Electric System Operations and Maintenance

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1730

RIN 0572--AA74

Electric System Operations and Maintenance

AGENCY: Rural Utilities Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Rural Utilities Service (RUS), successor to the Rural

Electrification Administration (REA), proposes to amend its regulations

by adding a new part concerning electric system operations and

maintenance. These new regulations would codify and clarify RUS policy

relating to the operations and maintenance of electric systems by RUS

electric borrowers. Also included is RUS policy relating to the review

and evaluation of borrowers' electric systems and facilities operations

and maintenance practices. These policies are presently contained in

RUS/REA Bulletin 161-5, which will be rescinded when the final rule

becomes effective. This proposed action is intended to clarify the

policies, procedures, and requirements, facilitate understanding and

compliance, and improve program effectiveness with respect to electric

system operations and maintenance.

DATES: Written comments must be received by RUS, or bear a postmark or

equivalent, no later than June 16, 1997.

ADDRESSES: Submit written comments to George J. Bagnall, Director,

Electric Staff Division, Rural Utilities Service, U.S. Department of

Agriculture, Stop 1569, 1400 Independence Ave, SW., Washington, DC

20250-1569. RUS requires a signed original and 3 copies of all comments

(Sec. 1700.30(e)). Comments will be made available for public

inspection at room 4034 South Building between 8:30 a.m. and 5 p.m. on

official work days (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT: Mr. Fred J. Gatchell, Deputy Director,

Electric Staff Division, Rural Utilities Service, U.S. Department of

Agriculture, Stop 1569, 1400 Independence Ave, SW., Washington, DC

20250-1569, telephone (202) 720-1398.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This proposed 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. et seq.), and therefore, the Regulatory

Flexibility Act does not apply to this proposed rule.

Information Collection and Recordkeeping Requirements

The recordkeeping and reporting burdens contained in this rule were

approved by OMB pursuant to the Paperwork Reduction Act of 1995 (44

U.S.C. Chapter 35, as amended) under control number 0572-0025.

National Environmental Policy Act Certification

The Administrator has determined that this proposed 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 proposed rule is listed in the

Catalog of Federal Domestic Assistance programs under No. 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, telephone

(202) 512-1800.

Executive Order 12372

This proposed rule is excluded from the scope of Executive Order

12372, Intergovernmental Consultation, which may require consultation

with State and local officials. A Notice of Final Rule entitled

Department Programs and Activities Excluded from Executive Order 12372

(50 FR 47034) exempts RUS loans and loan guarantees 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.

Executive Order 12988

This proposed rule has been reviewed under Executive Order 12988,

Civil Justice Reform. RUS has determined that this proposed rule meets

the applicable standards in Section 3 of the Executive Order.

Background

RUS has promulgated policies and procedures regarding the review

and evaluation of the operations and maintenance practices of RUS

financed electric systems. These policies and procedures are presently

contained in RUS/REA Bulletin 161-5, Electric System Review and

Evaluation. The mortgage and loan contract between RUS and electric

borrowers set certain standards for the operation and maintenance of

each borrower's electric system. The purpose of this proposed rule is

to implement the operations and maintenance provisions of the mortgage

and loan contract between RUS and electric borrowers and to consolidate

and clarify RUS policies and procedures with respect to electric system

operations and maintenance. Most of the provisions of this proposed

rule represent policies and requirements that have been in effect for

some time, whereas other provisions are an explicit statement of

policies and procedures that formerly were implicit. One new provision

will expand the requirement for electric system review and evaluation

to include power supply borrowers in addition to the distribution

borrowers presently covered by Bulletin 161-5. Proper operation and

maintenance practices are equally significant for power supply

borrowers, so RUS believes that power supply borrowers' operation and

maintenance practices should be covered under the review and evaluation

requirements of this rule. RUS Form 300, Review Rating Summary, has

also been updated and

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revised based on RUS' experience using this form.

List of Subjects in 7 CFR Part 1730

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

requirements, Rural areas.

In view of the above, RUS proposes to amend 7 CFR chapter XVII by

adding part 1730 to read as follows:

PART 1730--ELECTRIC SYSTEM OPERATIONS AND MAINTENANCE

Subpart A--General

Sec.

1730.1 Introduction.

1730.2 RUS policy.

1730.3 RUS addresses.

1730.4 Definitions

1730.5-1730.19 [Reserved]

Subpart B--Operations and Maintenance Requirements

1730.20 General.

1730.21 Inspections and tests.

1730.22 Borrower analysis.

1730.23 Review rating summary, RUS Form 300.

1730.24 RUS review and evaluation.

1730.25 Corrective action.

1730.26 Engineer's certification.

1730.27-1730.99 [Reserved]

Appendix A to Subpart B of Part 1730--Review Rating Summary, RUS Form

300

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

Subpart A--General

Sec. 1730.1 Introduction.

(a) This part contains the policies and procedures of the Rural

Utilities Service (RUS) related to electric borrowers' operation and

maintenance practices and RUS' review and evaluation thereof.

(b) The policies and procedures included in this part apply to all

electric borrowers (both distribution borrowers and power supply

borrowers) and are intended to clarify and implement certain provisions

of the mortgage and loan contract between RUS and electric borrowers

regarding operations and maintenance. This part is not intended to

waive or supersede any provisions of the mortgage and loan contract

between RUS and electric borrowers.

(c) The Administrator may waive, for good cause on a case by case

basis, certain requirements and procedures of this part.

Sec. 1730.2 RUS policy.

It is RUS policy to require that all borrower property be operated

and maintained properly in accordance with the requirements of the loan

documents. It is also RUS policy to provide financial assistance only

to borrowers whose operations and maintenance practices and records are

satisfactory or to those who are taking corrective actions expected to

make their operations and maintenance practices and records

satisfactory to RUS.

Sec. 1730.3 RUS addresses.

(a) Persons wishing to obtain forms referred to in this part should

contact: Rural Utilities Service, U.S. Department of Agriculture, Stop

1522, 1400 Independence Ave, SW, Washington, DC 20250-1533, telephone

(202) 720-8674. Borrowers or others may reproduce any of these forms in

any number required.

(b) Documents required to be submitted to RUS under this part are

to be sent to the office of the borrower's assigned RUS General Field

Representative (GFR) or such other office as designated by RUS.

Sec. 1730.4 Definitions.

Terms used in this part have the meanings set forth in 7 CFR part

1710.2. References to specific RUS forms and other RUS documents, and

to specific sections or lines of such forms and documents, shall

include the corresponding forms, documents, sections and lines in any

subsequent revisions of these forms and documents. In addition to the

terms defined in 7 CFR part 1710.2, the term Prudent Utility Practice

has the meaning set forth in Article 1, Section 1.01 of appendix A to

subpart B of 7 CFR part 1718--Model Form of Mortgage for Electric

Distribution Borrowers, for the purposes of this part.

Secs. 1730.5-1730.19 [Reserved]

Subpart B--Operations and Maintenance Requirements

Sec. 1730.20 General.

Each distribution borrower and power supply borrower must operate

and maintain its system in compliance with Prudent Utility Practice, in

compliance with its loan documents, and in compliance with all

applicable laws, regulations and orders, must maintain its systems in

good repair, working order and condition, and must make all needed

repairs, renewals, replacements, alterations, additions, betterments

and improvements, in accordance with applicable provisions of the

borrower's mortgage. Each borrower is responsible for on-going

operations and maintenance programs, for maintaining records of the

physical and electrical condition of its electric system and for the

quality of services provided to its customers. The borrower is also

responsible for all necessary inspections and tests of the component

parts of its system, and for maintaining records of such inspections

and tests. Each borrower must budget sufficient resources to operate

and maintain its system in accordance with the requirements of this

part.

Sec. 1730.21 Inspections and tests.

(a) Each borrower shall conduct all necessary inspections and tests

of the component parts of its electric system, and maintain adequate

records of such inspections and tests.

(b) The frequency of inspection and testing will be determined by

the borrower in conformance with applicable laws, regulations, national

standards, manufacturer's recommendations, and Prudent Utility

Practice. The frequency of inspection and testing will be determined

giving due consideration to the type of facilities or equipment, age,

operating environment and hazards to which the facilities are exposed,

consequences of failure, and results of previous inspections and tests.

The records of such inspections and tests will be retained in

accordance with applicable legal requirements and Prudent Utility

Practice. The retention period will be sufficient to identify long-term

trends. Records must be retained at least until the applicable

inspections or tests are repeated.

(c) Inspections of facilities must include a determination of the

facility's compliance with the National Electrical Safety Code,

National Electrical Code, and applicable local regulations. Any serious

or life-threatening deficiencies must be promptly repaired,

disconnected, or isolated in accordance with applicable codes or

regulations. Any other deficiencies found as a result of such

inspections and tests are to be recorded and those records are to be

maintained until such deficiencies are corrected or for the retention

period required by paragraph (b) of this section, whichever is longer.

Sec. 1730.22 Borrower analysis.

(a) Each borrower must periodically analyze its operations and

maintenance policies, practices, and procedures to determine if they

are appropriate and if they are being followed. The records of

inspections and tests are also to be analyzed to identify any trends

which could indicate deterioration in the physical condition or the

operational effectiveness of the system or suggest a need for changes

in operations or maintenance practices.

(b) When a borrower's operations and maintenance policies,

practices, and procedures are to be reviewed and evaluated by RUS, the

borrower shall:

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(1) Conduct the analysis required by paragraph (a) of this section

not more than 90 days prior to the scheduled RUS review;

(2) Complete RUS Form 300, Review Rating Summary, and other related

forms, prior to RUS' review and evaluation; and

(3) Make available to RUS the borrower's completed RUS Form 300

(including a written explanation of the basis for each rating) and

records related to the operations and maintenance of the borrower's

system.

(c) For those facilities not included on the RUS Form 300 (e.g.,

generating plants), the borrower shall prepare and complete an

appropriate supplemental form for such facilities.

Sec. 1730.23 Review rating summary, RUS Form 300.

RUS Form 300 in appendix A shall be used when required by this

part.

Sec. 1730.24 RUS review and evaluation.

RUS will initiate and conduct a periodic review and evaluation of

the operations and maintenance practices of each borrower for the

purpose of assessing loan security and determining borrower compliance

with RUS policy as outlined in this part. This review will normally be

done at least once every three years. The borrower will make available

to RUS the borrower's policies, procedures, and records related to the

operations and maintenance of its system. RUS may inspect facilities as

well as records, and may also observe construction and maintenance work

in the field. Key borrower personnel responsible for the facilities

being inspected are to accompany RUS during such inspections, unless

otherwise determined by RUS. RUS personnel may prepare an independent

summary of the operations and maintenance practices of the borrower.

Sec. 1730.25 Corrective action.

(a) For any items on the RUS Form 300 rated unsatisfactory (i.e., 0

or 1) by the borrower or by RUS, the borrower must prepare a corrective

action plan (CAP) outlining the steps (both short term and long term)

the borrower will take to improve existing conditions and to maintain

an acceptable rating. The CAP must include a time schedule and cost

estimate for corrective actions, and must be approved by the borrower's

Board of Directors. The CAP must be submitted to RUS for approval

within 90 days after the completion of RUS' evaluation noted in

Sec. 1730.24.

(b) The borrower must periodically report to RUS progress under the

CAP. This report must be submitted to RUS every six months until all

unsatisfactory items are corrected unless RUS prescribes a different

reporting schedule.

Sec. 1730.26 Engineer's certification.

Where provided for in the borrower's loan documents, RUS may

require the borrower to provide an ``Engineer's Certification'' as to

the condition of the borrower's system (including, but not limited to,

all mortgaged property.) Such certification shall be in form and

substance satisfactory to RUS and shall be prepared by a professional

engineer satisfactory to RUS. If RUS determines that the Engineer's

Certification discloses a need for improvements to the condition of its

system or any other operations of the borrower, the borrower shall,

upon notification by RUS, promptly undertake to accomplish such

improvements.

Secs. 1730.27--1730.99 [Reserved].

Appendix A to Subpart B of Part 1730--Review Rating Summary, RUS Form

300

Borrower Designation ____

Date Prepared ____

Ratings on form are:

0: Unsatisfactory--no records

1: Unsatisfactory--corrective action needed

2: Acceptable, but should be improved--see attached recommendations

3: Satisfactory--no additional action required at this time

N/A: Not applicable

Part I--Transmission and Distribution Facilities

1. Substations (Transmission and Distribution)

a. Safety, Clearance, Code Compliance Rating: ____

b. Physical Condition: Structure, Major Equipment, Appearance

Rating: ____

c. Inspection Records Each Substation Rating: ____

d. Oil Spill Prevention Rating: ____

2. Transmission Lines

a. Right-of-Way: Clearing, Erosion, Appearance, Intrusions Rating:

____

b. Physical Condition: Structure, Conductor, Guying Rating: ____

c. Inspection Program and Records Rating: ____

3. Distribution Lines--Overhead

a. Inspection Program and Records Rating: ____

b. Compliance with Safety Codes: Clearances Rating: ____

Compliance with Safety Codes: Foreign Structures Rating: ____

Compliance with Safety Codes: Attachments Rating: ____

c. Observed Physical Condition from Field Checking: Right-of-Way

Rating: ____

Observed Physical Condition from Field Checking: Other Rating:

____

4. Distribution--Underground Cable

a. Grounding and Corrosion Control Rating: ____

b. Surface Grading, Appearance Rating: ____

c. Riser Poles: Hazards, Guying, Condition Rating: ____

5. Distribution Line Equipment: Conditions and Records

a. Voltage Regulators Rating: ____

b. Sectionalizing Equipment Rating: ____

c. Distribution Transformers Rating:____

d. Pad Mounted Equipment--Safety: Locking, Dead Front, Barriers

Rating:____

Pad Mounted Equipment--Appearance: Settlement, Condition

Rating:____

e. Kilowatt-hour and Demand Meter Reading and Testing Rating:____

Part II--Operation and Maintenance

6. Line Maintenance and Work Order Procedures

a. Work Planning and Scheduling Rating:____

b. Work Backlogs: Right-of-Way Maintenance Rating:____

Work Backlogs: Poles Rating:____

Work Backlogs: Retirement of Idle Services Rating:____

Work Backlogs: Other Rating:____

7. Service Interruptions

a. Average Annual Hours/Consumer by Cause (Complete for each of the

previous 5 years)

1. Power Supplier ____

2. Major Storm ____

3. Scheduled ____

4. All Other ____

5. Total ____

Rating:____

b. Emergency Restoration Plan Rating:____

8. Power Quality

General Freedom from Complaints Rating:____

9. Loading and Load Balance

a. Distribution Transformer Loading Rating:____

b. Load Control Apparatus Rating:____

c. Substation and Feeder Loading Rating:____

10. Maps and Plant Records

a. Operating Maps: Accurate and Up-to-Date Rating:____

b. Circuit Diagrams Rating:____

c. Staking Sheets Rating:____

Part III--Engineering

11. System Load Conditions and Losses

a. Annual System Loses, ____ % Rating:____

b. Annual Load Factor, ____ % Rating:____

c. Power Factor at Monthly Peak, ____ % Rating: ____

d. Ratio of Individual Substation Peak kW to kVA, ____ Rating:____

12. Voltage Conditions

a. Voltage Surveys Rating:____

b. Substation Transformer Output Voltage Spread Rating:____

13. Load Studies and Planning

a. Long Range Engineering Plan Rating:____

b. Construction Work Plan Rating:____

c. Sectionalizing Study Rating:____

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d. Load Data for Engineering Studies Rating:____

e. Power Requirements Data Rating:____

Part IV--Operation and Maintenance Budgets

For Previous 2 Years:

Normal Operation--Actual $____

Normal Maintenance--Actual $____

Total--Actual $____

For Present Year:

Normal Operation

Budget $____

Staff Hours ____

Normal Maintenance

Budget $____

Staff Hours ____

Total

Budget $____

Staff Hours ____

For Future 3 Years:

Normal Operation

Budget $____

Staff Hours ____

Normal Maintenance

Budget $____

Staff Hours ____

Additional (Deferred) Maintenance

Budget $____

Staff Hours ____

Total

Budget $____

Staff Hours ____

14. Budgeting

Adequacy of Budgets For Needed Work Rating:____

15. Date Discussed with Board of Directors ____

Remarks: ____

Explanatory Notes

Item No. ____

Comments ____

Rated by ____

Title ____

Date ____

Reviewed by ____

Manager ____

Date ____

Reviewed by ____

RUS GFR ____

Date ____

Dated: April 10, 1997.

Jill Long Thompson,

Under Secretary, Rural Development.

[FR Doc. 97-9849 Filed 4-15-97; 8:45 am]

BILLING CODE 3410-15-P