Accounting Requirements for RUS Electric Borrowers

SUMMARY: This final rule amends the Rural Utilities Service's

regulations on accounting policies and procedures for RUS electric

borrowers. This final rule amends the regulations pertaining to

departures from the prescribed RUS Uniform System of Accounts (USoA),

by allowing RUS borrowers to implement certain revenue and expense

deferral plans without obtaining prior RUS approval. It also institutes

activity-based costing (functional accounting) requirements for

employee pensions and benefits, payroll taxes, and insurance and

establishes a new accounting interpretation that addresses the

accounting requirements set forth in Statement of Financial Accounting

Standards No. 121, Accounting for the Impairment of Long-Lived Assets

and for Long-Lived Assets to be Disposed of, within the framework of

the RUS USoA. This final rule also establishes uniform accounting

procedures for the National Rural Electric Cooperative Association's

(NRECA) Split-Dollar life insurance program, the NRECA Special Early

Retirement program, and the automatic meter reading system developed by

Hunt Technologies, Inc., global positioning systems, and radio-based

remote meter reading systems. This final rule also amends Accounting

Interpretation No. 104 to record plant contributed by an RUS electric

cooperative as an intangible asset.

EFFECTIVE DATE: September 5, 1997.

FOR FURTHER INFORMATION CONTACT: Ms. Roberta D. Purcell, Director,

Program Accounting Services Division, Rural Utilities Service, Stop

1523, Room 2221, South Building, U.S. Department of Agriculture, 1400

Independence Avenue, SW., Washington, DC 20250-1523, telephone number

(202) 720-9450.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This final rule has been determined to be not significant for the

purposes of Executive Order 12866 and therefore has not been reviewed

by the Office of Management and Budget (OMB).

Regulatory Flexibility Act Certification

The Administrator of RUS has determined that a rule relating to the

RUS electric loan program is not a rule as defined in the Regulatory

Flexibility Act (5 U.S.C. 601 et seq.), and, therefore, the Regulatory

Flexibility Act does not apply to this final rule.

Information Collection and Recordkeeping Requirements

The reporting and recordkeeping requirements contained in this

final rule were approved by OMB pursuant to the Paperwork Reduction Act

of 1995 (44 U.S.C. Chapter 35, as amended) under control number 0572-

0002.

Send questions or comments regarding this burden or any aspect of

this information collection, including suggestions for reducing the

burden to F. Lamont Heppe, Jr., Director, Program Support and

Regulatory Analysis, Rural Utilities Service, U.S. Department of

Agriculture, 1400 Independence Ave., SW., STOP 1522, Room 4034,

Washington, DC 20250-1522.

National Environment Policy Act Certification

The Administrator, RUS, has determined that this final rule will

not significantly affect the quality of the human environment as

defined by the National Environmental Policy Act of 1969 (42 U.S.C.

4321 et seq.). Therefore, this action does not require an environmental

impact statement or assessment.

Catalog of Federal Domestic Assistance

The program described by this final rule is listed in the Catalog

of Federal Domestic Assistance Program under number 10.850--Rural

Electrification Loans and Loan Guarantees. This catalog is available on

a subscription basis from the Superintendent of Documents, the United

States Government Printing Office, Washington, DC 20402-9325.

Executive Order 12372

This final rule is excluded from the scope of Executive Order

12372, Intergovernmental Consultation. A notice of final rule entitled

Department Programs and Activities Excluded from Executive Order 12372

(50 FR 47034) exempts RUS electric loans and loan guarantees to

governmental and nongovernmental entities from coverage under this

order.

National Performance Review

This regulatory action is being taken as part of the National

Performance Review program to eliminate unnecessary regulations and

improve those that remain in force.

Civil Justice Reform

This final rule has been reviewed under Executive Order 12988,

Civil Justice Reform. RUS has determined that this final rule meets the

applicable standards provided in Sec. 3, of the Executive Order.

Background

In order to facilitate the effective and economical operation of a

business enterprise, adequate and reliable financial records must be

maintained. Accounting records must provide a clear, accurate picture

of current economic conditions from which management can make informed

decisions in charting the company's future. The rate-regulated

environment in which an electric utility operates causes an even

greater need for financial information that is accurate, complete, and

comparable with that of other electric utilities.

RUS, as a Federal lender and mortgagee, and in furthering the

objectives of the Rural Electrification Act (RE Act) (7 U.S.C. 901 et

seq.) has a legitimate programmatic interest and a substantial

financial interest in requiring adequate records to be maintained. In

order to provide RUS with financial information that can be analyzed

and compared with the operations of other borrowers in the RUS program,

all RUS borrowers must maintain financial records that utilize uniform

accounts and uniform accounting policies and procedures. The standard

RUS security instrument, therefore, requires borrowers to maintain

their books, records, and accounts in accordance with methods and

principles of accounting prescribed by RUS in the RUS USoA for its

electric borrowers.

To ensure that borrowers consistently account for their financial

operations and keep pace with the ever-changing environment in which

they operate, as well as apply the provisions of recent pronouncements

of the Financial Accounting Standards Boards, the USoA must be revised

and updated as changes in the industry and generally accepted

accounting principles occur. RUS is, therefore, revising Section

1767.13, Departures from the Prescribed RUS Uniform System of Accounts,

to identify certain revenue and expense deferral plans that may be

implemented without the prior written approval of RUS. When RUS adopted

the requirements set forth in Section 1767.13 in 1993, RUS borrowers

were implementing a variety of revenue and expense deferral plans,

[[Page 42285]]

many without RUS knowledge or approval. Since the adoption of these

requirements, RUS has been able to better determine the types of

deferral plans being routinely adopted by its borrowers and the impact

of these plans on loan security. History has shown that RUS has

routinely approved the deferral of certain revenues and expenses and

the accelerated amortization of previously deferred costs that have a

minimal impact on loan security, provided that the information

necessary for RUS to evaluate the action was submitted. In an effort to

reduce paperwork requirements for both RUS and its borrowers, RUS is

eliminating the requirement to obtain prior RUS approval to implement

certain specific types of deferrals and accelerated amortizations of

previously deferred expenses that have been routinely approved for all

borrowers in the past.

With the issuance, by the Federal Energy Regulatory Commission

(FERC), of Orders 888 and 889 on April 24, 1996 (61 FR 21540-21736;

21737-21854 (May 10, 1996) on open access, it is essential that rural

electric cooperatives effectively and efficiently cost their products

and services if they are to compete in an open market. Before products

and services may be effectively priced in an open market, management

must have reliable financial information concerning the actual cost of

the products and services it provides. Costs, therefore, must be

accumulated on a functional basis. Salaries, materials, and many other

expenses incurred in utility operations are already accounted for on a

functional basis. Employee pensions and benefits, payroll taxes, and

insurance costs, however, are not, except to the extent that they are

charged to construction and retirement activities. RUS is, therefore,

revising its USoA to require borrowers to allocate employee pensions

and benefits expense, as well as payroll taxes and insurance costs

currently recorded in Accounts 408, Taxes Other than Income Taxes; 924,

Property Insurance; 925, Injuries and Damages; and 926, Employee

Pensions and Benefits; to the appropriate functional operations,

maintenance, and administrative expense accounts. Additionally, RUS is

amending the operations, maintenance, and administrative expense

accounts to which labor charges are accrued to reflect this activity-

based costing methodology. Accordingly, RUS is also amending the

accounting interpretations that address insurance and pensions and

benefits expense to reflect this cost allocation procedure.

This rule also revises Section 1767.41 by establishing a new

accounting interpretation that addresses the provisions of the recently

issued pronouncement of the Financial Accounting Standards Board,

Statement of Financial Accounting Standards No. 121, Accounting for the

Impairment of Long-Lived Assets and for Long-Lived Assets to be

Disposed of. RUS instructs its borrowers, with qualifying assets, as to

the proper accounts to be used within the framework of the RUS USoA.

Copies of Statements of Financial Accounting Standards may be obtained

from the Order Department of the Financial Accounting Standards Board,

401 Merritt 7, P.O. Box 5116, Norwalk, Connecticut 06856-5116.

RUS is also adopting new accounting interpretations that establish

the accounting policies and procedures for the NRECA Split-Dollar life

insurance program and the NRECA Special Early Retirement (SERP)

program. The Split-Dollar life insurance program and the Special Early

Retirement program are benefits packages established by NRECA for

borrowers to offer to their employees. The benefits provided under the

Split-Dollar life insurance program consist of two components, the face

value of the insurance policy which is payable to the employee's heirs

and the accumulated cash surrender value. While the employee is the

owner of the policy, the employee must sign a collateral assignment

that gives the employer, the RUS borrower, an absolute right to the

cash surrender value of the policy. Under the terms of this collateral

assignment, the employee must reimburse the cooperative for the

premiums paid upon the employee's termination of employment or

attainment of the age of 62, if the employee wishes to maintain the

insurance coverage. If death occurs prior to either of these events,

the premiums paid to date by the borrower are deducted from the death

benefits payable to the policy beneficiary. The accounting

interpretation details the accounting journal entries necessary to

record the cash surrender value of the policy and the expenses incurred

by the borrower in providing the policy.

The SERP is a vehicle through which the cooperative may reduce the

size of its workforce or replace more highly paid employees with lower

paid entry-level employees. If an employee covered by an NRECA

retirement plan chooses to retire before the employee's normal

retirement date, that employee would receive an actuarially reduced

benefit. However, when a cooperative elects to offer a SERP, no such

reduction is required. The accounting interpretation details the

accounting for the benefits package, itself, as well as the reduction

in postretirement benefit costs that may result from an employee

accepting the SERP.

This rule also establishes an accounting interpretation for the

automatic meter reading system developed by Hunt Technologies, Inc. The

system transmits continuous information one way from the meter to a

receiver located in the substation. The receiver constantly monitors

each meter served by the substation. The data is then transmitted to

the headquarters monitoring equipment via telephone line or an

equivalent communication system. The accounting records the various

components of the system in the primary plant accounts based upon their

functions.

This rule establishes an accounting interpretation for Global

Positioning Systems (GPS). The GPS is a worldwide radio-navigation

system formed from a network of 24 satellites and their ground stations

that utilities are using to update and modernize their system maps. GPS

uses a system of satellites orbiting the earth to establish plant

locations with pinpoint accuracy. By triangulating from three

satellites and using radio signals to measure distances and locate

items, system-wide maps can be created of the utility's service area.

The accounting records the various components of the system in the

primary plant accounts based upon their functions.

This rule also adopts an accounting interpretation for radio-based

automatic meter reading systems. Radio-based automatic meter reading

technology allows meters equipped with a low-power radio device called

an ERT (Encoder, Receiver, Transmitter) to be read from a remote

location. The ERT device ``encodes'' energy consumption and transmits

this information to a radio transceiver equipped handheld computer. The

data collected and stored in the handheld computer is then uploaded to

a billing computer using specialized software for that purpose. The

accounting records the various components of the system in the primary

plant accounts based upon their functions.

This rule revises Interpretation No. 104, Terminal Facilities, to

comply with guidance provided by FERC for public utilities on the

accounting for plant contributed by one electric cooperative to

another. Previously, contributed plant was recorded as a deferred

charge in Account 186, Miscellaneous Deferred Debits. FERC issuances,

however, direct public utilities to record contributed plant as an

intangible asset in Account 303, Miscellaneous Intangible Plant. Upon

review, RUS has determined that

[[Page 42286]]

the classification of contributed plant as an intangible asset is more

appropriate and is, therefore, revising its accounting interpretations

for RUS borrowers found in Interpretation No. 104.

Comments

A proposed rule entitled Accounting Requirements for RUS Electric

Borrowers, published April 29, 1997, at 62 FR 23298, invited interested

parties to submit comments on or before May 29, 1997. Twenty-seven

comments were received which included submissions from NRECA, RUS

electric borrowers, certified public accounting firms, and a statewide

organization. The comments submitted by NRECA were based upon a joint

review of the proposed rule by the Generation and Transmission

Managers' Accounting and Depreciation Subcommittee and the Distribution

Systems Accounting and Tax Committee. The following paragraphs address

the various topics that were discussed by the commenters.

Implementation Date

Comment. The majority of commenters requested that RUS recognize

that implementing the functional accounting requirements set forth in

the proposed rule would require borrowers to make significant computer

programming and accounting changes and, as a consequence, requested

that implementation be delayed until no earlier than January 1, 1998.

One borrower recommended a transition period of from 1 to 3 years for

implementation, during which time either the current accounting

methodologies or the functional approach could be utilized provided

that adequate disclose of the method utilized was made. One commenter

recommended an implementation date of January 1, 1999, with earlier

implementation encouraged and one commenter requested 3 years to allow

borrowers to implement the required accounting systems without unduly

interfering with their other required workloads. No commenters

expressed a need to delay the other proposed revisions to the USoA.

Response. RUS is sympathetic to the commenters' concerns and

believes, as do the majority of commenters, that a January 1, 1998,

implementation date is appropriate and achievable. The vast majority of

RUS borrowers' accounting systems are based upon computerized

accounting models designed by a few data processing centers. Because of

the importance, to their clients, of adopting a functional approach to

accounting for expenses, these centers have already begun reformatting

their accounting systems and software. Several are previewing the new

systems within the next 30 to 60 days.

It is also important to note that the managerial benefits to be

derived from a functional accounting system should not be delayed. The

sooner these systems are providing RUS borrowers' management with the

cost data critical to operating in a deregulated industry, the greater

benefits that are to be derived.

It is for these reasons that RUS will grant an automatic departure

from the functional accounting requirements of this final rule for any

borrower electing to delay implementation until January 1, 1998.

Comment. Many of the commenters requested relief from restating

prior periods' financial statements in the RUS Form 7, Financial and

Statistical Report; the RUS Form 12, Operating Report--Financial; and

the audited financial statements prepared and submitted in accordance

with 7 CFR part 1773, Policy on Audits of RUS Borrowers (part 1773).

Response. The security instruments utilized by RUS require

borrowers to prepare and furnish to RUS, at least once during each 12-

month period, a full and complete report of its financial condition,

operations, and cash flows, in form and substance satisfactory to RUS,

audited and certified by an independent CPA satisfactory to RUS, and

accompanied by a report of such audit, in form and substance

satisfactory to RUS. RUS has implemented these requirements through

regulations published in part 1773. In Section 8 of part 1773,

borrowers are required to prepare comparative financial statements for

the 12-month period as of their audit date and for the immediately

preceding 12-month period. It is this comparative financial information

that permits RUS to analyze a borrower's financial progress and monitor

any changes, either positive or negative, in operations from one year

to the next. We believe the importance of this information to RUS in

analyzing a borrower's continuing loan security status significantly

outweighs the cost to the borrowers of providing this information.

After adoption of the functional accounting requirements, borrowers

will be able to determine the percentage of general and administrative

costs allocated to the various functional operations, maintenance, and

administrative expense accounts. These same percentages could be

applied to the prior year's financial statements to prepare comparative

data. Since there is no net effect on a borrower's operating or net

margins for the year, we believe the impact will be immaterial to the

financial statements taken as a whole, thereby allowing CPAs to provide

the audit opinions necessary to allow borrowers to comply with the

requirements set forth in part 1773 and, ultimately, their security

instrument provisions. To alleviate any further reporting burden,

however, RUS will not require restatement of prior years' financial

statements in the RUS Forms 7 and 12.

Functional Accounting

Comment. A majority of the commenters disagreed with RUS'' proposal

to allocate labor related expenses such as employee pensions and

benefits, payroll taxes, and employee insurance on the basis of direct

labor hours. Rather, commenters recommended that those costs

specifically identifiable with a particular employee be charged to the

same accounts charged with that employee's labor and that those costs

not specifically identifiable be allocated on the basis of direct labor

dollars or hours, depending upon which allocation technique provides

the most equitable distribution.

Response. RUS agrees with the recommendation and has revised the

final rule accordingly.

Comment. Two commenters argued that property taxes and property

insurance are more typically grouped with other types of fixed costs

such as depreciation and interest and that either all of these ``fixed

costs'' should be allocated or none.

Response. Property taxes and property insurance are costs that are

readily identifiable with the various components of generation,

transmission, and distribution plant thereby making their allocation a

rational and elementary step toward a true functional accounting of

costs. While we agree that depreciation expense should be readily

identifiable with the various plant components, RUS has not required

such specific identification in the past and to do so currently would

dramatically change the depreciation accounting methodology for the

majority of RUS borrowers. Depreciation expense is currently recorded

by overall function; for example, steam production plant, nuclear

production plant, hydraulic production plant, other production plant,

transmission plant, distribution plant, and general plant and RUS has

determined that the cost of requiring any further allocation by primary

plant account would, for the majority of RUS borrowers, outweigh the

benefits to be derived. For those borrowers that have this capability,

however, RUS would, on

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an individual borrower basis, consider requests for approval of a

further allocation of depreciation expense.

With regard to interest expense, this allocation process would not

only be cumbersome but would, more importantly, render invalid RUS'

financial test requirements as set forth in its security instruments.

For these reasons, RUS will not adopt an allocation procedure for

depreciation or interest expense in this final rule.

Comment. One commenter recommended that property insurance premiums

be charged directly to the operations expense accounts associated with

insured substations and lines rather than to the miscellaneous

transmission and distribution operations expense account. The commenter

believes that this further allocation of these costs would be

beneficial in establishing rates and in developing cost of service

studies in the future.

Response. RUS agrees with this recommendation; however, believes

that additional informational benefits could be derived by extending

the allocation process beyond substations and lines. We have,

therefore, revised the final rule to require the allocation of property

insurance premiums and reserve accruals to the individual generation,

transmission, and distribution operating expense accounts associated

with the plant items insured. Property insurance premiums or reserve

accruals associated with general plant items will continue to be

charged to the miscellaneous administrative expense accounts as no

further allocation is available under the current USoA.

Comment. Two commenters recommended that additional general and

administrative costs be allocated to operations and maintenance

activities; specifically, Accounts 920, Administrative and General

Salaries; 921, Office Supplies and Expenses; 923, Outside Services

Employed;, 930, General Advertising Expense; 931, Rents; and 935,

Maintenance of General Plant.

Response. The descriptions of the aforementioned accounts, as

currently set forth in the USoA, allow general and administrative costs

that are assignable to specific functions to be so charged. Only those

costs attributable to the general administration of the borrowers'

activities must remain unallocated in these accounts. While some may

argue that all general and administrative costs could be allocated on

an indirect basis to the specific functional accounts, the USoA is

structured so as to maintain the integrity of the administrative and

general costs incurred in the overall operations of the cooperative.

For these reasons, no revisions were made to the final rule.

Comment. One commenter recommended that the administrative and

accounting fees related to 401(k) plans be allocated to the functional

operations and maintenance accounts.

Response. As previously indicated, the current USoA allows for the

assignment of general and administrative costs when a direct functional

relationship exists. Therefore, if a borrower can specifically assign

accounting and administrative fees associated with 401(k) plans to the

applicable operations, maintenance, and administrative accounts, no

further revision to the USoA is required. Costs that cannot be

specifically assigned are more accurately reflected as costs applicable

to the general administration of the borrowers' operations and should

remain in the general and administrative account categories.

Comment. One commenter recommended that Account 405, Amortization

of Other Electric Plant, be subaccounted similarly to Account 403,

Depreciation Expense, to facilitate cost identification between the

plant categories and facilities.

Response. While RUS encourages the use of subaccounts to provide

borrower management with the level of detail necessary to make informed

business decisions, we are reluctant to require specific subaccounts

that may not be reflective of an individual borrower's intangible or

other electric plant facilities. For this reason, no revision was made

in the final rule.

Comment. Two commenters recommended the use of subaccounts to

facilitate specific cost identification.

Response. While RUS encourages the use of subaccounts to provide

borrower management with the level of detail needed to make informed

business decisions, we are reluctant to require specific subaccounts

that may not apply or be easily adaptable to an individual borrower's

accounting system. For this reason, no revision was made in the final

rule.

Comment. Two commenters noted that payments made under workmen's

compensation laws were excluded from allocation to the maintenance

accounts.

Response. RUS agrees with the recommendation and has revised the

final rule to allocate all costs of injuries and damages to the various

operations, maintenance, and administrative expense accounts.

Section 1767.13, Departures From the Prescribed RUS USoA

Comment. In its proposed rule, RUS advocated eliminating the

requirement for RUS borrowers to obtain prior RUS approval to implement

certain, specific types of deferrals. Included among the deferrals

proposed to be exempted was the deferral of any current period expense

provided that a borrower would have met its financial tests (Times

Interest Earned Ratio (TIER) or Debt Service Charge (DSC) ratio) for

the year had the deferral not been made. Two commenters pointed out

that several generation and transmission borrowers have or are

negotiating new indentures that invoke a Margins for Interest

requirement rather that the standard TIER requirement. In addition, in

the new form of mortgage and loan contract applicable to RUS

distribution borrowers, borrowers not only have a TIER and DSC

requirement but an Operating TIER and DSC requirement. The commenters

recommended language that would focus on the financial covenants or

financial tests applicable to each borrower during the year the

deferral is made.

Response. RUS agrees with the recommendation and has revised the

final rule accordingly.

To further clarify this exemption, it was RUS' intent to apply this

provision to the cumulative total of all individual deferrals made

pursuant to this exemption during the reporting year. That is, not only

must each deferral made during the year meet this requirement but the

cumulative total of all deferrals made pursuant to this exemption

during the reporting year must meet this requirement.

Comment. Two commenters recommended that RUS exempt from its

approval process, all revenue deferral plans provided that the borrower

continued to meet RUS financial covenants after consideration of the

revenue deferral. In addition, one of these commenters recommended

exempting revenue deferrals that would be fully amortized within 12

months.

Response. RUS' purpose in exempting, from RUS approval

requirements, certain, specific revenue and expense deferral plans was

to minimize the paperwork requirements for both RUS and its borrowers.

The deferral plans selected for exemption were ordinary in the course

of business and provided little risk to RUS' loan security interests.

Requests for approvals of revenue deferral plans other than those

associated with the NRECA moratorium on pension plan payments are

minimal. Due to the

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infrequency of the requests and typically, the special nature of the

requests, RUS has determined that all other revenue deferral plans

should continue to be approved by RUS.

Comment. One commenter recommended a revision to the language

exempting, from RUS approval requirements, revenue deferrals coincident

with a moratorium imposed by NRECA on its Retirement and Security

Program. The proposed language exempted the deferral of revenues

coincident with a moratorium imposed by the NRECA on its Retirement and

Security Program, provided, however, that the deferral is for the sole

purpose of offsetting future pension cost increases. The commenter

requested that ``increases'' be deleted from the provision.

Response. RUS has no objection to this recommendation and has

revised the final rule accordingly.

Comment. Two commenters recommended that RUS clarify that those

deferrals exempted from the RUS approval process must still comply with

the provisions of Statement of Financial Accounting Standards No. 71,

Accounting for the Effects of Certain Types of Regulation, and that the

entities implementing such deferrals must continue to meet the

requirements for doing so.

Response. RUS agrees with this recommendation and has revised the

final rule accordingly.

Comment. One commenter recommended that the expense deferral plans

exempted from RUS approval requirements be cross-referenced to the

appropriate accounting interpretations.

Response. RUS agrees with the recommendation and has revised the

final rule accordingly.

Section 1767.41, Accounting Methods and Procedures Required of All RUS

Borrowers

Comment. One commenter expressed its concerns that RUS should not

interpret generally accepted accounting principles (GAAP) through its

accounting interpretations but should merely require its borrowers to

follow GAAP. The commenter expressed concern that any interpretation

that does not mirror a standard issued by the Financial Accounting

Standards Board provides the opportunity for a conflict to exist.

Response. Each accounting interpretation addressing a FASB standard

includes a synopsis of the requirements of the standard. While we

understand the commenter's concern that this synopsis could alter the

intent of the FASB standard, we expose, for public comment, all

interpretations to ensure that no apparent conflicts exist. The purpose

of the interpretations is to alert borrowers to recent issuances that

may impact upon their operations and to provide guidance on recording

the applicable transactions within the framework of the USoA. Our

purpose is not to alter the FASB standard unless it is necessary to do

so to accommodate the cooperative organizational structure of our

borrowers. To ensure that our intent was clear, we proposed

introductory language to Section 1767.41 detailing our purpose and

allowing borrowers to request a specific interpretation if they feel a

conflict exists. For this reason, we have made no revision to the final

rule.

Comment. One commenter recommended that the introductory language

to Section 1767.41 be amended. The commenter focused on the language

concerning requests for interpretations when a borrower feels that the

accounting prescribed in the USoA conflicts with GAAP. The proposed

language requires a borrower to request this interpretation in writing.

The commenter is concerned that requiring only written requests may

stifle questions posed to RUS and recommended language that focuses on

resolution of issues.

Response. It is and has always been RUS' intention to encourage

borrower questions, not to stifle them and we are receptive to any

action that will enhance interaction between RUS and its borrowers.

Therefore, we are revising the final rule to incorporate the

commenter's recommended language. We would, however, caution borrowers

that, due to the regulatory nature of the USoA, specific

interpretations thereof or departures therefrom must be requested, in

writing, in accordance with Sections 1767.13 and 1767.14. Written

interpretations of this USoA ensure consistency in the application of

accounting methodologies among RUS borrowers, thereby enhancing

financial analysis and ultimately, loan security.

Interpretation No. 137, Impairment of Long-Lived Assets

Comment. While agreeing with our accounting interpretation, one

commenter recommended that we expand our guidance to address the

potential impairment of a distribution cooperative's investment in a

generation and transmission (G&T) cooperative. The commenter expressed

concern that with the changes occurring in the electric utility

industry, additional guidance should be formulated to indicate what

accounting should be applied if an investment in a G&T becomes

impaired.

Response. The interrelationship between a G&T and its distribution

members is a complex one and encompasses many far-ranging issues in

addition to the distribution cooperatives' investments in their G&Ts.

While we share the commenter's concern, due to this complex

interrelationship and the electric utility industry's constantly

changing environment, we believe any guidance issued at this time may

prove imprudent. It is our intention, therefore, to monitor the

deregulation process closely, review all of the accounting

consequences, and issue guidance in future rulemakings as more of the

issues are resolved.

Interpretation No. 104, Terminal Facilities

Comment. One commenter stated that it is probable that power supply

contracts resulting in the construction of terminal facilities will not

be renewed. This commenter recommended that the amortization period be

associated with contract life if it is shorter than the average service

life of the plant constructed.

Response. RUS agrees with the recommendation and has revised the

final rule accordingly.

Interpretations No. 138, Automatic Meter Reading Systems--Turtles, and

140, Radio-Based Automatic Meter Reading Systems

Comment. Several commenters requested reconsideration of

Interpretations 138, Automatic Meter Reading Systems--Turtles, and 140,

Radio-Based Automatic Meter Reading Systems. The commenters addressed a

number of concerns including the functional classification of

equipment, depreciation period of equipment, and the need for a generic

interpretation to address all types of automatic meter reading devices.

The commenters believe that the primary purpose of both the Turtle and

Radio-Based Automatic Meter Reading Systems are to facilitate the meter

reading function and should be recorded in Account 370, Meters. They

expressed concern, however, that the depreciation rate applicable to

metering equipment was not reflective of the average service lives of

these devices and the associated computer software.

Response. RUS agrees with the commenters that the underlying

function of these systems is meter reading and that these types of

devices and the associated software have vastly different service lives

than the other

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equipment recorded in Account 370. RUS has, therefore, revised

Interpretations 138 and 140 to require that all equipment be classified

in a separate subaccount of Account 370, Meters. RUS has further

revised its interpretation to require depreciation of the meter reading

devices over the manufacturer's suggested service life and, in

accordance with Interpretation No. 401, Computer Software Costs,

depreciation of the associated software over its estimated useful

service life not to exceed 5 years.

In response to the commenters' request that we provide a generic

accounting interpretation to address all types of automatic meter

reading devices, RUS is hesitant to provide generic interpretations

that may be inappropriately applied to differing types of equipment. As

technologies constantly improve, many of the systems and equipment that

are in use in today's environment may be replaced by significantly

different devices that provide a range of functions currently

unanticipated by the industry. To avoid the application of accounting

instructions to systems or devices to which they do not apply, RUS has

decided to continue its practice of addressing specific, new

technologies as they arise.

Interpretation No. 610, Financial Forecasts

Comment. One commenter expressed the view that labor and related

expenses pertaining to the completion of a financial forecast should be

capitalized.

Response. While comments on Interpretation No. 610 were outside the

scope of this proposal, the preparation of financial forecasts are

necessary in the normal and usual operations of any business enterprise

and are considered common business practice. Financial forecasts are

managerial tools used to direct the course of an enterprise and to

evaluate its performance. Costs incurred in the normal course of

business are expensed in the period in which they are incurred.

Interpretation No. 627, Postretirement Benefits

Comment. One commenter suggested that the accounting journal

entries for the transition obligation associated with postretirement

benefits be amended to require the various operations, maintenance, and

administrative expense accounts to be charged rather than Account 926,

Employee Pensions and Benefits.

Response. The adoption of Statement of Financial Accounting

Standards No. 106, Employers' Accounting for Postretirement Benefits

Other Than Pension (Statement No. 106), was effective for most RUS

borrowers beginning with fiscal years after December 15, 1994. The

journal entry reference by the commenter addresses the current period

expensing of the transition obligation, which, due to the passage of

time, is no longer an appropriate option for borrowers. Borrowers that

failed to adopt Statement No. 106 within the required timeframe have

erred in the preparation of their financial statements and must account

for such error as a prior period adjustment. For this reason, no

revision was made to the final rule.

Interpretation No. 630, Split Dollar Life Insurance

Comment. Two commenters recommended that Interpretation No. 630,

Split Dollar Life Insurance, be revised to apply to all split dollar

life insurance programs, regardless of the service provider.

Response. While there are a number of split dollar life insurance

programs available in the marketplace, the majority of RUS borrowers

participate in the program offered by NRECA. The accounting guidance

provided in Interpretation No. 630 is based upon information provided

by NRECA on their program and is, therefore, specific to their plan.

If, however, a borrower is currently participating in a program offered

by another provider that parallels the NRECA program, the borrower

should use the accounting provided in this interpretation. If the

borrower's current program differs from that provided by NRECA, the

borrower should request specific accounting guidance for that program.

For this reason, no revision was made in the final rule.

Comment. One commenter recommended that Interpretation No. 630,

Split Dollar Life Insurance, be expanded to provide a standard expense

reference. This commenter recommended the use of Account 926, Employee

Pensions and Benefits, or Account 165, Prepayaments.

Response. RUS agrees that an expense account reference should be

added to this interpretation. However, in keeping with the functional

approach to accounting established in this rule, RUS will revise the

final rule to require that various operations, maintenance, and

administrative expense accounts be charged for the expenses associated

with split dollar life insurance.

Interpretation No. 631, Special Early Retirement Plan

Comment. One commenter recommended that Interpretation No. 631,

Special Early Retirement Plan (SERP), be revised to apply to all plans,

regardless of the provider of the service.

Response. While there are a number of SERP programs available, the

vast majority of RUS borrowers participate in the program offered by

NRECA. The accounting guidance provided in Interpretation No. 631 is

based upon information provided by NRECA on their program and is,

therefore, specific to their plan. If, however, a borrower is currently

participating in a program offered by another provider that mirrors the

NRECA program, the borrower should use the accounting provided in this

interpretation. If the borrower's current program differs from that

provided by NRECA, the borrower should request specific accounting

guidance for that program. For this reason, no revision was made in the

final rule.

List of Subjects in 7 CFR Part 1767

Electric power, Loan programs--energy, Reporting and recordkeeping

requirements, Rural areas, Uniform System of Accounts.

For the reasons set forth in the preamble, RUS hereby amends 7 CFR

chapter XVII as follows:

PART 1767--ACCOUNTING REQUIREMENTS FOR RUS ELECTRIC BORROWERS

1. The authority citation for part 1767 is revised to read as

follows:

Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

2. Section 1767.13 is amended by revising paragraphs (a) and (d) to

read as follows:

Sec. 1767.13 Departures from the prescribed RUS Uniform System of

Accounts.

(a) No departures are to be made to the prescribed RUS USoA without

the prior written approval of RUS. RUS grants a departure to any

borrower electing to delay implementation of the functional (activity-

based) accounting requirements of this part through December 31, 1997.

Requests for departures from the RUS USoA shall be addressed, in

writing, to the Director, Program Accounting Services Division (PASD).

* * * * *

(d) RUS borrowers will not implement the provisions of Statement of

Financial Accounting Standards (SFAS) No. 71, Accounting for the

Effects of Certain

[[Page 42290]]

Types of Regulation, SFAS No. 90, Regulated Enterprises--Accounting for

Abandonments and Disallowances of Plant Costs, SFAS No. 92, Regulated

Enterprises--Accounting for Phase-in Plans, without the prior written

approval of RUS except as provided for in paragraphs (d)(1) through

(d)(5) of this section. Requests for approval shall be addressed, in

writing, to the Director, PASD. The specific deferrals set forth in

paragraphs (d)(1) through (d)(5) of this section may be implemented

without the prior written approval of RUS provided that the deferrals

comply with Statement No. 71 and that the RUS borrowers implementing

such deferrals continue to meet the requirements set forth in Statement

No. 71 for doing so:

(1) The deferral and amortization of prior service pension costs

(See Sec. 1767.41, Interpretation No. 606, Pension Costs), remapping

expenses (See Sec. 1767.41, Interpretation No. 613, Mapping Costs), and

preliminary survey and investigation charges (See Sec. 1767.17,

Interpretation No. 111, Engineering Contracts for System Planning);

(2) The deferral of any current period expense or expenses, on a

cumulative basis for the fiscal year, only if a borrower would have met

each of its financial tests or coverage ratios that it has covenanted

with RUS to meet for that fiscal year, had the deferral not been made;

(3) The deferral of any cost that will be fully amortized within

the next 12 succeeding months;

(4) The accelerated amortization of any previously deferred

expense; and

(5) The deferral of revenues coincident with a moratorium imposed

by the National Rural Electric Cooperative Association on its

Retirement and Security Program, provided, however, that the deferral

is for the sole purpose of offsetting future pension costs.

* * * * *

3. Section 1767.17 is amended by revising paragraphs (a) and (b) to

read as follows:

Sec. 1767.17 Operating expense instructions.

(a) Supervision and engineering. The supervision and engineering

includible in the operating expense accounts shall consist of the

salary, employee pensions and benefits, social security and other

payroll taxes, injuries and damages, and other expenses of

superintendents, engineers, clerks, other employees, and consultants

engaged in supervising and directing the operation and maintenance of

each utility function. Whenever allocations are necessary in order to

arrive at the amount to be included in any account, the method and

basis of allocation shall be reflected by underlying records.

(1) Labor items:

(i) Special tests to determine efficiency of equipment operation;

(ii) Preparing or reviewing budgets, estimates, and drawings

relating to operation or maintenance for departmental approval;

(iii) Preparing instructions for operations and maintenance

activities;

(iv) Reviewing and analyzing operating results;

(v) Establishing organizational setup of departments and executing

changes therein;

(vi) Formulating and reviewing routines of departments and

executing changes therein;

(vii) General training and instruction of employees by supervisors

whose pay is chargeable hereto. Specific instructions and training in a

particular type of work is chargeable to the appropriate functional

account (See paragraph (c) (19) of this section); and

(viii) Secretarial work for supervisory personnel, but not general

clerical and stenographic work chargeable to other accounts.

(2) Expense items:

(i) Employee pensions and benefits;

(ii) Social security and other payroll taxes;

(iii) Injuries and damages;

(iv) Consultants' fees and expenses; and

(v) Meals, traveling, and incidental expenses.

(b) Maintenance. (1) The cost of maintenance chargeable to the

various operating expense and clearing accounts includes labor,

employee pensions and benefits, social security and other payroll

taxes, injuries and damages, materials, overheads, and other expenses

incurred in maintenance work. A list of work operations applicable

generally to utility plant is included in this paragraph (b). Other

work operations applicable to specific classes of plant are listed in

functional maintenance expense accounts.

(2) Materials recovered in connection with the maintenance of

property shall be credited to the same account to which the maintenance

cost was charged.

(3) If the book cost of any property is carried in Account 102,

Electric Plant Purchased or Sold, the cost of maintaining such property

shall be charged to the accounts for maintenance of property of the

same class and use, the book cost of which is carried in other electric

plant in service accounts. Maintenance of property leased from others

shall be treated as provided in paragraph (c) of this section.

(4) Items:

(i) Direct field supervision of maintenance;

(ii) Inspecting, testing, and reporting on condition of plant

specifically to determine the need for repairs, replacements,

rearrangements, and changes and inspecting and testing the adequacy of

repairs which have been made;

(iii) Work performed specifically for the purpose of preventing

failure, restoring serviceability or maintaining life of plant;

(iv) Rearranging and changing the location of plant not retired;

(v) Repairing for reuse materials recovered from plant;

(vi) Testing for, locating, and clearing trouble;

(vii) Net cost of installing, maintaining, and removing temporary

facilities to prevent interruptions in service; and

(viii) Replacing or adding minor items of plant which do not

constitute a retirement unit.

* * * * *

4. Section 1767.21 is amended by revising Account 408 to read as

follows:

Sec. 1767.21 Operating income.

* * * * *

408 Taxes Other Than Income Taxes

A. This account shall include the amounts of ad valorem, gross

revenue, or gross receipts taxes, state unemployment insurance,

franchise taxes, Federal excise taxes, social security taxes, and all

other taxes assessed by Federal, state, county, municipal, or other

local governmental authorities, except income taxes.

B. These accounts shall be charged in each accounting period with

the amounts of taxes which are applicable thereto, with concurrent

credits to Account 236, Taxes Accrued, or Account 165, Prepayments, as

appropriate. When it is not possible to determine the exact amounts of

taxes, the amounts shall be estimated and adjustments made in current

accruals as the actual tax levies become known.

C. The charges to these accounts shall be made or supported so as

to show the amount of each tax and the basis upon which each charge is

made. In the case of a utility rendering more than one utility service,

taxes of the kind includible in these accounts shall be assigned

directly to the utility department the operation of which gave rise to

the tax, in so far as practicable. Where the tax is not attributable to

a specific utility department, it shall be distributed among the

utility departments or nonutility operations on

[[Page 42291]]

an equitable basis after appropriate study to determine such basis.

Note A: Special assessments for street and similar improvements

shall be included in the appropriate utility plant or nonutility

property account.

Note B: Taxes specifically applicable to construction and

retirement activities shall be included in the cost of construction

or the retirement.

Note C: Gasoline and other sales taxes shall be charged as far

as practicable to the same account as the materials on which the tax

is levied.

Note D: Social security and other forms of payroll taxes shall

be charged to nonutility operations, the specific functional

operations, maintenance, and administrative expense accounts, and to

construction and retirement activities on a basis related to payroll

either directly or by transfers from this account.

Note E: Property taxes applicable to the various utility

functions shall be charged to the specific functional operations and

administrative expense accounts either directly or by transfers from

this account.

Note F: Interest on tax refunds or deficiencies shall not be

included in these accounts but in Account 419, Interest and Dividend

Income, or Account 431, Other Interest Expense, as appropriate.

D. Account 408 shall be subaccounted as follows:

408.1 Taxes--Property

408.2 Taxes--U.S. Social Security--Unemployment

408.3 Taxes--U.S. Social Security--F.I.C.A.

408.4 Taxes--State Social Security--Unemployment

408.5 Taxes--State Sales--Consumers

408.6 Taxes--Gross Revenue or Gross Receipts Tax

408.7 Taxes--Other

* * * * *

5. Section 1767.27 is amended by revising Accounts 500, 501, 502,

505, 506, 510, 511, 512, 513, 514, 517, 519, 520, 523, 524, 528, 529,

530, 531, 532, 535, 537, 538, 539, 541, 542, 543, 544, 545, 546, 548,

549, 551, 552, 553, 554, 556, 560, 561, 562, 563, 564, 566, 568, 569,

570, 571, 572, 573, 580, 581, 582, 583, 584, 585, 586, 587, 588, 590,

591, 592, 593, 594, 595, 596, 597, and 598 to read as follows:

Sec. 1767.27 Operation and maintenance expense.

* * * * *

500 Operation Supervision and Engineering

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and expenses incurred in the general supervision and direction

of the operation of steam power generating stations. Direct supervision

of specific activities, such as fuel handling, boiler-room operations,

and generator operations shall be charged to the appropriate account.

(See Sec. 1767.17(a).)

501 Fuel

A. This account shall include the cost of fuel used in the

production of steam for the generation of electricity, including

expenses in unloading fuel from the shipping media and handling thereof

up to the point where the fuel enters the first boiler plant bunker,

hopper, bucket, tank, or holder of the boiler-house structure. Records

shall be maintained to show the quantity, B.t.u. content and cost of

each type of fuel used.

B. The cost of fuel shall be charged initially to Account 151, Fuel

Stock, and cleared to this account on the basis of the fuel used. Fuel

handling expenses may be charged to this account as incurred or charged

initially to Account 152, Fuel Stock Expenses Undistributed. In the

latter event, they shall be cleared to this account on the basis of the

fuel used. Respective amounts of fuel stock and fuel stock expenses

shall be readily available.

Items

Labor:

1. Supervising, purchasing, and handling of fuel.

2. All routine fuel analyses.

3. Unloading from shipping facility and placing in storage.

4. Moving of fuel in storage and transferring fuel from one station

to another.

5. Handling from storage or shipping facility to first bunker,

hopper, bucket, tank, or holder of boiler-house structure.

6. Operation of mechanical equipment, such as locomotives, trucks,

cars, boats, barges, and cranes.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Operating, maintenance, and depreciation expenses and ad valorem

taxes on utility-owned transportation equipment used to transport fuel

from the point of acquisition to the unloading point.

2. Lease or rental costs of transportation equipment used to

transport fuel from the point of acquisition to the unloading point.

[[Page 42292]]

3. Cost of fuel including freight, switching, demurrage, and other

transportation charges.

4. Excise taxes, insurance, purchasing commissions, and similar

items.

5. Stores expenses to extent applicable to fuel.

6. Transportation and other expenses in moving fuel in storage.

7. Tools, lubricants, and other supplies.

8. Operating supplies for mechanical equipment.

9. Residual disposal expenses less any proceeds from sale of

residuals.

Note: Abnormal fuel handling expenses occasioned by emergency

conditions shall be charged to expense as incurred.

502 Steam Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, materials used, and

expenses incurred in production of steam for electric generation. This

includes all expenses of handling and preparing fuel beginning at the

point where the fuel enters the first boiler plant bunker, hopper,

tank, or holder of the boiler-house structure.

Items

Labor:

1. Supervising steam production.

2. Operating fuel conveying, storage, weighing, and processing

equipment within boiler plant.

3. Operating boiler and boiler auxiliary equipment.

4. Operating boiler feed water purification and treatment

equipment.

5. Operating ash-collecting and disposal equipment located inside

the plant.

6. Operating boiler plant electrical equipment.

7. Keeping boiler plant log and records and preparing reports on

boiler plant operations.

8. Testing boiler water.

9. Testing, checking, and adjusting meters, gauges, and other

instruments and equipment in boiler plant.

10. Cleaning boiler plant equipment when not incidental to

maintenance work.

11. Repacking glands and replacing gauge glasses where the work

involved is of a minor nature and is performed by regular operating

crews. Where the work is of a major character, such as that performed

on high-pressure boilers, the item should be considered as maintenance.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Chemicals and boiler inspection fees.

2. Lubricants.

3. Boiler feed water purchased and pumping supplies.

* * * * *

505 Electric Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, and materials used, and

expenses incurred in operating prime movers, generators, and their

auxiliary apparatus, switch gear, and other electric equipment to the

points where electricity leaves for conversion for transmission or

distribution.

Items

Labor:

1. Supervising electric production.

2. Operating turbines, engines, generators, and exciters.

3. Operating condensers, circulating water systems, and other

auxiliary apparatus.

4. Operating generator cooling system.

5. Operating lubrication and oil control system, including oil

purification.

6. Operating switchboards, switch gear and electric control, and

protective equipment.

7. Keeping electric plant log and records and preparing reports on

electric plant operations.

8. Testing, checking, and adjusting meters, gauges, and other

instruments, relays, controls, and other equipment in the electric

plant.

9. Cleaning electric plant equipment when not incidental to

maintenance work.

10. Repacking glands and replacing gauge glasses.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Taxes.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee

[[Page 42293]]

pensions and benefits, allocated on the more equitable basis of either

direct labor dollars or direct labor hours, applicable to the labor

items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Lubricants and control system oils.

2. Generator cooling gases.

3. Circulating water purification supplies.

4. Cooling water purchased.

5. Motor and generator brushes.

506 Miscellaneous Steam Power Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and materials used and expenses incurred which are not

specifically provided for or not readily assignable to other steam

generation operation expense accounts.

Items

Labor:

1. General clerical and stenographic work.

2. Guarding and patrolling plant and yard.

3. Building service.

4. Care of grounds including snow removal, and grass cutting.

5. Miscellaneous labor.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

2. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

3. Fees and expenses of claim investigators.

4. Payment of awards to claimants for court costs and attorneys'

services.

5. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

6. Compensation payments under workmen's compensation laws.

7. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

8. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. General operating supplies, such as tools, gaskets, packing

waste, gauge glasses, hose, indicating lamps, record and report forms.

2. First-aid supplies and safety equipment.

3. Employees' service facilities expenses.

4. Building service supplies.

5. Communication service.

6. Miscellaneous office supplies and expenses, printing, and

stationery.

7. Transportation expenses.

8. Meals, traveling, and incidental expenses.

9. Research, development, and demonstration expenses.

* * * * *

510 Maintenance Supervision and Engineering

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and expenses incurred in the general supervision and direction

of maintenance of steam generation facilities. Direct field supervision

of specific jobs shall be charged to the appropriate maintenance

account. (See Sec. 1767.17(a).)

511 Maintenance of Structures

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and materials used and expenses incurred in the

[[Page 42294]]

maintenance of steam structures, the book cost of which is includible

in Account 311, Structures and Improvements. (See Sec. 1767.17(b).)

512 Maintenance of Boiler Plant

A. This account shall include the cost of labor, employee pensions

and benefits, social security and other payroll taxes, injuries and

damages, and materials used and expenses incurred in the maintenance of

steam plant, the book cost of which is includible in Account 312,

Boiler Plant Equipment. (See Sec. 1767.17(b).)

B. For the purpose of making charges hereto and to Account 513,

Maintenance of Electric Plant, the point at which steam plant is

distinguished from electric plant is defined as follows:

1. Inlet flange of throttle valve on prime mover.

2. Flange of all steam extraction lines on prime mover.

3. Hotwell pump outlet on condensate lines.

4. Inlet flange of all turbine-room auxiliaries.

5. Connection to line side of motor starter for all boiler-plant

equipment.

513 Maintenance of Electric Plant

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and materials used and expenses incurred in the maintenance of

electric plant, the book cost of which is includible in Account 313,

Engines and Engine-Driven Generators; Account 314, Turbogenerator

Units; and Account 315, Accessory Electric Equipment. (See

Sec. 1767.17(b) and Paragraph B of Account 512.)

514 Maintenance of Miscellaneous Steam Plant

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and materials used and expenses incurred in maintenance of

miscellaneous steam generation plant, the book cost of which is

includible in Account 316, Miscellaneous Power Plant Equipment. (See

Sec. 1767.17(b).)

* * * * *

517 Operation Supervision and Engineering

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and expenses incurred in the general supervision and direction

of the operation of nuclear power generating stations. Direct

supervision of specific activities, such as fuel handling, reactor

operations, and generator operations shall be charged to the

appropriate account. (See Sec. 1767.17(a).)

* * * * *

519 Coolants and Water

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, and materials used and

expenses incurred for heat transfer materials and water used for steam

and cooling purposes.

Items

Labor:

1. Operation of water supply facilities.

2. Handling of coolants and heat transfer materials.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Taxes.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Chemicals.

2. Additions to or refining of fluids used in reactor systems.

3. Lubricants.

4. Pumping supplies and expenses.

5. Miscellaneous supplies and expenses.

6. Purchased water.

Note: Do not include in this account water for general station

use or the initial charge for coolants, heat transfer, or moderator

fluids, chemicals, or other supplies capitalized.

520 Steam Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, and materials used and

expenses incurred in production of steam through nuclear processes, and

similar expenses for operation of any auxiliary superheat facilities.

Items

Labor:

1. Supervising steam production.

2. Fuel handling including removal, insertion, disassembly, and

preparation for cooling operations and shipment.

3. Testing instruments and gauges.

4. Health, safety, monitoring, and decontamination activities.

[[Page 42295]]

5. Waste disposal.

6. Operating steam boilers and auxiliary steam, superheat

facilities.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Chemical supplies.

2. Charts and logs.

3. Health, safety, monitoring, and decontamination supplies.

4. Boiler inspection fees.

5. Lubricants.

* * * * *

523 Electric Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, materials used, and

expenses incurred in operating turbogenerators, steam turbines and

their auxiliary apparatus, switch gear, and other electric equipment to

the points where electricity leaves for conversion for transmission or

distribution.

Items

Labor:

1. Supervising electric production.

2. Operating turbines, engines, generators, and exciters.

3. Operating condensers, circulating water systems, and other

auxiliary apparatus.

4. Operating generator cooling system.

5. Operating lubrication and oil control system, including oil

purification.

6. Operating switchboards, switch gear, and electric control and

protective equipment.

7. Keeping plant log and records and preparing reports on electric

plant operations.

8. Testing, checking and adjusting meters, gauges, and other

instruments, relays, controls, and other equipment in the electric

plant.

9. Cleaning electric plant equipment when not incidental to

maintenance.

10. Repacking glands and replacing gauge glasses.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

[[Page 42296]]

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Lubricants and control system oils.

2. Generator cooling gases.

3. Log sheets and charts.

4. Motor and generator brushes.

524 Miscellaneous Nuclear Power Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred which are not

specifically provided for or are not readily assignable to other

nuclear generation operation accounts.

Items

Labor:

1. General clerical and stenographic work.

2. Plant security.

3. Building service.

4. Care of grounds, including snow removal, and grass cutting

5. Miscellaneous labor.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

2. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

3. Fees and expenses of claim investigators.

4. Payment of awards to claimants for court costs and attorneys'

services.

5. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

6. Compensation payments under workmen's compensation laws.

7. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

8. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. General operating supplies, such as tools, gaskets, hose,

indicating lamps, records and reports forms.

2. First-aid supplies and safety equipment.

3. Employees' service facilities expenses.

4. Building service supplies.

5. Communication service.

6. Miscellaneous office supplies and expenses, printing and

stationery.

7. Transportation expenses.

8. Meals, traveling, and incidental expenses.

9. Research, development, and demonstration expenses.

* * * * *

528 Maintenance Supervision and Engineering

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and expenses incurred in the general supervision and direction

of maintenance of nuclear generation facilities. Direct field

supervision of specific jobs shall be charged to the appropriate

maintenance account. (See Sec. 1767.17(a).)

529 Maintenance of Structures

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in the maintenance of

structures, the book cost of which is includible in Account 321,

Structures and Improvements. (See Sec. 1767.17(b).)

530 Maintenance of Reactor Plant Equipment

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in the maintenance of

reactor plant, the book cost of which is includible in Account 322,

Reactor Plant Equipment. (See Sec. 1767.17(b).)

531 Maintenance of Electric Plant

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in the maintenance of

electric plant, the book cost of which is includible in Account 323,

Turbogenerator Units, and Account 324, Accessory Electric Equipment.

(See Sec. 1767.17(b).)

532 Maintenance of Miscellaneous Nuclear Plant

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of

miscellaneous nuclear generating plant, the book cost of which is

includible in Account 325, Miscellaneous Power Plant Equipment. (See

Sec. 1767.17(b).)

* * * * *

535 Operation Supervision and Engineering

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and expenses incurred in the general supervision and direction

of the operation of hydraulic power generating stations. Direct

supervision of specific activities, such as hydraulic operation, and

generator operation shall be charged to the appropriate account. (See

Sec. 1767.17(a).)

* * * * *

537 Hydraulic Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, materials used, and

expenses incurred in operating hydraulic works including reservoirs,

dams, and waterways, and in activities directly relating to the

hydroelectric development outside the

[[Page 42297]]

generating station. It shall also include the cost of labor, materials

used, and other expenses incurred in connection with the operation of

(1) fish and wildlife, and (2) recreation facilities. Separate

subaccounts shall be maintained for each of the above.

Items

Labor:

1. Supervising hydraulic operation.

2. Removing debris and ice from trash racks, reservoirs, and

waterways.

3. Patrolling reservoirs and waterways.

4. Operating intakes, spillways, sluiceways, and outlet works.

5. Operating bubbler, heater, or other deicing systems.

6. Ice and log jam work.

7. Operating navigation facilities.

8. Operations relating to conservation of game, fish, and forests.

9. Insect control activities.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Insect control materials.

2. Lubricants, packing, and other supplies used in the operation of

hydraulic equipment.

3. Transportation expense.

538 Electric Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, materials used, and

expenses incurred in operating prime movers, generators, and their

auxiliary apparatus, switchgear, and other electric equipment, to the

point where electricity leaves for conversion for transmission or

distribution.

Items

Labor:

1. Supervising electric production.

2. Operating prime movers, generators, and auxiliary equipment.

3. Operating generator cooling system.

4. Operating lubrication and oil control systems, including oil

purification.

5. Operating switchboards, switchgear, and electric control and

protection equipment.

6. Keeping plant log and records and preparing reports on plant

operations.

7. Testing, checking and adjusting meters, gauges, and other

instruments, relays, controls, and other equipment in the plant.

8. Cleaning plant equipment when not incidental to maintenance

work.

9. Repacking glands.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

[[Page 42298]]

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Lubricants and control system oils.

2. Motor and generator brushes.

539 Miscellaneous Hydraulic Power Generation Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred which are not

specifically provided for or are not readily assignable to other

hydraulic generation operation expense accounts.

Items

Labor:

1. General clerical and stenographic work.

2. Guarding and patrolling plant and yard.

3. Building service.

4. Care of grounds including snow removal, and grass cutting.

5. Snow removal from roads and bridges.

6. Miscellaneous labor.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

2. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

3. Fees and expenses of claim investigators.

4. Payment of awards to claimants for court costs and attorneys'

services.

5. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

6. Compensation payments under workmen's compensation laws.

7. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

8. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. General operating supplies, such as tools, gaskets, packing,

waste, hose, indicating lamps, record and report forms.

2. First-aid supplies and safety equipment.

3. Employees' service facilities expenses.

4. Building service supplies.

5. Communication service.

6. Office supplies, printing and stationery.

7. Transportation expenses.

8. Fuel.

9. Meals, traveling, and incidental expenses.

10. Research, development, and demonstration expenses.

* * * * *

541 Maintenance Supervision and Engineering

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and expenses incurred in the general supervision and direction

of the maintenance of hydraulic power generating stations. Direct field

supervision of specific jobs shall be charged to the appropriate

maintenance account. (See Sec. 1767.17(a).)

542 Maintenance of Structures

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of

hydraulic structures, the book cost of which is includible in Account

331, Structures and Improvements. (See Sec. 1767.17 (b).) However, the

cost of labor, materials used, and expenses incurred in the maintenance

of fish and wildlife and recreation facilities, the book cost of which

is includible in Account 331, Structures and Improvements, shall be

charged to Account 545, Maintenance of Miscellaneous Hydraulic Plant.

543 Maintenance of Reservoirs, Dams, and Waterways

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of plant

includible in Account 332, Reservoirs, Dams, and Waterways. (See

Sec. 1767.17(b).) However, the cost of labor, materials used, and

expenses incurred in the maintenance of fish and wildlife and

recreation facilities, the book cost of which is includible in Account

332, Reservoirs, Dams, and Waterways, shall be charged to Account 545,

Maintenance of Miscellaneous Hydraulic Plant.

544 Maintenance of Electric Plant

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of plant

includible in Account 333, Water Wheels, Turbines and Generators, and

Account 334, Accessory Electric Equipment, (See Sec. 1767.17(b).)

545 Maintenance of Miscellaneous Hydraulic Plant

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of plant,

the book cost of which is includible in Account 335, Miscellaneous

Power Plant Equipment, and Account 336, Roads Railroads and

[[Page 42299]]

Bridges. (See Sec. 1767.17(b).) It shall also include the cost of

labor, materials used, and other expenses incurred in the maintenance

of (1) fish and wildlife, and (2) recreation facilities. Separate

subaccounts shall be maintained for each of the above.

* * * * *

546 Operation Supervision and Engineering

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and expenses incurred in the general supervision and direction

of the operation of other power generating stations. Direct supervision

of specific activities, such as fuel handling and engine and generator

operation shall be charged to the appropriate account. (See

Sec. 1767.17(a).)

* * * * *

548 Generation Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, materials used, and

expenses incurred in operating prime movers, generators, and electric

equipment in other power generating stations, to the point where

electricity leaves for conversion for transmission or distribution.

Items

Labor:

1. Supervising other power generation operation.

2. Operating prime movers, generators, and auxiliary apparatus and

switching and other electric equipment.

3. Keeping plant log and records and preparing reports on plant

operations.

4. Testing, checking, cleaning, oiling, and adjusting equipment.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Dynamo, motor, and generator brushes.

2. Lubricants and control system oils.

3. Water for cooling engines and generators.

549 Miscellaneous Other Power Generation Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in the operation of

other power generating stations which are not specifically provided for

or are not readily assignable to other generation expense accounts.

Items

Labor:

1. General clerical and stenographic work.

2. Guarding and patrolling plant and yard.

3. Building service.

4. Care of grounds, including snow removal, and grass cutting.

5. Miscellaneous labor.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

[[Page 42300]]

2. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

3. Fees and expenses of claim investigators.

4. Payment of awards to claimants for court costs and attorneys'

services.

5. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

6. Compensation payments under workmen's compensation laws.

7. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

8. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Building service supplies.

2. First-aid supplies and safety equipment.

3. Communication service.

4. Employees' service facilities expenses.

5. Office supplies, printing and stationery.

6. Transportation expense.

7. Meals, traveling, and incidental expenses.

8. Fuel for heating.

9. Water for fire protection or general use.

10. Miscellaneous supplies, such as hand tools, drills, saw blades,

and files.

11. Research, development, and demonstration expenses.

* * * * *

551 Maintenance Supervision and Engineering

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and expenses incurred in the general supervision and direction

of the maintenance of other power generating stations. Direct field

supervision of specific jobs shall be charged to the appropriate

maintenance account. (See Sec. 1767.17(a).)

552 Maintenance of Structures

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of

facilities used and expenses incurred in maintenance of facilities used

in other power generation, the book cost of which is includible in

Account 341, Structures and Improvements, and Account 342, Fuel

Holders, Producers and Accessories. (See Sec. 1767.17(b).)

553 Maintenance of Generating and Electric Equipment

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of plant,

the book cost of which is includible in Account 343, Prime Movers;

Account 344, Generators; and Account 345, Accessory Electric Equipment.

(See Sec. 1767.17(b).)

554 Maintenance of Miscellaneous Other Power Generation Plant

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of other

power generation plant, the book cost of which is includible in Account

346, Miscellaneous Power Plant Equipment. (See Sec. 1767.17(b).)

* * * * *

556 System Control and Load Dispatching

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, and expenses incurred in

load dispatching activities for system control. Utilities having an

interconnected electric system or operating under a central authority

which controls the production and dispatching of electricity may

apportion these costs to this account and Account 561, Load

Dispatching, and Account 581, Load Dispatching.

Items

Labor:

1. Allocating loads to plants and interconnections with others.

2. Directing switching.

3. Arranging and controlling clearances for construction,

maintenance, test, and emergency purposes.

4. Controlling system voltages.

5. Recording loadings, and water conditions.

6. Preparing operating reports and data for billing and budget

purposes.

7. Obtaining reports on the weather and special events.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

[[Page 42301]]

Expenses:

1. Communication service provided for system control purposes.

2. System record and report forms.

3. Meals, traveling, and incidental expenses.

4. Obtaining weather and special events reports.

* * * * *

560 Operation Supervision and Engineering

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and expenses incurred in the general supervision and direction

of the operation of the transmission system as a whole. Direct

supervision of specific activities, such as station operation and line

operation shall be charged to the appropriate account. (See

Sec. 1767.17(a).)

561 Load Dispatching

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, materials used, and

expenses incurred in load dispatching operations pertaining to the

transmission of electricity.

Items

Labor:

1. Direct switching.

2. Arranging and controlling clearances for construction,

maintenance, test, and emergency purposes.

3. Controlling system voltages.

4. Obtaining reports on the weather and special events.

5. Preparing operating reports and data for billing and budget

purposes.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Expenses:

1. Communication service provided for system control purposes.

2. System record and report forms.

3. Meals, traveling, and incidental expenses.

4. Obtaining weather and special events reports.

562 Station Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, materials used, and

expenses incurred in operating transmission substations and switching

stations. If transmission station equipment is located in or adjacent

to a generating station, the expenses applicable to transmission

station operations shall nevertheless be charged to this account.

Items

Labor:

1. Supervising station operation.

2. Adjusting station equipment where such adjustment primarily

affects performance, such as regulating the flow of cooling water,

adjusting current in fields of a machine or changing voltage of

regulators, changing station transformer taps.

3. Inspecting, testing, and calibrating station equipment for the

purpose of checking its performance.

4. Keeping station log and records and preparing records on station

operation.

5. Operating switching and other station equipment.

6. Standing watch, guarding, and patrolling station and station

yard.

7. Sweeping, mopping, and tidying station.

8. Care of grounds, including snow removal, and grass cutting.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally

[[Page 42302]]

allowed when not the result of occupational injuries or in excess of

statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Building service expenses.

2. Operating supplies, such as lubricants, commutator brushes,

water, and rubber goods.

3. Station meter and instrument supplies, such as ink and charts.

4. Station record and report forms.

5. Tool expense.

6. Transportation expenses.

7. Meals, traveling, and incidental expenses.

563 Overhead Line Expenses

564 Underground Line Expenses

A. These accounts shall include the cost of labor, employee

pensions and benefits, social security and other payroll taxes,

injuries and damages, property insurance, property taxes, materials

used, and expenses incurred in the operation of transmission lines.

B. If the expenses are not substantial for both overhead and

underground lines, these accounts may be combined.

Items

Labor:

1. Supervising line operation.

2. Inspecting and testing lightning arresters, circuit breakers,

switches, and grounds.

3. Load tests of circuits.

4. Routine line patrolling.

5. Routine voltage surveys made to determine the condition or

efficiency of transmission system.

6. Transferring loads, switching and reconnecting circuits and

equipment for operating purposes. (Switching for construction or

maintenance purposes is not includible in this account.)

7. Routine inspection and cleaning of manholes, conduit, network,

and transformer vaults.

8. Electrolysis surveys.

9. Inspecting and adjusting line-testing equipment, such as

voltmeters, ammeters, and wattmeters.

10. Regulation and addition of oil or gas in high-voltage cable

systems.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Transportation expenses.

2. Meals, traveling, and incidental expenses.

3. Tool expenses.

4. Operating supplies, such as instrument charts, and rubber goods.

* * * * *

566 Miscellaneous Transmission Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and damage,

materials used, and expenses incurred in transmission map and record

work, transmission office expenses, and other transmission expenses not

provided for elsewhere.

Items

Labor:

1. General records of physical characteristics of lines and

stations, such as capacities.

[[Page 42303]]

2. Ground resistance records.

3. Janitor work at transmission office buildings, including care of

grounds, snow removal, and grass cutting.

4. Joint pole maps and records.

5. Line load and voltage records.

6. Preparing maps and prints.

7. General clerical and stenographic work.

8. Miscellaneous labor.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

2. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

3. Fees and expenses of claim investigators.

4. Payment of awards to claimants for court costs and attorneys'

services.

5. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

6. Compensation payments under workmen's compensation laws.

7. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

8. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Communication service.

2. Building service supplies.

3. Map and record supplies.

4. Transmission office supplies and expenses, printing and

stationery.

5. First-aid supplies.

6. Research, development, and demonstration expenses.

* * * * *

568 Maintenance Supervision and Engineering

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and expenses incurred in the general supervision and direction

of maintenance of the transmission system. Direct field supervision of

specific jobs shall be charged to the appropriate maintenance account.

(See Sec. 1767.17(a).)

569 Maintenance of Structures

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in the maintenance of

structures, the book cost of which is includible in Account 352,

Structures and Improvements. (See Sec. 1767.17(b).)

570 Maintenance of Station Equipment

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of

station equipment, the book cost of which is includible in Account 353,

Station Equipment. (See Sec. 1767.17(b).)

571 Maintenance of Overhead Lines

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of

transmission plant, the book cost of which is includible in Accounts

354, Towers and Fixtures; 355, Poles and Fixtures; 356, Overhead

Conductors and Devices; and 359, Roads and Trails. (See

Sec. 1767.17(b).)

Items

1. Work of the following character on poles, towers, and fixtures:

a. Installing or removing additional clamps or strain insulators on

guys in place.

b. Moving line or guy pole in relocation of the same pole or

section of line.

c. Painting poles, towers, crossarms, or pole extensions.

d. Readjusting and changing position of guys or braces.

e. Realigning and straightening poles, crossarms braces, and other

pole fixtures.

f. Reconditioning reclaimed pole fixtures.

g. Relocating crossarms, racks, brackets, and other fixtures on

poles.

h. Repairing or realigning pins, racks, or brackets.

i. Repairing pole supported platform.

j. Repairs by others to jointly owned poles.

k. Shaving, cutting rot, or testing poles or crossarms in use or

salvaged for reuse.

l. Stubbing poles already in service.

m. Supporting fixtures and conductors and transferring them to new

poles during pole replacements.

n. Maintenance of pole signs, stencils, and tags.

2. Work of the following character on overhead conductors and

devices:

a. Overhauling and repairing line cutouts, line switches, and line

breakers.

b. Cleaning insulators and bushings.

c. Refusing cutouts.

d. Repairing line oil circuit breakers and associated relays and

control wiring.

e. Repairing grounds.

f. Resagging, retyping, or rearranging position or spacing of

conductors.

g. Standing by phones, going to calls, cutting faulty lines clear,

or similar activities at times of emergencies.

h. Sampling, testing, changing, purifying, and replenishing

insulating oil.

i. Repairing line testing equipment.

j. Transferring loads, switching and reconnecting circuits and

equipment for maintenance purposes.

k. Trimming trees and clearing brush.

l. Chemical treatment of right of way areas when occurring

subsequent to construction of line.

3. Work of the following character on roads and trails:

a. Repairing roadways and bridges.

b. Trimming trees and brush to maintain previous roadway clearance.

c. Snow removal from roads and trails.

d. Maintenance work on publicly owned roads and trails when done by

utility at its expense.

Taxes:

[[Page 42304]]

1. Federal and state unemployment.

2. F.I.C.A.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

2. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

3. Fees and expenses of claim investigators.

4. Payment of awards to claimants for court costs and attorneys'

services.

5. Medical and hospital services and expenses for employees as the

result of occupational injuries or resulting from claims of others.

6. Compensation payments under workmen's compensation laws.

7. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

8. Cost of safety, accident prevention, and similar educational

activities.

572 Maintenance of Underground Lines

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of

transmission plant, the book cost of which is includible in Accounts

357, Underground Conduit, and Account 358, Underground Conductors and

Devices. (See Sec. 1767.17(b).)

Items

1. Work of the following character on underground conduit:

a. Cleaning ducts, manholes, and sewer connections.

b. Minor alterations of handholes, manholes, or vaults.

c. Refastening, repairing, or moving racks, ladders, hangers in

manholes, or vaults.

d. Plugging and shelving or replugging ducts.

e. Repairs to sewers and drains, walls and floors, rings and

covers.

2. Work of the following character on underground conductors and

devices:

a. Repairing oil circuit breakers, switches, cutouts, and control

wiring.

b. Repairing grounds.

c. Retraining and reconnecting cables in manholes, including

transfer of cables from one duct to another.

d. Repairing conductors and splices.

e. Repairing or moving junction boxes and potheads.

f. Refireproofing of cables and repairing supports.

g. Repairing electrolysis preventive devices for cables.

h. Repairing cable bonding systems.

i. Sampling, testing, changing, purifying, and replenishing

insulating oil.

j. Transferring loads, switching and reconnecting circuits, and

equipment for maintenance purposes.

k. Repairing line testing equipment.

l. Repairs to oil or gas equipment in high-voltage cable system and

replacement of oil or gas.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

2. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

3. Fees and expenses of claim investigators.

4. Payment of awards to claimants for court costs and attorneys'

services.

5. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

6. Compensation payments under workmen's compensation laws.

7. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

8. Cost of safety, accident prevention, and similar educational

activities.

573 Maintenance of Miscellaneous Transmission Plant

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, materials used, and expenses incurred in maintenance of owned

or leased plant which is assignable to transmission operations and is

not provided for elsewhere. (See Sec. 1767.17(b).)

* * * * *

580 Operation Supervision and Engineering

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, and expenses incurred in the general supervision and direction

of the operation of the

[[Page 42305]]

distribution system. Direct supervision of specific activities, such as

station operation, line operation, and meter department operation shall

be charged to the appropriate account. (See Sec. 1767.17(a).)

581 Load Dispatching

This account (the keeping of which is optional with the utility)

shall include the cost of labor, employee pensions and benefits, social

security and other payroll taxes, injuries and damages, property

insurance, property taxes, materials used, and expenses incurred in

load dispatching operations pertaining to the distribution of

electricity.

Items

Labor:

1. Direct switching.

2. Arranging and controlling clearances for construction,

maintenance, test, and emergency purposes.

3. Controlling system voltages.

4. Preparing operating reports.

5. Obtaining reports on the weather and special events.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Expenses:

1. Communication service provided for system control purposes.

2. System record and report forms.

3. Meals, traveling, and incidental expenses.

582 Station Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, materials used, and

expenses incurred in the operation of distribution substations.

Items

Labor:

1. Supervising station operation.

2. Adjusting station equipment where such adjustment primarily

affects performance, such as regulating the flow of cooling water,

adjusting current in fields of a machine, changing voltage of

regulators, or changing station transformer taps.

3. Keeping station log and records and preparing reports on station

operation.

4. Inspecting, testing, and calibrating station equipment for the

purpose of checking its performance.

5. Operating switching and other station equipment.

6. Standing watch, guarding, and patrolling station and station

yard.

7. Sweeping, mopping, and tidying station.

8. Care of grounds, including snow removal, and grass cutting.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated

[[Page 42306]]

Provision for Injuries and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Building service expenses.

2. Operating, supplies, such as lubricants, commutator brushes,

water, and rubber goods.

3. Station meter and instrument supplies, such as ink and charts.

4. Station record and report forms.

5. Tool expense.

6. Transportation expense.

7. Meals, traveling, and incidental expenses.

Note: If the utility owns storage battery equipment used for

supplying electricity to customers in periods of emergency, the cost

of operating labor and of supplies, such as acid, gloves,

hydrometers, thermometers, soda, automatic cell fillers, and acid

proof shoes shall be included in this account. If significant in

amount, a separate subdivision shall be maintained for such

expenses.

583 Overhead Line Expenses

584 Underground Line Expenses

These accounts shall include, respectively, the cost of labor,

employee pensions and benefits, social security and other payroll

taxes, injuries and damages, property insurance, property taxes,

materials used, and expenses incurred in the operation of overhead and

underground distribution lines.

Items

Labor:

1. Supervising line operation.

2. Changing line transformer taps.

3. Inspecting and testing lightning arresters, line circuit

breakers, switches, and grounds.

4. Inspecting and testing line transformers for the purpose of

determining load, temperature, or operation performance.

5. Patrolling lines.

6. Load tests and voltage surveys of feeders, circuits, and line

transformers.

7. Removing line transformers and voltage regulators with or

without replacement.

8. Installing line transformers or voltage regulators with or

without change in capacity provided that the cost of first installation

of these items is included in Account 368, Line Transformers.

9. Voltage surveys, either routine or upon request of customers,

including voltage tests at customer's main switch.

10. Transferring loads, switching and reconnecting circuits and

equipment for operation purpose.

11. Electrolysis surveys.

12. Inspecting and adjusting line testing equipment.

Taxes:

1. Federal and State unemployment.

2. F.I.C.A,

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Tool expense.

2. Transportation expense.

3. Meals, traveling, and incidental expenses.

4. Operating supplies, such as instrument charts, and rubber goods.

585 Street Lighting and Signal System Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, materials used, and

expenses incurred in: (1) The operation of street lighting and signal

system plant which is owned or leased by the utility; and (2) the

operation and maintenance of such plant owned by customers where such

work is done regularly as a part of the street lighting and signal

system service.

Items

Labor:

1. Supervising street lighting and signal systems operation.

2. Replacing lamps and incidental cleaning of glassware and

fixtures in connection therewith.

3. Routine patrolling for lamp outages, extraneous nuisances, or

encroachments.

[[Page 42307]]

4. Testing lines and equipment including voltage and current

measurement.

5. Winding and inspection of time switch and other controls.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses:

1. Street lamp renewals.

2. Transportation and tool expense.

3. Meals, traveling, and incidental expenses.

586 Meter Expenses

This account shall include the cost of labor, employee pensions and

benefits, social security and other payroll taxes, injuries and

damages, property insurance, property taxes, materials used, and

expenses incurred in the operation of customer meters and associated

equipment.

Items

Labor:

1. Supervising meter operation.

2. Clerical work on meter history and associated equipment record

cards, test cards, and reports.

3. Disconnecting and reconnecting, removing and reinstalling,

sealing and unsealing meters and other metering equipment in connection

with initiating or terminating services including the cost of obtaining

meter readings, if incidental to such operation.

4. Consolidating meter installations due to elimination of separate

meters for different rates of service.

5. Changing or relocating meters, instrument transformers, time

switches, and other metering equipment.

6. Resetting time controls, checking operation of demand meters and

other metering equipment, when done as an independent operation.

7. Inspecting and adjusting meter testing equipment.

8. Inspecting and testing meters, instrument transformers, time

switches, and other metering equipment on premises or in shops

excluding inspecting and testing incidental to maintenance.

Taxes:

1. Federal and state unemployment.

2. F.I.C.A.

3. Property.

Employee Pensions and Benefits: The portion of employee pensions

and benefits specifically identifiable with employees' labor costs

charged herein or, in the absence of specific employee identification,

the portion of employee pensions and benefits, allocated on the more

equitable basis of either direct labor dollars or direct labor hours,

applicable to the labor items detailed above, including:

1. Accruals for or payments to pension funds or to insurance

companies for pension purposes.

2. Group and life insurance premiums (credit dividends received).

3. Payments for medical and hospital services and expenses of

employees when not the result of occupational injuries.

4. Payments for accident, sickness, hospital, and death benefits or

insurance.

5. Payments to employees incapacitated for service or on leave of

absence beyond periods normally allowed when not the result of

occupational injuries or in excess of statutory awards.

6. Expenses in connection with educational and recreational

activities for the benefit of employees.

Insurance:

1. Premiums payable to insurance companies for fire, storm,

burglary, boiler explosion, lightning, fidelity, riot, and similar

insurance.

2. Amounts credited to Account 228.1, Accumulated Provision for

Property Insurance, for similar protection.

3. Special costs incurred in procuring insurance.

4. Insurance inspection service.

5. Insurance counsel, brokerage fees, and expenses.

6. Premiums payable to insurance companies for protection against

claims from injuries and damages by employees or others, such as public

liability, property damages, casualty, employee liability, etc., and

amounts credited to Account 228.2, Accumulated Provision for Injuries

and Damage, for similar protection.

7. Losses not covered by insurance or reserve accruals on account

of injuries or deaths to employees or others and damages to the

property of others.

8. Fees and expenses of claim investigators.

9. Payment of awards to claimants for court costs and attorneys'

services.

10. Medical and hospital service and expenses for employees as the

result of occupational injuries or resulting from claims of others.

11. Compensation payments under workmen's compensation laws.

[[Page 42308]]

12. Compensation paid while incapacitated as the result of

occupational injuries. (See Account 924, Note A.)

13. Cost of safety, accident prevention, and similar educational

activities.

Materials and Expenses

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