220 CMR, § 51.03

Current through Register 1538, January 3, 2025

Section 51.03 - Specific Changes to the FERC System

220 CMR 51.03 presents the specific modifications to the FERC Uniform System of Accounts in the order in which they appear in the text.

(1)Changes to the Definition Section

(a) Replace the FERC definition of "Commission" (No. 7) with the following:

"Commission" refers to the Department of Public Utilities except in the following instances:

1. "Commission" shall refer to FERC when referenced in the following definitions: 14. Licensee; 19. Non project property; 24. Project property.

2. "Commission'' shall refer to FERC in number 16 of the General Instructions section (Separate Accounts or Records for Each Licensed Project) and in number 215.1 of the Balance Sheet Accounts section (Appropriated Retained Earnings - Amortization Reserve, Federal).

(b) Replace the FERC definition of "Public Utility "(No. 26) with the following:

"Public Utility "means all utilities subject to the jurisdiction of the Commission with the exception of municipal lighting plants.

This definition shall not be construed to contradict the definitions in M.G.L. c. 164, § 1.

(c) Add the following definition:

"Operating unit or system " shall include all capital investment which has been accorded or is eligible for rate base treatment.

(2)Changes to the General Instructions Section

Utility Classification. Replace the FERC Classification of Utilities (1 A) with the following:

This system of accounts applies to all Massachusetts electric utilities, excluding municipal lighting plants. Combined gas and electric utilities will maintain their books for electric utility reporting purposes in accordance with this system Gas operations will continue to utilize the existing system applicable to gas utilities.

(3)Changes to the Electric Plant Instructions Section

(a)Allowance for funds used during construction. The following paragraph should immediately precede the FERC subsection 3(17) which describes the methodology for determining the allowance for funds used during construction:

The methodology for determining the allowance for funds used during construction described in 220 CMR 51.03(3)(b) will not apply to electric utilities under the Commission's jurisdiction unless the Commission issues a separate order specifying the adoption of this method.

(b)Gains or losses on the disposition of property.

1. Replace subsection 5, Electric Plant Purchased or Sold, paragraph F, with the following paragraph:

When electric plant constituting an operating unit or system is sold, conveyed or transferred to another by sale, merger, consolidation, or otherwise, the book cost of the property sold or transferred to another shall be credited to the appropriate utility plant accounts, including amounts carried in Account 114, Electric Plant Acquisition Adjustments, and the amounts (estimated if not known) carried with respect thereto in the accounts for accumulated provision for depreciation and amortization and in Account 252, Customer Advances for Construction, shall be charged to such accounts and contra entries made to Account 102, Electric Plant Purchased or Sold. Unless otherwise ordered by the Commission, the difference, if any, between (a) the net amount of debits and credits and (b) the consideration received for the property (less commissions and other expenses of making the sale) shall be included in Account 411.6, Gains from Disposition of Utility Plant, or Account 411.7, Losses from Disposition of Utility Plant, if the property has ever been included in the company's Electric Plant in Service or Construction Work in Progress; or in Account 421.1, Gain on Disposition of Property, or Account 421.2, Loss on Disposition of Property, if never included in the company's Electric Plant in Service or Construction Work in Progress.

Note: This does not preclude the utility from submitting the details of the transaction to the Commission and requesting approval for alternative accounting treatment when warranted by the circumstances.

2. Replace subsection 7, Land and Land Rights, paragraph E, with the following paragraph:

Any difference between the amount received from the sale of land or land rights, less agent's commissions and other costs incident to sale, and the book cost of such land or rights, shall be included in Account 411.6, Gains from Disposition of Utility Plant, or 411.7, Losses from Disposition of Utility Plant, if the property was ever included in Electric Plant in Service or Construction Work in Progress; otherwise to Account 421.1, Gain on Disposition of Property, or 421.2, Loss on Disposition of Property, if property was never included in Electric Plant in Service or Construction Work in Progress, as appropriate, unless a reserve therefor has been authorized and provided. Appropriate adjustments of the accounts shall be made with respect to any structures or improvements located on land sold.

3. Replace subsection 10, Additions and Retirements of Electric Plant, paragraph E, with the following:

The book cost of land retired shall be credited to the appropriate land account. If the land is sold, the difference between the book cost (less any accumulated provision for depreciation or amortization there for which has been authorized and provided) and the sale price of the land (less commissions and other expenses of making the sale) shall be recorded in Account 411.6, Gains from Disposition of Utility Plant, or Account 411.7, Losses from Disposition of Utility Plant, if the property was ever included in Electric Plant in Service or Construction Work in Progress; otherwise to Account 421.1, Gain on Disposition of Property, or 421.2, Loss on Disposition of Property, if the property was never included in Electric Plant in Service or Construction Work in Progress. If the land is not used in utility service but is retained by the utility, the book cost shall be charged to Account 105, Electric Plant Held for Future Use, or Account 121, Non-Utility Property, as appropriate.

(c)Electric Plant Acquisition Adjustment Approval. The following paragraph should be inserted after paragraph 16, Nuclear Fuel Records Required:

17.Electric Plant Acquisition Adjustment Accounts. Entries to Electric Plant Acquisition Adjustment accounts: Account 114, Electric Plant Acquisition Adjustment, and Account 115, Accumulated Provision for Amortization of Electric Plant Acquisition Adjustments, may not be made without prior approval of the Commission.

(4)Changes to the Balance Sheet Accounts Section

(a)Account 105, Electric Plant Held For Future Use. Replace paragraph D of Account 105, Electric Plant Held for Future Use, with the following:

D. Gains or losses from the disposition of property previously recorded in this account shall be treated according to the Electric Plant Instructions.

(b)Operating Reserve Account Approval. The following paragraph should be inserted after the Operating Reserve subsection 9:

Utilities must have Commission approval before establishing any Operating Reserve accounts.

(5)Changes to the Income Accounts.

(a) Replace the paragraph following Account 411.6, Gains from Disposition of Utility Plant, with:

This account shall be credited with the gain on sale, conveyance, exchange or transfer of utility or other property to another as described in the Electric Plant Instructions. Income taxes relating to gains recorded in this account shall be recorded in Account 409.1, Income Taxes, Utility Operating Income.

(b) Replace the paragraph following Account 411.7, Losses from Disposition of Utility Plant, with:

This account shall be charged with the loss on the sale, conveyance, exchange or transfer of utility or other property to another as described in the Electric Plant Instructions. Income taxes relating to losses recorded in this account shall be recorded in Account 409.1, Income Taxes, Utility Operating Income.

(c) Replace the paragraph following Account 421.1, Gain on Disposition of Property, with:

This account shall be credited with the gain on sale, conveyance, exchange or transfer of utility or other property to another as described in the Electric Plant Instructions. Income taxes on gains recorded in this account shall be recorded in Account 409.2, Income Taxes, Other Income and Deductions.

(d) Replace the paragraph following Account 421.2, Loss on Disposition of Property, with the following paragraph:

This account shall be charged with the loss on sale, conveyance, exchange or transfer of utility property to another as described in the Electric Plant Instructions. The reduction in income taxes relating to losses recorded in this account shall be recorded in Account 409.2, Income Taxes, Other Income and Deductions.

(6)Changes to the Operating Revenue Accounts Section. The following account should be inserted after Account 448, Interdepartmental Sales:

Account 449, Miscellaneous Electric Sales. This account shall include all revenues from sales of electric energy not properly includible in any other account and unbilled sales not recorded in any other account.

220 CMR, § 51.03