# Accounting and Reporting Treatment of Certain Renewable Energy Assets

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2023-14994

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** October 5, 2023
- **Citation:** 88 FR 69294

## Text

DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 101
[Docket No. RM21-11-000; Order No. 898]
Accounting and Reporting Treatment of Certain Renewable Energy Assets

AGENCY:

Federal Energy Regulatory Commission, DOE.

ACTION:

Final rule.

SUMMARY:

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

DATES:

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

FOR FURTHER INFORMATION CONTACT:

Daniel Birkam (Technical Information), Office of Enforcement, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502-8035,
Daniel.Birkam@ferc.gov

Todd Kuzniewski (Technical Information), Office of Enforcement, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502-6381,
Todd.Kuzniewski@ferc.gov

Nathan Lobel (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, (202) 502-8456,
Nathan.Lobel@ferc.gov

SUPPLEMENTARY INFORMATION:

Table of Contents

Paragraph
numbers

I. Introduction
1

II. Background
4

A. Previous Changes to the USofA
4

B. Locke Lord Petition
9

C. Notice of Inquiry
12

D. Notice of Proposed Rulemaking
16

III. Need for Reform
17

IV. Proposed Reforms
22

A. Creation of New Subfunctions and Accounts for Non-Hydro Renewables
22

1. NOPR
22

2. Comments
31

3. Commission Determination
47

B. Creation of Energy Storage Function and Accounts
66

1. NOPR
66

2. Comments
68

3. Commission Determination
72

C. Accounting Treatment for Renewable Energy Credits
76

1. NOPR
76

2. Comments
78

3. Commission Determination
87

D. Creation of Computer Hardware, Software, and Communication Equipment Accounts
99

1. NOPR
99

2. Comments
103

3. Commission Determination
110

E. Reporting
117

1. NOPR
117

2. Comments
122

3. Commission Determination
125

F. Other Issues
129

1. Account Numbering
129

a. Comments
129

b. Commission Determination
130

2. Issues Beyond the Scope of This Rulemaking
131

a. Comments
131

b. Commission Determination
132

G. Proposed Compliance Procedures
133

1. Comments
133

2. Commission Determination
136

V. Information Collection Statement
139

VI. Environmental Analysis
148

VII. Regulatory Flexibility Act
149

VIII. Document Availability
152

IX. Effective Date and Congressional Notification
155

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

I. Introduction

1. In this final rule, the Commission is revising the Uniform System of Accounts (USofA)
1

to account for rapid changes in technology and resource mix in the U.S. energy industry over recent decades. The reforms adopted in this final rule will add functional detail to the USofA in order to provide uniformity, consistency, and transparency in accounting and reporting for investments in these technologies, and to assist the Commission in fulfilling its responsibilities under the Federal Power Act (FPA) to ensure that rates remain just and reasonable. Therefore, pursuant to the Commission's authority to prescribe accounting and financial reporting requirements for jurisdictional companies under section 301 of the FPA,
2

we modify part 101
3

of the Commission's regulations to: (1) create new subfunctions and accounts for wind, solar, and other renewable generating assets; (2) establish a new functional class and accounts for energy storage assets; (3) create new accounts and codify accounting treatment for environmental credits; and (4) create new accounts for computer hardware, software, and communication equipment within existing functions that do not already include them. The final rule also makes corresponding changes to the following FERC Forms to implement the USofA changes: FERC Form Nos. 1, 1-F, 3-Q (electric), and 60.
4

1

Uniform System of Accounts Prescribed for Public Utilities & Licensees Subject to the Provisions of the Federal Power Act,
18 CFR part 101. Unless otherwise indicated, references to the USofA in this final rule refer to the USofA for public utilities and licensees.

2
16 U.S.C. 825.

3
18 CFR part 101.

4
Edits to the FERC Form No. 60 Annual Report of Centralized Service Companies, governed under the Public Utility Holding Company Act, are the result of changes to the FERC forms for public utilities and licensees from which FERC Form No. 60 summarily references accounts.

2. Generally, we are adopting the specific reforms proposed in the Notice of Proposed Rulemaking (NOPR) (87 FR 59870 (Oct. 3, 2022)), but with certain revisions based on the record in this proceeding. In particular, certain proposals in the NOPR have been altered in this final rule to effectuate the Commission's intent, better address the needs of different stakeholders, and facilitate solutions to potential technical challenges.

3. As discussed further below in section IV.G (Proposed Compliance Procedures), each utility must implement the requirements of this final rule by January 1, 2025.

II. Background

A. Previous Changes to the USofA

4. The USofA was created by the Federal Power Commission to facilitate the Commission's ratemaking responsibilities and uniformly capture financial and operational information for, first, traditional public utilities, and then natural gas pipelines.
5

The USofA has been modified over time to account for changing technological, legal, and market conditions.

5
18 CFR part 101.

5. For example, in Order No. 552, the Commission revised the USofA to account for sulfur dioxide emissions allowances under the 1990 Clean Air Act Amendments.
6

In that order, the Commission created new inventory Accounts 158.1 (Allowance Inventory) and 158.2 (Allowances Withheld) and new expense Account 509 (Allowances) to accommodate the new sulfur dioxide emissions allowances. The Commission noted that some commenters sought to classify allowances in existing accounts to facilitate a desired ratemaking result; however, the Commission found these comments unpersuasive because accounting rules provide sound and uniform accounting rather than dictating particular ratemaking results.
7

6

Revisions to Uniform System of Accounts to Account for Allowances under the Clean Air Act Amendments of 1990 & Regulatory-Created Assets & Liabilities & to Form Nos. 1, 1-F, 2 & 2-A,
Order No. 552, 62 FR 61299 (Nov. 17, 1997), FERC Stats. & Regs. ¶ 30,967 (1993) (cross-referenced at 62 FERC ¶ 61,299).

7

Id.
at 30,799.

6. In 2013, the Commission issued Order No. 784, which revised the USofA and related forms to codify accounting treatment for energy storage.
8

The Commission created: (1) new electric plant and associated operating and maintenance expense accounts (O&M accounts) to record investments in, and operations and maintenance costs associated with, energy storage assets; (2) a new purchased power account to record the cost of power purchased for use in storage operations; and (3) new FERC Form Nos. 1 and 1-F schedules.
9

Order No. 784 also amended existing schedules in FERC Form Nos. 1, 1-F, and 3-Q (electric) to report operational and statistical data on storage assets.

8

Third-Party Provision of Ancillary Services; Accounting & Financial Reporting for New Electric Storage Technologies,
Order No. 784, 78 FR 46178 (July 30, 2013), 144 FERC ¶ 61,056 (2013),
order on clarification,
Order No. 784-A, 146 FERC ¶ 61,114 (2014).

9

Id.
P 123.

7. Specifically, the Commission created electric plant accounts for energy storage assets within the existing USofA functions: Account 348 (Energy Storage Equipment—Production), Account 351 (Energy Storage Equipment—Transmission), and Account 363 (Energy Storage Equipment—Distribution).
10

The Commission created corresponding new O&M accounts: Account 548.1 (Operation of Energy Storage Equipment) and Account 553.1 (Maintenance of Energy Storage Equipment) for energy storage plant classified as production; Account 562.1 (Operation of Energy Storage Equipment) and Account 570.1 (Maintenance of Energy Storage Equipment) for energy storage plant classified as transmission; and Account 582.1 (Operation of Energy Storage Equipment) and Account 592.2 (Maintenance of Energy Storage Equipment) for energy storage plant classified as distribution.
11

10

Id.
P 141.

11

Id.
P 147.

8. In these energy storage accounts, the installed cost of energy storage assets is recorded based on the function or purpose the assets serve. Where an energy storage asset performs more than one purpose or function, Order No. 784 requires the cost of the asset to be allocated among the accounts based on the functions performed and approved rate recovery.
12

While some commenters argued that the requirement to allocate energy storage assets that perform multiple functions across the relevant accounts places an undue administrative burden on utilities, the Commission nevertheless provided for functional recording because utilities that recover the costs of storage operations on a cost of service basis must already maintain cost allocation information on the assets.
13

Furthermore, the Commission in Order No. 784 found that the alternative of recording all costs of energy storage assets in a single plant account would result in less transparent reporting.
14

12

Id.
P 126.

13

Id.
P 133.

14

Id.
P 135.

B. Locke Lord Petition

9. In Docket No. AC20-103, Locke Lord submitted a petition to the Chief Accountant requesting confirmation that the costs of certain wind and solar generating assets should be booked to Other Production Accounts 343 (Prime Movers), 344 (Generators), and 345 (Accessory Electric Equipment).
15

Specifically, Locke Lord proposed to record: (1) wind turbines, solar modules, combiner circuits, and inverters to Account 343 (Prime

Movers); (2) wind turbine generators to Account 344 (Generators); and (3) DC conductors, individual low-voltage step-up transformers, AC conductors (34.5 kV) associated with collector systems, power cables, conduit and underground duct banks, circuit breakers, disconnect switches and accessories, grounding conductors and grounding transformers, collector system buses, main and/or auxiliary transfer buses, collector system control systems, Supervisory Control and Data Acquisition (SCADA) systems, static capacitors and reactors, and collector system substations to Account 345 (Accessory Electric Equipment).

15

Locke Lord LLP,
174 FERC ¶ 61,033, at P 1 (2021).

10. Some commenters in that proceeding argued that the petition proposed recording inappropriate costs, including costs related to the collector system and SCADA,
16

into Account 345 (Accessory Electric Equipment), which would implicate broader issues of compensation for reactive power.
17

Some commenters, including Edison Electric Institute (EEI), suggested that the Commission consider creating new accounts for wind, solar, and other non-hydro renewables to resolve this dispute.
18

16

Id.
P 6.

17

Id.
PP 10, 13. Specifically, the
AEP
Methodology identifies costs associated with four groups of plant investment: (1) the generators/exciters; (2) generator step-up transformers; (3) accessory electric equipment; and (4) the remaining production plant investment. These costs are then allocated between real and reactive power using an allocation factor.
Id.
P 10 n.12.

18

Id.
PP 8, 13, 16.

11. The Commission denied the petition, noting that the record reflected substantial disagreement about equipment functions and categorizations.
19

In so doing, the Commission also noted that it would concurrently issue a Notice of Inquiry (NOI) to consider creating separate categories of accounts in the USofA for wind and solar generating assets.
20

The Commission has since opened a separate proceeding under Docket No. RM22-2-000 to gather comments and information about potential alternative reactive power compensation.

19

Id.
P 19.

20

Id.
P 20.

C. Notice of Inquiry

12. On January 19, 2021, the Commission issued an NOI in the instant docket seeking comment on the appropriate accounting treatment for certain renewable generating assets.
21

Specifically, the Commission sought comment on: (1) whether to create new accounts within the USofA for non-hydro renewable energy generating assets;
22

(2) what modifications to FERC Form No. 1 are needed to reflect these changes; (3) whether to codify the proper accounting treatment of the purchase, generation, and use of renewable energy credits (REC); and (4) whether there are rate-setting implications for these accounting and reporting changes.

21

Accounting & Reporting Treatment of Certain Renewable Energy Assets,
Notice of Inquiry, 86 FR 7086, 174 FERC ¶ 61,032 (2021) (NOI).

22
The NOI defined non-hydro renewable generating assets as production assets other than hydroelectric generators (such as solar, wind energy, geothermal, biomass, etc.) that rely on the heat or motion of the earth or the sun's radiation to produce energy. These assets are denoted as renewable because the power production is based on a fuel source that is not consumed or destroyed by the generation process, such as buried hydrocarbons (coal, oil, natural gas) or the decay of rare irradiated heavy metals (nuclear). Biomass (trees, nut shells, grain husks and stalks, etc.) is considered renewable, despite consumption of its hydrocarbon source, because the carbon it releases is offset by regrowth of carbon capturing equivalent biomass.
Id.
P 1.

13. The Commission explained that the USofA contains discrete production accounts for Steam, Nuclear, Hydraulic, and Other Production, but does not contain accounts specifically designated for solar, wind, or other non-hydro renewable generating assets.
23

The Commission noted that companies record non-hydro renewable generating assets in the USofA's Other Production accounts, but that parties have disagreed which Other Production accounts are appropriate for these assets.
24

For example, the Commission noted that no plant account definition clearly describes solar panels, PV inverters, wind generation towers, or the computer hardware and software required to operate wind and solar generators.
25

Similarly, the Commission explained that the related O&M accounts do not uniquely accommodate costs to maintain wind and solar facilities.
26

23

Id.
P 2.

24

Id.
PP 2-3.

25

Id.
PP 6-9.

26

Id.
P 9.

14. The Commission also explained that USofA accounts do not explicitly address the purchase, generation, or use of RECs.
27

The Commission found in
Ameren Illinois Co.
that RECs are analogous to sulfur dioxide emission allowances, accounting treatment for which was codified in Order No. 552.
28

The Commission noted that Order No. 552 classified emission allowances as inventory and established new inventory and expense accounts to record the allowances and associated activities.
29

In keeping with Order No. 552, the Commission has found that RECs that are purchased or generated should be recorded in Account 158.1 (Allowance Inventory) and expensed to Account 509 (Allowances) as they are utilized.
30

27

Id.
PP 4, 13.

28

Ameren Illinois Co.,
170 FERC ¶ 61,267, at P 52 (2020).

29
NOI, 174 FERC ¶ 61,032 at P 13 (citing Order No. 552, FERC Stats. & Regs. ¶ 30,967).

30

Id.
PP 4, 13-14 (citing
Ameren Illinois Co.,
170 FERC ¶ 61,267 at P 52).

15. The Commission also noted that any proposed additions and modifications to its USofA would require corresponding changes to FERC Form No. 1, and could have a significant and measurable impact on rates.
31

31

Id.
PP 12, 16.

D. Notice of Proposed Rulemaking

16. On July 28, 2022, the Commission issued a NOPR in the same proceeding.
32

In the NOPR, the Commission proposed, as discussed in greater detail below, to: (1) create new subfunctions and accounts for wind, solar, and other non-hydro renewable generating assets; (2) establish a new functional class and accounts for energy storage accounts; (3) create new accounts and codify the accounting treatment of RECs; and (4) create new accounts for computer hardware, software, and communication equipment within existing functions that do not already include them. The Commission received seven comments from a diverse set of stakeholders.
33

32

See Accounting & Reporting Treatment of Certain Renewable Energy Assets,
Notice of Proposed Rulemaking, 87 FR 59870 (Oct. 3, 2022), 180 FERC ¶ 61,050, at P 28 (2022) (NOPR).

33

See
American Clean Power Association (ACP) and Solar Energy Industries Association (SEIA) (collectively Clean Energy Associations) NOPR Comments; Carl Pechman NOPR Comments; Dominion Energy, Inc. (Dominion) NOPR Comments; EEI and American Gas Association (AGA) (collectively Utility Associations) NOPR Comments; Liquid Energy Pipeline Association (LEPA) NOPR Comments; Pacific Gas and Electric (PG&E) and San Diego Gas and Electric (SDG&E) NOPR Comments; Retail Energy Supply Association (RESA) NOPR Comments.

III. Need for Reform

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

By adding functional detail to the USofA, these reforms will provide uniformity, consistency, and transparency in

accounting and reporting for investments into these assets, and assist the Commission in fulfilling its responsibilities under the FPA to ensure that rates remain just and reasonable.

34
NOPR, 180 FERC ¶ 61,050 at P 27.

18. As discussed in the NOPR and NOI, the USofA contains discrete production accounts for Steam, Nuclear, Hydraulic, and a catch-all category for Other Production.
35

However, the USofA does not have production accounts designated specifically for solar, wind, or other renewable generating assets; public utilities instead record non-hydro renewable generating assets in the Other Production accounts. Given the rapid expansion and development of wind, solar, and other renewable generation technologies, and the record in Docket No. AC20-103 and the instant rulemaking proceeding, we conclude that the USofA must be modified to clarify how public utilities should account for non-hydro renewable generating assets, to avoid inconsistencies in accounting and reporting, and to facilitate the ratemaking process. NOI and NOPR commenters also generally agreed that these accounts are needed given non-hydro renewables' varied and distinct characteristics from existing electric production subfunctions within the USofA.
36

35
18 CFR part 101.

36

See
ACP NOI Comments at 16; Alliant Energy NOI Comments at 3; Dominion NOPR Comments at 3; EEI NOI Comments at 4; Utility Associations NOPR Comments at 7.
But see
Clean Energy Associations NOPR Comments at 6 (contending that confusion and inconsistency in recording renewable energy assets can be resolved at lesser cost by clarifying that specific existing USofA accounts should be used).

19. Our reporting requirements for energy storage also need revision. In Order No. 784, the Commission created accounts for energy storage assets and related operations and maintenance expenses within different functions, but underestimated the additional burden that functional reporting, along with frequent reclassification of plant assets and associated accumulated depreciation, imposes on utilities.
37

Since the issuance of Order No. 784, and based on experience and industry input since the issuance of Order No. 784, the Commission now recognizes the need for revisions to its USofA for energy storage accounting. Today, it is clear that frequently changing functionalization imposes significant recordkeeping and reporting burden on utilities, which increases internal control risks for reporting errors in our forms.
38

Consequently, NOI commenters requested the Commission to create, and NOPR commenters supported the proposed creation of, a new energy storage function in this proceeding.
39

We are now persuaded that this new function is needed to simplify and improve recording and reporting of energy storage assets and related expenses.

37

See
Order No. 784, 144 FERC ¶ 61,056 at P 133.

38
EEI NOI Comments at 6-9.

39
Clean Energy Associations NOPR Comments at 5; EEI NOI Comments at 6-9; Energy Storage Association (ESA) NOI Comments at 1-2; Utility Associations NOPR Comments at 11.

20. Similarly, the Commission has concluded that USofA revision is needed to formalize accounting treatment for the purchase, generation, and use of environmental credits. While the Commission explained in 2020 that RECs should be treated analogously to the accounting treatment for sulfur dioxide emission allowances addressed in Order No. 552,
40

not all utilities follow this approach.
41

In addition, utilities are increasingly using a variety of environmental crediting items.
42

As such, codifying environmental credit treatment will promote consistent treatment of these items in Commission accounting and reporting.

40

Ameren Illinois Co.,
170 FERC ¶ 61,267 at P 52.

41
EEI NOI Comments at 10.

42

See
Carl Pechman NOPR Comments at 4; Utility Associations NOPR Comments at 19.

21. Lastly, designated computer hardware, software, and communication equipment accounts for all functions and plant subfunctions are needed to eliminate ambiguity and improve consistency in accounting and reporting. Currently, the USofA includes designated computer hardware, software, and computer equipment accounts in some functions and subfunctions but not others. Specifically, the Regional Transmission and Market Operation Plant function includes plant accounts for computer hardware, software, and communication equipment, and the Transmission and Regional Market functions contain maintenance accounts for these assets, but no other plant or maintenance function includes such specificity.
43

USofA revisions are therefore needed to provide for consistent treatment of these assets and costs.

43

See
18 CFR part 101.

IV. Proposed Reforms

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

1. NOPR

22. The Commission proposed three new subfunctions within the Production Plant function of the USofA: D. Solar Production, E. Wind Production, and F. Other Non-Hydro Renewable Production.
44

Consistent with all other production subfunctions (
e.g.,
Steam Production, Nuclear Production, and Hydraulic Production), the Commission proposed the following five accounts within each of these three new subfunctions: (1) Accounts 338.1, 338.20, and 339.1 (Land and Land Rights); (2) Accounts 338.2, 338.21, and 339.2 (Structures and Improvements); (3) Accounts 338.8, 338.29, and 339.8 (Other Accessory Electrical Equipment); (4) Accounts 338.12, 338.33, and 339.12 (Miscellaneous Power Plant Equipment); and (5) Accounts 338.13, 338.34, and 339.13 (Asset Retirement Costs).
45

These accounts are similar in description and instruction to the existing accounts of the same title in each of the other production subfunctions.

44
NOPR, 180 FERC ¶ 61,050 at P 33.

45

Id.
P 35. The three accounts under each number represent the three new subfunctions: Solar, Wind, and Non-Hydro Renewable Production, respectively.

23. The Commission also proposed to create three additional accounts for the new Solar Production and Wind Production subfunctions: (1) Accounts 338.5 and 338.26 (Collector System); (2) Accounts 338.6 and 338.27 (Generation Step-up Transformers (GSU)); and (3) Accounts 338.7 and 338.28 (Inverters).
46

Similar to distribution system accounts, the Collector System accounts list many of the same items included in the accounts for Poles, Towers and Fixtures (Account 364) and Overhead Conductors and Devices (Account 365).
47

The GSU accounts are intended to record transformers that are directly connected to generator terminal tips and supporting equipment. The inverter accounts are intended to record equipment that converts power from direct current to alternating current.

46

Id.
P 36.

47
For example, Account 364 listed, among others, poles, towers, anchors, and extension arms. Account 365 listed, among others, circuit breakers, conductors, and lightning arrestors.

24. Additionally, the Commission proposed unique generating accounts for all three subfunctions: (1) Account 338.4 (Solar Panels) for Solar Production; (2) Account 338.23 (Wind Turbines) and Account 338.24 (Wind Towers and Fixtures) for Wind Production; and (3) Account 339.3 (Fuel Holders), Account 339.4 (Boilers), and Account 339.6 (Generators) for Other Non-Hydro Renewable Production.
48

The solar panels account is designated to record panels and support equipment that change solar energy into electricity and related supporting structures such as racks and gears. The wind turbines

account includes components that are located from the top of the tower to the end of the turbine blades. The wind towers and fixtures account includes the tower and the components contained within the tower that are located from the top of the foundation to the base of the nacelle. The three accounts to record fuel holders, boilers, and generators that are included in Other Non-Hydro Renewable Production capture renewable generation assets that use any fuel source or method (
e.g.,
steam or direct burning). These accounts allow for recording biofuels, hydrogen, geothermal, and other types of generation in this subfunction. Many of the items listed in these account descriptions are the same as those accounts listed in the Steam and Other Production subfunctions.
49

48
NOPR, 180 FERC ¶ 61,050 at P 37.

49

See, e.g.,
Account 342 (Fuel Holders, Producers, and Accessories); Account 312 (Boiler Plant Equipment); Account 344 (Generators).

25. Similar to the new plant accounts for non-hydro renewables, the Commission proposed new O&M accounts for these subfunctions, titled F. Solar Generation, G. Wind Generation, and H. Other Non-Hydro Renewable Generation.
50

All three subfunctions include the following seven accounts consistent with the other subfunctions (
e.g.,
Steam, Nuclear, and Hydraulic): (1) Accounts 558.1, 558.20, and 559.1 (Operation Supervision and Engineering); (2) Accounts 558.4, 558.23, and 559.4 (Rents); (3) Accounts 558.5, 558.24, and 559.5 (Operation Supplies and Expenses (Nonmajor only)); (4) Accounts 558.6, 558.25, and 559.6 (Maintenance Supervision and Engineering (Major only)); (5) Accounts 558.7, 558.26, and 559.7 (Maintenance of Structures (Major only)); (6) Accounts 558.16, 558.36, and 559.15 (Maintenance of Miscellaneous (Solar, Wind, or Other Non-Hydro Renewable) Generation Plant (Major only)); and (7) Accounts 558.17, 558.37, and 559.16 (Maintenance of (Solar, Wind, or Other Non-Hydro Renewable) Generation Plant (Nonmajor only)).
51

These accounts have similar descriptions, items, and instructions to existing accounts.

50
NOPR, 180 FERC ¶ 61,050 at P 38.

51
Item 7 includes three accounts that are designated as nonmajor only. Nonmajor entities would therefore record all maintenance activities in these accounts without the added granularity required for major entities (Items 1-6).

26. The Commission also proposed four additional maintenance accounts for Solar and Wind Generation subfunctions, but not for the Other Non-Hydro Renewable Production subfunction:
52

(1) Accounts 558.9 and 558.29 (Maintenance of Collector Systems (Major only)); (2) Accounts 558.10 and 558.30 (Maintenance of Generator Step-up Transformers (Major only)); (3) Accounts 558.11 and 558.31 (Maintenance of Inverter Expenses (Major only)); and (4) Accounts 558.12 and 558.32 (Maintenance of Other Accessory Electrical Equipment (Major only)).
53

These accounts allow for recording maintenance expenses for the associated plant accounts for Solar and Wind Production. The proposed list of items for Accounts 558.9 and 558.29 (Maintenance of Collector Systems (Major only)) are similar to the list of items for Account 593 (Maintenance of Overhead Lines (Major only)) in the Distribution Expenses function.

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

53
NOPR, 180 FERC ¶ 61,050 at P 39.

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

54

Id.
P 40.

28. In addition, the Commission proposed new maintenance accounts for specific generation assets: for Solar Generation, Account 558.8 (Maintenance of Solar Panels (Major only)); for Wind Generation, Account 558.27 (Maintenance of Wind Turbines, Towers and Fixtures (Major only)); and for Other Non-Hydro Renewable Generation, Account 559.9 (Maintenance of Boilers (Major only)), and Account 559.10 (Maintenance of Generating and Electric Equipment (Major only)).
55

These new accounts have similar descriptions and instructions to maintenance accounts for generation equipment in the other subfunctions. The Commission proposed to designate an account for maintenance of electrical equipment separate from the maintenance of generation equipment for the new Solar and Wind Generation subfunctions.

55

Id.
P 41.

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

56

Id.
P 42.

30. Lastly, the Commission sought comment on several topics.
57

First, to avoid confusion with the existing “Other Production” generation subfunction, the Commission sought comment on whether to retitle that subfunction to “Prime Mover Production” because the current instructions to the “Other Production” subfunction only describe prime mover-type generation assets.
58

Second, noting that the USofA does not currently address kinetic energy from the ocean to generate electricity,
59

the Commission sought comment on whether to include both tidal and wave energy as part of the existing Hydraulic Production function, rather than in the newly proposed other non-hydro renewable asset accounts. Third, the Commission sought comment on whether the Commission's Chief Accountant should issue accounting guidance for hydrogen, and whether it would be helpful to propose revisions to the USofA for natural gas pipelines to account for hydrogen activities.

57

Id.
PP 34, 43, 68.

58
A prime mover electric generator is one where the fuel source directly moves the electric turbine rather than using a boiler or other secondary energy transfer.

59

See
EEI NOI Comments at 4-5.

2. Comments

31. Dominion and Utility Associations support the addition of new accounts for non-hydro renewable generating assets.
60

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

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

60
Dominion NOPR Comments at 3; Utility Associations NOPR Comments at 7.

61
Clean Energy Associations NOPR Comments at 6.

32. Commenters also suggest specific revisions to the NOPR proposal. First, Clean Energy Associations raise concerns that the NOPR proposed separate accounts for some equipment that is infrequently itemized by manufacturers and typically retired together.
62

For wind facilities, Clean Energy Associations accordingly recommend that the Commission consolidate proposed Account 338.23 (Wind Turbines) and Account 338.24 (Wind Towers and Fixtures) into a single account for the wind turbine generator, tower, pad-mounted or nacelle-mounted transformer, and foundation. Further, they argue that reporting wind towers and turbines together would be consistent with Electric Plant Instruction No. 3, Item 8, Part B, which states “[t]he cost of specially provided foundations not intended to outlast the machinery or apparatus for which provided, and the cost of angle irons, castings, etc., installed at the base of an item of equipment, shall be charged to the same account as the cost of the machinery, apparatus, or equipment.”
63

For solar facilities, Clean Energy Associations suggest that the Commission consolidate solar inverter and power station transformer costs into the same account.
64

In the alternative, Clean Energy Associations request that the Commission specify how costs should be recorded when manufacturers or contractors do not itemize them separately.

62

Id.
at 13-14, 19.

63
18 CFR part 101, Electric Plant Instruction No. 3, Item 8, Part B.

64
Clean Energy Associations NOPR Comments at 13-14.

33. Next, Clean Energy Associations make several comments related to recording collector system costs.
65

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

65

Id.
at 11-12.

34. Further, Clean Energy Associations request that the Commission identify an account for collector system substation costs.
66

Clean Energy Associations recommend that the Commission adopt a separate Production Plant account for the substation similar to the collector system or clarify the definition of the collector system to include the specific items that are part of the collector system substation.

66

Id.
at 7-8.

35. Clean Energy Associations also suggest that the Commission consolidate treatment of static capacitors and reactors in the same account.
67

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

67

Id.
at 6-7.

36. Clean Energy Associations next suggest that the Commission clarify the end-point of the collector system and adopt definitions that run from inverters or wind turbines up to but not including the MPT, consistent with comparable equipment for conventional generation.
68

According to Clean Energy Associations, the NOPR's solar and wind collector system definitions appear to go beyond the MPT, while conventional generation connects generators to the MPT via connection facilities that end at the low side of the MPT.

68

Id.
at 12.

37. In addition, Clean Energy Associations request that the Commission establish a separate Production Plant account to house the installed cost of the DC collector system, or clarify that the cost should be reported to Other Accessory Electric Equipment in proposed Account 338.8.
69

According to Clean Energy Associations, the DC collector system does not fit within the NOPR's definitions for proposed Account 338.4 (Solar Panels) nor Account 338.5 (Collector System), which they understand to be limited to the AC collector system connected to the high side of the inverter power station transformer.

69

Id.
at 8-9.

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

70

Id.
at 17-18.

39. The Commission also received comments on the NOPR's proposed accounts for GSU. Utility Associations note a potential inconsistency between the NOPR's proposed GSU definition and
Kentucky Utilities Company's
instruction that “GSU transformers are not used in the generation of power and thus should not be booked to production plant accounts” (although their costs may be assigned to production through the ratemaking process).
71

The Commission proposed to include GSU transformers on the low side of the collector system in new Solar Production and Wind Production subfunction accounts.
72

Utility Associations ask the Commission to reconcile this proposal with
Kentucky Utilities Company's
instruction.

71
Utility Associations NOPR Comments at 7-8 (citing
Kentucky Utilities Co.,
85 FERC ¶ 61,274, at 62,112 n.37 (1998) (Opinion No. 432)).

72
NOPR, 180 FERC ¶ 61,050 at P 36;
see also id.,
proposed Accounts 338.6 and 338.27.

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

Clean Energy Associations also cite to
Kentucky Utilities Company,
74

the Commission's characterization of
Kentucky Utilities Company
in
Pacific Gas & Electric Co.,
75

and Order No. 827,
76

to argue that the Commission should expand its GSU accounts to include the substation MPT and equipment located beyond the high side of the substation MPT.

73
Clean Energy Associations NOPR Comments at 9-10.

74

Id.
at 9 (citing Opinion No. 432, 85 FERC at 62,112 n.36 (“[T]he GSU serves no purpose without

the generator, and the generator cannot transform power to the transmission-level voltage without the GSU.”)).

75

Id.
at 10 (citing
Pacific Gas & Electric Co.,
106 FERC ¶ 61,144, at P 19 (2004) (“GSU transformers . . . are located at generation stations and [are] used solely to increase the voltage of electric energy produced by generators to the higher voltages necessary for bulk power transmission to load centers.”)).

76

Id.
(citing
Reactive Power Requirements for Non-Synchronous Generation,
Order No. 827, 81 FR 40793 (June 23, 2016), 155 FERC ¶ 61,277, at P 13 n.31 (2016) (“[T]he generator substation would be the substation for a wind [or solar] generator that separates the low-voltage collector system from the higher voltage elements of the Interconnection Customer Interconnection Facilities that bring the generator's energy to the Point of Interconnection.”)).

41. Clean Energy Associations also request clarification about where and how the substation MPT and equipment located beyond the high side of the substation MPT should be recorded.
77

Clean Energy Associations suggest that the proposed collector system definitions in Accounts 338.5, 338.26, and 387.5 overlap with the description for Station Equipment in existing Account 353.

77

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

42. Clean Energy Associations further request clarification related to reporting different types of land and construction costs for non-hydro renewable generation projects.
78

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

78

Id.
at 15-17.

43. In addition, several commenters comment on the NOPR's proposed O&M accounts. Utility Associations suggest that wind and solar plants are simpler to operate than other types of generating plant, with less distinguishable labor, and therefore require fewer O&M accounts to support them than traditional generation assets.
79

They therefore argue that the Commission should limit the creation of new O&M accounts for non-hydro renewables to those listed in Appendix A to their comments. Dominion argues that the Commission should create a robust list of maintenance accounts sufficient to meaningfully segregate costs.
80

Relatedly, Dominion opposes elimination of the miscellaneous expense account for each type of renewable energy in order to preserve a place for expenses that do not clearly fall within other specified accounts. Clean Energy Associations, for their part, agree with the NOPR's proposed O&M accounts, but urge the Commission to clarify that the operations and maintenance costs are related to Plant booked to Production Accounts.
81

Clean Energy Associations raise the need for this clarification because, while the NOPR suggests that its four proposed maintenance accounts “would allow for the recording of maintenance expense for the associated plant accounts for Solar and Wind Production,” it also suggests that maintenance of the collector system “would be similar to the list of items for Account 593 (Maintenance of Overhead Lines) (Major Only)) in the Distribution Expense function” and describes wind and solar collector systems as “distributive in design. . . .”
82

79
Utility Associations NOPR Comments at 7, app. A.

80
Dominion NOPR Comments at 3.

81
Clean Energy Associations NOPR Comments at 19-20.

82

Id.
(citing NOPR, 180 FERC ¶ 61,050 at P 39 n.78).

44. Commenters also responded to the NOPR's request for comment on renaming the Other Production account, how to account for tidal and wave technologies, and hydrogen accounting guidance. Utility Associations oppose the NOPR's proposal to retitle “Other Production” to “Prime Mover Production.”
83

Utility Associations suggest that retaining the “Other Production” account will preserve existing flexibility for recording assets in the face of technological change to record future production assets that do not meet the definition of either prime movers or renewable generating assets.

83
Utility Associations NOPR Comments at 7.

45. Regarding the NOPR's request for comment on hydrogen technologies, Utility Associations and Carl Pechman both request guidance on accounting for hydrogen facilities.
84

Utility Associations suggest that hydrogen equipment costs should be recorded to Account 339.12 (Miscellaneous Power Plant Equipment) while hydrogen fuel costs should be recorded to Account 547 instead of Account 559.3.
85

And, while Utility Associations believe that it is currently premature to propose new public utility accounts specifically for hydrogen use in the electricity industry, they suggest that new natural gas pipeline accounts are needed to record the investments and operating expenses incurred for hydrogen. They therefore recommend that the Commission update the USofA for natural gas pipelines to include a list of proposed accounts in Appendix B to their comments.
86

84
Carl Pechman NOPR Comments at 3-4; Utility Associations NOPR Comments at 9-11.

85
Utility Associations NOPR Comments at 9-11.

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

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

within existing Hydraulic Production accounts.
87

87
Carl Pechman NOPR Comments at 4.

3. Commission Determination

47. We adopt the NOPR's proposals to create new Production Plant subfunctions and associated accounts, with minor revisions, as discussed below. We disagree with Clean Energy Associations that accounting treatment clarity and transparency can be adequately provided at lesser administrative burden through issuance of accounting guidance instead of creating new renewable subfunctions.
88

The existing Other Production subfunction no longer fully accommodates the specificities of modern renewable generation systems. For instance, no existing Other Production account describes the function that collector systems provide to wind and solar farms—consolidating power from individual turbines or panels before interconnection to the grid. The Commission typically uses accounting guidance to clarify how best to account for an item among several available accounts. Creating new Wind Production, Solar Production, and Other Renewable Production subfunctions is therefore necessary to provide uniformity, consistency, and transparency to reduce risk of errors in accounting and reporting.

88

See
Clean Energy Associations NOPR Comments at 6.

48. First, we adopt the NOPR's proposals to separate reporting of wind towers, turbines, foundations, and transformers. Wind towers, turbines, foundations, and transformers are different items with separate purposes and potentially distinct service lives, and should therefore be tracked in separate accounts. While Clean Energy Associations note that these assets are often retired together,
89

we have assessed that these assets may feature distinct depreciation lives supporting separate accounts. We also note that, while vendor invoices are used for recording costs in construction work in progress that becomes plant in service, these invoices do not determine the unitization of plant in service by account under the USofA instructions.
90

89

Id.
at 13, 19.

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

49. We also adopt the NOPR's proposal to create separate GSU and inverter accounts within the Solar Production subfunction. Like the wind turbine, tower, foundation, and transformer accounts, establishing separate accounts is warranted because solar inverters are both separate equipment from, and do not serve the same function as, power station transformers. We note that we do not control how vendors describe the work performed during construction on invoices, and the company unitizes the costs (into retirement units) after the project is closed and records the costs to the appropriate plant accounts. Again, we reiterate that vendor invoices may inform about certain activities performed during construction, but asset unitization is performed when the project is complete and available to be placed in service.

50. In addition, we adopt the NOPR's proposal to create Collector System accounts within the new Solar Production and Wind Production subfunctions. However, we also agree with Clean Energy Associations that the definitions of the proposed collector systems in Account 338.5 and Account 338.26 require certain revisions for consistency.
91

We have revised the Wind Production subfunction Account 338.26 definition (and the Energy Storage function Account 387.5 definition) to mirror the Solar Production collector system definition in Account 338.5.

91

See
Clean Energy Associations NOPR Comments at 11-12.

51. We decline to grant Clean Energy Associations' request that we adopt a separate Production Plant account for the substation.
92

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

92

See id.
at 7-8.

52. However, we grant several of Clean Energy Associations' requests for clarification,
93

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

93

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

53. Next, we decline to provide an exhaustive list of the equipment that should be recorded in the Other Accessory Electrical Equipment accounts.
94

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

94

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

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

despite commenters' suggestion to the contrary,
95

this decision is consistent with Commission precedent in
Kentucky Utilities Company.
96

There, the Commission considered whether the costs of GSU transformers that step up voltage to the transmission system
97

should be included in transmission rates. It determined that, while the costs of such GSU transformers should be assigned to generators for rate purposes,
98

for accounting purposes “GSU transformers are not used in the generation of power, and thus should not be booked to production accounts.”
99

95

See
Clean Energy Associations NOPR Comments at 9-10; Utility Associations NOPR Comments at 7-8.

96

See
Opinion No. 432, 85 FERC ¶ 61,274.

97

Id.
at 62,109 n.33 (“A GSU transformer is an electrical device that transforms power from a lower voltage to a higher voltage. The GSU transformers in question in this proceeding are those which step-up voltages at the generation level to higher voltages at the [transmission level].”)

98

Id.
at 62,112.

99

Id.
at 62,112 n.37.

55. Utility Associations misread
Kentucky Utilities Company
in arguing that it conflicts with the NOPR's proposed GSU account definitions.
100

They question how the proposed Production Plant GSU accounts are consistent with the Commission's statement in
Kentucky Utilities Company
that “GSU transformers are not used in the generation of power, and thus should not be booked to production accounts.”
101

This confusion appears to derive from the fact that, unlike traditional generation sources that have a single GSU that steps-up the generator voltage to transmission or distribution levels, renewable plants have two step-up transformers: one GSU located on the low voltage side of the collector system, and another step-up transformer at the substation, that, as in conventional power plants, steps up voltage to connect to the transmission or distribution system. While these assets are both step-up transformers, they serve different functional purposes—and therefore should be reported to different accounts. The GSU transformers at issue in
Kentucky Utilities Company
stepped up voltage to the transmission system.
102

The GSU accounts that we create here for the new Solar Production and Wind Production subfunctions instead are designated for transformers that step up voltage to support the collector systems. These GSUs do not directly interconnect with transmission and distribution power grids. Therefore,
Kentucky Utilities Company
is inapposite. To further clarify the GSU assets that belong in the new Production subfunction accounts, however, we revise Accounts 338.6 and 338.27 (and Energy Storage function Account 387.6) to expressly exclude transformers and other equipment that step up voltage or frequency for the purposes of transmission or distribution. Those assets are more appropriately included in transmission or distribution Account 353 (Station Equipment) or Account 362 (Station Equipment), respectively.

100
Utility Associations NOPR Comments at 7-8.

101
Opinion No. 432, 85 FERC at 62,112 n.37.

102

Id.
at 62,109 n.33 (specifying that “[t]he GSU transformers in question in this proceeding are those which step-up voltages at the generation level to higher voltages at the [transmission level].”).

56. Clean Energy Associations also misread
Kentucky Utilities Company.
103

They argue that
Kentucky Utilities Company
requires the Commission to include the substation MPT and equipment located
beyond
the high side of the substation MPT within the GSU accounts. In doing so, Clean Energy Associations mistake
Kentucky Utilities Company's
holding on rate treatment for one applying to accounting treatment. To the contrary,
Kentucky Utilities Company
expressly forbade recording the cost of GSU equipment beyond the high side of the substation MPT to production plant accounts, even while noting that the GSUs serve generators for rate allocation purposes.
104

Clean Energy Associations' references to
Pacific Gas & Electric Co.
and Order No. 827 are even less relevant.
105

In
Pacific Gas & Electric Co.,
the Commission distinguished that rate case from
Kentucky Utilities Company
in finding that the facilities in the two cases were different and held that bulk transmission lines configured as loop facilities should be allocated to transmission rates. The Commission's order in
Pacific Gas & Electric Co.
said nothing about the accounting treatment for the substation MPT and equipment located beyond the high side of the substation MPT.
106

The Commission's illustrative footnote in Order No. 827, which required non-synchronous generators to provide dynamic reactive power at the high-side of the generator substation,
107

similarly did not disturb our precedent that transformers used to step up voltage for the purpose of transmission or distribution should not be recorded to Production Plant accounts.
108

Therefore, our decision to limit the equipment that is recorded in the new GSU accounts to equipment that steps up voltage on the low side of the MPT is consistent with Commission precedent.

103
Clean Energy Associations NOPR Comments at 9-10.

104

Compare
Opinion No. 432, 85 FERC at 62,112 n.37 (“GSU transformers are not used in the generation of power and thus should not be booked to production plant accounts.”)
with id.
at 62,112 (“[I]t has become increasingly important to recognize the role that GSUs perform in support of generation as it pertains to the allocation of costs.”).

105

See
Clean Energy Associations NOPR Comments at 9-10 (citing
Pacific Gas & Electric Co.,
106 FERC ¶ 61,144 at P 19 (“GSU transformers . . . are located at generation stations and [are] used solely to increase the voltage of electric energy produced by generators to the higher voltages necessary for bulk power transmission to load centers.”); Order No. 827, 155 FERC ¶ 61,277 at P 13 n.31 (“[T]he generator substation would be the substation for a wind [or solar] generator that separates the low-voltage collector system from the higher voltage elements of the Interconnection Customer Interconnection Facilities that bring the generator's energy to the Point of Interconnection.”).

106

Pacific Gas & Electric Co.,
106 FERC ¶ 61,144 at PP 19-20.

107
Order No. 827, 155 FERC ¶ 61,277 at P 13.

108

See
Opinion No. 432, 85 FERC at 62,112 n.37 (“GSU transformers are not used in the generation of power and thus should not be booked to production plant accounts.”).

57. In response to Clean Energy Associations' concerns about where to record the substation MPT given alleged conflict between proposed collector system definitions in Accounts 338.5, 338.26, and 387.5 and the Station Equipment in existing Account 353,
109

we note first that Clean Energy Associations misstate the NOPR's proposed collector system definition in Account 338.5.
110

The NOPR's Account 338.5 definition does not overlap with the definition of Account 353. As explained above, we have revised the definitions in Accounts 338.26 and 387.5 to align with the definition in Account 338.5 at Clean Energy Associations' request.
111

This change resolves the overlap with Account 353 that concerned Clean Energy Associations. Equipment at and beyond the substation serve transmission and distribution interconnection functions and should accordingly be recorded in the transmission and distribution accounts.

109
Clean Energy Associations NOPR Comments at 10-11 (citing NOPR proposed Accounts 338.5, 338.26, and 387.5; 18 CFR part 101, Account 353).

110

Compare
NOPR, proposed Account 338.5 (“This account shall include all cost of cabling, junction boxes, connection cabinets, and all facilities and devices (such as static capacitors) that are used to transport and consolidate the power fed from individual solar panels, once it has been stepped-up, to the substation prior to interconnection to the grid.”)
with
Clean Energy Associations NOPR Comments at 10-11 (quoting NOPR proposed Accounts 338.5, 338.26, and 387.5 text as: “This account shall include all cost of cabling, junction boxes, connection cabinets, and all facilities that are installed beyond the high side of the GSU transformer and the transmission or distribution point of interconnection.”).

111

See supra
P 50;
see also
Clean Energy Associations NOPR Comments at 11-12.

58. Regarding Clean Energy Associations' request for clarification on allocation of clearing and grading, permitting, and site civil costs,
112

we note that Electric Plant Instruction Nos. 3, 8(A), and 9(A) apply to all plant in service and have for several decades. We do not intend to change application of these instructions in this docket. We find the text of these instructions to be sufficient and do not require modification.

112

See
Clean Energy Associations NOPR Comments at 15-17.

59. We also adopt the NOPR's proposal to create O&M accounts to support the new production subfunctions, but we consolidate the specific accounts proposed in response to comments. We are persuaded by Utility Associations' argument that the new generation subfunctions are simpler, and less labor intensive to operate and maintain than steam and nuclear generation, and that therefore the limited rate-setting benefits of separating some of these costs are likely outweighed by the additional burden they create.
113

We believe that the accounts that Utility Associations propose appropriately streamline the O&M accounts while still providing for sufficient detail to meaningfully segregate costs, as requested by Dominion.
114

However, we are also persuaded by Dominion's request to retain the miscellaneous maintenance expense accounts to house expenses that do not clearly fall within other specified accounts, and so create a miscellaneous expense account alongside the others proposed by Utility Associations.

113

See
Utility Associations NOPR Comments at 7, app. A.

114
Dominion NOPR Comments at 3.

60. As such, we create only those maintenance accounts recommended by the Utility Associations,
115

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

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

61. In addition, in response to Clean Energy Associations' comment regarding the appropriate function for the new O&M accounts,
116

we clarify that operations and maintenance costs are related to Plant recorded to Production Accounts. Our note that collector systems are distributive in design was intended to be illustrative of how these systems operate and not to indicate that collector systems are part of the Distribution Plant function.

116

See
Clean Energy Associations NOPR Comments at 19.

62. Next, we address the subjects on which the NOPR requested comment. We are persuaded by Utility Associations' comment that retaining the “Other Production” account will preserve existing flexibility for recording assets in the face of technological change.
117

We therefore retain the “Other Production” title for this generation subfunction.

117

See
Utility Associations NOPR Comments at 7.

63. In response to comments regarding accounting treatment for tidal and wave resources,
118

we have determined that, because these resources do not fit well within the existing Hydraulic Production subfunction, they should be placed within the new Other Renewable subfunction. Accordingly, in this final rule we create an Other Renewable Production subfunction instead of the NOPR's proposed Other Non-Hydro Renewable Production subfunction.

118
Carl Pechman NOPR Comments at 3-4.

64. Lastly, as for hydrogen, we agree with Utility Associations that existing and proposed public utility accounts are sufficient for current and anticipated uses of hydrogen as an electric fuel or energy storage medium and that no new public utility accounts are therefore needed.
119

We reiterate that, for either electric generation or energy storage, the recording and reporting of hydrogen specific fuel, equipment, and operations and maintenance expenses should follow the most appropriate account instructions for the function it is used to fulfill.

119
Utility Associations Comments at 9.

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

B. Creation of Energy Storage Function and Accounts

1. NOPR

66. The Commission proposed a new USofA function for energy storage in order to reduce recordkeeping, depreciation, and retirement burden and opportunity for error deriving from energy storage reporting across generation, transmission, and distribution functions.
120

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

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

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

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

Lastly, the Commission proposed reclassifying pumped storage to be recorded within the Energy Storage function of the USofA rather than the Hydraulic Production subfunction.

121

Id.
PP 50-51.

2. Comments

68. Utility Associations and Clean Energy Associations support the NOPR's proposal to establish a separate function for Energy Storage.
122

Utility Associations, however, propose three revisions regarding Energy Storage related to functional reporting, O&M accounts, and pumped storage.

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

69. First, Utility Associations request removal of subpart c from Account 387.3, which would require accounting records to show monthly functional activity of storage assets, as well as the NOPR's proposed functional MWh reporting on pages 414-16 of Form No. 1.
123

Utility Associations argue that these requirements conflict with the goal that motivated moving energy storage to a separate function—removing burdensome requirements to track and frequently reclassify storage assets based on changes in function.
124

Rather, Utility Associations recommend following Order No. 784's approach of allowing the accounting for energy storage assets that serve more than one function to follow the allocation decisions made in the relevant rate proceedings.

123
Utility Associations NOPR Comments at 11-12.

124

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

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

125

Id.
at 13, app. A.

71. Lastly, Utility Associations recommend against reclassifying pumped storage assets to the new Energy Storage function.
126

Utility Associations explain that pumped storage is not a new technology and fits more naturally within existing hydroelectric generation accounts given similarities in the lives of the facilities, permitting processes, engineering, operation, and staffing.

126

Id.
at 13.

3. Commission Determination

72. We adopt the NOPR's proposal to establish a separate function for Energy Storage, with a few revisions, discussed below.

73. We agree with Utility Associations that the proposed instructions to subpart c of Account 387.3 and the associated reporting on pages 414-16 of the FERC Form No. 1 are needlessly burdensome and contrary to the purpose of this final rule, and thus remove them.
127

127

See id.
at 11-12.

74. We are also again persuaded by Utility Associations to consolidate the list of O&M accounts that we create for energy storage given the comparative operational simplicity of storage systems,
128

similar to our consolidation of the renewable production O&M accounts.
129

However, we add a miscellaneous maintenance account to the list proposed by Utility Associations. The new accounts will now be as follows: Account 578.2 (Maintenance of Energy Storage Equipment and Structures (Major only)), Account 578.3 (Maintenance of Computer Hardware (Major only)), Account 578.4 (Maintenance of Computer Software (Major only)), Account 578.5 (Maintenance of Communication Equipment (Major only)), Account 578.6 (Maintenance of Miscellaneous Other Energy Storage Plant (Major only)), and Account 578.7 (Maintenance of Other Energy Storage Plant (Nonmajor only)).

128
Again we correct the naming convention for the account for maintenance of communication equipment to refer to “communication equipment” rather than “communications equipment,” as proposed by Utility Associations, consistent with references to communication equipment accounts throughout this rule and the USofA.

129

See
Utility Associations NOPR Comments at 13.

75. Last, we are persuaded by Utility Associations' request not to reclassify pumped storage assets to the new Energy Storage function.
130

We agree with Utility Associations that pumped storage assets better fit within existing hydroelectric production accounts given the nature of these assets. This decision is particularly reasonable given our prior decision to streamline the Energy Storage function O&M accounts that we otherwise create in this final rule—the hydroelectric O&M accounts are better tailored to the relative complexity of operating and maintaining pumped storage assets.

130

See id.

C. Accounting Treatment for Renewable Energy Credits

1. NOPR

76. The Commission proposed a number of USofA revisions to codify treatment of RECs.
131

The Commission proposed to retitle General Instruction No. 21 (Allowances) to Allowances and Renewable Energy Credits (RECs), and to update the instruction to include REC reporting and correct typos. These proposed revisions include: (1) proposing to remove the reference to the Clean Air Act in Part A to make the instruction less restrictive and adding reference to the proposed new accounts described below; (2) moving the last sentence of Part A to the beginning of Part B; (3) amending Parts A and C to refer to historical cost to make the instruction consistent with other existing regulatory text in the USofA;
132

(4) correcting Part D to remove an erroneous repeated reference to “from inventory”; (5) updating the text in Part E to include references to RECs in addition to allowances and in Part F to clarify the inventory accounting for RECs; (6) replacing the language included in existing Part G with language that would instead provide guidance for cases in which allowances and RECs may be considered as prepayments; (7) moving the existing language in Part G addressing penalties to Part H, and removing the reference to the EPA to make the instruction applicable to similar items created by

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

131
NOPR, 180 FERC ¶ 61,050 at P 52.

132
18 CFR part 101, General Instruction No. 21 (Allowances).

77. Similarly, the Commission proposed to revise the text to Accounts 158.1 (Allowance Inventory) and 158.2 (Allowances Withheld) to remove references to the Environmental Protection Agency, to reference historical cost, and to include a new note to address prepayments in accordance with the proposed text in General Instruction No. 21.
133

The Commission also proposed to renumber Account 509 (Allowances) to Account 509.1, delete the reference to sulfur dioxide in that account, and create for RECs two new inventory accounts and, under the Steam Power Generation subfunction, two new expense accounts: Account 158.3 (Bundled Renewable Energy Credits Inventory), Account 158.4 (Unbundled Renewable Energy Credits Inventory), Account 509.2 (Bundled Renewable Energy Credits), and Account 509.3 (Unbundled Renewable Energy Credits).
134

And, consistent with the newly proposed instructions in Part I of General Instruction No. 21, the Commission proposed to add Account 411.11 (Gains from the Disposition of RECs) and Account 411.12 (Losses from the Disposition of RECs). Last, the Commission clarified that the Commission considered RECs to be inventory, and noted that Commission accounting and reporting regulations trump conflicting regulations by other accounting authorities.

133
NOPR, 180 FERC ¶ 61,050 at PP 53-57.

134
We use the term “bundled” to convey that the RECs are sold with their associated energy, and the term “unbundled” to convey that the RECs are sold separately from the energy.

2. Comments

78. Five parties commented on the NOPR's proposal to codify accounting treatment for RECs. These comments address: (1) the need for revisions or additional accounts to capture information on a broader range of credit mechanisms; (2) placement of REC expense accounts within the USofA; (3) interaction with REC treatment by other governing bodies; and (4) timing questions related to implementation, recovery, and REC expiration. RESA notes the similarities between the NOPR's REC proposals and those recommended by RESA in emphasizing its support for the NOPR overall.
135

PG&E and SDG&E, Utility Associations, and Dominion, however, suggest that the Commission host a technical conference on REC accounting treatment to ensure workability in light of the diversity of REC instruments.
136

135
RESA NOPR Comments at 5.

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

79. Utility Associations and Carl Pechman request revisions to the NOPR's proposals to capture data on utilities' investments in a broader range of environmental credit mechanisms. Utility Associations argue that the proposed retitling of General Instruction No. 21 to Allowances and Renewable Energy Credits and corresponding changes to the text of the instruction and related accounts do not fully reflect the scope of developments in the industry.
137

Rather, Utility Associations recommend that the Commission extend the provisions of the USofA to consider a broader variety of environmental credits that are either used to: (1) avoid or reduce greenhouse gas emissions to the atmosphere; or (2) convey environmental attributes of renewable electricity generation. Utility Associations also suggest that the Commission could use a proposed technical conference to further identify underlying characteristics of these types of instruments that, if met, would qualify for accounting in the same manner as allowances and RECs. Carl Pechman echoes this request, suggesting broadening new account definitions to incorporate Zero Emissions Credits (ZEC) and carbon offsets.
138

137
Utility Associations NOPR Comments at 19-20.

138
Carl Pechman NOPR Comments at 1, 4.

80. Carl Pechman further questions the NOPR's proposal to create a single category for “allowances” without more detail.
139

Carl Pechman suggests accounting for such allowances together without distinction misses an opportunity to make valuable data about utility investments in diverse environmental credits available to Public Utility Commissions and other interested stakeholders.

139

Id.
at 6-9.

81. Utility Associations also question the placement of the new Allowance expense accounts within the USofA.
140

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

140
Utility Associations NOPR Comments at 20-21.

82. In addition, some commenters voice concerns about alignment between the NOPR's REC accounting treatment and that of other regulatory bodies. First, several commenters urge the Commission to consider the Financial Accounting Standards Board's ongoing work to address the underlying economic and accounting issues associated with RECs (and other similar instruments) before issuing any final rule or guidance.
141

Utility Associations further advocate for the Commission to strive to align the final rule's requirements and Generally Accepted Accounting Principles (GAAP), to the extent possible, to avoid costs of dual recordkeeping.
142

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

142
Utility Associations NOPR Comments at 19.

83. These commenters also made several suggestions with respect to state ratemaking processes. First, PG&E and SDG&E request that the Commission's general instructions concerning REC reporting under the USofA explicitly clarify that RECs recorded to any FERC account are not intended to impact the retail rates of public utilities.
143

In addition, PG&E and SDG&E request the Commission to explicitly consider instances where regulatory recovery occurs at the time of renewable electric energy production, and reconsider its decision in Order No. 552 precluding the use of inventory methods in Commission filings that reflect the effects of the ratemaking treatment granted by state commissions.
144

PG&E and SDG&E and Utility Associations argue that, where the cost of the REC is bundled with electric energy and recovery from retail customers at the time of renewable electricity energy generation, the Commission should allow the entity to charge the full cost of the bundled product to Account 555 (Purchased Power) at the time of energy usage.
145

Commenters argue that doing so is necessary to ensure that accounting reflects the economic effects of the state ratemaking treatment and that the revenue and expense associated with the RECs match.

143
PG&E and SDG&E NOPR Comments at 2-5.

144

Id.
at 5.

145

Id.;
Utility Associations NOPR Comments at 22-23.

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

eligible to be used to comply with the applicable renewable energy standard for which they were initially created.
146

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

146
Utility Associations NOPR Comments at 21-22.

147
Dominion NOPR Comments at 4.

85. Utility Associations are also concerned about the flexibility of the NOPR's proposed REC accounting treatment as applied to REC valuation methodologies. Utility Associations worry that the NOPR's proposal to account for RECs as inventory and the issuance of RECs from inventory on a vintage basis using a monthly weighted average of historical cost determination risks mismatch with the variety of REC markets and treatment.
148

Therefore, Utility Associations advocate for the Commission to allow for more flexibility in valuation method to align the Commission's accounting requirements with compliance requirements, business practices, and retail ratemaking treatments.

148
Utility Associations NOPR Comments at 21.

86. Lastly, noting the diversity in current accounting practices and ratemaking treatment for RECs and other similar instruments across the utility industry, Utility Associations recommend prospective adoption of any final rule or accounting guidance related to RECs in order to allow for an adequate transition period for utilities.
149

Such prospective adoption would, according to Utility Associations, ensure utilities' existing accounting and reporting treatment continues to align with their current ratemaking treatment, while also providing utilities time to transition operational and accounting practices for future impacts on ratemaking and avoiding unnecessary additional cost and complexity.

149

Id.
at 20.

3. Commission Determination

87. We adopt the NOPR's proposal to codify accounting and reporting treatment for RECs, with a few revisions, discussed below.

88. Despite several commenters' requests,
150

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

150

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

89. As noted above, we make a few amendments to the NOPR's proposed accounting treatment for RECs. First, in response to Utility Associations' and Carl Pechman's concerns about inclusion of other non-REC environmental items,
151

we have decided to update the name of the proposed Renewable Energy Credit accounts to “Environmental Credits.” This retitling will clarify that these accounts are for all types of environmental credits, including ZECs and other allowances, and not just those classified as RECs. These accounts will provide for the recording of any type of environmental credit and allow companies to maintain granularity as needed (
e.g.,
by designating subaccounts or other codes for different types of environmental credits unique to their operations).

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

90. However, we decline to make additional granular accounting mandatory, as Carl Pechman requests.
152

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

152
Carl Pechman NOPR Comments at 6-9.

91. Next, we are persuaded by Utility Associations' request to place the expense accounts for Environmental Credits in the Other Power Supply expenses sub-function rather than the Steam Generation subfunction.
153

We agree that, because environmental credits are not generally the product of steam generation, their expenses do not belong in the Steam Generation subfunction. We have accordingly renamed and renumbered these accounts to Account 555.2 (Bundled Environmental Credits) and Account 555.3 (Unbundled Environmental Credits).

153

See
Utility Associations NOPR Comments at 20-21.

92. The other concerns raised by commenters relate to implementation practicalities rather than the NOPR's proposed accounting treatment itself. We believe that this final rule provides sufficient clarification to address these concerns. However, if any concerns remain, they can be addressed through subsequent informal or formal accounting guidance issued by the Commission's Chief Accountant.

93. The first set of these implementation concerns relates to the potential for inconsistency between Commission accounting treatment and that employed by other regulatory bodies.
154

These concerns seem to derive primarily from the NOPR's proposal to treat RECs as inventory.

154

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

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

accounting authority's treatment conflicts with the accounting and financial reporting needed by the Commission to fulfill its statutory responsibilities, then the Commission's accounting and reporting regulations prevail.
155

Finally, while this rule directs utilities to treat environmental credits as inventory, we recognize that there may be situations in which utilities have different accounting or rate treatment as required by their state or other regulatory bodies. Utilities can record regulatory assets or liabilities to record any differences between accounting and ratemaking treatment, or maintain separate records to accommodate the accounting treatment required by the different regulatory bodies (though, as for any tariff-driven deviation from standard accounting and FERC Form instructions, utilities must disclose such alternative accounting in their FERC Form reports). We also clarify, in response to PG&E and SDG&E's request,
156

the accounting in this rulemaking is not intended to impact retail rates, as indicated above.

155

See
Order No. 552, FERC Stats. & Regs. ¶ 30,967 at 30,801 (“If GAAP conflicts with the accounting and financial reporting needed by the Commission to fulfill its statutory responsibilities, then GAAP must yield. GAAP cannot control when it would prevent the Commission from carrying out its duty to provide jurisdictional companies with the opportunity to earn a fair return on their investment and to protect ratepayers from excessive charges and discriminatory treatment.”).

156
PG&E and SDG&E NOPR Comments at 2-5.

95. Next, we turn to commenters' various timing concerns. We are unpersuaded by Utility Associations' and PG&E and SDG&E's concerns about how to report bundled REC costs that are recovered from retail customers at the time of renewable electricity energy generation.
157

Existing regulatory accounts are readily available when costs incurred in one ratemaking period need to be recovered or expensed in another.
158

Changes to the NOPR's accounting proposal are therefore not needed to address these concerns.

157

Id.
at 5; Utility Associations NOPR Comments at 22-23.

158

See, e.g.,
Account 182.3 (Other Regulatory Assets) and Account 254 (Other Regulatory Liabilities). These regulatory accounts are designated for amounts that are probable to be included in a different period for purposes of developing the rates.

96. As for Utility Associations' concerns about where to record expired RECs,
159

we agree that expired RECs should be recorded in new Account 411.12 (Losses from Disposition of Environmental Credits). This treatment is consistent with the new General Instruction No. 21 Allowances and Environmental Credits, Part I. Similarly, in response to Dominion's concerns about the non-statutory use of expired RECs,
160

we note that General Instruction No. 21, Part I, indicates that losses on speculative trading should be recorded in Account 426.5 (Other Deductions). As such, no further revision to the accounting treatment for environmental credits is warranted to address recording of expired RECs.

159

See
Utility Associations NOPR Comments at 21-22.

160
Dominion NOPR Comments at 4

97. Regarding Utility Associations' inventory valuation concerns,
161

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

161
Utility Associations NOPR Comments at 21.

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

162

See id.
at 20.

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

1. NOPR

99. The Commission proposed new accounts in each function and subfunction for computer hardware, software, and communication equipment.
163

The USofA was updated in 2005 to include accounts for recording computer hardware, software, and communication equipment owned by regional transmission organizations (RTO), but did not create comparable accounts for non-RTO public utilities and licensees to report these types of assets.
164

Consequently, non-RTO public utilities do not record computer hardware, software, and communication equipment uniformly, with many utilities recording these assets in general accounts (
e.g.,
Account 303 (Miscellaneous Intangible Plant) and Account 391 (Office Furniture and Equipment)). To eliminate ambiguity and ensure greater consistency and transparency in accounting and reporting, the Commission proposed including computer hardware, software, and communication equipment accounts in each different functional area, including the general function.

163
NOPR, 180 FERC ¶ 61,050 at P 58.

164

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

100. The Commission proposed to add three plant accounts and three maintenance accounts to all functions and subfunctions that currently lack them, including the new Renewable Generation subfunctions and the new Energy Storage function.
165

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

165
NOPR, 180 FERC ¶ 61,050 at P 59.

101. The Commission also proposed adding a new Electric Plant Instruction No. 17, Integrated computer hardware, software, and communication equipment.
166

The instruction explained that where computer hardware, software, and communication equipment is integrated as part of a larger retirement unit, it shall be recorded in the property account of the retirement unit purchased. It further clarified that, if this computer hardware, software, or communication equipment is not integrated, Plant Instruction No. 10 should be followed.

166

Id.
P 60.

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

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

167

Id.
P 61.

2. Comments

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

168

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

104. Clean Energy Associations question whether the proposed accounts are warranted, alleging that they will add administrative burden with few expected benefits.
169

Clean Energy Associations suggest that these costs could better be recorded to Other Accessory Electric Equipment. In the alternative, Clean Energy Associations suggest that the Commission should confirm through accounting guidance that the scheduled retirements approach that most utilities use for non-structures and improvements related to General Plant may be used for computer hardware, software, and communication equipment Production accounts.

169
Clean Energy Associations NOPR Comments at 14-15.

105. Dominion, in contrast, supports the proposed changes regarding computer hardware and communication equipment, but raises three concerns regarding software accounting treatment.
170

First, Dominion believes that software should remain in Account 303 despite the potential for some inconsistency in accounting and reporting of computer software between functions. Second, because software is an intangible asset and does not have a depreciable service life similar to production plant, Dominion argues that it is more appropriate to recognize the amortization of software in Account 404 (Limited Term Plant Amortization) than Account 403 (Depreciation Expense). Third, Dominion asserts that the NOPR's proposed accounting guidance conflicts with recent guidance issued by the Commission's Chief Accountant regarding cloud computing, and Dominion states that it agrees with the guidance in that order.
171

Last, Dominion argues that one function having different instructions on how to handle software does not warrant a change to all other functions and subfunctions.
172

If software is to be recorded to different functions, Dominion believes that the Commission should issue guidance on how to account for software that supports more than one function—specifically, whether to use the General function or whether allocations to the functions are required.

170
Dominion NOPR Comments at 3-4.

171

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

172
Dominion NOPR Comments at 4.

106. Utility Associations also support creation of these new plant accounts, and recommend that balance amounts for computer hardware, software, and communication equipment that can be readily identified as dedicated to a particular function be transferred to the new accounts.
173

However, Utility Associations note that these assets may by nature share functionality, and even if not, it may be difficult to determine that equipment supports a sole functional area. Where computer hardware, software, or communication equipment is not clearly dedicated to a sole function, Utility Associations suggest that it should be recorded in General Plant.

173
Utility Associations NOPR Comments at 14.

107. In addition, Utility Associations make a number of comments on specific proposed accounts. First, they suggest that the Commission remove item 1 “Personal Computers” entirely or rename it “Computers and Similar Items” to avoid implying that all personal computers must be tracked functionally.
174

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

174

Id.
at 14-17.

108. Utility Associations and Dominion also responded to the NOPR's request for comment on the need to create computer hardware, software, and communication equipment accounts in the USofA for centralized service companies. Utility Associations recommend adding computer hardware, software, and communication accounts to the USofA and FERC Form No. 60 for centralized service companies to better align their reporting with associated operating companies.
175

Dominion also requests that if software is to be recorded to the different functions, the Commission should issue guidance on how centralized service companies should account for software that supports more than one function—that is, whether the use of the General function would be appropriate or whether allocations to the functions are required.
176

175

Id.
at 18.

176
Dominion NOPR Comments at 4.

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

177
LEPA NOPR Comments at 2-4.

3. Commission Determination

110. We adopt the NOPR's proposal to create new accounts for computer hardware, software, and communication equipment within existing functions that do not already include them.

111. Several commenters questioned whether it is necessary or warranted to create these new accounts, in all or in

part.
178

First, we disagree with Clean Energy Associations and Dominion that these new accounts are not warranted.
179

We recognize that creating these new accounts may create initial implementation burden for utilities, but we find that separate functional classification of such costs is necessary to improve uniformity, consistency, and transparency in accounting and reporting of such assets and related activities, and to better inform the ratemaking process. Additionally, to address the Utility Associations' comment regarding transfer of existing balance amounts for computer hardware, software, and communication equipment,
180

we clarify that if utilities cannot readily identify functional level of detailed balances of plant with associated accumulated depreciation, such balances may reside in the accounts initially used by the utilities.

178

See
Clean Energy Associations NOPR Comments at 14-15; Dominion NOPR Comments at 3-4; Utility Associations NOPR Comments at 14-17.

179

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

180

See
Utility Associations NOPR Comments at 14.

112. We also disagree with Dominion's suggestion that software should remain in Account 303 as provided in the prior guidance on cloud computing issued by the Commission's Chief Accountant in Docket No. AI20-1-000.
181

This guidance was consistent with then-available accounts within the USofA. In this prior accounting guidance, the Commission's Chief Accountant specifically stated that utilities should record implementation costs for cloud computing in Account 303 “
provided such costs are not specifically provided for in other utility plant accounts.
”
182

In the instant rulemaking, the Commission now provides functional plant accounts specifically designated for software, therefore superseding the prior accounting guidance in Docket No. AI20-1-000. As such, we also reject Dominion's request to provide for amortization of software in Account 404,
183

and instead direct utilities to record associated depreciation expense to Account 403, which includes depreciation for all classes of depreciable electric plant. We also clarify that where software supports more than one function, it can be recorded to Account 397.2 (General Plant Software).

181

See
Dominion NOPR Comments at 3-4.

182

Guidance on Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract,
Docket No. AI20-1-000, at 3 (Dec. 20, 2019) (emphasis added).

183

See
Dominion NOPR Comments at 3-4.

113. To address Utility Associations' comments about computer hardware, software, and communication equipment that serves multiple functions,
184

we clarify that utilities may record such assets based on the assets' predominant use or function, or, alternatively, in the new General Plant accounts. Concerning Utility Associations' comment related to personal computers,
185

we clarify that account lists are illustrative and not prescriptive; personal computers should therefore only be recorded in the functional computer accounts if the specific computer's retirement unit serves that predominant function, such as one issued to a transmission or distribution line worker. In the case of personal computers that are mostly used by employees for general purposes, such computers can be recorded in the new General Plant account.

184

See
Utility Associations NOPR Comments at 14-17.

185

See id.

114. To address Utility Associations' comment about fiber optic cables,
186

we note that the recording of fiber optic cables should follow the same classification criteria as discussed above, and be recorded based on their purpose and function. For example, fiber optic cables used as communication equipment should be recorded in the new functional accounts for communication equipment.

186

See id.
at 15-17.

115. To address Utility Associations'
187

and Clean Energy Associations'
188

comments related to the application of vintage accounting as discussed in AR-15, we note that vintage accounting is the same as scheduled retirements approach. The appropriateness of vintage depreciation is considered on a case-by-case basis within depreciation rate case proceedings.

187

Id.

188
Clean Energy Associations NOPR Comments at 15.

116. Finally, we note Utility Associations and Dominion's comments requesting new accounts or guidance for centralized service companies
189

and LEPA's comments opposing creation of such accounts for oil pipelines.
190

We will consider whether future guidance or amendments to the USofAs for centralized service companies and natural gas companies are warranted.

189

See
Dominion NOPR Comments at 3; Utility Associations NOPR Comments at 18.

190
LEPA NOPR Comments at 2-4.

E. Reporting

1. NOPR

117. To accommodate the proposed changes to the USofA explained above, the Commission proposed to amend FERC Form Nos. 1, 1-F, and 3-Q (electric) to include the new subfunctions for Wind, Solar, and Other Non-Hydro Renewable as well as a new Energy Storage function within the plant and operations and maintenance expense sections of the forms, including the schedules for depreciation.
191

Each subfunction and function would include the accounts as described above. The currently existing functional accounts for energy storage would be removed (Accounts 348, 351, 363, 548.1, 562.1, 570.1, and 584.1) or replaced (Accounts 553.1 and 592.2).

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

118. The proposed reporting changes to FERC Form Nos. 1, 1-F, and 3-Q (electric) would result in changes to centralized service company reporting in FERC Form No. 60, Schedule XVI—Analysis of Charges for Service—Associate and Non-Associate Companies, because the FERC Form No. 60 summarizes the functional and sub-functional O&M accounts detailed in FERC Form Nos. 1, 1-F, and 3-Q (electric).
192

As such, these proposed changes to FERC Form No. 60 consist of new rows for the summarized totals of the proposed new Energy Storage function and Generation sub-functions O&M accounts.

192

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

119. The Commission also proposed to amend FERC Form Nos. 1, 1-F, and 3-Q (electric) to include RECs as part of the instructions and titles wherever allowances are discussed.
193

Further, it proposed to consolidate inputs for both sulfur dioxide and nitrogen oxides (NO
X
) in the existing Allowances schedule,
194

to include inputs for both bundled and unbundled RECs, and to amend the related title for Account 509 to read as Account 509.1.
195

The Commission proposed to add separate gain and loss accounts to the statement of income for RECs.
196

193

Id.
at P 64, App. B: FERC Form Nos. 1/1-F at 320, FERC Form No. 1 at 2, 110-111, 120-121, 228a, 229a, FERC Form No. 1-F at 4, 10-11, 15-16.

194

Id.
at App. B: FERC Form No. 1 at 228a-229a amended, pages 228b-229b deleted.

195

Id.
at App. B: FERC Form Nos. 1/1-F at 320, FERC Form No. 1-F at 15.

196

Id.
at App. B: FERC Form Nos. 1/3-Q (electric) at 114, FERC Form No. 1-F at 6.

120. The Commission further proposed to amend FERC Form Nos. 1, 1-F, and 3-Q (electric) to include new plant and maintenance expense accounts for computer hardware, software, and communication equipment within all functions and subfunctions (including the general function).
197

In the Depreciation and Amortization of Electric Plant schedule section B (Basis for Amortization Charges), the Commission proposed to eliminate the first two sentences and the word software from the third sentence as these clauses would no longer be applicable to software.
198

197

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

198

Id.
at App. B: FERC Form No. 1 at 336.

121. Finally, the Commission proposed to consolidate the several statistical pages for different classes of large production generators into one statistical page to also include hydro and non-hydro renewables.
199

The Commission also proposed to amend the energy storage statistical pages to remove references in the instructions and columns related to cost functionalization.
200

199

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

200

Id.
at App. B: FERC Form No. 1 at 414-20.

2. Comments

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

201
Clean Energy Associations NOPR Comments at 3.

123. Utility Associations note that the NOPR proposed to combine all large generating assets for FERC Form No. 1 reporting purposes into one statistical page.
202

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

202
Utility Associations NOPR Comments at 23-24.

124. Utility Associations also note a number of ministerial errors in the NOPR related to reporting.
203

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

203

Id.,
at app. C.

3. Commission Determination

125. We adopt the NOPR's proposed changes to the FERC forms, with minor revisions, discussed below. First, in keeping with other revisions made in this final rule, we update references in FERC Form Nos. 1, 1-F, and 3-Q (electric) to the proposed Other Non-Hydro Renewable subfunction to refer instead to the Other Renewable subfunction. We also update references to RECs in FERC Form Nos. 1, 1-F, and 3-Q (electric) to instead reference environmental credits, as appropriate.

126. In response to Clean Energy Associations' concerns about potential increased burden resulting from the NOPR's proposed reporting requirements,
204

while sensitive to the administrative burdens our rules create, we find that the clarity, transparency, consistency, and uniformity benefits of this final rule, inclu

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2023-14994. Public record. Not legal advice.