N.Y. Comp. Codes R. & Regs. tit. 16 § 322.2

Current through Register Vol. 46, No. 25, June 18, 2024

Section 322.2 - 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) units of property or retirement units and (2) minor items. Units of property means those items of gas plant which are sufficiently distinct or important so that when they are retired with or without being replaced by other units of the same type or use, they are accounted for by crediting the amount at which they are carried on the books to the gas plant account in which included. All other items are to be considered as minor items. These retirement units should not be confused with continuing property record units filed by Class C utilities; the latter are units for which the cost will be shown separately in the continuing property records. Whenever units of property are mentioned in this system of accounts, the term refers to retirement units and not to continuing property record units. Each utility may adopt its own list of units of property for the purpose of this instruction until such time as the commission shall prescribe a list of units.

(b) Units of property.

(1) When a unit of property is added to gas plant, the cost thereof shall be added to the appropriate gas plant account.

(2) When a unit of property is retired from gas plant (i.e., is removed, sold, abandoned, destroyed or otherwise ceases to be used or useful in gas service), whether or not replaced by another unit of the same type or use, the amount at which it is carried on the books shall be credited to the gas plant account in which it is included (determined in the manner set forth in subd. [d], below) and charged to the depreciation reserve provided for such property.

(c) Minor items of property.

(1) When a minor item of property which does not replace a similar item is added to gas plant, the cost thereof shall be charged to the appropriate maintenance account and no entry shall be made in the gas plant or depreciation reserve accounts.

(2) When a minor item is retired and replaced independently of the unit of property of which it is a part, the cost of replacement shall be charged to the appropriate maintenance account and no entry shall be made in the gas plant or depreciation reserve accounts.

(3) When a minor item the book cost of which does not exceed $50 is retired and not replaced, if the book cost of such minor item is included with or spread over one or more units of property so that it will be accounted for through the retirement of such one or more units of property, no separate credit to the gas plant account shall be made; otherwise, however, the book cost of such minor item shall be credited to the appropriate gas plant account and charged to account 1250, Reserve for Depreciation of Utility Plant.

Note: For example, if a given length of main, including all fittings, valves, drip pots, etc., is a unit and the cost of such section of main includes the cost of the valves, drip pots, etc., no separate credit to the plant account shall be made when a drip pot or valve (the book cost of which is less than $50) is retired even though not replaced. Any labor in connection with the removal shall be charged to the appropriate maintenance account, and any salvage for material recovered shall be credited to the appropriate maintenance account.

(d) Determination of amount to be credited to plant accounts. Gas plant retired shall be credited to the plant accounts at the amount at which such property is included therein, including all components of construction costs, such as engineering, supervision, interest and taxes during construction, etc. The amount shall be determined from the utility's records and if this can not be done, it shall be estimated. When it is impracticable to determine the amount carried on the books for each item, due to the relatively large number or small cost thereof, the average of such items, with due allowances for any differences in size, character, and year of installation (if known), shall be used.

(e) Land retired. When land is retired the amount at which it is carried on the books shall be credited to the appropriate land account. If the land is sold, the difference between the amount at which it is carried on the books and the sale price of the land (less commissions and other expenses of making the sale) shall be credited or debited to account 1250, Reserve for Depreciation of Utility Plant.

N.Y. Comp. Codes R. & Regs. Tit. 16 § 322.2