[Federal Register: January 29, 2008 (Volume 73, Number 19)]
[Proposed Rules]
[Page 5136-5151]
[DOCID:fr29ja08-20]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 41 and 141

[Docket No. RM08-5-000]

Revisions to Forms, Statements, and Reporting Requirements for
Electric Utilities and Licensees

Issued January 18, 2008.
AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Notice of Proposed Rulemaking.

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

SUMMARY: In this Notice of Proposed Rulemaking, the Federal Energy
Regulatory Commission (Commission) proposes to amend its financial
forms, statements, and reports for electric utilities and licensees,
contained in FERC Form Nos. 1, 1-F, and 3-Q. The proposed revisions are
the result of comments received in response to the Commission's Notice
of Inquiry (NOI) seeking comment on whether revisions to these forms
are needed. Based on the comments received, the Commission proposes
certain revisions to Forms Nos. 1, 1-F, and 3-Q and seeks comment on
other suggestions for changes. These revisions are proposed to ensure
that the Commission and the public have sufficient information to
assess the justness and reasonableness of public utility rates. The
revisions will enhance the forms' usefulness by updating them to better
reflect current electric industry markets and provide cost information
useful to the Commission and the utilities' customers.

DATES: Comments must be filed on or before March 14, 2008.

ADDRESSES: You may submit comments, identified by Docket No. RM08-5-
000, by one of the following methods:
    Agency web site: http://www.ferc.gov. Follow the instructions for

submitting comments via the eFiling link found in the Comment
Procedures Section of the preamble.
    Mail: Commenters unable to file comments electronically must mail
or hand deliver an original and 14 copies of their comments to: Federal
Energy Regulatory Commission, Secretary of the Commission, 888 First
Street, NE., Washington, DC 20426. Please refer to the Comment
Procedures Section of the preamble for additional information on how to
file paper comments.

FOR FURTHER INFORMATION CONTACT:
Michelle Veloso (Technical Information), Forms Administration and Data
Branch, Division of Financial Regulation, Office of Enforcement,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, Telephone:<PHONE_NUMBER>, E-mail:
<EMAIL_ADDRESS>
Scott Molony (Technical Information), Regulatory Accounting Branch,
Division of Financial Regulation, Office of Enforcement, Federal Energy
Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
Telephone:<PHONE_NUMBER>, E-mail<EMAIL_ADDRESS>Jane E. Stelck (Legal Information), Office of Enforcement, Federal
Energy

Regulatory Commission, 888 First Street, NE., Washington, DC 20426,
Telephone:<PHONE_NUMBER>, E-mail<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Introduction

    1. The Commission proposes to amend its financial forms, reports,
and statements for public utilities \1\ and licensees. Specifically,
the Commission proposes changes to FERC Form No. 1 (Form 1), Annual
report for major electric utilities, licensees, and others; FERC Form
No. 1-F (Form 1-F), Annual report for nonmajor public utilities,
licensees and others; and FERC Form No. 3-Q (Form 3-Q), Quarterly
report of electric utilities, licensees, and natural gas companies. On
September 20, 2007, the Commission issued a Notice of Proposed
Rulemaking (NOPR) proposing changes to FERC Form Nos. 2, 2-A and 3-Q,
annual and quarterly reporting requirements for interstate natural gas
companies.\2\ This NOPR pertains only to the financial forms filed by
public utilities and licensees. The Commission is proposing these
changes to improve the forms, reports and statements to provide, in
fuller detail, the information the Commission needs to carry out its
responsibilities under the Federal Power Act (FPA) to ensure that rates
are just and reasonable, and to provide public utility customers, state
commissions, and the public the information they need to assess the
justness and reasonableness of electric rates. Public utility customers
need ready access to data to make informed assessments regarding the
propriety of the rates charged, particularly customers of utilities
without formula rates. The NOPR proposes changes that would require
public utilities to provide additional information regarding
implementing formula rates and affiliate transactions. However, by
seeking to improve the Form 1, we clarify that we do not intend to
convert the Form 1 into a section 205 rate case filing or into a cost
and revenue study. Instead, these improvements will assist interested
parties in their evaluation of a utility's rates. Therefore, the
revised Form 1 will not be used to limit or change an entity's rights
or obligations under the FPA and our regulations. Nor will the revised
Form 1 change our obligation to rule on complaints, petitions, or other
requests for relief based on a full record and substantial evidence.
The Commission seeks comments on the proposed changes as well as on
other issues. The proposed effective date for implementation of these
changes is calendar year 2009. Accordingly, companies subject to the
new requirements would file their new Form 3-Qs beginning with the Form
3-Q for the first calendar quarter of 2009 and their new Forms 1 and 1-
F in April 2010 for calendar year 2009. In addition, the Commission
proposes to eliminate the filing requirement for public utilities not
subject to the Commission's jurisdiction under section 201 of the
FPA.\3\
---------------------------------------------------------------------------

    \1\ While 18 CFR 141.1 nominally refers to ``electric
utilities,'' this regulation in fact applies to ``public
utilities.'' See 16 U.S.C. 824; accord 18 CFR part 101 Definitions
29, 40. The reference in 18 CFR 141.1 to ``electric utilities''
predates the 1978 addition of separate statutorily defined
``electric utilities;'' see 16 U.S.C. 796(22), when the only
utilities that were Commission regulated under the Federal Power Act
were the statutorily-defined public utilities, see 16 U.S.C. 824.
E.g., 18 CFR 141.1 (1977).
    \2\ The September 20, 2007 NOPR was noticed in Docket No. RM07-
9-000. We have assigned a new docket number, RM08-5-000, for this
NOPR addressing electric utilities and licensees.
    \3\ 16 U.S.C. 824.
---------------------------------------------------------------------------

II. Background

    2. On September 20, 2007, the Commission issued a NOPR proposing
changes to the financial forms filed by interstate natural gas pipeline
companies subject to the Commission's jurisdiction.\4\ The NOPR
followed a financial form review by Commission staff that included
meetings with both filers and users of FERC Forms 1, 1-F, 2, 2-A, and
3-Q data in the fall of 2006. As a result of those discussions, the
Commission issued a Notice of Inquiry (NOI) on February 15, 2007, which
sought comments on the need for changes or additions to the financial
information reported in these forms.\5\
---------------------------------------------------------------------------

    \4\ Revisions to Forms, Statements, and Reporting Requirements
for Natural Gas Pipelines, 72 FR 54860 (Sept. 27, 2007), FERC Stats.
& Regs. ] 32,623 (2007).
    \5\ Assessment of Information Requirements for FERC Financial
Forms, Notice of Inquiry, 72 FR 8316 (Feb. 26, 2007), FERC Stats. &
Regs. ] 35,554 (2007). While the outreach meetings addressed only
Forms 1 and 2, the NOI invited comments from filers of Forms 6 and
6-Q as well.
---------------------------------------------------------------------------

    3. The Commission received 35 comments from filers and users of the
annual and quarterly FERC Forms 1, 1-F, 2, 2-A, 3-Q, 6, and 6-Q,
followed by 15 reply comments filed in response to the NOI.\6\ After
reviewing the comments, the Commission determined that each of the
forms, representing different industries subject to the Commission's
jurisdiction, merited its own separate review. Accordingly, the NOPR
issued on September 20, 2007, addressed only changes, additions, and
amendments to the forms applicable to interstate natural gas companies.
---------------------------------------------------------------------------

    \6\ Parties who filed comments and reply comments are listed on
Appendix A.
---------------------------------------------------------------------------

    4. In this NOPR, we focus on Form 1, Annual report of major
electric utilities, licensees and others; Form 1-F, Annual report for
nonmajor public utilities and licensees; and Form 3-Q, quarterly
financial report of electric utilities, licensees, and natural gas
companies.\7\ Sections 304, 307 and 309 of the FPA authorize the
Commission to collect such data.\8\
---------------------------------------------------------------------------

    \7\ A major electric utility is one that had, in the last three
consecutive years, sales or transmission services that exceeded (1)
one million megawatt-hours of total sales; (2) 100 megawatt-hours of
sales for resale; (3) 500 megawatt-hours of power exchanges
delivered; or (4) 500 megawatt-hours if wheeling for others.
Utilities and licensees that are not classified as major and had
total sales in each of the last three consecutive years of 10,000
megawatt-hours or more are classified as Nonmajor. See 18 CFR part
101.
    \8\ 16 U.S.C. 825a, 825f, 825h; see also 16 U.S.C. 825j.
---------------------------------------------------------------------------

    5. Form 1, in particular, requires information to be filed on an
annual basis by public utilities and certain hydroelectric production
sources under the Commission's jurisdiction. Form 1 collects corporate
information, summary financial information, and balance sheet and
income information, as well as electric plant, sales, operating and
statistical data.
    6. Since its inception, Form 1 has been amended by the Commission
on numerous occasions to address and keep pace with the transformation
of the electric industry. In Order No. 529, issued in 1990, the
Commission modified Form 1 to improve reporting of bulk power
transactions.\9\ In 1993, in Order No. 552, the Commission revised the
Uniform System of Accounts (USofA) to account for allowances under the
1990 Clean Air Act Amendments, and adopted corresponding reporting
schedules for Form 1.\10\
---------------------------------------------------------------------------

    \9\ Amendments to FERC Form Nos. 1 and 1-F, and Annual Charges,
and Fuel Cost and Purchased Economic Power Adjustment Clauses, Order
No. 529, 55 FR 47311, FERC Stats. & Regs. ] 30,904 (1990).
    \10\ Revisions to Uniform System of Accounts to Account for
Allowances under the Clean Air Act Amendments of 1990 and
Regulatory-Created Assets and Liabilities and to Form Nos. 1, 1-F, 2
and 2-A, Order No. 552, 58 FR 17982, FERC Stats. & Regs. ] 30,967
(1993).
---------------------------------------------------------------------------

    7. In 2002, the Commission issued Order No. 626 which required
electronic filing of Form 1 beginning with the Form 1 filed for
2002.\11\ In the same year, the Commission amended the USofA to
establish accounting requirements to recognize changes in the fair
value of certain security

investments, derivative instruments, and hedging activities, and added
new schedules and accounts to Form 1.\12\
---------------------------------------------------------------------------

    \11\ Electronic Filing of FERC Form No. 1, and Elimination of
Certain Designated Schedules in Form Nos. 1 and 1-F, Order No. 626,
67 FR 36093, FERC Stats. & Regs. ] 31,130 (2002).
    \12\ Accounting and Reporting of Financial Instruments,
Comprehensive Income, Derivatives and Hedging Activities, Order No.
627, 67 FR 70006, FERC Stats. & Regs. ] 31,134 (2002).
---------------------------------------------------------------------------

    8. In Order No. 646, the Commission added the requirement of
quarterly reporting for entities that filed Forms 1 and 1-F, and
updated annual reporting requirements to add new schedules on ancillary
services and electric transmission peak loads.\13\ In 2005, in Order
No. 668, the Commission amended its regulations to update the
accounting requirements for public utilities and licensees, including
independent system operators (ISOs) and regional transmission
organizations (RTOs).\14\ The Commission also revised its USofA with
corresponding changes to Form 1 to accommodate the restructuring
changes that occurred in the electric industry as a result of open-
access transmission service and increasing competition in wholesale
bulk power markets.\15\
---------------------------------------------------------------------------

    \13\ Quarterly Financial Reporting and Revisions to the Annual
Reports, Order No. 646, FERC Stats. & Regs. ] 31,158, order on
reh'g, Order No. 646-A, FERC Stats. & Regs. ] 31,163 (2004).
    \14\ Accounting and Financial Reporting for Public Utilities
Including RTOs, Order No. 668, FERC Stats. & Regs. ] 31,199 (2005),
reh'g denied, Order No. 668-A, FERC Stats. & Regs. ] 31,215 (2006).
    \15\ Id.
---------------------------------------------------------------------------

III. Comments to NOI

    9. As noted, the Commission received 35 comments and 15 reply
comments in response to the NOI. Generally, the comments respond to the
12 questions posed in the NOI, and some raise additional issues.\16\
Twenty-one initial comments or motions to intervene without filing
comments and four reply comments specifically address Forms 1, 1-F and
3-Q. As might be anticipated, the Form 1 public utility filers
generally assert that the existing Form 1 requires an excessive amount
of data at considerable expense; the information now provided is
sufficient to permit an evaluation of the filers' jurisdictional rates;
and additional filing requirements would be burdensome. On the other
side, Form 1 users, including nonprofit publicly-owned utilities and
state commissions, state that more information is needed to permit rate
evaluation and thus determine whether rates may be unjust and
unreasonable.
---------------------------------------------------------------------------

    \16\ A copy of the 12 questions posed in the NOI is attached as
Appendix B.
---------------------------------------------------------------------------

    10. The Edison Electric Institute (EEI) argues that its members
currently file large quantities of financial data with the Commission
and other federal and state agencies, and that the information filed
with the Commission already provides sufficient financial
information.\17\ EEI also argues that disclosing details about a
company's costs and facilities can disadvantage that company in
competing with others, and that information on facility locations and
security safeguards should be released under confidentiality provisions
and only to those who demonstrate a need for the information.\18\ In
EEI's view, Forms 1 and 3-Q are intended to provide basic financial
statements that capture a utility's current financial status, and are
not intended as substitutes for rate cases.\19\ EEI states that any
significant additions or changes to the financial forms, other than
minor or technical changes, could impose a substantial additional
burden on companies.
---------------------------------------------------------------------------

    \17\ Comments of EEI at 8.
    \18\ Id. at 7.
    \19\ Id. at 8.
---------------------------------------------------------------------------

    11. Further, EEI asserts that the information provided in Form 1 is
sufficient to audit formula rates.\20\ EEI argues that, to the extent
formula rates are tied to fuel costs, the Commission already collects
sufficient information on those costs through the FERC Form No. 423,
and that, should the Commission need additional information, it can
request the information in an audit rather than impose an additional
burden on filers.\21\
---------------------------------------------------------------------------

    \20\ Id. at 9.
    \21\ Id. On November 2, 2007, the Commission issued a NOPR in
Docket No. RM07-18 seeking comments on the proposed elimination of
Form 423. See Elimination of FERC Form No. 423, Notice of Proposed
Rulemaking, 72 FR 65246, FERC Stats. & Regs. ] 32,624 (2007).
---------------------------------------------------------------------------

    12. In response to the NOI's question of whether the Commission
should require reporting of information on demand response initiatives,
EEI notes that other agencies, such as the Department of Energy's
Energy Information Administration (EIA) are also considering whether to
request similar information.\22\ EEI encourages the Commission to
collaborate with EIA to ensure that any demand response information
collected is streamlined, avoids duplicative collection efforts, and is
collected from municipalities and rural cooperatives in addition to
shareholder-owned utilities.\23\
---------------------------------------------------------------------------

    \22\ Id. at 11.
    \23\ Id.
---------------------------------------------------------------------------

    13. EEI also asserts that the information contained in Form 3-Q is
of marginal value beyond the information already provided in Form
1.\24\ EEI suggests that the Commission perform a cost-benefit analysis
of the continued viability of Form 3-Q.\25\ Similarly, EEI asks the
Commission to reconsider its handling of commercially sensitive
information contained in the forms, and asks that the Commission not
release detailed information regarding generating plant costs and
operating performance.\26\
---------------------------------------------------------------------------

    \24\ Id. at 12.
    \25\ Id. at 13.
    \26\ Id.
---------------------------------------------------------------------------

    14. Duke Energy Corporation (Duke) supports the comments filed by
EEI and agrees that the information currently reported in Form 1 is
sufficient to audit formula rates and to permit evaluation of
jurisdictional rates.\27\ Duke also states that the annual and
quarterly reports are not the appropriate filings in which to report
demand response initiatives, and that such information is typically
reported to state commissions.\28\ In general, Duke argues that unless
new information is clearly justified by a valid business or regulatory
need, Duke would oppose any added requirements as burdensome.\29\ Duke
cites several current reporting requirements that it considers
unnecessary or burdensome: (1) Form 1, page 105 (publishing the
salaries of Executive Officers is unnecessary as that information is
publicly available in SEC filings); (2) Form 1, pages 202 and 203
(Nuclear Fuel Materials) Duke argues that the expenses in Account
120.10 should be consolidated into one line that includes Allowance for
Funds Used During Construction (AFUDC); \30\ (3) Form 1, page 216
(Construction Work in Progress) Duke argues that the instructions for
this page should be modified to require reporting of projects with
balances of $10 million or greater, with all remaining balances
aggregated functionally; (4) Form 1, pages 228 and 229 (Emission
Allowances) Duke argues that these pages are not meaningful to users
since SO2 and NOX must be combined. Duke suggests
that separate pages be provided for SO2 and NOX
or any other type of emission that may be required in the future; (5)
Form 1, pages 232, 233 and 278 (Other Regulatory Assets, Miscellaneous
Deferred Debits & Other Regulatory Liabilities) Duke notes that each of
these pages allows grouping of items with balances of $50,000 or less,
and suggests that this limit should be increased to $1 million as it
would be a more meaningful threshold for large filers; (6) Form 1,
pages 262 and 263 (General Taxes) Duke argues that these pages are time
consuming to prepare and difficult for users to reconcile with the
financial statements; (7) Form 1,

page 269 (Other Deferred Credits) this page allows grouping of items
with a balance of $10,000 or less, and Duke suggests that this
threshold be increased to a more meaningful level; (8) Form 1, pages
301 and 326 (Electric Operating Revenues and Purchased Power) Duke
states that it is unsure if the work required to break down costs
between energy and demand is necessary since some organized markets are
not structured in this manner; (9) Form 1, page 304 (Revenue by Rate
Codes) Duke argues that reporting revenue by rate code is unnecessary
as rate codes are not necessarily consistent across utilities for the
services provided. Duke suggests that it would be less burdensome to
continue revenue reporting on classification only; (10) Form 1, pages
310 and 326 (Out of Period Adjustment (AD)) Duke asserts that the
structure of organized markets causes member utilities to have a large
number of ``out of period'' adjustments, and that the requirement to
carve out the ``adjustments'' is overly burdensome; (11) Form 1, pages
328-30 (Transmission of Electricity for Others) Duke argues that
columns (b) Energy Received From, and (c) Energy Delivered To, report
information that provides little value to users and should be deleted.
Duke asserts that this is true also for columns (f) Point of receipt
and (g) Point of delivery. Additionally, Duke asserts that the
requirement to footnote all amounts listed in column (m) creates time
consuming work and provides little value; (12) Form 1, page 332
(Megawatt Hours Related to Transmission Charges) Duke argues that the
requirement to report megawatt hours relating to transmission charges
is overly burdensome because many sellers do not report transmission
hours on invoices and it is very time consuming to collect the
information by other means; (13) Form 1, pages 352 and 353 (Research
and Development (R&D)) Duke argues that the requirement to list all R&D
items costing more than $5,000 is overly burdensome and should be
raised to a more reasonable level such as $100,000; (14) Form 1, pages
422-25 (Miles of Transmission Lines) Duke argues that the level of
detail required for reporting miles of transmission lines is extremely
burdensome and suggests that a requirement to report miles of
transmission lines (by state or legal entity) and totals of type of
supporting structures by voltage would be sufficient; (15) Form 1, page
426 (Substations) Duke argues that the requirement to enter the
necessary information related to several thousand substations is
burdensome and of questionable value to users.\31\ In addition, Duke
identifies several technical issues that require revision, and
instructions that require modification.\32\ These issues are listed in
Appendix C.
---------------------------------------------------------------------------

    \27\ Initial Comments of Duke at 2-3.
    \28\ Id. at 3.
    \29\ Id.
    \30\ See 18 CFR part 101, Electric Plant Instructions, 17(a).
    \31\ Id. at 5-7.
    \32\ Id. at 7-9.
---------------------------------------------------------------------------

    15. Public Service Electric & Gas Company (PSE&G) states that the
data in Forms 1 and 3-Q provide sufficient information for the
Commission to monitor cost-based rates to ensure that rates are just
and reasonable.\33\ PSE&G, however, urges the Commission to re-examine
the value of Form 3-Q to assess whether the benefits of quarterly
reporting outweigh the burden of providing such information.\34\ PSE&G
posits that the annual nature of Form 1 provides users with a
comprehensive picture of a utility's operations, which is preferable to
the quarterly snapshot provided by Form 3-Q.\35\
---------------------------------------------------------------------------

    \33\ Comments of Public Service & Electric Co. at 2.
    \34\ Id. at 5.
    \35\ Id.
---------------------------------------------------------------------------

    16. Wisconsin Electric Power Company (Wisconsin Electric) argues
that where differences between the accounting requirements of a state
regulatory commission and this Commission exist, a utility should not
be required to adhere to the Commission's USofA.\36\ Wisconsin Electric
cites a Commission order in which Wisconsin Electric's request for
waiver of Form 1 was denied.\37\ Wisconsin Electric proposes other
changes to the financial forms, including: (1) A perceived disconnect
between purchases and sales reported on pages 326-27 and 310-11 of Form
1 and purchase and sales amounts reported on page 401a (Wisconsin
Electric suggests that this disconnect could be rectified by adding
extra lines on page 401a to report off-system purchases and sales); (2)
Purchases and Sales, pages 326 and 327 could be simplified by
eliminating one of the category designations, or by minimizing the
amount of data to be reported; and (3) the Commission should create a
new report, separate from Form 1, that is filed by entities
participating in an RTO which would include each of the new RTO adapted
schedules.\38\
---------------------------------------------------------------------------

    \36\ Comments of Wisconsin Electric at 3.
    \37\ Id.
    \38\ Id. at 6-8.
---------------------------------------------------------------------------

    17. Comments filed by MidAmerican Energy Company and PacifiCorp
(collectively, MidAmerican) propose that the Commission eliminate the
filing requirement for pages 422 and 423, Transmission Line Statistics,
and for pages 426 and 427, Substations. MidAmerican asserts that pages
422 and 423 are unnecessary because the information reported on pages
424 and 425, Transmission Lines Added During the Year, provides
sufficient information.\39\ MidAmerican asserts further that the
information reported on pages 426 and 427 requires significant effort
to maintain and is burdensome.\40\
---------------------------------------------------------------------------

    \39\ Initial Comments of MidAmerican Energy Company and
PacifiCorp at 4.
    \40\ Id.
---------------------------------------------------------------------------

    18. FirstEnergy Services Company (FirstEnergy) asserts that the
purpose of the annual reports is not to provide information to permit
an evaluation of the filers' jurisdictional rates, but to address the
Commission's accounting requirements.\41\ With respect to formula
rates, FirstEnergy asserts that the formula rate, in some instances, is
tied to specific Form 1 items (for example, FirstEnergy's Attachment O
formula rate under Midwest Independent Transmission System Operator,
Inc.'s open access tariff), and additional data is not required.\42\ If
the transmission owner, however, proposes to make the initial rate
calculation under its formula, it would be appropriate for the
transmission owner to file the additional information needed to bridge
the gap between the formula rate in the tariff and the Form 1 data.
FirstEnergy states that having the additional information in the tariff
is preferable to modifying existing Form 1 requirements.\43\ In
addition, FirstEnergy argues that the metrics used by the Commission to
define a major utility for reporting purposes should be updated to
relieve the reporting requirement for small utilities; however,
FirstEnergy does not offer any specific suggestions for how this might
be accomplished.\44\ FirstEnergy also states that the requirement to
report the type of supporting structure and size of conductor for
transmission lines in columns (e) and (i) of pages 422-23 of Form 1
should be eliminated.\45\
---------------------------------------------------------------------------

    \41\ Comments of FirstEnergy at 3. FirstEnergy states that its
comments are filed on behalf of its affiliates American Transmission
Systems, Inc., Cleveland Electric Illuminating Co., Jersey Central
Power and Light Co., Metropolitan Edison Co., Ohio Edison Co.,
Pennsylvania Electric Co., Pennsylvania Power Co., Toledo Edison
Co., and York Haven Power Co.
    \42\ Id. at 6.
    \43\ Id.
    \44\ Id. at 11.
    \45\ Id.
---------------------------------------------------------------------------

    19. Southern Company Services, Inc. (SCS), on behalf of Alabama
Power Company, Georgia Power Company, Gulf Power Company, Mississippi
Power Company and Southern Power Company (collectively, Southern)
supports the comments filed by EEI.

Southern asserts that the annual and quarterly reports provide
sufficient data for the public to make an evaluation of the filers'
rates.\46\ In addition, Southern argues that certain information now
included in the forms is unnecessary and should be eliminated. Southern
states that at present, the electric industry reports detailed
information regarding wholesale electric transactions through the
Commission's Electric Quarterly Report (EQR) and the same information
should not be required to be re-filed in Forms 1 and 3-Q.\47\ Rather,
Southern argues that a one line entry summarizing the amount of
wholesale energy sold should be sufficient. In addition, Southern
requests that the Commission restrict access to confidential
information when appropriate. Finally, Southern does not believe that
the Commission should require reporting of information on demand
response initiatives.
---------------------------------------------------------------------------

    \46\ Comments of SCS at 2.
    \47\ Id. at 4.
---------------------------------------------------------------------------

    20. Consolidated Edison Co. of New York, Inc. and Orange and
Rockland Utilities, Inc. (jointly, the Companies) take no position on
whether the Commission should institute a rulemaking to revise the
existing reporting requirements. The Companies do, however, urge the
Commission to closely scrutinize any proposals to avoid disruptions to
public utilities' existing reporting requirements.\48\ The Companies'
comments focus on the question of whether the Commission should require
reporting of information on demand response initiatives. The Companies
note that EIA currently monitors demand side management activities and
collects information on those activities on an annual basis. The
Companies argue that given the public availability of the EIA data,
through EIA Form 861, there appears to be little benefit from
duplicating the demand response data in Form 1.\49\ The Companies
assert that if the Commission required utilities to report different
demand response data in Form 1 than they report in EIA Form 861, the
use of different reporting periods or different categories for
aggregation, for example, could result in conflicting information that
could diminish the usefulness of the data.\50\ Thus, the Companies
argue that if the Commission imposes such a requirement, it is
important that it conform its reporting requirement with the EIA
requirement.\51\
---------------------------------------------------------------------------

    \48\ Comments of the Companies at 1.
    \49\ Id. at 3.
    \50\ Id.
    \51\ Id.
---------------------------------------------------------------------------

    21. The American Public Power Association (APPA) states that the
annual and quarterly forms do not provide sufficient information to
permit an evaluation of the filers' jurisdictional rates.\52\ According
to APPA, the Commission's financial forms have not kept pace with
standard ratemaking practice, and should be revised to collect the
information typically needed in transmission rate cases.\53\ APPA
states that transmission rates based on the Commission's Order No. 888
pro forma open access transmission tariff (OATT) \54\ model use a load
divisor based on replacing part of the actual system peak with peak-
coincident transmission reservations, but that amount is not reported
on Form 1. APPA recommends that the standard rate divisor, as specified
in Order No. 888, should be reported on Form 1, and that plant,
depreciation, and expenses for facilities defined as transmission in
the USofA but assigned to other functions, be separately
identified.\55\ APPA also recommends that Accounts 447 (Sales for
resale) and 456 (Other electric revenues) be modified to provide
sufficient information to compute the revenue that would be considered
creditable under Commission policy.\56\ APPA recommends that revenues
be broken down into the various firmness and duration classes of OATT
and grandfathered agreements and presented separately. APPA also
recommends that revenues from ``wholesale distribution'' be separately
identified.\57\
---------------------------------------------------------------------------

    \52\ Comments of APPA at 2.
    \53\ Id. at 3.
    \54\ Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities; Recovery
of Stranded Costs by Public Utilities and Transmitting Utilities,
Order No. 888, FERC Stats. & Regs. ] 31,036 (1996), order on reh'g,
Order No. 888-A, FERC Stats. & Regs. ] 31,048, order on reh'g, Order
No. 888-B, 81 FERC ] 61,248 (1997), order on reh'g, Order No. 888-C,
82 FERC ] 61,046 (1998), aff'd in relevant part sub nom.
Transmission Access Policy Study Group v. FERC, 225 F.3d 667 (D.C.
Cir. 2000), aff'd sub nom. New York v. FERC, 535 U.S. 1 (2002).
    \55\ Id.
    \56\ Id. at 3-4.
    \57\ Id. at 4.
---------------------------------------------------------------------------

    22. With respect to formula rates, APPA states that Form 1
information and the rate policies embedded in rate formulas are not
well matched, and substantial adjustments are often necessary. APPA
states that the ``translation instructions'' that are part of many
formula rates provide a very useful checklist of areas in which Form 1
information as currently collected is not fulfilling its ``rate-
related'' purpose. APPA cautions, however, that if the Commission makes
any changes, it must be sensitive to the fact that current formula
rates reference Form 1 data by page numbers, line numbers, and cost
categories, and that if changes are made to the line numbers or cost
categories, parties would have to renegotiate contracts to revise the
data sources.\58\ Thus, APPA recommends that any modifications that may
be made to Form 1 be made in ways that add to, rather than redo, the
current numbering system and categories.\59\ APPA also recommends that
Form 1 be amended to collect additional information on transmission
facilities. APPA states that on page 422, it would be useful to have an
additional table showing total transmission line-miles and the amount
of line-miles added in the most recent reporting year.\60\ Finally,
APPA urges the Commission to keep Form 1 data publicly available.\61\
---------------------------------------------------------------------------

    \58\ Id. at 4.
    \59\ Id. at 5.
    \60\ Id. at 6.
    \61\ Id. at 7.
---------------------------------------------------------------------------

    23. Consumers Energy Company (Consumers) states that it relies on
Form 1 data to assess the justness and reasonableness of rates proposed
and charged by the transmission providers from which Consumers obtains
electric transmission service. Consumers states that it does not
believe that wholesale changes to the forms are required, but focuses
its concern on the sufficiency of information provided with respect to
assessing formula rates.\62\ Consumers states that since a new rate
proceeding is not initiated when formula rates are reset, a customer's
sole recourse, if it believes that the rates are unjust and
unreasonable, is to file a complaint under section 206 of the FPA.\63\
Consumers recommends that the Commission require that electric
transmission owners for whom self-implementing formula rates have been
approved, provide sufficient information in Form 1 regarding
Transmission Plant Additions to allow an investigation of the prudence
of the additions. Specifically, Consumers recommends the following: for
each project put into service during the calendar year, the
transmission owner should be required to provide: (1) A description of
the project; (2) the planned project cost as it was identified in the
regional planning process; (3) the actual project cost; (4) whether the
project was part of an approved regional plan; and (5) the
justification for the project.\64\ Consumers states that the ability to
differentiate between projects

that have been approved as part of a regional plan versus those that
have not is important in light of the Commission's requirement that
transmission providers develop regional planning processes, and that
more scrutiny is needed where the project has not gone through a
regional planning process.\65\
---------------------------------------------------------------------------

    \62\ Comments of Consumers at 3.
    \63\ 16 U.S.C. 824e.
    \64\ Id. at 5-6.
    \65\ Id. at 6.
---------------------------------------------------------------------------

    24. The New York Independent System Operator, Inc. (NYISO) agrees
that the financial forms are intended to provide the public with
sufficient information to permit a meaningful evaluation of a filer's
jurisdictional rates.\66\ The NYISO states that some relatively simple
changes would improve the forms.\67\ The NYISO avers that the current
financial forms do not provide sufficient data to permit an evaluation
of all filers' jurisdictional rates, and the forms do not require the
information needed to develop either the numerator or denominator
needed to calculate the NYISO's rates.\68\ The NYISO states that the
financial forms assume that the numerator of a filer's rate will be
that filer's income statement for the reporting period, but it is not
true for the NYISO which has a more complicated rate structure.\69\ The
NYISO urges the Commission to incorporate into the forms a mechanism by
which a filer can provide the details of its rate structure that are
necessary to evaluate the filer's rate. The NYISO suggests that a new
section could be added to the financial forms to provide the details of
an entity's rate structure as well as the resulting rate.\70\ In
addition, the NYISO claims that the forms do not provide sufficient
guidance for calculating the required information. The NYISO recommends
that the Commission adopt a more ``open-ended solicitation'' of the
information needed to accurately calculate the filer's rates, such as
requiring the filer to report the components of the numerator and
denominator of its rate, as well as the resulting rate itself.\71\ The
NYISO also states that the financial forms do not provide clarity as to
what level of reporting information is required for the footnote
disclosures in the Form 3-Q.\72\
---------------------------------------------------------------------------

    \66\ Comments of NYISO at 2.
    \67\ Id.
    \68\ Id.
    \69\ Id. at 3.
    \70\ Id. at 3-4.
    \71\ Id. at 4.
    \72\ Id. at 5-6.
---------------------------------------------------------------------------

    25. The Missouri Public Service Commission (Missouri) suggests
several ways in which it believes the information reported in Form 1
could be enhanced. For example, page 103 of Form 1 requires that the
filer list all corporations that it controls. Missouri suggests that
the filer also include all of the ``doing business as'' names on page
103.\73\ Missouri's other recommendations include the following: (1)
Require further details regarding any adjustments made to pages 200-07
of Form 1, Depreciation, Depletion, and Amortization Expenses; (2)
require further information on how taxes are calculated on pages 262-63
of Form 1; (3) require filers to provide an explanation for each type
of revenue identified on Form 1, pages 300-01; (4) require utilities to
identify separately all income, franchise and property taxes by state
and tax year, Form 1 pages 262-63; and (5) require utilities to provide
the allocation methodology used to assign joint and common costs and
the rate of return and taxes.\74\
---------------------------------------------------------------------------

    \73\ Comments of Missouri at 3.
    \74\ Id. at 4-5.
---------------------------------------------------------------------------

    26. The New York State Public Service Commission (NYPSC) proposes
several changes to Form 1, including: (1) Expand rate schedules on page
304 to include reporting of delivery-only revenues and other unbundled
services (current information is insufficient for purposes of measuring
Energy Service Company penetration in a utility's service territory);
(2) require a detailed breakdown of the sources of Other Electric
Revenues on pages 300-01; (3) require reporting of Other Income and
Other Income Deductions as part of Form 1; (4) require utilities to
describe and quantify each type of affiliate transaction; and (5)
require utility-specific information regarding pensions and other post-
employment benefits (OPEB) and report contributions to OPEB and pension
funds.\75\
---------------------------------------------------------------------------

    \75\ Comments of NYPSC at 3-7.
---------------------------------------------------------------------------

    27. Golden State Water Company (GSW) recommends that the Commission
consider modifying the threshold requirements that determine whether
smaller public utilities may file Form 1-F rather than Form 1.\76\ GSW
states that because small public utilities often must manage a
portfolio of purchased-power resources to meet load requirements, a
threshold of 100 MWh of sales for resale is likely to disqualify a
small public utility from the ability to file Form 1-F rather than Form
1.\77\ GSW states that the threshold does not distinguish between
whether the sales for resale are made from the public utility's owned
generation or from reselling purchased power, and suggests that for
purposes of the Form 1 filing requirement, only sales for resale from
the public utility's owned generation should be counted.\78\ GSW also
suggests that the Commission consider exempting Form 1-F filers from
the quarterly reporting requirements of Form 3-Q, and finally, GSW
requests that the Commission enable Form 1-F users to file reports
electronically.\79\
---------------------------------------------------------------------------

    \76\ Comments of GSW at 5.
    \77\ Id. at 6.
    \78\ Id.
    \79\ Id. at 7.
---------------------------------------------------------------------------

    28. The National Electrical Manufacturing Association (NEMA) and
member ABB, Inc., filed comments advocating revision of Form 1 to
address new transmission expansion by adding the requirement that
utilities report expenditure plans for each of the future five
years.\80\ Specifically, NEMA and ABB recommend that the Transmission
and Distribution Plant accounts in rows 47-75 of page 206 be expanded
by adding five columns to each row that would contain annual
projections of unit investment for each of the future five years.\81\
They also recommend breaking the Additions column into two, to reflect
both additions and replacements.\82\ NEMA and ABB state that this
reporting requirement will enable manufacturers to have available hard
data on which to base investment in manufacturing capability. Further,
they state that investment in new manufacturing capability is required
in the public interest because without it, significant new transmission
expansion would not be possible.\83\
---------------------------------------------------------------------------

    \80\ Comments of NEMA at 2; Comments of ABB at 2.
    \81\ Id.
    \82\ Id.
    \83\ Id. at 1-2.
---------------------------------------------------------------------------

    29. UGI Utilities, Inc. (UGI) recommends that the Commission change
its annual reporting requirements for public utilities to accommodate
the circumstances of companies like UGI that do not maintain a
calendar-year fiscal year.\84\ The Commission's current reporting
requirements require annual report filers to report information on a
calendar-year basis and require that this information be certified by
the filers' independent accountants. UGI asserts that for a company
that does not maintain a calendar-year fiscal year, an additional
burden results from the fact that the company has to prepare two sets
of audited financial statements, one set on a calendar-year basis and a
second on a fiscal-year basis.\85\ UGI proposes that utilities with
non-calendar year fiscal years continue to file annual reports every
April, as the Commission's rules now provide, but

rather than perform the audit process with respect to the calendar year
filing, the utilities would be permitted to file a second set of
financial statements following the end of their fiscal year, together
with the CPA certification required by the Commission's
regulations.\86\ UGI states that its recommendation will not change the
annual reporting obligations or deprive the Commission or the public of
any information; the change will simply accommodate the circumstances
of public utilities with non-calendar fiscal years and relieve the
burden of incurring the effort and expense of two annual audit
processes.\87\
---------------------------------------------------------------------------

    \84\ Comments of UGI at 1.
    \85\ Id.
    \86\ Id. at 2.
    \87\ Id. at 3-4.
---------------------------------------------------------------------------

    30. The Bureau of Economic Analysis (BEA) states that it uses both
direct and indirect sources for information the Commission provides on
costs related to the electric industry.\88\ BEA requests the Commission
consider the inclusion of additional data in Form 1 that would enhance
the data provided by BEA.\89\ For example, BEA states that it utilizes
items such as plant in service by type of utility; subsidiary and non-
utility investments; allowance for funds used during construction;
plant held for future use; plant leased to others; construction work in
progress; depreciation; and other plant-related schedules. BEA states
that in general, income statement and balance sheet data support
utility industry investment by industry estimates and that tabulations
by legal form of ownership are also useful, and that BEA is interested
in plant-in-service separately identified for electric generation (by
type of generation), transmission, and distribution.
---------------------------------------------------------------------------

    \88\ Comments of BEA at 1.
    \89\ Id.
---------------------------------------------------------------------------

    31. Reply comments were filed by Portland General Electric Company
(PGE), Consumers, the Companies, and jointly, by International
Transmission Company and Michigan Electric Transmission Company, Inc.
(ITC and METC). PGE's comments request that the Commission weigh the
usefulness of the Form 3-Q requirement against the burden on companies
to provide data on a quarterly basis. PGE states its agreement with
initial comments filed by EEI and PSE&G, both of whom support a
reappraisal of Form 3-Q in light of the filing burdens created by the
form.\90\ Consumers' reply comments address initial comments filed by
Duke and MidAmerican which request that the Commission eliminate pages
422 and 423 (Transmission Line Statistics) and pages 426-27
(Substations) of Form 1.\91\ Consumers avers that pages 422-27 of Form
1 provide important information on transmission lines and substations
that allow Consumers and other form users to track rate base amounts on
a facility-by-facility basis.\92\ Consumers states that if this
information is eliminated from Form 1, it will be more difficult for
customers like Consumers, other stakeholders and the Commission to
monitor and assess the justness and reasonableness of a transmission
owner's formula rates when such rates are reset each year.\93\
---------------------------------------------------------------------------

    \90\ Reply Comments of PGE at 1.
    \91\ Reply Comments of Consumers at 2.
    \92\ Id. at 3.
    \93\ Id.
---------------------------------------------------------------------------

    32. The Companies replied to the NYPSC's recommendation that
utilities be required to separately report revenues related to bundled-
service customers and delivery-only customers, by expanding the data
reported on page 304 of Form 1.\94\ The Companies state that they do
not account for revenue and service quantities on a disaggregated
basis, the reporting method recommended by the NYPSC, and could not do
so without a substantial investment.\95\ The Companies state that new
computer and accounting systems would be necessary, at a considerable
expense, to disaggregate the revenue and quantity data for the separate
services. Thus, the Companies state that the NYPSC's proposal would
have to be implemented on an aggregated basis.\96\
---------------------------------------------------------------------------

    \94\ Reply Comments of the Companies at 2.
    \95\ Id.
    \96\ Id. at 2-3.
---------------------------------------------------------------------------

    33. ITC and METC's reply comments respond to Consumers'
recommendation that electric transmission owners, for whom self-
implementing rates have been approved, be required to provide
sufficient information in Form 1 regarding Transmission Plant Additions
to permit an examination of the prudence of such costs by customers and
the Commission.\97\ ITC and METC assert that there is no need for this
information given the requirements in the Commission's Order No. 890
for coordinated, open and transparent transmission planning.\98\ ITC
and METC argue that Order No. 890 spells out the process for consulting
and meeting with customers to discuss the methodology, criteria, and
processes used to develop transmission plans, and requires local
transmission planning as well as regional transmission planning to be
open and transparent.\99\ Thus, ITC and METC argue that Consumers seeks
information that they have already agreed to provide and there is no
need for the Commission to require submission of the same information
in Form 1.\100\
---------------------------------------------------------------------------

    \97\ Reply Comments of ITC and METC at 1.
    \98\ Id. at 3; see Preventing Undue Discrimination and
Preference in Transmission Service, Order No. 890, FERC Stats. &
Regs. ] 31,241 (2007).
    \99\ Id. at 3-4.
    \100\ Id. at 5-6.
---------------------------------------------------------------------------

IV. Discussion

A. General

    34. Many of the comments centered on the need for technical
changes, software updates, and revisions to the filing instructions
rather than proposing substantive additions to the forms. Several
commenters requested additional information for particular accounts or
schedules but failed to specify the exact nature of the information
sought. Many commenters questioned the quality of the data submitted,
citing incomplete submissions and a lack of uniform responses to
footnote instructions. Some of the commenters requested that the
Commission place greater emphasis on enforcing the filing requirements
to ensure completeness and uniformity of responses. Several commenters
suggested technical changes, both to the instructions and the Form 1
software. These proposals are listed in a spreadsheet attached as
Appendix C, and we invite comments on their usefulness and necessity.
    35. While a number of commenters have suggested the collection of
additional Form 1 data, we do not propose to adopt all of the requests
for additional information. In light of the comments received and given
the Commission's experience with reporting requirements, we believe
that wholesale changes to Form 1 may not be needed at this time.
Rather, only targeted changes are necessary. We thus will not propose
that filers provide a cost and revenue study or the type of detailed
information needed in a rate case, as requested by APPA. We will not
require detailed information on pensions and other employment benefits,
as requested by the NYPSC. We believe this level of detail may be
unnecessary and burdensome.
    36. In addition, some of the information sought is already included
in Form 1. For example, the details of income and property taxes by
state and by tax year, as requested by Missouri, are already required
to be reported on pages 262-63 of Form 1. In addition, much of the
information sought by Wisconsin Electric on ISO/RTO expenses is now
reported in Form 1 at page 331; Order No. 668, issued in December 2005,
updated the USofA and

the financial reporting requirements for both annual and quarterly
reports to improve the transparency of financial information and
facilitate better understanding of RTO costs.\101\ Form 1 at pages 400,
401a, and 401b has monthly system peak and system energy data. These
data already provide sufficient information to determine the rate
divisor requested by APPA. APPA also requests that Form 1 separately
identify revenues creditable from particular services. Pages 310-11
(Sales for resale) and 328-30 (Transmission of Electricity for others)
of Form 1 require the filer to classify the nature of service provided
and users of the form can discern whether the revenues associated with
that service should be treated as a credit in a cost of service
analysis. As we have stated, we expect all filers to provide full
information in accordance with the form's instructions.
---------------------------------------------------------------------------

    \101\ Accounting and Financial Reporting for Public Utilities
Including RTOs, Order No. 668, FERC Stats. & Regs. ] 31,199 (2005),
reh'g denied, Order No. 668-A, FERC Stats. & Regs. ] 31,215 (2006).
---------------------------------------------------------------------------

    37. The NOI requested comment on whether Form 1 should contain
certain demand response information. While there is general agreement
that demand response information is important and should be collected,
commenters recommend that the data not be collected in Form 1. We agree
that Form 1 is not the best method for collecting demand response data.
The Commission currently collects demand response and advanced metering
data through the FERC-727 Demand Response and Time Based Rate Programs
Survey and the FERC-728 Advanced Metering Program Survey. We anticipate
that we will continue to obtain the needed demand response data through
these forms.
    38. In addition, we reject Wisconsin Electric's assertion that,
when differences between the accounting requirements of a state
regulatory commission and the Commission exist, a utility should not be
required to adhere to the Commission's USofA. Wisconsin Electric refers
to a Commission order denying its request for a waiver of Form 1
requirements for reporting the AFUDC and asks that the Commission
revisit its decision. As the Letter Order indicated, the Commission has
specifically rejected requests to permit use of an AFUDC rate
prescribed by a state agency rather than the maximum rate determined in
accordance with the formula contained in Order No. 561.\102\ In any
event, this proceeding does not address the applicability of the USofA,
and therefore, Wisconsin Electric's comments are outside the scope of
this proceeding.
---------------------------------------------------------------------------

    \102\ See Wisconsin Electric Power Co., Docket No. AC05-25
(January 16, 2007) (unpublished letter order) at 2.
---------------------------------------------------------------------------

    39. We remind filers that the information reported in Forms 1, 1-F
and 3-Q is critical to the work of the Commission and all filers are
expected to follow the instructions and submit properly completed
forms. Commission staff will continue to monitor not only the timely
filing of the forms but their accuracy and completeness as well.\103\
---------------------------------------------------------------------------

    \103\ Failure to file may subject the jurisdictional entity to
appropriate penalties.
---------------------------------------------------------------------------

    40. Notwithstanding First Energy's claim, the purpose of Form 1 is
to provide basic financial and operational information to allow the
Commission, customers, and competitors to monitor a utility's rates for
jurisdictional services. While we recognize the time, effort and cost
that the financial reports require, as described by EEI and others in
their comments, we also emphasize the importance of this data--relied
upon by the Commission, state commissions, utility customers, and other
interested persons as an important, and in some instances the primary
source of information to assess whether rates charged are just and
reasonable or may be unjust and unreasonable. Further, most of the
information is data that is already maintained by the public utility.
    41. As stated earlier, the Form 1 is not a substitute for a rate
case filing nor is the data intended to project what might happen in
future years; rather the data must provide enough detail to enable the
form's users to monitor and assess a utility's rates. For example, many
transmission owners operate under formula rates that are reset each
year. The annual rate adjustment may not initiate a rate proceeding and
the customer's recourse, if it believes the resulting rates are unjust
and unreasonable, is to file a complaint under section 206 of the FPA.
While the Form 1 in particular is not intended to provide all of the
information that would be available in a rate case, customers
nevertheless need sufficient information to enable them to perform a
preliminary rate assessment and to determine whether, under the
circumstances, a complaint may be warranted, and the Form 1 needs to
provide that information.

B. Proposed Revisions

 1. Formula Rates
    42. Several commenters complain that Form 1 does not contain enough
information to provide a basis for interpreting or assessing formula
rates.\104\ APPA recommends that filers be required to provide the
standard rate divisor, as specified in Order No. 888, with separate
identification of any behind-the-meter loads that counted towards
network transmission service billing determinants.\105\ FirstEnergy
recommends that in cases where a transmission owner proposes to make
the calculation of the formula rate, the transmission owner should be
required to file additional information to ``bridge'' the gap between
the formula rate in the tariff and the Form 1 data.\106\ Consumers
states that the Commission should require transmission owners for whom
self-implementing formula rates have been approved, to provide
sufficient information regarding transmission plant additions to allow
an investigation of the prudence of such investments.\107\ NYISO
suggests that a new section be added to the forms to provide the
details of an entity's rate structure, including the development of
numerators and denominators, as well as the resulting rate.\108\
Missouri suggests that additional detail is needed, including
information regarding depreciation, depletion and amortization
expenses, other revenues, and that filers be required to provide
written explanations of any significant changes from the prior year to
the current year.\109\
---------------------------------------------------------------------------

    \104\ See Comments of Consumers at 3; Comments of First Energy
at 3; Comments of APPA at 3-4, Comments of NYISO at 3, and Comments
of Missouri at 8.
    \105\ Comments of APPA at 3.
    \106\ Comments of FirstEnergy at 6.
    \107\ Comments of Consumers at 5.
    \108\ Id.
    \109\ Comments of Missouri at 3-4, 8.
---------------------------------------------------------------------------

    43. On the other hand, EEI, Duke Energy, and Southern all argue
that Form 1 currently contains sufficient information to audit formula
rates.\110\ EEI states that, to the extent formula rates are tied to
fuel costs, the Commission already collects information on those costs
through FERC Form 423.\111\ EEI suggests that if the Commission
requires additional information, it can most efficiently request the
information in the context of an audit, rather than imposing a burden
on all filing companies.\112\
---------------------------------------------------------------------------

    \110\ See Comments of EEI at 9, Comments of Duke at 2; and
Comments of Southern at 3.
    \111\ Comments of EEI at 9.
    \112\ Id.
---------------------------------------------------------------------------

    44. Although many commenters recommend that additional information
be added to enable users to audit formula rates, few specific
suggestions were made that would be applicable to all Form 1 filers.
The derivation of a formula rate differs from company to

company and there is no single one-size fits-all information that would
provide the missing link in all cases.\113\
---------------------------------------------------------------------------

    \113\ When utilities submit formula rates, the Commission often
requires additional informational filings to support the proposed
rate, and in one instance, required that if the utility's data
inputs are from non-public sources, the data must be reported in
Form 1. See, e.g., Arizona Public Service Commission, 120 FERC ]
61,262 (2007); see also Trans-Allegheny Interstate Line Co., 121
FERC ] 61,009 (2007).
---------------------------------------------------------------------------

    45. We believe that caution should be exercised in making changes
to the formula rate data contained in Form 1. Even though FirstEnergy,
for example, recommends that the Commission require transmission owners
to provide some additional information to bridge the ``gap'' between
the formula rate in the tariff and the available Form 1 data, it
acknowledges that the Commission should be cautious in modifying the
Form 1.\114\ FirstEnergy correctly observes that because many formula
rates require line-by-line insertion of specific Form 1 references, any
change to the Form 1 filing requirements may require utilities to make
corresponding section 205 applications to modify their formula
rates.\115\ In addition, transmission rates within the tariffs of RTOs
are set in a manner that does not correspond to the individual service
zones of the operating utilities filing the Form 1.
---------------------------------------------------------------------------

    \114\ Comments of FirstEnergy at 6.
    \115\ Id.
---------------------------------------------------------------------------

    46. We believe that some limited additional information will
satisfy the concerns of commenters who have requested more data. We
propose to revise the Form 1 to require that if the inputs to a formula
rate deviate from what is currently shown in the Form 1, the filer must
provide an explanation for the change in a footnote to the
corresponding page, line and column where the specific data is
reported. This requirement would apply only to utilities with formula
rates that have not made informational filings with the Commission. We
also ask, however, whether it makes sense to require utilities to
provide such explanation through a means other than the Form 1. We
believe that this limited additional information is not unduly
burdensome and would provide additional transparency with regard to
formula rates and the underlying data.
2. Filing Thresholds for Forms 1 and 1-F
    47. Several commenters recommend that the Commission revise the
metrics it uses to determine whether a jurisdictional filer must submit
a Form 1 or a Form 1-F.\116\ FirstEnergy states that revising the
threshold requirements for a Form 1 filer would reduce the reporting
requirements on small utilities, but does not propose any specific
revised numbers for this purpose.\117\ GSW supports modifying the
requirements that determine whether smaller utilities may file Form 1-F
rather than Form 1, and recommends that for purposes of triggering the
requirement to file Form 1, only sales for resale from the utility's
owned generation should be counted.\118\
---------------------------------------------------------------------------

    \116\ See Comments of FirstEnergy at 11; Comments of GSW at 5.
    \117\ Comments of FirstEnergy at 11.
    \118\ Comments of GSW at 5-6.
---------------------------------------------------------------------------

    48. Sections 141.1 and 141.2 of the Commission's regulations
prescribe the reporting requirements for public utilities defined as
major or nonmajor.\119\ The definition of major and nonmajor is
contained in Part 101, Subchapter C of the regulations, which determine
whether a utility must file a Form 1 or a 1-F.\120\ The filing
thresholds established in the USofA , General Instructions, defining
major and nonmajor utility have been in place for some time.\121\ While
several commenters suggest that the Commission revise the metrics for
determining the thresholds defining major and nonmajor utilities, no
one has yet offered a specific suggestion for different thresholds. The
Commission invites form filers, users, and state commissions to comment
on the issue of whether the definitions for major and nonmajor
utilities requires some revision. We urge commenters to offer specific
suggestions for how this might be done, and why their proposed
thresholds would be appropriate.
---------------------------------------------------------------------------

    \119\ 18 CFR 141.1, 141.2
    \120\ 18 CFR part 101; see supra note 7.
    \121\ See Revisions to Public Utility and Natural Gas Company
Classification Criteria, Uniform Systems of Accounts, Form Nos. 1,
1-F, 2 and 2-A and Related Regulations, Order No. 390, FERC Stats. &
Regs. ] 30,586 (1984).
---------------------------------------------------------------------------

    49. The Commission recently addressed the issue of the
applicability of financial form filing requirements for utilities that
are not subject to the Commission's jurisdiction. In Morenci Water &
Electric Co., the Commission granted Morenci a waiver from the
requirement of Sec. Sec.  141.1 and 141.400 of the Commission's
regulations that utilities who are not public utilities under Part II
of the FPA but who otherwise meet the threshold filing requirements for
Forms 1, 1-F and 3-Q must comply with the reporting requirements
established in the regulations.\122\ The order noted that the
Commission is in the process of re-evaluating its financial forms
filing requirements and granted the waiver subject to any further
Commission decision with respect to the applicability of the
Commission's regulations.\123\
---------------------------------------------------------------------------

    \122\ See Morenci Water & Electric Co., 121 FERC ] 61,024
(2007).
    \123\ Id.
---------------------------------------------------------------------------

    50. It appears that there may be five other utilities that
currently file Form 1 who, like Morenci, are not public utilities under
Part II of the FPA, but make sales that meet or exceed the threshold
for the Commission's Forms 1 and 3-Q reporting requirements.\124\ In
this NOPR, we propose to eliminate the filing requirement for utilities
not subject to the Commission's jurisdiction and invite comments on
this proposal.
---------------------------------------------------------------------------

    \124\ The five utilities are: Alaska Electric and Power Co.;
CenterPoint Energy Houston Electric, LLC; Hawaii Electric Light Co.,
Inc.; Hawaiian Electric Co., Inc.; and Maui Electric Co., Ltd.
---------------------------------------------------------------------------

3. Affiliated Transactions
    51. The NYPSC states that at present Form 1 contains no information
regarding affiliate transactions.\125\ NYPSC suggests that additional
controls and disclosures of affiliate transactions are necessary to
prevent cross-subsidization between regulated and unregulated
companies. NYPSC recommends that Form 1 be revised to require utilities
to describe and quantify each type of affiliate transaction.\126\ NYPSC
further recommends that the Commission adopt a schedule similar to FERC
Form No. 60 which requires centralized service companies to perform an
analysis of charges for services they bill to associate and non-
associate companies by USofA account.\127\
---------------------------------------------------------------------------

    \125\ Comments of NYPSC at 6.
    \126\ Id.
    \127\ Comments of NYPSC at 6.
---------------------------------------------------------------------------

    52. The Commission agrees that information concerning the nature
and extent of affiliate transactions is important because these
transactions are not conducted at arms' length and could provide
opportunities for inappropriate cross-subsidization. To ensure that
Forms 1 and 1-F users have access to more detailed information
regarding affiliated transactions, the Commission proposes to add a new
page 429, ``Transactions with Associated (Affiliated) Companies'' that
would require filers to report affiliated transactions. The Commission
believes this proposed schedule would provide further transparency and
improve the detection of cross-subsidization. On page 429, we propose
to require that filers report the following: (1) A description of the
good or service charged or credited; (2) the name of the

associated (affiliated) company; (3) the FERC account charged or
credited; and (4) the amount charged or credited.
4. Transmission Investment
    53. NEMA and its member ABB urge the Commission to widen the scope
of Form 1 to provide for collection of information on utilities'
projected costs for transmission investment.\128\ NEMA thus recommends
that certain accounts on page 206 be expanded to require annual
projections of unit investment for each of the future five years (ABB
recommends three years).\129\ In addition, NEMA proposes the expansion
of other information reported on page 206 to provide additional
detail.\130\ Both NEMA and ABB aver that the additional information
would benefit manufacturers and utilities with better manufacturing
quality and quality supply efficiencies.\131\
---------------------------------------------------------------------------

    \128\ Comments of NEMA at 2; Comments of ABB at 2. As noted
earlier, NEMA is a trade association representing about 450
manufacturers who make the products in the electricity
infrastructure. ABB is a manufacturer of power transmission and
distribution systems and equipment.
    \129\ Comments of NEMA at 2.
    \130\ Id. at 2-3.
    \131\ Id.
---------------------------------------------------------------------------

    54. Although we agree that information on future transmission
investment could be useful in particular circumstances, the Form 1 is
not the appropriate vehicle for obtaining this information. Form 1 is
intended to provide information on a utility's financial activities for
the reporting year. To date, it has not included projections of future
costs for future activities. We also note that Order No. 890 required
each RTO or ISO to submit a proposed transmission planning process to
the Commission.\132\ Attachment K of the pro forma tariff sets forth
the requirements for a transmission planning process.\133\ Order No.
890 thus already provides information that should aid manufacturers'
planning processes.
---------------------------------------------------------------------------

    \132\ Order No. 890, FERC Stats. & Regs. ] 31,241 at P 435.
    \133\ Id.
---------------------------------------------------------------------------

5. Non-Calendar Fiscal Year
    55. Form 1 is filed on a calendar year basis. Some of the reporting
companies, however, operate on a non-calendar fiscal year. UGI argues
that it is burdensome for companies that do not use a calendar fiscal
year to prepare two sets of audited statements.\134\ UGI proposes that
this burden could be eliminated by requiring public utilities with non-
calendar fiscal years to continue to file annual reports each April,
but rather than undertake a separate audit process with respect to the
calendar year financial statements submitted with the annual report,
those public utilities would be allowed to file a second set of
financial statements following the end of their fiscal years, with
those financial statements to be independently audited and accompanied
by a CPA Certification as required by the Commission's
regulations.\135\
---------------------------------------------------------------------------

    \134\ Comments of UGI at 1-2.
    \135\ Comments of UGI at 2; see 18 CFR 41.11.
---------------------------------------------------------------------------

    56. The Commission has, upon request, granted individual waivers of
the CPA Certification requirement for Forms 1 and 1-F filers so long as
the certification accompanies the fiscal year-end financial information
filed after the annual Form 1 or 1-F is submitted.\136\ The Commission
believes that UGI's proposal is reasonable and proposes to adopt it in
this NOPR. The Commission requests comments on this proposal.
---------------------------------------------------------------------------

    \136\ See, e.g., PacifiCorp, Docket Nos. AC00-20-000 and AC00-
20-001 (April 14, 2000) (unpublished letter order).
---------------------------------------------------------------------------

6. Other Revenues
    57. Both NYPSC and Missouri recommend that Form 1 be expanded to
require a detailed breakdown of the various sources of Other Revenues,
pages 300-01.\137\ At present, Form 1 contains only a cumulative total
for the reporting year of the various ``Other Revenues.'' We agree that
more detail would be useful and propose a change to the instructions on
page 300 to require that for any revenues not otherwise specified on
pages 328-30 (Transmission of Electricity for Others (Including
transactions referred to as `wheeling')), the filer must provide this
information in a footnote to page 300.
---------------------------------------------------------------------------

    \137\ Comments of NYPSC at 4; Comments of Missouri at 4.
---------------------------------------------------------------------------

7. Deletions and Miscellaneous Revisions
    58. Several commenters recommended deleting certain reporting
requirements. MidAmerican urges the Commission to delete Form 1, pages
422 and 423, Transmission Line Statistics, and pages 426 and 427,
Substations. MidAmerican claims that the information provided on these
pages is no longer necessary and unduly burdensome.\138\ Duke also
argues that these pages are unnecessary and should be eliminated.\139\
In reply comments, Consumers argues that pages 422-27 provide important
information on transmission lines and substations that allows Consumers
to track rate base amounts on a facility-by-facility basis.\140\ For
example, Consumers states that, through the information provided on
pages 422 and 423, customers are able to see changes in gross plant
investment by specific transmission line and make an assessment as to
the capacity, cost and benefits by comparing changes from year to
year.\141\ We do not believe that FirstEnergy and Duke have made a
compelling case to support the elimination of this data, and we believe
any burden is outweighed by the need for the data and therefore do not
propose to eliminate these filing requirements.
---------------------------------------------------------------------------

    \138\ Id.
    \139\ Comments of Duke at 4-5.
    \140\ Reply Comments of Consumers at 3.
    \141\ Id.
---------------------------------------------------------------------------

    59. As delineated at P 14, above, Duke suggests changes to and the
elimination of several pages from the Form 1. Our response to each of
Duke's recommendations is as follows: page 105 (Officers)--providing
this information is not unduly burdensome and Duke has not offered an
argument that supports eliminating this page; pages 202 and 203
(Nuclear Fuel Materials)--the reporting of nuclear fuel materials is
not unduly burdensome and we do not see a need to consolidate the
expenses in Account 120.10, as suggested by Duke; pages 228 and 229
(Emission Allowances)--these pages provide users valuable data on
allowances allowed and not allowed by the Environmental Protection
Agency and we agree that separate pages should be provided for
SO2 and NOX; pages 262 and 263 (General Taxes)--
we reject Duke's recommendation to eliminate these pages as the
information reported on pages 262 and 263 provides form users with
important tax information that enables form users and auditors to
determine tax allowances; pages 301 and 326 (Electric Operating
Revenues and Purchased Power)--this information is useful to form users
as it provides a breakdown by demand and energy; page 304 (Revenue by
Rate Codes)--the information is important as it provides transparency
to form users and auditors; pages 310 and 326 (The requirement of AD
classification)--this information is valuable to the public as it
provides transparency and facilitates auditing; pages 327-30
(Transmission of Electricity for Others)--this information provides
important operational data and enables users to understand affiliate
relationships; page 332 (Megawatt Hours related to Transmission
Charges)--this page provides important information to form users on
wheeling and electricity provided by others.
    60. In addition, Duke recommends raising the threshold levels for
reporting certain information. Although we find

that Duke's suggested new levels are generally too high and would
inappropriately exclude information from smaller filers, based on our
experience we agree that it is reasonable to increase certain threshold
levels. We therefore propose new threshold levels but lower than Duke's
proposed threshold levels, and invite comment on whether it is
appropriate to increase these threshold levels and whether our proposed
levels are appropriate. Page 216 (Construction Work in Progress)--Duke
recommends that reporting be required only for projects with balances
of $10 million or greater. We believe this number may be too high. We
believe a requirement of $1 million is more reasonable and invite
comments. Pages 232, 233 and 278 (Other Regulatory Assets,
Miscellaneous Deferred Debits & Other Regulatory Liabilities)--Duke
proposes to raise the balance limit for grouping items from $50,000 or
less to $1 million or less. Again, we believe that Duke's number may be
too high. However, we propose that the balance be increased from the
current level of $50,000 or less to $100,000 or less. Page 269 (Other
Deferred Credits)--Duke recommends that the threshold of $10,000 for
grouping items be raised but does not suggest a specific number. Based
on our experience, we propose that it be raised from $10,000 to
$100,000. Pages 352 and 353 (Research & Development)--Duke recommends
that the requirement to list all R&D items costing more than $5,000 is
unduly burdensome and suggests that the level be raised to $100,000. We
believe that the level proposed by Duke is too high. Rather, we propose
to raise the level from $5,000 to $50,000. Comments are invited on all
of these proposals.

C. Miscellaneous

    61. Several commenters requested that the Commission reassess the
need for Form 3-Q, and some urged that it be eliminated. The Commission
believes that the increased frequency of financial information provided
in Form 3-Q is important. The quarterly reports allow for more timely
evaluations of existing rates and improve the transparency and currency
of financial information submitted to the Commission. Thus, at this
time, the Commission will not propose the elimination of Form 3-Q.
    62. EEI expresses concern regarding the confidentiality of certain
financial data and the possibility of competitive risks by disclosing
information about a utility's performance and costs. EEI also argues a
need to avoid harm to critical infrastructure. The Commission remains
committed to the public availability of financial data filed in Form 1
and its other reporting forms. The Commission is also sensitive to the
need for security safeguards and established Critical Energy
Infrastructure Information (CEII) regulations to protect such
information. However, the Commission does not believe that additional
precautions or protection of financial data are required at this
time.\142\
---------------------------------------------------------------------------

    \142\ Recently, the Commission renewed its commitment to public
access to information, while still ensuring that information
critical to energy infrastructure security is protected. As recently
as October 30, 2007, the Commission amended its regulations for
accessing critical energy infrastructure information (CEII) to
provide landowners access to information containing CEII for the
portion of a project that would affect their land, and eliminated
the non-internet public (NIP) category inasmuch as information
currently designated as NIP is easily available on-line from other
sources. See Critical Energy Infrastructure Information, Order No.
683, FERC Stats. & Regs. ] 31,228 (2006), order on reh'g, 119 FERC ]
61,029 (2007).
---------------------------------------------------------------------------

    63. The NOI posed two questions that are not directly related to
the forms. The first is whether public utilities and licensees should
be required to notify the Commission when their total transactions fall
below the minimum thresholds established in the Commission's
regulations such that the utility or licensee believes that it is no
longer subject to the filing requirements. Missouri supported this
proposal and no one opposed it.\143\ The Commission believes that
notification of non-filing status would be helpful to the Commission
and users of Forms 1 and 1-F. Accordingly, at such time as a utility or
licensee now subject to the filing requirements has, in three
consecutive years, experienced sales and transactions below the
threshold levels specified in the Commission's regulations and believes
that they are no longer required to file a Form 1 or 1-F, must notify
the Commission of this change. The utility or licensee must file the
notice on the date that the form would otherwise be due.
---------------------------------------------------------------------------

    \143\ Comments of Missouri at 10.
---------------------------------------------------------------------------

    64. The NOI also asked commenters whether the Commission should
require a showing of good cause before granting an extension of time in
which to file the required reports. Missouri and SCS agreed that the
Commission should impose such a requirement.\144\ EEI stated that it
was not sure such a requirement is necessary because the Commission had
not indicated there had been a problem.\145\ The Commission believes
that any request for an extension of time in which to comply with the
Commission's regulations or a Commission order must show good cause.
Absent such a showing, the request may not be granted. The Commission
staff is monitoring filers' timely compliance with the reporting
requirements and will continue to do so.
---------------------------------------------------------------------------

    \144\ Comments of Missouri at 10; Comments of SCS at 6.
    \145\ Comments of EEI at 19.
---------------------------------------------------------------------------

D. Technical Corrections

    65. We received a number of suggested technical changes and
instruction revisions that we believe have merit. We have provided a
full list of those suggestions in Appendix C and invite comment on
those proposed changes and corrections.

V. Information Collection Statement

    66. The collections of information contained in this proposed rule
have been submitted to the Office of Management and Budget for review
under section 3507(d) of the Paperwork Reduction Act of 1995.\146\ The
Commission solicits comments on the Commission's need for this
information, whether the information will have practical utility, the
accuracy of the burden estimates, ways to enhance the quality, utility
and clarity of the information to be collected or retained, and any
suggested methods for minimizing respondents' burden, including the use
of automated information techniques.
---------------------------------------------------------------------------

    \146\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    Estimated Annual Burden: The Commission estimates that on average
it will take respondents 14 hours annually to comply with the proposed
requirements. Most of the additional information required to be
reported is already compiled and maintained by the utilities, and will
not substantially increase the existing reporting burden. This will
result in total hours for the following collections of information:

----------------------------------------------------------------------------------------------------------------
                                                              Change in the                      Change in the
           Data collection form                Number of     number of hours   Filing periods     total annual
                                              respondents     per respondent                         hours
----------------------------------------------------------------------------------------------------------------
(a).......................................              (b)              (c)              (d)    (e)=(b)x(c)x(d)

FERC Form 1...............................             205               11                1               2,255
FERC Form 3-Q.............................             194                1                3                 582
                                           ---------------------------------------------------------------------
    Relevant Totals.......................  ...............  ...............  ...............              2,837
----------------------------------------------------------------------------------------------------------------

    Information Collection Costs: The Commission seeks comments on the
costs to comply with these requirements. As the required data is
already maintained by the utilities, the Commission estimates that the
collection costs will not be unduly burdensome.
    Title: FERC Form No. 1, ``Annual Report of Major Electric
Utilities, Licensees, and Others''; FERC Form No. 1-F, ``Annual Report
for Nonmajor Public Utilities and Licensees; FERC Form No. 3-Q,
``Quarterly Financial Report of Electric Utilities, Licensees, and
Natural Gas Companies.''
    Action: Proposed information collection.
    OMB Control Nos. 1902-0021 (Form 1); 1902-0029 (Form 1-F); 1902-
0205 (Form 3-Q).
    Respondents: Businesses or other for profit.
    Frequency of responses: Annually and quarterly.
    Necessity of the information: The information maintained and
collected under the requirements of part 141 is essential to the
Commission's statutory responsibilities under the FPA. The data now
reported in the forms lacks certain information that the Commission
believes will better permit the Commission and the public to evaluate
the filers' jurisdictional rates. The additional information proposed
to be collected by the NOPR will increase the forms' usefulness to both
the Commission and the public. Without this information, it would be
difficult for the Commission and the public to assess utility costs,
and thereby ensure that utility rates are just and reasonable.
    Internal Review: The Commission has reviewed the proposed changes
and has determined that the changes are necessary. These requirements
conform to the Commission's need for efficient information collection,
communication, and management within the energy industry. The
Commission has assured itself, by means of internal review, that there
is specific, objective support associated with the information
requirements.
    67. Interested persons may obtain information on the reporting
requirements by contacting: Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426 [Attention: Michael Miller,
Office of the Chief Information Officer, phone:<PHONE_NUMBER>, fax:
(202) 273-0873, e-mail<EMAIL_ADDRESS>Comments concerning
the collection of information and the associated burden estimates,
should be sent to the contact listed above and to the Office of
Management and Budget, Office of Information and Regulatory Affairs,
Washington, DC 20503 [Attention: Desk Officer for the Federal Energy
Regulatory Commission, phone<PHONE_NUMBER>; fax<PHONE_NUMBER>].

VI. Environmental Analysis

    68. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\147\ No
environmental consideration is needed for the promulgation of a rule
that addresses information gathering, analysis, and dissemination,\148\
or that addresses accounting.\149\ These proposed rules, if finalized,
involve information gathering, analysis, and dissemination, and
accounting. In addition, these proposed rules, if finalized, involve
information gathering, analysis, and dissemination, and accounting.
Consequently, neither an Environmental Impact Statement or
Environmental Assessment is required.
---------------------------------------------------------------------------

    \147\ See Regulations Implementing the National Environmental
Policy Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783
(1987).
    \148\ See 18 CFR 380.4(a)(5).
    \149\ See 18 CFR 380.4(a)(16).
---------------------------------------------------------------------------

VII. Regulatory Flexibility Act

    69. The Regulatory Flexibility Act of 1980 (RFA) \150\ requires
rulemakings to contain either a description or analysis of the effect
that the rule will have on small entities or a certification that the
rule will not have a significant economic impact on a substantial
number of small entities.\151\ Most utilities regulated by the
Commission do not fall within the RFA's definition of a small
entity.\152\ Thus, most utilities to which the rules proposed herein,
if finalized, would apply would not fall within the RFA's definition of
small entities. Consequently, the rules proposed herein, if finalized,
will not have a significant economic effect on a substantial number of
small entities.
---------------------------------------------------------------------------

    \150\ 5 U.S.C. 601-612.
    \151\ Id.
    \152\ 5 U.S.C. 601(3).
---------------------------------------------------------------------------

VIII. Comment Procedures

    70. The Commission invites interested persons to submit comments on
the matters and issues proposed in this notice to be adopted, including
any related matters or alternative proposals that commenters may wish
to discuss. Comments are due on or before March 14, 2008. Comments must
refer to Docket No. RM08-5-000, and must include the commenter's name,
the organization he or she represents, if applicable, and his or her
address.
    71. The Commission encourages comments to be filed electronically
via the eFiling link on the Commission's Web site at http://www.ferc.gov.
 The Commission accepts most standard word processing

formats, and commenters may attach additional files with supporting
information in certain other file formats. Commenters filing
electronically do not need to make a paper filing.
    72. Commenters who are not able to file comments electronically
must send an original and 14 copies of their comments to: Federal
Energy Regulatory Commission, Secretary of the Commission, 888 First
Street, NE., Washington, DC 20426.
    73. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commenters on this notice of
proposed rulemaking are not required to serve copies of their comments
on other commenters.

IX. Document Availability

    74. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's home page (http://www.ferc.gov) and

in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5 p.m.

Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
    75. From the Commission's home page on the Internet, this
information is available in the Commission's document management
system, eLibrary. The full text of this document is available on
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or
downloading. To access this document in eLibrary, type the docket
number excluding the last three digits of this document in the docket
number field.
    76. User assistance is available for eLibrary and the Commission's
Web site during normal business hours. For assistance, please contact
FERC Online Support at 1-866-208-3676 (toll free) or<PHONE_NUMBER> or e-
mail at<EMAIL_ADDRESS>or the Public Reference Room at
(202) 502-8371, TTY<PHONE_NUMBER>. E-mail at
<EMAIL_ADDRESS>

List of Subjects in 18 CFR Part 41 and 141

18 CFR Part 41

    Administrative practice and procedures, Electric utilities,
Reporting and recordkeeping requirements, Uniform System of Accounts.

18 CFR Part 141

    Electric utilities and licensees, Reporting requirements.

    By direction of the Commission.
Nathaniel J. Davis, Sr.,
 Deputy Secretary.

    In consideration of the foregoing, the Commission proposes to amend
parts 41 and 141 of Title 18 of the Code of Federal Regulations, as set
forth below:

PART 41--ACCOUNTS, RECORDS, MEMORANDA AND DISPOSITION OF CONTESTED
AUDIT FINDINGS AND PROPOSED REMEDIES

    1. The authority citation for part 41 continues to read as follows:

    Authority: 16 U.S.C. 791a-825r, 2601-2645; 42 U.S.C. 7101-7352.

    2. Section 41.11 is revised to read as follows:

Sec.  41.11  Report of certification.

    Each Major and Nonmajor public utility or licensee operating on a
calendar fiscal year and not classified as Class C or Class D prior to
January 1, 1984 must file with the Commission a letter or report of the
independent accountant certifying approval, together with or within 30
days after the filing of the Annual Report, Form No. 1, covering the
subjects and in the form prescribed in the General Instructions of the
Annual Report. For such utility or licensee operating on a non-calendar
fiscal year, the letter or report of the independent accountant
certifying approval must be filed within 90 days of the close of the
company's fiscal year. The letter or report must also identify which,
if any, of the examined schedules do not conform to the Commission's
requirements and shall describe the discrepancies that exist. The
Commission will not be bound by a certification of compliance made by
an independent accountant pursuant to this paragraph.

PART 141--STATEMENTS AND REPORTS (SCHEDULES)

    3. The authority citation for part 141 continues to read as
follows:

    Authority: 15 U.S.C. 79; 16 U.S.C. 791a-828c, 2601-2645; 31
U.S.C. 9701; 42 U.S.C. 7101-7352.

    4. In Sec.  141.1, paragraph (b)(1)(i) is revised to read as
follows:

Sec.  141.1  FERC Form No. 1, Annual report of Major electric
utilities, licensees and others.

* * * * *
    (b) Filing requirements--(1) Who must file--(i) Generally. Each
Major electric utility (as defined in part 101 of Subchapter C of this
chapter) and each licensee as defined in section 3 of the Federal Power
Act (16 U.S.C. 796, et seq.), including any agency, authority or other
legal entity or instrumentality engaged in generation, transmission,
distribution, or sale of electric energy, however produced, throughout
the United States and its possessions, having sales or transmission
service equal to Major as defined above, must prepare and file
electronically with the Commission the FERC Form 1 pursuant to the
General Instructions as provided in that form.
* * * * *

    Note: Appendix A will not be published in the Code of Federal
Regulations.

                     Appendix A.--List of Commenters
------------------------------------------------------------------------
           Company name                         Abbreviation
------------------------------------------------------------------------
1. ABB Inc. of Norwalk, CT.......  ABB
2. American Public Power           APPA
 Association.
3. Consolidated Edison Company of  ConEd NY and ORU
 New York, Inc. and Orange and
 Rockland Utilities, Inc.
4. Consumers Energy Company......  CECo
5. Duke Energy Corporation.......  Duke
6. Edison Electric Institute.....  EEI
7. Energy Information              EIA
 Administration.
8. FirstEnergy Service Company...  FirstEnergy
9. Golden State Water Company....  GSW
10. MidAmerican Energy Company...  MidAmerican
11. Missouri Public Service        MoPSC
 Commission.
12. National Electrical            NEMA
 Manufacturers Association.
13. New York State Public Service  NYPSC
 Commission.
14. New York Independent System    NYISO
 Operator, Inc.
15. Public Service Electric & Gas  PSE&G
 Company.
16. Southern Company Services,     SCS
 Inc.
17. The Bureau of Economic         BEA
 Analysis.
18. The Public Utilities           PUCO
 Commission of Ohio.
19. UGI Utilities, Inc...........  UGI Utilities
20. Wisconsin Electric Power       Wisconsin Electric
 Company.
------------------------------------------------------------------------
                             Reply Comments
------------------------------------------------------------------------
1. Consumers Energy Company......  CECo
2. Consolidated Edison Company of  ConEd NY and ORU
 New York, Inc. and Orange and
 Rockland Utilities, Inc.
3. Portland General Electric       PGE
 Company.

4. The International Transmission  ITC and METC
 Company and Michigan Electric
 Transmission Company, Inc.
------------------------------------------------------------------------

    Note: Appendix B will not be published in the Code of Federal
Regulations.

Appendix B--List of Questions Posed in the Notice of Inquiry (RM07-9-
000).

    (1) Do the annual and quarterly Financial Forms provide
sufficient data for the public to permit an evaluation of the
filers' jurisdictional rates?
    (2) If not, what additional data is needed to conduct such an
evaluation? Please specify the form (or forms) to which your
suggestions pertain.
    (3) Do the financial reports provide sufficient data to the
public to determine revenues attributable to the sale of excess fuel
retention? If not, what additional data is needed to conduct such an
evaluation?
    (4) Is the information included in the financial reports
sufficient to audit formulaic rates?
    (5) Should the Commission require reporting of information on
demand response initiatives (interruptible, load control, etc.),
including demand and peak demand impacts, associated costs and
savings, and the number of advanced meters installed?
    (6) Please explain how this additional data will be useful to
users of the Financial Forms.
    (7) How burdensome would any requirement for additional
information be to filers of Financial Forms?
    (8) Are there specific reporting requirements that are no longer
necessary or unduly burdensome that should be deleted?
    (9) What technical revisions, if any, need to be made to the
Financial Forms? For example, identify any suggested changes in
instructions, desirable software upgrades, and whether there are
errors embedded in the forms which need to be corrected.
    (10) Should the Commission require electric utilities, licensees
and interstate natural gas and oil pipeline companies to provide
notification when their total sales or transactions fall below the
minimum thresholds established in the Commission's regulations such
that they are no longer subject to these filing requirements?
    (11) Should the Commission require a showing of good cause
before granting an extension of time in which to file the required
forms?
    (12) Are these concerns of sufficient importance to warrant a
rulemaking and, if so, what rules should the Commission promulgate?
Commenters are encouraged to be as specific as possible.

    Note: Appendix C will not be published in the Code of Federal
Regulations.

                  Appendix C.--List of Proposed Changes
------------------------------------------------------------------------
             Commenter                             Comment
------------------------------------------------------------------------
1. EEI............................  The software's cross-checking
                                     function has not been functional
                                     for some time, requiring companies
                                     to perform an additional level of
                                     review and verification.
2. Duke Energy Corporation........  Column width cannot be altered to
                                     make dollar input fit and be
                                     readable. This occurred on Form 1,
                                     pages 120-121, Statement of Cash
                                     Flows, line 44, column b.
3. EEI............................  Page 114, Instruction 1--
                                     Should it read report in Column `E'
                                     the balance for the reporting
                                     quarter and in Column `F' the
                                     balance for the same three-month
                                     period for the prior year, rather
                                     than Column `D' and Column `E'? The
                                     instruction appears to be a column
                                     off.
4. EEI............................  Page 114, Instruction 2--
                                     Should it read report in Column `G'
                                     the quarter-to-date amounts for
                                     electric utility function; in
                                     Column `I' the quarter-to-date
                                     amounts for gas utility, and in
                                     Column `K' the quarter-to-date
                                     amounts for other utility function
                                     for the current year's quarter,
                                     rather than Columns F, H, and J.
                                     The instruction appears to be a
                                     column off.
5. EEI............................  Page 114, Instruction 3--
                                     Should it read report in Column `H'
                                     the quarter-to-date amounts for
                                     electric utility function; in
                                     Column `J' the quarter-to-date
                                     amounts for gas utility; and in
                                     Column `L' the quarter-to-date
                                     amounts for other utility function
                                     for the prior year quarter, rather
                                     than Columns G, I, and K? The
                                     instruction appears to be a column
                                     off.
6. EEI............................  Page 200--Should Column H be for
                                     Common rather than Column F, as
                                     referenced in instructions?
7. EEI............................  Page 205--Instruction 9 cuts off, as
                                     well as anything after that.
8. EEI............................  Page 401b--The instructions refer to
                                     Lines 2 through 6, but there are no
                                     such lines on this page. The
                                     instructions should refer to
                                     Columns b through f.
9. EEI............................  Page 110, Line 15 has a reference
                                     page to 122. There is no page 122;
                                     it is ``Intentionally Left Blank.''
                                     Why is the page referenced on the
                                     Balance Sheet?
10. EEI...........................  Page 111, Line 70 should reference
                                     page 230a, not 230.
11. EEI...........................  Page 111, Line 72 should reference
                                     page 230b, not 230.
12. EEI...........................  Page 112, Lines 4-6 and 8 reference
                                     page 252. There is no page 252. Why
                                     is it referenced?
    EEI...........................  Page 112, Line 10 should reference
                                     page 254b, not 254.
13. EEI...........................  Page 117, Lines 43-44 and 66-67
                                     reference page 340. There is no
                                     page 340. Why is it referenced?
14. EEI...........................  Pages 122(a) and (b)--These pages
                                     follow the notes, but should come
                                     before the notes according to the
                                     page number order.
15. EEI...........................  On many pages of the Form 1, the
                                     footnotes contain improper page
                                     references or appear on the wrong
                                     page. Each of the pages that
                                     contains footnotes shows page
                                     number 450.1 on the bottom,
                                     regardless of the actual page
                                     number.
16. Duke Energy Corporation.......  Printed hard copies from the
                                     software do not always match what
                                     is seen on screen.
17. EEI...........................  Page 399--Grayed-out items (where no
                                     data should appear) get populated
                                     with subtotals or random figures
                                     that do not appear to be derived
                                     from a formula or calculation.
                                     Companies have to black them out
                                     with a marker when submitting the
                                     forms for printing. Can this be
                                     deleted or corrected?
18. EEI...........................  Duplicate pages often print. Is it
                                     possible to make changes to prevent
                                     this?
19. Duke Energy Corporation.......  There have been instances when
                                     footnotes have been added to pages
                                     and disappear upon later return to
                                     the page.
20. Duke Energy Corporation.......  At times, filers have not been able
                                     to save changes to the forms when
                                     using the save function.
21. EEI...........................  When companies enter information
                                     into FOSS, they find in some cases
                                     that the information is
                                     inaccurately totaled, incorrectly
                                     displayed on the screen, or wrongly
                                     printed.

22. EEI...........................  EEI members have experienced a
                                     number of problems with the current
                                     FERC financial form software,
                                     Version 5.19.0 of FOSS.
23. NYISO.........................  The ``data cross-check'' feature
                                     used in the Commission's reporting
                                     software has not always functioned
                                     correctly.
24. EEI...........................  Page 332--In the Transfer of Energy
                                     section column headings, the word
                                     megawatt is misspelled as
                                     ``megawatt.''
25. Wisconsin Electric Power        Wisconsin Electric suggests that the
 Company.                            instructions to all pages should be
                                     updated to include regional
                                     transmission organization (``RTO'')
                                     accounting and reporting
                                     requirements. Specifically, pages
                                     310-311, 326-327, 332, 397-398
                                     should receive this update. The
                                     instructions on these pages should
                                     also be enhanced to provide proper
                                     RTO MWh netting and reporting to
                                     meet FERC requirements.
26. NYISO.........................  The Financial Forms do not provide
                                     clarity as to what level of
                                     reporting information is required
                                     for the footnote disclosures
                                     included in the quarterly Form 3-Q.
27. Duke Energy Corporation.......  Should have the ability to copy data
                                     into the software directly from
                                     Microsoft Excel, Word, or from
                                     other sources such as SEC 10K
                                     files.
28. Duke Energy Corporation.......  The FERC software is extremely time
                                     consuming and requires hours of
                                     formatting work.
29. Duke Energy Corporation.......  Make it easier to copy and paste
                                     blocks of data or text into
                                     software.
30. Duke Energy Corporation.......  Upgrade help tool so help topics can
                                     be entered and help screens assist
                                     preparers.
31. Duke Energy Corporation.......  Printing capabilities in the
                                     software need to be improved. The
                                     ability to print individual pages
                                     within a section should be
                                     available to the user.
32. Duke Energy Corporation.......  Form 1, Pages 310 & 326 (Sales for
                                     Resale and Purchase Power): FERC
                                     should publish guidelines on how to
                                     count volumes, particularly volumes
                                     associated with financial
                                     transactions.
33. Duke Energy Corporation.......  Need improved clarification on all
                                     field definitions within the
                                     financial forms.
34. Duke Energy Corporation.......  Form 1, Page 401A (Electric Energy
                                     Account): FERC should publish
                                     additional instructions on which
                                     hours should be reported. There is
                                     confusion on this page pertaining
                                     to what data should be included
                                     with respect to physical versus
                                     financial transactions.
35. Duke Energy Corporation.......  Form 1, Pages 301 & 326 (Electric
                                     Operating Revenues and Purchased
                                     Power): Duke would like
                                     clarification on how the
                                     statistical classification column
                                     (b) is being used.
36. New York State Public Service   The instructions for reporting
 Commission.                         electric operating revenues should
                                     be clarified to ensure consistency.
                                     In order to ensure consistency, the
                                     instructions on pages 300-301 of
                                     Form 1 should indicate that
                                     delivery-only revenues shall be
                                     recorded as Other Electric Revenues
                                     (Account 456), while sales of
                                     electricity shall be recorded on a
                                     full-service basis (Accounts 440
                                     through 448), assuming the USofA is
                                     not revised to provide for an
                                     unbundling of electric operating
                                     revenues.
------------------------------------------------------------------------
The Commission agrees with the technical revisions proposed by
  commenters in lines 1-24, 26-31 and 33. The Commission seeks specific
  comment on lines 25, 32, and 34-36.

BILLING CODE 6717-01-P

[GRAPHIC] [TIFF OMITTED] TP29JA08.000

 [FR Doc. E8-1385 Filed 1-28-08; 8:45 am]

BILLING CODE 6717-01-C