File numbers RM21-11-000
Article E-3 | Press release
Good afternoon, Mr. Chairman and Commissioners.
Item E-3 is a Notice of Proposed Rulemaking, or NOPR, that proposes to update the Commission’s Uniform System of Accounts, or USofA. The USofA was created by the Federal Power Commission to facilitate the Commission’s ratemaking responsibilities and capture financial and operational information uniformly. The USofA has been modified over time to reflect changing technological, legal and market conditions. These proposed revisions to the USofA are intended to address many of the current technological and economic developments, such as the growth of non-hydroelectric renewable power generation facilities and renewable energy credits, or RECs.
NOPR proposes four changes to the USofA for utilities and licensees:
First, NOPR proposes to create dedicated generation accounts for wind, solar and other non-hydro renewable assets. Currently, the USofA does not contain single accounts for non-hydroelectric renewable power generation, and instead utilities use a broad category of accounts called “other generation” to record these assets and related activities. The creation of new accounts for renewable energy generation should help make reporting practices more uniform and provide more transparent reporting.
Second, NOPR proposes to establish a new functional class for energy storage accounts. Currently, utilities must reallocate costs between generation, transmission, and distribution accounts based on storage asset usage. However, based on the Commission staff’s analysis, industry outreach, and our review of industry comments, NOPR preliminarily concludes that the current energy storage accounting requirements create a significant burden and are impractical. NOPR also tentatively concludes that the creation of a new dedicated storage function would enable utilities to avoid cumbersome accounting practices and also enable the use of traditional and meaningful pricing allocation methodologies.
Third, NOPR proposes to codify the accounting treatment for renewable energy credits and other similar financial instruments. Based on industry input, previous Commission guidance on emission allowances and to promote uniformity of practice, NOPR proposes that dedicated inventory accounts be created to record emissions credits. renewable energy.
Fourth, NOPR proposes to create dedicated accounts for computer hardware, software, and communications equipment to promote uniformity in practice. NOPR is also seeking comments on whether the Commission should create such accounts for gas pipelines, oil pipelines and service companies.
NOPR is also proposing corresponding changes to the relevant FERC forms to reflect the new accounts.
Finally, NOPR is seeking comments on whether the Chief Accountant should issue hydrogen accounting guidance that would apply to both utilities and licensees and natural gas companies.
These proposed reforms are intended to modernize the USofA and add the necessary functional details to inform the Commission’s ratemaking responsibilities.
This concludes our presentation and we are happy to answer all your questions.