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Proposed Rule2022-16610

Accounting and Reporting Treatment of Certain Renewable Energy Assets

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Published

October 3, 2022

Issuing agencies

Energy DepartmentFederal Energy Regulatory Commission

Abstract

The Federal Energy Regulatory Commission is issuing a notice of proposed rulemaking proposing reforms to the Uniform System of Accounts (USofA) for public utilities and licensees to include new accounts for wind, solar, and other non-hydro renewable assets; create a new functional class for energy storage accounts; codify the accounting treatment of renewable energy credits; and create new accounts within existing functions for hardware, software, and communication equipment. We propose revisions to the relevant FERC forms to accommodate these changes. We also seek comment on whether the Chief Accountant should issue guidance on the accounting for hydrogen. The Commission invites all interested persons to submit comments on the proposed reforms and in response to specific questions.

Full Text

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[Federal Register Volume 87, Number 190 (Monday, October 3, 2022)]
[Proposed Rules]
[Pages 59870-59963]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-16610]

[[Page 59869]]

Vol. 87

Monday,

No. 190

October 3, 2022

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;
Proposed Rule

Federal Register / Vol. 87, No. 190 / Monday, October 3, 2022 /
Proposed Rules

[[Page 59870]]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 101

[Docket No. RM21-11-000]

Accounting and Reporting Treatment of Certain Renewable Energy
Assets

AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission is issuing a notice
of proposed rulemaking proposing reforms to the Uniform System of
Accounts (USofA) for public utilities and licensees to include new
accounts for wind, solar, and other non-hydro renewable assets; create
a new functional class for energy storage accounts; codify the
accounting treatment of renewable energy credits; and create new
accounts within existing functions for hardware, software, and
communication equipment. We propose revisions to the relevant FERC
forms to accommodate these changes. We also seek comment on whether the
Chief Accountant should issue guidance on the accounting for hydrogen.
The Commission invites all interested persons to submit comments on the
proposed reforms and in response to specific questions.

DATES: Comments are due November 17, 2022.

ADDRESSES: Comments, identified by docket number, may be filed in the
following ways. Electronic filing through <a href="https://www.ferc.gov">https://www.ferc.gov</a>, is
preferred.
<bullet> Electronic Filing: Documents must be filed in acceptable
native applications and print-to-PDF, but not in scanned or picture
format.
<bullet> For those unable to file electronically, comments may be
filed by U.S. Postal Service mail or by hand (including courier)
delivery.
[cir] Mail via U.S. Postal Service Only: Addressed to: Federal
Energy Regulatory Commission, Secretary of the Commission, 888 First
Street NE, Washington, DC 20426.
[cir] For delivery via any other carrier (including courier):
Deliver to: Federal Energy Regulatory Commission, 12225 Wilkins Avenue,
Rockville, MD 20852.
The Comment Procedures Section of this document contains more
detailed filing procedures.

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, <a href="/cdn-cgi/l/email-protection#6024010e09050c4e2209120b010d20060512034e070f16">[email&#160;protected]</a>.
Todd Kuzniewski (Technical Information), Office of Enforcement,
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426, (202) 502-6381, <a href="/cdn-cgi/l/email-protection#bde9d2d9d993f6c8c7d3d4d8caced6d4fddbd8cfde93dad2cb">[email&#160;protected]</a>.
Sarah Greenberg (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426, (202) 502-6230, <a href="/cdn-cgi/l/email-protection#bcefddceddd492fbced9d9d2ded9cedbfcdad9cedf92dbd3ca">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

Paragraph Nos.

I. Introduction...................................... 1
II. Background....................................... 4
A. Previous Changes to the USofA................. 4
B. Locke Lord Petition........................... 9
C. Notice of Inquiry............................. 12
D. Comments...................................... 16
1. Non-Hydro Renewables...................... 18
2. Energy Storage............................ 21
3. Renewable Energy Credits.................. 24
4. Reporting and Ratemaking.................. 26
III. Discussion...................................... 27
A. Need for Reform............................... 27
B. Proposed Revisions............................ 32
1. Non-Hydro Renewables...................... 33
2. Energy Storage............................ 44
1. Renewable Energy Credits.................. 52
4. Hardware, Software, and Communication 58
Equipment...................................
C. Reporting..................................... 62
D. Hydrogen Guidance............................. 68
IV. Information Collection Statement................. 69
V. Environmental Analysis............................ 79
VI. Regulatory Flexibility Act....................... 80
VII. Comment Procedures.............................. 82
VIII. Document Availability.......................... 85

I. Introduction

1. The Federal Energy Regulatory Commission (Commission or FERC) is
proposing reforms to modernize the Uniform System of Accounts (USofA)
\1\ to account for the rapid changes in technology and resource mix
over the last few decades. These reforms are intended to add to the
USofA functional detail needed to inform the Commission's
responsibilities under the Federal Power Act (FPA) to ensure that rates
remain just and reasonable.
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\1\ Uniform System of Accounts Prescribed for Public Utilities
and Licensees Subject to the Provisions of the Federal Power Act, 18
CFR part 101 (2021). Unless otherwise indicated, references to the
USofA in this notice of proposed rulemaking refer to the USofA for
public utilities and licensees.
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2. Specifically, we propose to: (1) create new accounts for wind,
solar, and other non-hydro renewable assets; (2) establish a new
functional class for energy storage accounts; (3) codify the accounting
treatment of renewable energy credits (REC); and (4) create new
accounts within existing functions for hardware, software, and
communication equipment. These changes would also require corresponding
changes to FERC Form Nos. 1, 1-F, 3-Q (electric), and 60.\2\ We seek
comment on these

[[Page 59871]]

proposed reforms. We also seek comment on whether the Chief Accountant
should issue guidance on the accounting for hydrogen that would apply
to both public utilities and licensees and to natural gas companies.
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\2\ Proposed edits to the FERC Form No. 60 Annual Report of
Centralized Service Companies, governed under the Public Utility
Holding Company Act (PUHCA), are the result of proposed changes to
the FERC forms for public utilities and licensees from which FERC
Form No. 60 summarily references accounts.
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3. These proposed changes would account for new technologies,
provide transparency to inform meaningful ratemaking, and provide
useful information to stakeholders. Additionally, improving the
accounting instructions so that they specifically describe the relevant
equipment may result in fewer disputes about which accounts to use for
which equipment and improve regulatory certainty. The use of these new
discrete accounts based on functional use would also enable more
reasonable estimates for plant service lives and their recorded
depreciation, which in turn would result in more meaningful rate base,
return, and cost of service measures.

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.\3\ As such, the USofA
has been modified over time to account for changing technological,
legal, and market conditions.
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\3\ 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.\4\ 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 the Commission's intention in its
accounting rules is to provide sound and uniform accounting rather than
to dictate any particular ratemaking result.\5\
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\4\ Revisions to Unif. Sys. of Accts. to Acct. for Allowances
under the Clean Air Act Amends. of 1990 & Reguly-Created Assets &
Liabilities & to Form Nos. 1, 1-F, 2 and 2-A, Order No. 552, 58 FR
17982 (Apr. 7, 1993), FERC Stats. & Regs. ] 30,967 (1993) (cross-
referenced at 62 FERC ] 61,299).
\5\ Id. at 17986.
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6. In 2013, the Commission issued Order No. 784, which revised the
USofA and related forms to address energy storage.\6\ The Commission
created: (1) new electric plant and associated operating and
maintenance (O&M) expense accounts to record the investment and O&M
costs of 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 and amended existing
schedules in those forms and FERC Form No. 3-Q (electric) to report
operational and statistical data on storage assets.\7\
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\6\ Third-Party Provision of Ancillary Servs.; Acct. & Fin.
Reporting for New Elec. Storage Tech., 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).
\7\ Id. P 123.
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7. Specifically, the Commission created electric plant accounts for
energy storage assets in the existing functional classifications:
Account 348 (Energy Storage Equipment--Production), Account 351 (Energy
Storage Equipment--Transmission), and Account 363 (Energy Storage
Equipment--Distribution).\8\ The Commission created corresponding new
accounts for O&M expenses: 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 classified as
transmission; and Account 582.1 (Operation of Energy Storage Equipment)
and Account 592.2 (Maintenance of Energy Storage Equipment) for energy
storage classified as distribution.\9\
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\8\ Id. P 141.
\9\ 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 asset
serves: where an energy storage asset performs more than one purpose or
function, the cost of the asset is split among the accounts based on
the functions performed and approved rate recovery.\10\ 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 was
unpersuaded because utilities that recover the costs of storage
operations on a cost of service basis must already maintain use and
cost allocation information on the assets.\11\ 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.\12\
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\10\ Id. P 126.
\11\ Id. P 133.
\12\ 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 are properly booked to the ``Other
Production'' Accounts 343 (Prime Movers), 344 (Generators), and 345
(Accessory Electric Equipment).\13\ Specifically, Locke Lord proposed
to book: (1) wind turbines, solar modules, combiner circuits, and
inverters to Account 343 (Prime 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
collection systems, power cables, conduit and underground duct banks,
circuit breakers, disconnect switches and accessories, grounding
conductors and grounding transformers, collection system buses, main
and/or auxiliary transfer buses, collection system control systems,
Supervisory Control and Data Acquisition (SCADA) systems, static
capacitors and reactors, and collector system substations to Account
345 (Accessory Electric Equipment).\14\
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\13\ Locke Lord LLP, 174 FERC ] 61,033, at P 1 (2021).
\14\ Id. P 6.
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10. Some commenters in that proceeding argued that the petition
booked an inappropriate amount of costs, including costs related to the
collector system and SCADA, into Account 345 (Accessory Electric
Equipment), which are included in reactive power rates pursuant to the
American Electric Power Service Corp. (AEP) Methodology.\15\ Some
commenters, including the Edison Electric Institute (EEI), suggested
that the Commission consider creating new accounts for wind, solar, and
other non-hydro renewable assets to resolve this dispute.\16\
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\15\ Id. PP 10, 13. 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.
\16\ Id. PP 8, 13, 16.
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11. The Commission denied the petition, noting that the record
reflected

[[Page 59872]]

substantial disagreement about equipment functions and
categorizations.\17\ 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.\18\ 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
methods for both synchronous and nonsynchronous resource compensation
(86 FR 67933 (Nov. 30, 2021)).
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\17\ Id. P 19.
\18\ 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 energy assets.\19\ Specifically, the Commission
sought comment on: (1) whether to create new accounts for non-hydro
renewable energy generating assets; \20\ (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
RECs; and (4) whether there are rate setting implications of these
accounting and reporting changes.
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\19\ Acct. & Rep. Treatment of Certain Renewable Energy Assets,
86 FR 7086 (Jan. 26, 2021), 174 FERC ] 61,032 (2021) (NOI).
\20\ The NOI defined non-hydro renewable 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 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 its
hydrocarbon source being consumed, due to its carbon release being
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, but does
not contain any accounts designed for solar, wind, or other non-hydro
renewable generating assets.\21\ The Commission noted that companies
record non-hydro renewable assets in the Other Production accounts of
the USofA, but that parties have disagreed which Other Production
accounts are appropriate for these assets.\22\ For example, the
Commission noted that no plant account clearly captures solar panels,
PV inverters, wind generation towers, or the computer hardware and
software required to operate wind and solar generators.\23\ Similarly,
the Commission explained that the O&M accounts do not clearly
accommodate costs to record maintenance of wind and solar facilities,
and some of the O&M accounts (such as Account 547 (Fuel)) are entirely
inapplicable to wind and solar generation.\24\
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\21\ Id. P 2.
\22\ Id. PP 2-3.
\23\ Id. PP 6-9.
\24\ Id. P 9.
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14. The Commission also explained that the USofA accounts do not
explicitly address the purchase, generation, or use of RECs.\25\ The
Commission has previously found that RECs are analogous to sulfur
dioxide emission allowances, which were addressed in Order No. 552.
Order No. 552 classified emission allowances as inventoriable items and
established new inventory and expense accounts to record the
allowances.\26\ 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.\27\
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\25\ Id. PP 4, 13.
\26\ Id. (citing Order No. 552, FERC Stats. & Regs. ] 30,967).
\27\ Id. PP 4, 13-14 (citing Ameren Ill. Co., 170 FERC ] 61,267,
at P 52 (2020)).
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15. The Commission also noted that any proposed additions and
modifications to the USofA would require corresponding changes to FERC
Form No. 1 and could have a significant and measurable impact on
rates.\28\
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\28\ Id. PP 12, 16.
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D. Comments

16. The Commission received four initial comments and three reply
comments in response to the NOI. All commenters acknowledged the shift
in generation mix towards increased wind and solar and the need for
Commission guidance on how the costs of such facilities should be
booked in the USofA. Commenters also suggested that the Commission
convene a technical conference in this docket.
17. Comments generally addressed four topics: (1) the creation of
new accounts for non-hydro renewables; (2) accounting for RECs; (3)
addressing energy storage accounts; and (4) reporting and ratemaking
impacts of the proposed changes.
1. Non-Hydro Renewables
18. EEI and Alliant Energy (Alliant) support the creation of new
accounts for non-hydro renewable resources.\29\ EEI and Alliant state
that there are fundamental differences between traditional thermal
resources and non-hydro renewable resources and that existing accounts
do not and cannot accurately reflect the costs of non-hydro renewable
assets.\30\ EEI and Alliant both argue that the need for new accounts
for non-hydro renewables is illustrated when such resources seek
compensation for the provision of reactive power, as there are often
disputes over whether collector systems (i.e., facilities physically
located between the high side of the generator step-up transformer and
the transmission sub-station) should be included in reactive power
rates.\31\ EEI and Alliant state that these types of reactive power
cases are usually set for hearing and settlement judge proceedings,
which is a lengthy and costly process that could be mitigated with
Commission guidance.\32\ EEI's comment included an initial list of
proposed accounts that could be developed for non-hydro renewable
resources.\33\ EEI specifically requests that the new accounts provide
separate sub-system accounts for each type of renewable generation
facility in order to identify the ways that these resources provide
value to the grid.\34\ EEI also acknowledges that additional accounts
may be needed as new technologies are developed, such as hydrogen,
tidal and wave energy,\35\ and synthetic or biofuels.\36\
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\29\ EEI Comments at 2-5 (filed Mar. 29, 2021); Alliant Comments
at 1-3 (filed Mar. 29, 2021).
\30\ EEI Comments at 4; Alliant Comments at 3.
\31\ EEI Comments at 14; Alliant Comments at 3-5.
\32\ EEI Comments at 14; Alliant Comments at 5.
\33\ EEI Comments at 17-23.
\34\ Id. at 4.
\35\ The US does not have any tidal or wave generation units in
operation, although there are demonstration projects being
developed, but optimization of these systems is limited to certain
coastal regions. EIA, Tidal Power, (Sept. 2021), <a href="https://www.eia.gov/energyexplained/hydropower/tidal-power.php">https://www.eia.gov/energyexplained/hydropower/tidal-power.php</a>; EIA, Wave
Power, (Sept. 2021), <a href="https://www.eia.gov/energyexplained/hydropower/wave-power.php">https://www.eia.gov/energyexplained/hydropower/wave-power.php</a>.
\36\ EEI Comments at 4-5.
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19. In contrast, the American Clean Power Association (ACP) and
Solar Energy Industries Association (SEIA) argue that the current
``Other Production'' accounts can accommodate specific wind and solar
generating equipment.\37\ ACP explains that the typical configuration
of wind and solar facilities contains a low voltage step-up transformer
converting voltage to 34.5 kV connected to collection system feeders,
which are then connected to a collection system bus located in the
facility substation, static capacitors and/or reactors that supplement
the reactive

[[Page 59873]]

power production capability, and a high voltage generator step-up
transformer that converts the voltage to the transmission level.\38\
ACP and SEIA argue, similar to the Docket No. AC20-103 petition, that
the Commission should clarify that: (1) wind turbines, wind turbine
generators, solar panels, combiner circuits, and inverters should be
booked to Account 343 (Prime Movers) (or, alternatively, Account 344
(Generators)); and (2) low-voltage step-up transformers, collection
systems, capacitors, breakers, switches and cabling, and communication
and control equipment (including SCADA) should be booked to Account 345
(Accessory Electric Equipment).\39\ ACP and SEIA contend that the above
classifications would allow renewable generators to receive the
appropriate level of reactive power compensation and relieve the wave
of reactive power litigation.\40\ However, SEIA and ACP both
specifically note that they do not oppose the creation of new accounts,
although they do not believe creating new accounts is worth the time or
investment, as they believe the existing accounts are sufficient.\41\
ACP also states that, if the Commission creates new accounts, it should
provide guidance regarding how the new accounts should be treated for
purposes of reactive power compensation.\42\
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\37\ ACP Comments at 3 (filed Mar. 29, 2021); SEIA Comments at
1-2 (filed Mar. 29, 2021).
\38\ ACP Comments at 4-6.
\39\ Id. at 7-15; SEIA Comments at 6.
\40\ ACP Comments at 2; SEIA Comments at 7-8.
\41\ ACP Comments at 7-8, 15-16; SEIA Comments at 4.
\42\ ACP Comments at 16.
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20. In reply comments, EEI rebuts the suggestion that the current
``Other Production'' accounts could be used for wind and solar
assets.\43\ In so doing, EEI contests ACP's assertion that there is a
typical configuration for wind and solar resources.\44\ For example,
EEI notes that some wind facility designs have the first step-up in the
nacelle, whereas others are designed with the first step-up transformer
at the base of the nacelle. EEI also points out that there are
differences in opinion concerning how equipment is classified.\45\ EEI
also contends that new configurations are likely to come in the future
due to the pace of change in the resource mix and technological
advancements.\46\ All of this, EEI argues, supports the need for new
accounts.\47\ EEI states that, once the Commission decides the
appropriate accounting, that will serve as the basis for ratemaking
instruction, which will help provide regulatory certainty and resolve
reactive power compensation issues.\48\
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\43\ EEI Comments at 2-3.
\44\ Id. at 3.
\45\ Id. at 4.
\46\ Id. at 3-4.
\47\ Id. at 4.
\48\ Id. at 5.
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2. Energy Storage
21. The Energy Storage Association (ESA) requests a discussion
about accounting for energy storage in a technical conference in this
docket.\49\ ESA did not discuss its preference for accounting for
storage resources.
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\49\ ESA Comments at 1-2 (filed Apr. 26, 2021).
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22. EEI also suggests that the Commission use this proceeding as an
opportunity to modify the existing energy storage accounts.\50\
Specifically, EEI recommends that the Commission replace the existing
energy storage accounts with a separate function for energy storage,
separate from production, transmission, and distribution, similar to
the General Plant account.\51\ EEI states that such an approach is
appropriate because energy storage can provide generation,
transmission, and distribution services, but it is difficult to track
frequent (sometimes daily) changes between functions within a utility's
books.\52\ EEI proposes that separate Plant Accounts could be
established within the new storage function to designate different
types of storage, such as batteries/chemical, compressed air,
flywheels, superconducting magnetic storage, and thermal.\53\ EEI
argues that this approach would assist in depreciation because separate
accounts for each energy storage modality would facilitate the analysis
of asset lives for determining depreciation rates for similar
technologies.\54\ EEI argues that this approach would also assist in
ratemaking, because the asset, depreciation, and O&M costs could be
allocated to the appropriate functions using an analysis based on the
usage of the storage asset, consistent with Order No. 784.
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\50\ EEI Comments at 6-9 (filed March 29, 2021).
\51\ Id. at 7.
\52\ Id. at 8.
\53\ Id. at 8-9.
\54\ Id. at 9.
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23. ACP contests EEI's suggestion to replace the energy storage
accounts, arguing that it is inappropriate to eliminate the existing
storage accounts for production, transmission, and distribution
functions.\55\ In particular, ACP argues that the General Plant account
is not an appropriate analogy for storage: ACP contends that storage is
not retired on a schedule because it is depreciated based on recovering
the service value over the useful life.\56\ ACP also cautions that, if
the Commission considers replacing the energy storage accounts, it
should do so in view of the movement to characterize storage as
transmission and with awareness of the potential for storage to be
initially used to address a transmission reliability need, but to do so
in larger MW than is needed to address the transmission need.\57\
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\55\ ACP Comments at 6-7.
\56\ Id. at 7.
\57\ Id. at 8.
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3. Renewable Energy Credits
24. EEI supports formalizing the accounting requirements for RECs
and similar instruments such as zero-emission credits (ZEC).\58\ EEI
cautions that the long-time existence of diverse accounting for RECs
has been incorporated into both federal and retail ratemaking, so it
will be important for the Commission to consider these varying
treatments and provide a transition period to avoid unnecessary cost,
complexity, and unintended changes in ratemaking.\59\
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\58\ EEI Comments at 9-13.
\59\ Id. at 10-11.
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25. EEI also indicates that the Commission should consider, among
other things, the following topics related to the treatment of RECs:
(1) RECs can be acquired in a number of ways, and there may not always
be explicitly identifiable costs (e.g., if RECs are created by the
operation of an utility's own generating facility or purchased as part
of a contract that includes other products); (2) RECs may be used for
more than one purpose (operational and/or nonoperational)--some
companies acquire RECs to trade, whereas others use them to comply with
clean energy regulations; and (3) there may be other instruments with
similar economic characteristics that the Commission should include in
these updates.\60\
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\60\ Id. at 11-13.
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4. Reporting and Ratemaking
26. EEI recognizes that, as the Commission noted in the NOI,
additions and modifications to the USofA will require corresponding
changes to FERC Form No. 1, and these changes could impact some rates,
particularly in the reactive power context.\61\ EEI states that changes
to FERC Form No. 1 and FERC Form No. 3-Q will be required to allow
reporting of new accounts.\62\ EEI also specifically requests that the
Commission add a new page to the forms for reporting Renewable
Generating Plants, similar to existing pages 402-409 for Generating
Plant

[[Page 59874]]

Statistics, in which companies should report solar, wind, and other
non-hydro renewable plant with 10,000 kW or greater installed capacity.
EEI specifically notes that FERC Form No. 1 pages 204-207, 219, 320-
323, 336, 352-353, 401a, 414-416, and 419-420 would need to be updated
to reflect a new separate function for energy storage assets. To
address the ratemaking impacts of new accounts, EEI suggests that the
Commission allow affected utilities to propose the necessary changes to
formula rates as part of single-issue ratemaking filings.\63\
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\61\ Id. at 5-6, 13-15.
\62\ Id. at 5-6.
\63\ Id. at 15 (citing Promoting Transmission Investment through
Pricing Reform, Order No. 679, 71 FR 43294 (July 31, 2006), 116 FERC
] 61,057, order on reh'g, Order No. 679-A, 72 FR 1152 (Jan. 10,
2007), 117 FERC ] 61,345, at P 98 (2006), order on reh'g, 119 FERC ]
61,062 (2007) (``[A]pplicants for single-issue ratemaking are only
required to address cost and rate issues associated with the new
investment and therefore are not obligated to justify the
reasonableness of unchanged rates'')).
---------------------------------------------------------------------------

III. Discussion

A. Need for Reform

27. The USofA has not been significantly modified since the
Commission issued Order No. 784 in 2013. The USofA does not address
many technological and economic developments, such as the growth in
non-hydro renewable generating facilities and RECs, among others. In
the absence of clear guidance on these topics, the industry has
disagreed on how to account for such items in the USofA.
28. As discussed in the NOI, the USofA contains discrete production
accounts for Steam, Nuclear, Hydraulic, and Other Production.\64\
However, the USofA does not contain any production accounts designed
specifically for solar, wind, or other non-hydro renewable generating
assets. Therefore, electric utilities currently record non-hydro
renewable assets in the Other Production accounts of the USofA. This
approach appears to be inadequate. As the record in Docket No. AC20-103
demonstrates, the lack of clarity on how to account for non-hydro
renewable assets has led to disputes about which equipment belongs in
which accounts. Renewable energy technologies such as wind and solar
continue to expand and develop at a rapid pace, and now make up a
significant portion of electricity production within FERC's accounting,
reporting, and ratemaking jurisdiction. We also note that the NOI
commenters all indicated that the Commission needs to address the
accounting for non-hydro renewables.\65\ This is due to non-hydro
renewables having varied and distinct characteristics from existing
electric production subfunctions within the USofA.
---------------------------------------------------------------------------

\64\ 18 CFR part 101; Acct. & Fin. Reporting for Pub. Utils.
Including RTOs, Order No. 668, 70 FR 77627 (Dec. 30, 2005), 113 FERC
] 61,276, at P 59 (2005).
\65\ See supra notes 30, 42.
---------------------------------------------------------------------------

29. Similarly, new accounts appear to be needed for energy storage.
In response to the NOI, commenters requested that the Commission
address energy storage in this proceeding.\66\ The Commission in Order
No. 784 created accounts for energy storage spread across all functions
for plant and maintenance expenses based on the understanding of the
limited use of storage technology at that time, as well as the expected
impact of storage on rates. Our existing accounting caused individual
assets and their associated accumulated depreciation to be divided
amongst several different accounts in different functions, with some
energy storage assets changing functionality frequently during a
reporting period.\67\ The recordkeeping to track these frequent
functionalization changes creates a significant accounting burden to
utilities, and an increased internal control risk for reporting errors
in our forms. This industry experience indicates a need to reform the
energy storage accounts to reduce this burden and risk for error.
---------------------------------------------------------------------------

\66\ ESA Comments at 1-2; EEI Comments at 6-9.
\67\ EEI Comments at 6-9.
---------------------------------------------------------------------------

30. In addition, there appears to be a need to formalize the
accounting treatment of the purchase, generation, or use of RECs.
Although the Commission stated in 2020 that RECs are analogous to the
sulfur dioxide emission allowances addressed in Order No. 552,\68\ not
all utilities follow this approach.\69\ As such, codifying the
treatment of RECs would promote their consistent treatment in
Commission accounting and reporting.
---------------------------------------------------------------------------

\68\ Ameren Ill. Co., 170 FERC ] 61,267 at P 52.
\69\ EEI Comments at 10.
---------------------------------------------------------------------------

31. Lastly, establishing designated computer hardware, software,
and communications equipment accounts for all functions and plant
subfunctions would help ensure greater consistency in accounting and
reporting and eliminate ambiguity.\70\ Currently, the USofA is
inconsistent with the designated reporting of these items across the
different functions, which can lead to confusion within the public
utility industry. For instance, the Regional Transmission and Market
Operation Plant function has designated plant accounts for computer
hardware, software, and communication equipment which lists includable
items like SCADA, whereas no other function or subfunction does.\71\
Correspondingly, the Transmission and Regional Market functions contain
maintenance accounts for computer hardware, software, and communication
equipment, whereas no other function or subfunction does.\72\ There is
no consistent guidance or practice concerning the proper accounting of
such costs in our existing accounts.
---------------------------------------------------------------------------

\70\ The Commission's regulations currently contain accounts for
computer hardware, software, and communication in the Regional
Transmission and Market Operation function.
\71\ 18 CFR part 101.
\72\ Id.
---------------------------------------------------------------------------

B. Proposed Revisions

32. Below, we propose several reforms to the USofA related to: (1)
non-hydro renewables; (2) energy storage; (3) RECs; and (4) hardware,
software, and communications equipment. We seek comment on each of
these proposals.
1. Non-Hydro Renewables
33. We propose three new subfunctions within the Production Plant
function: D. Solar Production, E. Wind Production, and F. Other Non-
Hydro Renewable Production. The existing ``Other Production''
subfunction would be renumbered from D. to G. The new generation
subfunction titled ``Other Non-Hydro Renewable Production'' would
capture renewable generation technologies other than solar and wind.
34. To avoid confusion with the existing ``Other Production''
generation subfunction, we seek comment on whether to retitle that
subfunction as ``Prime Mover Production'' because the current
instructions to the ``Other Production'' subfunction only describe
prime mover type generation assets.\73\ All subfunctions would contain
reserved account numbers (Accounts 338.3 for Solar, 338.22 and 338.25
for Wind, and 339.5 and 339.7 for Other Non-hydro Renewable) for future
use.
---------------------------------------------------------------------------

\73\ 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.
---------------------------------------------------------------------------

35. The new non-hydro renewable subfunctions (Solar, Wind, and
Other Non-hydro Renewable Production) would all include the following
five accounts consistent with all other production subfunctions (e.g.,
steam, nuclear and hydraulic): (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

[[Page 59875]]

Equipment); and (5) Accounts 338.13, 338.34, and 339.13 (Asset
Retirement Costs).\74\ These accounts would be similar in description
and instruction to the existing accounts of the same title in each of
the other production subfunctions.
---------------------------------------------------------------------------

\74\ The three accounts under each number represents the three
new subfunctions: Solar, Wind, and Non-hydro Renewable Production,
respectively.
---------------------------------------------------------------------------

36. Additionally, the new Solar and Wind Production subfunctions
would both include three accounts: (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). The
collector system account describes a distribution system in reverse and
includes many of the same items listed in the accounts for Poles,
Towers and Fixtures (Account 364), and Overhead Conductors and Devices
(Account 365),\75\ which are illustrative, not prescriptive. The GSU
account would be used for transformers directly connected to the
generator terminal tips and supporting equipment. The inverter account
would be used for equipment converting power from direct current to
alternating current.
---------------------------------------------------------------------------

\75\ Examples for Account 364: poles, towers, anchors, extension
arms, etc.; Account 365: circuit breakers, conductors, lightning
arrestors, etc.
---------------------------------------------------------------------------

37. Finally, all three subfunctions would have unique generating
accounts: (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. The solar panels account would be
specifically designated for panels and support equipment that change
solar energy into electricity and related supporting structures such as
racks and gears. The wind turbines account would include 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 for fuel
holders, boilers, and generators included in Other Non-hydro Renewable
Production allow for the recording of assets related to renewable
generation that uses any fuel source or method (e.g., steam or direct
burning). These accounts would allow for recording biofuels, hydrogen,
geothermal, and other types of generation in this subfunction. Many of
the items listed in these account descriptions would be the same as
those accounts listed in the Steam and Other Production
subfunctions.\76\
---------------------------------------------------------------------------

\76\ Account 342 (Fuel Holders, Producers, and Accessories);
Account 312 (Boiler Plant Equipment); Account 344 (Generators).
---------------------------------------------------------------------------

38. Similar to the new plant accounts for non-hydro renewables, we
propose new O&M expense accounts for these subfunctions, titled F.
Solar Generation, G. Wind Generation, and H. Other Non-Hydro Renewable
Generation. All three subfunctions would include the following seven
accounts that are in common with all 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)).\77\ These accounts would have similar
descriptions, items, and instructions to the existing accounts of the
same title.
---------------------------------------------------------------------------

\77\ Item 7 includes three accounts that are designated as
nonmajor only: thus, nonmajor entities would record all maintenance
activities in these accounts without further granularity as required
for major entities (Items 1-6).
---------------------------------------------------------------------------

39. The Solar and Wind Generation subfunctions would have four
maintenance accounts that the Other Non-hydro Renewable Generation
subfunction would not have: \78\ (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)). These accounts
would allow for the recording of the maintenance expense 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)) would be similar to the list of items for Account
593 (Maintenance of Overhead Lines (Major only)) in the Distribution
Expenses function.
---------------------------------------------------------------------------

\78\ Unlike wind and solar, which are distributive in design
(i.e., with a collector system spread across a comparatively wide
area), other non-hydro renewables are, as currently conceived,
unlikely to be distributive in design. Rather, non-distributive
plants would include plants that by design would be similar to
existing coal, oil, nuclear, and gas plants in that they do not have
a collector system, and in addition, their generator step up
transformers and inverters are comparatively minor integrated parts.
---------------------------------------------------------------------------

40. We also propose new operating expense accounts for the main
operating costs of the new generation 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).
41. In addition, we propose new maintenance accounts for the
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)). These
new accounts would have descriptions and instructions that are similar
to those involving maintenance of other generation equipment in the
other subfunctions. We propose to designate an account for maintenance
of electrical equipment separate from the maintenance of generation
equipment for the new Solar and Wind Generation subfunctions.
42. Finally, we propose 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.
43. Lastly, tidal and wave energy use kinetic energy from the ocean
to generate electricity, which is currently not addressed by the
USofA.\79\ We seek comment 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.
Both

[[Page 59876]]

tidal and wave energy are related to, and may reasonably be viewed, as
hydraulic production. However, we also acknowledge that tidal and wave
energy have varied configurations and components from those currently
described in the existing hydraulic production subfunction: for
example, some configurations use the energy of water itself to turn the
turbines, while other configurations use the force of the tide or waves
to create compressed air which is then forced through the turbines.
Additionally, some configurations require tethering equipment under
water, while other configurations have land-based basins and equipment.
We seek comment on whether it would be useful to record tidal and wave
energy activities within existing hydraulic production accounts, or
whether it would be more useful to consider tidal and wave energy
activities as a type of other renewable production.
---------------------------------------------------------------------------

\79\ See EEI Comments at 4-5.
---------------------------------------------------------------------------

2. Energy Storage
44. We propose to create a new function for energy storage for
accounting purposes.\80\ This proposal is consistent with traditional
accounting concepts that do not provide for recording the same physical
plant asset in more than one account and are in line with our existing
accounting instructions for plant in service capitalization, cost
recording, and transfers.\81\
---------------------------------------------------------------------------

\80\ All cost allocation issues would be resolved separately
through the ratemaking process and would not require constant
reclassification in the continuing property records and accounting
systems.
\81\ See, e.g., Kester, Accounting Theory and Practice, 283-84
(1914) (discussing the classification of plant assets as units
grouped for the same purpose, in this case applying depreciation,
with the assumption of units being indivisible); Paton, Accounting
Theory, 113-16 (1922) (discussing the idea that changes in the
status of individual assets are by definition transactions, and not
merely bookkeeping adjustments). Additionally, while generally
accepted accounting principles (GAAP) accounting does not drive
Commission accounting, it may provide useful information for our
consideration. See Financial Accounting Standards Board (FASB)
Concepts Statement No. 5, at 89 (1986) (explaining that the reasons
for changing the recorded value of assets still in use does not
contemplate moving recorded values between multiple asset accounts
within the same entity on a regular basis (changes in utility or
substance and changes in price)); Foster & Rodney, Public Utility
Accounting, Chs. 10-11, 219 (1951) (showing in Figure 10-1 the
conceptual complexity of adjusting plant account records and
continuing property records). These accounting concepts are
indicated in the USofA in General Instruction 12. Records for Each
Plant (Major Utility), and Electric Plant Instructions 2. Electric
Plant to Be Recorded at Cost, and 12. Transfers of Property. These
instructions all discuss the maintaining of records for plant in
service, and imply that adjustments to records are a major event
akin to unitization or classification (discussed in the instruction
to account 106 Completed Construction not Classified--Electric
(Major only)), or retirement (discussed in Electric Plant
Instruction 10. Additions and Retirements of Electric Plant).
---------------------------------------------------------------------------

45. Currently, energy storage assets are recorded in several
accounts in separate functions (generation, transmission, and
distribution). This accounting requirement creates an additional burden
with respect to recordkeeping, depreciation, and retirement, all of
which increase internal control risk and the opportunity for error.
These potential errors may arise as a utility reclassifies portions of
the original cost of an asset between two or three different plant
accounts, which may have different depreciation rates.\82\ Based on our
review of industry comments, it appears that the energy storage
accounting requirements of Order No. 784, and the related accounting
guidance,\83\ created a significant burden and are not practical.\84\
For example, companies emphasize that an energy storage asset's
functionality can change on a daily basis requiring constant accounting
reclassification entries. As a result, we propose to create one new
function dedicated to energy storage.\85\ By 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.
---------------------------------------------------------------------------

\82\ Companies currently must also shift portions of the related
accumulated depreciation balances.
\83\ AI14-1, Accounting and Reporting Guidance for New Electric
Storage Technologies (2014).
\84\ EEI Comments at 6-9 (filed March 29, 2021).
\85\ Cost allocation would, as noted earlier, be addressed
separately through the ratemaking process. See supra note 81.
---------------------------------------------------------------------------

46. In its reply comments, ACP claims that it is not appropriate
for storage assets to be treated as general plant assets: ACP indicates
that general plant is a catch-all category that utilities use for
offices and miscellaneous and small cost property that does not fit in
one of the other functional categories, whereas storage is significant
property that should not be depreciated on a schedule like General
Plant.\86\ However, we do not propose to consider the energy storage
function as general plant. As explained above, utilities would record
energy storage assets in the proposed dedicated new function consistent
with our proposed new accounting regulations, and then use the
appropriate cost allocation methodologies for ratemaking purposes.
---------------------------------------------------------------------------

\86\ ACP Reply Comments at 6-8 (filed Apr. 26, 2021).
---------------------------------------------------------------------------

47. There are currently three plant accounts, three operating
expense accounts, and three maintenance expense accounts for energy
storage, as created in Order No. 784: Accounts 348 (Energy Storage
Equipment--Production), 351 (Energy Storage Equipment--
Transmission),\87\ 363 (Storage Battery Equipment), 558.1 (Operations
of Energy Storage Equipment), 553.1 (Maintenance of Energy Storage
Equipment), 562.1 (Operations of Energy Storage Equipment), 570.1
(Maintenance of Energy Storage), 584.1 (Operations of Energy Storage
Equipment), and 592.2 (Maintenance of Energy Storage Equipment). We
propose to retitle most of these account numbers to indicate reserved,
but as described below, retitle Accounts 553.1 and 592.2 as Maintenance
of Computer Hardware (Major only).
---------------------------------------------------------------------------

\87\ The title of Account 351 currently reads as ``Reserved'' in
the USofA Electric Plant Chart of Accounts.
---------------------------------------------------------------------------

48. We also propose to renumber the General Plant function from
number 6. to number 7. in the Electric Plant Chart of Accounts and
retitle existing number 6. to Energy Storage Plant function.
Additionally, in the Operation and Maintenance Expense Chart of
Accounts, we propose to retitle existing number 4. from Distribution
Expenses to Energy Storage Expenses, and renumber Distribution Expenses
from 4. to 5., Customer Account Expenses from 5. to 6., Customer
Service and Informational Expenses from 6. to 7., Sales Expenses from
7. to 8., and Administrative and General Expenses from 8. to a new 9.
49. The proposed new dedicated storage function in the Electric
Plant Chart of Accounts would be structured similarly to the other
functions in the USofA and would include the following plant accounts:
(1) Account 387.1 (Land and Land Rights); (2) Account 387.2 (Structures
and Improvements); (3) Account 387.11 (Miscellaneous Energy Storage
Equipment); and (4) Account 387.12 (Asset Retirement Costs for Energy
Storage). The Energy Storage function would also have accounts, similar
to those in the Solar and Wind Production subfunctions, for: (1)
Account 387.5 (Collector System); (2) Account 387.6 (Generator Step-up
Transformer (GSU)); and (3) Account 387.7 (Inverters). These proposed
new accounts are intended to accommodate activities related to
distributed and/or direct current energy storage plant

[[Page 59877]]

assets.\88\ We also propose to include the three new plant accounts for
computer hardware, software, and communication equipment as described
below. Finally, we propose 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.
---------------------------------------------------------------------------

\88\ The Commission does not expect these accounts to be used if
they are not applicable to a specific energy storage plant.
---------------------------------------------------------------------------

50. We also propose new Operations and Maintenance Expense accounts
for the Energy Storage function: (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)); and (10) Account 578.11 (Maintenance of Other Energy
Storage Plant (Nonmajor only)). We further propose to create three new
additional expense accounts specific to the new Energy Storage
function: (1) Account 577.2 (Operation of Energy Storage Equipment
(Major only)); (2) Account 577.3 (Storage Fuel); and (3) Account 578.3
(Maintenance of Energy Storage Equipment (Major only)). Finally, we
propose to create three new maintenance computer hardware, software,
and communication equipment accounts related to the energy storage
function as described below.
51. Pumped storage is currently recorded within the Hydraulic
Production subfunction in the USofA, consistent with the instructions
to Account 348 (Energy Storage Equipment--Production), which state:
``The cost of pumped storage hydroelectric plant shall be charged to
hydraulic production plant.'' We propose to remove Account 348 and
instead use its instructions in the new Account 387.3 as part of the
proposed new Energy Storage function.
3. Renewable Energy Credits
52. We propose to retitle General Instruction No. 21 (Allowances)
to Allowances and Renewable Energy Credits (RECs). We also propose
several changes to this instruction. In Part A, we propose to remove
the reference to the Clean Air Act to make the instruction less
restrictive. We further propose to modify the instruction to reference
the proposed new accounts as described below. Additionally, we propose
to move the last sentence of Part A to the beginning of Part B. We also
propose that Parts A and C refer to historical cost to make the
instruction consistent with other existing regulatory text in the
USofA.\89\ We further propose to correct Part D, which currently reads,
in part, ``Issuances from inventory from inventory included in . . .''
to instead read ``Issuances from inventory included in . . . [.]'' We
propose to update the text in Part E to include references to RECs in
addition to allowances and to add language to Part F to clarify the
inventory accounting for RECs. We also propose to replace 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. We propose to move the existing language in Part G which
currently addresses penalties to Part H, and remove the reference to
the Environmental Protection Agency (EPA) to make the instruction
applicable to similar items created by other regulatory bodies. Then,
we propose to move and update the existing language in Part H to a
newly proposed Part I that would address gains and losses on
dispositions of allowances and RECs. Finally, we propose to add a new
Part J that would address the revenues for RECs associated with the
sale of energy.
---------------------------------------------------------------------------

\89\ 18 CFR part 101, General Instruction No. 21 (Allowances).
---------------------------------------------------------------------------

53. Additionally, we propose to change the existing text to Account
158.1 (Allowance Inventory) and Account 158.2 (Allowances Withheld) to
remove the references to the EPA, to reference historical cost, and to
include a new note to address prepayments in accordance with the
proposed text within General Instruction No. 21.
54. The Commission has recognized that RECs are state-created and -
issued.\90\ As such, the Commission has concluded that when REC
transactions are independent of wholesale electric energy transactions,
these unbundled REC transactions do not fall within the Commission's
authority under FPA sections 205 and 206; these unbundled REC
transactions do not directly affect rates for electric energy sold at
wholesale. By contrast, the Commission also has concluded that when
RECs are bundled with electric energy sold at wholesale, the Commission
has authority over the entire transaction, including the RECs, as all
components are deemed to directly affect the wholesale electric energy
rates.\91\ Therefore, we also propose two new inventory accounts for
RECs: Account 158.3 (Bundled Renewable Energy Credits Inventory), to
record RECs bundled with energy sales, and Account 158.4 (Unbundled
Renewable Energy Credits Inventory), to record RECs unbundled from
energy sales.\92\
---------------------------------------------------------------------------

\90\ WSPP Inc., 139 FERC ] 61,061, at P 21 (2012).
\91\ Id. PP 22-24.
\92\ We propose to 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.
---------------------------------------------------------------------------

55. We propose to renumber Account 509 (Allowances) to Account
509.1, delete the reference to sulfur dioxide in this account, and
create two new expense accounts for RECs: Account 509.2 (Bundled
Renewable Energy Credits), and Account 509.3 (Unbundled Renewable
Energy Credits). These accounts would be used to expense monthly
bundled and unbundled REC costs, respectively, similar to how Account
509.1 is used for allowances.
56. Finally, we propose to add Account 411.11 (Gains from the
Disposition of RECs) and Account 411.12 (Losses from the Disposition of
RECs), consistent with the newly proposed instructions in Part I of
General Instruction No. 21.
57. While we recognize that there may be differences in accounting
and reporting for RECs (e.g., inventory vs. intangible assets) as may
be allowed by other regulatory bodies, we believe that the
characteristics of RECs are more akin to inventory.\93\ Generally, if
another 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.\94\
---------------------------------------------------------------------------

\93\ Ameren Ill. Co., 170 FERC ] 61,267, at P 52 (explaining
that RECs are appropriately classified as inventory).
\94\ 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.'').
---------------------------------------------------------------------------

4. Hardware, Software, and Communication Equipment
58. We propose new accounts in each function and subfunction for
computer hardware, software, and communication equipment in this
proceeding. While the USofA was updated in 2005 to include

[[Page 59878]]

accounts for recording computer hardware, software, and communication
equipment owned by regional transmission organizations (RTOs), there
are no comparable accounts for non-RTO public utilities and licensees
to report these types of assets.\95\ This has led to discrepancies in
how non-RTO public utilities record computer hardware, software, and
communication equipment, 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, we propose including computer hardware, software, and
communication equipment in each different functional area, including
the general function. It appears that the creation of new accounts for
these items would allow more accurate functional identification, which
would assist in the ratemaking process.
---------------------------------------------------------------------------

\95\ Order No. 668, 113 FERC ] 61,276.
---------------------------------------------------------------------------

59. We recognize that these proposed accounts are needed for the
new Non-hydro Renewable Generation subfunctions and the new Energy
Storage function proposed above, but based on industry input from EEI,
among others, we preliminarily find that these new accounts are needed
for all functions and production subfunctions. As such, we propose to
add three plant accounts and three maintenance accounts to all
functions and subfunctions that currently lack them. 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); Account 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, 587.8, 592.2, and 935.1 (Maintenance of Computer
Hardware (Major only)); Accounts 513.2, 531.2, 544.2, 553.2, 558.14,
558.34, 558.13, 578.8, 587.9, 582.3, 935.2 (Maintenance of Computer
Software (Major only)); and Account 513.3, 531.3, 544.3, 553.3, 558.15,
558.35, 559.14, 578.9, 587.10, 592.4, 935.3 (Maintenance of
Communication Equipment (Major only)). The existing Transmission
Expenses Maintenance accounts 569.1, 569.2, 569.3, would have (Major
only) added to the account names to denote this condition, as
consistent with the newly proposed accounts. Because the RTO function
only exists in RTOs and independent system operators, we currently see
no need for this designation on accounts in this function (i.e.,
Accounts 576.2, 576.3, and 576.4). These accounts would all have the
same descriptions, instructions, and items as the existing RTO and
Transmission function accounts of the same title.
60. We also propose adding a new Electric Plant Instruction No. 17,
Integrated computer hardware, software, and communication equipment.
The instruction would explain 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 would further clarify that, if this
hardware, software, or communication equipment is not integrated, Plant
Instruction No. 10 should be followed.
61. We seek comment on whether the Commission also should create
computer hardware, software, and communication accounts for natural gas
pipelines, oil pipelines, and a holding company's service companies.

C. Reporting

62. To accommodate the proposed changes to the USofA explained
above, we propose to amend 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
O&M expense sections of the forms, including the schedules for
depreciation.\96\ 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).
---------------------------------------------------------------------------

\96\ Appendix 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 (see the
appendix at the end of this document).
---------------------------------------------------------------------------

63. The proposed reporting changes to Form Nos. 1, 1-F, and 3-Q
(electric) would result in changes to service company reporting in FERC
Form No. 60, Schedule XVI--Analysis of Charges for Service--Associate
and Non-Associate Companies, because the Form No. 60 summarizes the
functional and sub-functional O&M expenses detailed in Form Nos. 1, 1-
F, and 3-Q (electric).\97\ 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 expenses.
---------------------------------------------------------------------------

\97\ Appendix B: FERC Form No. 60 at 304-305a.
---------------------------------------------------------------------------

64. We also propose to amend Form Nos. 1, 1-F, and 3-Q (electric)
to include RECs as part of the instructions and titles wherever
allowances are discussed.\98\ Further, we propose to consolidate inputs
for both sulfur dioxide and nitrogen oxides (NO<INF>X</INF>) in the
existing Allowances schedule,\99\ to include inputs for both bundled
and unbundled RECs, and to amend the related title for Account 509 to
read as Account 509.1.\100\ We propose to add separate gain and loss
accounts to the statement of income for RECs.\101\
---------------------------------------------------------------------------

\98\ Appendix B: FERC Form Nos. 1/1-F at 320; FERC Form No. 1 at
2, 110-111, 120-121, 228a, 229a; Form No. 1-F at 4, 10-11, 15-16.
\99\ Appendix B: FERC Form No. 1 at 228a-229a amended, pages
228b-229b deleted.
\100\ Appendix B: FERC Form Nos. 1/1-F at 320; FERC Form No. 1-F
at 15.
\101\ Appendix B: FERC Form Nos. 1/3-Q (electric) at 114; FERC
Form No. 1-F at 6.
---------------------------------------------------------------------------

65. We further propose to amend 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).\102\ In
the Depreciation and Amortization of Electric Plant schedule section B
(Basis for Amortization Charges), we propose to eliminate the first two
sentences and the word software from the third sentence as these
clauses would no longer be applicable to software.\103\
---------------------------------------------------------------------------

\102\ Appendix B: FERC Form Nos. 1/1-F at 204-207, 320-323; FERC
Form No. 3-Q (electric) at 325.
\103\ Appendix B: FERC Form No. 1 at 336.
---------------------------------------------------------------------------

66. Currently, FERC Form No. 1 contains several statistical pages
for different classes of large production generators. To simplify the
forms and reduce the reporting burden, we propose to combine all large
generating assets into one statistical page to also include hydro and
non-hydro renewables.\104\
---------------------------------------------------------------------------

\104\ Appendix B: FERC Form No. 1 at 402-403 amended; pages 406-
407 deleted.
---------------------------------------------------------------------------

67. Finally, we propose to amend the energy storage statistical
pages to remove references in the instructions and columns related to
cost functionalization.\105\
---------------------------------------------------------------------------

\105\ Appendix B: FERC Form No. 1 at 414-420.
---------------------------------------------------------------------------

D. Hydrogen Guidance

68. Comments in response to the NOI and separate industry inquiries
advocated for accounting guidance for hydrogen. We solicit comment on
whether the Chief Accountant should issue such guidance.\106\ This
guidance

[[Page 59879]]

could provide that the classification of hydrogen plant should be
determined based on its functionality for both plant and its associated
O&M accounting as well as for fuel accounting, including any newly
created accounts that may result from this proceeding. This guidance
could further define which activities are appropriate for accounting
under the electric and which under the natural gas USofA. In addition,
we seek comment on whether it would be helpful in the case of hydrogen
to use existing natural gas accounts and instructions for production
plant and O&M expenses, or if it would be more helpful either to update
titles and instructions, or to create new accounts in a future
proceeding.
---------------------------------------------------------------------------

\106\ We are not proposing changes to the USofA to account for
hydrogen but rather seek comment on the potential issuance of more
general accounting guidance that could be issued by the Chief
Accountant.
---------------------------------------------------------------------------

IV. Information Collection Statement

69. The information collection requirements contained in this
notice of proposed rulemaking (NOPR) are subject to review by the
Office of Management and Budget (OMB) under section 3507(d) of the
Paperwork Reduction Act of 1995.\107\ OMB's regulations require
approval of certain information collection requirements imposed by
agency rules.\108\ 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.
---------------------------------------------------------------------------

\107\ 44 U.S.C. 3507(d).
\108\ 5 CFR 1320.11.
---------------------------------------------------------------------------

70. This NOPR would require 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 as
directed in Docket No. RM21-11-000. The updates within the USofA will
also be required in the respective forms (FERC Form Nos. 1, 1-F, 3-Q
(electric), and 60) that are filed with the Commission.
71. 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 (<a href="/cdn-cgi/l/email-protection#f3b7928792b09f969281929d9096b395968190dd949c85">[email&#160;protected]</a>) or telephone
(202) 502-8663).
72. The Commission solicits comments on the Commission's need for
this information, whether the information will have practical utility,
the accuracy of the burden estimates, ways to enhance the quality,
utility, and clarity of the information to be collected or retained,
and any suggested methods for minimizing respondents' burden, including
the use of automated information techniques.
73. Please send comments concerning the collections of information
and the associated burden estimates to the Office of Information and
Regulatory Affairs, Office of Management and Budget, through
<a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a>. Attention: Federal Energy Regulatory
Commission Desk Officer. Please identify the OMB Control Numbers 1902-
0021, 1902-0029, 1902-0205, and 1902-0215 in the subject line of your
comments. Comments should be sent within 45 days of publication of this
NOPR in the Federal Register.
74. Please submit a copy of your comments on the information
collections to the Commission via the eFiling link on the Commission's
website at <a href="https://www.ferc.gov">https://www.ferc.gov</a>. Comments on the information collection
that are sent to FERC should refer to Docket No. RM21-11-000.
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: Proposed revision of collections of information in
accordance with Docket No. RM21-11-000 and request for comments.
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.
Necessity of Information: The reforms in this proposed 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.
75. The Commission estimates a one-time burden due to the proposed
revisions in FERC Form Nos. 1, 1-F, 3-Q (electric), and 60 reflected in
the NOPR in Docket No. RM21-11-000 but estimates that the ongoing
burden following the implementation to 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 NOPR 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.
76. The one-time implementation burden includes updating, adding,
and modifying accounts to be compliant with the NOPR in Docket No.
RM21-11-000. This includes updates to the Form Nos. 1, 1-F, 3-Q
(electric), and 60 for the creation of new accounts and production
subfunctions for wind, solar, and other non-hydro renewable assets;
establishing a new functional class for energy storage accounts;
codifying the accounting treatment of RECs, and creation of new
accounts within existing functions for hardware, software, and
communication equipment. The Reporting section III(B)(6) of this
document indicates which forms and pages will be affected by the
categorized proposed changes.
77. The estimates below were calculated using previous NOPRs
combined with the Commission's best estimate to the required effort to
update, modify, or add accounts within the USofA. The Commission
estimates that on average it will take 20 minutes to create or
transition an account to be compliant with the requirements listed in
this NOPR. In total there are 154 accounts being added, modified, or
updated, but not all accounts are in each form. FERC Form No. 1
requires 145 account changes, FERC Form No. 1-F requires 145 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 since the quarterly reports are generally a subset of
the annual filings required by FERC Form No. 1. The changes above are
reflected in the one-time implementation burden estimate listed in
Table 1 below.\109\
---------------------------------------------------------------------------

\109\ The burden numbers in the table are rounded to 1 decimal
place, and the costs are rounded to the nearest dollar.

[[Page 59880]]

Table 1--RM21-11-000
[NOPR one-time implementation burden, in Year 1]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual number
Number of of responses Total number Average burden & cost Total annual burden hours & Annual cost
Requirement respondents per of responses per response \110\ cost per
respondent respondent ($)
(1) (2) (1) * (2) = (4)...................... (3) * (4) = (5)............... (5) / (1)
(3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Form No. 1................... 217 1 217 48.3 hrs.; $4,202........ 10,481.1 hrs.; $911,834....... $4,202
Form No.1-F.................. 2 1 2 48.3 hrs.; $4,202........ 96.6 hrs.; $8,404............. 4,202
Form No. 3-Q electric \111\.. 221 3 663 0 hrs. $0................ 0 hrs. $0..................... 0
Form No. 60.................. 42 1 42 3.7 hrs.; $322........... 155.4 hrs.; $13,524........... 305
--------------------------------------------------------------------------------------------------------------------------
Total for Implementation .............. .............. 924 ......................... 10,733.1 hrs.; $933,762....... ..............
Burden.
--------------------------------------------------------------------------------------------------------------------------------------------------------

78. 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.
---------------------------------------------------------------------------

\110\ 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
$180,703 or $87 per hour.
\111\ 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 since quarterly filings are typically a subset of the annual
filings.

Table 2--RM21-11-000 NOPR
[Annual ongoing burden (current), starting in Year 2]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual number
Number of of responses Total number Average burden & cost Total annual burden hours & Annual cost
Requirement \112\ respondents per of responses per response \1\ cost \1\ per
respondent respondent ($)
(1) (2) (1) * (2) = (4)...................... (3) * (4) = (5)............... (5) / (1)
(3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Form No. 1 (including Form 217 1 217 1,182 hrs.; $102,834..... 256,494 hrs.; $22,314,978..... $102,834
1T).
Form No.1-F (including Form 1- 2 1 2 136 hrs.; $11,832........ 272 hrs.; $23,664............. 11,832
FT).
Form No. 3-Q electric 221 3 663 168 hrs. $14,616......... 111,384 hrs. $9,690,408....... 43,848
(including Form 3-QT).
Form No. 60 (including Form 42 1 42 78 hrs.; $6,786.......... 3,276 hrs.; $285,012.......... 6,786
60A).
--------------------------------------------------------------------------------------------------------------------------
Total Ongoing Burden .............. .............. 924 ......................... 371,426 hrs.; $32,314,062..... ..............
(current).
--------------------------------------------------------------------------------------------------------------------------------------------------------

V. Environmental Analysis
---------------------------------------------------------------------------

\112\ The temporary forms (labeled ``T'') are currently
undergoing the collection renewal process, which combines the ``T''
forms with their parent forms. The ``T'' forms were created during
the XBRL transition since OMB does not allow for more than one
Information Collection Request to be submitted under a single OMB
control number. The ``T'' forms are anticipated to be retired
following OMB approval of each renewed form.
---------------------------------------------------------------------------

79. 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.\113\ No
environmental consideration is necessary for the promulgation of a rule
that addresses information gathering, analysis, and dissemination,\114\
and also that addresses accounting.\115\ This NOPR addresses
accounting. In addition, this NOPR involves information gathering,
analysis, and dissemination. Therefore, this NOPR falls within
categorical exemptions provided in the Commission's regulations.
Consequently, neither an environmental impact statement nor an
environmental assessment is required.
---------------------------------------------------------------------------

\113\ Reguls. Implementing the Nat'l Envt'l Pol'y Act, Order No.
486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. 30,783 (1987)
(cross-referenced at 41 FERC 61,284).
\114\ See 18 CFR 380.4(a)(5).
\115\ See 18 CFR 380.4(c)(16).
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act

80. The Regulatory Flexibility Act of 1980 (RFA) \116\ generally
requires a description and analysis of proposed 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.\117\ The Small Business Administration (SBA) sets the
threshold for what constitutes a small business. Under SBA's size
standards,\118\ electric generators definitions of ``small'' range from
250-750 employees based on the type of generation. For the purpose of
our analysis, we use the 250 employee threshold that is used for solar,
wind, geothermal, biomass, and ``other'' generators since the proposed
rules accounting changes are particularly relevant for these types of
generation.
---------------------------------------------------------------------------

\116\ 5 U.S.C. 601-612.
\117\ Id. 603(c).
\118\ 13 CFR 121.201.
---------------------------------------------------------------------------

81. In our analysis, we utilized previous submissions of the FERC
Form Nos. 1,\119\ 1-F,\120\ 3-Q (electric),\121\ and 60 \122\ filers to
create populations of companies to determine the number of small
entities. The Commission found that of this population, approximately
seven percent of companies filing FERC Form No. 1, 50% of companies
filing

[[Page 59881]]

FERC Form No. 1-F,\123\ and approximately eight percent of companies
filing FERC Form No. 60, qualify as ``small'' using the definition
provided by SBA. The Commission believes this rule will not have a
significant economic impact on a substantial number of small entities,
and therefore no regulatory flexibility analysis is required.
---------------------------------------------------------------------------

\119\ The total population of FERC Form No. 1 filers totaled
222. We used a statistical sample size of 99 companies that produces
a 95% confidence level.
\120\ The total population of FERC Form No. 1-F filers totaled
2.
\121\ The FERC Form 3-Q are quarterly filings, which are
typically a subset of the annual filings. The Commission assumes
that the 3-Q filers are consistent with FERC Form No. 1 filers.
\122\ The total population of FERC Form No. 60 filers totaled
43. We used a statistical sample size of 35 companies that produces
a 95% confidence level.
\123\ The Commission recognizes that 50% is a significant
percentage. However, because only two companies file the FERC Form
No. 1-F, 50% of FERC Form No. 1-F filers only represents one
company. When compared to the total population of all filers
effected by this rulemaking, one company (50% of FERC Form No. 1-f
filers) is not deemed significant.
---------------------------------------------------------------------------

VII. Comment Procedures

82. We invite interested persons to submit comments on the matters
and issues proposed in this NOPR to be adopted, including any related
matters or alternative proposals that commenters may wish to discuss.
Comments are due November 17, 2022. Comments must refer to Docket No.
RM21-11-000, and must include the commenter's name, the organization
they represent, if applicable, and their address in their comments. All
comments will be placed in the Commission's public files and may be
viewed, printed, or downloaded remotely as described in the Document
Availability section below. Commenters on this proposal are not
required to serve copies of their comments on other commenters.
83. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's website at <a href="https://www.ferc.gov">https://www.ferc.gov</a>. The Commission accepts most standard word processing
formats. Documents created electronically using word processing
software must be filed in native applications or print-to-PDF format
and not in a scanned format. Commenters filing electronically do not
need to make a paper filing.
84. Commenters that are not able to file comments electronically
may file an original of their comment by the U.S. Postal Service (USPS)
mail or by courier-or other delivery services. For submission sent via
USPS only, filings should be mailed to: Federal Energy Regulatory
Commission, Office of the Secretary, 888 First Street NE, Washington,
DC 20426. Submission of filings other than by USPS should be delivered
to: Federal Energy Regulatory Commission, 12225 Wilkins Avenue,
Rockville, MD 20852.

VIII. Document Availability

85. 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 (<a href="https://www.ferc.gov">https://www.ferc.gov</a>). At
this time, the Commission has suspended access to the Commission's
Public Reference Room due to the President's March 13, 2020
proclamation declaring a National Emergency concerning the Novel
Coronavirus Disease (COVID-19).
86. 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.
87. User assistance is available for eLibrary and the Commission's
website during normal business hours from the Commission's Online
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
<a href="/cdn-cgi/l/email-protection#ea8c8f988985848683848f999f9a9a85989eaa8c8f9889c48d859c">[email&#160;protected]</a>, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at
<a href="/cdn-cgi/l/email-protection#15656077797c763b6770737067707b7670677a7a7855737067763b727a63">[email&#160;protected]</a>.

List of Subjects in 18 CFR Part 101

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

By direction of the Commission.

Issued: July 28, 2022.
Debbie-Anne A. Reese,
Deputy Secretary.

In consideration of the foregoing, the Commission proposes to amend
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. In part 101:
0
a. Under General Instructions, Instruction 21 is revised;
0
b. Under Electric Plant Instructions, Instruction 17 is added;
0
c. Under Balance Sheet Chart of Accounts, Accounts 158.3 and 158.4 are
added to the list;
0
d. Under Balance Sheet Accounts:
0
i. Accounts 108, 111, 158.1, and 158.2 are revised; and
0
ii. Accounts 158.3 and 158.4 are added;
0
e. Under Electric Plant Chart of Accounts:
0
i. Accounts 315.1, 315.2, 315.3, 324.1, 324.2, 324.3, 334.1, 334.2, and
334.3 are added to the list;
0
ii. Section 2.d. of the list is revised;
0
iii. Sections 2.e., 2.f., and 2.g. and Accounts 351.1, 351.2, and 351.3
are added to the list;
0
iv. Account 363 is removed from the list and reserved;
0
v. Accounts 363.1, 363.2, and 363.3 are added to the list;
0
vi. Account 387 is removed from the list;
0
vii. Section 6 is redesignated as section 7 of the list;
0
viii. A new section 6 is added to the list;
0
ix. Account 397 is removed from the list and reserved; and
0
x. Accounts 397.1, 397.2, and 397.3 are added to the list;
0
f. Under Electric Plant Accounts:
0
i. 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 are added;
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;
0
g. Under Income Chart of Accounts, Accounts 411.11 and 411.12 are added
to the list;
0
h. Under Income Accounts, Accounts 411.11 and 411.12 are added;
0
i. Under Operation and Maintenance Expense Chart of Accounts:
0
i. Account 509 is removed from the list;
0
ii. Accounts 509.1, 509.2, 509.3, 513.1, 513.2, 513.3, 531.1, 531.2,
531.3, 544.1, 544.2, and 544.3 are added to the list;
0
iii. Account 548.1 is removed from the list and reserved;
0
iv. Account 553.1 of the list is revised;
0
v. Accounts 553.2 and 553.3 and sections 1.f., 1.g, and 1.h. are added
to the list;
0
vi. Account 562.1 is removed from the list and reserved;

[[Page 59882]]

0
vii. Accounts 569.1, 569.2, and 569.3 of the list are revised;
0
viii. Account 570.1 is removed from the list and reserved;
0
ix. Sections 4 through 8 are redesignated as sections 5 through 9 of
the list;
0
x. A new section 4 is added to the list;
0
xi. Account 584.1 is removed from the list and reserved;
0
xii. Account 592.2 of the list is revised; and
0
xiii. Accounts 592.3, 592.4, 935.1, 935.2, and 935.3 are added to the
list; and
0
j. Under Operation and Maintenance Expense Accounts:
0
i. Account 509 is redesignated as Account 509.1;
0
ii. Newly redesignated Account 509.1 is revised;
0
iii. Accounts 509.2, 509.3, 513.1, 513.2, 513.3, 531.1, 531.2, 531.3,
544.1, 544.2, and 544.3 are added;
0
iv. Account 548.1 is removed and reserved;
0
v. Account 553.1 is revised;
0
vi. Accounts 553.2, 553.3, 558.1 through 558.17, 558.20 through 558.37,
and 559.1 through 559.16 are added;
0
vii. Account 562.1 is removed and reserved;
0
viii. Accounts 569.1, 569.2, and 569.3 are revised;
0
ix. Account 570.1 is removed and reserved;
0
x. Accounts 577.1, 577.2 through 577.5, 578.1 through 578.11 are added;
0
xi. Account 584.1 is removed and reserved; and
0
xii. Account 592.2, 592.3, 592.4, 935.1, 935.2, and 935.3 are added.
The revisions and additions read as follows:

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

* * * * *

General Instructions

* * * * *
21. Allowances and renewable energy credits (RECs).
A. Public utilities owning allowances and RECs for operational
purposes, shall account for such allowances and RECs at historical cost
in Account 158.1, Allowance Inventory, Account 158.2, Allowances
Withheld, Account 158.3, Bundled Renewable Energy Credits Inventory, or
Account 158.4, Unbundled Renewable Energy Credits Inventory, as
appropriate.
B. Allowances and RECs acquired for speculative purposes shall be
accounted for in Account 124, Other Investments. When purchased
allowances and RECs 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 RECs 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 RECs are acquired, for a
loan with a term similar to the period that it will hold the allowances
and RECs and in an amount equal to the purchase price.
C. The underlying records supporting operational allowances and
RECs 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 RECs and the related
cost by vintage year, including allowances and RECs 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 RECs 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 509.1, 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
158.4 shall be credited and Account 509.2, Bundled Renewable Energy
Credits, and Account 509.3, Unbundled Renewable Energy Credits,
debited, respectively, so that the cost of the RECs 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 RECs, the utility shall debit Account
158.3 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 and Account 158.3
and Account 509.1 and Account 509.2 within a single month, as
appropriate.
G. When a prepayment is made for allowances or RECs, 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 RECs, other than 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, Gain from Disposition of
RECs. Losses on disposition of allowances and RECs, 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 RECs. (See Definition No.
31.) Gains or losses on disposition of allowances and RECs held for
speculative purposes shall be recognized in Account 421, Miscellaneous
Nonoperating Income, or Account 426.5, Other Deductions, as
appropriate.
J. Revenues for RECs associated with the sale of energy shall be
recorded in the appropriate operating revenue account.
* * * * *

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.
* * * * *

[[Page 59883]]

Balance Sheet Chart of Accounts

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

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 Non-hydro 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 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

[[Page 59884]]

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 non-hydro 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 509.1, 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 renewable energy credits inventory.

A. This account shall include the cost of RECs owned by the
utility, bundled with energy, and not withheld by any authoritative
agency. See General Instruction No. 21 and Account 158.2, Allowances
and RECs Withheld.
B. This account shall be credited and Account 509.2, Bundled
Renewable Energy Credits, shall be debited concurrent with the monthly
use of RECs.
C. Separate subdivisions of this account shall be maintained so as
to separately account for those RECs 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 REC
included; the origin of each REC; and the historical cost.
(Note: For prepayments of RECs, see General Instruction No. 21.)

158.4 Unbundled renewable energy credits inventory.

A. This account shall include the cost of RECs owned by the
utility, not considered bundled with energy, and not withheld by any
authoritative agency. See General Instruction No. 21 and Account 158.2,
Allowances and RECs Withheld.
B. This account shall be credited and Account 509.3, Unbundled
Renewable Energy Credits, shall be debited concurrent with the monthly
use of RECs.
C. Separate subdivisions of this account shall be maintained so as
to separately account for those RECs 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 REC
included; the origin of each REC; and the historical cost.
(Note: For prepayments of RECs, see General Instruction No. 21.)
* * * * *

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 non-hydro 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 non-hydro 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.

[[Page 59885]]

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.
* * * * *

Electric Plant Accounts

* * * * *

315.1 Computer hardware.

This account shall include the cost of computer hardware and
miscellaneous information technology equipment to provide scheduling,
system control and dispatching.
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 purchased and used to provide scheduling, system
control and dispatching activities.
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 used to control
and dispatch the system.
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.

324.2 Computer software.

324.3 Communication equipment.

334.1 Computer hardware.

334.2 Computer software.

334.3 Communication equipment.

This account shall include the cost of communication equipment
owned and

[[Page 59886]]

used to acquire or share data and information used to control and
dispatch the system.
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, 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 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.
Items
1. Anchors, head arm, and other guys, including guy guards, guy
clamps, strain insulators, pole plates, etc.
3. Armored conductors, buried, submarine, including insulators,
insulating materials, splices in terminal chamber, potheads, etc.
4. Brackets.
5. Circuit breakers.
6. Conductors, including insulated and bare wires and cables.
7. Conduit, concrete, brick and tile, including iron pipe, fiber
pipe, Murray duct, and standpipe on pole or tower.
8. Crossarms and braces.
9. Excavation and backfill, including shoring, bracing, bridging,
and disposal of excess excavated material.
10. Extension arms.
11. Fireproofing, in connection with any items listed herein.
12. Foundations and settings specially constructed for and not
expected to outlast the apparatus for which constructed.
13. Ground wires, clamps, etc.
14. Guards.
15. Hollow-core oil-filled cable, including straight or stop
joints, pressure tanks, auxiliary air tanks, feeding tanks, terminals,
potheads and connections, etc.
16. Insulators, including pin, suspension, and other types, and tie
wire or clamps.
17. Lightning arresters.
18. Paving, Pavement disturbed, including cutting and replacing
pavement, pavement base, and sidewalks.
19. Permits for construction.
20. Pole steps and ladders.
21. Poles, wood, steel, concrete, or other material.
22. Racks complete with insulators.
23. Railings.
24. Railroad and highway crossing guards.
25. Reinforcing and stubbing.
26. Removal and relocation of subsurface obstructions.
27. Settings.
28. Sewer connections, including drains, traps, tide valves, check
valves, etc.
29. Shaving, painting, gaining, roofing, stenciling, and tagging.
30. Splices.
31. Sumps, including pumps.
32. Switches.
33. Towers.
34. Tree trimming, initial cost including the cost of permits
therefor.
35. Ventilating equipment.
36. 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.

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 the
protection of electric circuits and equipment which operate at
generating level voltage (excluding SCADA systems). 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. Excitation system, including motor, turbine and dual-drive
exciter sets and rheostats, 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, generator field and exciter
switch panels, exciter bus tie panels, generator and exciter rheostats,
etc., special housings, protective screens, 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, etc., special housing, protective screens, 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 and exciter signal stands, temperature-recording
devices, frequency control equipment, master clocks, watt-hour meter,
station totalizing wattmeter, storage batteries, panels and charging
sets, instrument transformers for supervisory metering, conductors and
conduit, special supports for conduit, switchboards, batteries, special
housing for batteries, protective screens, doors, 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,

[[Page 59887]]

starting transformers, current transformers, potential transformers,
protective relays, 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.

338.10 Computer software.

338.11 Communication equipment.

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.

[[Page 59888]]

17. Lightning arresters.
18. Paving, Pavement disturbed, including cutting and replacing
pavement, pavement base, and sidewalks.
19. Permits for construction.
20. Pole steps and ladders.
21. Poles, wood, steel, concrete, or other material.
22. Racks complete with insulators.
23. Railings.
24. Railroad and highway crossing guards.
25. Reinforcing and stubbing.
26. Removal and relocation of subsurface obstructions.
27. Settings.
28. Sewer connections, including drains, traps, tide valves, check
valves, etc.
29. Shaving, painting, gaining, roofing, stenciling, and tagging.
30. Splices.
31. Sumps, including pumps.
32. Switches.
33. Towers.
34. Tree trimming, initial cost including the cost of permits
therefor.
35. Ventilating equipment.
36. 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.

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.

338.30 Computer hardware.

338.31 Computer software.

338.32 Communication equipment.

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 non-hydro 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 non-hydro 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.
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.
3. Boilers and equipment, including boilers and baffles,
economizers,

[[Page 59889]]

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 non-hydro
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.

339.9 Computer hardware.

339.10 Computer software.

339.11 Communication equipment.

339.12 Miscellaneous power plant equipment.

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

339.13 Asset retirement costs for other non-hydro renewable
production.

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

345.1 Computer hardware.

[[Page 59890]]

7. Networking components.

345.2 Computer software.

345.3 Communication equipment.

348 [Reserved]

* * * * *

351 [Reserved]

351.1 Computer hardware.

351.2 Computer software.

351.3 Communication equipment.

363 [Reserved]

363.1 Computer hardware.

363.2 Computer software.

363.3 Communication equipment.

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.
C. The records supporting this account shall show, by months, the
function(s) each energy storage asset supports or performs.
Items
1. Batteries/Chemical.
2. Compressed Air.
3. Flywheels.
4. Superconducting Magnetic Storage.
5. Thermal.

[[Page 59891]]

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

387.6 Generator step-up transformers (GSU).

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.

387.9 Computer software.

387.10 Communication equipment.

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.

397.2 Computer software.

This account shall include the cost of off-the-shelf and in-house
developed software purchased and used to provide scheduling, system
control and dispatching activities.
Items
1. Software licenses.

[[Page 59892]]

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.

Income Chart of Accounts

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

Income Accounts

* * * * *

411.11 Gains from disposition of RECs.

This account shall be credited with the gain on the sale, exchange,
or other disposition of RECs in accordance with paragraph (H) 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 RECs 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 RECs.

This account shall be debited with the loss on the sale, exchange,
or other disposition of RECs in accordance with paragraph (H) 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.
* * * * *

Operation and Maintenance Expense Chart of Accounts

1. Power Production Expenses
a. steam power generation

Operation

* * * * *
509.1 Allowances.
509.2 Bundled renewable energy credits.
509.3 Unbundled renewable energy credits.
* * * * *

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).
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).
* * * * *
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 structures (Major only).
558.8 Maintenance of solar panels (Major only).
558.9 Maintenance of collector systems (Major only).
558.10 Maintenance of generator step-up transformers (Major
only).
558.11 Maintenance of inverter expenses (Major only).
558.12 Maintenance of other accessory electrical equipment
(Major only).
558.13 Maintenance of computer hardware (Major only).
558.14 Maintenance of computer software (Major only).
558.15 Maintenance of communication equipment (Major only).
558.16 Maintenance of miscellaneous solar generation plant
(Major only).
558.17 Maintenance of solar generation plant (Nonmajor only).
g. wind generation

Operation

558.20 Operation supervision and engineering.
558.21 Wind turbine generation and other plant operating
expenses (Major only).
558.22 [Reserved]
558.23 Rents.
558.24 Operation supplies and expenses (Nonmajor only).

Maintenance

558.25 Maintenance supervision and engineering (Major only).
558.26 Maintenance of structures (Major only).
558.27 Maintenance of wind turbines, towers and fixtures (Major
only).
558.28 [Reserved]
558.29 Maintenance of collector systems (Major only).
558.30 Maintenance of generator step-up transformers (Major
only).
558.31 Maintenance of inverter expenses (Major only).
558.32 Maintenance of other accessory electrical equipment
(Major only).
558.33 Maintenance of computer hardware (Major only).
558.34 Maintenance of computer software (Major only).
558.35 Maintenance of communication equipment (Major only).
558.36 Maintenance of miscellaneous wind generation plant (Major
only).
558.37 Maintenance of wind generation plant (Nonmajor only).
h. other non-hydro 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).

[[Page 59893]]

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 non-hydro renewable
generation plant (Major only).
559.16 Maintenance of other non-hydro 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 structures (Major only).
578.3 Maintenance of energy storage equipment (Major only).
578.4 Maintenance of collector systems (Major only).
578.5 Maintenance of generator step-up transformers (Major
only).
578.6 Maintenance of inverter expenses (Major only).
578.7 Maintenance of computer hardware (Major only).
578.8 Maintenance of computer software (Major only).
578.9 Maintenance of communication equipment (Major only).
578.10 Maintenance of miscellaneous other energy storage plant
(Major only).
578.11 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).
* * * * *

Operation and Maintenance Expense Accounts

* * * * *

509.1 Allowances.

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

509.2 Bundled renewable energy credits.

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

509.3 Unbundled renewable energy credits.

For RECs that were unbundled from energy, this account shall
include the cost of RECs expensed concurrent with the monthly usage.
(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.)

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

[[Page 59894]]

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.)
* * * * *

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
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 structures (Major only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of solar structures, the book cost
of which is includible in account 338.2, Structures and Improvements.
(See operating expense instruction 2.)

558.8 Maintenance of solar panels (Major only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of solar plant, the book cost of
which is includible in account 338.4, Solar Panels. (See operating
expense instruction 2.)

558.9 Maintenance of collector systems (Major only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of collector

[[Page 59895]]

systems, the book cost of which is includible in account 338.5,
Collector Systems. (See operating expense instruction 2.)
Items
1. Work of the following character on poles, towers, and fixtures:
a. Installing additional clamps or removing clamps or strain
insulators on guys in place.
b. Painting poles, towers, crossarms, or pole extensions.
c. Readjusting and changing position of guys or braces.
d. Realigning and straightening poles, crossarms, braces, pins,
racks, brackets, and other pole fixtures.
f. Relocating crossarms, racks, brackets, and other fixtures on
poles.
g. Shaving, cutting rot, or treating poles or crossarms.
h. Supporting conductors, transformers, and other fixtures and
transferring them to new poles during pole replacements.
2. Work of the following character on overhead conductors and
devices:
a. Overhauling and repairing line cutouts, line switches, line
breakers, and capacitor installations.
b. Cleaning insulators and bushings.
c. Refusing line cutouts.
d. Repairing line oil circuit breakers and associated relays and
control wiring.
e. Repairing grounds.
f. Resagging, retying, or rearranging position or spacing of
conductors.
g. Sampling, testing, changing, purifying, and replenishing
insulating oil.
h Transferring loads, switching, and reconnecting circuits and
equipment for maintenance purposes.
i. Repairing line testing equipment.
j. Trimming trees and clearing brush.

558.10 Maintenance of generator step-up transformers (Major only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of generator step-up transformers,
the book cost of which is includible in account 338.6, Generator Step-
up Transformers. (See operating expense instruction 2.)

558.11 Maintenance of inverter expenses (Major only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of inverter expenses, the book
cost of which is includible in account 338.7, Inverters. (See operating
expense instruction 2.)

558.12 Maintenance of other accessory electrical equipment (Major
only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of other electrical accessory
equipment, the book cost of which is includible in account 338.8 Other
Accessory Electrical Equipment. (See operating expense instruction 2.)

558.13 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.)

558.14 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.)

558.15 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.)

558.16 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.)

558.17 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 338.1 to 338.12,
inclusive. (See operating expense instruction 2.)

558.20 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.

558.21 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.
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.

[[Page 59896]]

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.

558.22 [Reserved]

558.23 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.)

558.24 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.

558.25 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.)

558.26 Maintenance of structures (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.
(See operating expense instruction 2.)

558.27 Maintenance of wind turbines, towers and fixtures (Major only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of wind turbines, the book cost of
which is includible in account 338.23, Wind Turbines and in account
338.24, Wind Towers and Fixtures. (See operating expense instruction
2.)

558.28 [Reserved]

558.29 Maintenance of collector systems (Major only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of collector systems, the book
cost of which is includible in account 338.26, Collector Systems. (See
operating expense instruction 2.)
Items
1. Work of the following character on poles, towers, and fixtures:
a. Installing additional clamps or removing clamps or strain
insulators on guys in place.
b. Painting poles, towers, crossarms, or pole extensions.
c. Readjusting and changing position of guys or braces.
d. Realigning and straightening poles, crossarms, braces, pins,
racks, brackets, and other pole fixtures.
f. Relocating crossarms, racks, brackets, and other fixtures on
poles.
g. Shaving, cutting rot, or treating poles or crossarms.
h. Supporting conductors, transformers, and other fixtures and
transferring them to new poles during pole replacements.
2. Work of the following character on overhead conductors and
devices:
a. Overhauling and repairing line cutouts, line switches, line
breakers, and capacitor installations.
b. Cleaning insulators and bushings.
c. Refusing line cutouts.
d. Repairing line oil circuit breakers and associated relays and
control wiring.
e. Repairing grounds.
f. Resagging, retying, or rearranging position or spacing of
conductors.
g. Sampling, testing, changing, purifying, and replenishing
insulating oil.
h Transferring loads, switching, and reconnecting circuits and
equipment for maintenance purposes.
i. Repairing line testing equipment.
j. Trimming trees and clearing brush.

558.30 Maintenance of generator step-up transformers (Major only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of generator step-up transformers,
the book cost of which is includible in account 338.27, Generator Step-
up Transformers. (See operating expense instruction 2.)

558.31 Maintenance of inverter expenses (Major only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of inverter expenses, the book
cost of which is includible in account 338.28, Inverters. (See
operating expense instruction 2.)

558.32 Maintenance of other accessory electrical equipment (Major
only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of other accessory electrical
equipment, the book cost of which is includible in account 338.29,
Other Accessory Electrical Equipment. (See operating expense
instruction 2.)

558.33 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.)

558.34 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.)

558.35 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.)

558.36 Maintenance of miscellaneous wind generation (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.)

558.37 Maintenance of wind generation (Nonmajor only).

This account shall include the cost of labor, materials used and
expenses incurred in the maintenance of wind

[[Page 59897]]

generation plant the book cost of which is includible in plant accounts
338.20 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 non-hydro 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 non-hydro renewable
power generating stations.
Labor
1. Supervising other non-hydro renewable production.
2. Operating other non-hydro 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 non-hydro 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 non-hydro
renewable generation operation expense accounts.
Labor
1. Operating switchboards, switch gear and electric control and
protective equipment.
2. Operating other non-hydro 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.
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 non-hydro 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 non-hydro 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 non-
hydro 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 wind 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 steam plant, the book cost of
which is includible in account 339.4, Boiler Plant Equipment. (See
operating expense instruction 2.)

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

This account shall include the cost of labor, mat

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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.