Revisions to Forms, Statements and Reporting Requirements for Electric Utilities and Licensees, 58720-58769 [E8-23458]

Agencies

• DEPARTMENT OF ENERGY
• Federal Energy Regulatory Commission

[Federal Register Volume 73, Number 195 (Tuesday, October 7, 2008)]
[Rules and Regulations]
[Pages 58720-58769]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-23458]



[[Page 58719]]

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Part II





Department of Energy





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Federal Energy Regulatory Commission



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18 CFR Parts 41 and 141



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

Federal Register / Vol. 73, No. 195 / Tuesday, October 7, 2008 / 
Rules and Regulations

[[Page 58720]]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 41 and 141

[Docket No. RM08-5-000; Order No. 715]


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

Issued September 19, 2008.

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final Rule.

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SUMMARY: This Final Rule amends the Federal Energy Regulatory 
Commission's reporting requirements for public utilities and licensees 
to file financial forms, reports, and statements, including FERC Form 
No. 1, FERC Form No. 1-F, and FERC Form No. 3-Q. These changes will 
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 to ensure that rates remain just and 
reasonable. In addition, the changes will help provide public utility 
customers, state commissions, and the public information to assess the 
justness and reasonableness of electric rates.

DATES: Effective Date: This rule will become effective January 1, 2009.

FOR FURTHER INFORMATION CONTACT: David Lengenfelder (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: 
(202) 502-8351, e-mail: david.lengenfelder@ferc.gov, Richard M. 
Wartchow (Legal Information), Office of the General Counsel, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC 
20426, Telephone: (202) 502-8744, e-mail: richard.wartchow@ferc.gov.

SUPPLEMENTARY INFORMATION: 

                               Final Rule
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                                                              Paragraph
                                                               Numbers
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I. Introduction............................................            1
II. Background.............................................            6
III. Notice of Inquiry.....................................           10
IV. Notice of Proposed Rulemaking..........................           11
V. Discussion..............................................           12
    A. Notice of Inquiry...................................           12
    B. Notice of Proposed Rulemaking.......................           13
    C. Effective Date......................................           19
    D. Proposed Revisions..................................           21
        1. Formula Rates...................................           21
        2. Filing Thresholds for Form 1....................           51
        3. Affiliate Transactions..........................           56
        4. CPA Certification for a Non-Calendar Fiscal Year           74
        5. ``Other Revenues'' (Pages 300-301)..............           78
        6. Increases to Threshold Reporting Levels.........           91
        7. Proposed Technical Corrections..................           94
        8. Additional Technical Revisions..................           98
    E. Miscellaneous.......................................          103
        1. Retaining Form 3-Q..............................          103
        2. Confidentiality Concerns........................          107
        3. Requests To Reconsider Rejected Revisions.......          111
        4. Requests for Additional Cost Data...............          116
    F. Reporting Burden....................................          121
VI. Information Collection Statement.......................          129
VII. Environmental Analysis................................          130
VIII. Regulatory Flexibility Act...........................          131
IX. Document Availability..................................          132
X. Effective Date and Congressional Notification...........          135
Revised Regulatory Text--18 CFR Parts 41 and 141.
Appendix A: Revised Form 1 Pages.
Appendix B: List of Proposed Technical Changes and
 Responses.
Appendix C: List of Commenters.
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I. Introduction

    1. This Final Rule amends the Federal Energy Regulatory 
Commission's (Commission) reporting requirements for public utilities 
\1\ and licensees to file financial forms, reports, and statements, 
including FERC Form No. 1 (Form 1), FERC Form No. 1-F (Form 1-F), and 
FERC Form No. 3-Q (Form 3-Q). These changes will 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 remain just and 
reasonable. In addition, the changes will help provide public utility 
customers, state commissions, and the public the information they need 
to assess the justness and reasonableness of electric rates.
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    \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 and 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. 
See, e.g., 18 CFR 141.1 (1977).
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    2. This Final Rule complements the Commission's recent revisions to 
the reporting requirements for natural gas

[[Page 58721]]

companies; \2\ it revises the financial forms filed by public utilities 
and licensees--specifically, Form 1, Annual report for major electric 
utilities, licensees, and others; Form 1-F, Annual report for nonmajor 
public utilities, licensees and others; and Form 3-Q, Quarterly report 
of electric utilities, licensees, and natural gas companies.
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    \2\ 18 CFR Parts 158 and 260; Revisions to Forms, Statements, 
and Reporting Requirements for Natural Gas Pipelines, Order No. 710, 
Docket No. RM07-9-000, 73 FR 19389 (Apr. 10, 2008), FERC Stats. & 
Regs. ] 31,267, order on reh'g, Order No. 710-A, 123 FERC ] 61,278 
(2008).
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    3. Specifically, the Final Rule adopts revised reporting 
requirements which will enhance the Commission's and customers' review 
of formula rates; permit better understanding of non-power goods and 
services transactions with affiliates, and provide additional detail of 
revenues not previously specified in Form 1. In addition, the Final 
Rule will expedite reporting by clarifying Form 1 instructions and 
cross-references and making certain technical improvements in the form. 
Finally, the Final Rule responds to the burdens faced by filers by 
adopting minimum reporting thresholds for certain accounting data, 
eliminating the reporting requirement for certain utilities that are 
not otherwise subject to this Commission's reporting obligations or 
jurisdiction, and accommodating filers whose fiscal year does not fall 
in the calendar year that is used for reporting purposes.
    4. This Final Rule does not convert the submission of Form 1 and 
other data into a FPA section 205 \3\ rate case filing or a cost-and-
revenue study, but is instead intended to better ensure a ready source 
of data to assist the Commission and interested parties in evaluating 
the justness and reasonableness of a utility's rates. The revised forms 
do not limit or change an entity's rights or obligations under the FPA 
and our regulations, and this Final Rule is not intended to change our 
obligation to rule on complaints, petitions, or other requests for 
relief based on a full record and substantial evidence.
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    \3\ 16 U.S.C. 824d.
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    5. 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 following the first 
calendar quarter of 2009 and their new Forms 1 and 1-F in April 2010 
for calendar year 2009. In addition, this Final Rule eliminates the 
filing requirement for utilities not subject to the Commission's 
jurisdiction under section 201 of the FPA \4\ but required to file Form 
1 solely because they met the reporting threshold in the regulations.
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    \4\ 16 U.S.C. 824.
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II. Background

    6. Under the Commission's regulations, entities classified as major 
electric utilities are required to file Form 1. Entities classified as 
nonmajor electric utilities are required to file Form 1-F.\5\ Sections 
304, 307 and 309 of the FPA authorize the Commission to collect such 
data.\6\ 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. Since its inception, Form 1 has been amended by the 
Commission on numerous occasions to address and keep pace with the 
transformation of the utility industry.
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    \5\ 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 of wheeling for others 
(deliveries plus losses). 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 
nonnmajor. See 18 CFR Part 101.
    \6\ 16 U.S.C. 825a, 825f, 825h; see also 16 U.S.C. 825j.
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    7. In 1990, the Commission issued Order No. 529, which modified 
Form 1 to improve reporting of bulk power transactions.\7\ In 1993, the 
Commission issued Order No. 552, which revised the Uniform System of 
Accounts (USofA) to account for allowances under the 1990 Clean Air Act 
Amendments, and adopted corresponding reporting schedules for Forms 1 
and 1-F.\8\
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    \7\ Amendments to FERC Form Nos. 1 and 1-F, and Annual Charges, 
and Fuel Cost and Purchased Economic Power Adjustment Clauses, Order 
No. 529, FERC Stats. & Regs. ] 30,904 (1990).
    \8\ 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, FERC Stats. & Regs. ] 30,967 (1993).
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    8. In 1994, the Commission issued Order No. 574, which required the 
filing of an electronic version of Form 1, along with the paper 
version. The electronic version was prepared pursuant to a computer 
program supplied by the Commission.\9\ In 2002, the Commission issued 
Order No. 626, which eliminated the paper filing requirement, relying 
solely on electronic filing of Form 1.\10\ Also in 2002, the Commission 
expanded USofA accounting requirements to include monitoring for the 
fair value of certain security investments, derivative instruments, and 
hedging activities, and added new schedules and accounts to Forms 1 and 
1-F.\11\
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    \9\ Electronic Filing of FERC Form No. 1 and Delegation to Chief 
Accountant, Order No. 574, FERC Stats. & Regs. ] 31,013 (1994) 
(establishing the Form 1 Submission Software (FOSS)).
    \10\ Electronic Filing of FERC Form No. 1, and Elimination of 
Certain Designated Schedules in Form Nos. 1 and 1-F, Order No. 626, 
FERC Stats. & Regs. ] 31,130 (2002).
    \11\ Accounting and Reporting of Financial Instruments, 
Comprehensive Income, Derivatives and Hedging Activities, Order No. 
627, FERC Stats. & Regs. ] 31,134 (2002).
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    9. Order No. 646 implemented quarterly reporting for entities that 
filed Forms 1 and 1-F and added annual reporting requirements for 
ancillary services and electric transmission peak loads.\12\ In 2005, 
Order No. 668 updated the Commission's accounting requirements for 
utilities and licensees, including independent system operators (ISOs) 
and regional transmission organizations (RTOs).\13\ The Commission also 
revised its USofA and Forms 1 and 1-F to accommodate industry 
restructuring under the Commission's open-access transmission policies 
and increased competition in wholesale bulk power markets.\14\
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    \12\ 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).
    \13\ 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).
    \14\ Id.
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III. Notice of Inquiry

    10. As part of Commission staff's ongoing comprehensive review of 
the Commission's financial data requirements, a series of public 
meetings were held in Fall 2006 with both filers and users of FERC's 
financial reports (Forms 1, 1-F, 2, 2-A and 3-Q). On February 15, 2007, 
the Commission issued a Notice of Inquiry (NOI) in response to those 
discussions.\15\ The NOI sought comments on the need for changes or 
additions to the financial information reported on these forms. In 
response to the comments received, the Commission determined that each 
of the forms, representing different industries subject to the 
Commission's jurisdiction, merited its own separate review. 
Accordingly, the Commission established a separate proceeding in Docket 
No. RM07-9-000, addressing only changes, additions, and

[[Page 58722]]

amendments to the forms applicable to interstate natural gas 
companies.\16\
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    \15\ Assessment of Information Requirements for FERC Financial 
Forms, Notice of Inquiry, FERC Stats. & Regs. ] 35,554 (2007).
    \16\ Revisions to Forms. Statements, and Reporting Requirements 
for Natural Gas Pipelines, Order No. 710, FERC Stats. & Regs. ] 
31,267, order on reh'g, Order No. 710-A, 123 FERC ] 61,278 (2008).
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IV. Notice of Proposed Rulemaking

    11. On January 18, 2008, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) that proposed to revise the Form 1 (and Forms 1-F and 
3-Q) and requested comments on several issues, including: (1) 
Differences between Form 1 data and costs that are reflected in formula 
rate inputs, (2) the non-jurisdictional utility requirements and 
revising the Form 1-F reporting threshold for nonmajor utilities, (3) 
reporting for affiliate transactions, (4) filers whose reporting and 
accounting systems are based on a non-calendar fiscal year, (5) 
reporting for ``Other Revenues,'' and (6) the minimum threshold 
reporting levels for certain line-item information.\17\ In addition, 
the NOPR proposed two non-form related rule changes, concerning 
notification of non-filing status and grants of extension of time for 
good cause. The NOPR also invited comments on software updates, 
revisions to the filing instructions, requests for additional 
information for particular accounts or schedules, and suggestions to 
improve the quality, completeness and consistency of data 
submissions.\18\
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    \17\ Revisions to Forms, Statements, and Reporting Requirements 
for Electric Utilities and Licensees, Notice of Proposed Rulemaking, 
73 FR 5136 (Jan. 29, 2008), FERC Stats. & Regs. ] 32,627 (Jan. 18, 
2008) (NOPR).
    \18\ These proposals were listed in an appendix to the NOPR, 
which is updated here with Commission responses and provided in 
Appendix B to this Final Rule.
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V. Discussion

A. Notice of Inquiry

    12. In responding to the NOI, Form 1 public utility filers 
generally emphasized the difficulty and expense of Form 1 preparation, 
stated that the current scope of information sought is sufficient to 
evaluate jurisdictional rates, and objected to particular filing 
requirements as burdensome. In contrast, Form 1 users, including 
nonprofit publicly-owned utilities and state commissions, disagree--
requesting that Form 1 provide additional information to permit more 
effective review to determine whether current and proposed rates are 
just and reasonable.

B. Notice of Proposed Rulemaking

    13. In the NOPR, the Commission affirmed that the information 
reported in Forms 1, 1-F and 3-Q is critical to the work of the 
Commission and stated its expectation that all filers would continue to 
follow the instructions and submit properly completed forms. The NOPR 
emphasized the importance of Form 1 data to the Commission, state 
commissions, utility customers and other interested persons as an 
important and primary source of information to assess whether rates 
charged remain just and reasonable or may be unjust and unreasonable. 
The NOPR stated that the purpose of Form 1, in particular, is to 
provide basic financial and operational information to allow the 
Commission, customers, and competitors to monitor a utility's rates for 
jurisdictional services. Form 1 is an essential tool in the 
Commission's regulatory program. Form 1 makes publicly available the 
financial information upon which cost-based rates are developed and 
provides information on the financial operations of utilities. Form 1 
and the underlying data are used in ratemaking and for customer rate 
and cost monitoring. In addition, because it reflects the Commission's 
USofA, Form 1 ensures that such data is uniform and comparable between 
companies and reporting periods. Form 1 is not a substitute for a rate 
case filing or a projection of future financial performance, however. 
Instead the data enables the form's users to monitor and assess a 
utility's rates.
    14. Pursuant to the Commission's comprehensive review of its 
financial reporting forms and based on the responses to the NOI, the 
Commission determined that wholesale changes were not justified, and 
instead proposed targeted adjustments to the existing reporting 
requirements.
    15. In response to the NOPR, the Commission received 13 timely 
comments, one motion to submit comments out-of-time, and one set of 
reply comments.\19\ These comments are summarized in the remainder of 
the discussion section.
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    \19\ A list of commenters is attached as Appendix C.
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    16. After careful consideration of the comments received, the 
Commission is adopting changes and revisions proposed in the NOPR with 
certain modifications and clarifications, as discussed below.
    17. No comments were filed objecting to the NOPR's proposals 
concerning (i) accommodating filers whose books close on a non-calendar 
fiscal year, (ii) filing notifications of changes to non-filing status, 
(iii) adopting a good cause requirement for reviewing requests for 
extension of time, and (iv) providing for separate reporting of 
emissions allowances, such as nitrogen oxide (NOX) and 
sulfur dioxide (SO2). In fact, comments were received 
supporting several of these proposals, including the non-calendar year 
accommodation and emission allowances. Therefore, we adopt the 
proposals as set forth in the NOPR.
    18. In addition, several commenters proposed additional reporting 
requirements or modifications to the proposals made in the NOPR. To the 
extent such comments proposed revisions that were feasible and in 
keeping with the goals expressed in the NOPR, the Commission has 
attempted to incorporate commenters' suggestions as discussed below. 
The discussion in the ``Commission Determination'' sections addressing 
each NOPR proposal provides additional detail to clarify those 
proposals and respond to the comments.

C. Effective Date

    19. The NOPR proposed calendar year 2009 as the effective date to 
implement these changes to the reporting requirements, stating:

    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.

    20. The Commission believes that this effective date provides 
sufficient time for filing companies to collect the information needed 
to fulfill the reporting obligations proposed in the NOPR and adopted 
in this Final Rule. Because the changes adopted here are limited in 
scope, filers have sufficient opportunity to make the necessary changes 
to their reporting systems to capture the necessary data in the detail 
needed to complete the new requirements contained in this Final Rule. 
This proposed effective date thus provides an adequate time for 
utilities to revise their information collection procedures, and filers 
will have several additional months before the first reporting deadline 
to implement the changes needed because the first report due is the 
Form 3-Q, a quarterly report, due in May 2009. Therefore, the 
Commission adopts the changes provided for in this Final Rule effective 
calendar year 2009, consistent with the date proposed in the NOPR.

D. Proposed Revisions

1. Formula Rates
    21. In response to comments requesting additional information to 
accommodate formula rate review, the NOPR proposed the addition of

[[Page 58723]]

explanatory information when formula rate inputs deviate from data 
reported in Form 1. Specifically, the NOPR proposed 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 deviation in a footnote to the corresponding page, line and 
column where the specific data is reported. The Commission sought 
comment on this proposal.\20\
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    \20\ NOPR at P 46.
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Comments
    22. Several commenters support the Commission's proposal for filing 
utilities to explain departures from Form 1 data in formula rates. 
SDG&E, for example, notes that many utilities with formula rates 
already make periodic informational filings to explain the use of 
modified Form 1 data. SDG&E supports the NOPR proposal and 
characterizes the proposal as a pragmatic and narrowly-tailored effort 
to provide additional information that does not duplicate publicly 
available material, while avoiding a ``one size fits all'' modification 
to Form 1 that does not address the varieties of formula rates 
currently in effect or utilities' uses of variations from Form 1 data.
    23. APPA also supports the Commission's intent that utilities 
provide all information necessary for calculating formula rates, but 
questions whether the Commission's proposal will achieve the desired 
effect. APPA states that the requirement that filers describe in 
footnotes details on how formula rates deviate from Form 1 information 
may be difficult to monitor because staff may lack the means to 
identify utilities subject to the formula rate information requirement. 
APPA suggests that the Commission require a new schedule for filers to 
identify their status in regard to formula rates, which would require a 
filer to indicate (1) whether it has formula rates; and (2) where to 
find all explanations for deviations between formula rates and Form 1 
information (either informational filings or footnotes in connection 
with specific page, line and column numbers of Form 1). Such a schedule 
would ensure that a utility does not omit a necessary footnote and 
would also locate deviations from Form 1 data. APPA predicts that such 
a schedule would not change any Form 1 references currently contained 
in formula rates and should not add any substantial burden to 
respondents, because it would not repeat the information, but would 
simply reference the location of the information already compiled.
    24. BPA agrees that since formula rates routinely cite specific 
accounts and page numbers, the Commission should not revise Form 1 
accounts or page numbers, so as to necessitate amendments to existing 
formula rates. BPA supports the use of explanatory footnotes, stating 
that the footnotes are an essential aspect of Form 1 and may provide 
the only means for a utility to explain, and Form 1 user to understand, 
the data. BPA suggests the need for additional enforcement of Form 1 
requirements, including penalties for failure to meet footnote 
requirements.
    25. In addition, BPA requests clarification that a statement made 
in paragraph 41 of the NOPR, ``[t]he 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,'' is not intended to change the burden of 
proof in a section 206 proceeding involving a formula rate. 
Specifically, BPA requests the Commission clarify that the statement 
does not shift the burden of proof from the utility to establish that 
the formula is correctly applied or that the correct data is being used 
to populate the formula.\21\
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    \21\ BPA states its understanding that the burden of proof 
otherwise remains on the party challenging a Commission-approved 
formula.
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    26. Nevada Companies suggests that a transmission provider should 
post the reasons for changes in formula rates on its Web site within a 
prescribed period of time, which would provide immediate information to 
customers on changes in rates rather than having to wait for a 
quarterly or annual filing.
    27. TAPS strongly supports the NOPR's effort to further the goal of 
timely transparency through inclusion of the relevant information in 
Form 1. TAPS questions the level of detail in an informational filing 
that would relieve a utility of the requirement to describe formula 
rate differences in Form 1. TAPS states that the rule should require 
that the transparency information be included in Form 1 submissions of 
each utility whose Form 1 data is input into a formula rate. TAPS 
proposes that waivers be considered where the utility can show that it 
is legally committed to make annual informational filings that will 
provide all of the data, of the same quality and reliability, that 
would otherwise have to be included in its Form 1, and will do so in 
time to facilitate rate monitoring by customers, regulators, and the 
public. TAPS also requests that the Final Rule require annual reporting 
of all historical cost, load, and revenue information that is an input 
into a Form 1 filing utility's formula rate.
    28. The Michigan Commission requests that the Commission initiate a 
process to address problems associated with its review of utility 
transmission investment in conjunction with formula rates. The Michigan 
Commission states that a lack of necessary data reporting in 
combination with formula rates can shield utility investment decisions 
from review. The Michigan Commission suggests that the Commission 
initiate an inquiry, possibly a technical conference, to explore ways 
that formula rates can be reviewed.
    29. Several utility commenters object to the requirement to add 
footnotes to discuss differences between Form 1 financial information 
and formula rate inputs for wholesale rates.\22\ AEP believes that the 
Form 1 is a financial report and should continue to be a financial 
report and not a rate verification report. AEP claims that footnoting 
differences between Form 1 data and formula rate inputs would, for some 
filers like AEP, be extensive, voluminous and burdensome to comply 
with. AEP suggests that multiple rates will require reconciliation, 
including separate wholesale customer service rates and some regional 
transmission organization rates. AEP states that the Commission should 
obtain such information from the seller when needed on a case-by-case 
basis. AEP suggests that the additional detail need not be made public, 
and states that the information is better provided as a separate rate 
filing to be made whenever the formula rate is being changed or 
supported.
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    \22\ See AEP, EEI, FirstEnergy, and Duke comments.
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    30. EEI encourages the Commission not to add a requirement to Form 
1 to explain departures from Form 1 information used as inputs to 
formula rates. EEI argues that companies should not be required to 
footnote Form 1 data to explain differences in formula rates, so long 
as they document changes to formula rate inputs, adhere to the approved 
formula rate tariffs, and provide information to the Commission and 
affected customers on request or via informational filings.
    31. EEI suggests that the Commission adopt an alternate policy, 
under which companies adopting formula rates would provide information 
to customers about rate inputs, including underlying costs and cost 
increases, in sufficient detail to enable the customers to understand 
the basis for their rates. EEI states that if the Commission does

[[Page 58724]]

impose a formula rate footnote requirement in Form 1, the Commission 
should: (1) Clarify that the footnote is necessary only to explain 
departures from Form 1 data when a formula rate tariff calls for 
specific Form 1 data as inputs and different input data are used; (2) 
clarify that the footnote requirement applies only to cost-based rates, 
not to market-based rates (MBR); (3) specify that, if a seller files 
informational filings containing information about inputs to its 
formula rates, a footnote is not required; (4) specify that if 
customers have audit rights under a formula rate tariff, a footnote is 
not required; (5) specify that if a company has explained departures 
from Form 1 data as inputs to a formula rate elsewhere in information 
available to the Commission and customers on request, it is not 
required to do so again in Form 1; (6) specify that, if the footnote 
cannot be added before Form 1 is filed, it can be added at the next 
reporting cycle; and (7) address how the footnote should be prepared 
when multiple operating companies or gas and electric companies are 
involved and not all of those companies are reflected in a given Form 
1.
    32. FirstEnergy requests that the Commission clarify that its 
proposal is not a blanket requirement on companies filing the Form 1 to 
include any changes on inputs to formula rates in a footnote to the 
relevant page in Form 1. Similarly, the Commission should also clarify 
that its proposed requirement would not preclude companies from 
submitting the formula input information in filings other than Form 1.
    33. FirstEnergy states that companies should not be required to 
submit informational filings or otherwise report situations in which 
formula rate inputs differ slightly from what is shown in Form 1, and 
requests the Commission to clarify whether such disclosures will now be 
required. To the extent that such information will be required, 
FirstEnergy does not believe that Form 1 is an appropriate vehicle for 
reporting information concerning a utility's formula rates. FirstEnergy 
states that Forms 1 and 3-Q are financial statements providing 
information in accordance with the USofA and argues that the forms are 
not, and should not be, considered ratemaking documents to be used for 
ratemaking purposes.
Commission Determination
    34. In this Final Rule, as we explain below, we adopt the NOPR 
proposal that Form 1 filers should provide explanatory information when 
formula rate inputs differ from Form 1 reported amounts.\23\ That is, 
with regard to formula rates for which no informational filings are 
required to be regularly submitted to this Commission, we revise the 
Form 1 to require that, if the formula rate relies on Form 1 data and 
if the input amounts to that formula rate differ from what is shown in 
the Form 1, the filer must provide a narrative explaining the reason 
for the difference. The explanation must be provided in a footnote on 
the same page, line and column where the specific data is reported.
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    \23\ Other than comprehensive formula rates, the Commission's 
regulations provide for automatic adjustment of only those costs 
specified in section 35.14 of our regulations (fuel adjustment 
clause). See Public Service Company of Oklahoma, 40 FERC ] 61,215, 
at 61,733 (1987).
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    35. As described above, EEI states that companies which provide 
service under formula rates should make additional information 
available if requested by customers, on an as-needed basis, if such 
information is not already being provided in the informational filings. 
EEI recommends that the Commission adopt an alternative policy, under 
which companies using formula rates would provide information to 
customers about rate inputs, including underlying costs and cost 
increases, in sufficient detail to enable the customers to understand 
any deviations to the inputs used in calculating the formula rates.
    36. With respect to EEI's requests for various clarifications, we 
adopt portions of EEI's recommendations as follows. Consistent with the 
NOPR proposal we limit the footnoting requirement so that it will only 
apply to utilities with formula rates that do not make regular (i.e., 
at least annual) informational filings of cost data with the Commission 
pursuant to the requirements of their formula rates (or for example, 
pursuant to the requirements of a Commission-approved settlement or a 
Commission directive). We believe it is unnecessary to require 
companies that are required to make regular informational filings to 
include a footnote in Form 1 because any difference from any Form 1 
inputs used in formula rates should already be described in sufficient 
detail in their informational filings.\24\
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    \24\ Thus, utilities that are required to make regular 
informational filings by their formula rates, a Commission-approved 
settlement, or other Commission order need not provide footnotes. 
These filers must nevertheless complete the new schedule provided in 
page 106.
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    37. In addition, EEI requests clarification of the treatment of 
formula rates accepted under our MBR policies. We clarify that a rate 
is subject to the footnoting requirement if it relies on Form 1 data 
and is on file with the Commission. Such rates may be featured in 
tariffs of general applicability or individual rate schedules.\25\ We 
further adopt EEI's suggestion that, if companies have formula rates 
but do not make such informational filings with the Commission, they 
must maintain sufficient records that explain the changes made to those 
inputs \26\ (and, of course, must adhere to the approved formula rate 
tariffs on file) and provide that information to the Commission, state 
commissions and affected customers on request. Furthermore, we clarify 
that if customers have audit rights under a formula rate, a footnote is 
still required, so that utilities can describe how the rate was derived 
(as described herein).
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    \25\ We clarify that we do not seek the explanatory information 
for fuel adjustment clauses, which are governed by separate policies 
established in the Commission's regulations and which typically 
would not reference Form 1. See 18 CFR 35.14.
    \26\ This recordkeeping requirement is in addition to any other 
Commission recordkeeping requirement, see, e.g., 18 CFR Parts 101, 
125, including the footnoting requirement adopted in this Final 
Rule.
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    38. With respect to EEI's request that the Commission specify that 
footnote information that cannot be added before Form 1 is filed may be 
added at the next reporting cycle, we clarify that if the necessary 
information is not available at the time for filing (given that Form 1 
is an annual report), the utility must provide the information in its 
next Form 1 filing.
    39. As stated in the NOPR, we do not propose to convert the Form 1 
filing process into a rate proceeding. As noted by several commenters, 
Form 1 is an historical financial reporting document. However, Form 1 
provides cost and revenue data that aids in evaluating the justness and 
reasonableness of rates in a ratemaking proceeding, and Form 1 serves 
as a ready source of public information to assess on an ongoing basis 
the justness and reasonableness of utility rates. In particular, for a 
formula rate, Form 1 identifies costs that result in annual 
fluctuations in rates as costs rise and fall. Thus, Form 1 plays an 
important role in the Commission's rate review process.
    40. A key component of this rate review process is the transparency 
provided by requiring utilities to make information on costs underlying 
rates publicly available. This cost information is, in turn, used by 
the Commission, state commissions, and customers to review and monitor 
a utility's rates, which, as appropriate, may ultimately result in an 
investigation or a complaint proceeding. Thus, Form 1 is a valuable 
tool. Commenters' attempts to establish a bright line between financial 
reporting

[[Page 58725]]

and rate making are insufficient for the Commission to withdraw its 
proposals to seek information that will assist the Commission in 
carrying out its statutory obligations to ensure that rates are just 
and reasonable, and to assist others--including customers--with 
monitoring rates charged.
    41. The NOPR did not propose to revise the Commission's USofA 
accounting requirements to track specific costs or cost estimates for 
future projects as suggested by TAPS and the Michigan Commission. 
Therefore, we will not adopt proposals to track additional costs that 
would require changes to the Commission's accounting requirements.
    42. In response to APPA's comments concerning how Commission staff 
will determine whether a utility is subject to a regular informational 
filing requirement for its formula rate, we note that the existence of 
such a filing requirement is a matter of public record for each formula 
rate. That is, the requirement that a utility make a regular 
informational filing describing the information that will be used to 
populate the formula rate is typically established in the rate 
proceeding accepting the formula rate. If an interested entity believes 
that a utility has failed to include the required footnotes, or that a 
utility has not responded in a timely manner to a request for an 
explanation of the applicable formula rate and the inputs to that rate, 
it should discuss the matter with the utility and, if not satisfied, 
may, among other things, notify the Commission through our enforcement 
Hotline and the Commission's Office of Enforcement will take 
appropriate action.
    43. Based on the record in this proceeding, the Commission does not 
anticipate that this reporting requirement will be unduly burdensome 
because the information is already available and can be transposed to a 
footnote.
    44. Several filing utilities request the Commission to clarify the 
scope of the formula rate footnoting requirement. Initially, as noted 
above, the Commission clarifies that a filing company should footnote 
differences from Form 1 data in formula rates that are on file with 
this Commission and that rely on Form 1 data, and that such rates may 
be featured in tariffs of general applicability or individual rate 
schedules.\27\ The Commission also clarifies that it is not necessary 
to provide a detailed reconciliation. The Commission anticipates that 
the footnotes would contain a simple narrative explaining how the 
``rate'' (or billing) was derived if different from the reported amount 
in the Form 1. For instance, differences could be due to: (i) 
Application of a percent allocation factor for gross transmission plant 
that is OATT related; (ii) excluding particular items such as step-up 
transformer investment; (iii) deducting amounts for transmission for 
others from total transmission expenses or applying an OATT 
transmission factor; or (iv) excluding particular cost items from 
administrative and general expenses or application of an OATT labor 
factor. This list is not exhaustive, we caution, but is strictly for 
illustration purposes; the Commission anticipates that similar issues 
would be footnoted in Form 1. The description should describe the 
difference, including any reference to a Commission proceeding 
approving the difference. Such an explanation should be sufficient to 
alert interested parties of the deviation and to permit them to 
estimate and evaluate the impact of the departure on rates.\28\ In this 
fashion, interested entities should be able to, with reasonable 
accuracy, monitor rates in light of current costs and available 
financial data.
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    \27\ As noted above, we do not seek the explanatory information 
for fuel adjustment clauses, which are governed by separate polices 
under the Commission's regulations and typically do not reference 
Form 1. See 18 CFR 35.14.
    \28\ The information contained in a formula rate footnote (as 
for any Form 1 footnote) should be specific to the data provided in 
the form, and not simply transferred from consolidated financial 
statements that may reflect different assumptions and reporting 
requirements.
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    45. In response to suggestions that formula rate information be 
centralized, a new schedule (page 106) will be incorporated in Form 1 
on which filers will (1) indicate whether they have formula rates; (2) 
provide details about the formula rates; (3) indicate whether the filer 
makes regular informational filings and the location of the filings 
(e.g., accession numbers) on the Commission's eLibrary Web site; and 
(4) summarize, if required,\29\ the differences between the Form 1 
amounts and any amounts included in a formula rate as described 
above.\30\
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    \29\ Whether or not a public utility or licensee must provide 
this information is addressed above.
    \30\ Revised Form 1 pages affected by this Final Rule are 
provided in Appendix A.
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    46. AEP is concerned that reporting may be difficult because of the 
number and variety of rate schedules and tariffs that may be covered by 
this requirement. As stated above, we do not anticipate that this 
requirement need rise to the level of an accounting reconciliation; a 
narrative description (with reference to a rate proceeding adopting the 
difference) may suffice.
    47. In addition, a utility is not precluded from filing 
modifications to its formula rates to make cost references consistent 
with Form 1 reporting requirements as they are updated.\31\
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    \31\ The Commission reiterates that utilities that are required 
to make regular informational filings by their formula rates, a 
Commission-approved settlement, or other Commission requirement 
(e.g., a Commission requirement imposed as a condition of acceptance 
of the formula rates) need not provide footnotes. These filers must 
nevertheless complete the new schedule provided in page 106.
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    48. In response to BPA and the Michigan Commission, we clarify that 
this Final Rule does not change our policies with respect to the burden 
of proof associated with challenges to previously approved formula 
rates under section 206.\32\ Form 1 is not filed pursuant to sections 
205 or 206 of the FPA and, therefore, its submittal will not initiate a 
rate proceeding or investigation. A rate proceeding is initiated by a 
rate filing under section 205, or an investigation initiated either in 
response to a complaint or pursuant to a notice of Commission 
investigation under section 206. Additional information to assess 
jurisdictional rates may be requested from the utility or sought 
through discovery in an appropriate proceeding; the Commission's 
actions here do not, for example, affect the scope of discovery in 
litigated proceedings.
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    \32\ See Order No. 710 at P 12 (noting that despite changes made 
to gas reporting forms, a party filing a complaint has the burden to 
show why the information in the Commission's financial forms 
supports an allegation that the existing rates are not just and 
reasonable, and that the changes adopted in Order No. 710 do not 
limit an entity's rights under governing law and the Commission's 
regulations, nor change the Commission's obligation to rule on 
complaints, petitions, or other requests for relief based on a full 
record and substantial evidence).
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    49. In addition, we reject TAPS' proposals to change the 
Commission's accounting as beyond the scope of this proceeding, which 
relates to reporting requirements for the various accounts defined by 
the USofA, and we reject the Nevada Companies' proposal to revise our 
OASIS Web site posting requirements; both should be addressed in more 
appropriate proceedings reviewing the Commission's accounting and OASIS 
regulations.
    50. With respect to the Michigan Commission's suggestion that the 
Commission initiate an inquiry into the Commission's formula rate 
policies and whether formula rates can shield future utility investment 
decisions from review, the Commission declines to initiate such an 
investigation. The NOPR rejected calls for reporting

[[Page 58726]]

information on future transmission investments, stating that Form 1 is 
intended to provide information on a utility's financial activities for 
the reporting year, but does not include projections of future 
costs.\33\ Comments filed in response to the NOPR have not persuaded us 
to change our views. Should an entity desire to question the prudence 
of a utility's transmission investment decisions, it may file a 
complaint with the Commission.\34\
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    \33\ NOPR at P 54.
    \34\ Preventing Undue Discrimination and Preference in 
Transmission Service, Order No. 890, 72 FR 12,266 (March 15, 2007), 
FERC Stats. & Regs. ] 31,241 at P 435 (2007), order on reh'g, Order 
No. 890-A, 73 FR 2984 (Jan. 16, 2008), FERC Stats. & Regs. ] 31,261 
(2007), order on reh'g, Order No. 890-B, 123 FERC ] 61,299 (2008).
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2. Filing Thresholds for Form 1
    51. The NOPR proposed to eliminate the filing requirement for 
utilities that are not subject to the Commission's jurisdiction because 
they are not public utilities under Part II of the FPA, but make sales 
that meet or exceed the threshold for meeting the Commission's Forms 1 
and 3-Q reporting requirements.\35\ The NOPR also sought comment on 
whether to revise the definitions for major and nonmajor utilities, 
inviting specific suggestions for how this might be done with 
justifications for proposed thresholds.\36\ The NOPR mentioned that the 
Commission was aware of five non-jurisdictional utilities that 
otherwise met or exceeded the threshold for reporting: Alaska Electric 
and Power Co.; CenterPoint Energy Houston Electric, LLC; Hawaii 
Electric Light Co., Inc.; Hawaiian Electric Co., Inc.; and Maui 
Electric Co., Ltd.
---------------------------------------------------------------------------

    \35\ NOPR at P 50.
    \36\ Id. P 48.
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    52. The NOPR cited an order where the Commission recently granted 
waiver of the financial form filing requirements under such 
circumstances. In Morenci Water and Electric Co., the Commission 
granted 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.\37\
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    \37\ Morenci Water and Electric Co., 121 FERC ] 61,024 (2007).
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Comments
    53. No commenter objected to these proposals. International 
Transmission proposes, however, that non-major electric utilities and 
non-jurisdictional utilities that belong to a joint rate zone be 
required to file Form 1 and that, for purposes of the filing 
thresholds, all of the electric utilities in a joint rate zone should 
be deemed major electric utilities. International Transmission thus 
proposes that, in addition to the numerical filing thresholds, the 
General Instructions to Part 101 be revised to require that: (1) 
Nonmajor electric utilities in joint rate zones with major electric 
utilities be required to file Form 1; and (2) non-jurisdictional 
utilities in joint rate zones with jurisdictional public utilities also 
be required to file Form 1.
Commission Determination
    54. In this Final Rule we are removing the words ``whether or not 
the jurisdiction of the Commission is otherwise involved'' from 
Sec. Sec.  141.1(b) and 141.400(b), which establish the filing 
requirements for Form 1 and Form 3-Q, respectively. With this change, 
companies that are not subject to the Commission's jurisdiction because 
they are not public utilities (or licensees) need no longer file Form 1 
or 3-Q. If a company is concerned that it may still fall within the 
revised requirements of Sec. Sec.  141.1(b) or 141.400(b), but 
nevertheless should be exempted from filing Forms 1 and 3-Q, it may 
continue to seek an individual waiver from the Commission. No 
commenter, we add, objected to the proposal to cease requiring filing 
by companies that do not otherwise fall under the Commission's 
jurisdiction, but meet the minimum filing requirements found in 
Sec. Sec.  141.1 and 141.400 of the Commission's regulations.
    55. The Commission rejects International Transmission's proposal to 
revise the definitions that distinguish major and nonmajor utilities, 
to require utilities that participate in joint rate zones with major 
utilities to also file Form 1. International Transmission's proposal 
expands the reporting requirement so that it would apply to non-
jurisdictional entities and also would require small utilities to file 
Form 1, regardless of the reporting threshold. International 
Transmission's proposal would unreasonably increase the reporting 
burdens on small utilities. Therefore, we reject the proposal.
3. Affiliate Transactions
    56. To provide further transparency and improve the detection of 
cross-subsidization, the NOPR proposed to add a new schedule and page 
429, ``Transactions with Associated (Affiliated) Companies,'' providing 
information concerning affiliate transactions. The NOPR proposed that 
filers would report the following: (1) A description of the good or 
service charged or credited; (2) the name of the associated 
(affiliated) company; (3) the USofA account charged or credited; and 
(4) the amount charged or credited.\38\
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    \38\ NOPR at P 51-52.
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Comments
    57. Several commenters support the proposal,\39\ and some include 
proposals to expand the reporting requirement.\40\ Others object to the 
affiliate transaction reporting requirement \41\ or argue that such a 
requirement would be duplicative of other reporting obligations, 
unnecessary and burdensome.\42\
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    \39\ APPA and Michigan Commission comments.
    \40\ International Transmission, and SDG&E comments.
    \41\ See AEP, EEI, MidAmerican, and Nevada Companies comments.
    \42\ FirstEnergy and Duke comments.
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    58. APPA supports the Commission's proposal to add the new schedule 
to collect information on affiliate transactions. The Michigan 
Commission states that detailed descriptions of costs allocated to 
jurisdictional operations from affiliates are essential to detect 
cross-subsidization. It also requests clarification whether the 
Commission intends that an allocation for common facilities that are 
billed to one or more affiliates be reported as an affiliate 
transaction. The Michigan Commission requests that the Commission 
require additional detail, consisting of a description of all 
allocation factors used by the utility and its affiliates and an 
explanation of how ``direct'' and ``common'' costs are defined and 
implemented.
    59. Nevada Companies states that affiliate transactions should be 
reported by type of service provided and goods transferred. The Nevada 
Companies note that reporting amounts by types of services provided 
would link this report to master service agreements entered into by 
many affiliated companies. They also request a definition of good or 
service.
    60. SDG&E recommends that the Commission clarify that the affiliate 
transaction information required to be provided is limited to 
transactions between a jurisdictional utility and its affiliates and 
does not include transactions solely between or among the affiliates.
    61. Nevada Companies requests that affiliate transaction 
information only be reported annually for companies that prepare 
similar information to fulfill state requirements, suggesting the 
proposed reporting requirement could be met by state oversight. AEP 
objects to an affiliate transaction reporting

[[Page 58727]]

requirement and suggests that the issue is a state regulatory 
matter.\43\
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    \43\ See also Nevada Companies comments.
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    62. Duke requests that the Commission clarify that the new page 429 
is not intended to require the reporting of affiliate transactions 
between the electric utility and centralized service companies, as this 
information is already reported in FERC Form No. 60 (Form 60). 
FirstEnergy states that the new page would result in a duplication of 
effort since the same information is already reported to the Commission 
in other FERC forms, including the Form 60, and other places in Form 1, 
such as page 332, Transmission of Electricity by Others and pages 326-
327, Purchased Power. At a minimum, FirstEnergy requests that a set of 
parameters be established for reporting the information requested, and 
suggests filers be permitted to report the information by general 
category rather than by individual transactions.
    63. MidAmerican objects to detailed reporting of each affiliate 
transaction as unnecessarily burdensome and states that the information 
is already being provided in other publicly available documents. 
MidAmerican requests that the Commission limit any affiliate 
transaction reporting requirement and (1) establish an aggregate annual 
transaction reporting threshold of the greater of (a) $250,000 per 
affiliate or (b) one one-hundredth of one percent (.01%) of the 
electric utility's operating revenues \44\ and (2) exempt transactions 
based on regulator-approved tariffs.\45\ The Nevada Companies request 
that $100,000 be set as a reasonable minimum amount to report the 
transfer of a good, or an aggregate amount of service.
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    \44\ SDG&E also supports a $250,000 reporting threshold for 
affiliate transactions.
    \45\ In particular, MidAmerican notes that it is bound to serve 
affiliates due to its provision of service to 2.5 million retail 
customers. MidAmerican argues that provision of service in 
accordance with a state-regulator-approved tariff precludes the 
opportunity for cross-subsidization or preferential service. 
MidAmerican states that the same holds true where MidAmerican 
purchases tariff services from an affiliate of its parent (Berkshire 
Hathaway).
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    64. EEI states that the affiliate transaction reporting proposal is 
inconsistent with the Commission's decisions in Orders No. 707 and 708 
not to require additional reporting.\46\ International Transmission and 
Nevada Companies object to an affiliate reporting requirement that 
would apply to transactions between regulated public utilities. 
International Transmission cites the Commission's proposal that page 
429 is to ``provide further transparency and improve the detection of 
cross-subsidization.'' \47\ International Transmission states that a 
broad, one-size-fits-all requirement that includes reporting of 
transactions between affiliated regulated public utilities would not 
produce useful information for detecting improper cross-subsidization 
for the benefit of non-utility affiliates. International Transmission 
argues that the regulated affiliates' Form 1 filings already provide 
ample transparency and that the affiliate transaction reporting 
requirement is therefore not necessary for affiliate transactions 
between regulated public utilities.
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    \46\ Cross-Subsidization Restrictions on Affiliate Transactions, 
Order No. 707, 73 FR 11013 (Feb. 29, 2008), FERC Stats. & Regs. ] 
31,264, order on reh'g, Order No. 707-A, 73 FR 43072 (Jul. 24, 
2008), FERC Stats. & Regs. ] 31,272 (2008); Blanket Authorization 
Under FPA Section 203, Order No. 708, 73 FR 11003 (Feb. 29, 2008), 
FERC Stats. & Regs. ] 31,265, order on reh'g, Order No. 708-A, 73 FR 
43066 (Jul. 24, 2008), FERC Stats. & Regs. ] 31,273 (2008).
    \47\ Citing NOPR at P 52.
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Commission Determination
    65. Consistent with our natural gas reporting requirements 
established in Order No. 710, we will adopt the NOPR proposal and 
incorporate new page 429, Transactions with Associated (Affiliated) 
Companies. Consistent with the reporting threshold established in Order 
No. 710, the schedule instructions incorporate a $250,000 threshold for 
reporting individual transactions. While some commenters suggested 
alternative thresholds, we find that the threshold we adopt here 
reasonably balances the burden while still reporting needed 
information. Therefore, we will not adopt the suggested alternative 
proposals.
    66. In response to requests that the Commission specify the 
affiliated or associated company transactions to which new page 429 
applies, we clarify that the schedule applies to all affiliated/
associated company non-power goods and services transactions including 
those with other regulated public utilities, centralized and other 
service companies, and other affiliated or associated companies 
providing non-power goods and services to the respondent or receiving 
non-power goods or services from the respondent. However, we also 
clarify that page 429 does not apply to transactions between affiliate 
or associate companies that do not include the respondent utility.
    67. We disagree with EEI that the ``affiliate transaction reporting 
proposal is inconsistent with the Commission's decisions in Orders No. 
707 and 708 not to require additional reporting.'' We note that, 
although Order No. 707 did not adopt a reporting requirement, at the 
same time the NOPR in this proceeding alerted interested persons that 
the Commission was separately proposing the additional affiliate 
transaction reporting requirements that are adopted in this Final Rule. 
Order No. 707 was intended to update our rate filing regulations to 
reflect our expanded authority following the repeal of the Public 
Utility Holding Company Act of 1935 (PUHCA 1935).\48\ In Order No. 707, 
the Commission codified in its rate regulations \49\ restrictions on 
affiliate transactions between franchised public utilities that have 
captive customers or that own or provide transmission service over 
jurisdictional transmission facilities, on the one hand, and their 
market-regulated power sales affiliates or non-utility affiliates, on 
the other. Order No. 707 addressed both power and non-power goods and 
services transactions between the utility and its affiliates and 
specifically power sales affiliates. This proceeding provides expanded 
affiliate/associate transaction reporting to facilitate monitoring 
affiliate/associate non-power goods and services transactions as part 
of a comprehensive proceeding to update our reporting requirements. 
Thus, while Order No. 707 did not expand reporting to implement the 
revised rate filing regulations adopted in the wake of the repeal of 
PUHCA 1935, this proceeding is based on the need for data to monitor on 
an ongoing basis utility rates to ensure that they remain just and 
reasonable. On the basis of the record in this proceeding, we find that 
the additional reporting requirement adopted here is appropriate 
because it will assist the Commission and the public in monitoring a 
utility's rates.
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    \48\ 15 U.S.C. 79a, et seq.
    \49\ 18 CFR Part 35.
----------------------------------------------------------------