(b) This account must be credited, and accounts 410.1 Provision for
deferred income taxes, operating income (Sec.  367.4101), or 410.2
Provision for deferred income taxes, other income and deductions (Sec.
367.4102), as appropriate, must be debited with tax effects related to
items described in paragraph (a) of this section where taxable income
is lower than pretax accounting income due to differences between the
periods in which revenue and expense transactions affect taxable income
and the periods in which they enter into the determination of pretax
accounting income.
    (c) This account must be debited, and accounts 411.1, Provision for
deferred income taxes-Credit, operating income (Sec.  367.4111), or
411.2, Provision for deferred income taxes-Credit, other income and
deductions (Sec.  367.4112), as appropriate, must be credited with tax
effects related to items described in paragraph (a) of this account
where taxable income is higher than pretax accounting income due to
differences between the periods in which revenue and expense
transactions affect taxable income and the periods in which they enter
into the determination of pretax accounting income.
    (d) Records with respect to entries to this account, as described
in paragraphs (a) through (c) of this section, and the account balance,
must be maintained so as to show the factors of calculation with
respect to each annual amount of the item or class of items.
    (e) The service company is restricted in its use of this account to
the purposes described in paragraphs (a) through (c) of this section.
It must not transfer the balance in the account or any portion of the
account to retained earnings or to any other account or make any use of
the account except as provided in the text of this account, without
prior approval of the Commission. Upon the disposition by sale,
exchange, transfer, abandonment or premature retirement of items on
which there is a related balance herein, this account must be charged
with an amount equal to the related income tax effect, if any, arising
from the disposition and accounts 411.1, Provision for deferred income
taxes-Credit, operating income (Sec.  367.4111), or 411.2, Provision
for deferred income taxes--Credit, other income and deductions (Sec.
367.4112), as appropriate, must be credited.
    (f) When property is disposed of by transfer to a wholly-owned
subsidiary, the related balance in this account also must be
transferred. When the disposition relates to retirement of an item or
items under a group method of depreciation where there is no tax effect
in the year of retirement, no entries are required in this account if
it can be determined that the related balance must be retained to
offset future group item tax deficiencies.

Subpart G--Service Company Property Chart of Accounts

Sec.  367.3010  Account 301, Organization.

    (a) This account must include all fees paid to federal or state
governments for the privilege of incorporation and expenditures
incident to organizing the

corporation, partnership, or other enterprise and putting it into
readiness to do business.
    (b) This account must include the following items:
    (1) Cost of obtaining certificates authorizing the service company
to engage in its business.
    (2) Fees and expenses for incorporation.
    (3) Fees and expenses for mergers or consolidations.
    (4) Office expenses incident to organizing the service company.
    (5) Stock and minute books and corporate seal.
    (c) This account must not include any discounts upon securities
issued or assumed; nor may it include any costs incident to negotiating
loans, selling bonds or other evidences of debt or expenses in
connection with the authorization, issuance or sale of capital stock.
    (d) Exclude from this account and include in the appropriate
expense account, the cost of preparing and filing papers in connection
with the extension of the term of incorporation unless the first
organization costs have been written off. When charges are made to this
account for expenses incurred in mergers, consolidations, or
reorganizations, amounts previously included in this account or in
similar accounts in the books of the companies concerned must be
excluded from this account.

Sec.  367.3030  Account 303, Miscellaneous intangible property.

    (a) This account must include the cost of patent rights, licenses,
privileges, and other intangible property necessary or valuable in the
conduct of service company operations and not specifically chargeable
to any other account.
    (b) When any item included in this account is retired or expires,
the related book cost must be credited to this account and charged to
account 426.5, Other deductions (Sec.  367.4265), or account 111,
Accumulated provision for amortization of property (Sec.  367.1110).
    (c) This account must be maintained in a manner so that the service
company can furnish full information with respect to the amounts
included in this account.

Sec.  367.3060  Account 306, Leasehold improvements.

    This account must include all costs incurred by the service company
in improvements of, remodeling of, or installation of additional
facilities in rented offices or buildings to suit tenant's needs,
placed in service prior to January 1, 2008.

Sec.  367.3890  Account 389, Land and land rights.

    This account must include the cost of land and land rights used for
service company purposes, the cost of which is not properly includible
in other land and land rights accounts (See Service Company Property
Instructions in Sec.  367.55).

Sec.  367.3900  Account 390, Structures and improvements.

    This account must include the cost in place of structures and
improvements used for service company purposes, the cost of which is
not properly includible in other structures and improvements accounts
(See Service Company Property Instructions in Sec.  367.56).

Sec.  367.3910  Account 391, Office furniture and equipment.

    (a) This account must include the cost of office furniture and
equipment owned by the service company and devoted to service company
operations, and not permanently attached to buildings, except the cost
of the furniture and equipment that the service company elects to
assign to other property accounts on a functional basis.
    (b) This account must include the following items:
    (1) Bookcases and shelves.
    (2) Desks, chairs, and desk equipment.
    (3) Drafting-room equipment.
    (4) Filing, storage, and other cabinets.
    (5) Floor covering.
    (6) Library and library equipment.
    (7) Mechanical office equipment, such as accounting machines,
typewriters, and other similar items.
    (8) Safes.
    (9) Tables.

Sec.  367.3920  Account 392, Transportation equipment.

    (a) This account must include the cost of transportation vehicles
used for service company purposes.
    (b) This account must include the following items:
    (1) Airplanes.
    (2) Automobiles.
    (3) Bicycles.
    (4) Electrical vehicles.
    (5) Motor trucks.
    (6) Motorcycles.
    (7) Repair cars or trucks.
    (8) Tractors and trailers.
    (9) Other transportation vehicles.

Sec.  367.3930  Account 393, Stores equipment.

    (a) This account must include the cost of equipment used for the
receiving, shipping, handling, and storage of materials and supplies.
    (b) This account must include the following items:
    (1) Chain falls.
    (2) Counters.
    (3) Cranes (portable).
    (4) Elevating and stacking equipment (portable).
    (5) Hoists.
    (6) Lockers.
    (7) Scales.
    (8) Shelving.
    (9) Storage bins.
    (10) Trucks, hand and power driven.
    (11) Wheelbarrows.

Sec.  367.3940  Account 394, Tools, shop and garage equipment.

    (a) This account must include the cost of tools, implements, and
equipment used in construction, repair work, general shops and garages
and not specifically provided for or includible in other accounts.
    (b) This account must include the following items:
    (1) Air compressors.
    (2) Anvils.
    (3) Automobile repair shop equipment.
    (4) Battery charging equipment.
    (5) Belts, shafts and countershafts.
    (6) Boilers.
    (7) Cable pulling equipment.
    (8) Concrete mixers.
    (9) Drill presses.
    (10) Derricks.
    (11) Electric equipment.
    (12) Engines.
    (13) Forges.
    (14) Furnaces.
    (15) Foundations and settings specially constructed for equipment
in this account and not expected to outlast the equipment for which
provided.
    (16) Gas producers.
    (17) Gasoline pumps, oil pumps and storage tanks.
    (18) Greasing tools and equipment.
    (19) Hoists.
    (20) Ladders.
    (21) Lathes.
    (22) Machine tools.
    (23) Motor-driven tools.
    (24) Motors.
    (25) Pipe threading and cutting tools.
    (26) Pneumatic tools.
    (27) Pumps.
    (28) Riveters.
    (29) Smithing equipment.
    (30) Tool racks.
    (31) Vises.
    (32) Welding apparatus.
    (33) Work benches.

Sec.  367.3950  Account 395, Laboratory equipment.

    (a) This account must include the cost installed of laboratory
equipment used for general laboratory purposes.
    (b) This account must include the following items:

    (1) Ammeters.
    (2) Balances and scales.
    (3) Barometers.
    (4) Calorimeters-bomb, flow, recording types, and other similar
items.
    (5) Current batteries.
    (6) Electric furnaces.
    (7) Frequency changers.
    (8) Galvanometers.
    (9) Gas burning equipment.
    (10) Gauges.
    (11) Glassware, beakers, burettes, and other similar items.
    (12) Humidity testing apparatus.
    (13) Inductometers.
    (14) Laboratory hoods.
    (15) Laboratory standard millivolt meters.
    (16) Laboratory standard volt meters.
    (17) Laboratory tables and cabinets.
    (18) Meter-testing equipment.
    (19) Millivolt meters.
    (20) Motor generator sets.
    (21) Muffles.
    (22) Oil analysis apparatus.
    (23) Panels.
    (24) Phantom loads.
    (25) Piping.
    (26) Portable graphic ammeters, voltmeters, and wattmeters.
    (27) Portable loading devices.
    (28) Potential batteries.
    (29) Potentiometers.
    (30) Rotating standards.
    (31) Specific gravity apparatus.
    (32) Standard bottles for meter prover testing.
    (33) Standard cell, reactance, resistor, and shunt.
    (34) Stills.
    (35) Sulphur and ammonia apparatus.
    (36) Switchboards.
    (37) Synchronous timers.
    (38) Tar analysis apparatus.
    (39) Testing panels.
    (40) Testing resistors.
    (41) Thermometers--indicating and recording.
    (42) Transformers.
    (43) Voltmeters.
    (44) Other testing, laboratory, or research equipment not provided
for elsewhere.
    (45) Other items of equipment for testing gas, fuel, flue gas,
water, residuals, and other similar items.

Sec.  367.3960  Account 396, Power operated equipment.

    (a) This account must include the cost of power operated equipment
used in construction or repair work exclusive of equipment includible
in other accounts. Include, also, the tools and accessories acquired
for use with the equipment and the vehicle on which the equipment is
mounted.
    (b) This account must include the following items:
    (1) Air compressors, including driving unit and vehicle.
    (2) Back filling machines.
    (3) Boring machines.
    (4) Bulldozers.
    (5) Cranes and hoists.
    (6) Diggers.
    (7) Engines.
    (8) Pile drivers.
    (9) Pipe cleaning machines.
    (10) Pipe coating or wrapping machines.
    (11) Tractors--Crawler type.
    (12) Trenchers.
    (13) Other power operated equipment.
    (c) It is intended that this account include only the large units
that are generally self-propelled or mounted on movable equipment.

Sec.  367.3970  Account 397, Communication equipment.

    (a) This account must include the cost installed of telephone,
telegraph, and wireless equipment for general use in connection with
service company operations.
    (b) This account must include the following items:
    (1) Amplifiers.
    (2) Antennae.
    (3) Booths.
    (4) Cables.
    (5) Carrier terminal equipment.
    (6) Conductors.
    (7) Distributing boards.
    (8) Extension cords.
    (9) Gongs.
    (10) Hand sets, manual and dial.
    (11) Insulators.
    (12) Intercommunicating sets.
    (13) Loading coils.
    (14) Microwave equipment.
    (15) Operators' desks.
    (16) Paraboloids.
    (17) Poles and fixtures used wholly for telephone or telegraph
wire.
    (18) Power supply equipment.
    (19) Radio transmitting and receiving sets.
    (20) Reflectors.
    (21) Repeaters.
    (22) Remote control equipment and lines.
    (23) Sending keys.
    (24) Storage batteries.
    (25) Switchboards.
    (26) Telautograph circuit connections.
    (27) Telegraph receiving sets.
    (28) Telephone and telegraph circuits.
    (29) Testing instruments.
    (30) Towers.
    (31) Underground conduit used wholly for telephone or telegraph
wires and cable wires.

Sec.  367.3980  Account 398, Miscellaneous equipment.

    (a) This account must include the cost of equipment, apparatus, and
other similar items, used in the service company's operations that are
not included in any other account of this system of accounts.
    (b) This account must include the following items:
    (1) Hospital and infirmary equipment.
    (2) Kitchen equipment.
    (3) Employees' recreation equipment.
    (4) Radios.
    (5) Restaurant equipment.
    (6) Soda fountains.
    (7) Operators' cottage furnishings.
    (8) Other miscellaneous equipment.

Sec.  367.3990  Account 399, Other tangible property.

    This account must include the cost of tangible service company
property not provided for elsewhere.

Sec.  367.3991  Account 399.1, Asset retirement costs for service
company property.

    This account must include asset retirement costs on service company
property.

Subpart H--Income Statement Chart of Accounts

Service Company Operating Income

Sec.  367.4000  Account 400, Operating revenues.

    There must be shown under this caption the total amount included in
the service company operating revenue accounts 457 through 459
(Sec. Sec.  367.4570 through 367.4590).

Sec.  367.4010  Account 401, Operation expense.

    There must be shown under this caption the total amount included in
the service company operation expense accounts 500 through 589
(Sec. Sec.  367.5000 through 367.5890), 800 through 881 (Sec. Sec.
367.8000 through 367.8810) and 901 through 931 (Sec. Sec.  367.9010
through 367.9310).

Sec.  367.4020  Account 402, Maintenance expense.

    There must be shown under this caption the total amount included in
the service company maintenance expense accounts 500 through 598
(Sec. Sec.  367.5000 through 367.5890), 800 through 894 (Sec. Sec.
367.8000 through 367.8810), and 935 (Sec.  367.9350).

Sec.  367.4030  Account 403, Depreciation expense.

    (a) This account must include the amount of depreciation for all
service company property, the cost of which is included in accounts 390
through 399.1 (Sec. Sec.  367.3900 through 367.3991). Provide
subaccounts by each class of service company property owned or leased

except the depreciation expense that is charged to clearing accounts or
to account 416, Costs and expenses of merchandising, jobbing and
contract work (Sec.  367.4160).
    (b) The service company must keep the records of property and
property retirements that will reflect the service life of property
that has been retired and aid in estimating probable service life by
mortality, turnover, or other appropriate methods; and also the records
that will reflect the percentage of salvage and costs of removal for
property retired from each account, or related subaccount, for
depreciable property.
    (c) Depreciation expenses applicable to transportation equipment,
shop equipment, tools, work equipment, power operated equipment and
other general equipment may be charged to clearing accounts as
necessary in order to obtain a proper distribution of expenses between
construction and operation.

Sec.  367.4031  Account 403.1, Depreciation expense for asset
retirement costs.

    This account must include the depreciation expense for asset
retirement costs included in service company property.

Sec.  367.4040  Account 404, Amortization of limited-term property.

    This account must include amortization charges applicable to
amounts included in the service company property accounts for limited-
term franchises, licenses, patent rights, limited-term interests in
land, and expenditures on leased property where the service life of the
improvements is terminable by action of the lease. The charges to this
account must be sufficient to distribute the book cost of each
investment as evenly as may be over the period of its benefit (See
account 111, Accumulated provision for amortization of service company
property (Sec.  367.1110)).

Sec.  367.4050  Account 405, Amortization of other property.

    (a) When authorized by the Commission, this account must include
charges for amortization of intangible or other property that does not
have a definite or terminable life and that is not subject to charges
for depreciation expense.
    (b) This account must be supported in sufficient detail to show the
amortization applicable to each investment being amortized, together
with the book cost of the investment and the period over which it is
being written off.

Sec.  367.4073  Account 407.3, Regulatory debits.

    This account shall be debited, when appropriate, with amounts
credited to Account 254, Other Regulatory Liabilities, to record
regulatory liabilities imposed on the service company by the ratemaking
actions of regulatory agencies. This account shall also be debited,
when appropriate, with the amounts credited to Account 182.3, Other
Regulatory Assets, concurrent with the recovery of such amounts in
rates.

Sec.  367.4074  Account 407.4, Regulatory credits.

    This account shall be credited, when appropriate, with amounts
debited to Account 182.3, Other Regulatory Assets, to establish
regulatory assets. This account shall also be credited, when
appropriate, with the amounts debited to Account 254, Other Regulatory
Liabilities, concurrent with the return of such amounts to customers
through rates.

Sec.  367.4081  Account 408.1, Taxes other than income taxes, operating
income.

    This account must include those taxes, other than income taxes,
that relate to service company operating income. This account must be
maintained so as to allow ready identification of the various classes
of taxes.

Sec.  367.4082  Account 408.2, Taxes other than income taxes, other
income and deductions.

    This account must include those taxes, other than income taxes,
that relate to other income and deductions.

Sec.  367.4091  Account 409.1, Income taxes, operating income.

    This account must include the amount of those local, state and
Federal income taxes that relate to service company operating income.

Sec.  367.4092  Account 409.2, Income taxes, other income and
deductions.

    This account must include the amount of those local, state and
Federal income taxes (both positive and negative), that relate to other
income and deductions.

Sec.  367.4093  Account 409.3, Income taxes, extraordinary items.

    This account must include the amount of those local, state and
Federal income taxes (both positive and negative), that relate to
extraordinary items.

Sec.  367.4101  Account 410.1, Provision for deferred income taxes,
operating income.

    This account must include the amounts of those deferrals of taxes
and allocations of deferred taxes that relate to service company
operating income.

Sec.  367.4102  Account 410.2, Provision for deferred income taxes,
other income and deductions.

    This account must include the amounts of those deferrals of taxes
and allocations of deferred taxes that relate to other income and
deductions.

Sec.  367.4111  Account 411.1, Provision for deferred income taxes--
Credit, operating income.

    This account must include the amounts of those allocations of
deferred taxes and deferrals of taxes, credit, that relate to service
company operating income.

Sec.  367.4112  Account 411.2, Provision for deferred income taxes--
Credit, other income and deductions.

    This account must include the amounts of those allocations of
deferred taxes and deferrals of taxes, credit, that relate to other
income and deductions.

Sec.  367.4114  Account 411.4, Investment tax credit adjustments,
service company property.

    This account must include the amount of those investment tax credit
adjustments that relate to service company property.

Sec.  367.4115  Account 411.5, Investment tax credit adjustments,
other.

    This account must include the amount of those investment tax credit
adjustments not properly included in other accounts.

Sec.  367.4116  Account 411.6, Gains from disposition of service
company plant.

    (a) The service company must record in this account gains resulting
from the settlement of asset retirement obligations related to service
company plant in accordance with the accounting prescribed in General
Instructions in Sec.  367.22.
    (b) Income taxes relating to losses, recorded in this account must
be recorded in Account 409.1, Income Taxes, operating income (Sec.
367.4091).

Sec.  367.4117  Account 411.7, Losses from disposition of service
company plant.

    (a) The service company must record in this account losses
resulting from the settlement of asset retirement obligations related
to service company plant in accordance with the accounting prescribed
in General Instructions in Sec.  367.22.
    (b) Income taxes relating to losses, recorded in this account must
be

recorded in Account 409.1, Income Taxes, operating income (Sec.
367.4091).

Sec.  367.4118  Account 411.10, Accretion expense.

    This account must be charged for accretion expense on the
liabilities associated with asset retirement obligations included in
account 230, Asset retirement obligations (Sec.  367.2300), related to
service company property.

Sec.  367.4120  Account 412, Cost and expenses of construction or other
services.

    This account must include expenditures related to the performance
of construction or service contracts, under which the service company
undertakes projects to construct physical property for associate or
non-associate companies (see General Instructions Sec.  367.24,
Construction and service contracts for other companies) and the cost of
services performed for others not provided for elsewhere.

Sec.  367.4160  Account 416, Costs and expenses of merchandising,
jobbing and contract work.

    (a) This account must include the following labor items for
services provided:
    (1) Canvassing and demonstrating appliances in homes and other
places for the purpose of selling appliances.
    (2) Demonstrating and selling activities in sales rooms.
    (3) Installing appliances on customer premises where the work is
done only for purchasers of appliances from the associated company.
    (4) Installing wiring, piping, or other property work, on a jobbing
or contract basis.
    (5) Preparing advertising materials for appliance sales purposes.
    (6) Receiving and handling customer orders for merchandise or for
jobbing services.
    (7) Cleaning and tidying sales rooms.
    (8) Maintaining display counters and other equipment used in
merchandising.
    (9) Arranging merchandise in sales rooms and decorating display
windows.
    (10) Reconditioning repossessed appliances.
    (11) Bookkeeping and other clerical work in connection with
merchandise and jobbing activities.
    (12) Supervising merchandise and jobbing operations.
    (b) This account must include the following materials and expenses
items:
    (1) Advertising in newspapers, periodicals, radio, television, and
other similar items.
    (2) Cost of merchandise sold and of materials used in jobbing work.
    (3) Stores expenses on merchandise and jobbing stocks.
    (4) Fees and expenses of advertising and commercial artists'
agencies.
    (5) Printing booklets, dodgers, and other advertising data.
    (6) Premiums given as inducement to buy appliances.
    (7) Light, heat and power.
    (8) Depreciation on equipment used primarily for merchandise and
jobbing operations.
    (9) Rent of sales rooms or of equipment.
    (10) Transportation expense in delivery and pick-up of appliances
by the associated company's facilities.
    (11) Stationery and office supplies and expenses.
    (12) Losses from uncollectible merchandise and jobbing accounts.
    (c) Records in support of this account shall be so kept as to
permit ready summarization of costs and expenses by such major items as
are feasible.
    (d) Related taxes must be recorded in account 408.2, Taxes other
than income taxes, other income and deductions (Sec.  367.4082), or
account 409.2, Income taxes, other income and deductions (Sec.
367.4092), as appropriate.

Sec.  367.4180  Account 418, Non-operating rental income.

    (a) The expenses shall include all elements of costs incurred in
the ownership and rental of property and the accounts shall be
maintained so as to permit ready summarization of operation,
maintenance, rents, depreciation, and amortization.
    (b) Related taxes shall be recorded in Account 408.2, Taxes other
than income taxes, other income and deductions (Sec.  367.4082) or
Account 409.2, Income taxes, other income and deductions (Sec.
367.4092), as appropriate.

Sec.  367.4181  Account 418.1, Equity in earnings of subsidiary
companies.

    This account must include the service company's equity in the
earnings or losses of subsidiary companies for the year.

Sec.  367.4190  Account 419, Interest and dividend income.

    (a) This account must include interest revenues on securities,
loans, notes, advances, special deposits, tax refunds and all other
interest-bearing assets, and dividends on stocks of other companies,
whether the securities on which the interest and dividends are received
are carried as investments or included in sinking or other special fund
accounts.
    (b) This account may include the pro rata amount necessary to
extinguish (during the interval between the date of acquisition and the
date of maturity) the difference between the cost to the service
company and the face value of interest-bearing securities. The amounts
credited or charged must be concurrently included in the accounts in
which the securities are carried.
    (c) Where significant in amount, expenses, excluding operating
taxes and income taxes, applicable to security investments and to
interest and dividend revenues on the account must be charged in this
account.
    (d) Related taxes must be recorded in account 408.2, Taxes other
than income taxes, other income and deductions (Sec.  367.4082), or
account 409.2, Income taxes, other income and deductions (Sec.
367.4092).
    (e) Interest accrued, the payment of which is not reasonably
assured, dividends receivable that have not been declared or
guaranteed, and interest or dividends upon reacquired securities issued
or assumed by the service company must not be credited to this account.

Sec.  367.4191  Account 419.1, Allowance for other funds used during
construction.

    This account must include concurrent credits for allowance for
other funds used during construction.

Sec.  367.4210  Account 421, Miscellaneous income or loss.

    This account must include all revenue and expense items except
taxes properly includible in the income account and not provided for
elsewhere. Related taxes must be recorded in account 408.2, Taxes other
than income taxes, other income and deductions (Sec.  367.4082), or
account 409.2, Income taxes, other income and deductions (Sec.
367.4092).

Sec.  367.4211  Account 421.1, Gain on disposition of property.

    This account must be credited with the gain on the sale,
conveyance, exchange, or transfer of service or other property to
another. Income taxes on gains recorded in this account must be
recorded in account 409.2, Income taxes, other income and deductions
(Sec.  367.4092).

Sec.  367.4212  Account 421.2, Loss on disposition of property.

    This account must be charged with the loss on the sale, conveyance,
exchange or transfer of service or other property to another. The
reduction in income taxes relating to losses recorded in this account
must be recorded in account 409.2, Income taxes, other income and
deductions (Sec.  367.4092).

Sec.  367.4250  Account 425, Miscellaneous amortization.

    (a) This account must include amortization charges not includible
in

other accounts which are properly deductible in determining the income
of the service company before interest charges. Charges included in
this account, if significant in amount, must be in accordance with an
orderly and systematic amortization program.
    (b) This account must include the following items:
    (1) Amortization of intangibles included in service company
property.
    (2) Other miscellaneous amortization charges authorized to be
included in this account by the Commission.

Sec.  367.4261  Account 426.1, Donations.

    This account must include all payments or donations for charitable,
social or community welfare purposes.

Sec.  367.4262  Account 426.2, Life insurance.

    This account must include all payments for life insurance of
officers and employees where the service company is beneficiary (net
premiums less increase in cash surrender value of policies).

Sec.  367.4263  Account 426.3, Penalties.

    This account must include payments by the service company for
penalties or fines for violation of any regulatory statutes by the
service company or its officials.

Sec.  367.4264  Account 426.4, Expenditures for certain civic,
political and related activities.

    (a) This account must include expenditures for the purpose of
influencing public opinion with respect to the election or appointment
of public officials, referenda, legislation, or ordinances (either with
respect to the possible adoption of new referenda, legislation or
ordinances or repeal or modification of existing referenda, legislation
or ordinances) or approval, modification, or revocation of franchises;
or for the purpose of influencing the decisions of public officials.
    (b) This account must not include expenditures that are directly
related to appearances before regulatory or other governmental bodies
in connection with an associate utility company's existing or proposed
operations.

Sec.  367.4265  Account 426.5, Other deductions.

    This account must include other miscellaneous expenses that are not
properly included in service company operations.

Sec.  367.4270  Account 427, Interest on long-term debt.

    (a) This account must include the amount of interest on outstanding
long-term debt issued or assumed by the service company, the liability
for which is included in account 224, Other long-term debt (Sec.
367.2240).
    (b) This account must be kept or supported so as to show the
interest accruals on each class and series of long-term debt.
    (c) This account must not include interest on nominally issued or
nominally outstanding long-term debt, including securities assumed.

Sec.  367.4280  Account 428, Amortization of debt discount and expense.

    (a) This account must include the amortization of unamortized debt
discount and expense on outstanding long-term debt. Amounts charged to
this account must be credited concurrently to accounts 181, Unamortized
debt expense (Sec.  367.1810), and 226, Unamortized discount on long-
term debt--Debit (Sec.  367.2260).
    (b) This account must be kept or supported so as to show the debt
discount and expense on each class and series of long-term debt.

Sec.  367.4290  Account 429, Amortization of premium on debt--Credit.

    (a) This account must include the amortization of unamortized net
premium on outstanding long-term debt. Amounts credited to this account
must be charged concurrently to account 225, Unamortized premium on
long-term debt (Sec.  367.2250).
    (b) This account must be kept or supported so as to show the
premium on each class and series of long-term debt.
    (c) This account must include the following items:
    (1) Loss relating to investments in securities written-off or
written-down.
    (2) Loss on sale of investments.
    (3) Loss on reacquisition, resale or retirement of service
company's debt securities.
    (4) Preliminary survey and investigation expenses related to
abandoned projects, when not written-off to the appropriate operating
expense account.

Sec.  367.4300  Account 430, Interest on debt to associate companies.

    This account must include interest accrued on amounts included in
account 223, Advances from associate companies (Sec.  367.2230), and
account 233, Notes payable to associate companies (Sec.  367.2330). The
records supporting the entries to this account must be kept so as to
show to who the interest is to be paid, the period covered by the
accrual, the rate of interest and the principal amount of the advances
or other obligations on which the interest is accrued. Separate
subaccounts must be maintained for each related debt account.

Sec.  367.4310  Account 431, Other interest expense.

    This account must include all interest charges not provided for
elsewhere.

Sec.  367.4320  Account 432, Allowance for borrowed funds used during
construction--Credit.

    This account must include concurrent credits for allowance for
borrowed funds used during construction.

Subpart I--Retained Earnings Accounts

Sec.  367.4330  Account 433, Balance transferred from income.

    This account must include the net credit or debit transferred from
income for the year.

Sec.  367.4340  Account 434, Extraordinary income.

    This account must be credited with gains of unusual nature and
infrequent occurrence that would significantly distort the current
year's income computed before extraordinary items, if reported other
than as extraordinary items. Income tax relating to the amounts
recorded in this account must be recorded in account 409.3, Income
taxes, extraordinary items (Sec.  367.4093) (See General Instructions
in Sec.  367.8).

Sec.  367.4350  Account 435, Extraordinary deductions.

    This account must be debited with losses of unusual nature and
infrequent occurrence that would significantly distort the current
year's income computed before extraordinary items, if reported other
than as extraordinary items. Income tax relating to the amounts
recorded in this account must be recorded in account 409.3, Income
taxes, extraordinary items (Sec.  367.4093) (See General Instructions
in Sec.  367.8).

Sec.  367.4360  Account 436, Appropriations of retained earnings.

    This account must include appropriations of retained earnings as
follows:
    (a) Appropriations required under terms of mortgages, orders of
courts, contracts, or other agreements.
    (b) Appropriations required by action of regulatory authorities.
    (c) Other appropriations made at option of the service company for
specific purposes.

Sec.  367.4370  Account 437, Dividends declared--preferred stock.

    (a) This account must include amounts declared payable out of

retained earnings as dividends on actually outstanding preferred or
prior lien capital stock issued by the service company.
    (b) Dividends must be segregated for each class and series of
preferred stock as to those payable in cash, stock, and other forms. If
not payable in cash, the medium of payment must be described with
sufficient detail to identify it.

Sec.  367.4380  Account 438, Dividends declared--common stock.

    (a) This account must include amounts declared payable out of
retained earnings as dividends on actually outstanding common capital
stock issued by the service company.
    (b) Dividends must be segregated for each class of common stock as
to those payable in cash, stock and other forms. If not payable in
cash, the medium of payment must be described with sufficient detail to
identify it.

Sec.  367.4390  Account 439, Adjustments to retained earnings.

    (a) This account must, with prior Commission approval, include
significant non-recurring transactions accounted for as prior period
adjustments, as follows:
    (1) Correction of an error in the financial statements of a prior
year.
    (2) Adjustments that result from realization of income tax benefits
of reacquisition operating loss carry forwards of purchased
subsidiaries. All other items of profit and loss recognized during a
year must be included in the determination of net income for that year.
    (b) Adjustments, charges, or credits due to losses on
reacquisition, resale or retirement of the company's own capital stock
must be included in this account.

Subpart J--Operating Revenue Chart of Accounts

Sec.  367.4570  Account 457, Services rendered to associate companies.

    This account must include amounts billed to associate companies for
services rendered at cost (See accounts 457.1 through 457.3 in
Sec. Sec.  367.4571 through 367.4573). Overbillings or underbillings
arising from adjustments of estimated costs to actual costs must be
cleared through this account and concurrent adjustments made to other
accounts involved.

Sec.  367.4571  Account 457.1, Direct costs charged to associate
companies.

    This account must include those direct costs that can be identified
through a cost allocation system as being applicable to services
performed for associate companies. This account must not include any
compensation for use of equity capital or inter-company interest on
indebtedness.

Sec.  367.4572  Account 457.2, Indirect costs charged to associate
companies.

    This account must include recovery of those indirect costs that
cannot be separately identified to a single or group of associate
companies and therefore must be allocated. Only journal or memorandum
entries should be prepared monthly, by departments, for all such cost
accumulated and billed to customers. Amounts billed to associate
companies must be included in this account. This account must not
include any compensation for use of equity capital or inter-company
interest on indebtedness.

Sec.  367.4573  Account 457.3, Compensation for use of capital-
associate companies.

    This account must include only the portion of compensation for use
of equity capital and inter-company interest on indebtedness before
income taxes that is properly allocable to services rendered to each
associate company.

Sec.  367.4580  Account 458, Services rendered to non-associate
companies.

    This account must include amounts billed for services rendered to
non-associate companies (See accounts 458.1 through 458.4 (Sec. Sec.
367.4581 through 367.4584)).

Sec.  367.4581  Account 458.1, Direct costs charged to non-associate
companies.

    This account must include those direct costs that can be identified
through a cost allocation system as being applicable to services
performed for non-associate companies. This account must not include
any compensation for use of equity capital or interest on indebtedness.

Sec.  367.4582  Account 458.2, Indirect costs charged to non-associate
companies.

    This account must include recovery of those indirect costs of
services performed for non-associate companies that cannot be
specifically assigned and therefore must be allocated. This account
must not include any compensation for use of equity capital or inter-
company interest on indebtedness.

Sec.  367.4583  Account 458.3, Compensation for use of capital--Non-
associate companies.

    This account must include only the portion of compensation for use
of equity capital and inter-company interest on indebtedness before
income taxes that is properly allocable to services rendered to non-
associate utility companies. A statement to support the basis for the
compensation and how it was calculated must be attached to a separate
journal entry, ledger system, or memorandum file.

Sec.  367.4584  Account 458.4, Excess or deficiency on servicing non-
associate utility companies.

    This account must include the amount by which the aggregate price
received for services rendered to non-associate utility companies
differs from the sum of the total direct and indirect costs and
compensation for use of capital which are properly allocable to such
services (See accounts 458.1 through 458.3 (Sec. Sec.  367.4581 through
367.4583) and General Instructions in Sec.  367.23).

Subpart K--Operation and Maintenance Expense Chart of Accounts

Sec.  367.5000  Accounts 500-598, Electric operation and maintenance
accounts.

    Service companies must use accounts 500 through 598 in part 101 of
this chapter.

Sec.  367.8000  Accounts 800-894, Gas operation and maintenance
accounts.

    Service companies must use accounts 800 through 894 in part 201 of
this chapter.

Sec.  367.9010  Account 901, Supervision.

    This account must include the cost of labor and expenses incurred
in the general direction and supervision of customer accounting and
collecting activities. Direct supervision of a specific activity must
be charged to account 902, Meter reading expenses (Sec.  367.9020), or
account 903, Customer records and collection expenses (Sec.  367.9030),
as appropriate (See Operating Expense Instructions in Sec.  367.80).

Sec.  367.9020  Account 902, Meter reading expenses.

    (a) This account must include the cost of labor, materials used and
expenses incurred in reading customer meters, and determining
consumption when performed by employees engaged in reading meters.
    (b) This account must include the following labor items:
    (1) Addressing forms for obtaining meter readings by mail.
    (2) Changing and collecting meter charts used for billing purposes.
    (3) Inspecting time clocks, checking seals, and other similar
items, when performed by meter readers and the work represents a minor
activity incidental to regular meter reading routine.

    (4) Reading meters, including demand meters, and obtaining load
information for billing purposes. Exclude and charge to account 586,
Meter expenses (Sec.  367.5000), account 878, Meter and house regulator
expenses (Sec.  367.8000), or to account 903, Customer records and
collection expenses (Sec.  367.9030), as applicable, the cost of
obtaining meter readings, first and final, if incidental to the
operation of removing or resetting, sealing, or locking, and
disconnecting or reconnecting meters.
    (5) Computing consumption from meter reader's book or from reports
by mail when done by employees engaged in reading meters.
    (6) Collecting from prepayment meters when incidental to meter
reading.
    (7) Maintaining record of customers'' keys.
    (8) Computing estimated or average consumption when performed by
employees engaged in reading meters.
    (c) This account must include the following materials and expenses
items:
    (1) Badges, lamps, and uniforms.
    (2) Demand charts, meter books and binders and forms for recording
readings, but not the cost of preparation.
    (3) Postage and supplies used in obtaining meter readings by mail.
    (4) Transportation, meals, and incidental expenses.

Sec.  367.9030  Account 903, Customer records and collection expenses.

    (a) This account must include the cost of labor, materials used and
expenses incurred in work on customer applications, contracts, orders,
credit investigations, billing and accounting, collections and
complaints.
    (b) This account must include the following labor items:
    (1) Receiving, preparing, recording and handling routine orders for
service, disconnections, transfers or meter tests initiated by the
customer, excluding the cost of carrying out the orders, that is
chargeable to the account appropriate for the work called for by the
orders.
    (2) Investigations of customers'' credit and keeping of records
pertaining to the investigations, including records of uncollectible
accounts written off.
    (3) Receiving, refunding or applying customer deposits and
maintaining customer deposit, line extension, and other miscellaneous
records.
    (4) Checking consumption shown by meter readers'' reports where
incidental to preparation of billing data.
    (5) Preparing address plates and addressing bills and delinquent
notices.
    (6) Preparing billing data.
    (7) Operating billing and bookkeeping machines.
    (8) Verifying billing records with contracts or rate schedules.
    (9) Preparing bills for delivery, and mailing or delivering bills.
    (10) Collecting revenues, including collection from prepayment
meters unless incidental to meter-reading operations.
    (11) Balancing collections, preparing collections for deposit, and
preparing cash reports.
    (12) Posting collections and other credits or charges to customer
accounts and extending unpaid balances.
    (13) Balancing customer accounts and controls.
    (14) Preparing, mailing, or delivering delinquent notices and
preparing reports of delinquent accounts.
    (15) Final meter reading of delinquent accounts when done by
collectors incidental to regular activities.
    (16) Disconnecting and reconnecting service because of nonpayment
of bills.
    (17) Receiving, recording, and handling of inquiries, complaints,
and requests for investigations from customers, including preparation
of necessary orders, but excluding the cost of carrying out such
orders, which is chargeable to the account appropriate for the work
called for by the orders.
    (18) Statistical and tabulating work on customer accounts and
revenues, but not including special analyses for sales department, rate
department, or other general purposes, unless incidental to regular
customer accounting routines.
    (19) Preparing and periodically rewriting meter reading sheets.
    (20) Determining consumption and computing estimated or average
consumption when performed by employees other than those engaged in
reading meters.
    (c) This account must include the following materials and expenses
items:
    (1) Address plates and supplies.
    (2) Cash overages and shortages.
    (3) Commissions or fees to others for collecting.
    (4) Payments to credit organizations for investigations and
reports.
    (5) Postage.
    (6) Transportation expenses (Major only), including transportation
of customer bills and meter books under centralized billing procedure.
    (7) Transportation, meals, and incidental expenses.
    (8) Bank charges, exchange, and other fees for cashing and
depositing customers' checks.
    (9) Forms for recording orders for services removals, and other
similar forms.
    (10) Rent of mechanical equipment.
    (d) The cost of work on meter history and meter location records is
chargeable to account 586, Meter expenses (Sec.  367.5000) or account
878, Meter and house regulator expenses (Sec.  367.8000).

Sec.  367.9040  Account 904, Uncollectible accounts.

    This account must be charged with amounts sufficient to provide for
losses from uncollectible service company revenues. Concurrent credits
must be made to account 144, Accumulated provision for uncollectible
accounts--Credit (Sec.  367.1440). Losses from uncollectible accounts
also must be charged to account 144 (Sec.  367.1440).

Sec.  367.9050  Account 905, Miscellaneous customer accounts expenses.

    (a) This account must include the cost of labor, materials used and
expenses incurred not provided for in other accounts.
    (b) This account must include the following labor items:
    (1) General clerical and stenographic work.
    (2) Miscellaneous labor.
    (c) This account must include the following materials and expenses
items:
    (1) Communication service.
    (2) Miscellaneous office supplies and expenses and stationery and
printing other than those specifically provided for in accounts 902 and
903 (Sec. Sec.  367.9020 and 367.9030).

Sec.  367.9070  Account 907, Supervision.

    This account must include the cost of labor and expenses incurred
in the general direction and supervision of customer service
activities, the object of which is to encourage safe, efficient and
economical use of the associate utility company's service. Direct
supervision of a specific activity within customer service and
informational expense classification must be charged to the account
wherein the costs of such activity are included (See Operating Expense
Instructions in Sec.  367.80).

Sec.  367.9080  Account 908, Customer assistance expenses.

    (a) This account must include the cost of labor, materials used and
expenses incurred in providing instructions or assistance to customers,
the object of which is to encourage safe, efficient and economical use
of the associate utility company's service.
    (b) This account must include the following labor items:
    (1) Direct supervision of department.
    (2) Processing customer inquiries relating to the proper use of
electric equipment, the replacement of such equipment and information
related to the equipment.

    (3) Advice directed to customers as to how they may achieve the
most efficient and safest use of electric equipment.
    (4) Demonstrations, exhibits, lectures, and other programs designed
to instruct customers in the safe, economical or efficient use of
electric service, and/or oriented toward conservation of energy.
    (5) Engineering and technical advice to customers, the object of
which is to promote safe, efficient and economical use of the associate
utility company's service.
    (c) This account must include the following materials and expenses
items:
    (1) Supplies and expenses pertaining to demonstrations, exhibits,
lectures, and other programs.
    (2) Loss in value on equipment and appliances used for customer
assistance programs.
    (3) Office supplies and expenses.
    (4) Transportation, meals, and incidental expenses.
    (d) Do not include in this account expenses that are provided for
elsewhere, such as accounts 416, Costs and expenses of merchandising,
jobbing and contract work (Sec.  367.4160), 587, Customer installations
expenses (Sec.  367.5870), 879, Customer installations expenses (Sec.
367.8790), and 912, Demonstrating and selling expenses (Sec.
367.9120).

Sec.  367.9090  Account 909, Informational and instructional
advertising expenses.

    (a) This account must include the cost of labor, materials used and
expenses incurred in activities which primarily convey information as
to what the associate utility company urges or suggests customers
should do in utilizing service to protect health and safety, to
encourage environmental protection, to utilize their equipment safely
and economically, or to conserve energy.
    (b) This account must include the following labor items:
    (1) Direct supervision of informational activities.
    (2) Preparing informational materials for newspapers, periodicals,
billboards, and other similar forms of advertisement, and preparing and
conducting informational motion pictures, radio and television
programs.
    (3) Preparing informational booklets, bulletins, and other similar
forms of advertisement, used in direct mailings.
    (4) Preparing informational window and other displays.
    (5) Employing agencies, selecting media and conducting negotiations
in connection with the placement and subject matter of information
programs.
    (c) This account must include the following materials and expenses
items:
    (1) Use of newspapers, periodicals, billboards, radio, and other
similar forms of advertisement, for informational purposes.
    (2) Postage on direct mailings to customers exclusive of postage
related to billings.
    (3) Printing of informational booklets, dodgers, bulletins, and
other similar items.
    (4) Supplies and expenses in preparing informational materials for
the associate utility company.
    (5) Office supplies and expenses.
    (d) Exclude from this account and charge to account 930.2,
Miscellaneous general expenses, the cost of publication of stockholder
reports, dividend notices, bond redemption notices, financial
statements, and other notices of a general corporate character. Also
exclude all expenses of a promotional, institutional, goodwill or
political nature, that are included in accounts 913, Advertising
expenses (Sec.  367.9130), 930.1, General advertising expenses (Sec.
367.9301), and 426.4, Expenditures for certain civic, political, and
related expenses (Sec.  367.4264).
    (e) Entries relating to informational advertising included in this
account must contain or refer to supporting documents that identify the
specific advertising message. If references are used, copies of the
advertising message must be readily available.

Sec.  367.9100  Account 910, Miscellaneous customer service and
informational expenses.

    (a) This account must include the cost of labor, materials used and
expenses incurred in connection with customer service and informational
activities that are not includible in other customer information
expense accounts.
    (b) This account must include the following labor items:
    (1) General clerical and stenographic work not assigned to specific
customer service and informational programs.
    (2) Miscellaneous labor.
    (c) This account must include the following materials and expenses
items:
    (1) Communication service.
    (2) Printing, postage and office supplies expenses.

Sec.  367.9110  Account 911, Supervision.

    This account must include the cost of labor and expenses incurred
in the general direction and supervision of sales activities, except
merchandising. Direct supervision of a specific activity, such as
demonstrating, selling, or advertising, must be charged to the account
wherein the costs of such activity are included (See Operating Expense
Instructions in Sec.  367.80).

Sec.  367.9120  Account 912, Demonstrating and selling expenses.

    (a) This account must include the cost of labor, materials used and
expenses incurred in promotional, demonstrating, and selling
activities, except by merchandising, the object of which is to promote
or retain the business of present and prospective customers of the
service company and the companies within the holding company system
that is not recorded in Accounts 416, Costs and expenses of
merchandising, jobbing and contract work (Sec.  367.4160), or 930.1,
General advertising expenses for associated companies (Sec.  367.9301).
    (b) This account must include the following labor items:
    (1) Demonstrating uses of services provided by companies within the
holding company system.
    (2) Conducting cooking schools, preparing recipes, and related home
service activities.
    (3) Exhibitions, displays, lectures, and other programs to promote
the services provided by the service company or the companies within
the holding company system.
    (4) Experimental and development work in connection with new and
improved appliances and equipment, prior to general public acceptance.
    (5) Solicitation of new customers or of additional business from
old customers, including commissions paid employees.
    (6) Engineering and technical advice to present or prospective
customers in connection with promoting or retaining the use of
services.
    (7) Special customer canvasses when their primary purpose is the
retention of business or the promotion of new business.
    (c) This account must include the following materials and expenses
items:
    (1) Supplies and expenses pertaining to demonstration and
experimental and development activities.
    (2) Booth and temporary space rental.
    (3) Loss in value on equipment and appliances used for
demonstration purposes.
    (4) Transportation, meals, and incidental expenses.

Sec.  367.9130  Account 913, Advertising expenses.

    (a) This account must include the cost of labor, materials used and
expenses incurred in advertising designed to promote or retain the use
of services provided by the service company or the companies within the
holding company system, except advertising the sale of merchandise.
    (b) This account must include the following labor items:
    (1) Direct supervision of department.

    (2) Preparing advertising material for newspapers, periodicals,
billboards, and other similar forms of advertisement, and preparing and
conducting motion pictures, radio and television programs.
    (3) Preparing booklets, bulletins, and other similar forms of
advertisement, used in direct mail advertising.
    (4) Preparing window and other displays.
    (5) Clerical and stenographic work.
    (6) Investigating advertising agencies and media and conducting
negotiations in connection with the placement and subject matter of
sales advertising.
    (c) This account must include the following materials and expenses
items:
    (1) Advertising in newspapers, periodicals, billboards, radio, and
other similar forms of advertisement, for sales promotion purposes, but
not including institutional or goodwill advertising included in account
930.1, General advertising expenses (Sec.  367.9301).
    (2) Materials and services given as prizes or otherwise in
connection with civic lighting contests, canning, or cooking contests,
bazaars, and other similar materials and services, in order to
publicize and promote the use of utility services.
    (3) Fees and expenses of advertising agencies and commercial
artists.
    (4) Novelties for general distribution.
    (5) Postage on direct mail advertising.
    (6) Premiums distributed generally, such as recipe books, and other
similar items, when not offered as inducement to purchase appliances.
    (7) Printing booklets, dodgers, bulletins, and other similar forms
of advertisement.
    (8) Supplies and expenses in preparing advertising material.
    (9) Office supplies and expenses.
    (d) The cost of advertisements which set forth the value or
advantages of offered services without reference to specific appliances
or the promotion of appliances must be considered sales promotion
advertising and charged to this account. However, advertisements that
are limited to specific makes of appliances sold by any company and
prices, terms, and other similar items, without referring to the value
or advantages of offered services, must be considered as merchandise
advertising and the cost must be charged to account 416, Costs and
expenses of merchandising, jobbing and contract work (Sec.  367.4160).
    (e) Advertisements that substantially mention or refer to the value
or advantages of offered services, together with specific reference to
makes of appliances sold by any company and the price, terms, and other
similar items, and designed for the joint purpose of increasing the use
of offered services and the sales of appliances, must be considered as
a combination advertisement and the costs must be distributed between
this account and account 416 (Sec.  367.4160) on the basis of space,
time, or other proportional factors.
    (f) Exclude from this account and charge to account 930.2,
Miscellaneous general expenses (Sec.  367.9302), the cost of
publication of stockholder reports, dividend notices, bond redemption
notices, financial statements, and other notices of a general corporate
character. Exclude also all institutional or goodwill advertising (See
account 930.1, General advertising expenses (Sec.  367.9301)).

Sec.  367.9160  Account 916, Miscellaneous sales expenses.

    (a) This account must include the cost of labor, materials used and
expenses incurred in connection with sales activities, except
merchandising, which are not includible in other sales expense
accounts.
    (b) This account must include the following labor items:
    (1) General clerical and stenographic work not assigned to specific
functions.
    (2) Special analysis of customer accounts and other statistical
work for sales purposes not a part of the regular customer accounting
and billing routine.
    (3) Miscellaneous labor.
    (c) This account must include the following materials and expenses
items:
    (1) Communication service.
    (2) Printing, postage, and office supplies and expenses applicable
to sales activities, except those chargeable to account 913,
Advertising expenses (Sec.  367.9130).

Sec.  367.9200  Account 920, Administrative and general salaries.

    (a) This account must include salaries, wages, bonuses and other
consideration for services, with the exception of director's fees paid
directly to officers and employees of the service company.
    (b) This account must be supported by time records and
appropriately referenced to detailed records subdividing salaries and
wages by departments or other functional organization units.

Sec.  367.9210  Account 921, Office supplies and expenses.

    (a) This account must include office supplies and expenses incurred
in connection with the general administration of service company
operations assignable to specific administrative or general departments
and not specifically provided for in other accounts. This includes the
expenses of the various administrative and general departments, the
salaries and wages of which are included in account 920, Administrative
and general salaries (Sec.  367.9200).
    (b) This account may be subdivided in accordance with a
classification appropriate to the departmental or other functional
organization of the service company. The following items must be
included in this account:
    (1) Automobile service, including charges through clearing account.
    (2) Bank messenger and service charges.
    (3) Books, periodicals, bulletins and subscriptions to newspapers,
newsletters, tax service, and other similar items.
    (4) Building service expenses for customer accounts, sales, and
administrative and general purposes.
    (5) Communication service expenses to include telephone, telegraph,
wire transfer, micro-wave, and other similar items.
    (6) Cost of individual items of office equipment used by general
departments which are of small value or short life.
    (7) Membership fees and dues in trade, technical, and professional
associations paid by a utility for employees. (Company memberships must
be included in account 930.2 in Sec.  367.9302.)
    (8) Office supplies and expenses.
    (9) Payment of court costs, witness fees, and other expenses of
legal department.
    (10) Postage, printing and stationery.
    (11) Meals, traveling, entertainment and incidental expenses.
    (c) Records must be so maintained to permit ready analysis by item
showing the nature of the expense and identity of the person furnishing
the service.

Sec.  367.9230  Account 923, Outside services employed.

    (a) This account must include the fees and expenses of professional
consultants and others for general services with the exception of fees
and expenses for outside services of account 928, Regulatory commission
expenses (Sec.  367.9280), and account 930.1, General advertising
expenses (Sec.  367.9301). Separate subaccounts must be provided for
auditing, legal, engineering, management consulting fees and any other
fees for professional or outside services.
    (b) Records must be maintained so as to permit ready analysis
showing the nature of service, identity of the person furnishing the
service, affiliation to the service company, and, if allocated to

more than one company, the specific method of allocation.

Sec.  367.9240  Account 924, Property insurance.

    (a) This account must include the cost of insurance or reserve
accruals to protect the service company against losses and damages to
owned or leased property used in service company operations. It also
must include the cost of labor and related supplies and expenses
incurred in property insurance activities.
    (b) Recoveries from insurance companies or others for property
damages must be credited to the account charged with the cost of the
damage. If the damaged property has been retired, the credit must be to
the appropriate account for accumulated provision for depreciation.
    (c) Records must be kept so as to show the amount of coverage for
each class of insurance carried, the property covered, and the
applicable premiums. Any dividends distributed by mutual insurance
companies must be credited to the accounts to which the insurance
premiums were charged. The following items must be included in this
account:
    (1) Premiums payable to insurance companies for fire, storm,
burglary, boiler explosion, lightning, fidelity, riot, and similar
insurance.
    (2) Special costs incurred in procuring insurance.
    (3) Insurance inspection service.
    (4) Insurance counsel, brokerage fees, and expenses.
    (d) The cost of insurance or reserve accruals capitalized must be
charged to construction either directly or by transfer to construction
projects from this account.
    (e) The cost of insurance or reserve accruals for the following
classes of property must be charged as indicated.
    (1) Materials and supplies and stores equipment, to account 163,
Stores expense undistributed (Sec.  367.1630), or appropriate materials
account.
    (2) Transportation and other general equipment to appropriate
clearing accounts that may be maintained.
    (3) Merchandise and jobbing property, to account 416, Costs and
expenses of merchandising, jobbing and contract work (Sec.  367.4160).
    (f) The cost of labor and related supplies and expenses of
administrative and general employees who are only incidentally engaged
in property insurance work may be included in accounts 920 and 921
(Sec. Sec.  367.9200 and 367.9210), as appropriate.

Sec.  367.9250  Account 925, Injuries and damages.

    (a) This account must include the cost of insurance or reserve
accruals to protect the service company against injuries and damages
claims of employees or others, losses of such character not covered by
insurance, and expenses incurred in settlement of injuries and damages
claims. It also must include the cost of labor and related supplies and
expenses incurred in injuries and damages activities.
    (b) Reimbursements from insurance companies or others for expenses
charged to this account because of injuries and damages and insurance
dividends or refunds must be credited to this account. The following
items must be included in this account:
    (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, and other
similar items.
    (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 paragraph (c) of this section).
    (8) Cost of safety, accident prevention and similar educational
activities.
    (c) Payments to or on behalf of employees for accident or death
benefits, hospital expenses, medical supplies or for salaries while
incapacitated for service or on leave of absence beyond periods
normally allowed, when not the result of occupational injuries, must be
charged to account 926, Employee pensions and benefits (Sec.  367.9260)
(See also paragraph (e) of account 926 (Sec.  367.9260)).
    (d) The cost of injuries and damages or reserve accruals
capitalized must be charged to construction directly or by transfer to
construction projects from this account.
    (e) Exclude the time and expenses of employees (except those
engaged in injuries and damages activities) spent in attendance at
safety and accident prevention educational meetings, if occurring
during the regular work period.
    (f) The cost of labor and related supplies and expenses of
administrative and general employees who are only incidentally engaged
in injuries and damages activities may be included in accounts 920 and
921 (Sec. Sec.  367.9200 and 367.9210), as appropriate.

Sec.  367.9260  Account 926, Employee pensions and benefits.

    (a) This account must include pensions paid to, or on behalf of,
retired employees, or accruals to provide for pensions, or payments for
the purchase of annuities for this purpose, when the service company
has definitely, by contract, committed itself to a pension plan under
which the pension funds are irrevocably devoted to pension purposes,
and payments for employee accident, sickness, hospital, and death
benefits, or insurance related to this account. Include, also, expenses
incurred in medical, educational or recreational activities for the
benefit of employees, and administrative expenses in connection with
employee pensions and benefits.
    (b) The service company must maintain a complete record of accruals
or payments for pensions and be prepared to furnish full information to
the Commission of the plan under which it has created or proposes to
create a pension fund and a copy of the declaration of trust or
resolution under which the pension plan is established.
    (c) Records in support of this account must be kept so that the
total pensions expense, the total benefits expense, the administrative
expenses included in this account, and the amounts of pensions and
benefits expenses transferred to construction or other accounts will be
readily available. The following items must be included in this
account:
    (1) Payment of pensions under a non-accrual or non-funded basis.
    (2) Accruals for or payments to pension funds or to insurance
companies for pension purposes.
    (3) Group and life insurance premiums (credit dividends received).
    (4) Payments for medical and hospital services and expenses of
employees when not the result of occupational injuries.
    (5) Payments for accident, sickness, hospital, and death benefits
or insurance.
    (6) 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.

    (7) Expenses in connection with educational and recreational
activities for the benefit of employees.
    (d) The cost of labor and related supplies and expenses of
administrative and general employees who are only incidentally engaged
in employee pension and benefit activities may be included in accounts
920 and 921 (Sec. Sec.  367.9200 and 367.9210), as appropriate.
    (e) Salaries paid to employees during periods of non-occupational
sickness may be charged to the appropriate labor account rather than to
employee benefits.

Sec.  367.9280  Account 928, Regulatory commission expenses.

    (a) This account must include all expenses, properly included in
service company operating expenses, incurred by the service company in
connection with formal cases before regulatory commissions, or other
regulatory bodies, on its own behalf or on behalf of associate
companies, including payments made to a regulatory commission for fees
assessed to the service company for pay and expenses of such
commission, its officers, agents and employees, and for filings or
reports made under regulations of regulatory commissions. The service
company must be prepared to show the cost of each formal case. The
following items must be included in this account:
    (1) Salaries, fees, retainers, and expenses of counsel, solicitors,
attorneys, accountants, engineers, clerks, attendants, witnesses, and
others engaged in the prosecution of, or defense against petitions or
complaints presented to regulatory bodies.
    (2) Office supplies and expenses, payments to public service or
other regulatory commissions, stationery and printing, traveling
expenses, and other expenses incurred directly in connection with
formal cases before regulatory commissions.
    (b) Exclude from this account and include in other appropriate
operating expense accounts, expenses incurred in the improvement of
service, additional inspection, or rendering reports, which are made
necessary by the rules and regulations, or orders, of regulatory
bodies.

Sec.  367.9301  Account 930.1, General advertising expenses for
associated companies.

    (a) This account must include the cost of labor, materials used,
and expenses incurred in advertising and related activities, the cost
of which by their content and purpose are not provided for elsewhere.
    (b) This account must include the following labor items:
    (1) Supervision.
    (2) Preparing advertising material for newspapers, periodicals,
billboards, and other similar items, and preparing or conducting motion
pictures, radio and television programs.
    (3) Preparing booklets, bulletins, and other similar forms of
advertisement, used in direct mail advertising.
    (4) Preparing window and other displays.
    (5) Clerical and stenographic work.
    (6) Investigating and employing advertising agencies, selecting
media and conducting negotiations in connection with the placement and
subject matter of advertising.
    (c) This account must include the following materials and expenses
items:
    (1) Advertising in newspapers, periodicals, billboards, radio, and
other similar forms of advertisement.
    (2) Advertising matter such as posters, bulletins, booklets, and
related items.
    (3) Fees and expenses of advertising agencies and commercial
artists.
    (4) Postage and direct mail advertising.
    (5) Printing of booklets, dodgers, bulletins, and other related
items.
    (6) Supplies and expenses in preparing advertising materials.
    (7) Office supplies and expenses.
    (d) Properly includible in this account is the cost of advertising
activities on a local or national basis of a good will or institutional
nature, which is primarily designed to improve the image of the
associate utility company or the industry, including advertisements
which inform the public concerning matters affecting the associate
utility company's operations, such as, the cost of providing service,
the associate utility company's efforts to improve the quality of
service, the company's efforts to improve and protect the environment,
and other similar forms of advertisement. Entries relating to
advertising included in this account must contain or refer to
supporting documents which identify the specific advertising message.
If references are used, copies of the advertising message must be
readily available.
    (e) Exclude from this account and include in account 426.4,
Expenditures for certain civic, political and related activities (Sec.
367.4264), expenses for advertising activities that are designed to
solicit public support or the support of public officials in matters of
a political nature.

Sec.  367.9302  Account 930.2, Miscellaneous general expenses.

    (a) This account must include the cost of expenses incurred in
connection with the general management of the service company not
provided for elsewhere.
    (b) This account must include labor items including miscellaneous
labor not elsewhere provided for.
    (c) This account must include the following expenses items:
    (1) Industry association dues for company memberships.
    (2) Contributions for conventions and meetings of the industry.
    (3) Research, development, and demonstration expenses not charged
to other operation and maintenance expense accounts on a functional
basis.
    (4) Communication service not chargeable to other accounts.
    (5) Trustee, registrar, and transfer agent fees and expenses.
    (6) Stockholders meeting expenses.
    (7) Dividend and other financial notices.
    (8) Printing and mailing dividend checks.
    (9) Directors' fees and expenses.
    (10) Publishing and distributing annual reports to stockholders.
    (11) Public notices of financial, operating and other data required
by regulatory statutes, not including, however, notices required in
connection with security issues or acquisitions of property.
    (d) Records must be maintained so as to permit ready analysis by
item showing the nature of the expense and identity of the person
furnishing the service.

Sec.  367.9310  Account 931, Rents.

    This account must include rents, including taxes, paid for the
property of others used, occupied or operated in connection with
service company functions. Provide subaccounts for major groupings such
as office space, warehouses, other structure, office furniture,
fixtures, computers, data processing equipment, microwave and
telecommunication equipment, airplanes, automobiles, and other similar
groupings of property. The cost, when incurred by the lessee, of
operating and maintaining leased property, must be charged to the
accounts appropriate for the expense as if the property were owned.

Sec.  367.9350  Account 935, Maintenance of structures and equipment.

    This account must include materials used and expenses incurred in
the maintenance of property owned, the cost of which is included in
accounts 390 through 399 (Sec. Sec.  367.3900 through 367.3990), and of
property leased from others. Provide subaccounts by major classes of
structures and equipment, owned and leased.

0
6. Part 368 is added to subchapter U to read as follows:

PART 368--PRESERVATION OF RECORDS OF HOLDING COMPANIES AND SERVICE
COMPANIES

Sec.
368.1 Promulgation.
368.2 General instructions.
368.3 Schedule of records and periods of retention.

    Authority: 42 U.S.C. 16451-16463.

Sec.  368.1  Promulgation.

    This part is prescribed and promulgated as the regulations
governing the preservation of records by any holding company and by any
service company within a holding company system subject to the
jurisdiction of the Commission under the Public Utility Holding Company
Act of 2005 (42 U.S.C. Sec. Sec.  16451 et seq.).

Sec.  368.2  General instructions.

    (a) Scope of this part. (1) The regulations in this part apply to
all books of account and other records prepared, maintained or held by
any agent or employee on behalf of the company. The specification in
the schedule in Sec.  368.3 of a record related to a type of
transaction includes all documents and correspondence, not redundant or
duplicative of other records retained, needed to explain or verify the
transaction.
    (2) Company means a service company or a holding company as defined
in Sec.  367.1 of this chapter. Public utilities, licensees, and
natural gas companies must continue to use parts 125 and 225 of this
chapter.
    (3) Any company subject to this regulation, that, as agent,
operator, lessor or otherwise, maintains or has possession of any
records relating to the operation, property or obligations of a public
utility, licensee, or natural gas company, as defined in the Federal
Power Act (16 U.S.C. Sec. Sec.  824 et seq.), the Natural Gas Act (15
U.S.C. Sec. Sec.  717 et seq.), or the laws of any state within which
the public utility, licensee, or natural gas company operates, must
comply with the laws or regulations as to record retention and
destruction which would apply to the records if they were records of
the public utility, licensee, or natural gas company as codified in
parts 125 and 225 of this chapter.
    (4) The regulations in this part should not be construed as
excusing compliance with other lawful requirements of any other
governmental body, Federal or State, prescribing other record keeping
requirements or for preservation of records longer than those
prescribed in this part.
    (5) To the extent that any Commission regulations may provide for a
different record retention period, the records must be retained for the
longer of the retention periods.
    (6) Records, other than those listed in the schedule, may be
destroyed at the option of the company. However, records that are used
in lieu of those listed must be preserved for the periods prescribed
for the records used for substantially similar purposes. Additionally,
retention of records pertaining to added services, functions, plant,
and other similar service, the establishment of which cannot be
presently foreseen, must conform to the principles embodied in this
section.
    (7) Notwithstanding the provisions of the records retention
schedule in this section, the Commission may, upon the request of the
company, authorize a shorter period of retention for any record listed
in the schedule upon a showing by the company that preservation of the
record for a longer period is not necessary or appropriate, in the
public interest or for the protection of investors or consumers.
    (b) Designation of supervisory official. Each company subject to
these record retention regulations must designate one or more officials
to supervise the preservation or authorized destruction of its records.
    (c) Protection and storage of records. The company must provide
reasonable protection from damage by fire, flood, and other hazards for
records required by these record retention regulations to be preserved
and, in the selection of storage space, safeguard such records from
unnecessary exposure to deterioration from excessive humidity, dryness,
or lack of proper ventilation.
    (d) Index of records. At each site or location where company
records are kept or stored, the records must be arranged, filed, and
currently indexed so that records may be readily identified and made
available for inspection by authorized representatives of any
regulatory agency concerned, including the Commission.
    (e) Record storage media. Each company has the flexibility to
select its own storage media subject to the following conditions.
    (1) The storage media must have a life expectancy at least equal to
the applicable record retention period provided in Sec.  368.3 of this
chapter unless there is a quality transfer from one media to another
with no loss of data.
    (2) Each company is required to implement internal control
procedures that assure the reliability of, and ready access to, data
stored on machine readable media. Internal control procedures must be
documented by a responsible supervisory official.
    (3) Each transfer of data from one media to another must be
verified for accuracy and documented. Software and hardware required to
produce readable records must be retained for the same period the media
format is used.
    (f) Destruction of records. At the expiration of the retention
period, the company may use any appropriate method to destroy records.
Precautions should be taken, however, to macerate or otherwise destroy
the legibility of records, the content of which is forbidden by law to
be divulged to unauthorized persons.
    (g) Premature destruction or loss of records. When records are
destroyed or lost before the expiration of the prescribed period of
retention, a certified statement listing, as far as may be determined,
the records destroyed and describing the circumstances of accidental or
other premature destruction or loss must be filed with the Commission
within 90 days from the date of discovery of the destruction.
    (h) Schedule of records and periods of retention. The schedule of
records retention periods constitutes a part of these records retention
regulations. The schedule prescribes the periods of time that
designated records must be preserved. Plant records related to public
utilities and licensees and natural gas companies must be retained in
accordance with Sec. Sec.  125.3 and 225.3 of this chapter.
    (i) Retention periods designated ``Destroy at option.'' ``Destroy
at option'' constitutes authorization for destruction of records at
managements' discretion if the destruction does not conflict with other
legal retention requirements or usefulness of the records in satisfying
pending regulatory actions or directives. ``Destroy at option after
audit'' requires retention until the company has received an opinion
from its independent accountants with respect to the financial
statements including the transactions to which the records relate.
    (j) Records of services performed by associate companies. Holding
companies and service companies must assure the availability of records
of services performed by and for public utilities and licensees and
natural gas companies with supporting cost information for the periods
indicated in Sec. Sec.  125.3 and 225.3 of this chapter as necessary to
be able to readily furnish detailed information as to the nature of the
transaction, the amounts involved,

and the accounts used to record the transactions.
    (k) Rate case. Notwithstanding the minimum retention periods
provided in these regulations, the company must retain the appropriate
records to support the costs and adjustments proposed in any rate case.
    (l) Pending complaint litigation or governmental proceedings.
Notwithstanding the minimum requirements, if a company is involved in
pending litigation, complaint procedures, proceedings remanded by the
court, or governmental proceedings, it must retain all relevant
records.
    (m) Life or mortality study data. Life or mortality study data for
depreciation purposes must be retained for 25 years or for 10 years
after property is retired, whichever is longer.

Sec.  368.3  Schedule of records and periods of retention.

              Schedule of Records and Periods of Retention
------------------------------------------------------------------------
        Item No. and description                 Retention period
------------------------------------------------------------------------
                          Corporate and General
------------------------------------------------------------------------
1. Reports to stockholders: Annual       5 years.
 reports or statements to stockholders.
2. Organizational documents:
    (a) Minute books of stockholders,    5 years or termination of the
     directors' and directors'            corporation's existence,
     committee meetings.                  whichever occurs first.
    (b) Title, franchises, and           6 years after final non-
     licenses: Copies of formal orders    appealable order.
     of regulatory commissions served
     upon the company.
        (1) Certificates of              Life of corporation.
         incorporation, or equivalent
         agreements and amendments
         thereto.
        (2) Deeds, leases and other      6 years after property or
         title papers (including          investment is disposed of
         abstracts of title and           unless delivered to
         supporting data), and            transferee.
         contracts and agreements
         related to the acquisition or
         disposition of property or
         investments.
3. Contracts and agreements: Contracts,
 including amendments and agreements
 (except contracts provided for
 elsewhere):
    (a) Service contracts, such as for   All contracts, related
     management, consulting,              memoranda, and revisions
     accounting, legal, financial or      should be retained for 4 years
     engineering services.                after expiration or until the
                                          conclusion of any contract
                                          disputes pertaining to such
                                          contracts, whichever is later.
    (b) Memoranda essential to clarify   For same period as contract to
     or explain provisions of contracts   which they relate.
     and agreements.
    (c) Card or book records of          For the same periods as
     contracts, leases, and agreements    contracts to which they
     made, showing dates of expirations   relate.
     and of renewals, memoranda of
     receipts, and payments under such
     contracts.
    (d) Contracts and other agreements   All contracts, related
     relating to services performed in    memoranda, and revisions
     connection with construction of      should be retained for 4 years
     property (including contracts for    after expiration or until the
     the construction of property by      conclusion of any contract
     others for the company and for       disputes or governmental
     supervision and engineering          proceedings pertaining to such
     relating to construction work).      contracts, whichever is later.
4. Accountants' and auditors' reports:
    (a) Reports of examinations and      5 years after the date of the
     audits by accountants and auditors   report.
     not in the regular employ of the
     company (such as reports of public
     accounting firms and commission
     accountants).
    (b) Internal audit reports and       5 years after the date of the
     working papers.                      report.
------------------------------------------------------------------------
                    Information Technology Management
------------------------------------------------------------------------
5. Automatic data processing records     Retain as long as it represents
 (retain original source data used as     an active viable program or
 input for data processing and data       for periods prescribed for
 processing report printouts for the      related output data, whichever
 applicable periods prescribed            is shorter.
 elsewhere in the schedule): Software
 program documentation and revisions
 thereto.
------------------------------------------------------------------------
                       General Accounting Records
------------------------------------------------------------------------
6. General and subsidiary ledgers:
    (a) Ledgers:
        (1) General ledgers............  10 years.
        (2) Ledgers subsidiary or        10 years.
         auxiliary to general ledgers
         except ledgers provided for
         elsewhere.
    (b) Indexes:
        (1) Indexes to general ledgers.  10 years.
        (2) Indexes to subsidiary        10 years.
         ledgers except ledgers
         provided for elsewhere.
    (c) Trial balance sheets of general  2 years
     and subsidiary ledgers.
7. Journals: General and subsidiary....  10 years.
8. Journal vouchers and journal entries
 including supporting detail:
    (a) Journal vouchers and journal     10 years.
     entries.
    (b) Analyses, summarization,
     distributions, and other
     computations which support journal
     vouchers and journal entries:
        (1) Charging property accounts.  25 years. See Sec.  Sec.
                                          125.2(g) and 225.2(g) of this
                                          chapter for public utilities
                                          and licensees and natural gas
                                          companies.
        (2) Charging all other accounts  6 years.

9. Cash books: General and subsidiary    5 years after close of fiscal
 or auxiliary books.                      year.
10. Voucher registers: Voucher           5 years. See Sec.  Sec.
 registers or similar records when used   125.2(g) and 225.2(g) of this
 as a source document.                    chapter for public utilities
                                          and licensees and natural gas
                                          companies.
11. Vouchers:
    (a) Paid and canceled vouchers (one  5 years. See Sec.  Sec.
     copy-analysis sheets showing         125.2(g) and 225.2(g) of this
     detailed distribution of charges     chapter for public utilities
     on individual vouchers and other     and licensees and natural gas
     supporting papers.                   companies.
    (b) Original bills and invoices for  5 years. See Sec.  Sec.
     materials, services, etc., paid by   125.2(g) and 225.2(g) of this
     vouchers.                            chapter for public utilities
                                          and licensees and natural gas
                                          companies.
    (c) Paid checks and receipts for     5 years.
     payments of specific vouchers.
    (d) Authorization for the payment    5 years. See Sec.  Sec.
     of specific vouchers.                125.2(g) and 225.2(g) of this
                                          chapter for public utilities
                                          and licensees and natural gas
                                          companies.
    (e) Lists of unaudited bills         Destroy at option.
     (accounts payable), list of
     vouchers transmitted, and
     memoranda regarding changes in
     audited bills.
    (f) Voucher indexes................  Destroy at option.
    (g) Purchases and stores records     5 years.
     related to disbursement vouchers.
------------------------------------------------------------------------
                                Insurance
------------------------------------------------------------------------
12. Insurance records:
    (a) Records of insurance policies    Destroy at option after
     in force, showing coverage,          expiration of such policies.
     premiums paid, and expiration
     dates.
    (b) Records of amounts recovered     6 years. See Sec.  Sec.
     from insurance companies in          125.2(g) and 225.2(g) of this
     connection with losses and of        chapter for public utilities
     claims against insurance             and licensees and natural gas
     companies, including reports of      companies.
     losses, and supporting papers.
    (c) Records of self-insurance
     against:
        (1) losses from fire and         6 years after date of last
         casualty,.                       accounting entry with respect
                                          thereto.
        (2) damage to property of        6 years after date of last
         others, and.                     accounting entry with respect
                                          thereto.
        (3) personal injuries..........  6 years after date of last
                                          accounting entry with respect
                                          thereto.
    (d) Inspectors' reports and reports  Destroy when superseded.
     of condition of property.
------------------------------------------------------------------------
                               Maintenance
------------------------------------------------------------------------
13. Maintenance project and work
 orders:
    (a) Authorizations for expenditures  5 years.
     for maintenance work to be covered
     by project or work orders,
     including memoranda showing the
     estimates of costs to be incurred.
    (b) Project or work order sheets to  5 years.
     which are posted in detail the
     entries for labor, material, and
     other charges in connection with
     maintenance, and other work
     pertaining to company operations.
    (c) Summaries of expenditures on     5 years.
     maintenance and job orders and
     clearances to operating other
     accounts (exclusive of property
     accounts).
¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤
                 Property, Depreciation and Investments
------------------------------------------------------------------------
14. Property records, excluding
 documents included in Item 2(a)(2):
    (a) Ledgers of property accounts     25 years. See Sec.  Sec.
     including land and other detailed    125.2(g) and 225.2(g) of this
     ledgers showing the cost of          chapter for public utilities
     property by classes.                 and licensees and natural gas
                                          companies.
    (b) Continuing property inventory    25 years. See Sec.  Sec.
     ledger, book or card records         125.2(g) and 225.2(g) of this
     showing description, location,       chapter for public utilities
     quantities, cost, etc., of           and licensees and natural gas
     physical units (or items) of         companies.
     property owned.
    (c) Operating equipment records....  3 years after disposition,
                                          termination of lease, or write-
                                          off of property or investment.
    (d) Office furniture and equipment   3 years after disposition,
     records.                             termination of lease or write-
                                          off of property or investment.
    (e) Automobiles, other vehicles and  3 years after disposition,
     related garage equipment records.    termination of lease or write-
                                          off of property or investment.
    (f) Aircraft and airport equipment   3 years after disposition,
     records.                             termination of lease or write-
                                          off of property or investment.
    (g) Other property records not       3 years after disposition,
     defined elsewhere.                   termination of lease or write-
                                          off of property or investment.
15. Construction work in progress
 ledgers, project or work orders, and
 supplemental records:
    (a) Construction work in progress    5 years after clearance to
     ledgers.                             property account, provided
                                          continuing inventory records
                                          are maintained; otherwise 5
                                          years after property is
                                          retired.
    (b) Project or work orders sheets    5 years after clearance to
     to which are posted in summary       property account, provided
     form or in detail the entries for    continuing inventory records
     labor, materials, and other          are maintained; otherwise 5
     charges for property additions and   years after property is
     the entries closing the project or   retired.
     work orders to property records at
     completion.

    (c) Authorizations for expenditures  5 years after clearance to
     for additions to property,           property account.
     including memoranda showing the
     detailed estimates of cost, and
     the bases therefore (including
     original and revised or subsequent
     authorizations).
    (d) Requisitions and registers of    5 years after clearance to
     authorizations for property          property account.
     expenditures.
    (e) Completion or performance        5 years after clearance to
     reports showing comparison between   property account.
     authorized estimates and actual
     expenditures for property
     additions.
    (f) Analysis or cost reports         5 years after clearance to
     showing quantities of materials      property account.
     used, unit costs, number of man-
     hours etc., in connection with
     completed construction project.
    (g) Records and reports pertaining   Destroy at option.
     to progress of construction work,
     the order in which jobs are to be
     completed, and similar records
     which do not form a basis of
     entries to the accounts.
16. Retirement work in progress
 ledgers, project or work orders, and
 supplemental records:
    (a) Project or work order sheets to  5 years after the property is
     which are posted the entries for     retired.
     removal costs, materials
     recovered, and credits to property
     accounts for cost of property
     retirement.
    (b) Authorizations for retirement    5 years after the property is
     of property, including memoranda     retired.
     showing the basis for
     determination to be retired and
     estimates of salvage and removal
     costs.
    (c) Registers of retirement work...  5 years.
17. Summary sheets, distribution         5 years.
 sheets, reports, statements, and
 papers directly supporting debits and
 credits to property accounts not
 covered by construction or retirement
 project or work orders and their
 supporting records.
18. Appraisals and valuations:
    (a) Appraisals and valuations made   3 years after appraisal.
     by the company of its properties
     or investments or of the
     properties or investments of any
     associated companies. (Includes
     all records essential thereto.).
    (b) Determinations of amounts by
     which properties or investments of
     the company or any of its
     associated companies will be
     either written up or written down
     as a result of:
        (1) Mergers or acquisitions....  10 years after completion of
                                          transaction or as ordered by
                                          the Commission.
        (2) Asset impairments..........  10 years after recognition of
                                          asset impairment.
        (3) Other bases................  10 years after the asset was
                                          written up or down.
19. Production maps, geological maps,    6 years after completion of
 reproductions, including aerial          project or work order.
 photographs, showing the location of
 all facilities the subject matter of
 which falls within the project or work
 orders of the company.
20. Engineering records, drawings,       6 years after completion of
 supporting data to include diagrams,     project or work order.
 profiles, photographs, field-survey
 notes, plot plans, detail drawings,
 and records of engineering studies
 that are part of or performed by the
 company within the project or work
 order system.
21. Records of building space occupied   6 years.
 by various departments of the company.
22. Contracts relating to property:
    (a) Contracts relating to            6 years after property is
     acquisition or sale of property.     retired or sold
    (b) Contracts and other agreements   6 years after property is
     relating to services performed in    retired or sold.
     connection with construction of
     property (including contracts for
     the construction of property by
     others for the company and for
     supervision and engineering
     relating to construction work).
23. Records pertaining to                6 years.
 reclassification of property accounts
 to conform to prescribed systems of
 accounts including supporting papers
 showing the bases for such
 reclassifications.
24. Records of accumulated provisions
 for depreciation and depletion of
 property and amortization of
 intangible property and supporting
 computation of expense:
    (a) Detailed records or analysis     3 years after retirement or
     sheets segregating the accumulated   disposition of property
     depreciation according to the
     classification of property.
    (b) Records reflecting the service   3 years after retirement or
     life of property and the             disposition of property
     percentage of salvage and cost of
     removal for property retired from
     each account for depreciable
     company property.
25. Investment records:
    (a) Records of investment in         3 years after disposition of
     associate companies.                 investment.
    (b) Records of other investments,    3 years after disposition of
     including temporary investments of   investment.
     cash.
------------------------------------------------------------------------

                           Purchase and Stores
------------------------------------------------------------------------
26. Procurement:
    (a) Agreements entered into for the
     acquisition of goods or the
     performance of services. Includes
     all forms of agreements such as
     but not limited to: Letters of
     intent, exchange of
     correspondence, master agreements,
     term contracts, rental agreements,
     and the various types of purchase
     orders:
        (1) For goods or services        6 years. See Sec.  Sec.
         relating to property             125.2(g) and 225.2(g) of this
         construction.                    chapter for public utilities
                                          and licensees and natural gas
                                          companies.
        (2) For other goods or services  6 years.
    (b) Supporting documents including   6 years. See Sec.  Sec.
     accepted and unaccepted bids or      125.2(g) and 225.2(g) of this
     proposals (summaries of unaccepted   chapter for public utilities
     bids or proposals may be kept in     and licensees and natural gas
     lieu of originals) evidencing all    companies.
     relevant elements of the
     procurement.
27. Material ledgers: Ledger sheets of   6 years after the date the
 materials and supplies received,         records/ledgers were created.
 issued, and on hand.
28. Materials and supplies received and  6 years. See Sec.  Sec.
 issued: Records showing the detailed     125.2(g) and 225.2(g) of this
 distribution of materials and supplies   chapter for public utilities
 issued during accounting periods.        and licensees and natural gas
                                          companies).
------------------------------------------------------------------------
                           Revenue Accounting
------------------------------------------------------------------------
29. Miscellaneous billing data: Billing  5 years.
 department's copies of contracts with
 customers (other than contracts in
 general files).
30. Revenue summaries: Summaries of      5 years.
 monthly revenues according to classes
 of service. Including summaries of
 forfeited discounts and penalties.
------------------------------------------------------------------------
                                   Tax
------------------------------------------------------------------------
31. Tax records:
    (a) Copies of tax returns and
     supporting schedules filed with
     taxing authorities, supporting
     working papers, records of appeals
     of tax bills, and receipts for
     payment. See Item 11 for vouchers
     evidencing disbursements:
        (1) Income tax returns.........  2 years after final tax
                                          liability is determined.
        (2) Agreements between and       2 years after final tax
         schedule of allocation by        liability is determined.
         associate companies of
         consolidated Federal income
         taxes.
     (b) Other taxes, including State
     or local property or income taxes.
        (1) Property tax returns.......  2 years after final tax
                                          liability is determined.
        (2) Sales and other use taxes..  2 years.
        (3) Other Taxes................  2 years after final tax
                                          liability is determined.
    (c) Filings with taxing authorities  5 years after discontinuance of
     to qualify employee benefit plans.   plan.
    (d) Information returns and reports  3 years after final tax
     to taxing authorities.               liability is determined.
------------------------------------------------------------------------
                                Treasury
------------------------------------------------------------------------
32. Statements of funds and deposits:
    (a) Summaries and periodic           Destroy at option after
     statements of cash balances on       completion of audit by
     hand and with depositories for       independent accountants.
     company or associate.
    (b) Requisitions and receipts for    Destroy at option after funds
     funds furnished associates and       have been returned or
     others.                              accounted for.
    (c) Statements of periodic deposits  Retain records for the most
     with external fund administrators    recent 3 years.
     or trustees.
    (d) Statements of periodic           Retain records for the most
     withdrawals from external fund.      recent 3 years.
33. Records of deposits with banks and
 others:
    (a) Statements from depositories     Destroy at option after
     showing the details of funds         completion of audit by
     received, disbursed, transferred,    independent accountants.
     and balances on deposit, bank
     reconcilement papers and
     statements of interest credits.
    (b) Check stubs, registers, or       6 years.
     other records of checks issued.
------------------------------------------------------------------------
                             Payroll Records
------------------------------------------------------------------------
34. Payroll records:
    (a) Payroll sheets or registers of   6 years.
     payments of salaries and wages,
     pensions and annuities paid by
     company or by contractors of its
     account.
    (b) Records showing the              6 years.
     distribution of salaries and wages
     paid for each payroll period and
     summaries or recapitulations of
     such distribution.
------------------------------------------------------------------------

                              Miscellaneous
------------------------------------------------------------------------
35. Financial, operating and             5 years.
 statistical annual reports regularly
 prepared in the course of business for
 internal administrative or operating
 purposes.
36. Budgets and other forecasts          3 years.
 (prepared for internal administrative
 or operating purposes) of estimated
 future income, receipts and
 expenditures in connection with
 financing, construction and
 operations, including acquisitions and
 disposals of properties or investments.
37. Periodic or special reports filed
 by the company on its own behalf with
 the Commission or with any other
 Federal or State rate-regulatory
 agency, including exhibits or
 amendments to such reports:
    (a) Reports to Federal and State     5 years.
     regulatory commissions including
     annual financial, operating and
     statistical reports.
    (b) Monthly and quarterly reports    5 years.
     of operating revenues, expenses,
     and statistics.
38. Advertising: Copies of               2 years.
 advertisements by or for the company
 on behalf of itself or any associate
 company in newspapers, magazines, and
 other publications, including costs
 and other records relevant thereto
 (excluding advertising of appliances,
 employment opportunities, routine
 notices, and invitations for bids all
 of which may be destroyed at option).
------------------------------------------------------------------------

0
7. Part 369 is added to Subchapter U to read as follows:

PART 369--STATEMENTS AND REPORTS (SCHEDULES)

    Authority: 42 U.S.C. 16451-16463.

Sec.  369.1  FERC Form No. 60, Annual report of centralized service
company.

    (a) Prescription. The form of annual report for centralized service
companies, designated as FERC Form No. 60, is prescribed for the
reporting year 2008 and each subsequent year.
    (b) Filing requirements. (1) Who must file. Unless the holding
company system is exempted or granted a waiver by Commission rule or
order pursuant to Sec. Sec.  366.3 and 366.4, every centralized service
company (See Sec.  367.2 of this chapter) in a holding company system
must prepare and file electronically with the Commission the FERC Form
No. 60 then in effect pursuant to the General Instructions set out in
the form.
    (2) When to file and what to file.
    (i) The annual report for the year ending December 31, 2008 must be
filed by May 1, 2009. The annual report for each year thereafter must
be filed by May 1 of the following years.
    (ii) The annual report in effect must be filed with the Commission
as prescribed in Sec.  385.2011 of this chapter and as indicated in the
General Instructions set out in the form, and must be properly
completed and verified. Filing on electronic media pursuant to Sec.
385.2011 of this chapter is required.

PART 375--THE COMMISSION

0
8. The authority citation for part 375 continues to read as follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w, 3301-3432; 16
U.S.C. 791-825r, 2601-2645; 42 U.S.C. 7101-7352; 42 U.S.C. 16451-
16463.

0
9. In Sec.  375.303, paragraphs (c), (d), (e), (f), (g) and (h) are
revised to read as follows:

Sec.  375.303  Delegations to the Chief Accountant.

* * * * *
    (c) Issue interpretations of the Uniform Systems of Accounts for
public utilities and licensees, centralized service companies, natural
gas companies and oil pipeline companies.
    (d) Pass upon any proposed accounting matters submitted by or on
behalf of jurisdictional companies that require Commission approval
under the Uniform Systems of Accounts, except that if the proposed
accounting matters involve unusually large transactions or unique or
controversial features, the Chief Accountant must present the matters
to the Commission for consideration.
    (e) Pass upon applications to increase the size or combine property
units of jurisdictional companies.
    (f) Accept for filing FERC Form No. 60, FERC-61, and Quarterly
Financial Report Form Nos. 3-Q and 6-Q if such filings are in
compliance with Commission orders or decisions, and when appropriate,
notify the party of such acceptance. Issue and sign deficiency letters
if the filing fails to comply with applicable statutory requirements,
and with all applicable Commission rules, regulations, and orders for
which a waiver has not been granted.
    (g) Deny or grant, in whole or in part, requests for waiver of the
reporting requirements for and requests for extensions of time for the
filing of the forms under Sec. Sec.  141.400, 260.300, 357.4, 366.23
and part 369 of this chapter and the filing of these forms on
electronic media under Sec.  385.2011 of this chapter.
    (h) Deny or grant, in whole or in part, requests for waiver of the
requirements of parts 352, 356, 367 and 368 of this chapter, except
that, if the matters involve unusually large transactions or unique or
controversial features, the Chief Accountant must present the matters
to the Commission for consideration.
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[FR Doc. 06-9003 Filed 11-6-06; 8:45 am]

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