Notice2026-07711
Rate Recovery, Reporting, and Accounting Treatment of Industry Association Dues and Certain Civic, Political, and Related Expenses Center for Biological Diversity
Primary source
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Published
April 21, 2026
Issuing agencies
Energy DepartmentFederal Energy Regulatory Commission
Abstract
The Federal Energy Regulatory Commission is withdrawing a notice of inquiry that sought comments on the rate recovery, reporting, and accounting treatment of industry association dues and certain civic, political, and related expenses. Additionally, the Commission denies a petition for rulemaking.
Full Text
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<title>Federal Register, Volume 91 Issue 76 (Tuesday, April 21, 2026)</title>
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[Federal Register Volume 91, Number 76 (Tuesday, April 21, 2026)]
[Notices]
[Pages 21286-21287]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-07711]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket Nos. RM22-5-000; RM21-15-000]
Rate Recovery, Reporting, and Accounting Treatment of Industry
Association Dues and Certain Civic, Political, and Related Expenses
Center for Biological Diversity
AGENCY: Federal Energy Regulatory Commission.
ACTION: Withdrawal of notice of inquiry and termination of proceeding;
denial of petition for rulemaking.
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SUMMARY: The Federal Energy Regulatory Commission is withdrawing a
notice of inquiry that sought comments on the rate recovery, reporting,
and accounting treatment of industry association dues and certain
civic, political, and related expenses. Additionally, the Commission
denies a petition for rulemaking.
DATES: The notice of inquiry published on December 23, 2021 (86 FR
72958) is withdrawn as of April 16, 2026.
FOR FURTHER INFORMATION CONTACT:
Bianca Hill, (Technical Information), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426, (202) 502-6032, <a href="/cdn-cgi/l/email-protection#84c6ede5eae7e5aaccede8e8c4e2e1f6e7aae3ebf2"><span class="__cf_email__" data-cfemail="fab8939b94999bd4b2939696ba9c9f8899d49d958c">[email protected]</span></a>.
Deborah Brentani, (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426, (202) 502-8501, <a href="/cdn-cgi/l/email-protection#723617101d00131a5c3000171c06131c1b32141700115c151d04"><span class="__cf_email__" data-cfemail="f6b293949984979ed8b48493988297989fb690938495d8919980">[email protected]</span></a>.
Daniel Birkam, (Technical Information), Office of Enforcement and
Regulatory Accounting, Federal Energy Regulatory Commission, 888 First
Street NE, Washington, DC 20426, (202) 502-8035,
<a href="/cdn-cgi/l/email-protection#2b6f4a45424e4705694259404a466b4d4e5948054c445d"><span class="__cf_email__" data-cfemail="e8ac8986818d84c6aa819a838985a88e8d9a8bc68f879e">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: 1. On December 16, 2021, the Commission
issued a Notice of Inquiry \1\ in Docket No. RM22-5-000, seeking
comments on the rate recovery, reporting, and accounting treatment of
industry association dues and certain civic, political, and related
expenses. Prior to the Notice of Inquiry, on March 17, 2021, in Docket
No. RM21-15-000, the Center for Biological Diversity filed a petition
for rulemaking pursuant to Rule 207 of the Commission's Rules of
Practice and Procedure \2\ and section 553 of the Administrative
Procedure Act,\3\ requesting that the Commission amend the Uniform
System of Accounts (USofA) requirements for payments to industry
associations engaged in lobbying or other influence-related activities
(Petition).
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\1\ Rate Recovery, Reporting, & Acct. Treatment of Indus. Ass'n
Dues & Certain Civic, Pol., & Related Expenses, 86 FR 72958 (Dec.
23, 2021) 177 FERC ] 61,180 (2021) (Notice of Inquiry).
\2\ 18 CFR 385.207.
\3\ 5 U.S.C. 553.
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2. As discussed below, we are exercising our discretion to withdraw
the Notice of Inquiry and to terminate the proceeding in Docket No.
RM22-5-000. We also deny the Petition.
I. Background
3. In March 2021, the Center for Biological Diversity filed a
petition for rulemaking, requesting that the Commission amend the USofA
requirements relating to utility payments to industry associations
engaged in lobbying or other influence-related expenses. Specifically,
the Center for Biological Diversity requested that the Commission amend
the USofA to require the use of Account 426.4 (Expenditures For Certain
Civic, Political and Related Activities) for all industry association
dues paid by utilities.\4\ In response to the Petition, the Commission
received 35 comments.\5\ Some commenters recommended that the
Commission remove all industry association dues from rates, whereas
others suggested that such a move is unnecessary because industry
association dues are properly allocated between recoverable and non-
recoverable accounts and changing this approach would be contrary to
the fundamental principles of accounting.
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\4\ Petition at 8, 16.
\5\ A list of the commenters is provided in the Appendix.
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4. In the Notice of Inquiry, the Commission stated that it has
authority pursuant to the Federal Power Act (FPA) and the Natural Gas
Act (NGA) to determine whether a rate is unjust, unreasonable, unduly
discriminatory or preferential, and if the Commission determines that
the rate is unlawful, to establish a just and reasonable replacement
rate.\6\ The Commission also stated that it has authority to prescribe
and maintain systems of accounts, i.e., the USofA, for public utilities
and licensees subject to the FPA, and natural gas companies under the
NGA, and the rules and regulations contained therein.\7\
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\6\ Notice of Inquiry, 177 FERC ] 61,180 at P 3 (citing 16
U.S.C. 824e(a); 15 U.S.C. 717d(a)).
\7\ Id. (citing 16 U.S.C. 825; 15 U.S.C. 717g; 18 CFR pts. 101,
201).
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5. In the Notice of Inquiry, the Commission sought comments on a
number of questions to examine the Commission's current policies and
regulations governing the rate recovery, reporting, and accounting
treatment of industry association dues and certain civic political and
related expenses. The Commission also sought comments on any potential
changes that may be necessary to ensure that such expenditures are
appropriately accounted for under the USofA and that recovery of these
expenditures through Commission jurisdictional rates is just and
reasonable.
[[Page 21287]]
6. In response to the Notice of Inquiry, the Commission received 93
initial and reply comments.\8\ Several commenters asserted that further
rulemaking would be redundant because there is enough transparency into
industry association dues. Some commenters asserted that utilities rely
on itemized invoices to determine what amounts are recoverable or
nonrecoverable in rates. Other commenters argued that there is a lack
of transparency. One commenter proposed that the Commission provide
guidance on a case-by-case basis, rather than through general guidance.
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\8\ A list of the commenters is provided in the Appendix.
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II. Discussion
7. We appreciate the feedback commenters provided in response to
the Notice of Inquiry. Based on consideration of the record, we find
that the concerns raised in the Notice of Inquiry are better considered
on a case-by-case basis, consistent with longstanding Commission
practice.
8. Accordingly, we exercise our discretion to withdraw the Notice
of Inquiry and terminate the proceeding in Docket No. RM22-5-000. For
the same reasons, we also deny the Center for Biological Diversity's
Petition. Although we decline to pursue the Notice of Inquiry, we
encourage regulated entities to adopt tariff revisions that enhance
transparency into the industry association costs included in an
entity's rates.
9. We note that in individual cases, evaluating whether industry
association costs were appropriately included in rates will continue to
be governed by Commission regulations,\9\ not other regulatory agency
regulations.\10\ Specifically, expenditures for certain civic,
political and related activities are typically not includable in rates
and properly recorded in USofA nonoperating Account 426.4. Further,
costs recorded in Account 426.4 should include ``expenditures for the
purpose of influencing public opinion . . . or for the purpose of
influencing the decisions of public officials.'' \11\ Conversely, costs
for public relations activities, under certain parameters, are
recordable in operating expense accounts and are recoverable in
rates.\12\
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\9\ Regarding regulated electric utilities, section 141.1 of the
Code of Federal Regulations states ``[e]ach Major and each
Nonoperating (formerly designated as Major) electric utility . . .
must prepare and file electronically with the Commission the FERC
Form 1 pursuant to the General Instructions as provided in that
form.'' 18 CFR 141.1(b)(1)(i). The general instructions to the FERC
Form No. 1 require utilities to ``[p]repare this report in
conformity with the Uniform System of Accounts (18 CFR part 101)
(USofA)'' and to ``[i]nterpret all accounting words and phrases in
accordance with the USofA.'' Similar regulations and instructions
apply to natural gas and oil pipeline companies.
\10\ Cf. EEI Initial Comments at 6 (citing the Internal Revenue
Code employed by the Internal Revenue Service).
\11\ 18 CFR pts. 101, 201, Instructions to Account 426.4.
\12\ 18 CFR pts. 101, 201, Instructions to Accounts 923 and
930.1; see also Alaskan Nw. Nat. Gas Transp. Co., 19 FERC ] 61,218
(1982).
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10. While there is no brightline test differentiating (1)
activities to influence public opinion and policymakers, which must be
recorded in nonoperating Account 426.4; versus (2) recoverable public
relations activities, which are recorded in operating accounts, the
Commission has found that expenditures incurred to influence the
opinion of the public that have ``little or no benefit to the
ratepayers . . . must be borne by stockholders.'' \13\ In addition, the
U.S. Court of Appeals for the District of Columbia Circuit found that
Account 426.4 should include utility ``expenditures for the purpose of
indirectly as well as directly influencing the decisions of public
officials.'' \14\ Specifically, the Court, in vacating an earlier
Commission order, found that costs including those of hired public
relations contractors to organize coalitions that would (1) conduct
public opinion polls; and (2) run promotional advertisements to
persuade state officials that were ``persuasive rather than merely
informative'' should be in Account 426.4.\15\ In addressing whether
certain industry association costs are includable in rates in any
future individual proceeding, the Commission will continue to rely on
its regulations and the precedent interpreting those regulations.
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\13\ N. Border Pipeline Co., 23 FERC ] 61,213, at 61,439 (1983).
\14\ Newman v. FERC, 27 F.4th 690, 697 (D.C. Cir. 2022).
\15\ Id. at 694, 697.
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The Commission orders:
(A) The Notice of Inquiry is hereby withdrawn, and Docket No. RM22-
5-000 is hereby terminated, as discussed in the body of this order.
(B) The Petition in Docket No. RM21-15-000 is hereby denied, as
discussed in the body of this order.
By the Commission. Commissioner LaCerte is not participating.
Issued April 16, 2026.
Carlos D. Clay,
Deputy Secretary.
Note: The following appendix will not appear in the Code of
Federal Regulations.
[FR Doc. 2026-07711 Filed 4-20-26; 8:45 am]
BILLING CODE 6717-01-P
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