transformers on the low side of the collector system in new Solar 
Production and Wind Production subfunction accounts.\72\ Utility 
Associations ask the Commission to reconcile this proposal with 
Kentucky Utilities Company's instruction.
---------------------------------------------------------------------------

    \71\ Utility Associations NOPR Comments at 7-8 (citing Kentucky 
Utilities Co., 85 FERC ] 61,274, at 62,112 n.37 (1998) (Opinion No. 
432)).
    \72\ NOPR, 180 FERC ] 61,050 at P 36; see also id., proposed 
Accounts 338.6 and 338.27.
---------------------------------------------------------------------------

    40. Clean Energy Associations, for their part, suggest that the 
Commission revise the proposed GSU account definitions to include all 
transformer devices up to and including the MPT housed in the 
substation--that is, GSUs on the high side of the of the collector 
system in addition to those on the low side.\73\ Clean Energy 
Associations also cite to Kentucky Utilities Company,\74\

[[Page 69300]]

the Commission's characterization of Kentucky Utilities Company in 
Pacific Gas & Electric Co.,\75\ and Order No. 827,\76\ to argue that 
the Commission should expand its GSU accounts to include the substation 
MPT and equipment located beyond the high side of the substation MPT.
---------------------------------------------------------------------------

    \73\ Clean Energy Associations NOPR Comments at 9-10.
    \74\ Id. at 9 (citing Opinion No. 432, 85 FERC at 62,112 n.36 
(``[T]he GSU serves no purpose without the generator, and the 
generator cannot transform power to the transmission-level voltage 
without the GSU.'')).
    \75\ Id. at 10 (citing Pacific Gas & Electric Co., 106 FERC ] 
61,144, at P 19 (2004) (``GSU transformers . . . are located at 
generation stations and [are] used solely to increase the voltage of 
electric energy produced by generators to the higher voltages 
necessary for bulk power transmission to load centers.'')).
    \76\ Id. (citing Reactive Power Requirements for Non-Synchronous 
Generation, Order No. 827, 81 FR 40793 (June 23, 2016), 155 FERC ] 
61,277, at P 13 n.31 (2016) (``[T]he generator substation would be 
the substation for a wind [or solar] generator that separates the 
low-voltage collector system from the higher voltage elements of the 
Interconnection Customer Interconnection Facilities that bring the 
generator's energy to the Point of Interconnection.'')).
---------------------------------------------------------------------------

    41. Clean Energy Associations also request clarification about 
where and how the substation MPT and equipment located beyond the high 
side of the substation MPT should be recorded.\77\ Clean Energy 
Associations suggest that the proposed collector system definitions in 
Accounts 338.5, 338.26, and 387.5 overlap with the description for 
Station Equipment in existing Account 353.
---------------------------------------------------------------------------

    \77\ Id. at 10-11 (citing NOPR proposed Accounts 338.5, 338.26, 
and 387.5 (``This account shall include all cost of cabling, 
junction boxes, connection cabinets, and all facilities that are 
installed beyond the high side of the GSU transformer and the 
transmission or distribution point of interconnection.'') and 18 CFR 
part 101, Account 353 (``This account shall include the cost 
installed of transforming, conversion, and switching equipment used 
for the purpose of changing the characteristics of electricity in 
connection with its transmission or for controlling transmission 
circuits.'')).
---------------------------------------------------------------------------

    42. Clean Energy Associations further request clarification related 
to reporting different types of land and construction costs for non-
hydro renewable generation projects.\78\ Clean Energy Associations 
suggest that the Commission define or affirm that it is appropriate to 
allocate the clearing and grading, permitting, and site civil costs 
across all direct costs (including both structures and equipment 
accounts). Specifically, Clean Energy Associations suggest clarifying 
that it is appropriate to report: (1) improvement and equipment costs 
comparably to USofA Electric Plant Instruction Nos. 8(A) and 9(A) 
across all direct costs; (2) permits and privileges in accordance with 
the booking of the associated plant for which the permit is sought; and 
(3) land option payments that permit site access, investigation, and 
permit applications and/or land lease payments during the construction 
period as privileges and permits under Electric Plant Instruction No. 
3, Components of Construction Cost, Item 9, or expenses during 
construction under Electric Plant Instruction No. 3.
---------------------------------------------------------------------------

    \78\ Id. at 15-17.
---------------------------------------------------------------------------

    43. In addition, several commenters comment on the NOPR's proposed 
O&M accounts. Utility Associations suggest that wind and solar plants 
are simpler to operate than other types of generating plant, with less 
distinguishable labor, and therefore require fewer O&M accounts to 
support them than traditional generation assets.\79\ They therefore 
argue that the Commission should limit the creation of new O&M accounts 
for non-hydro renewables to those listed in Appendix A to their 
comments. Dominion argues that the Commission should create a robust 
list of maintenance accounts sufficient to meaningfully segregate 
costs.\80\ Relatedly, Dominion opposes elimination of the miscellaneous 
expense account for each type of renewable energy in order to preserve 
a place for expenses that do not clearly fall within other specified 
accounts. Clean Energy Associations, for their part, agree with the 
NOPR's proposed O&M accounts, but urge the Commission to clarify that 
the operations and maintenance costs are related to Plant booked to 
Production Accounts.\81\ Clean Energy Associations raise the need for 
this clarification because, while the NOPR suggests that its four 
proposed maintenance accounts ``would allow for the recording of 
maintenance expense for the associated plant accounts for Solar and 
Wind Production,'' it also suggests that maintenance of the collector 
system ``would be similar to the list of items for Account 593 
(Maintenance of Overhead Lines) (Major Only)) in the Distribution 
Expense function'' and describes wind and solar collector systems as 
``distributive in design. . . .'' \82\
---------------------------------------------------------------------------

    \79\ Utility Associations NOPR Comments at 7, app. A.
    \80\ Dominion NOPR Comments at 3.
    \81\ Clean Energy Associations NOPR Comments at 19-20.
    \82\ Id. (citing NOPR, 180 FERC ] 61,050 at P 39 n.78).
---------------------------------------------------------------------------

    44. Commenters also responded to the NOPR's request for comment on 
renaming the Other Production account, how to account for tidal and 
wave technologies, and hydrogen accounting guidance. Utility 
Associations oppose the NOPR's proposal to retitle ``Other Production'' 
to ``Prime Mover Production.'' \83\ Utility Associations suggest that 
retaining the ``Other Production'' account will preserve existing 
flexibility for recording assets in the face of technological change to 
record future production assets that do not meet the definition of 
either prime movers or renewable generating assets.
---------------------------------------------------------------------------

    \83\ Utility Associations NOPR Comments at 7.
---------------------------------------------------------------------------

    45. Regarding the NOPR's request for comment on hydrogen 
technologies, Utility Associations and Carl Pechman both request 
guidance on accounting for hydrogen facilities.\84\ Utility 
Associations suggest that hydrogen equipment costs should be recorded 
to Account 339.12 (Miscellaneous Power Plant Equipment) while hydrogen 
fuel costs should be recorded to Account 547 instead of Account 
559.3.\85\ And, while Utility Associations believe that it is currently 
premature to propose new public utility accounts specifically for 
hydrogen use in the electricity industry, they suggest that new natural 
gas pipeline accounts are needed to record the investments and 
operating expenses incurred for hydrogen. They therefore recommend that 
the Commission update the USofA for natural gas pipelines to include a 
list of proposed accounts in Appendix B to their comments.\86\
---------------------------------------------------------------------------

    \84\ Carl Pechman NOPR Comments at 3-4; Utility Associations 
NOPR Comments at 9-11.
    \85\ Utility Associations NOPR Comments at 9-11.
    \86\ Those accounts include: (1) Gas Plant Accounts as Section 
D--Hydrogen and Other Renewables under Natural Gas Storage and 
Processing Plant: (a) Land and land rights, (b) Structures and 
improvements, (c) Hydrogen generation and conversion equipment, (d) 
Hydrogen storage equipment, (e) Biogas cleaning and conditioning 
equipment, (f) Other renewable equipment, (g) Compression and power 
equipment, (h) Measuring and regulating equipment Pipelines, (i) 
Other equipment Gas Expense; (2) Accounts as Section D--Hydrogen and 
Other Renewables under Natural Gas Storage Terminaling and 
Processing Expense: (a) Operation: (i) Operation supervision and 
engineering, (ii) Hydrogen equipment and storage expense, (iii) 
Biogas Equipment expense, (iv) Other renewable equipment expense, 
(v) Compression and power equipment expense, (vi) Measuring and 
regulating equipment expense, (vii) Pipelines expense, (viii) Other 
hydrogen and renewables operating expense, and (b) Maintenance: (i) 
Maintenance supervision and engineering, (ii) Maintenance of 
structures and improvements, (iii) Maintenance of hydrogen equipment 
and storage, (iv) Maintenance of biogas and other renewable 
equipment, (v) Maintenance of compression and power equipment, (vi) 
Maintenance of measuring and regulating equipment, and (vii) 
Maintenance of pipelines Maintenance of other equipment. Id., at 
app. B.
---------------------------------------------------------------------------

    46. Last, regarding the NOPR's request for comment on tidal and 
wave technologies, Carl Pechman advocates for the Commission to adopt a 
forward[hyphen]looking policy of developing accounting provisions for 
new resources that treats tidal and wave energy activities as a type of 
other renewable production rather than including it

[[Page 69301]]

within existing Hydraulic Production accounts.\87\
---------------------------------------------------------------------------

    \87\ Carl Pechman NOPR Comments at 4.
---------------------------------------------------------------------------

3. Commission Determination
    47. We adopt the NOPR's proposals to create new Production Plant 
subfunctions and associated accounts, with minor revisions, as 
discussed below. We disagree with Clean Energy Associations that 
accounting treatment clarity and transparency can be adequately 
provided at lesser administrative burden through issuance of accounting 
guidance instead of creating new renewable subfunctions.\88\ The 
existing Other Production subfunction no longer fully accommodates the 
specificities of modern renewable generation systems. For instance, no 
existing Other Production account describes the function that collector 
systems provide to wind and solar farms--consolidating power from 
individual turbines or panels before interconnection to the grid. The 
Commission typically uses accounting guidance to clarify how best to 
account for an item among several available accounts. Creating new Wind 
Production, Solar Production, and Other Renewable Production 
subfunctions is therefore necessary to provide uniformity, consistency, 
and transparency to reduce risk of errors in accounting and reporting.
---------------------------------------------------------------------------

    \88\ See Clean Energy Associations NOPR Comments at 6.
---------------------------------------------------------------------------

    48. First, we adopt the NOPR's proposals to separate reporting of 
wind towers, turbines, foundations, and transformers. Wind towers, 
turbines, foundations, and transformers are different items with 
separate purposes and potentially distinct service lives, and should 
therefore be tracked in separate accounts. While Clean Energy 
Associations note that these assets are often retired together,\89\ we 
have assessed that these assets may feature distinct depreciation lives 
supporting separate accounts. We also note that, while vendor invoices 
are used for recording costs in construction work in progress that 
becomes plant in service, these invoices do not determine the 
unitization of plant in service by account under the USofA 
instructions.\90\
---------------------------------------------------------------------------

    \89\ Id. at 13, 19.
    \90\ Costs included in capitalization are explained in 18 CFR 
part 101, Electric Plant Instruction Nos. 1. Classification of 
electric plant at effective date of system of accounts (Major 
utilities), 2. Electric Plant to Be Recorded at Cost, 3. Components 
of construction cost, and 4. Overhead Construction Costs.
---------------------------------------------------------------------------

    49. We also adopt the NOPR's proposal to create separate GSU and 
inverter accounts within the Solar Production subfunction. Like the 
wind turbine, tower, foundation, and transformer accounts, establishing 
separate accounts is warranted because solar inverters are both 
separate equipment from, and do not serve the same function as, power 
station transformers. We note that we do not control how vendors 
describe the work performed during construction on invoices, and the 
company unitizes the costs (into retirement units) after the project is 
closed and records the costs to the appropriate plant accounts. Again, 
we reiterate that vendor invoices may inform about certain activities 
performed during construction, but asset unitization is performed when 
the project is complete and available to be placed in service.
    50. In addition, we adopt the NOPR's proposal to create Collector 
System accounts within the new Solar Production and Wind Production 
subfunctions. However, we also agree with Clean Energy Associations 
that the definitions of the proposed collector systems in Account 338.5 
and Account 338.26 require certain revisions for consistency.\91\ We 
have revised the Wind Production subfunction Account 338.26 definition 
(and the Energy Storage function Account 387.5 definition) to mirror 
the Solar Production collector system definition in Account 338.5.
---------------------------------------------------------------------------

    \91\ See Clean Energy Associations NOPR Comments at 11-12.
---------------------------------------------------------------------------

    51. We decline to grant Clean Energy Associations' request that we 
adopt a separate Production Plant account for the substation.\92\ This 
equipment should be recorded either to Account 353 (Station Equipment) 
for transmission, or Account 362 (Station Equipment) for distribution. 
We note that transmission-level substations have historically been, and 
will remain, considered transmission plant for accounting purposes. 
While we recognize that this classification may be inconvenient for 
utilities that otherwise own only Generation or General Plant function 
assets, the true function of the substation--providing transmission-
level voltage to a wire system--governs its classification.
---------------------------------------------------------------------------

    \92\ See id. at 7-8.
---------------------------------------------------------------------------

    52. However, we grant several of Clean Energy Associations' 
requests for clarification,\93\ and so clarify account text as 
described herein. First, we have revised the Collector System account 
definitions to include static capacitors and reactors in the same 
account because they serve similar functions within collector systems. 
We note, however, that reactors can serve multiple purposes and are 
therefore listed in multiple accounts, and should be recorded to the 
appropriate account based on their operational purpose. Second, we have 
revised the new Collector System account definitions (Accounts 338.5 
and 338.26, as well as Account 387.5 in the new energy storage 
function) to indicate that: (1) the collector system end-point extends 
up to, but does not include, the substation prior to interconnection to 
the grid; and (2) to exclude the cost of transformers and other 
equipment used to interconnect to transmission or distribution lines. 
We agree with Clean Energy Associations that this revision is needed to 
harmonize the solar and wind collector system definitions with our 
existing accounts for conventional generation. Third, we clarify that 
DC collector systems should be recorded in the Collector System 
accounts and revise the Account 338.5 and 338.26 definitions to remove 
``once it has been stepped up.'' This revision resolves confusion and 
furthers the NOPR's intent to include DC collector systems within the 
Collector System account definitions.
---------------------------------------------------------------------------

    \93\ See id. at 7 (suggesting inclusion of static capacitors and 
reactors in the same account), 12 (requesting clarification on the 
collector system end point), 8-9 (requesting clarification on DC 
collector system recording).
---------------------------------------------------------------------------

    53. Next, we decline to provide an exhaustive list of the equipment 
that should be recorded in the Other Accessory Electrical Equipment 
accounts.\94\ We reiterate that operational purpose of equipment, 
rather than equipment name, determines appropriate account 
classification, and that account equipment lists are meant to be 
illustrative, not prescriptive. Attempting to provide an exhaustive 
list of equipment to be recorded to the Other Accessory Electrical 
Equipment account risks over- and under-inclusion of equipment that 
should be booked to that account based on functional purpose. To 
further clarify the purposes of each account, we have revised their 
definitions and instructions to emphasize that Collector System 
accounts are for equipment used to transport and consolidate the power 
fed from individual generation units (solar panels, wind turbines), 
while the equipment recorded in the Other Accessory Electrical 
Equipment account supports the generator in the action of generating 
power.
---------------------------------------------------------------------------

    \94\ See id. at 17-18 (requesting specification of all equipment 
that should be recorded in Other Accessory Equipment accounts).
---------------------------------------------------------------------------

    54. We also adopt the NOPR's proposal to create GSU accounts within 
the new Wind Production and Solar Production subfunctions. We note 
that,

[[Page 69302]]

despite commenters' suggestion to the contrary,\95\ this decision is 
consistent with Commission precedent in Kentucky Utilities Company.\96\ 
There, the Commission considered whether the costs of GSU transformers 
that step up voltage to the transmission system \97\ should be included 
in transmission rates. It determined that, while the costs of such GSU 
transformers should be assigned to generators for rate purposes,\98\ 
for accounting purposes ``GSU transformers are not used in the 
generation of power, and thus should not be booked to production 
accounts.'' \99\
---------------------------------------------------------------------------

    \95\ See Clean Energy Associations NOPR Comments at 9-10; 
Utility Associations NOPR Comments at 7-8.
    \96\ See Opinion No. 432, 85 FERC ] 61,274.
    \97\ Id. at 62,109 n.33 (``A GSU transformer is an electrical 
device that transforms power from a lower voltage to a higher 
voltage. The GSU transformers in question in this proceeding are 
those which step-up voltages at the generation level to higher 
voltages at the [transmission level].'')
    \98\ Id. at 62,112.
    \99\ Id. at 62,112 n.37.
---------------------------------------------------------------------------

    55. Utility Associations misread Kentucky Utilities Company in 
arguing that it conflicts with the NOPR's proposed GSU account 
definitions.\100\ They question how the proposed Production Plant GSU 
accounts are consistent with the Commission's statement in Kentucky 
Utilities Company that ``GSU transformers are not used in the 
generation of power, and thus should not be booked to production 
accounts.'' \101\ This confusion appears to derive from the fact that, 
unlike traditional generation sources that have a single GSU that 
steps-up the generator voltage to transmission or distribution levels, 
renewable plants have two step-up transformers: one GSU located on the 
low voltage side of the collector system, and another step-up 
transformer at the substation, that, as in conventional power plants, 
steps up voltage to connect to the transmission or distribution system. 
While these assets are both step-up transformers, they serve different 
functional purposes--and therefore should be reported to different 
accounts. The GSU transformers at issue in Kentucky Utilities Company 
stepped up voltage to the transmission system.\102\ The GSU accounts 
that we create here for the new Solar Production and Wind Production 
subfunctions instead are designated for transformers that step up 
voltage to support the collector systems. These GSUs do not directly 
interconnect with transmission and distribution power grids. Therefore, 
Kentucky Utilities Company is inapposite. To further clarify the GSU 
assets that belong in the new Production subfunction accounts, however, 
we revise Accounts 338.6 and 338.27 (and Energy Storage function 
Account 387.6) to expressly exclude transformers and other equipment 
that step up voltage or frequency for the purposes of transmission or 
distribution. Those assets are more appropriately included in 
transmission or distribution Account 353 (Station Equipment) or Account 
362 (Station Equipment), respectively.
---------------------------------------------------------------------------

    \100\ Utility Associations NOPR Comments at 7-8.
    \101\ Opinion No. 432, 85 FERC at 62,112 n.37.
    \102\ Id. at 62,109 n.33 (specifying that ``[t]he GSU 
transformers in question in this proceeding are those which step-up 
voltages at the generation level to higher voltages at the 
[transmission level].'').
---------------------------------------------------------------------------

    56. Clean Energy Associations also misread Kentucky Utilities 
Company.\103\ They argue that Kentucky Utilities Company requires the 
Commission to include the substation MPT and equipment located beyond 
the high side of the substation MPT within the GSU accounts. In doing 
so, Clean Energy Associations mistake Kentucky Utilities Company's 
holding on rate treatment for one applying to accounting treatment. To 
the contrary, Kentucky Utilities Company expressly forbade recording 
the cost of GSU equipment beyond the high side of the substation MPT to 
production plant accounts, even while noting that the GSUs serve 
generators for rate allocation purposes.\104\ Clean Energy 
Associations' references to Pacific Gas & Electric Co. and Order No. 
827 are even less relevant.\105\ In Pacific Gas & Electric Co., the 
Commission distinguished that rate case from Kentucky Utilities Company 
in finding that the facilities in the two cases were different and held 
that bulk transmission lines configured as loop facilities should be 
allocated to transmission rates. The Commission's order in Pacific Gas 
& Electric Co. said nothing about the accounting treatment for the 
substation MPT and equipment located beyond the high side of the 
substation MPT.\106\ The Commission's illustrative footnote in Order 
No. 827, which required non-synchronous generators to provide dynamic 
reactive power at the high-side of the generator substation,\107\ 
similarly did not disturb our precedent that transformers used to step 
up voltage for the purpose of transmission or distribution should not 
be recorded to Production Plant accounts.\108\ Therefore, our decision 
to limit the equipment that is recorded in the new GSU accounts to 
equipment that steps up voltage on the low side of the MPT is 
consistent with Commission precedent.
---------------------------------------------------------------------------

    \103\ Clean Energy Associations NOPR Comments at 9-10.
    \104\ Compare Opinion No. 432, 85 FERC at 62,112 n.37 (``GSU 
transformers are not used in the generation of power and thus should 
not be booked to production plant accounts.'') with id. at 62,112 
(``[I]t has become increasingly important to recognize the role that 
GSUs perform in support of generation as it pertains to the 
allocation of costs.'').
    \105\ See Clean Energy Associations NOPR Comments at 9-10 
(citing Pacific Gas & Electric Co., 106 FERC ] 61,144 at P 19 (``GSU 
transformers . . . are located at generation stations and [are] used 
solely to increase the voltage of electric energy produced by 
generators to the higher voltages necessary for bulk power 
transmission to load centers.''); Order No. 827, 155 FERC ] 61,277 
at P 13 n.31 (``[T]he generator substation would be the substation 
for a wind [or solar] generator that separates the low-voltage 
collector system from the higher voltage elements of the 
Interconnection Customer Interconnection Facilities that bring the 
generator's energy to the Point of Interconnection.'').
    \106\ Pacific Gas & Electric Co., 106 FERC ] 61,144 at PP 19-20.
    \107\ Order No. 827, 155 FERC ] 61,277 at P 13.
    \108\ See Opinion No. 432, 85 FERC at 62,112 n.37 (``GSU 
transformers are not used in the generation of power and thus should 
not be booked to production plant accounts.'').
---------------------------------------------------------------------------

    57. In response to Clean Energy Associations' concerns about where 
to record the substation MPT given alleged conflict between proposed 
collector system definitions in Accounts 338.5, 338.26, and 387.5 and 
the Station Equipment in existing Account 353,\109\ we note first that 
Clean Energy Associations misstate the NOPR's proposed collector system 
definition in Account 338.5.\110\ The NOPR's Account 338.5 definition 
does not overlap with the definition of Account 353. As explained 
above, we have revised the definitions in Accounts 338.26 and 387.5 to 
align with the definition in Account 338.5 at Clean Energy 
Associations' request.\111\ This change resolves the overlap with 
Account 353 that concerned Clean Energy Associations. Equipment at and 
beyond the substation serve transmission and distribution 
interconnection functions and should accordingly be recorded in the 
transmission and distribution accounts.
---------------------------------------------------------------------------

    \109\ Clean Energy Associations NOPR Comments at 10-11 (citing 
NOPR proposed Accounts 338.5, 338.26, and 387.5; 18 CFR part 101, 
Account 353).
    \110\ Compare NOPR, proposed Account 338.5 (``This account shall 
include all cost of cabling, junction boxes, connection cabinets, 
and all facilities and devices (such as static capacitors) that are 
used to transport and consolidate the power fed from individual 
solar panels, once it has been stepped-up, to the substation prior 
to interconnection to the grid.'') with Clean Energy Associations 
NOPR Comments at 10-11 (quoting NOPR proposed Accounts 338.5, 
338.26, and 387.5 text as: ``This account shall include all cost of 
cabling, junction boxes, connection cabinets, and all facilities 
that are installed beyond the high side of the GSU transformer and 
the transmission or distribution point of interconnection.'').
    \111\ See supra P 50; see also Clean Energy Associations NOPR 
Comments at 11-12.

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[[Page 69303]]

    58. Regarding Clean Energy Associations' request for clarification 
on allocation of clearing and grading, permitting, and site civil 
costs,\112\ we note that Electric Plant Instruction Nos. 3, 8(A), and 
9(A) apply to all plant in service and have for several decades. We do 
not intend to change application of these instructions in this docket. 
We find the text of these instructions to be sufficient and do not 
require modification.
---------------------------------------------------------------------------

    \112\ See Clean Energy Associations NOPR Comments at 15-17.
---------------------------------------------------------------------------

    59. We also adopt the NOPR's proposal to create O&M accounts to 
support the new production subfunctions, but we consolidate the 
specific accounts proposed in response to comments. We are persuaded by 
Utility Associations' argument that the new generation subfunctions are 
simpler, and less labor intensive to operate and maintain than steam 
and nuclear generation, and that therefore the limited rate-setting 
benefits of separating some of these costs are likely outweighed by the 
additional burden they create.\113\ We believe that the accounts that 
Utility Associations propose appropriately streamline the O&M accounts 
while still providing for sufficient detail to meaningfully segregate 
costs, as requested by Dominion.\114\ However, we are also persuaded by 
Dominion's request to retain the miscellaneous maintenance expense 
accounts to house expenses that do not clearly fall within other 
specified accounts, and so create a miscellaneous expense account 
alongside the others proposed by Utility Associations.
---------------------------------------------------------------------------

    \113\ See Utility Associations NOPR Comments at 7, app. A.
    \114\ Dominion NOPR Comments at 3.
---------------------------------------------------------------------------

    60. As such, we create only those maintenance accounts recommended 
by the Utility Associations,\115\ plus miscellaneous maintenance 
expense accounts. We therefore also renumber the maintenance accounts. 
For solar, these accounts will now be numbered as follows: Account 
558.7 (Maintenance of Solar Panels, Structures, and Equipment (Major 
only)), Account 558.8 (Maintenance of Computer Hardware (Major only)), 
Account 558.9 (Maintenance of Computer Software (Major only)), Account 
558.10 (Maintenance of Communication Equipment (Major only)), Account 
558.11 (Maintenance of Miscellaneous Solar Generation Plant (Major 
only)), and Account 558.12 (Maintenance of Solar Generation Plant 
(Nonmajor only)). For wind, these accounts will now be numbered as 
follows: Account 558.13 (Operation Supervision and Engineering), 
Account 558.14 (Wind Turbine Generation and Other Plant Operating 
Expenses (Major only)), Account 558.15 (Reserved), Account 558.16 
(Rents), Account 558.17 (Operation Supplies and Expenses (Nonmajor 
only)), Account 558.18 (Maintenance Supervision and Engineering (Major 
only)), Account 558.19 (Maintenance of Wind Turbines, Structures, and 
Equipment (Major only)), Account 558.20 (Maintenance of Computer 
Hardware (Major only)), Account 558.21 (Maintenance of Computer 
Software (Major only)), Account 558.22 (Maintenance of Communication 
Equipment (Major only)), Account 558.23 (Maintenance of Miscellaneous 
Wind Generation Plant (Major only)), and Account 558.24 (Maintenance of 
Wind Generation Plant (Nonmajor only)).
---------------------------------------------------------------------------

    \115\ We correct the naming convention for the accounts for 
maintenance of communication equipment to refer to ``communication 
equipment'' rather than ``communications equipment,'' as proposed by 
Utility Associations, consistent with references to communication 
equipment accounts throughout this rule and the USofA.
---------------------------------------------------------------------------

    61. In addition, in response to Clean Energy Associations' comment 
regarding the appropriate function for the new O&M accounts,\116\ we 
clarify that operations and maintenance costs are related to Plant 
recorded to Production Accounts. Our note that collector systems are 
distributive in design was intended to be illustrative of how these 
systems operate and not to indicate that collector systems are part of 
the Distribution Plant function.
---------------------------------------------------------------------------

    \116\ See Clean Energy Associations NOPR Comments at 19.
---------------------------------------------------------------------------

    62. Next, we address the subjects on which the NOPR requested 
comment. We are persuaded by Utility Associations' comment that 
retaining the ``Other Production'' account will preserve existing 
flexibility for recording assets in the face of technological 
change.\117\ We therefore retain the ``Other Production'' title for 
this generation subfunction.
---------------------------------------------------------------------------

    \117\ See Utility Associations NOPR Comments at 7.
---------------------------------------------------------------------------

    63. In response to comments regarding accounting treatment for 
tidal and wave resources,\118\ we have determined that, because these 
resources do not fit well within the existing Hydraulic Production 
subfunction, they should be placed within the new Other Renewable 
subfunction. Accordingly, in this final rule we create an Other 
Renewable Production subfunction instead of the NOPR's proposed Other 
Non-Hydro Renewable Production subfunction.
---------------------------------------------------------------------------

    \118\ Carl Pechman NOPR Comments at 3-4.
---------------------------------------------------------------------------

    64. Lastly, as for hydrogen, we agree with Utility Associations 
that existing and proposed public utility accounts are sufficient for 
current and anticipated uses of hydrogen as an electric fuel or energy 
storage medium and that no new public utility accounts are therefore 
needed.\119\ We reiterate that, for either electric generation or 
energy storage, the recording and reporting of hydrogen specific fuel, 
equipment, and operations and maintenance expenses should follow the 
most appropriate account instructions for the function it is used to 
fulfill.
---------------------------------------------------------------------------

    \119\ Utility Associations Comments at 9.
---------------------------------------------------------------------------

    65. Finally, we will not at this time propose additional guidance 
for electric utility hydrogen reporting or new natural gas pipeline 
hydrogen accounts. We will consider the need for such additional 
guidance and natural gas pipeline USofA revisions in separate 
proceedings, as necessary.

B. Creation of Energy Storage Function and Accounts

1. NOPR
    66. The Commission proposed a new USofA function for energy storage 
in order to reduce recordkeeping, depreciation, and retirement burden 
and opportunity for error deriving from energy storage reporting across 
generation, transmission, and distribution functions.\120\ The 
Commission proposed to structure the new Energy Storage Plant function 
similar to those for other USofA functions, including the new wind, 
solar, and other renewable subfunctions, as follows: (1) Account 387.1 
(Land and Land Rights); (2) Account 387.2 (Structures and 
Improvements); (3) Account 387.11 (Miscellaneous Energy Storage 
Equipment); (4) Account 387.12 (Asset Retirement Costs for Energy 
Storage); (5) Account 387.5 (Collector System); (6) Account 387.6 
(Generator Step-up Transformers (GSU)); and (7) Account 387.7 
(Inverters). The Commission also proposed to add a new Account 387.3 
(Energy Storage Equipment), which would include the primary energy 
storage equipment in this function as described in the proposed 
instructions. In addition, the Commission proposed to create Energy 
Storage function plant accounts for computer hardware, software, and 
communication equipment, as described below.
---------------------------------------------------------------------------

    \120\ NOPR, 180 FERC ] 61,050 at PP 44, 48-49.
---------------------------------------------------------------------------

    67. The Commission further proposed to create an Energy Storage 
Expense function within the Operation and Maintenance Expense Chart of

[[Page 69304]]

Accounts, including: (1) Account 577.1 (Operation Supervision and 
Engineering); (2) Account 577.4 (Rents); (3) Account 577.5 (Operation 
Supplies and Expenses (Nonmajor only)); (4) Account 578.1 (Maintenance 
Supervision and Engineering (Major only)); (5) Account 578.2 
(Maintenance of Structures (Major only)); (6) Account 578.4 
(Maintenance of Collector Systems (Major only)); (7) Account 578.5 
(Maintenance of Generator Step-up Transformers (Major only)); (8) 
Account 578.6 (Maintenance of Inverter Expenses (Major only)); (9) 
Account 578.10 (Maintenance of Miscellaneous Other Energy Storage Plant 
(Major only)); (10) Account 578.11 (Maintenance of Other Energy Storage 
Plant (Nonmajor only)); (11) Account 577.2 (Operation of Energy Storage 
Equipment (Major only)); (12) Account 577.3 (Storage Fuel); and (13) 
Account 578.3 (Maintenance of Energy Storage Equipment (Major only)) 
(as well as the computer hardware, software, and communication 
equipment accounts described below).\121\ Lastly, the Commission 
proposed reclassifying pumped storage to be recorded within the Energy 
Storage function of the USofA rather than the Hydraulic Production 
subfunction.
---------------------------------------------------------------------------

    \121\ Id. PP 50-51.
---------------------------------------------------------------------------

2. Comments
    68. Utility Associations and Clean Energy Associations support the 
NOPR's proposal to establish a separate function for Energy 
Storage.\122\ Utility Associations, however, propose three revisions 
regarding Energy Storage related to functional reporting, O&M accounts, 
and pumped storage.
---------------------------------------------------------------------------

    \122\ Clean Energy Associations NOPR Comments at 5; Utility 
Associations NOPR Comments at 11.
---------------------------------------------------------------------------

    69. First, Utility Associations request removal of subpart c from 
Account 387.3, which would require accounting records to show monthly 
functional activity of storage assets, as well as the NOPR's proposed 
functional MWh reporting on pages 414-16 of Form No. 1.\123\ Utility 
Associations argue that these requirements conflict with the goal that 
motivated moving energy storage to a separate function--removing 
burdensome requirements to track and frequently reclassify storage 
assets based on changes in function.\124\ Rather, Utility Associations 
recommend following Order No. 784's approach of allowing the accounting 
for energy storage assets that serve more than one function to follow 
the allocation decisions made in the relevant rate proceedings.
---------------------------------------------------------------------------

    \123\ Utility Associations NOPR Comments at 11-12.
    \124\ Id. at 11 (citing NOPR, 180 FERC ] 61,050 at P 45 
(explaining that ``[b]y creating one new dedicated storage function, 
utilities would no longer be required to track and frequently 
reclassify storage assets based on changes in function, and thus, 
after the initial burden to implement the changes proposed to be 
adopted here, the continuing compliance burden would be 
significantly reduced.'')).
---------------------------------------------------------------------------

    70. Further, as for the renewables O&M accounts, Utility 
Associations suggest that, given the relative simplicity of energy 
storage operations and maintenance, the Commission should limit the 
energy storage O&M accounts to those listed in Appendix A to their 
comments.\125\
---------------------------------------------------------------------------

    \125\ Id. at 13, app. A.
---------------------------------------------------------------------------

    71. Lastly, Utility Associations recommend against reclassifying 
pumped storage assets to the new Energy Storage function.\126\ Utility 
Associations explain that pumped storage is not a new technology and 
fits more naturally within existing hydroelectric generation accounts 
given similarities in the lives of the facilities, permitting 
processes, engineering, operation, and staffing.
---------------------------------------------------------------------------

    \126\ Id. at 13.
---------------------------------------------------------------------------

3. Commission Determination
    72. We adopt the NOPR's proposal to establish a separate function 
for Energy Storage, with a few revisions, discussed below.
    73. We agree with Utility Associations that the proposed 
instructions to subpart c of Account 387.3 and the associated reporting 
on pages 414-16 of the FERC Form No. 1 are needlessly burdensome and 
contrary to the purpose of this final rule, and thus remove them.\127\
---------------------------------------------------------------------------

    \127\ See id. at 11-12.
---------------------------------------------------------------------------

    74. We are also again persuaded by Utility Associations to 
consolidate the list of O&M accounts that we create for energy storage 
given the comparative operational simplicity of storage systems,\128\ 
similar to our consolidation of the renewable production O&M 
accounts.\129\ However, we add a miscellaneous maintenance account to 
the list proposed by Utility Associations. The new accounts will now be 
as follows: Account 578.2 (Maintenance of Energy Storage Equipment and 
Structures (Major only)), Account 578.3 (Maintenance of Computer 
Hardware (Major only)), Account 578.4 (Maintenance of Computer Software 
(Major only)), Account 578.5 (Maintenance of Communication Equipment 
(Major only)), Account 578.6 (Maintenance of Miscellaneous Other Energy 
Storage Plant (Major only)), and Account 578.7 (Maintenance of Other 
Energy Storage Plant (Nonmajor only)).
---------------------------------------------------------------------------

    \128\ Again we correct the naming convention for the account for 
maintenance of communication equipment to refer to ``communication 
equipment'' rather than ``communications equipment,'' as proposed by 
Utility Associations, consistent with references to communication 
equipment accounts throughout this rule and the USofA.
    \129\ See Utility Associations NOPR Comments at 13.
---------------------------------------------------------------------------

    75. Last, we are persuaded by Utility Associations' request not to 
reclassify pumped storage assets to the new Energy Storage 
function.\130\ We agree with Utility Associations that pumped storage 
assets better fit within existing hydroelectric production accounts 
given the nature of these assets. This decision is particularly 
reasonable given our prior decision to streamline the Energy Storage 
function O&M accounts that we otherwise create in this final rule--the 
hydroelectric O&M accounts are better tailored to the relative 
complexity of operating and maintaining pumped storage assets.
---------------------------------------------------------------------------

    \130\ See id.
---------------------------------------------------------------------------

C. Accounting Treatment for Renewable Energy Credits

1. NOPR
    76. The Commission proposed a number of USofA revisions to codify 
treatment of RECs.\131\ The Commission proposed to retitle General 
Instruction No. 21 (Allowances) to Allowances and Renewable Energy 
Credits (RECs), and to update the instruction to include REC reporting 
and correct typos. These proposed revisions include: (1) proposing to 
remove the reference to the Clean Air Act in Part A to make the 
instruction less restrictive and adding reference to the proposed new 
accounts described below; (2) moving the last sentence of Part A to the 
beginning of Part B; (3) amending Parts A and C to refer to historical 
cost to make the instruction consistent with other existing regulatory 
text in the USofA; \132\ (4) correcting Part D to remove an erroneous 
repeated reference to ``from inventory''; (5) updating the text in Part 
E to include references to RECs in addition to allowances and in Part F 
to clarify the inventory accounting for RECs; (6) replacing the 
language included in existing Part G with language that would instead 
provide guidance for cases in which allowances and RECs may be 
considered as prepayments; (7) moving the existing language in Part G 
addressing penalties to Part H, and removing the reference to the EPA 
to make the instruction applicable to similar items created by

[[Page 69305]]

other regulatory bodies; (8) moving and updating the existing language 
in Part H to a newly proposed Part I that would address gains and 
losses on dispositions of allowances and RECs; and (9) adding a new 
Part J that would address the revenues for RECs associated with the 
sale of energy.
---------------------------------------------------------------------------

    \131\ NOPR, 180 FERC ] 61,050 at P 52.
    \132\ 18 CFR part 101, General Instruction No. 21 (Allowances).
---------------------------------------------------------------------------

    77. Similarly, the Commission proposed to revise the text to 
Accounts 158.1 (Allowance Inventory) and 158.2 (Allowances Withheld) to 
remove references to the Environmental Protection Agency, to reference 
historical cost, and to include a new note to address prepayments in 
accordance with the proposed text in General Instruction No. 21.\133\ 
The Commission also proposed to renumber Account 509 (Allowances) to 
Account 509.1, delete the reference to sulfur dioxide in that account, 
and create for RECs two new inventory accounts and, under the Steam 
Power Generation subfunction, two new expense accounts: Account 158.3 
(Bundled Renewable Energy Credits Inventory), Account 158.4 (Unbundled 
Renewable Energy Credits Inventory), Account 509.2 (Bundled Renewable 
Energy Credits), and Account 509.3 (Unbundled Renewable Energy 
Credits).\134\ And, consistent with the newly proposed instructions in 
Part I of General Instruction No. 21, the Commission proposed to add 
Account 411.11 (Gains from the Disposition of RECs) and Account 411.12 
(Losses from the Disposition of RECs). Last, the Commission clarified 
that the Commission considered RECs to be inventory, and noted that 
Commission accounting and reporting regulations trump conflicting 
regulations by other accounting authorities.
---------------------------------------------------------------------------

    \133\ NOPR, 180 FERC ] 61,050 at PP 53-57.
    \134\ We use the term ``bundled'' to convey that the RECs are 
sold with their associated energy, and the term ``unbundled'' to 
convey that the RECs are sold separately from the energy.
---------------------------------------------------------------------------

2. Comments
    78. Five parties commented on the NOPR's proposal to codify 
accounting treatment for RECs. These comments address: (1) the need for 
revisions or additional accounts to capture information on a broader 
range of credit mechanisms; (2) placement of REC expense accounts 
within the USofA; (3) interaction with REC treatment by other governing 
bodies; and (4) timing questions related to implementation, recovery, 
and REC expiration. RESA notes the similarities between the NOPR's REC 
proposals and those recommended by RESA in emphasizing its support for 
the NOPR overall.\135\ PG&E and SDG&E, Utility Associations, and 
Dominion, however, suggest that the Commission host a technical 
conference on REC accounting treatment to ensure workability in light 
of the diversity of REC instruments.\136\
---------------------------------------------------------------------------

    \135\ RESA NOPR Comments at 5.
    \136\ Dominion NOPR Comments at 4-5; PG&E and SDG&E NOPR 
Comments at 1, 2, 5; Utility Associations NOPR Comments at 18.
---------------------------------------------------------------------------

    79. Utility Associations and Carl Pechman request revisions to the 
NOPR's proposals to capture data on utilities' investments in a broader 
range of environmental credit mechanisms. Utility Associations argue 
that the proposed retitling of General Instruction No. 21 to Allowances 
and Renewable Energy Credits and corresponding changes to the text of 
the instruction and related accounts do not fully reflect the scope of 
developments in the industry.\137\ Rather, Utility Associations 
recommend that the Commission extend the provisions of the USofA to 
consider a broader variety of environmental credits that are either 
used to: (1) avoid or reduce greenhouse gas emissions to the 
atmosphere; or (2) convey environmental attributes of renewable 
electricity generation. Utility Associations also suggest that the 
Commission could use a proposed technical conference to further 
identify underlying characteristics of these types of instruments that, 
if met, would qualify for accounting in the same manner as allowances 
and RECs. Carl Pechman echoes this request, suggesting broadening new 
account definitions to incorporate Zero Emissions Credits (ZEC) and 
carbon offsets.\138\
---------------------------------------------------------------------------

    \137\ Utility Associations NOPR Comments at 19-20.
    \138\ Carl Pechman NOPR Comments at 1, 4.
---------------------------------------------------------------------------

    80. Carl Pechman further questions the NOPR's proposal to create a 
single category for ``allowances'' without more detail.\139\ Carl 
Pechman suggests accounting for such allowances together without 
distinction misses an opportunity to make valuable data about utility 
investments in diverse environmental credits available to Public 
Utility Commissions and other interested stakeholders.
---------------------------------------------------------------------------

    \139\ Id. at 6-9.
---------------------------------------------------------------------------

    81. Utility Associations also question the placement of the new 
Allowance expense accounts within the USofA.\140\ They recommend that 
the Commission place the new Allowances account within the Other Power 
Supply expense subfunction rather than within the Steam Power 
Generation subfunction. Utility Associations explain that, because 
RECs, unlike sulfur dioxide allowances, typically do not derive from 
steam power generation, the Steam Power Generation subfunction is not 
an appropriate place for those costs to be reported.
---------------------------------------------------------------------------

    \140\ Utility Associations NOPR Comments at 20-21.
---------------------------------------------------------------------------

    82. In addition, some commenters voice concerns about alignment 
between the NOPR's REC accounting treatment and that of other 
regulatory bodies. First, several commenters urge the Commission to 
consider the Financial Accounting Standards Board's ongoing work to 
address the underlying economic and accounting issues associated with 
RECs (and other similar instruments) before issuing any final rule or 
guidance.\141\ Utility Associations further advocate for the Commission 
to strive to align the final rule's requirements and Generally Accepted 
Accounting Principles (GAAP), to the extent possible, to avoid costs of 
dual recordkeeping.\142\
---------------------------------------------------------------------------

    \141\ Carl Pechman NOPR Comments at 9; PG&E and SDG&E NOPR 
Comments at 1; Utility Associations NOPR Comments at 18-19.
    \142\ Utility Associations NOPR Comments at 19.
---------------------------------------------------------------------------

    83. These commenters also made several suggestions with respect to 
state ratemaking processes. First, PG&E and SDG&E request that the 
Commission's general instructions concerning REC reporting under the 
USofA explicitly clarify that RECs recorded to any FERC account are not 
intended to impact the retail rates of public utilities.\143\ In 
addition, PG&E and SDG&E request the Commission to explicitly consider 
instances where regulatory recovery occurs at the time of renewable 
electric energy production, and reconsider its decision in Order No. 
552 precluding the use of inventory methods in Commission filings that 
reflect the effects of the ratemaking treatment granted by state 
commissions.\144\ PG&E and SDG&E and Utility Associations argue that, 
where the cost of the REC is bundled with electric energy and recovery 
from retail customers at the time of renewable electricity energy 
generation, the Commission should allow the entity to charge the full 
cost of the bundled product to Account 555 (Purchased Power) at the 
time of energy usage.\145\ Commenters argue that doing so is necessary 
to ensure that accounting reflects the economic effects of the state 
ratemaking treatment and that the revenue and expense associated with 
the RECs match.
---------------------------------------------------------------------------

    \143\ PG&E and SDG&E NOPR Comments at 2-5.
    \144\ Id. at 5.
    \145\ Id.; Utility Associations NOPR Comments at 22-23.
---------------------------------------------------------------------------

    84. Further, Utility Associations and Dominion comment on the 
treatment of expired RECs. Utility Associations request specific 
guidance on how to report expired RECs that are no longer

[[Page 69306]]

eligible to be used to comply with the applicable renewable energy 
standard for which they were initially created.\146\ They recommend 
that expired RECs be recorded in Account 411.12, Losses from 
Disposition of RECs. Dominion emphasizes that RECs may be created or 
purchased for reasons unrelated to compliance with a specific renewable 
energy standard, and therefore requests that the Commission adopt an 
expired RECs definition flexible enough to account for potential REC 
benefits aside from renewable energy standard application.\147\
---------------------------------------------------------------------------

    \146\ Utility Associations NOPR Comments at 21-22.
    \147\ Dominion NOPR Comments at 4.
---------------------------------------------------------------------------

    85. Utility Associations are also concerned about the flexibility 
of the NOPR's proposed REC accounting treatment as applied to REC 
valuation methodologies. Utility Associations worry that the NOPR's 
proposal to account for RECs as inventory and the issuance of RECs from 
inventory on a vintage basis using a monthly weighted average of 
historical cost determination risks mismatch with the variety of REC 
markets and treatment.\148\ Therefore, Utility Associations advocate 
for the Commission to allow for more flexibility in valuation method to 
align the Commission's accounting requirements with compliance 
requirements, business practices, and retail ratemaking treatments.
---------------------------------------------------------------------------

    \148\ Utility Associations NOPR Comments at 21.
---------------------------------------------------------------------------

    86. Lastly, noting the diversity in current accounting practices 
and ratemaking treatment for RECs and other similar instruments across 
the utility industry, Utility Associations recommend prospective 
adoption of any final rule or accounting guidance related to RECs in 
order to allow for an adequate transition period for utilities.\149\ 
Such prospective adoption would, according to Utility Associations, 
ensure utilities' existing accounting and reporting treatment continues 
to align with their current ratemaking treatment, while also providing 
utilities time to transition operational and accounting practices for 
future impacts on ratemaking and avoiding unnecessary additional cost 
and complexity.
---------------------------------------------------------------------------

    \149\ Id. at 20.
---------------------------------------------------------------------------

3. Commission Determination
    87. We adopt the NOPR's proposal to codify accounting and reporting 
treatment for RECs, with a few revisions, discussed below.
    88. Despite several commenters' requests,\150\ we decline to host a 
technical conference on REC treatment implementation. We note that the 
majority of REC comments received on the NOPR do not conflict with the 
NOPR's proposed REC accounting treatment but rather relate to 
practicalities of rule implementation and matters outside the area of 
accounting and reporting. This rule addresses those comments that 
require deviation from the NOPR's proposals, specifically by broadening 
relevant instructions in the USofA and creating accounts to accommodate 
all types of environmental credits. Any accounting and reporting 
questions that public utilities may have after the issuance of this 
final rule can be directed to the Commission's Chief Accountant seeking 
informal or formal accounting guidance in a separate docket.
---------------------------------------------------------------------------

    \150\ See Dominion NOPR Comments at 4-5; PG&E and SDG&E NOPR 
Comments at 1, 2, 5; Utility Associations NOPR Comments at 18.
---------------------------------------------------------------------------

    89. As noted above, we make a few amendments to the NOPR's proposed 
accounting treatment for RECs. First, in response to Utility 
Associations' and Carl Pechman's concerns about inclusion of other non-
REC environmental items,\151\ we have decided to update the name of the 
proposed Renewable Energy Credit accounts to ``Environmental Credits.'' 
This retitling will clarify that these accounts are for all types of 
environmental credits, including ZECs and other allowances, and not 
just those classified as RECs. These accounts will provide for the 
recording of any type of environmental credit and allow companies to 
maintain granularity as needed (e.g., by designating subaccounts or 
other codes for different types of environmental credits unique to 
their operations).
---------------------------------------------------------------------------

    \151\ Carl Pechman NOPR Comments at 1, 4; Utility Associations 
NOPR Comments at 19-20.
---------------------------------------------------------------------------

    90. However, we decline to make additional granular accounting 
mandatory, as Carl Pechman requests.\152\ Such additional granularity 
is not necessary. The USofA is a standard framework on which a 
utility's accounting system is to be based in order to support the 
Commission's statutory responsibilities. However, utilities are not 
precluded from tailoring their accounting systems to their own needs, 
which is a standard practice, by using subaccounts or other codes to 
track more granular detail for managerial or additional regulatory 
purposes. Therefore, we adopt the NOPR's proposed changes to General 
Instruction No. 21.
---------------------------------------------------------------------------

    \152\ Carl Pechman NOPR Comments at 6-9.
---------------------------------------------------------------------------

    91. Next, we are persuaded by Utility Associations' request to 
place the expense accounts for Environmental Credits in the Other Power 
Supply expenses sub-function rather than the Steam Generation 
subfunction.\153\ We agree that, because environmental credits are not 
generally the product of steam generation, their expenses do not belong 
in the Steam Generation subfunction. We have accordingly renamed and 
renumbered these accounts to Account 555.2 (Bundled Environmental 
Credits) and Account 555.3 (Unbundled Environmental Credits).
---------------------------------------------------------------------------

    \153\ See Utility Associations NOPR Comments at 20-21.
---------------------------------------------------------------------------

    92. The other concerns raised by commenters relate to 
implementation practicalities rather than the NOPR's proposed 
accounting treatment itself. We believe that this final rule provides 
sufficient clarification to address these concerns. However, if any 
concerns remain, they can be addressed through subsequent informal or 
formal accounting guidance issued by the Commission's Chief Accountant.
    93. The first set of these implementation concerns relates to the 
potential for inconsistency between Commission accounting treatment and 
that employed by other regulatory bodies.\154\ These concerns seem to 
derive primarily from the NOPR's proposal to treat RECs as inventory.
---------------------------------------------------------------------------

    \154\ See id. at 18-19; Carl Pechman NOPR Comments at 9; PG&E 
and SDG&E NOPR Comments at 1.
---------------------------------------------------------------------------

    94. Our decision to treat environmental credits as inventory is 
consistent with the Commission's long-standing policy, first stated in 
Order No. 552, of treating emission allowances as inventory, which the 
Commission has since extended to other environmental credits. Moreover, 
the primary purpose of our accounting rules is to facilitate ratemaking 
processes, not necessarily to align with other regulators' accounting 
practices, which may be designed to serve different objectives. 
Environmental credits, like allowances, are government-created 
tradeable property rights designed to promote environmental objectives 
that store value and are often utilized in a period other than that in 
which they are acquired. In this sense, environmental credits operate 
for utilities as an inventoriable asset similar to the value of assets 
recorded in Account 151 (Fuel Stock (Major Only)), or Account 154 
(Plant Materials and Operating Supplies). Generally, if another

[[Page 69307]]

accounting authority's treatment conflicts with the accounting and 
financial reporting needed by the Commission to fulfill its statutory 
responsibilities, then the Commission's accounting and reporting 
regulations prevail.\155\ Finally, while this rule directs utilities to 
treat environmental credits as inventory, we recognize that there may 
be situations in which utilities have different accounting or rate 
treatment as required by their state or other regulatory bodies. 
Utilities can record regulatory assets or liabilities to record any 
differences between accounting and ratemaking treatment, or maintain 
separate records to accommodate the accounting treatment required by 
the different regulatory bodies (though, as for any tariff-driven 
deviation from standard accounting and FERC Form instructions, 
utilities must disclose such alternative accounting in their FERC Form 
reports). We also clarify, in response to PG&E and SDG&E's 
request,\156\ the accounting in this rulemaking is not intended to 
impact retail rates, as indicated above.
---------------------------------------------------------------------------

    \155\ See Order No. 552, FERC Stats. & Regs. ] 30,967 at 30,801 
(``If GAAP conflicts with the accounting and financial reporting 
needed by the Commission to fulfill its statutory responsibilities, 
then GAAP must yield. GAAP cannot control when it would prevent the 
Commission from carrying out its duty to provide jurisdictional 
companies with the opportunity to earn a fair return on their 
investment and to protect ratepayers from excessive charges and 
discriminatory treatment.'').
    \156\ PG&E and SDG&E NOPR Comments at 2-5.
---------------------------------------------------------------------------

    95. Next, we turn to commenters' various timing concerns. We are 
unpersuaded by Utility Associations' and PG&E and SDG&E's concerns 
about how to report bundled REC costs that are recovered from retail 
customers at the time of renewable electricity energy generation.\157\ 
Existing regulatory accounts are readily available when costs incurred 
in one ratemaking period need to be recovered or expensed in 
another.\158\ Changes to the NOPR's accounting proposal are therefore 
not needed to address these concerns.
---------------------------------------------------------------------------

    \157\ Id. at 5; Utility Associations NOPR Comments at 22-23.
    \158\ See, e.g., Account 182.3 (Other Regulatory Assets) and 
Account 254 (Other Regulatory Liabilities). These regulatory 
accounts are designated for amounts that are probable to be included 
in a different period for purposes of developing the rates.
---------------------------------------------------------------------------

    96. As for Utility Associations' concerns about where to record 
expired RECs,\159\ we agree that expired RECs should be recorded in new 
Account 411.12 (Losses from Disposition of Environmental Credits). This 
treatment is consistent with the new General Instruction No. 21 
Allowances and Environmental Credits, Part I. Similarly, in response to 
Dominion's concerns about the non-statutory use of expired RECs,\160\ 
we note that General Instruction No. 21, Part I, indicates that losses 
on speculative trading should be recorded in Account 426.5 (Other 
Deductions). As such, no further revision to the accounting treatment 
for environmental credits is warranted to address recording of expired 
RECs.
---------------------------------------------------------------------------

    \159\ See Utility Associations NOPR Comments at 21-22.
    \160\ Dominion NOPR Comments at 4
---------------------------------------------------------------------------

    97. Regarding Utility Associations' inventory valuation 
concerns,\161\ we note that our preference for weighted average cost 
has been in place for Allowances since Order No. 552, which the 
Commission has consistently applied to environmental credits in the 
decades since. However, we emphasize again that if specific state law 
or tariff provisions require utilities to use a different inventory 
method, the economic reality of the transaction governs, with 
divergence from standard practice noted and explained in the FERC Form 
Nos. 1 and 3-Q disclosures.
---------------------------------------------------------------------------

    \161\ Utility Associations NOPR Comments at 21.
---------------------------------------------------------------------------

    98. Lastly, we clarify for Utility Associations that, as for all 
final rules, this final rule will apply only prospectively and will 
allow utilities an adequate transition period, as discussed further 
below.\162\
---------------------------------------------------------------------------

    \162\ See id. at 20.
---------------------------------------------------------------------------

D. Creation of Computer Hardware, Software, and Communication Equipment 
Accounts

1. NOPR
    99. The Commission proposed new accounts in each function and 
subfunction for computer hardware, software, and communication 
equipment.\163\ The USofA was updated in 2005 to include accounts for 
recording computer hardware, software, and communication equipment 
owned by regional transmission organizations (RTO), but did not create 
comparable accounts for non-RTO public utilities and licensees to 
report these types of assets.\164\ Consequently, non-RTO public 
utilities do not record computer hardware, software, and communication 
equipment uniformly, with many utilities recording these assets in 
general accounts (e.g., Account 303 (Miscellaneous Intangible Plant) 
and Account 391 (Office Furniture and Equipment)). To eliminate 
ambiguity and ensure greater consistency and transparency in accounting 
and reporting, the Commission proposed including computer hardware, 
software, and communication equipment accounts in each different 
functional area, including the general function.
---------------------------------------------------------------------------

    \163\ NOPR, 180 FERC ] 61,050 at P 58.
    \164\ Accounting & Financial Reporting for Public Utilities 
Including RTOs, Order No. 668, 70 FR 77627 (Dec. 30, 2005), FERC 
Stats. & Regs ] 31,199 (2005) (cross-referenced at 113 FERC ] 
61,276), rehearing denied, Order No. 668-A, 71 FR 28513 (May 16, 
2006), 115 FERC ] 61,080 (2006).
---------------------------------------------------------------------------

    100. The Commission proposed to add three plant accounts and three 
maintenance accounts to all functions and subfunctions that currently 
lack them, including the new Renewable Generation subfunctions and the 
new Energy Storage function.\165\ These accounts are: Accounts 315.1, 
324.1, 334.1, 338.9, 338.30, 339.9, 345.1, 351.1, 363.1, 387.8, and 
397.1 (Computer Hardware); Accounts 315.2, 324.2, 334.2, 338.10, 
338.31, 339.10, 345.2, 351.2, 363.2, 387.9, and 397.2 (Computer 
Software); Accounts 315.3, 324.3, 334.3, 338.11, 338.32, 339.11, 345.3, 
351.3, 363.3, 387.10, and 397.3 (Communication Equipment); Accounts 
513.1, 531.1, 544.1, 553.1, 558.13, 558.33, 559.12, 578.7, 592.2, and 
935.1 (Maintenance of Computer Hardware (Major only)); Accounts 513.2, 
531.2, 544.2, 553.2, 558.14, 558.34, 559.13, 578.8, 592.3, 935.2 
(Maintenance of Computer Software (Major only)); and Accounts 513.3, 
531.3, 544.3, 553.3, 558.15, 558.35, 559.14, 578.9, 592.4, 935.3 
(Maintenance of Communication Equipment (Major only)). The Commission 
added (Major only) to the account names for existing Transmission 
Expenses Maintenance Accounts 569.1, 569.2, 569.3, consistent with the 
proposed accounts. Because the RTO function only exists for RTOs and 
independent system operators, the Commission did not propose this 
designation on its accounts (i.e., Accounts 576.2, 576.3, and 576.4). 
These accounts have the same descriptions, instructions, and items as 
the existing RTO and Transmission function accounts of the same title.
---------------------------------------------------------------------------

    \165\ NOPR, 180 FERC ] 61,050 at P 59.
---------------------------------------------------------------------------

    101. The Commission also proposed adding a new Electric Plant 
Instruction No. 17, Integrated computer hardware, software, and 
communication equipment.\166\ The instruction explained that where 
computer hardware, software, and communication equipment is integrated 
as part of a larger retirement unit, it shall be recorded in the 
property account of the retirement unit purchased. It further clarified 
that, if this computer hardware, software, or communication equipment 
is not integrated, Plant Instruction No. 10 should be followed.
---------------------------------------------------------------------------

    \166\ Id. P 60.
---------------------------------------------------------------------------

    102. Lastly, the Commission sought comment on whether the 
Commission should also create computer hardware,

[[Page 69308]]

software, and communication accounts for natural gas pipelines, oil 
pipelines, and centralized service companies.\167\
---------------------------------------------------------------------------

    \167\ Id. P 61.
---------------------------------------------------------------------------

2. Comments
    103. Dominion, Clean Energy Associations, and Utility Associations 
commented on the NOPR's proposal to create new accounts within existing 
functions for computer hardware, software, and communication equipment. 
Dominion and Utility Associations appear to conditionally support the 
NOPR's proposals, with some requested revisions, while Clean Energy 
Associations oppose them.\168\
---------------------------------------------------------------------------

    \168\ See Clean Energy Associations NOPR Comments at 14-15; 
Dominion NOPR Comments at 3; Utility Associations NOPR Comments at 
14.
---------------------------------------------------------------------------

    104. Clean Energy Associations question whether the proposed 
accounts are warranted, alleging that they will add administrative 
burden with few expected benefits.\169\ Clean Energy Associations 
suggest that these costs could better be recorded to Other Accessory 
Electric Equipment. In the alternative, Clean Energy Associations 
suggest that the Commission should confirm through accounting guidance 
that the scheduled retirements approach that most utilities use for 
non-structures and improvements related to General Plant may be used 
for computer hardware, software, and communication equipment Production 
accounts.
---------------------------------------------------------------------------

    \169\ Clean Energy Associations NOPR Comments at 14-15.
---------------------------------------------------------------------------

    105. Dominion, in contrast, supports the proposed changes regarding 
computer hardware and communication equipment, but raises three 
concerns regarding software accounting treatment.\170\ First, Dominion 
believes that software should remain in Account 303 despite the 
potential for some inconsistency in accounting and reporting of 
computer software between functions. Second, because software is an 
intangible asset and does not have a depreciable service life similar 
to production plant, Dominion argues that it is more appropriate to 
recognize the amortization of software in Account 404 (Limited Term 
Plant Amortization) than Account 403 (Depreciation Expense). Third, 
Dominion asserts that the NOPR's proposed accounting guidance conflicts 
with recent guidance issued by the Commission's Chief Accountant 
regarding cloud computing, and Dominion states that it agrees with the 
guidance in that order.\171\ Last, Dominion argues that one function 
having different instructions on how to handle software does not 
warrant a change to all other functions and subfunctions.\172\ If 
software is to be recorded to different functions, Dominion believes 
that the Commission should issue guidance on how to account for 
software that supports more than one function--specifically, whether to 
use the General function or whether allocations to the functions are 
required.
---------------------------------------------------------------------------

    \170\ Dominion NOPR Comments at 3-4.
    \171\ Id. at 4 (citing Guidance on Accounting for Implementation 
Costs Incurred in a Cloud Computing Arrangement that is a Service 
Contract, Docket No. AI20-1-000 (Dec. 20, 2019)).
    \172\ Dominion NOPR Comments at 4.
---------------------------------------------------------------------------

    106. Utility Associations also support creation of these new plant 
accounts, and recommend that balance amounts for computer hardware, 
software, and communication equipment that can be readily identified as 
dedicated to a particular function be transferred to the new 
accounts.\173\ However, Utility Associations note that these assets may 
by nature share functionality, and even if not, it may be difficult to 
determine that equipment supports a sole functional area. Where 
computer hardware, software, or communication equipment is not clearly 
dedicated to a sole function, Utility Associations suggest that it 
should be recorded in General Plant.
---------------------------------------------------------------------------

    \173\ Utility Associations NOPR Comments at 14.
---------------------------------------------------------------------------

    107. In addition, Utility Associations make a number of comments on 
specific proposed accounts. First, they suggest that the Commission 
remove item 1 ``Personal Computers'' entirely or rename it ``Computers 
and Similar Items'' to avoid implying that all personal computers must 
be tracked functionally.\174\ Utility Associations explain that 
personal computers are generally not tracked functionally due to their 
short lives, low cost, and frequent transfer among personnel supporting 
different functional operations. Eliminating or broadening the item 
would mitigate the large, disproportionate burden that functional 
tracking of personal computers would require. Next, Utility 
Associations recommend allowing utilities to use Accounts 356, 358, 
365, and 367 to record fiber optic cable used for transmission and 
distribution purposes. Utility Associations explain that fiber optic 
cable provides protective capabilities (shield and grounding, vibration 
and cable failure detection) and, when used for transmission and 
distribution, has a longer life than other communication devices more 
consistent with traditional overhead and underground conductors and 
devices. Therefore, Utility Associations argue that retaining the 
ability to continue to record fiber optic cable to plant Accounts 356, 
358, 365 and 367 better aligns depreciation to its appropriate life 
span. Last, Utility Associations recommend that the Commission's Chief 
Accountant amend Accounting Release No. 15, Vintage Year Accounting for 
General Plant Accounts (AR-15), to allow public utilities currently 
applying the principles of AR-15 to vintaged General Plant accounts for 
computer hardware and communication equipment to continue that practice 
for assets that will now be accounted for in the new functional 
accounts. Utility Associations explain that this amendment will allow 
utilities to continue to record ``auto-retirements'' of assets that are 
fully amortized and eliminate the need to track small individual items 
of property.
---------------------------------------------------------------------------

    \174\ Id. at 14-17.
---------------------------------------------------------------------------

    108. Utility Associations and Dominion also responded to the NOPR's 
request for comment on the need to create computer hardware, software, 
and communication equipment accounts in the USofA for centralized 
service companies. Utility Associations recommend adding computer 
hardware, software, and communication accounts to the USofA and FERC 
Form No. 60 for centralized service companies to better align their 
reporting with associated operating companies.\175\ Dominion also 
requests that if software is to be recorded to the different functions, 
the Commission should issue guidance on how centralized service 
companies should account for software that supports more than one 
function--that is, whether the use of the General function would be 
appropriate or whether allocations to the functions are required.\176\
---------------------------------------------------------------------------

    \175\ Id. at 18.
    \176\ Dominion NOPR Comments at 4.
---------------------------------------------------------------------------

    109. LEPA responded to the NOPR's request for comment on the need 
to create computer hardware, software, and communication equipment 
accounts in the USofA for oil pipelines. LEPA opposes creation of such 
new accounts for oil pipelines, arguing that doing so would create 
needless burdens for oil pipelines that would far outweigh any 
perceived benefit.\177\
---------------------------------------------------------------------------

    \177\ LEPA NOPR Comments at 2-4.
---------------------------------------------------------------------------

3. Commission Determination
    110. We adopt the NOPR's proposal to create new accounts for 
computer hardware, software, and communication equipment within 
existing functions that do not already include them.
    111. Several commenters questioned whether it is necessary or 
warranted to create these new accounts, in all or in

[[Page 69309]]

part.\178\ First, we disagree with Clean Energy Associations and 
Dominion that these new accounts are not warranted.\179\ We recognize 
that creating these new accounts may create initial implementation 
burden for utilities, but we find that separate functional 
classification of such costs is necessary to improve uniformity, 
consistency, and transparency in accounting and reporting of such 
assets and related activities, and to better inform the ratemaking 
process. Additionally, to address the Utility Associations' comment 
regarding transfer of existing balance amounts for computer hardware, 
software, and communication equipment,\180\ we clarify that if 
utilities cannot readily identify functional level of detailed balances 
of plant with associated accumulated depreciation, such balances may 
reside in the accounts initially used by the utilities.
---------------------------------------------------------------------------

    \178\ See Clean Energy Associations NOPR Comments at 14-15; 
Dominion NOPR Comments at 3-4; Utility Associations NOPR Comments at 
14-17.
    \179\ See Clean Energy Associations NOPR Comments at 14-15; 
Dominion NOPR Comments at 4 (arguing that one function having 
different instructions on how to handle software does not warrant a 
change to all other functions and subfunctions).
    \180\ See Utility Associations NOPR Comments at 14.
---------------------------------------------------------------------------

    112. We also disagree with Dominion's suggestion that software 
should remain in Account 303 as provided in the prior guidance on cloud 
computing issued by the Commission's Chief Accountant in Docket No. 
AI20-1-000.\181\ This guidance was consistent with then-available 
accounts within the USofA. In this prior accounting guidance, the 
Commission's Chief Accountant specifically stated that utilities should 
record implementation costs for cloud computing in Account 303 
``provided such costs are not specifically provided for in other 
utility plant accounts.'' \182\ In the instant rulemaking, the 
Commission now provides functional plant accounts specifically 
designated for software, therefore superseding the prior accounting 
guidance in Docket No. AI20-1-000. As such, we also reject Dominion's 
request to provide for amortization of software in Account 404,\183\ 
and instead direct utilities to record associated depreciation expense 
to Account 403, which includes depreciation for all classes of 
depreciable electric plant. We also clarify that where software 
supports more than one function, it can be recorded to Account 397.2 
(General Plant Software).
---------------------------------------------------------------------------

    \181\ See Dominion NOPR Comments at 3-4.
    \182\ Guidance on Accounting for Implementation Costs Incurred 
in a Cloud Computing Arrangement that is a Service Contract, Docket 
No. AI20-1-000, at 3 (Dec. 20, 2019) (emphasis added).
    \183\ See Dominion NOPR Comments at 3-4.
---------------------------------------------------------------------------

    113. To address Utility Associations' comments about computer 
hardware, software, and communication equipment that serves multiple 
functions,\184\ we clarify that utilities may record such assets based 
on the assets' predominant use or function, or, alternatively, in the 
new General Plant accounts. Concerning Utility Associations' comment 
related to personal computers,\185\ we clarify that account lists are 
illustrative and not prescriptive; personal computers should therefore 
only be recorded in the functional computer accounts if the specific 
computer's retirement unit serves that predominant function, such as 
one issued to a transmission or distribution line worker. In the case 
of personal computers that are mostly used by employees for general 
purposes, such computers can be recorded in the new General Plant 
account.
---------------------------------------------------------------------------

    \184\ See Utility Associations NOPR Comments at 14-17.
    \185\ See id.
---------------------------------------------------------------------------

    114. To address Utility Associations' comment about fiber optic 
cables,\186\ we note that the recording of fiber optic cables should 
follow the same classification criteria as discussed above, and be 
recorded based on their purpose and function. For example, fiber optic 
cables used as communication equipment should be recorded in the new 
functional accounts for communication equipment.
---------------------------------------------------------------------------

    \186\ See id. at 15-17.
---------------------------------------------------------------------------

    115. To address Utility Associations'\187\ and Clean Energy 
Associations'\188\ comments related to the application of vintage 
accounting as discussed in AR-15, we note that vintage accounting is 
the same as scheduled retirements approach. The appropriateness of 
vintage depreciation is considered on a case-by-case basis within 
depreciation rate case proceedings.
---------------------------------------------------------------------------

    \187\ Id.
    \188\ Clean Energy Associations NOPR Comments at 15.
---------------------------------------------------------------------------

    116. Finally, we note Utility Associations and Dominion's comments 
requesting new accounts or guidance for centralized service companies 
\189\ and LEPA's comments opposing creation of such accounts for oil 
pipelines.\190\ We will consider whether future guidance or amendments 
to the USofAs for centralized service companies and natural gas 
companies are warranted.
---------------------------------------------------------------------------

    \189\ See Dominion NOPR Comments at 3; Utility Associations NOPR 
Comments at 18.
    \190\ LEPA NOPR Comments at 2-4.
---------------------------------------------------------------------------

E. Reporting

1. NOPR
    117. To accommodate the proposed changes to the USofA explained 
above, the Commission proposed to amend FERC Form Nos. 1, 1-F, and 3-Q 
(electric) to include the new subfunctions for Wind, Solar, and Other 
Non-Hydro Renewable as well as a new Energy Storage function within the 
plant and operations and maintenance expense sections of the forms, 
including the schedules for depreciation.\191\ Each subfunction and 
function would include the accounts as described above. The currently 
existing functional accounts for energy storage would be removed 
(Accounts 348, 351, 363, 548.1, 562.1, 570.1, and 584.1) or replaced 
(Accounts 553.1 and 592.2).
---------------------------------------------------------------------------

    \191\ NOPR, 180 FERC ] 61,050 at P 62, App. B: FERC Form Nos. 1/
1-F at 204-207, 219, 321-322, FERC Form No. 1 at 227, 336, 352, 354, 
401a, FERC Form No. 1-F at 21, 24, FERC Form No. 3-Q (electric) at 
208, 324a, 324b.
---------------------------------------------------------------------------

    118. The proposed reporting changes to FERC Form Nos. 1, 1-F, and 
3-Q (electric) would result in changes to centralized service company 
reporting in FERC Form No. 60, Schedule XVI--Analysis of Charges for 
Service--Associate and Non-Associate Companies, because the FERC Form 
No. 60 summarizes the functional and sub-functional O&M accounts 
detailed in FERC Form Nos. 1, 1-F, and 3-Q (electric).\192\ As such, 
these proposed changes to FERC Form No. 60 consist of new rows for the 
summarized totals of the proposed new Energy Storage function and 
Generation sub-functions O&M accounts.
---------------------------------------------------------------------------

    \192\ Id. at P 63, App. B: FERC Form No. 60 at 304-305a.
---------------------------------------------------------------------------

    119. The Commission also proposed to amend FERC Form Nos. 1, 1-F, 
and 3-Q (electric) to include RECs as part of the instructions and 
titles wherever allowances are discussed.\193\ Further, it proposed to 
consolidate inputs for both sulfur dioxide and nitrogen oxides 
(NOX) in the existing Allowances schedule,\194\ to include 
inputs for both bundled and unbundled RECs, and to amend the related 
title for Account 509 to read as Account 509.1.\195\ The Commission 
proposed to add separate gain and loss accounts to the statement of 
income for RECs.\196\
---------------------------------------------------------------------------

    \193\ Id. at P 64, App. B: FERC Form Nos. 1/1-F at 320, FERC 
Form No. 1 at 2, 110-111, 120-121, 228a, 229a, FERC Form No. 1-F at 
4, 10-11, 15-16.
    \194\ Id. at App. B: FERC Form No. 1 at 228a-229a amended, pages 
228b-229b deleted.
    \195\ Id. at App. B: FERC Form Nos. 1/1-F at 320, FERC Form No. 
1-F at 15.
    \196\ Id. at App. B: FERC Form Nos. 1/3-Q (electric) at 114, 
FERC Form No. 1-F at 6.

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

[[Page 69310]]

    120. The Commission further proposed to amend FERC Form Nos. 1, 1-
F, and 3-Q (electric) to include new plant and maintenance expense 
accounts for computer hardware, software, and communication equipment 
within all functions and subfunctions (including the general 
function).\197\ In the Depreciation and Amortization of Electric Plant 
schedule section B (Basis for Amortization Charges), the Commission 
proposed to eliminate the first two sentences and the word software 
from the third sentence as these clauses would no longer be applicable 
to software.\198\
---------------------------------------------------------------------------

    \197\ Id. at P 65, App. B: FERC Form Nos. 1/1-F at 204-207, 320-
323, FERC Form No. 3-Q (electric) at 325.
    \198\ Id. at App. B: FERC Form No. 1 at 336.
---------------------------------------------------------------------------

    121. Finally, the Commission proposed to consolidate the several 
statistical pages for different classes of large production generators 
into one statistical page to also include hydro and non-hydro 
renewables.\199\ The Commission also proposed to amend the energy 
storage statistical pages to remove references in the instructions and 
columns related to cost functionalization.\200\
---------------------------------------------------------------------------

    \199\ Id. at P 62, App. B: FERC Form No. 1 at 402-03 amended, 
pages 406-07 deleted.
    \200\ Id. at App. B: FERC Form No. 1 at 414-20.
---------------------------------------------------------------------------

2. Comments
    122. Clean Energy Associations suggest that the NOPR's proposed 
changes to the USofA and FERC Form No. 1 have the potential to increase 
the burden on public utilities that are subject to the USofA 
requirements, but clarify that if public utilities that are subject to 
the USofA are supportive of the NOPR's proposed reporting changes, it 
does not object to the additional requirements.\201\
---------------------------------------------------------------------------

    \201\ Clean Energy Associations NOPR Comments at 3.
---------------------------------------------------------------------------

    123. Utility Associations note that the NOPR proposed to combine 
all large generating assets for FERC Form No. 1 reporting purposes into 
one statistical page.\202\ Utility Associations recommend that the 
Commission keep existing statistical plant pages 402-03 and 406-07 
unchanged and instead add new pages for reporting large solar, wind, 
and other non-hydro renewables larger than 10 MW. Utility Associations 
argue that, because the vast majority of the reporting requirements on 
the existing pages are not applicable to solar, wind, and other non-
hydro renewable generating assets, consolidating the information for 
generating plant statistics on one page adds undue complexity that will 
complicate preparation and review. In addition, echoing their comments 
on the NOPR's energy storage provisions (that the functional MWh 
reporting on pages 414-16 of FERC Form No. 1 contradict the NOPR's goal 
in establishing a new storage function), Utility Associations recommend 
that the Commission modify FERC Form No. 1 pages 414-16 to eliminate 
columns d, e, and f, which show functional MWhs delivered.
---------------------------------------------------------------------------

    \202\ Utility Associations NOPR Comments at 23-24.
---------------------------------------------------------------------------

    124. Utility Associations also note a number of ministerial errors 
in the NOPR related to reporting.\203\ Those errors include: (1) 
proposed line 35.46 on the FERC Form No. 1 and 1-F page should identify 
339.13 instead of 338.13; (2) proposed line 10.5 on the FERC Form No. 
3-Q page 324a should be re-labeled to remove the word ``Renewables'' 
from ``Wind Renewables Generation--Maintenance (558.25-558.35)'' to 
ensure consistent naming convention with proposed lines 10.1, 10.2 and 
10.4; (3) the summation referenced in proposed line 21.4 on FERC Form 
No. 3-Q page 325 should be changed from ``Enter Total of lines 21 thru 
21.4'' to ``Enter Total of lines 21 thru 21.3''; and (4) on pages 320-
23 of FERC Form No. 1 and 1-F: (a) proposed line 79.15 should be 
modified to ``Maintenance of Other Accessory Electrical Equipment'' 
instead of ``Other Accessory Electrical Equipment''; (b) proposed line 
79.37 should list Account 558.33 instead of Account 558.31; (c) 
proposed line 79.38 should list Account 558.34 instead of Account 
558.32; (d) proposed line 79.39 should list Account 558.35 instead of 
Account 558.33; and (e) proposed line 79.40 should list Account 558.36 
instead of Account 558.34.
---------------------------------------------------------------------------

    \203\ Id., at app. C.
---------------------------------------------------------------------------

3. Commission Determination
    125. We adopt the NOPR's proposed changes to the FERC forms, with 
minor revisions, discussed below. First, in keeping with other 
revisions made in this final rule, we update references in FERC Form 
Nos. 1, 1-F, and 3-Q (electric) to the proposed Other Non-Hydro 
Renewable subfunction to refer instead to the Other Renewable 
subfunction. We also update references to RECs in FERC Form Nos. 1, 1-
F, and 3-Q (electric) to instead reference environmental credits, as 
appropriate.
    126. In response to Clean Energy Associations' concerns about 
potential increased burden resulting from the NOPR's proposed reporting 
requirements,\204\ while sensitive to the administrative burdens our 
rules create, we find that the clarity, transparency, consistency, and 
uniformity benefits of this final rule, including its reporting 
requirements, outweigh the potential burdens of reporting.
---------------------------------------------------------------------------

    \204\ We note that Clean Energy Associations qualified their 
objection to the NOPR's proposed reporting requirements. See Clean 
Energy Associations NOPR Comments at 3 (``The Clean Energy 
Associations also note that the extensive changes to the USofA and 
FERC Form No. 1 proposed in the USofA NOPR actually have the 
potential to increase the burden on public utilities that are 
subject to the USofA requirements; if public utilities that are 
subject to the USofA are supportive of the significant reporting 
changes proposed in the USofA NOPR that they would have to bear, 
Clean Energy Associations do not object to these additional 
requirements.''). We also note that Utility Associations, whose 
members are subject to the USofA, appear to support the reporting 
proposals. See Utility Associations NOPR Comments at 1, 24 
(explaining that Utility Associations support the NOPR's provisions 
``except as noted in [their] specific comments[,]'' and not 
otherwise objecting to the NOPR's reporting proposals).
---------------------------------------------------------------------------

    127. We agree with Utility Associations' request to maintain 
statistical plant pages 402-03 and 406-07 and instead add new pages for 
reporting renewable generating assets larger than 10 MW.\205\ 
Accordingly, we add a new renewable generating plant statistical page 
404 to FERC Form No. 1. The NOPR's proposal to consolidate these forms 
was intended to simplify the reporting burden associated with this 
final rule. After considering Utility Associations' comment, we find 
that refraining from consolidation better reduces administrative 
burdens.
---------------------------------------------------------------------------

    \205\ Utility Associations NOPR Comments at 23-24.
---------------------------------------------------------------------------

    128. Lastly, we accept all of Utility Associations' proposed 
ministerial revisions \206\ in order to correctly reflect the 
Commission's intent in proposing the NOPR and effectuate the purpose of 
this final rule.
---------------------------------------------------------------------------

    \206\ Id., at app. C.
---------------------------------------------------------------------------

F. Other Issues

1. Account Numbering
a. Comments
    129. Utility Associations and Dominion take issue with the number 
of digits that the NOPR proposed to include for new accounts. 
Specifically, both commenters recommend using four-digit accounts 
rather than the five-digit accounts (for example, using 338.1 rather 
than 338.10) proposed in the NOPR to avoid the cost and time that 
modifying accounting software to allow for five-digit accounts will 
require.\207\
---------------------------------------------------------------------------

    \207\ Dominion NOPR Comments at 2; Utility Associations NOPR 
Comments at 6.
---------------------------------------------------------------------------

b. Commission Determination
    130. While we recognize Utility Associations' and Dominion's 
concerns that the proposed five-digit numbering

[[Page 69311]]

increases implementation burdens to update accounting software,\208\ we 
nevertheless find five-digit numbering to be the least burdensome way 
to implement needed changes because creating these new accounts without 
using five-digit numbering would require complete overhaul of the 
USofA's numbering system. In addition, we find that the need for and 
benefit from these new accounts, as discussed above, justifies the 
burden caused by the proposed numbering.
---------------------------------------------------------------------------

    \208\ See Dominion NOPR Comments at 2; Utility Associations NOPR 
Comments at 6.
---------------------------------------------------------------------------

2. Issues Beyond the Scope of This Rulemaking
a. Comments
    131. Some commenters raise issues that were not addressed in the 
NOPR. Clean Energy Associations urge the Commission to convene a 
technical conference, issue guidance, or act on the NOI in Docket No. 
RM22-2-000 on reactive power compensation issues, and otherwise to 
confirm that the cost of equipment that supports the production and 
provision of reactive power service should be used to support reactive 
power compensation that is based on the current American Electric Power 
methodology.\209\ RESA requests that the Commission make additional 
modifications to the USofA in this or a subsequent rulemaking to 
include accounts associated with competitive market function activities 
(i.e., the provision of default supply service).\210\ Carl Pechman 
suggests that the Commission adopt an on-going process to evaluate 
accounting needs required to support decarbonization of the electric 
system.\211\ In addition, Carl Pechman suggests evaluating whether 
existing accounting protocols for generation assets provide sufficient 
fidelity to provide adequate information on capital cost of pollution 
control and decarbonization investments (such as carbon capture and 
storage).
---------------------------------------------------------------------------

    \209\ Clean Energy Associations NOPR Comments at 5.
    \210\ RESA NOPR Comments at 5-11.
    \211\ Carl Pechman NOPR Comments at 2.
---------------------------------------------------------------------------

b. Commission Determination
    132. The NOPR did not propose reforms related to these issues 
raised by commenters. Therefore, these issues are outside the scope of 
this proceeding and will not be addressed here.

G. Proposed Compliance Procedures

1. Comments
    133. Several commenters request that the rule's accounting and 
reporting requirements apply prospectively to avoid the need to restate 
or refile financial statements from prior years.\212\ Specifically, 
Dominion suggests a two-year implementation window between rulemaking 
issuance and implementation date given the significant time and expense 
that implementing the rulemaking's changes will require.\213\ Utility 
Associations also request guidance on how utilities should transfer 
historical balances to the new accounts when implementing the 
Commission's order, and propose providing for the transfer of the 
historical balances to the new accounts in the current year without 
restating balances for prior years and for disclosure in footnotes in 
reports filed with the Commission, including FERC Form No. 1, 
describing the amounts transferred.\214\
---------------------------------------------------------------------------

    \212\ Id. at 6; Dominion NOPR Comments at 2-3; PG&E and SDG&E 
NOPR Comments at 1, 5.
    \213\ Dominion NOPR Comments at 5.
    \214\ Utility Associations NOPR Comments at 6 (stating that its 
proposed treatments would be consistent with the treatment that the 
Commission previously approved in Order No. 784).
---------------------------------------------------------------------------

    134. Several commenters also request that the Commission allow 
utilities to continue to apply the previously approved depreciation 
rates applicable to the prior accounts in the new accounts until 
depreciation rates are approved for the new accounts.\215\ Utility 
Associations explain that this would enable the continued depreciation 
of assets using approved depreciation rates until a utility can propose 
new rates for review and approval.
---------------------------------------------------------------------------

    \215\ Dominion NOPR Comments at 2-3; Utility Associations NOPR 
Comments at 7.
---------------------------------------------------------------------------

    135. Last, Utility Associations suggest that the Commission should 
allow jurisdictional utilities with formula rates to update their 
formula rates to comply with the Commission's order updating the USofA 
through a single-issue filing either under FPA section 205 or a 
compliance filing.\216\ Utility Associations note that permitting 
single-issue filings would allow affected utilities to update their 
formula rates solely for the purpose of complying with this final rule, 
thereby providing the necessary clarity that the remainder of the filed 
rate would not be subject to litigation.
---------------------------------------------------------------------------

    \216\ Utility Associations NOPR Comments at 4-5, 24.
---------------------------------------------------------------------------

2. Commission Determination
    136. We require regulated entities to implement the requirements of 
this final rule by January 1, 2025. These changes are therefore 
prospective, as requested.\217\ We will not require retroactive 
reporting in the FERC Form Nos. 1 and 3-Q of these accounting changes, 
nor restatement of prior years in the initial Forms under 
implementation of the new accounts. Therefore, public utilities must 
use the accounting treatment codified in this rule in all applicable 
filings starting in the first quarter of 2025. We have chosen the 
January 1, 2025, implementation date despite Dominion's request for two 
years to implement the changes \218\ in order to timely respond to the 
need for this final rule's changes while providing a reasonable 
implementation period that coincides with a new accounting and 
reporting cycle. This extended implementation schedule will also ensure 
that smaller entities subject to our accounting and reporting 
requirements have sufficient time to update their accounting and 
reporting software. In response to Utility Associations' request for 
guidance on how utilities should transfer historical balances to the 
new accounts,\219\ we agree that the historical balances should be 
transferred to the new accounts in the current year without restating 
balances for prior years, and that the amounts transferred should be 
disclosed in the utilities' FERC Forms filed with the Commission.
---------------------------------------------------------------------------

    \217\ Id. at 6; Dominion NOPR Comments at 2-3; PG&E and SDG&E 
NOPR Comments at 1, 5.
    \218\ Dominion NOPR Comments at 5.
    \219\ Utility Associations NOPR Comments at 6 (stating that its 
proposed treatments would be consistent with the treatment that the 
Commission previously approved in Order No. 784).
---------------------------------------------------------------------------

    137. We agree with commenters that existing depreciation rates 
should apply to the newly classified plant going forward, to be 
revisited in a timely manner in the utility's next relevant 
depreciation rate case.\220\ This includes, as noted above, vintage 
depreciation rates being applied to non-General Plant, and current 
amortization rates being treated as vintage depreciation with identical 
rates. We will consider on a case-by-case basis the appropriateness of 
this depreciation method going forward as with any depreciation rate 
case, and take into account all of the appropriate information relevant 
to retirement units in the account, including the accuracy of historic 
accounting and supplementary property records in contested depreciation 
rate cases.
---------------------------------------------------------------------------

    \220\ See Dominion NOPR Comments at 2-3; Utility Associations 
NOPR Comments at 7.
---------------------------------------------------------------------------

    138. We also agree with Utility Associations \221\ that utilities 
affected by

[[Page 69312]]

this final rule may seek to update their rates on a single-issue basis 
given the limited scope of the requirements in this final rule.\222\ We 
therefore will allow jurisdictional utilities with formula rates to 
seek to update their formula rates to comply with this rule through 
either a single-issue filing under FPA section 205 or as part of a 
utility's section 205 filing to update formula rates involving other 
matters. We note, however, that, as we do not issue this rule under FPA 
section 206, FPA section 206 compliance filings are neither a required 
nor appropriate response to this final rule; compliance rather requires 
appropriate accounting for items subject to the accounting treatment in 
rate filings. We also emphasize that, as for other accounting 
rulemakings, nothing in this rule should be construed as pre-granting 
authority for rate recovery in a rate proceeding.\223\
---------------------------------------------------------------------------

    \221\ See Utility Associations NOPR Comments at 4-5, 24 (citing 
Promoting Transmission Investment through Pricing Reform, Order No. 
679, 71 FR 43294 July 31, (2006), 116 FERC ] 61,057, at PP 191-193, 
order on rehearing, Order No. 679-A, 72 FR 1152 (Jan. 10, 2007), 117 
FERC ] 61,345 (2006), order on rehearing, 119 FERC ] 61,062 (2007)).
    \222\ See Indicated RTO Transmission Owners, 161 FERC ] 61,018, 
at PP 13-14 (2017); see also See Public Utility Transmission Rate 
Changes to Address Accumulated Deferred Income Taxes, Order No. 864, 
84 FR 65281 (Nov. 7, 2019), 169 FERC ] 61,139, at PP 2, 18 (2019), 
order on rehearing, Order No. 864-A, 85 FR 27681 (May 11, 2020), 171 
FERC ] 61,033 (2020).
    \223\ See Accounting, Financial Reporting, & Rate Filing 
Requirements for Asset Retirement Obligations, Order No. 631, 68 FR 
19610 (Apr. 21, 2003), 103 FERC ] 61,021, at P 64 (2003).
---------------------------------------------------------------------------

V. Information Collection Statement

    139. The information collection requirements contained in this 
final rule are subject to review by the Office of Management and Budget 
(OMB) under section 3507(d) of the Paperwork Reduction Act of 
1995.\224\ OMB's regulations require approval of certain information 
collection requirements imposed by agency rules.\225\ 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 
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.
---------------------------------------------------------------------------

    \224\ 44 U.S.C. 3507(d).
    \225\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    140. This final rule requires jurisdictional entities as detailed 
in 18 CFR part 101 (Uniform System of Accounts Prescribed for Public 
Utilities and Licensees Subject to the Provision of the Federal Power 
Act, General Instructions) to update, modify, and add accounts. The 
updates within the USofA are also required in the respective forms 
(FERC Form Nos. 1, 1-F, 3-Q (electric), and 60) that are filed with the 
Commission.
    141. Interested persons may obtain information on the reporting 
requirements by contacting Ellen Brown, Office of the Executive 
Director, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426 via email ([email protected]) or telephone 
((202) 502-8663).
    142. Title: Annual Report of Major Electric Utilities, Licensees, 
and Others (FERC Form No. 1), Annual Report for Nonmajor Public 
Utilities and Licensees (FERC Form No. 1-F), Quarterly Financial Report 
of Electric Utilities, Licensees (FERC Form No. 3-Q (electric)), Annual 
Reports of Centralized Service Companies (FERC Form No. 60).
    Action: Revision of collections of information in accordance with 
Docket No. RM21-11-000.
    OMB Control Nos.: 1902-0021 (FERC Form No. 1) and 1902-0029 (FERC 
Form No. 1-F), 1902-0205 (FERC Form No. 3-Q (electric)), and 1902-0215 
(FERC Form No. 60).
    Respondents: Public utilities and licensees and centralized service 
companies who are not exempt or waived from filing per 18 CFR parts 141 
and 369.
    Frequency of Information Collection: Annually (FERC Form Nos. 1, 1-
F, and 60); quarterly (FERC Form No. 3-Q).
    Necessity of Information: The reforms in this final rule adjust the 
USofA to account for changes in the industry, particularly around 
renewable generation.
    Internal Review: The Commission has reviewed the changes and has 
determined that such changes are necessary. These requirements conform 
to the Commission's need for efficient information collection, 
communication, and management within the energy industry. The 
Commission has specific, objective support for the burden estimates 
associated with the information collection requirements.
    143. The Commission estimates a one-time burden due to the 
revisions in FERC Form Nos. 1, 1-F, 3-Q (electric), and 60 reflected in 
the final rule in Docket No. RM21-11-000, but estimates that the 
ongoing burden following the implementation will be consistent with the 
current collection estimates. The burden estimates below are included 
in two tables, the first table showing the one-time implementation 
burden required to update, add, and modify accounts related to the 
final rule and the second table showing the ongoing annual burden to 
record and report on each account in the FERC Form Nos. 1, 1-F, 3-Q 
(electric), and 60.
    144. The one-time implementation burden includes updating, adding, 
and modifying accounts to be compliant with the final rule in Docket 
No. RM21-11-000. This includes updates to FERC Form Nos. 1, 1-F, 3-Q 
(electric), and 60 for the creation of new accounts and production 
subfunctions for wind, solar, and other renewable generating assets; 
establishment of a new functional class for energy storage accounts; 
codification of the accounting treatment of environmental credits; and 
creation of new accounts within existing functions for computer 
hardware, software, and communication equipment. The Reporting section 
IV.E of this document indicates which forms and pages will be affected 
by the categorized proposed changes.
    145. The estimates below were calculated using previous final rules 
combined with the Commission's best estimate of the required effort to 
update, modify, or add accounts within the USofA. We estimate that, on 
average, it will take 20 minutes to create or transition an account to 
comply with the requirements listed in this final rule. FERC Form No. 1 
requires 132 account changes, FERC Form No. 1-F requires 132 account 
changes, and FERC Form No. 60 requires 11 account changes. The changes 
to FERC Form No. 3-Q (electric) are reflected in the calculations for 
FERC Form No. 1 and 1-F because the quarterly reports are generally a 
subset of the annual filings required by FERC Form No. 1 and 1-F. The 
changes above are reflected in the one-time implementation burden 
estimate listed in Table 1 below.\226\
---------------------------------------------------------------------------

    \226\ The burden numbers in the table are rounded to 1 decimal 
place, and the costs are rounded to the nearest dollar.

[[Page 69313]]

                                                           Table 1--RM21-11-000 Final Rule--One-Time Implementation Burden, in Year 1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Annual number                                                                                                           Annual cost
               Requirement                    Number of     of responses    Total number of     Average burden & cost per response         Total annual burden hours & cost       per respondent
                                             respondents   per respondent      responses                      \227\                                                                     ($)
                                                      (1)             (2)    (1) * (2) = (3)  (4)..................................  (3) * (4) = (5)............................       (5) / (1)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Form No. 1...............................             217               1                217  44 hrs.; $4,004......................  9,548 hrs.; $868,868.......................          $4,004
Form No.1-F..............................               2               1                  2  44 hrs.; $4,004......................  88 hrs.; $8,008............................           4,004
Form No. 3-Q electric \228\..............             221               3                663  0 hrs.; $0...........................  0 hrs.; $0.................................               0
Form No. 60..............................              42               1                 42  3.7 hrs.; $336.70....................  155.4 hrs.; $14,141.40.....................          336.70
                                          ------------------------------------------------------------------------------------------------------------------------------------------------------
    Total for Implementation Burden......  ..............  ..............                924  .....................................  9,791.4 hrs.; $891,017.40..................  ..............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    146. The Commission estimates that the ongoing burden in years 2 
and beyond will be consistent with the current burden estimates related 
to FERC Form Nos. 1, 1-F, 3-Q (electric), and 60 because, although the 
accounts are changing, the data historically has been recorded and 
documented under different account names: therefore, after the initial 
implementation of the changes, respondents will likely revert to the 
current burden estimates. The estimated ongoing burden is shown in 
Table 2 below.
---------------------------------------------------------------------------

    \227\ The average burden and cost per response is calculated 
using the hourly wage figures for FERC staff. The Commission 
estimates that the costs for the Commission are comparable to those 
in industry. Commission staff average salary plus benefits totals 
$188,922 or $91 per hour.
    \228\ The Commission assumes that the one-time burden for the 
FERC Form No. 3-Q is incorporated into the calculation of FERC Form 
No. 1 because quarterly filings are typically a subset of the annual 
filings.

                                                      Table 2--RM21-11-000 Final Rule--Annual Ongoing Burden (Current), Starting in Year 2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Annual number                                                                                                           Annual cost
               Requirement                    Number of     of responses    Total number of     Average burden & cost per response         Total annual burden hours & cost       per respondent
                                             respondents   per respondent      responses                      \229\                                                                     ($)
                                                      (1)             (2)    (1) * (2) = (3)  (4)..................................  (3) * (4) = (5)............................       (5) / (1)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Form No. 1...............................             217               1                217  1,182 hrs.; $107,562.................  256,494 hrs.; $23,340,954..................        $107,562
Form No.1-F..............................               2               1                  2  136 hrs.; $12,376....................  272 hrs.; $24,752..........................          12,376
Form No. 3-Q electric....................             221               3                663  168 hrs.; $15,288....................  111,384 hrs.; $10,135,944..................          45,864
Form No. 60..............................              42               1                 42  78 hrs.; $7,098......................  3,276 hrs.; $298,116.......................           7,098
                                          ------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Ongoing Burden (current).......  ..............  ..............                924  .....................................  371,426 hrs.; $33,799,766..................  ..............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    147. In this final rule, besides the noted revisions, the 
Commission used the numbers provided in the NOPR.
---------------------------------------------------------------------------

    \229\ The average burden and cost per response is calculated 
using the hourly wage figures for FERC staff. The Commission 
estimates that the costs for the Commission are comparable to those 
in industry. Commission staff average salary plus benefits totals 
$188,992 or $91 per hour.
---------------------------------------------------------------------------

VI. Environmental Analysis

    148. 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.\230\ No 
environmental consideration is necessary for the promulgation of a rule 
that addresses information gathering, analysis, and dissemination,\231\ 
or that addresses accounting.\232\ This final rule addresses 
accounting. In addition, this final rule involves information 
gathering, analysis, and dissemination. Therefore, this final rule 
falls within categorical exemptions provided in the Commission's 
regulations. Consequently, neither an environmental impact statement 
nor an environmental assessment is required.
---------------------------------------------------------------------------

    \230\ Regulations Implementing the National Environmental Policy 
Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. 
Preambles 1986-1990 ] 30,783 (1987) (cross-referenced at 41 FERC ] 
61,284).
    \231\ See 18 CFR 380.4(a)(5).
    \232\ See id. 380.4(a)(16).
---------------------------------------------------------------------------

VII. Regulatory Flexibility Act

    149. The Regulatory Flexibility Act of 1980 (RFA) \233\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
The RFA mandates consideration of regulatory alternatives that 
accomplish the stated objectives of a proposed rule and minimize any 
significant economic impact on a substantial number of small 
entities.\234\ The Small Business Administration (SBA) sets the 
threshold for what constitutes a small business. Under SBA's size 
standards,\235\ electric generators definitions of ``small'' range from 
250-1,150 employees based on the type of generation. For the purpose of 
our analysis, we use the 1150 employee threshold NAICS Code: 221115 
Wind Electric Power Generation (this will cover all categories of 
electric generators) that is used for solar, wind, geothermal, biomass, 
and ``other'' generators because the proposed rules accounting changes 
are particularly relevant for these types of generation.
---------------------------------------------------------------------------

    \233\ 5 U.S.C. 601-612.
    \234\ Id. 603(c).
    \235\ 13 CFR 121.201.
---------------------------------------------------------------------------

    150. In our analysis, we utilized previous submissions of the FERC 
Form Nos. 1,\236\ 1-F,\237\ 3-Q (electric),\238\ and 60 \239\ filers to 
create populations of companies to determine the number of small 
entities. The Commission found that, of this population, approximately 
88% percent of companies filing FERC Form No. 1, 50% of companies 
filing

[[Page 69314]]

FERC Form No. 1-F, and approximately 69% of companies filing FERC Form 
No. 60, qualify as ``small'' using the definition provided by SBA. The 
Commission believes that this rule will not have a significant economic 
impact on a substantial number of small entities, and therefore no 
regulatory flexibility analysis is required.
---------------------------------------------------------------------------

    \236\ The total population of 2020 FERC Form No. 1 filers 
totaled 221. We used a statistical sample size of 67 companies that 
produces a 95% confidence level.
    \237\ The total population of 2020 FERC Form No. 1-F filers 
totaled 2.
    \238\ The FERC Form No. 3-Q are quarterly filings, which are 
typically a subset of the annual filings. The Commission assumes 
that the 3-Q filers are generally consistent with FERC Form No. 1 
filers.
    \239\ The total population of 2020 FERC Form No. 60 filers 
totaled 42. We used a statistical sample size of 29 companies that 
produces a 95% confidence level.
---------------------------------------------------------------------------

    151. According to SBA guidance, the determination of significance 
of impact ``should be seen as relative to the size of the business, the 
size of the competitor's business, and the impact the regulation has on 
larger competitors.'' \240\ We do not consider the estimated cost to be 
a significant economic impact. As a result, we certify that this final 
rule will not have a significant economic impact on a substantial 
number of small entities.
---------------------------------------------------------------------------

    \240\ U.S. Small Business Administration, A Guide for Government 
Agencies How to Comply with the Regulatory Flexibility Act, at 18 
(May 2012), https://www.sba.gov/sites/default/files/advocacy/rfaguide_0512_0.pdf.
---------------------------------------------------------------------------

VIII. Document Availability

    152. 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).
    153. 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.
    154. User assistance is available for eLibrary and the Commission's 
website during normal business hours from FERC Online Support at (202) 
502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
[email protected].

IX. Effective Date and Congressional Notification

    These regulations are effective January 1, 2025. The Commission has 
determined, with the concurrence of the Administrator of the Office of 
Information and Regulatory Affairs of OMB, that this rule is not a 
``major rule'' as defined in section 351 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.

List of Subjects in 18 CFR Part 101

    Electric power, Electric utilities, Reporting and recordkeeping 
requirements, Uniform system of accounts.

    By the Commission.

    Issued: June 29, 2023
Kimberly D. Bose,
Secretary.

    In consideration of the foregoing, the Commission amends Part 101, 
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

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, 7651-7651o.

0
2. Under ``General Instructions'', revise Instruction 21 to read as 
follows:

General Instructions

* * * * *
    21. Allowances and environmental credits.
    A. Public utilities owning allowances and environmental credits for 
operational purposes, shall account for such allowances and 
environmental credits at historical cost in account 158.1, Allowance 
Inventory, account 158.2, Allowances Withheld, account 158.3, Bundled 
Environmental Credits Inventory, or account 158.4, Unbundled 
Environmental Credits Inventory, as appropriate.
    B. Allowances and environmental credits acquired for speculative 
purposes shall be accounted for in account 124, Other Investments. When 
purchased allowances and environmental credits acquired for speculative 
purposes become eligible for use in different years, and the allocation 
of the purchase cost cannot be determined by fair value, the purchase 
cost allocated to allowances and environmental credits of each vintage 
shall be determined through use of a present-value based measurement. 
The interest rate used in the present-value measurement shall be the 
utility's incremental borrowing rate, in the month in which the 
allowances and environmental credits are acquired, for a loan with a 
term similar to the period that it will hold the allowances and 
environmental credits and in an amount equal to the purchase price.
    C. The underlying records supporting operational allowances and 
environmental credits recorded in account 158.1, account 158.2, account 
158.3, and account 158.4 shall be maintained in sufficient detail at 
historical costs and provide the number of allowances and environmental 
credits and the related cost by vintage year, including allowances and 
environmental credits acquired at zero cost.
    D. Issuances from inventory included in account 158.1, account 
158.2, account 158.3, and account 158.4 shall be accounted for on a 
vintage basis using a monthly weighted-average method of historical 
cost determination. The cost of eligible allowances and environmental 
credits not used in the current year, shall be transferred to the 
vintage for the immediately following year.
    E. Account 158.1 shall be credited and account 509, Allowances, 
debited concurrent with the monthly remittance of the allowances to be 
charged to expense based on each month's emissions. Account 158.3 and 
account 158.4 shall be credited and account 555.2, Bundled 
Environmental Credits, and account 555.3, Unbundled Environmental 
Credits, debited, respectively, so that the cost of the environmental 
credits to be remitted for the year is charged to expense based on each 
month's usage. This may, in certain circumstances, require allocation 
of the cost between months on a fractional basis.
    F. In any period in which actual emissions exceed the amount 
allowable based on eligible allowances owned, the utility shall 
estimate the cost to acquire the additional allowances needed and 
charge account 158.1 with the estimated cost and credit the proper 
liability account. In any period in which a utility records its 
estimated amount of required environmental credits, the utility shall 
debit account 158.3 or account 158.4 with the estimated cost and credit 
the proper liability account. When differences between the estimated 
and actual costs become known, the adjustments should be made through 
account 158.1, account 158.3, and account 158.4, as well as account 
509, account 555.2, and account 555.3 within a single month, as 
appropriate.
    G. When a prepayment is made for allowances or environmental 
credits, the payment is debited to account 165, Prepayments. This 
accounting is not intended to influence the outcome of any rate 
treatment.
    H. Penalties assessed by any authoritative agencies shall be 
charged to account 426.3, Penalties.
    I. Gains on dispositions of allowances and environmental credits, 
other than

[[Page 69315]]

those held for speculative purposes, shall be accounted for as follows. 
First, if there is uncertainty as to the regulatory treatment, the gain 
shall be deferred in account 254, Other Regulatory Liabilities, pending 
resolution of the uncertainty. Second, if there is certainty as to the 
existence of a regulatory liability, the gain will be credited to 
account 254, with subsequent recognition in income when reductions in 
charges to customers occur or the liability is otherwise satisfied. 
Third, all other gains will be credited to account 411.8, Gains from 
Disposition of Allowances, or account 411.11, Gains from Disposition of 
Environmental Credits. Losses on disposition of allowances and 
environmental credits, other than those held for speculative purposes, 
shall be accounted for as follows. Losses that qualify as regulatory 
assets shall be charged directly to account 182.3, Other Regulatory 
Assets. All other losses shall be charged to account 411.9, Losses from 
Disposition of Allowances, or account 411.12, Losses from Disposition 
of Environmental Credits. (See Definition No. 31.) Gains or losses on 
disposition of allowances and environmental credits held for 
speculative purposes shall be recognized in account 421, Miscellaneous 
Nonoperating Income, or account 426.5, Other Deductions, as 
appropriate.
    J. Revenues for environmental credits associated with the sale of 
energy shall be recorded in the appropriate operating revenue account.
* * * * *

0
3. Under ``Electric Plant Instructions'', add Instruction 17 to read as 
follows:

Electric Plant Instructions

* * * * *
    17. Integrated computer hardware, software, and communication 
equipment. Where computer hardware, software, and communication 
equipment is integrated as part of a larger retirement unit, it shall 
be recorded in the property account of the retirement unit purchased. 
This shall be done consistently with electric plant instruction 10.

0
4. In the list of accounts under ``Under Balance Sheet Chart of 
Accounts'', under ``Assets and other debits,'' under section 3 
``Current and Accrued Assets'', add accounts 158.3 and 158.4 to read as 
follows:

Balance Sheet Chart of Accounts

* * * * *
    3. Current and Accrued Assets
* * * * *
    158.3 Bundled environmental credits inventory.
    158.4 Unbundled environmental credits inventory.
* * * * *

0
5. Under Balance Sheet Accounts:
0
i. Revise Accounts 108, 111, 158.1, and 158.2; and
0
ii. Add accounts 158.3 and 158.4.
    The additions and revisions read as follows:

Balance Sheet Accounts

* * * * *

108  Accumulated provision for depreciation of electric utility plant 
(Major only).

    A. This account shall be credited with the following:
    (1) Amounts charged to account 403, Depreciation Expense, or to 
clearing accounts for current depreciation expense for electric plant 
in service.
    (2) Amounts charged to account 403.1, Depreciation expense for 
asset retirement costs, for current depreciation expense related to 
asset retirement costs in electric plant in service in a separate 
subaccount.
    (3) Amounts charged to account 421, Miscellaneous Nonoperating 
Income, for depreciation expense on property included in account 105, 
Electric Plant Held for Future Use. Include, also, the balance of 
accumulated provision for depreciation on property when transferred to 
account 105, Electric Plant Held for Future Use, from other property 
accounts. Normally account 108 will not be used for current 
depreciation provisions because, as provided herein, the service life 
during which depreciation is computed commences with the date property 
is includible in electric plant in service; however, if special 
circumstances indicate the propriety of current accruals for 
depreciation, such charges shall be made to account 421, Miscellaneous 
Nonoperating Income.
    (4) Amounts charged to account 413, Expenses of Electric Plant 
Leased to Others, for electric plant included in account 104, Electric 
Plant Leased to Others.
    (5) Amounts charged to account 416, Costs and Expenses of 
Merchandising, Jobbing, and Contract Work, or to clearing accounts for 
current depreciation expense.
    (6) Amounts of depreciation applicable to electric properties 
acquired as operating units or systems. (See electric plant instruction 
5.)
    (7) Amounts charged to account 182, Extraordinary Property Losses, 
when authorized by the Commission.
    (8) Amounts of depreciation applicable to electric plant donated to 
the utility.
    (The utility shall maintain separate subaccounts for depreciation 
applicable to electric plant in service, electric plant leased to 
others and electric plant held for future use.)
    B. At the time of retirement of depreciable electric utility plant, 
this account shall be charged with the book cost of the property 
retired and the cost of removal and shall be credited with the salvage 
value and any other amounts recovered, such as insurance. When 
retirement, costs of removal and salvage are entered originally in 
retirement work orders, the net total of such work orders may be 
included in a separate subaccount hereunder. Upon completion of the 
work order, the proper distribution to subdivisions of this account 
shall be made as provided in the following paragraph.
    C. For general ledger and balance sheet purposes, this account 
shall be regarded and treated as a single composite provision for 
depreciation. For purposes of analysis, however, each utility shall 
maintain subsidiary records in which this account is segregated 
according to the following functional classification for electric 
plant:
    (1) Steam production,
    (2) Nuclear production,
    (3) Hydraulic production,
    (4) Solar production,
    (5) Wind production,
    (6) Other renewable production,
    (7) Other production,
    (8) Transmission,
    (9) Distribution,
    (10) Regional Transmission and Market Operation,
    (11) Energy Storage Plant, and
    (12) General.
    These subsidiary records shall reflect the current credits and 
debits to this account in sufficient detail to show separately for each 
such functional classification:
    (a) The amount of accrual for depreciation,
    (b) The book cost of property retired,
    (c) Cost of removal,
    (d) Salvage, and
    (e) Other items, including recoveries from insurance.
    Separate subsidiary records shall be maintained for the amount of 
accrued cost of removal other than legal obligations for the retirement 
of plant recorded in account 108, Accumulated Provision for 
Depreciation of Electric Utility Plant (Major only).
    D. When transfers of plant are made from one electric plant account 
to another, or from or to another utility department, or from or to 
nonutility

[[Page 69316]]

property accounts, the accounting for the related accumulated provision 
for depreciation shall be as provided in electric plant instruction 12.
    E. The utility is restricted in its use of the accumulated 
provision for depreciation to the purposes set forth above. It shall 
not transfer any portion of this account to retained earnings or make 
any other use thereof without authorization by the Commission.
* * * * *

111  Accumulated provision for amortization of electric utility plant 
(Major only).

    A. This account shall be credited with the following:
    (1) Amounts charged to account 404, Amortization of Limited-Term 
Electric Plant, for the current amortization of limited-term electric 
plant investments.
    (2) Amounts charged to account 421, Miscellaneous Nonoperating 
Income, for amortization expense on property included in account 105, 
Electric Plant Held for Future Use. Include also the balance of 
accumulated provision for amortization on property when transferred to 
account 105, Electric Plant Held for Future Use, from other property 
accounts. See also paragraph A(2), account 108, Accumulated Provision 
for Depreciation of Electric Utility Plant.
    (3) Amounts charged to account 405, Amortization of Other Electric 
Plant.
    (4) Amounts charged to account 413, Expenses of Electric Plant 
Leased to Others, for the current amortization of limited-term or other 
investments subject to amortization included in account 104, Electric 
Plant Leased to Others.
    (5) Amounts charged to account 425, Miscellaneous Amortization, for 
the amortization of intangible or other electric plant which does not 
have a definite or terminable life and is not subject to charges for 
depreciation expense, with Commission approval.
    (The utility shall maintain subaccounts of this account for the 
amortization applicable to electric plant in service, electric plant 
leased to others and electric plant held for future use.)
    B. When any property to which this account applies is sold, 
relinquished, or otherwise retired from service, this account shall be 
charged with the amount previously credited in respect to such 
property. The book cost of the property so retired less the amount 
chargeable to this account and less the net proceeds realized at 
retirement shall be included in account 421.1, Gain on Disposition of 
Property, or account 421.2, Loss on Disposition of Property, as 
appropriate.
    C. For general ledger and balance sheet purposes, this account 
shall be regarded and treated as a single composite provision for 
amortization. For purposes of analysis, however, each utility shall 
maintain subsidiary records in which this account is segregated 
according to the following functional classification for electric 
plant: (1) Steam production; (2) nuclear production; (3) hydraulic 
production; (4) solar production; (5) wind production; (6) other 
renewable production; (7) other production; (8) transmission; (9) 
distribution; (10) regional transmission and market operation; (11) 
energy storage plant; and (12) general. These subsidiary records shall 
reflect the current credits and debits to this account in sufficient 
detail to show separately for each such functional classification (a) 
the amount of accrual for amortization, (b) the book cost of property 
retired, (c) cost of removal, (d) salvage, and (e) other items, 
including recoveries from insurance.
    D. The utility is restricted in its use of the accumulated 
provision for amortization to the purposes set forth above. It shall 
not transfer any portion of this account to retained earnings or make 
any other use thereof without authorization by the Commission.
* * * * *

158.1  Allowance inventory.

    A. This account shall include the cost of allowances owned by the 
utility and not withheld by any authoritative agency. See General 
Instruction No. 21 and account 158.2, Allowances Withheld.
    B. This account shall be credited and account 509, Allowances, 
shall be debited concurrent with the monthly emissions.
    C. Separate subdivisions of this account shall be maintained so as 
to separately account for those allowances usable in the current year 
and in each subsequent year. The underlying records of these 
subdivisions shall be maintained in sufficient detail so as to identify 
each allowance included; the origin of each allowance; and the 
historical cost.

    (Note:  For prepayments of allowances, see General Instruction 
No. 21.)

158.2  Allowances withheld.

    A. This account shall include the cost of allowances owned by the 
utility but withheld by any authoritative agency. (See General 
Instruction No. 21.)
    B. The inventory cost of the allowances released by any 
authoritative agency for use by the utility shall be transferred to 
account 158.1, Allowance Inventory.
    C. The underlying records of this account shall be maintained in 
sufficient detail so as to identify each allowance included; the origin 
of each allowance; and the historical cost.

158.3  Bundled environmental credits inventory.

    A. This account shall include the cost of environmental credits 
owned by the utility, bundled with energy. See General Instruction No. 
21.
    B. This account shall be credited and account 555.2, Bundled 
Environmental Credits, shall be debited concurrent with the monthly use 
of environmental credits.
    C. Separate subdivisions of this account shall be maintained so as 
to separately account for those environmental credits usable in the 
current year and in each subsequent year. The underlying records of 
these subdivisions shall be maintained in sufficient detail so as to 
identify each environmental credit included; the origin of each 
environmental credit; and the historical cost.

    (Note:  For prepayments of environmental credits, see General 
Instruction No. 21.)

158.4  Unbundled environmental credits inventory.

    A. This account shall include the cost of environmental credits 
owned by the utility, not considered bundled with energy. See General 
Instruction No. 21.
    B. This account shall be credited and account 555.3, Unbundled 
Environmental Credits, shall be debited concurrent with the monthly use 
of environmental credits.
    C. Separate subdivisions of this account shall be maintained so as 
to separately account for those environmental credits usable in the 
current year and in each subsequent year. The underlying records of 
these subdivisions shall be maintained in sufficient detail so as to 
identify each environmental credit included; the origin of each 
environmental credit; and the historical cost.

    (Note:  For prepayments of environmental credits, see General 
Instruction No. 21.)

* * * * *

0
6. In the list of accounts under ``Electric Plant Chart of Accounts'':
0
i. Under section 2.a, add accounts 315.1, 315.2, and 315.3;
0
ii. Under section 2.b, add accounts 324.1, 324.2, and 324.3;
0
iii. Under section 2.c, add accounts 334.1, 334.2, and 334.3;

[[Page 69317]]

0
iv. Redesignate section 2.d, ``other production'', consisting of 
accounts 340 through 348, as section 2.g;
0
v. Add a new section 2.d, ``solar production'', section 2.e, ``wind 
production'', and section 2.f, ``other renewable production'';
0
vi. Under newly designated section 2.g, ``other production'', add 
accounts 345.1, 345.2, and 345.3, and remove and reserve account 348;
0
vii. Under section 3 ``Transmission Plant'', add accounts 351.1, 351.2, 
and 351.3;
0
viii. Under section 4 ``Distribution Plant'', remove and reserve 
account 363 and add accounts 363.1, 363.2, and 363.3;
0
ix. Redesignate section 6, ``General Plant'', consisting of accounts 
389 through 399.1, as section 7;
0
x. Add a new section 6, ``Energy Storage Plant'';
0
xi. Transfer account 387 under section 5 ``Regional Transmission and 
Market Operation Plan,'' to newly created section 6, ``Energy Storage 
Plant'';
0
xii. Add accounts 387.1 through 387.12 to newly created section 6, 
``Energy Storage Plant'';
0
xiii. Under newly redesignated section 7, ``General Plant'', remove and 
reserve account 397; and
0
xiv. Add Accounts 397.1, 397.2, and 397.3 to newly redesignated section 
7, ``General Plant'';
* * * * *
    The revisions and additions read as follows:

Electric Plant Chart of Accounts

* * * * *
    2. Production Plant
    a. steam production
* * * * *
    315.1 Computer hardware.
    315.2 Computer software.
    315.3 Communication equipment.
* * * * *
    b. nuclear production
* * * * *
    324.1 Computer hardware.
    324.2 Computer software.
    324.3 Communication equipment.
* * * * *
    c. hydraulic production
* * * * *
    334.1 Computer hardware.
    334.2 Computer software.
    334.3 Communication equipment.
* * * * *
    d. solar production
    338.1 Land and land rights.
    338.2 Structures and improvements.
    338.3 [Reserved].
    338.4 Solar panels.
    338.5 Collector system.
    338.6 Generator step-up transformers (GSU).
    338.7 Inverters.
    338.8 Other accessory electrical equipment.
    338.9 Computer hardware.
    338.10 Computer software.
    338.11 Communication equipment.
    338.12 Miscellaneous power plant equipment.
    338.13 Asset retirement costs for solar production.
    e. wind production
    338.20 Land and land rights.
    338.21 Structures and improvements.
    338.22 [Reserved].
    338.23 Wind turbines.
    338.24 Wind towers and fixtures.
    338.25 [Reserved].
    338.26 Collector system.
    338.27 Generator step-up transformers (GSU).
    338.28 Inverters.
    338.29 Other accessory electrical equipment.
    338.30 Computer hardware.
    338.31 Computer software.
    338.32 Communication equipment.
    338.33 Miscellaneous power plant equipment.
    338.34 Asset retirement costs for wind production.
    f. other renewable production
    339.1 Land and land rights.
    339.2 Structures and improvements.
    339.3 Fuel holders.
    339.4 Boilers.
    339.5 [Reserved].
    339.6 Generators.
    339.7 [Reserved].
    339.8 Other accessory electrical equipment.
    339.9 Computer hardware.
    339.10 Computer software.
    339.11 Communication equipment.
    339.12 Miscellaneous power plant equipment.
    339.13 Asset retirement costs for other renewable production.
    g. other production
    340 Land and land rights.
    341 Structures and improvements.
    342 Fuel holders, producers, and accessories.
    343 Prime movers.
    344 Generators.
    345 Accessory electric equipment.
    345.1 Computer hardware.
    345.2 Computer software.
    345.3 Communication equipment.
    346 Miscellaneous power plant equipment.
    347 Asset retirement costs for other production plant.
    348 [Reserved].
    3. Transmission Plant
* * * * *
    351.1 Computer hardware.
    351.2 Computer software.
    351.3 Communication equipment.
* * * * *
    4. Distribution Plant
* * * * *
    363 [Reserved].
    363.1 Computer hardware.
    363.2 Computer software.
    363.3 Communication equipment.
* * * * *
    6. Energy Storage Plant
    387 [Reserved].
    387.1 Land and land rights.
    387.2 Structures and improvements.
    387.3 Energy storage equipment.
    387.4 [Reserved].
    387.5 Collector system.
    387.6 Generator step-up transformers (GSU).
    387.7 Inverters.
    387.8 Computer hardware.
    387.9 Computer software.
    387.10 Communication equipment.
    387.11 Miscellaneous energy storage equipment.
    387.12 Asset retirement costs for energy storage.
    7. General Plant
* * * * *
    397 [Reserved].
    397.1 Computer hardware.
    397.2 Computer software.
    397.3 Communication equipment.
* * * * *

0
7. In the section ``Balance Sheet Accounts,'' under ``Electric Plant 
Accounts'':
0
i. Add Accounts 315.1, 315.2, 315.3, 324.1, 324.2, 324.3, 334.1, 334.2, 
334.3, 338.1 through 338.13, 338.20 through 338.34, 339.1 through 
339.13, and 345.1 through 345.3;
0
ii. Accounts 348 and 351 are removed and reserved;
0
iii. Accounts 351.1, 351.2, and 351.3 are added;
0
iv. Account 363 is removed and reserved;
0
v. Accounts 363.1, 363.2, 363.3, 387, and 387.1 through 387.12 are 
added;
0
vi. Account 397 is removed and reserved; and
0
vii. Accounts 397.1, 397.2, and 397.3 are added;
    The revisions and additions read as follows:

Electric Plant Accounts

* * * * *

315.1  Computer hardware.

    This account shall include the cost of computer hardware and 
miscellaneous information technology equipment.
Items
    1. Personal computers.
    2. Servers.
    3. Workstations.
    4. Energy Management System (EMS) hardware.
    5. Supervisory Control and Data Acquisition (SCADA) system 
hardware.
    6. Peripheral equipment.
    7. Networking components.

315.2  Computer software.

    This account shall include the cost of off-the-shelf and in-house 
developed software.

[[Page 69318]]

Items
    1. Software licenses.
    2. User interface software.
    3. Modeling software.
    4. Database software.
    5. Tracking and monitoring software.
    6. Energy Management System (EMS) software.
    7. Supervisory Control and Data Acquisition (SCADA) system 
software.
    8. Evaluation and assessment system software.
    9. Operating, planning and transaction scheduling software.
    10. Reliability applications.
    11. Market application software.

315.3  Communication equipment.

    This account shall include the cost of communication equipment 
owned and used to acquire or share data and information.
Items
    1. Fiber optic cable.
    2. Remote terminal units.
    3. Microwave towers.
    4. Global Positioning System (GPS) equipment.
    5. Servers.
    6. Workstations.
    7. Telephones.
* * * * *

324.1  Computer hardware.

    This account shall include the cost of computer hardware and 
miscellaneous information technology equipment.
Items
    1. Personal computers.
    2. Servers.
    3. Workstations.
    4. Energy Management System (EMS) hardware.
    5. Supervisory Control and Data Acquisition (SCADA) system 
hardware.
    6. Peripheral equipment.
    7. Networking components.

324.2  Computer software.

    This account shall include the cost of off-the-shelf and in-house 
developed software.
Items
    1. Software licenses.
    2. User interface software.
    3. Modeling software.
    4. Database software.
    5. Tracking and monitoring software.
    6. Energy Management System (EMS) software.
    7. Supervisory Control and Data Acquisition (SCADA) system 
software.
    8. Evaluation and assessment system software.
    9. Operating, planning and transaction scheduling software.
    10. Reliability applications.
    11. Market application software.

324.3  Communication equipment.

    This account shall include the cost of communication equipment 
owned and used to acquire or share data and information.
Items
    1. Fiber optic cable.
    2. Remote terminal units.
    3. Microwave towers.
    4. Global Positioning System (GPS) equipment.
    5. Servers.
    6. Workstations.
    7. Telephones.
* * * * *

334.1  Computer hardware.

    This account shall include the cost of computer hardware and 
miscellaneous information technology equipment.
Items
    1. Personal computers.
    2. Servers.
    3. Workstations.
    4. Energy Management System (EMS) hardware.
    5. Supervisory Control and Data Acquisition (SCADA) system 
hardware.
    6. Peripheral equipment.
    7. Networking components.

334.2  Computer software.

    This account shall include the cost of off-the-shelf and in-house 
developed software.
Items
    1. Software licenses.
    2. User interface software.
    3. Modeling software.
    4. Database software.
    5. Tracking and monitoring software.
    6. Energy Management System (EMS) software.
    7. Supervisory Control and Data Acquisition (SCADA) system 
software.
    8. Evaluation and assessment system software.
    9. Operating, planning and transaction scheduling software.
    10. Reliability applications.
    11. Market application software.

334.3  Communication equipment.

    This account shall include the cost of communication equipment 
owned and used to acquire or share data and information.
Items
    1. Fiber optic cable.
    2. Remote terminal units.
    3. Microwave towers.
    4. Global Positioning System (GPS) equipment.
    5. Servers.
    6. Workstations.
    7. Telephones.
* * * * *

338.1  Land and land rights.

    This account shall include the cost of land and land rights used in 
connection with solar power generation. (See electric plant instruction 
7.)

338.2  Structures and improvements.

    This account shall include the cost in place of structures and 
improvements used in connection with solar power generation. (See 
electric plant instruction 8.)

338.3  [Reserved].

338.4  Solar panels.

    This account shall include the installed cost of the racks, solar 
panels, solar tracking system, and other equipment to be used primarily 
for generating Direct Current (DC) electricity.

338.5  Collector system.

    This account shall include all cost of cabling, junction boxes, 
connection cabinets, and all facilities and devices (such as capacitors 
and reactors) that are used to transport and consolidate the power fed 
from individual solar panels up to, but not including, the substation 
prior to interconnection to the grid. This account shall exclude the 
cost of transformers and other equipment used for the express purpose 
of interconnecting to transmission or distribution lines.
Items
    1. Anchors, head arm, and other guys, including guy guards, guy 
clamps, strain insulators, pole plates, etc.
    2. Armored conductors, buried, submarine, including insulators, 
insulating materials, splices in terminal chamber, potheads, etc.
    3. Brackets.
    4. Circuit breakers.
    5. Conductors, including insulated and bare wires and cables.
    6. Conduit, concrete, brick and tile, including iron pipe, fiber 
pipe, Murray duct, and standpipe on pole or tower.
    7. Crossarms and braces.
    8. Excavation and backfill, including shoring, bracing, bridging, 
and disposal of excess excavated material.
    9. Extension arms.
    10. Fireproofing, in connection with any items listed herein.
    11. Foundations and settings specially constructed for and not 
expected to outlast the apparatus for which constructed.
    12. Ground wires, clamps, etc.

[[Page 69319]]

    13. Guards.
    14. Hollow-core oil-filled cable, including straight or stop 
joints, pressure tanks, auxiliary air tanks, feeding tanks, terminals, 
potheads and connections, etc.
    15. Insulators, including pin, suspension, and other types, and tie 
wire or clamps.
    16. Lightning arresters.
    17. Paving, pavement disturbed, including cutting and replacing 
pavement, pavement base, and sidewalks.
    18. Permits for construction.
    19. Pole steps and ladders.
    20. Poles, wood, steel, concrete, or other material.
    21. Racks complete with insulators.
    22. Railings.
    23. Railroad and highway crossing guards.
    24. Reinforcing and stubbing.
    25. Removal and relocation of subsurface obstructions.
    26. Settings.
    27. Sewer connections, including drains, traps, tide valves, check 
valves, etc.
    28. Shaving, painting, gaining, roofing, stenciling, and tagging.
    29. Splices.
    30. Sumps, including pumps.
    31. Switches.
    32. Towers.
    33. Tree trimming, initial cost including the cost of permits 
therefor.
    34. Ventilating equipment.
    35. Other line devices.

338.6  Generator step-up transformers (GSU).

    This account shall include only the cost of the GSU transformers 
directly connected to the generator terminal tips and other equipment 
used for conveying the power to the GSU for the purpose of initially 
changing the voltage or frequency of electric energy for the purpose of 
moving the power. It shall exclude the cost of additional transformers 
and other equipment once the power has been initially stepped up from a 
generator voltage to a higher voltage.
    Note: Do not include in this account transformers and other 
equipment used for changing the voltage or frequency of electricity for 
the purposes of transmission or distribution.

338.7  Inverters.

    This account shall include the installed cost of inverters for the 
purpose of converting electricity from direct current (DC) to 
alternating current (AC).

338.8  Other accessory electrical equipment.

    This account shall include the installed cost of other conversion 
or auxiliary generating apparatus and equipment used primarily in 
connection with the control and switching of electric energy produced 
by solar panels, including weather monitoring equipment, and protection 
of electric circuits and equipment, as used to support the generator in 
the action of generating power (excluding SCADA systems) not 
specifically chargeable to any other account. This account shall 
exclude Collector System costs, account 338.5, Collector System; GSU 
costs, account 338.6, Generator Step-up Transformers (GSU); and 
Inverter costs, account 338.7, Inverters.
Items
    1. Auxiliary generators, including boards, compartments, switching 
equipment, control equipment, and connections to auxiliary power bus.
    2. Rheostats, backup storage batteries and charging equipment, 
circuit breakers, panels and accessories, knife switches and 
accessories, surge arresters, instrument shunts, conductors and 
conduit, special supports for conduit, special housings, etc.
    3. Generator main connections, including oil circuit breakers and 
accessories, disconnecting switches and accessories, operating 
mechanisms and interlocks, current transformers, potential 
transformers, protective relays, isolated panels and equipment, 
conductors and conduit, special supports for generator main leads, 
grounding switch, special housing, etc.
    4. Station control system, including station switchboards with 
panel wiring, panels with instruments and control equipment only, 
panels with switching equipment mounted or mechanically connected, 
trunktype boards complete, cubicles, generator signal stands, 
temperature-recording devices, atmospheric reading devices, frequency 
control equipment, master clocks, watt-hour meter, station totalizing 
wattmeter, backup storage batteries, panels and charging sets, 
instrument transformers for supervisory metering, conductors and 
conduit, special supports for conduit, switchboards, emergency backup 
batteries, special housing for batteries, etc.
    5. Station buses, including main, auxiliary transfer, synchronizing 
and fault ground buses, including oil circuit breakers and accessories, 
disconnecting switches and accessories, operating mechanisms and 
interlocks, reactors and accessories, voltage regulators and 
accessories, compensators, resistors, current transformers, potential 
transformers, protective relays, backup storage batteries and charging 
equipment, isolated panels and equipment, conductors and conduit, 
special supports, special housings, concrete pads, general station 
ground system, special fire-extinguishing system, and test equipment.

    Note A: Do not include in this account transformers and other 
equipment used for changing the voltage or frequency of electric 
energy for the purpose of transmission or distribution.

    Note B: When any item of equipment listed herein is used wholly 
to furnish power to equipment included in another account, its cost 
shall be included in such other account.

338.9  Computer hardware.

    This account shall include the cost of computer hardware and 
miscellaneous information technology equipment.
Items
    1. Personal computers.
    2. Servers.
    3. Workstations.
    4. Energy Management System (EMS) hardware.
    5. Supervisory Control and Data Acquisition (SCADA) system 
hardware.
    6. Peripheral equipment.
    7. Networking components.

338.10  Computer software.

    This account shall include the cost of off-the-shelf and in-house 
developed software.
Items
    1. Software licenses.
    2. User interface software.
    3. Modeling software.
    4. Database software.
    5. Tracking and monitoring software.
    6. Energy Management System (EMS) software.
    7. Supervisory Control and Data Acquisition (SCADA) system 
software.
    8. Evaluation and assessment system software.
    9. Operating, planning and transaction scheduling software.
    10. Reliability applications.
    11. Market application software.

338.11  Communication equipment.

    This account shall include the cost of communication equipment 
owned and used to acquire or share data and information.
Items
    1. Fiber optic cable.
    2. Remote terminal units.
    3. Microwave towers.
    4. Global Positioning System (GPS) equipment.

[[Page 69320]]

    5. Servers.
    6. Workstations.
    7. Telephones.

338.12  Miscellaneous power plant equipment.

    This account shall include the installed cost of miscellaneous 
equipment in and about the solar plant devoted to general station use, 
and which is not properly includible in any of the foregoing solar 
power production accounts.
Items
    1. Compressed air and vacuum cleaning systems, including tanks, 
compressors, exhausters, air filters, piping, etc.
    2. Cranes and hoisting equipment, including cranes, cars, crane 
rails, monorails, hoists, etc., with electric and mechanical 
connections.
    3. Fire-extinguishing equipment for general station use.
    4. Foundations and settings, specially constructed for and not 
expected to outlast the apparatus for which provided.
    5. Miscellaneous equipment, including atmospheric and weather 
indicating devices, intrasite communication equipment, laboratory 
equipment, signal systems, callophones, emergency whistles and sirens, 
fire alarms, and other similar equipment.
    6. Miscellaneous belts, pulleys, countershafts, etc.
    7. Refrigerating system including compressors, pumps, cooling 
coils, etc.
    8. Station maintenance equipment, including lathes, shapers, 
planers, drill presses, hydraulic presses, grinders, etc., with motors, 
shafting, hangers, pulleys, etc.
    9. Ventilating equipment, including items wholly identified with 
apparatus listed herein.

    Note: When any item of equipment, listed herein is used wholly 
in connection with equipment included in another account, its cost 
shall be included in such other account.

338.13  Asset retirement costs for solar production.

    This account shall include asset retirement costs on plant included 
in solar production function.

338.20  Land and land rights.

    This account shall include the cost of land and land rights used in 
connection with wind power generation. (See electric plant instruction 
7.)

338.21  Structures and improvements.

    This account shall include the cost in place of structures and 
improvements used in connection with wind power generation. (See 
electric plant instruction 8.)

338.22  [Reserved]

338.23  Wind turbines.

    This account shall include the cost installed of the mechanical 
turbine parts and generator equipment, including nacelle, gearbox, 
etc., to be used primarily for generating electricity.

338.24  Wind towers and fixtures.

    This account shall include the cost installed of towers and 
appurtenant fixtures used for supporting wind power production. 
Foundations shall be included in account 338.21 Structures and 
Improvements.

338.25  [Reserved]

338.26  Collector system.

    This account shall include all cost of cabling, junction boxes, 
connection cabinets, and all facilities and devices (such as capacitors 
and reactors) that are used to transport and consolidate the power fed 
from individual wind turbines up to, but not including, the substation 
prior to interconnection to the grid. This account shall exclude the 
cost of transformers and other equipment used for the express purpose 
of interconnecting to transmission or distribution lines.
Items
    1. Anchors, head arm, and other guys, including guy guards, guy 
clamps, strain insulators, pole plates, etc.
    2. Armored conductors, buried, submarine, including insulators, 
insulating materials, splices in terminal chamber, potheads, etc.
    3. Brackets.
    4. Circuit breakers.
    5. Conductors, including insulated and bare wires and cables.
    6. Conduit, concrete, brick and tile, including iron pipe, fiber 
pipe, Murray duct, and standpipe on pole or tower.
    7. Crossarms and braces.
    8. Excavation and backfill, including shoring, bracing, bridging, 
and disposal of excess excavated material.
    9. Extension arms.
    10. Fireproofing, in connection with any items listed herein.
    11. Foundations and settings specially constructed for and not 
expected to outlast the apparatus for which constructed.
    12. Ground wires, clamps, etc.
    13. Guards.
    14. Hollow-core oil-filled cable, including straight or stop 
joints, pressure tanks, auxiliary air tanks, feeding tanks, terminals, 
potheads and connections, etc.
    15. Insulators, including pin, suspension, and other types, and tie 
wire or clamps.
    16. Lightning arresters.
    17. Paving, pavement disturbed, including cutting and replacing 
pavement, pavement base, and sidewalks.
    18. Permits for construction.
    19. Pole steps and ladders.
    20. Poles, wood, steel, concrete, or other material.
    21. Racks complete with insulators.
    22. Railings.
    23. Railroad and highway crossing guards.
    24. Reinforcing and stubbing.
    25. Removal and relocation of subsurface obstructions.
    26. Settings.
    27. Sewer connections, including drains, traps, tide valves, check 
valves, etc.
    28. Shaving, painting, gaining, roofing, stenciling, and tagging.
    29. Splices.
    30. Sumps, including pumps.
    31. Switches.
    32. Towers.
    33. Tree trimming, initial cost including the cost of permits 
therefor.
    34. Ventilating equipment.
    35. Other line devices.

338.27  Generator step-up transformers (GSU).

    This account shall include only the cost of the GSU transformers 
and other equipment used for conveying the power to the pad-mount GSU 
for the purpose of initially changing the voltage or frequency of 
electric energy for the purpose of moving the power. It shall exclude 
the cost of additional transformers and other equipment once the power 
has been initially stepped up from a generator voltage to a higher 
voltage.
    Note: Do not include in this account transformers and other 
equipment used for changing the voltage or frequency of electricity for 
the purposes of transmission or distribution.

338.28  Inverters.

    This account shall include the installed cost of inverters for the 
purpose of converting electricity from direct current (DC) to 
alternating current (AC).

338.29  Other accessory electrical equipment.

    This account shall include the installed cost of other conversion 
or auxiliary generating apparatus and equipment used primarily in 
connection with the control and switching of electric energy produced 
by wind

[[Page 69321]]

turbines, including weather monitoring equipment, and protection of 
electric circuits and equipment, as used to support the generator in 
the action of generating power (excluding SCADA systems) not 
specifically chargeable to any other account. This account shall 
exclude Collector System costs, account 338.26, Collector System; GSU 
costs, account 338.27, Generator Step-up Transformers (GSU); and 
Inverter costs, account 338.28, Inverters.
Items
    1. Auxiliary generators, including boards, compartments, switching 
equipment, control equipment, and connections to auxiliary power bus.
    2. Rheostats, backup storage batteries and charging equipment, 
circuit breakers, panels and accessories, knife switches and 
accessories, surge arresters, instrument shunts, conductors and 
conduit, special supports for conduit, special housings, etc.
    3. Generator main connections, including oil circuit breakers and 
accessories, disconnecting switches and accessories, operating 
mechanisms and interlocks, current transformers, potential 
transformers, protective relays, isolated panels and equipment, 
conductors and conduit, special supports for generator main leads, 
grounding switch, special housing, etc.
    4. Station control system, including station switchboards with 
panel wiring, panels with instruments and control equipment only, 
panels with switching equipment mounted or mechanically connected, 
trunktype boards complete, cubicles, station supervisory control 
boards, generator signal stands, temperature-recording devices, 
atmospheric reading devices, frequency control equipment, master 
clocks, watt-hour meter, station totalizing wattmeter, backup storage 
batteries, panels and charging sets, instrument transformers for 
supervisory metering, conductors and conduit, special supports for 
conduit, switchboards, emergency backup batteries, special housing for 
batteries, etc.
    5. Station buses, including main, auxiliary transfer, synchronizing 
and fault ground buses, including oil circuit breakers and accessories, 
disconnecting switches and accessories, operating mechanisms and 
interlocks, reactors and accessories, voltage regulators and 
accessories, compensators, resistors, current transformers, potential 
transformers, protective relays, backup storage batteries and charging 
equipment, isolated panels and equipment, conductors and conduit, 
special supports, special housings, concrete pads, general station 
ground system, special fire-extinguishing system, and test equipment.

    Note A: Do not include in this account transformers and other 
equipment used for changing the voltage or frequency of electric 
energy for the purpose of transmission or distribution.

    Note B: When any item of equipment listed herein is used wholly 
to furnish power to equipment included in another account, its cost 
shall be included in such other account.

338.30  Computer hardware.

    This account shall include the cost of computer hardware and 
miscellaneous information technology equipment.
Items
    1. Personal computers.
    2. Servers.
    3. Workstations.
    4. Energy Management System (EMS) hardware.
    5. Supervisory Control and Data Acquisition (SCADA) system 
hardware.
    6. Peripheral equipment.
    7. Networking components.

338.31  Computer software.

    This account shall include the cost of off-the-shelf and in-house 
developed software.
Items
    1. Software licenses.
    2. User interface software.
    3. Modeling software.
    4. Database software.
    5. Tracking and monitoring software.
    6. Energy Management System (EMS) software.
    7. Supervisory Control and Data Acquisition (SCADA) system 
software.
    8. Evaluation and assessment system software.
    9. Operating, planning and transaction scheduling software.
    10. Reliability applications.
    11. Market application software.

338.32  Communication equipment.

    This account shall include the cost of communication equipment 
owned and used to acquire or share data and information.
Items
    1. Fiber optic cable.
    2. Remote terminal units.
    3. Microwave towers.
    4. Global Positioning System (GPS) equipment.
    5. Servers.
    6. Workstations.
    7. Telephones.

338.33  Miscellaneous power plant equipment.

    This account shall include the installed cost of miscellaneous 
equipment in and about the wind plant devoted to general station use, 
and which is not properly includible in any of the foregoing wind power 
production accounts.

338.34  Asset retirement costs for wind production.

    This account shall include asset retirement costs on plant included 
in wind production function.

339.1  Land and land rights.

    This account shall include the cost of land and land rights used in 
connection with other renewable power generation. (See electric plant 
instruction 7.)

339.2  Structures and improvements.

    This account shall include the cost in place of structures and 
improvements used in connection with other renewable power generation. 
(See electric plant instruction 8.)
    Note: this includes mirrors for solar boiler systems.

339.3  Fuel holders.

    This account shall include the cost installed of renewable fuel 
handling and storage equipment used between the point of fuel delivery 
to the station and the intake through which fuel is either directly 
drawn to the engine, or into a boiler system, inclusive.
Items
    1. Blower and fans.
    2. Boilers and pumps.
    3. Economizers.
    4. Exhauster outfits.
    5. Flues and piping.
    6. Pipe system.
    7. Producers.
    8. Regenerators.
    9. Scrubbers.
    10. Steam injectors.
    11. Tanks for storage of electrolytes, hydrogen, renewable natural 
gas, algae, etc.
    12. Vaporizers.

339.4  Boilers.

    This account shall include the cost installed of furnaces, boilers, 
steam and feed water piping, boiler apparatus and accessories used in 
the production of steam or other vapor, to be used primarily for 
generating electricity. This account includes solar boiler systems.
Items
    1. Boiler feed system, including feed water heaters, evaporator 
condensers, heater drain pumps, heater drainers, deaerators, and vent 
condensers, boiler feed pumps, surge tanks, feed water regulators, feed 
water measuring equipment, and all associated drives.
    2. Boiler plant cranes and hoists and associated drives.

[[Page 69322]]

    3. Boilers and equipment, including boilers and baffles, 
economizers, superheaters, foundations and settings, water walls, 
arches, grates, insulation, blow-down system, drying out of new 
boilers, also associated motors or other power equipment.
    4. Draft equipment, including air preheaters and accessories, 
induced and forced draft fans, air ducts, combustion control 
mechanisms, and associated motors or other power equipment.
    5. Gas-burning equipment, including holders, burner equipment and 
piping, control equipment, etc.
    6. Instruments and devices, including all measuring, indicating, 
and recording equipment for boiler plant service together with 
mountings and supports.
    7. Lighting systems.
    8. Stacks, including foundations and supports, stack steel and 
ladders, stack concrete, stack lining, stack painting (first), when set 
on separate foundations, independent of substructure or superstructure 
of building.
    9. Station piping, including pipe, valves, fittings, separators, 
traps, desuperheaters, hangers, excavation, covering, etc., for station 
piping system, including all steam, condensate, boiler feed and water 
supply piping, etc.
    10. Ventilating equipment.
    11. Water purification equipment, including softeners and 
accessories, evaporators and accessories, heat exchangers, filters, 
tanks for filtered or softened water, pumps, motors, etc.
    12. Water-supply systems, including pumps, motors, strainers, raw-
water storage tanks, boiler wash pumps, intake and discharge pipes and 
tunnels not a part of a building.

339.5  [Reserved]

339.6  Generators.

    This account shall include the cost installed of other renewable 
generators of all types apart from wind and solar.
Items
    1. Cranes, hoists, etc., including items wholly identified with 
such apparatus.
    2. Fire-extinguishing equipment.
    3. Foundations and settings, specially constructed for and not 
expected to outlast the apparatus for which provided.
    4. Generator cooling system, including air cooling and washing 
apparatus, air fans and accessories, air ducts, etc.
    5. Generators--main, a.c. or d.c., including field rheostats and 
connections for self-excited units and excitation system when 
identified with the generating unit.
    6. Lighting systems.
    7. Lubricating system, including tanks, filters, strainers, pumps, 
piping, coolers, etc.
    8. Mechanical meters, and recording instruments.
    9. Platforms, railings, steps, gratings, etc., appurtenant to 
apparatus listed herein.
    10. Cooling system, including towers, pumps, tank, and piping.
    11. Piping--main exhaust, including connections between generator 
and condenser and between condenser and hotwell.
    12. Piping--main steam, including connections from main throttle 
valve to turbine inlet.
    13. Circulating pumps, including connections between condensers and 
intake and discharge tunnels.
    14. Tunnels, intake and discharge, for condenser system, when not a 
part of structure, water screens, etc.
    15. Water screens, motors, etc.
    16. Moisture separator for turbine steam.
    17. Turbine lubricating oil (initial charge).

339.7  [Reserved]

339.8  Other accessory electrical equipment.

    This account shall include the installed cost of other conversion 
or auxiliary generating apparatus and equipment used primarily in 
connection with the control and switching of electric energy produced 
by other renewable, including weather monitoring equipment, and 
protection of electric circuits and equipment as used to support the 
generator in the action of generating power (excluding SCADA systems) 
not specifically chargeable to any other account.
Items
    1. Auxiliary generators, including boards, compartments, switching 
equipment, control equipment, and connections to auxiliary power bus.
    2. Rheostats, backup storage batteries and charging equipment, 
circuit breakers, panels and accessories, knife switches and 
accessories, surge arresters, instrument shunts, conductors and 
conduit, special supports for conduit, special housings, etc.
    3. Generator main connections, including oil circuit breakers and 
accessories, disconnecting switches and accessories, operating 
mechanisms and interlocks, current transformers, potential 
transformers, protective relays, isolated panels and equipment, 
conductors and conduit, special supports for generator main leads, 
grounding switch, special housing, etc.
    4. Station control system, including station switchboards with 
panel wiring, panels with instruments and control equipment only, 
panels with switching equipment mounted or mechanically connected, 
trunktype boards complete, cubicles, station supervisory control 
boards, generator signal stands, temperature-recording devices, 
atmospheric reading devices, frequency control equipment, master 
clocks, watt-hour meter, station totalizing wattmeter, backup storage 
batteries, panels and charging sets, instrument transformers for 
supervisory metering, conductors and conduit, special supports for 
conduit, switchboards, emergency backup batteries, special housing for 
batteries, etc.
    5. Station buses, including main, auxiliary transfer, synchronizing 
and fault ground buses, including oil circuit breakers and accessories, 
disconnecting switches and accessories, operating mechanisms and 
interlocks, reactors and accessories, voltage regulators and 
accessories, compensators, resistors, current transformers, potential 
transformers, protective relays, backup storage batteries and charging 
equipment, isolated panels and equipment, conductors and conduit, 
special supports, special housings, concrete pads, general station 
ground system, special fire-extinguishing system, and test equipment.

    Note A: Do not include in this account transformers and other 
equipment used for changing the voltage or frequency of electric 
energy for the purpose of transmission or distribution.

    Note B: When any item of equipment listed herein is used wholly 
to furnish power to equipment included in another account, its cost 
shall be included in such other account.

339.9  Computer hardware.

    This account shall include the cost of computer hardware and 
miscellaneous information technology equipment.
Items
    1. Personal computers.
    2. Servers.
    3. Workstations.
    4. Energy Management System (EMS) hardware.
    5. Supervisory Control and Data Acquisition (SCADA) system 
hardware.
    6. Peripheral equipment.
    7. Networking components.

339.10  Computer software.

    This account shall include the cost of off-the-shelf and in-house 
developed software.
Items
    1. Software licenses.

[[Page 69323]]

    2. User interface software.
    3. Modeling software.
    4. Database software.
    5. Tracking and monitoring software.
    6. Energy Management System (EMS) software.
    7. Supervisory Control and Data Acquisition (SCADA) system 
software.
    8. Evaluation and assessment system software.
    9. Operating, planning and transaction scheduling software.
    10. Reliability applications.
    11. Market application software.

339.11  Communication equipment.

    This account shall include the cost of communication equipment 
owned and used to acquire or share data and information.
Items
    1. Fiber optic cable.
    2. Remote terminal units.
    3. Microwave towers.
    4. Global Positioning System (GPS) equipment.
    5. Servers.
    6. Workstations.
    7. Telephones.

339.12  Miscellaneous power plant equipment.

    This account shall include the installed cost of miscellaneous 
equipment in and about the other renewable plant devoted to general 
station use, and which is not properly includible in any of the 
foregoing other renewable power production accounts.

339.13  Asset retirement costs for other renewable production.

    This account shall include asset retirement costs on plant included 
in other renewable production function.
* * * * *

345.1  Computer hardware.

    This account shall include the cost of computer hardware and 
miscellaneous information technology equipment.
Items
    1. Personal computers.
    2. Servers.
    3. Workstations.
    4. Energy Management System (EMS) hardware.
    5. Supervisory Control and Data Acquisition (SCADA) system 
hardware.
    6. Peripheral equipment.
    7. Networking components.

345.2  Computer software.

    This account shall include the cost of off-the-shelf and in-house 
developed software.
Items
    1. Software licenses.
    2. User interface software.
    3. Modeling software.
    4. Database software.
    5. Tracking and monitoring software.
    6. Energy Management System (EMS) software.
    7. Supervisory Control and Data Acquisition (SCADA) system 
software.
    8. Evaluation and assessment system software.
    9. Operating, planning and transaction scheduling software.
    10. Reliability applications.
    11. Market application software.

345.3  Communication equipment.

    This account shall include the cost of communication equipment 
owned and used to acquire or share data and information.
Items
    1. Fiber optic cable.
    2. Remote terminal units.
    3. Microwave towers.
    4. Global Positioning System (GPS) equipment.
    5. Servers.
    6. Workstations.
    7. Telephones.
* * * * *

348  [Reserved]

* * * * *

351  [Reserved]

351.1  Computer hardware.

    This account shall include the cost of computer hardware and 
miscellaneous information technology equipment.
Items
    1. Personal computers.
    2. Servers.
    3. Workstations.
    4. Energy Management System (EMS) hardware.
    5. Supervisory Control and Data Acquisition (SCADA) system 
hardware.
    6. Peripheral equipment.
    7. Networking components.

351.2  Computer software.

    This account shall include the cost of off-the-shelf and in-house 
developed software.
Items
    1. Software licenses.
    2. User interface software.
    3. Modeling software.
    4. Database software.
    5. Tracking and monitoring software.
    6. Energy Management System (EMS) software.
    7. Supervisory Control and Data Acquisition (SCADA) system 
software.
    8. Evaluation and assessment system software.
    9. Operating, planning and transaction scheduling software.
    10. Reliability applications.
    11. Market application software.

351.3  Communication equipment.

    This account shall include the cost of communication equipment 
owned and used to acquire or share data and information.
Items
    1. Fiber optic cable.
    2. Remote terminal units.
    3. Microwave towers.
    4. Global Positioning System (GPS) equipment.
    5. Servers.
    6. Workstations.
    7. Telephones.
* * * * *

363  [Reserved]

363.1  Computer hardware.

    This account shall include the cost of computer hardware and 
miscellaneous information technology equipment.
Items
    1. Personal computers.
    2. Servers.
    3. Workstations.
    4. Energy Management System (EMS) hardware.
    5. Supervisory Control and Data Acquisition (SCADA) system 
hardware.
    6. Peripheral equipment.
    7. Networking components.

363.2  Computer software.

    This account shall include the cost of off-the-shelf and in-house 
developed software.
Items
    1. Software licenses.
    2. User interface software.
    3. Modeling software.
    4. Database software.
    5. Tracking and monitoring software.
    6. Energy Management System (EMS) software.
    7. Supervisory Control and Data Acquisition (SCADA) system 
software.
    8. Evaluation and assessment system software.
    9. Operating, planning and transaction scheduling software.
    10. Reliability applications.
    11. Market application software.

363.3  Communication equipment.

    This account shall include the cost of communication equipment 
owned and used to acquire or share data and information.
Items
    1. Fiber optic cable.

[[Page 69324]]

    2. Remote terminal units.
    3. Microwave towers.
    4. Global Positioning System (GPS) equipment.
    5. Servers.
    6. Workstations.
    7. Telephones.
* * * * *

387  [Reserved]

387.1  Land and land rights.

    This account shall include the cost of land and land rights used in 
connection with energy storage plant. (See electric plant instruction 
7.)

387.2  Structures and improvements.

    This account shall include the cost in place of structures and 
improvements used in connection with energy storage plant. (See 
electric plant instruction 8.)

387.3  Energy storage equipment.

    A. This account shall include the cost installed of energy storage 
equipment used to store energy for load managing purposes.
    B. Labor costs and power purchased to energize the equipment are 
includible on the first installation only. The cost of removing, 
relocating and resetting energy storage equipment shall not be charged 
to this account but to operations and maintenance expense accounts for 
energy storage expenses, as appropriate.
Items
    1. Batteries/Chemical.
    2. Compressed Air.
    3. Flywheels.
    4. Superconducting Magnetic Storage.
    5. Thermal.

    Note: The cost of pumped storage hydroelectric plant shall be 
charged to hydraulic production plant. These are examples of items 
includible in this account. This list is not exhaustive.

387.4  [Reserved]

387.5  Collector system.

    This account shall include all cost of cabling, junction boxes, 
connection cabinets, and all facilities and devices (such as capacitors 
and reactors) that are used to transport and consolidate the power fed 
from individual storage facilities up to, but not including, the 
substation prior to interconnection to the grid. This account shall 
exclude the cost of transformers and other equipment used for the 
express purpose of interconnecting to transmission or distribution 
lines.
Items
    1. Anchors, head arm, and other guys, including guy guards, guy 
clamps, strain insulators, pole plates, etc.
    2. Armored conductors, buried, submarine, including insulators, 
insulating materials, splices in terminal chamber, potheads, etc.
    3. Brackets.
    4. Circuit breakers.
    5. Conductors, including insulated and bare wires and cables.
    6. Conduit, concrete, brick and tile, including iron pipe, fiber 
pipe, Murray duct, and standpipe on pole or tower.
    7. Crossarms and braces.
    8. Excavation and backfill, including shoring, bracing, bridging, 
and disposal of excess excavated material.
    9. Extension arms.
    10. Fireproofing, in connection with any items listed herein.
    11. Foundations and settings specially constructed for and not 
expected to outlast the apparatus for which constructed.
    12. Ground wires, clamps, etc.
    13. Guards.
    14. Hollow-core oil-filled cable, including straight or stop 
joints, pressure tanks, auxiliary air tanks, feeding tanks, terminals, 
potheads and connections, etc.
    15. Insulators, including pin, suspension, and other types, and tie 
wire or clamps.
    16. Lightning arresters.
    17. Paving, pavement disturbed, including cutting and replacing 
pavement, pavement base, and sidewalks.
    18. Permits for construction.
    19. Pole steps and ladders.
    20. Poles, wood, steel, concrete, or other material.
    21. Racks complete with insulators.
    22. Railings.
    23. Railroad and highway crossing guards.
    24. Reinforcing and stubbing.
    25. Removal and relocation of subsurface obstructions.
    26. Settings.
    27. Sewer connections, including drains, traps, tide valves, check 
valves, etc.
    28. Shaving, painting, gaining, roofing, stenciling, and tagging.
    29. Splices.
    30. Sumps, including pumps.
    31. Switches.
    32. Towers.
    33. Tree trimming, initial cost including the cost of permits 
therefor.
    34. Ventilating equipment.
    35. Other line devices.

387.6  Generator step-up transformers (GSU).

    This account shall include only the cost of the GSU transformers 
and other equipment used for conveying the power to the pad-mount GSU 
for the purpose of initially changing the voltage or frequency of 
electric energy for the purpose of moving the power. It shall exclude 
the cost of additional transformers and other equipment once the power 
has been initially stepped up from a generator voltage to a higher 
voltage.

    Note:  Do not include in this account transformers and other 
equipment used for changing the voltage or frequency of electricity 
for the purposes of transmission or distribution.

387.7  Inverters.

    This account shall include the installed cost of inverters for the 
purpose of converting electricity from direct current (DC) to 
alternating current (AC).

387.8  Computer hardware.

    This account shall include the cost of computer hardware and 
miscellaneous information technology equipment.
Items
    1. Personal computers.
    2. Servers.
    3. Workstations.
    4. Energy Management System (EMS) hardware.
    5. Supervisory Control and Data Acquisition (SCADA) system 
hardware.
    6. Peripheral equipment.
    7. Networking components.

387.9  Computer software.

    This account shall include the cost of off-the-shelf and in-house 
developed software.
Items
    1. Software licenses.
    2. User interface software.
    3. Modeling software.
    4. Database software.
    5. Tracking and monitoring software.
    6. Energy Management System (EMS) software.
    7. Supervisory Control and Data Acquisition (SCADA) system 
software.
    8. Evaluation and assessment system software.
    9. Operating, planning and transaction scheduling software.
    10. Reliability applications.
    11. Market application software.

387.10  Communication equipment.

    This account shall include the cost of communication equipment 
owned and used to acquire or share data and information.
Items
    1. Fiber optic cable.
    2. Remote terminal units.
    3. Microwave towers.

[[Page 69325]]

    4. Global Positioning System (GPS) equipment.
    5. Servers.
    6. Workstations.
    7. Telephones.

387.11  Miscellaneous energy storage equipment.

    This account shall include the installed cost of miscellaneous 
equipment in and about the energy storage equipment devoted to general 
station use, and which is not properly includible in any of the 
foregoing energy storage plant accounts.

387.12  Asset retirement costs for energy storage plant.

    This account shall include asset retirement costs on plant included 
in the energy storage plant function.
* * * * *

397   [Reserved]

397.1  Computer hardware.This account shall include the cost of 
computer hardware and miscellaneous information technology equipment.

Items
    1. Personal computers.
    2. Servers.
    3. Workstations.
    4. Energy Management System (EMS) hardware.
    5. Supervisory Control and Data Acquisition (SCADA) system 
hardware.
    6. Peripheral equipment.
    7. Networking components.

397.2  Computer software.

    This account shall include the cost of off-the-shelf and in-house 
developed software.
Items
    1. Software licenses.
    2. User interface software.
    3. Modeling software.
    4. Database software.
    5. Tracking and monitoring software.
    6. Energy Management System (EMS) software.
    7. Supervisory Control and Data Acquisition (SCADA) system 
software.
    8. Evaluation and assessment system software.
    9. Operating, planning and transaction scheduling software.
    10. Reliability applications.
    11. Market application software.

397.3  Communication equipment.

    This account shall include the cost of communication equipment 
owned and used to acquire or share data and information.
Items
    1. Fiber optic cable.
    2. Remote terminal units.
    3. Microwave towers.
    4. Global Positioning System (GPS) equipment.
    5. Servers.
    6. Workstations.
    7. Telephones.
* * * * *

0
8. Under Income Chart of Accounts, section 1, ``Utility Operating 
Income'', add accounts 411.11 and 411.12 to read as follows;

Income Chart of Accounts

    1. Utility Operating Income
* * * * *
    411.11 Gains from disposition of environmental credits.
    411.12 Losses from disposition of environmental credits.
* * * * *

0
9. Under ``Income Accounts'', add accounts 411.11 and 411.12 to read as 
follows;

Income Accounts

* * * * *

411.11  Gains from disposition of environmental credits.

    This account shall be credited with the gain on the sale, exchange, 
or other disposition of environmental credits in accordance with 
paragraph (I) of General Instruction No. 21. Income taxes relating to 
gains recorded in this account shall be recorded in account 409.1, 
Income Taxes, Utility Operating Income.

    Note: Revenues for environmental credits associated with the 
sale of energy shall be recorded in the appropriate operating 
revenue account consistent with General Instruction No. 21 (J).

411.12  Losses from disposition of environmental credits.

    This account shall be debited with the loss on the sale, exchange, 
or other disposition of environmental credits in accordance with 
paragraph (I) of General Instruction No. 21. Income taxes relating to 
losses recorded in this account shall be recorded in account 409.1, 
Income Taxes, Utility Operating Income.
* * * * *

0
10. In the list of accounts under ``Operation and Maintenance Expense 
Chart of Accounts'':
0
i. Under section 1.a, under ``Maintenance'', add accounts 513.1, 513.2, 
and 513.3;
0
ii. Under section 1.b, under ``Maintenance'', add accounts 531.1, 
531.2, and 531.3;
0
iii. Under section 1.c, under ``Maintenance'', add accounts 544.1, 
544.2, and 544.3;
0
iv. Under section 1.d, under ``Operation'', remove and reserve account 
548.1;
0
v. Under section 1.d, under ``Maintenance'', revise account 553.1, and 
add accounts 553.2, and 553.3
0
vi. Under section 1.e, add accounts 555.2, and 555.3;
0
vii. Add sections 1.f, ``solar generation'', 1.g ``wind generation'', 
and 1.h, ``other renewable generation'';
0
viii. Under section 2, under subtitle ``Operation'' remove and reserve 
account 562.1;
0
ix. Under section 2, under subtitle ``Maintenance'', revise accounts 
569.1, 569.2, and 569.3, and remove and reserve account 570.1;
0
x. Redesignate sections 4 ``Distribution Expenses'' through 8 
``Administrative and General Expenses'', as sections 5 through 9;
0
xi. Add a new section 4, ``Energy Storage Expenses'';
0
xii. Under newly redesignated section 5, ``Distribution Expenses'', 
remove and reserve account 584.1, revise account 592.2, and add 
accounts 592.3, and 592.4; and
0
xiii. Under newly redesignated section 9, ``Administrative and General 
Expenses'', add accounts 935.1, 935.2, and 935.3;
    The revisions and additions read as follows:

Operation and Maintenance Expense Chart of Accounts

    1. Power Production Expenses
    a. steam power generation
* * * * *
    Maintenance
* * * * *
    513.1 Maintenance of computer hardware (Major only).
    513.2 Maintenance of computer software (Major only).
    513.3 Maintenance of communication equipment (Major only).
* * * * *
    b. nuclear power generation
* * * * *

Maintenance

* * * * *
    531.1 Maintenance of computer hardware (Major only).
    531.2 Maintenance of computer software (Major only).
    531.3 Maintenance of communication equipment (Major only).
* * * * *
    c. hydraulic power generation
* * * * *

Maintenance

* * * * *
    544.1 Maintenance of computer hardware (Major only).
    544.2 Maintenance of computer software (Major only).

[[Page 69326]]

    544.3 Maintenance of communication equipment (Major only).
* * * * *
    d. other power generation
* * * * *
    Operation
* * * * *
    548.1 [Reserved]
* * * * *

Maintenance

* * * * *
    553.1 Maintenance of computer hardware (Major only).
    553.2 Maintenance of computer software (Major only).
    553.3 Maintenance of communication equipment (Major only).
* * * * *
    e. other power supply expenses
    555.2 Bundled environmental credits.
    555.3 Unbundled environmental credits.
* * * * *
    f. solar generation

Operation

    558.1 Operation supervision and engineering.
    558.2 Solar panel generation and other plant operating expenses 
(Major only).
    558.3 [Reserved]
    558.4 Rents.
    558.5 Operation supplies and expenses (Nonmajor only).

Maintenance

    558.6 Maintenance supervision and engineering (Major only).
    558.7 Maintenance of solar panels, structures, and equipment 
(Major only).
    558.8 Maintenance of computer hardware (Major only).
    558.9 Maintenance of computer software (Major only).
    558.10 Maintenance of communication equipment (Major only).
    558.11 Maintenance of miscellaneous solar generation plant 
(Major only).
    558.12 Maintenance of solar generation plant (Nonmajor only).
    g. wind generation

Operation

    558.13 Operation supervision and engineering.
    558.14 Wind turbine generation and other plant operating 
expenses (Major only).
    558.15 [Reserved]
    558.16 Rents.
    558.17 Operation supplies and expenses (Nonmajor only).

Maintenance

    558.18 Maintenance supervision and engineering (Major only).
    558.19 Maintenance of wind turbines, structures, and equipment 
(Major only).
    558.20 Maintenance of computer hardware (Major only).
    558.21 Maintenance of computer software (Major only).
    558.22 Maintenance of communication equipment (Major only).
    558.23 Maintenance of miscellaneous wind generation plant (Major 
only).
    558.24 Maintenance of wind generation plant (Nonmajor only).
    h. other renewable generation

Operation

    559.1 Operation supervision and engineering.
    559.2 Other miscellaneous generation and other plant operating 
expenses (Major only).
    559.3 Fuel.
    559.4 Rents.
    559.5 Operation supplies and expenses (Nonmajor only).

Maintenance

    559.6 Maintenance supervision and engineering (Major only).
    559.7 Maintenance of structures (Major only).
    559.8 [Reserved]
    559.9 Maintenance of boilers (Major only).
    559.10 Maintenance of generating and electric equipment (Major 
only).
    559.11 [Reserved]
    559.12 Maintenance of computer hardware (Major only).
    559.13 Maintenance of computer software (Major only).
    559.14 Maintenance of communication equipment (Major only).
    559.15 Maintenance of miscellaneous other renewable generation 
plant (Major only).
    559.16 Maintenance of other renewable generation plant (Nonmajor 
only).
    2. Transmission Expenses

Operation

* * * * *
    562.1 [Reserved]
* * * * *

Maintenance

* * * * *
    569.1 Maintenance of computer hardware (Major only).
    569.2 Maintenance of computer software (Major only).
    569.3 Maintenance of communication equipment (Major only).
* * * * *
    570.1 [Reserved]
* * * * *
    4. Energy Storage Expenses

Operation

    577.1 Operation supervision and engineering.
    577.2 Operation of energy storage equipment (Major only).
    577.3 Storage fuel.
    577.4 Rents.
    577.5 Operation supplies and expenses (Nonmajor only).

Maintenance

    578.1 Maintenance supervision and engineering (Major only).
    578.2 Maintenance of energy storage equipment and structures 
(Major only).
    578.3 Maintenance of computer hardware (Major only).
    578.4 Maintenance of computer software (Major only).
    578.5 Maintenance of communication equipment (Major only).
    578.6 Maintenance of miscellaneous other energy storage plant 
(Major only).
    578.7 Maintenance of other energy storage plant (Nonmajor only).
    5. Distribution Expenses

Operation

* * * * *
    584.1 [Reserved]
* * * * *

Maintenance

* * * * *
    592.2 Maintenance of computer hardware (Major only).
    592.3 Maintenance of computer software (Major only).
    592.4 Maintenance of communication equipment (Major only).
* * * * *
    9. Administrative and General Expenses
* * * * *

Maintenance

* * * * *
    935.1 Maintenance of computer hardware (Major only).
    935.2 Maintenance of computer software (Major only).
    935.3 Maintenance of communication equipment (Major only).
* * * * *

0
11. Under Operation and Maintenance Expense Accounts:
0
i. Revise account 509;
0
ii. Add accounts 513.1, 513.2, 513.3, 531.1, 531.2, 531.3, 544.1, 
544.2, and 544.3;
0
iii. Remove and reserve account 548.1;
0
iv. Revise account 553.1;
0
v. Add accounts 553.2, 553.3, 555.2, 555.3, 558.1 through 558.24, and 
559.1 through 559.16;
0
vi. Remove and reserve account 562.1;
0
vii. Revise accounts 569.1, 569.2, and 569.3;
0
viii. Remove and reserve account 570.1;
0
ix. Add accounts 577.1, 577.2 through 577.5, and 578.1 through 578.7;
0
x. Remove and reserve account 584.1; and
0
xi. Add account 592.2, 592.3, 592.4, 935.1, 935.2, and 935.3.
    The revisions and additions read as follows:

Operation and Maintenance Expense Accounts

* * * * *

509  Allowances.

    This account shall include the cost of allowances expensed 
concurrent with the monthly emissions. (See General Instruction No. 
21.)

513.1  Maintenance of computer hardware (Major only).

    The account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware serving the 
steam power generation subfunction. (See operating expense instruction 
2.)

[[Page 69327]]

513.2  Maintenance of computer software (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products serving the steam power generation subfunction. (See operating 
expense instruction 2.)

513.3  Maintenance of communication equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment serving 
the steam power generation subfunction. (See operating expense 
instruction 2.)
* * * * *

531.1  Maintenance of computer hardware (Major only).

    The account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware serving the 
nuclear power generation subfunction. (See operating expense 
instruction 2.)

531.2  Maintenance of computer software (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products serving the nuclear power generation subfunction. (See 
operating expense instruction 2.)

531.3  Maintenance of communication equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment serving 
the nuclear power generation subfunction. (See operating expense 
instruction 2.)
* * * * *

544.1  Maintenance of computer hardware (Major only).

    The account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware serving the 
hydraulic power generation subfunction. (See operating expense 
instruction 2.)

544.2  Maintenance of computer software (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products serving the hydraulic power generation subfunction. (See 
operating expense instruction 2.)

544.3  Maintenance of communication equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment serving 
the hydraulic power generation subfunction. (See operating expense 
instruction 2.)
* * * * *

548.1  [Reserved]

* * * * *

553.1  Maintenance of computer hardware (Major only).

    The account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware serving the 
other power generation subfunction. (See operating expense instruction 
2.)

553.2  Maintenance of computer software (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products serving the other power generation subfunction. (See operating 
expense instruction 2.)

553.3  Maintenance of communication equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment serving 
the other power generation subfunction. (See operating expense 
instruction 2.)
* * * * *

555.2  Bundled environmental credits.

    For environmental credits that were bundled with energy, this 
account shall include the cost of environmental credits expensed 
concurrent with the monthly usage. (See General Instruction No. 21.)

555.3  Unbundled environmental credits.

    For environmental credits that were unbundled from energy, this 
account shall include the cost of environmental credits expensed 
concurrent with the monthly usage. (See General Instruction No. 21.)
* * * * *

558.1  Operation supervision and engineering.

    A. For Major Utilities, this account shall include the cost of 
labor and expenses incurred in the general supervision and direction of 
the operation of solar power generating stations. Direct supervision of 
specific activities shall be charged to the appropriate account. (See 
operating expense instruction 1.)
    B. For Nonmajor Utilities, this account shall include the cost of 
supervision and labor in the operation of solar power generating 
stations.
Labor
    1. Supervising solar production.
    2. Operating solar panels, auxiliary apparatus and switching and 
other electric equipment.
    3. Operating switchboards, switch gear and electric control and 
protective equipment.
    4. Keeping electric plant log and records and preparing reports on 
electric plant operations.
    5. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in the electric 
plant.
    6. Cleaning electric plant equipment when not incidental to 
maintenance work.

558.2  Solar panel generation and other plant operating expenses (Major 
only).

    This account shall include the cost of labor, materials used and 
expenses incurred in operating solar generation and their auxiliary 
apparatus, switch gear and other electric equipment to the points where 
electricity leaves for conversion for transmission or distribution, or 
are not readily assignable to other solar generation operation expense 
accounts.
Labor
    1. Operating switchboards, switch gear and electric control and 
protective equipment.
    2. Operating solar generators and auxiliary apparatus and switching 
and other electric equipment.
    3. Keeping electric plant log and records and preparing reports on 
electric plant operations.
    4. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in the electric 
plant.
    5. Cleaning electric plant equipment when not incidental to 
maintenance work.
    6. General clerical work.
    7. Guarding and patrolling plant and yard.
    8. Building service.
    9. Care of grounds including snow removal, cutting grass, etc.
    10. Miscellaneous labor.
    Materials and Expenses

[[Page 69328]]

    11. Lubricants and control system oils.
    12. General operating supplies, such as tools, gaskets, packing 
waste, gauge glasses, hose, indicating lamps, record and report forms, 
etc.
    13. First-aid supplies and safety equipment.
    14. Employees' service facilities expenses.
    15. Building service supplies.
    16. Communication service.
    17. Miscellaneous office supplies and expenses, printing and 
stationery.
    18. Transportation expenses.
    19. Meals, traveling and incidental expenses.
    20. Water for fire protection or general use.
    21. Research, development, and demonstration expenses.

558.3  [Reserved]

558.4  Rents.

    This account shall include all rents of property of others used, 
occupied or operated in connection with solar power generation. (See 
operating expense instruction 3.)

558.5  Operation supplies and expenses (Nonmajor only).

    This account shall include the cost of materials used and expenses 
incurred in the operation of solar power generating stations.
Items
    1. Lubricants and control system oils.
    2. General operating supplies, such as tools, packing waste, hose, 
indicating lamps, record and report forms, etc.
    3. First-aid supplies and safety equipment.
    4. Employees' service facilities expenses.
    5. Building service supplies.
    6. Communication service.
    7. Miscellaneous office supplies and expenses, printing and 
stationery.
    8. Transportation expenses.
    9. Meals, traveling and incidental expenses.
    10. Water for fire protection or general use.

558.6  Maintenance supervision and engineering (Major only).

    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of solar 
generation facilities. Direct field supervision of specific jobs shall 
be charged to the appropriate maintenance account. (See operating 
expense instruction 1.)

558.7  Maintenance of solar panels, structures, and equipment (Major 
only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of solar structures, solar panels, 
and other solar plant equipment, the book cost of which is includible 
in account 338.2, Structures and Improvements, account 338.4, Solar 
Panels, account 338.5, Collector System, account 338.6, Generator Step-
up Transformers (GSU), account 338.7, Inverters, and account 338.8, 
Other Accessory Electrical Equipment. (See operating expense 
instruction 2.)

558.8  Maintenance of computer hardware (Major only).

    The account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware serving the 
solar generation subfunction. (See operating expense instruction 2.)

558.9  Maintenance of computer software (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products serving the solar generation subfunction. (See operating 
expense instruction 2.)

558.10  Maintenance of communication equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment serving 
the solar generation subfunction. (See operating expense instruction 
2.)

558.11  Maintenance of miscellaneous solar generation plant (Major 
only).

    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of miscellaneous solar generation 
plant, the book cost of which is includible in account 338.12, 
Miscellaneous Power Plant Equipment. (See operating expense instruction 
2.)

558.12  Maintenance of solar generation plant (Nonmajor only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of solar generation plant the book 
cost of which is includible in plant accounts 338.2 to 338.12, 
inclusive. (See operating expense instruction 2.)

558.13  Operation supervision and engineering.

    A. For Major Utilities, this account shall include the cost of 
labor and expenses incurred in the general supervision and direction of 
the operation of wind power generating stations. Direct supervision of 
specific activities shall be charged to the appropriate account. (See 
operating expense instruction 1.)
    B. For Nonmajor Utilities, this account shall include the cost of 
supervision and labor in the operation of wind power generating 
stations.
Labor
    1. Supervising wind production.
    2. Operating wind turbines, generators and auxiliary apparatus and 
switching and other electric equipment.
    3. Operating switchboards, switch gear and electric control and 
protective equipment.
    4. Keeping electric plant log and records and preparing reports on 
electric plant operations.
    5. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in the electric 
plant.
    6. Cleaning electric plant equipment when not incidental to 
maintenance work.

558.14  Wind turbine generation and other plant operating expenses 
(Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in operating wind generation and their auxiliary 
apparatus, switch gear and other electric equipment to the points where 
electricity leaves for conversion for transmission or distribution, or 
are not readily assignable to other wind generation operation expense 
accounts.
Labor
    1. Operating switchboards, switch gear and electric control and 
protective equipment.
    2. Operating wind turbines, generators and auxiliary apparatus and 
switching and other electric equipment.
    3. Keeping electric plant log and records and preparing reports on 
electric plant operations.
    4. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in the electric 
plant.
    5. Cleaning electric plant equipment when not incidental to 
maintenance work.
    6. General clerical work.
    7. Guarding and patrolling plant and site.
    8. Building service.
    9. Care of grounds including snow removal, cutting grass, etc.
    10. Miscellaneous labor.
Materials and Expenses
    11. Lubricants and control system oils.

[[Page 69329]]

    12. General operating supplies, such as tools, gaskets, packing 
waste, gauge glasses, hose, indicating lamps, record and report forms, 
etc.
    13. First-aid supplies and safety equipment.
    14. Employees' service facilities expenses.
    15. Building service supplies.
    16. Communication service.
    17. Miscellaneous office supplies and expenses, printing and 
stationery.
    18. Transportation expenses.
    19. Meals, traveling and incidental expenses.
    20. Water for fire protection or general use.
    21. Research, development, and demonstration expenses.

558.15  [Reserved]

558.16  Rents.

    This account shall include all rents of property of others used, 
occupied or operated in connection with wind power generation. (See 
operating expense instruction 3.)

558.17  Operation supplies and expenses (Nonmajor only).

    This account shall include the cost of materials used and expenses 
incurred in the operation of wind power generating stations.
Items
    1. Lubricants and control system oils.
    2. General operating supplies, such as tools, packing waste, hose, 
indicating lamps, record and report forms, etc.
    3. First-aid supplies and safety equipment.
    4. Employees' service facilities expenses.
    5. Building service supplies.
    6. Communication service.
    7. Miscellaneous office supplies and expenses, printing and 
stationery.
    8. Transportation expenses.
    9. Meals, traveling and incidental expenses.
    10. Water for fire protection or general use.

558.18  Maintenance supervision and engineering (Major only).

    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of wind 
generation facilities. Direct field supervision of specific jobs shall 
be charged to the appropriate maintenance account. (See operating 
expense instruction 1.)

558.19  Maintenance of wind turbines, structures, and equipment (Major 
only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of wind structures, the book cost 
of which is includible in account 338.21, Structures and Improvements, 
account 338.23, Wind Turbines, account 338.24, Wind Towers and 
Fixtures, account 338.26, Collector System, account 338.27, Generator 
Step-up Transformers (GSU), account 338.28, Inverters, and account 
338.29, Other Accessory Electrical Equipment. (See operating expense 
instruction 2.)

558.20  Maintenance of computer hardware (Major only).

    The account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware serving the 
wind generation subfunction. (See operating expense instruction 2.)

558.21  Maintenance of computer software (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products serving the wind generation subfunction. (See operating 
expense instruction 2.)

558.22  Maintenance of communication equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment serving 
the wind generation subfunction. (See operating expense instruction 2.)

558.23  Maintenance of miscellaneous wind generation plant (Major 
only).

    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of miscellaneous wind generation 
plant, the book cost of which is includible in account 338.33, 
Miscellaneous Power Plant Equipment. (See operating expense instruction 
2.)

558.24  Maintenance of wind generation plant (Nonmajor only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of wind generation plant the book 
cost of which is includible in plant accounts 338.21 to 338.33, 
inclusive. (See operating expense instruction 2.)

559.1  Operation supervision and engineering.

    A. For Major Utilities, this account shall include the cost of 
labor and expenses incurred in the general supervision and direction of 
the operation of other renewable power generating stations. Direct 
supervision of specific activities shall be charged to the appropriate 
account. (See operating expense instruction 1.)
    B. For Nonmajor Utilities, this account shall include the cost of 
supervision and labor in the operation of other renewable power 
generating stations.
Labor
    1. Supervising other renewable production.
    2. Operating other renewable prime movers, generators and auxiliary 
apparatus and switching and other electric equipment.
    3. Operating switchboards, switch gear and electric control and 
protective equipment.
    4. Keeping electric plant log and records and preparing reports on 
electric plant operations.
    5. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in the electric 
plant.
    6. Cleaning electric plant equipment when not incidental to 
maintenance work.

559.2  Other miscellaneous generation and other plant operating 
expenses (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in operating other renewable generation and their 
auxiliary apparatus, switch gear and other electric equipment to the 
points where electricity leaves for conversion for transmission or 
distribution, or are not readily assignable to other renewable 
generation operation expense accounts.
Labor
    1. Operating switchboards, switch gear and electric control and 
protective equipment.
    2. Operating other renewable prime movers, generators and auxiliary 
apparatus and switching and other electric equipment.
    3. Keeping electric plant log and records and preparing reports on 
electric plant operations.
    4. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in the electric 
plant.
    5. Cleaning electric plant equipment when not incidental to 
maintenance work.
    6. General clerical work.
    7. Guarding and patrolling plant and yard.
    8. Building service.
    9. Care of grounds including snow removal, cutting grass, etc.

[[Page 69330]]

    10. Miscellaneous labor.
Materials and Expenses
    11. Lubricants and control system oils.
    12. General operating supplies, such as tools, gaskets, packing 
waste, gauge glasses, hose, indicating lamps, record and report forms, 
etc.
    13. First-aid supplies and safety equipment.
    14. Employees' service facilities expenses.
    15. Building service supplies.
    16. Communication service.
    17. Miscellaneous office supplies and expenses, printing and 
stationery.
    18. Transportation expenses.
    19. Meals, traveling and incidental expenses.
    20. Water for fire protection or general use.
    21. Research, development, and demonstration expenses.

559.3  Fuel.

    This account shall include the cost delivered at the station (see 
account 151, Fuel Stock, for Major utilities, and account 154, Plant 
Materials and Operating Supplies, for Nonmajor utilities) of all fuel, 
such as electrolytes, hydrogen, renewable natural gas, algae, etc., 
used in other power generation.

559.4  Rents.

    This account shall include all rents of property of others used, 
occupied or operated in connection with other renewable power 
generation. (See operating expense instruction 3.)

559.5  Operation supplies and expenses (Nonmajor only).

    This account shall include the cost of materials used and expenses 
incurred in the operation of other renewable power generating stations.
Items
    1. Lubricants and control system oils.
    2. General operating supplies, such as tools, packing waste, hose, 
indicating lamps, record and report forms, etc.
    3. First-aid supplies and safety equipment.
    4. Employees' service facilities expenses.
    5. Building service supplies.
    6. Communication service.
    7. Miscellaneous office supplies and expenses, printing and 
stationery.
    8. Transportation expenses.
    9. Meals, traveling and incidental expenses.
    10. Water for fire protection or general use.

559.6  Maintenance supervision and engineering (Major only).

    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of other 
renewable power generation facilities. Direct field supervision of 
specific jobs shall be charged to the appropriate maintenance account. 
(See operating expense instruction 1.)

559.7  Maintenance of structures (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of other renewable structures, the 
book cost of which is includible in account 339.2, Structures and 
Improvements, and account 339.3 Fuel Holders. (See operating expense 
instruction 2.)

559.8  [Reserved]

559.9  Maintenance of boilers (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of other renewable plant, the book 
cost of which is includible in account 339.4, Boilers. (See operating 
expense instruction 2.)

559.10  Maintenance of generating and electric equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of plant, the book cost of which is 
includible in account 339.6. Generators, and account 339.8, Other 
Accessory Electrical Equipment. (See operating expense instruction 2.)

559.11  [Reserved]

559.12  Maintenance of computer hardware (Major only).

    The account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware serving the 
other renewable generation subfunction. (See operating expense 
instruction 2.)

559.13  Maintenance of computer software (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products serving the other renewable generation subfunction. (See 
operating expense instruction 2.)

559.14  Maintenance of communication equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment serving 
the other renewable generation subfunction. (See operating expense 
instruction 2.)

559.15  Maintenance of miscellaneous other renewable generation plant 
(Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of miscellaneous other renewable 
generation plant, the book cost of which is includible in account 
339.12, Miscellaneous Power Plant Equipment. (See operating expense 
instruction 2.)

559.16  Maintenance of other renewable generation plant (Nonmajor 
only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of other renewable generation 
plant the book cost of which is includible in plant accounts 339.2 to 
339.12, inclusive. (See operating expense instruction 2.)
* * * * *

562.1  [Reserved]

* * * * *

569.1  Maintenance of computer hardware (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware serving the 
transmission function. (See operating expense instruction 2.)

569.2  Maintenance of computer software. (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products serving the transmission function. (See operating expense 
instruction 2.)
Items
    1. Telephone support.
    2. Onsite support.
    3. Software updates and minor revisions.

569.3  Maintenance of communication equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment serving 
the transmission function. (See operating expense instruction 2.)
* * * * *

570.1  [Reserved]

* * * * *

[[Page 69331]]

577.1  Operation supervision and engineering.

    A. For Major Utilities, this account shall include the cost of 
labor and expenses incurred in the general supervision and direction of 
the operation of energy storage plant. Direct supervision of specific 
activities shall be charged to the appropriate account. (See operating 
expense instruction 1.)
    B. For Nonmajor Utilities, this account shall include the cost of 
supervision and labor in the operation of energy storage equipment.
Labor
    1. Supervising energy storage equipment operation.
    2. Operating energy storage equipment and auxiliary apparatus and 
switching and other electric equipment.
    3. Operating switchboards, switch gear and electric control and 
protective equipment.
    4. Keeping electric plant log and records and preparing reports on 
electric plant operations.
    5. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in the electric 
plant.
    6. Cleaning electric plant equipment when not incidental to 
maintenance work.

577.2  Operation of energy storage equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in operating energy storage plant and their auxiliary 
apparatus, switch gear and other electric equipment to the points where 
electricity leaves for conversion for transmission or distribution, or 
are not readily assignable to other energy storage operation expense 
accounts.
Labor
    1. Operating switchboards, switch gear and electric control and 
protective equipment.
    2. Operating energy storage and auxiliary apparatus and switching 
and other electric equipment.
    3. Keeping electric plant log and records and preparing reports on 
electric plant operations.
    4. Testing, checking and adjusting meters, gauges, and other 
instruments, relays, controls and other equipment in the electric 
plant.
    5. Cleaning electric plant equipment when not incidental to 
maintenance work.
    6. General clerical work.
    7. Guarding and patrolling plant and yard.
    8. Building service.
    9. Care of grounds including snow removal, cutting grass, etc.
    10. Miscellaneous labor.
Materials and Expenses
    11. Lubricants and control system oils.
    12. General operating supplies, such as tools, gaskets, packing 
waste, gauge glasses, hose, indicating lamps, record and report forms, 
etc.
    13. First-aid supplies and safety equipment.
    14. Employees' service facilities expenses.
    15. Building service supplies.
    16. Communication service.
    17. Miscellaneous office supplies and expenses, printing and 
stationery.
    18. Transportation expenses.
    19. Meals, traveling and incidental expenses.
    20. Water for fire protection or general use.
    21. Research, development, and demonstration expenses.

577.3  Storage fuel.

    This account shall include the cost delivered at the station (see 
account 151, Fuel Stock, for Major utilities, and account 154, Plant 
Materials and Operating Supplies, for Nonmajor utilities) of all fuel, 
such as electrolytes, hydrogen, renewable natural gas, algae, etc., 
used in energy storage.

577.4  Rents.

    This account shall include all rents of property of others used, 
occupied or operated in connection with energy storage. (See operating 
expense instruction 3.)

577.5  Operation supplies and expenses (Nonmajor only).

    This account shall include the cost of materials used and expenses 
incurred in the operation of energy storage equipment.
Items
    1. Lubricants and control system oils.
    2. General operating supplies, such as tools, packing waste, hose, 
indicating lamps, record and report forms, etc.
    3. First-aid supplies and safety equipment.
    4. Employees' service facilities expenses.
    5. Building service supplies.
    6. Communication service.
    7. Miscellaneous office supplies and expenses, printing and 
stationery.
    8. Transportation expenses.
    9. Meals, traveling and incidental expenses.
    10. Water for fire protection or general use.

578.1  Maintenance supervision and engineering (Major only).

    This account shall include the cost of labor and expenses incurred 
in the general supervision and direction of maintenance of energy 
storage facilities. Direct field supervision of specific jobs shall be 
charged to the appropriate maintenance account. (See operating expense 
instruction 1.)

578.2  Maintenance of energy storage equipment and structures (Major 
only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of energy storage structures, 
energy storage equipment, and other energy storage plant the book cost 
of which is includible in account 387.2, Structures and Improvements, 
account 387.3, Energy Storage Equipment, account 387.5, Collector 
System, account 387.6, Generator Step-up Transformers (GSU), and 
account 387.7, Inverters. (See operating expense instruction 2.)

578.3  Maintenance of computer hardware (Major only).

    The account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware serving the 
energy storage function. (See operating expense instruction 2.)

578.4  Maintenance of computer software (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products serving the energy storage function. (See operating expense 
instruction 2.)

578.5  Maintenance of communication equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment serving 
the energy storage function. (See operating expense instruction 2.)

578.6  Maintenance of miscellaneous other energy storage plant (Major 
only).

    This account shall include the cost of labor, materials used and 
expenses incurred in maintenance of miscellaneous energy storage plant, 
the book cost of which is includible in account 387.11, Miscellaneous 
Energy Storage Equipment. (See operating expense instruction 2.)

578.7  Maintenance of other energy storage plant (Nonmajor only).

    This account shall include the cost of labor, materials used and 
expenses

[[Page 69332]]

incurred in the maintenance of energy storage plant the book cost of 
which is includible in plant accounts 387.2 to 387.11, inclusive. (See 
operating expense instruction 2.)

584.1  [Reserved]

* * * * *

592.2  Maintenance of computer hardware (Major only).

    The account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware serving the 
distribution function.

592.3  Maintenance of computer software (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products serving the distribution function. (See operating expense 
instruction 2.)

592.4  Maintenance of communication equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment serving 
the distribution function. (See operating expense instruction 2.)
* * * * *

935.1  Maintenance of computer hardware (Major only).

    The account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of computer hardware used for 
administrative and general purposes. (See operating expense instruction 
2.)

935.2  Maintenance of computer software (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred for annual computer software license renewals, annual 
software update services and the cost of ongoing support for software 
products used for administrative and general purposes. (See operating 
expense instruction 2.)

935.3  Maintenance of communication equipment (Major only).

    This account shall include the cost of labor, materials used and 
expenses incurred in the maintenance of communication equipment used 
for administrative and general purposes. (See operating expense 
instruction 2.)

    Note: The following Appendix will not be published in the Code 
of Federal Regulations.

X. Appendix A: New and Amended Form 1/1F/3-Q (Electric)

    (The form changes were done considering a PDF format but would 
ultimately be configured for XBRL presentation. The following forms 
schedules represent an option for implementation and do not necessarily 
represent how the schedule will appear once designed, developed, and 
deployed.)

    Note: Deletions are in brackets and Additions are in italics.

    As indicated in the labels at the bottom of each schedule, the 
first schedules show changes to the pages of FERC Form No. 1 as well as 
pages that are the same in FERC Form Nos. 1-F and 3-Q (stating where 
page numbers differ), followed by schedules that have changes that only 
affect FERC Form No. 1-F, and lastly schedule changes to FERC Form No. 
60.
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[FR Doc. 2023-14994 Filed 10-4-23; 8:45 am]
BILLING CODE 6717-01-C