Units of Property Accounting Regulations

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 101, 116, 201, 216 and 352

[Docket No. RM97-6-000]

Units of Property Accounting Regulations

July 25, 1997.

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission is proposing to amend

its units of property and oil pipeline regulations to require companies

to maintain a written property units listing, to apply the listing

consistently, and to furnish the Commission with a justification of any

changes in the listing, if requested, and to clarify that companies may

use estimates when it is impractical or unduly burdensome for companies

to identify the cost of retired property. In addition, the Commission

proposes to remove certain regulations which prescribe unit-of-property

listings for jurisdictional companies. These changes will allow

companies additional flexibility in maintaining their records of units

of property. Finally, the Commission also proposes to remove the

regulation which prescribes a minimum rule that requires Oil Pipelines

to charge operating expenses for acquisitions, additions and

improvements costing less than $500.

DATES: Comments are due on or before September 15, 1997.

ADDRESSES: File comments with the Office of the Secretary, Federal

Energy Regulatory Commission, 888 First Street, NE., Washington, DC

20426.

FOR FURTHER INFORMATION CONTACT:

Harris S. Wood, Office of the General Counsel, Federal Energy

Regulatory Commission, 888 First Street, NE, Washington, DC 20426,

ovements costing less than $500.

DATES: Comments are due on or before September 15, 1997.

ADDRESSES: File comments with the Office of the Secretary, Federal

Energy Regulatory Commission, 888 First Street, NE., Washington, DC

20426.

FOR FURTHER INFORMATION CONTACT:

Harris S. Wood, Office of the General Counsel, Federal Energy

Regulatory Commission, 888 First Street, NE, Washington, DC 20426,

(202) 208-0224

Mark Klose, Office of the Chief Accountant, Federal Energy Regulatory

Commission, 888 First Street, NE, Washington, DC 20426, (202) 219-2595

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of

this document in the Federal Register, the Commission provides all

interested persons an opportunity to inspect or copy the contents of

this document during normal business hours in Room 2A, 888 First

Street, NE., Washington DC 20426.

The Commission Issuance Posting System (CIPS), an electronic

bulletin board service, provides access to the texts of formal

documents issued by the Commission. CIPS is available at no charge to

the user and may be accessed using a personal computer with a modem by

dialing 202-208-1397 if dialing locally or 1-800-856-3920 if dialing

long distance. To access CIPS, set your communications software to

19200, 14400, 12000, 9600, 7200, 4800, 2400, or 1200 bps, full duplex,

no parity, 8 data bits and 1 stop bit. The full text of this order will

be available on CIPS in ASCII and WordPerfect 6.1 format. CIPS user

assistance is available at 202-208-2474.

CIPS is also available on the Internet through the Fed World

system. Telnet software is required. To access CIPS via the Internet,

point your browser to the URL address: http://www.fedworld.gov and

select the ``Go to the FedWorld Telnet Site'' button. When your Telnet

software connects you, log on to the FedWorld system, scroll down and

select FedWorld by typing: 1 and at the command line and type: /go

FERC. FedWorld may also be accessed by Telnet at the address

fedworld.gov

is required. To access CIPS via the Internet,

point your browser to the URL address: http://www.fedworld.gov and

select the ``Go to the FedWorld Telnet Site'' button. When your Telnet

software connects you, log on to the FedWorld system, scroll down and

select FedWorld by typing: 1 and at the command line and type: /go

FERC. FedWorld may also be accessed by Telnet at the address

fedworld.gov.

Finally, the complete text on diskette in WordPerfect format may be

purchased from the Commission's copy contractor, La Dorn Systems

Corporation. La Dorn Systems Corporation is also located in the Public

Reference Room at 888 First Street, NE., Washington, DC 20426.

Federal Energy Regulatory Commission

[Docket No. RM97-6-000]

Notice of Proposed Rulemaking

July 25, 1997

Recordkeeping for Units of Property Accounting Regulations for

Public Utilities and Licensees, Natural Gas Companies and Oil

Pipeline Companies.

The Federal Energy Regulatory Commission (Commission) proposes to

modify its regulations governing units of property to simplify the

fixed-asset recordkeeping requirements for Public Utilities and

Licensees (Public Utilities), Natural Gas Companies, and Oil Pipeline

Companies. These three groups are collectively called ``Companies'' in

this Notice of Proposed Rulemaking (NOPR).

This NOPR proposes to remove the Commission's prescribed units of

property listings contained in 18 CFR parts 116 and 216 and instruction

3-14 of part 352, thereby giving Companies the flexibility to maintain

their own property listings and corresponding fixed-asset records. The

NOPR also proposes to require Companies to maintain their own written

property units listing for use in accounting for additions and

retirements of plant, apply the listing consistently, and if requested,

furnish the Commission with the justification for any changes to the

listing

ing Companies the flexibility to maintain

their own property listings and corresponding fixed-asset records. The

NOPR also proposes to require Companies to maintain their own written

property units listing for use in accounting for additions and

retirements of plant, apply the listing consistently, and if requested,

furnish the Commission with the justification for any changes to the

listing.

The NOPR proposes to clarify existing requirements for Public

Utilities and Natural Gas Companies, and add the requirement for Oil

Pipelines regarding estimating property costs when it is unduly

burdensome to determine the cost of retired property. This will permit

Oil Pipelines, as well as Public Utilities and Natural Gas Companies,

to use estimates, and requires that Companies furnish the basis of

their estimate to the Commission, if requested.

Lastly, the NOPR proposes to remove the minimum rule for Oil

Pipelines. This rule requires that Oil Pipelines must expense additions

and improvements of less than $500 and must seek Commission approval to

change this amount.

The proposed regulations will give Companies the opportunity to

identify and maintain property unit listings that are up-to-date and

more in harmony with the needs of their businesses. It will permit

Companies to reduce the level and number of detailed property unit

records that they currently maintain. Additionally, the Commission will

not need to commit resources for maintaining and approving changes to

the property listings.

The elimination of parts 116, 216, and 352 (instruction 3-14) will

not affect the information currently reported in the FERC Forms 1, 1-F,

2, 2-A or 6.1 These Forms do not report costs at the level

of detail prescribed by parts 116, 216 and 352 (instruction 3-14).

Therefore, the NOPR will not affect the information contained in these

Forms. The elimination of parts 116, 216, and 352 (instruction 3-14)

will not affect the manner in which costs are recognized for accounting

or rate-making purposes

Public Utilities and Natural Gas Companies

In 1937, the Federal Power Commission (FPC) issued Order No. 45

2 that prescribed the USofA for Public Utilities subject to

the Federal Power Act.3 Order No. 45 also established the

property unit listing for use in accounting for additions and

retirements of electric plant.

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\2\ 2 FR 135, January 26, 1937.

\3\ The current version of the USofA for Public Utilities is

found at 18 CFR, subchapter C, part 101, et seq.; for natural gas

companies, 18 CFR, subchapter F, part 201 et seq.; and for Oil

Pipelines, 18 CFR, subchapter Q, part 352.

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These regulations do not permit Public Utilities to combine the

items in the listing into fewer, higher level units without Commission

approval. The Commission made only one significant revision to the

electric plant property unit listing when, in 1987, it added nuclear

plant equipment.4

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\4\ List of Property for Use in Accounting for the Addition and

Retirement of Reactor Plant Equipment, FERC Stats. & Regs.,

Regulations Preamble 1986-1990 para. 30,779 (1987).

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Similarly, in 1939, the FPC issued Order No. 69, effective January

1, 1940, which established the property unit listing for use in

accounting for additions and retirements of gas plant. These

regulations also do not permit natural gas companies to combine the

items in the listing into fewer, higher level units without Commission

approval.5 The Commission made only one significant revision

to the gas plant property unit listing when, in 1978, it added

liquefied natural gas plant equipment.6

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gas plant. These

regulations also do not permit natural gas companies to combine the

items in the listing into fewer, higher level units without Commission

approval.5 The Commission made only one significant revision

to the gas plant property unit listing when, in 1978, it added

liquefied natural gas plant equipment.6

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\5\ 4 FR 4764, December 5, 1939.

\6\ Order Amending the Uniform System of Accounts for Natural

Gas Companies and Related Regulations to Provide for Base Load

Liquefied Natural Gas Facilities, FERC Stats. & Regs., Regulations

Preamble 1977-1981, para. 30,009A (1978).

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b. Oil Pipelines

In 1977, the Commission began regulating Oil Pipelines, with the

implementation of the Department of Energy Organization

Act.7 Prior to 1977, the Interstate Commerce Commission

(ICC) regulated interstate oil pipelines and prescribed a property

units listing. The Commission continues to use the ICC's prescribed

listing as identified in 18 CFR part 352 (instruction 3-14). The

regulations do not permit Oil Pipelines to combine, add or expand the

property items contained in the listing without Commission approval.

Oil Pipeline plant property listings have not been revised or updated

since the Commission began regulating Oil Pipelines.

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\7\ 42 U.S.C.A. Sec. 7101 (1995).

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II. Proposed Changes to Regulations

tained in the listing without Commission approval.

Oil Pipeline plant property listings have not been revised or updated

since the Commission began regulating Oil Pipelines.

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\7\ 42 U.S.C.A. Sec. 7101 (1995).

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II. Proposed Changes to Regulations

The Commission performed a review of current practices by Public

Utilities, Natural Gas Companies, and Oil Pipelines in applying Parts

116, 216 and 352. Between January and April 1997, Commission staff met

with several representatives from Public Utilities, Natural Gas

Companies, Oil Pipelines, and associated Industry Groups 8

to discuss the effects on Companies of identifying and tracking units

of property at the prescribed detailed level. Based on this review, the

Commission proposes to reduce detailed recordkeeping across all

industry segments.

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\8\ Edison Electric Institute, Interstate Natural Gas

Association, American Gas Association, and Association of Oil

Pipelines.

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For Public Utilities and Natural Gas Companies, the Commission

proposes to delete 18 CFR parts 116 and 216 which prescribe a units of

property listing for the additions and retirements of electric plant

and gas plant, respectively. The Commission proposes to modify 18 CFR

part 101, Electric Plant Instruction 10, and 18 CFR part 201, Gas Plant

Instruction 10, to require companies to

--------

For Public Utilities and Natural Gas Companies, the Commission

proposes to delete 18 CFR parts 116 and 216 which prescribe a units of

property listing for the additions and retirements of electric plant

and gas plant, respectively. The Commission proposes to modify 18 CFR

part 101, Electric Plant Instruction 10, and 18 CFR part 201, Gas Plant

Instruction 10, to require companies to

maintain a written property units listing, to apply the listing

consistently, and to furnish the Commission with the justification for

any changes to the listing, if requested. In addition, the Commission

proposes to clarify 18 CFR parts 101 and 201, concerning the use of

estimates when it is impractical or unduly burdensome for Companies to

identify the cost of retired property.

For Oil Pipelines, the Commission proposes to delete 18 CFR part

352 (instruction 3-14), which prescribes a units-of-property listing.

The Commission proposes to modify 18 CFR part 352 (instruction 3-4) to

require Oil Pipelines to maintain a written property units listing, to

apply the listing consistently, and to furnish the Commission with the

justification for any changes to the listing, if requested. In

addition, the Commission proposes to clarify 18 CFR part 352

(instruction 3-7), concerning the use of estimates when it is

impractical or unduly burdensome for Oil Pipelines to identify the cost

of property retired.

Finally, the Commission also proposes to delete 18 CFR part 352

(instruction 3-2), which prescribes a minimum rule that requires Oil

Pipelines to charge operating expenses for acquisitions, additions and

improvements costing less than $500, and to delete any references to

the minimum rule in Part 352 (instructions 3-4, 3-5, and 3-6(a)).

III. Discussion

identify the cost

of property retired.

Finally, the Commission also proposes to delete 18 CFR part 352

(instruction 3-2), which prescribes a minimum rule that requires Oil

Pipelines to charge operating expenses for acquisitions, additions and

improvements costing less than $500, and to delete any references to

the minimum rule in Part 352 (instructions 3-4, 3-5, and 3-6(a)).

III. Discussion

The USofA requires Companies to record the cost of additions and

retirements of property and equipment in the appropriate plant

account.9 Additionally, Companies maintain a fixed asset

recordkeeping system that tracks these plant account costs by property

units. Parts 116, 216, and 352 of the Commission's regulations

prescribe the detailed property unit listings that Companies must use

to identify the items of property and equipment tracked by the fixed

asset recordkeeping system.

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\9\ 18 CFR parts 101, 201 and 352. The USofA for Public

Utilities and Natural Gas Companies specifies in the plant

instructions of parts 101 and 201, respectively, the type of

information companies must keep related to their fixed assets.

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These listings prescribe a level of detail that companies maintain

to support the amounts in the plant accounts. However, the property

unit listings do not reflect the technological changes that have taken

place in the utility industry. The NOPR proposes to remove the

prescribed property unit listings, and allow Companies to identify

property units and maintain a level of support determined by their

business needs. The NOPR will not eliminate the need for Companies to

maintain a property recordkeeping system. Companies will continue to

maintain support of the amounts shown in the plant accounts

place in the utility industry. The NOPR proposes to remove the

prescribed property unit listings, and allow Companies to identify

property units and maintain a level of support determined by their

business needs. The NOPR will not eliminate the need for Companies to

maintain a property recordkeeping system. Companies will continue to

maintain support of the amounts shown in the plant accounts.

As discussed below, the level of detail prescribed by the property

unit listings and regulations place an unnecessary burden on Companies,

are not current, are too restrictive, and appear to provide minimal

benefit to either the Companies or to the Commission.

A. Burdens for Companies

(1) Recordkeeping Burden

Companies are experiencing fixed asset recordkeeping burdens due to

the level of detail currently prescribed by 18 CFR parts 116, 216, and

352 (instruction 3-14). These regulations require companies to keep

detailed fixed asset records for each unit of property and its

associated cost, and track the units' costs throughout the life of the

asset.

For example, under the Commission's prescribed property unit

listings, a Company may keep several fixed asset records for a

building. These records detail the cost of the building's foundation,

ventilating system, fire escape system, fire protection system,

plumbing system, roof, and various other units of property, if the

components or systems are relatively costly, and are identified in the

List of General Retirement Units.10

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\10\ The process of sub-dividing a fixed asset into its various

major components or unit of propoerty units is also referred to as

the ``unitization process.''

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re relatively costly, and are identified in the

List of General Retirement Units.10

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\10\ The process of sub-dividing a fixed asset into its various

major components or unit of propoerty units is also referred to as

the ``unitization process.''

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In April 1997, Industry Groups initiated and conducted their own

survey of their associated companies. The survey requested Companies to

estimate the burden associated with tracking units of property in

accordance with parts 116, 216 and 352 (instruction 3-14). Companies'

responses included estimated annual number of hours, labor dollars, and

the portion of software costs used for complying with the regulations.

Table 1 shows the estimated cost of identifying units of property in

accordance with the current regulations, based upon meetings with the

Industry Groups and their survey results.

Table 1.--Average Annual Labor Costs Incurred per Surveyed Company to

Track Units of Property at Detailed Level Prescribed by Parts 116, 216

and 352. Instruction 3-14

------------------------------------------------------------------------

Average

annual

labor

Source* costs per

surveyed

company

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Edison Electric Institute (EEI)............................. $592,000

Interstate Natural Gas Association of America (INGAA)....... 122,000

American Gas Association (AGA).............................. 315,000

Association of Oil Pipelines (AOPL)......................... 80,000

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* 13 Public Utilities responded to EEI's preliminary survey; 16 Natural

Gas Companies responded to INGAA's preliminary survey, and 19 Oil

Pipelines responded to AOPL's preliminary survey. AGA did not identify

the number of respondents.

........ 315,000

Association of Oil Pipelines (AOPL)......................... 80,000

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* 13 Public Utilities responded to EEI's preliminary survey; 16 Natural

Gas Companies responded to INGAA's preliminary survey, and 19 Oil

Pipelines responded to AOPL's preliminary survey. AGA did not identify

the number of respondents.

Eliminating the property unit listings and regulations would give

Companies the flexibility to maintain their own property listings and

track the costs of fixed assets at the level of detail tailored to

their business. This would reduce the burden Companies experience when

tracking fixed assets at a level more detailed than either their

business or the Commission needs.

(2) Software Burden

Another burden placed on Companies is the cost of developing fixed

asset software that is utility specific, or purchasing and modifying

non-utility specific software. Companies often must modify the software

in order to track units of property in the manner prescribed by the

Commission. The preliminary surveys that were initiated and conducted

by Industry Groups show their associated companies incur costs ranging

from $20,000 to $2.7 million for fixed asset software.

Based on the preliminary surveys, Companies could realize

substantial savings if the Commission deletes unnecessary detailed

recordkeeping requirements. The proposed changes would also eliminate

the burden placed on the Commission to update the items in the

listings.

B. Revamping Fixed Asset Regulations

ted companies incur costs ranging

from $20,000 to $2.7 million for fixed asset software.

Based on the preliminary surveys, Companies could realize

substantial savings if the Commission deletes unnecessary detailed

recordkeeping requirements. The proposed changes would also eliminate

the burden placed on the Commission to update the items in the

listings.

B. Revamping Fixed Asset Regulations

(1) Property Units Listings

The Commission's review of electric, gas and oil pipeline property

listings found that the Commission's property listings do not contain

all types of property currently used by Companies. The listings in

Parts 116, 216, and 352 (instruction 3-14) do not include

property resulting from technological advances, such as scrubbers,

microwave towers, and smart pigging equipment. Additionally, the

property unit listings contain items of property that are no longer

used by Companies such as telegraph and teletype equipment and gas

storage cleaning equipment. By allowing Companies the flexibility to

identify and maintain their own property unit listings the proposed

revisions to the regulations will eliminate the need for the Commission

to devote resources necessary to update the listings.

(2) Minimum Rule for Oil Pipelines

Unlike Public Utilities and Natural Gas Companies, Oil Pipelines

are subject to a Minimum Rule as prescribed in Part 352 (instruction 3-

2). The minimum rule requires Oil Pipelines to charge operating

expenses for acquisitions, additions and improvements costing less than

$500. It also requires Oil Pipelines to obtain Commission approval if

they wish to change the minimum level.

The Commission considers the $500 dollar threshold to be inadequate

in today's environment. Consequently, the Commission proposes to delete

the prescribed minimum rule, and permit Oil Pipelines to establish

their own dollar threshold in order to avoid undue refinement in

accounting for acquisitions, additions, and improvements.

C. Restrictions on Estimating Cost

to change the minimum level.

The Commission considers the $500 dollar threshold to be inadequate

in today's environment. Consequently, the Commission proposes to delete

the prescribed minimum rule, and permit Oil Pipelines to establish

their own dollar threshold in order to avoid undue refinement in

accounting for acquisitions, additions, and improvements.

C. Restrictions on Estimating Cost

Carrier regulations do not permit companies to estimate property

costs at the time of retirement when the cost is not determinable.

However, Public Utilities and Natural Gas Companies are permitted to

use estimates in similar circumstances.11 Unlike Oil

Pipelines, they may use cost trending indices to determine an estimated

cost of retired property when it is impractical or unduly burdensome to

identify the cost.

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\11\ 18 CFR part 101 for Public Utilities states in electric

plant instruction 10(D) that the ``book cost of electric plant

retired shall be the amount at which such property is included in

the electric plant accounts. . . The book cost shall be determined

from the utility's records and if this cannot be done, it shall be

estimated;'' 18 CFR part 201 for Natural Gas Companies states in gas

plant instruction 10(D) that the ``book cost of gas plant retired

shall be the amount at which such property is included in the gas

plant accounts * * * The book cost shall be determined from the

utility's records and if this cannot be done, it shall be

estimated.''

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Therefore, the Commission proposes to permit Oil Pipeline to use

estimates in Oil Pipeline plant instructions when it is impractical or

unduly burdensome to identify the cost of the property retired. The

Commission will also require that Oil Pipelines be prepared to furnish

the Commission with the basis of such estimates if requested.

IV. Information Collection Statement

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Therefore, the Commission proposes to permit Oil Pipeline to use

estimates in Oil Pipeline plant instructions when it is impractical or

unduly burdensome to identify the cost of the property retired. The

Commission will also require that Oil Pipelines be prepared to furnish

the Commission with the basis of such estimates if requested.

IV. Information Collection Statement

The following collections of information contained in this proposed

rule are being submitted to the Office of Management and Budget (OMB)

for review under the Paperwork Reduction Act of 1995. (See 44 U.S.C.

3507(d)) The information provided under 18 CFR parts 101 and 116 is

approved under OMB Control Nos. 1902-0021, 1902-0029 and 1902-0092; for

parts 201 and 216, OMB Control Nos. 1902-0028, 1902-0030 and 1902-0092

and for part 352 OMB Control Nos. 1902-0022. Applicants shall not be

penalized for failure to respond to these collections of information

unless the collection(s) of information display a valid OMB control

number.

The Commission's regulations governing units of property in parts

116, 216 and 352 (instruction 3-14) require companies to keep detailed

fixed asset records, including the costs for each unit of property, and

then track the units' costs throughout the life of the asset. These

regulations place recordkeeping burdens on Companies.

Information Collection Burden and Costs: In the preliminary survey

conducted in April 1997, Companies provided an estimate of the annual

number of hours they incur when identifying units of property in

accordance with parts 116, 216 and 352 (instruction 3-14) regulations.

Table 2 displays the average number of hours spent per respondent in

each industry group:

rdkeeping burdens on Companies.

Information Collection Burden and Costs: In the preliminary survey

conducted in April 1997, Companies provided an estimate of the annual

number of hours they incur when identifying units of property in

accordance with parts 116, 216 and 352 (instruction 3-14) regulations.

Table 2 displays the average number of hours spent per respondent in

each industry group:

Table 2.--Average Annual Labor Hours Incurred per Surveyed Company to

Track Units of Property at the Prescribed Detailed Level

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Average

Annual

Labor

Source Hours per

Surveyed

Company

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Public Utilities (source: Edison Electric Institute)........ 16,430

Natural Gas Companies (source: Interstate Natural Gas

Association of America).................................... 5,863

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Total Average Annual Labor Hours for Collection of Information for

Public Utilities and Natural Gas Companies: 4,224,259.

The Commission anticipates substantial savings with the proposed

reduction of these recordkeeping requirements and, as part of the

proposed rule, solicits comments on potential cost savings. (See 5 CFR

1320.11)

Comments are solicited on the Commission's continuing need for this

information, whether the information has practical use, ways to enhance

the quality, use and clarity of the information collected, and any

suggested methods for minimizing the respondent's burden, including the

use of automated information techniques.

The Commission requires public utilities and licensees, natural gas

companies and oil pipeline companies to identify units of property as

listed in 18 CFR parts 116, 216 and 352 (instruction 3-14). The listing

identifies major components of plant property each company must track

throughout the property's life

ing the respondent's burden, including the

use of automated information techniques.

The Commission requires public utilities and licensees, natural gas

companies and oil pipeline companies to identify units of property as

listed in 18 CFR parts 116, 216 and 352 (instruction 3-14). The listing

identifies major components of plant property each company must track

throughout the property's life. The Commission also specifies in parts

101 and 201 (Electric and Gas Plant Instructions), the type of

information and level of detail Companies must keep of their fixed

assets.

The proposed rule seeks to modify these requirements to reduce the

recordkeeping burden imposed on Companies and to make the regulations

current with industry practices. Therefore, the Commission proposes to

delete parts 116, 216 and 352 (instruction 3-14)--Property Unit

Listings and requirements.

The Commission's internal review determined that there is specific,

objective support for the burden estimates associated with the

Commission's requirements.

Interested persons may obtain information on the reporting

requirements by contacting the following: Federal Energy Regulatory

Commission, 888 First Street, NE, Washington, DC 20426, (Attention:

Michael Miller, Division of Information Services, Phone: (202) 208-

1415, fax: (202) 273-0873, E-mail: [email protected]

For submitting comments concerning the collection of information(s)

and the associated burden estimate(s) send your comments to the contact

listed above and to the Office of Management and Budget, Office of

Information and Regulatory Affairs, Washington, D.C. 20503. (Attention:

Desk Officer for the Federal Energy Regulatory Commission, phone: (202)

395-3087, fax: (202) 395-7285)

V. Environmental Analysis

The Commission is required to prepare an Environmental Assessment

or an Environmental Impact Statement for any action that may have a

significant adverse effect on the human

Budget, Office of

Information and Regulatory Affairs, Washington, D.C. 20503. (Attention:

Desk Officer for the Federal Energy Regulatory Commission, phone: (202)

395-3087, fax: (202) 395-7285)

V. Environmental Analysis

The Commission is required to prepare an Environmental Assessment

or an Environmental Impact Statement for any action that may have a

significant adverse effect on the human

environment.12 The Commission has categorically excluded

certain actions from these requirements as not having a significant

effect on the human environment.13 The action proposed here

is procedural in nature and therefore falls within the categorical

exclusions provided in the Commission's regulations.14

Therefore, neither an environmental impact statement nor an

environmental assessment is necessary and will not be prepared in this

proposed NOPR.

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\12\ Order No. 486, Regulations Implementing the National

Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Statutes

and Regulations, Regulations Preambles 1986-1990 para. 30,783

(1987).

\13\ 18 CFR 380.4.

\14\ See 18 CFR 380.4(a)(2)(ii).

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VI. Regulatory Flexibility Act Certification

The Regulatory Flexibility Act 15 generally requires the

Commission to describe the impact that a proposed rule would have on

small entities or to certify that the rule will not have a significant

economic impact on a substantial number of small entities. An analysis

is not required if a proposed rule will not have such an

impact.16

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\15\ 5 U.S.C. 601-612.

\16\ 5 U.S.C. 605(b).

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ies or to certify that the rule will not have a significant

economic impact on a substantial number of small entities. An analysis

is not required if a proposed rule will not have such an

impact.16

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\15\ 5 U.S.C. 601-612.

\16\ 5 U.S.C. 605(b).

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Pursuant to section 605(b), the Commission certifies that the

proposed rule, if promulgated, will not have a significant adverse

economic impact on a substantial number of small entities.

VII. Comment Procedures

The Commission invites interested persons to submit written

comments on the matters and issues proposed in this notice to be

adopted, including any related matters or alternative proposals that

commenters may wish to discuss. All comments must be filed with the

Commission no later than September 15, 1997. An original and 14 copies

of comments should be submitted to the Office of the Secretary, Federal

Energy Regulatory Commission, 888 First Street, NE, Washington, DC

20426, and should refer to Docket No. RM97-6-000. Additionally,

comments should be submitted electronically. Participants can submit

comments on computer diskette in WordPerfect 6.1 or lower

format or in ASCII format, with the name of the filer and Docket No.

RM97-6-000 on the outside of the diskette.

All written comments will be placed in the Commission's public

files and will be available for inspection in the Commission's Public

Reference Room at 888 First Street, NE, Washington, DC 20426, during

regular business hours.

List of Subjects

18 CFR Part 101

Electric power, Electric utilities, Reporting and recordkeeping

requirements, Uniform System of Accounts

18 CFR Part 116

Electric power plants, Electric utilities, Reporting and

recordkeeping requirements, Uniform System of Accounts

18 CFR Part 201

Natural gas, Reporting and recordkeeping requirements, Uniform

System of Accounts

18 CFR Part 216

hours.

List of Subjects

18 CFR Part 101

Electric power, Electric utilities, Reporting and recordkeeping

requirements, Uniform System of Accounts

18 CFR Part 116

Electric power plants, Electric utilities, Reporting and

recordkeeping requirements, Uniform System of Accounts

18 CFR Part 201

Natural gas, Reporting and recordkeeping requirements, Uniform

System of Accounts

18 CFR Part 216

Natural gas, Reporting and recordkeeping requirements, Uniform

System of Accounts

18 CFR Part 352

Pipelines, Reporting and recordkeeping requirements, Uniform System

of Accounts.

By direction of the Commission.

Lois D. Cashell,

Secretary.

In consideration of the foregoing, the Commission gives notice of

its proposal to amend Parts 101, 116, 201, 216, and 352 Chapter I,

Title 18, Code of Federal Regulations, as set forth below.

PART 101--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR PUBLIC

UTILITIES AND LICENSEES SUBJECT TO THE PROVISIONS OF THE FEDERAL

POWER ACT

1. The authority citation for Part 101 continues to read as

follows:

Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42

U.S.C. 7102-7352, 7651-7651o.

2. In Part 101, Electric Plant Instruction 10, paragraphs A and D

are revised to read as follows:

10. Additions and Retirements of Electric Plant.

A. For the purpose of avoiding undue refinement in accounting for

additions to and retirements and replacements of electric plant, all

property shall be considered as consisting of (1) retirement units and

701; 42

U.S.C. 7102-7352, 7651-7651o.

2. In Part 101, Electric Plant Instruction 10, paragraphs A and D

are revised to read as follows:

10. Additions and Retirements of Electric Plant.

A. For the purpose of avoiding undue refinement in accounting for

additions to and retirements and replacements of electric plant, all

property shall be considered as consisting of (1) retirement units and

(2) minor items of property. Each utility shall maintain a written

property units listing for use in accounting for additions and

retirements of electric plant, apply the listing consistently, and if

requested, furnish the Commission with justifications for any changes

to the listing.

* * * * *

D. The book cost of electric plant retired shall be the amount at

which such property is included in the electric plant accounts,

including all components of construction costs. The book cost shall be

determined from the utility's records and if this cannot be done it

shall be estimated. Utilities must furnish the particulars of such

estimates to the Commission, if requested. When it is impracticable to

determine the book cost of each unit, due to the relatively large

number or small cost thereof, an appropriate average book cost of the

units, with due allowance for any differences in size and character,

shall be used as the book cost of the units retired.

* * * * *

3. In Part 101, Electric Plant Instruction 11, paragraph C is

revised to read as follows:

11. Work Order and Property Record System Required.

* * * * *

C. In the case of Major utilities, each utility shall maintain

records in which, for each plant account, the amounts of the annual

additions and retirements are classified so as to show the number and

cost of the various record units or retirement units.

PART 116--UNITS OF PROPERTY FOR USE IN ACCOUNTING FOR ADDITIONS TO

AND RETIREMENTS OF ELECTRIC PLANT

4. Part 116 is removed.

.

* * * * *

C. In the case of Major utilities, each utility shall maintain

records in which, for each plant account, the amounts of the annual

additions and retirements are classified so as to show the number and

cost of the various record units or retirement units.

PART 116--UNITS OF PROPERTY FOR USE IN ACCOUNTING FOR ADDITIONS TO

AND RETIREMENTS OF ELECTRIC PLANT

4. Part 116 is removed.

PART 201--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR NATURAL GAS

COMPANIES SUBJECT TO THE PROVISIONS OF THE NATURAL GAS ACT

5. The authority citation for Part 201 continues to read as

follows:

Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352,

7651-7651o.

6. In Part 201, Gas Plant Instruction 10, paragraphs A and D are

revised to read as follows:

10. Additions and retirements of gas plant. A. For the purpose of

avoiding undue refinement in accounting for additions to and

retirements and replacements of gas plant, all property shall be

considered as consisting of (1) retirement units and (2) minor items of

property. Each utility shall maintain a written property units listing

for use in accounting for additions and retirements of gas plant, apply

the listing consistently, and if requested, furnish the Commission with

justifications for any changes to the listing.

* * * * *

D. The book cost of gas plant retired shall be the amount at which

such property is included in the gas plant accounts, including all

components of construction costs. The book cost shall be determined

from the utility's records and if this cannot be done it shall be

estimated. Utilities must furnish the particulars of such estimates to

the Commission, if requested. When it is impracticable to determine the

book cost of each unit, due to the relatively large number or small

cost thereof, an appropriate average book cost of the units, with due

allowance for any differences in size and character, shall be used as

the book cost of the units retired.

* * * * *

7

mated. Utilities must furnish the particulars of such estimates to

the Commission, if requested. When it is impracticable to determine the

book cost of each unit, due to the relatively large number or small

cost thereof, an appropriate average book cost of the units, with due

allowance for any differences in size and character, shall be used as

the book cost of the units retired.

* * * * *

7. In Part 201, Gas Plant Instruction 11, paragraph C is revised to

read as follows:

11. Work order and property record system required.

* * * * *

C. Each utility shall maintain records in which, for each plant

account, the amounts of the annual additions and retirements are

classified so as to show the number and cost of the various record

units or retirement units.

PART 216--UNITS OF PROPERTY FOR USE IN ACCOUNTING FOR ADDITIONS TO

AND RETIREMENTS OF GAS PLANT

8. Part 216 is removed.

PART 352--UNIFORM SYSTEM OF ACCOUNTS PRESCRIBED FOR OIL PIPELINE

COMPANIES SUBJECT TO THE PROVISIONS OF THE INTERSTATE COMMERCE ACT

9. The authority citation for Part 352 is revised to read as

follows:

Authority: 49 U.S.C. 60502; 49 App. U.S.C. 1-85.

10. In Part 352, Instructions for Carrier Property Accounts,

instruction 3-2, Minimum Rule is removed. In instructions 3-5,

introductory text, and 3-6(a), the phrase ``subject to the minimum

rule'' is removed.

11. In Part 352, Instructions for Carrier Property Accounts,

instruction 3-4, Additions is revised to read as follows:

3-4 Additions. Each carrier shall maintain a written property units

listing for use in accounting for additions and retirements of carrier

plant, apply the listing consistently, and if requested, furnish the

Commission with justifications for any changes to the listing. When

property units are added to Carrier plant, the cost thereof shall be

added to the appropriate carrier plant account as set forth in the

policy.

12

hall maintain a written property units

listing for use in accounting for additions and retirements of carrier

plant, apply the listing consistently, and if requested, furnish the

Commission with justifications for any changes to the listing. When

property units are added to Carrier plant, the cost thereof shall be

added to the appropriate carrier plant account as set forth in the

policy.

12. In Part 352, Instructions for Carrier Property Accounts,

instruction 3-7, Retirements, introductory text and paragraph (b)(1)

are revised and new paragraph (c) is added to read as follows:

3-7 Retirements. When property units are retired from carrier

plant, with or without replacement, the cost thereof and the cost of

minor items of property retired and not replaced shall be credited to

the carrier plant account in which it is included. The retirement of

carrier property shall be accounted for as follows:

(a) * * *

(b) Property. (1) The book cost, as set forth in paragraph (c) of

this instruction, of units of property retired and of minor items of

property retired and not replaced shall be written out of the property

account as of date of retirement, and the service value shall be

charged to account 31, Accrued Depreciation--Carrier Property.

* * * * *

(c) The book cost of carrier property retired shall be determined

from the carrier's records and if this cannot be done it shall be

estimated. When it is impracticable to determine the book cost of each

unit, due to the relatively large number or small cost thereof, an

appropriate average book cost of the units, with due allowance for any

differences in size and character, shall be used as the book cost of

the units retired. Oil Pipelines must furnish the particulars of such

estimates to the Commission, if requested.

13. In Part 352, Instructions for Carrier Property Accounts,

instruction 3-14 Accounting units of property is removed.

[FR Doc. 97-20149 Filed 7-30-97; 8:45 am]

BILLING CODE 6717-01-P