Government Energy Regulatory Commission Update

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´╗┐Government Energy Regulatory Commission Update Steven D. Chase, CPA Office of Enforcement, Division of Financial Regulation Federal Energy Regulatory Commission NARUC Staff Subcommittee on Accounting and Finance Phoenix, Arizona

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Disclaimer The perspectives and remarks exhibited are my own and don't speak to, nor are they to be deciphered to speak to the perspectives, remarks, or places of the Federal Energy Regulatory Commission.

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AGENDA Commission Members Accounting Actions Enforcement Actions Commission Actions

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Chairman Wellinghoff Jon Wellinghoff was named Chairman by President Barack Obama on March 19, 2009. An individual from the Commission since 2006, the U.S. Senate reconfirmed him to an entire, five-year FERC term in December 2007. Director Wellinghoff is a vitality law authority with over 30 years involvement in the field. Before joining FERC, he was in private practice and concentrated solely on customer matters identified with renewable vitality, vitality proficiency and disseminated era. Served two terms as the State of Nevada's first Consumer Advocate for Customers of Public Utilities. While serving in that part, Chairman Wellinghoff spoke to Nevada's utility customers before the Public Utilities Commission of Nevada, the FERC, and in bids under the steady gaze of the Nevada Supreme Court. While Consumer Advocate, he created the main exhaustive state utility coordinated arranging statute. Training: Antioch School of Law, Washington, D.C., JD, 1975; Howard University, Washington, D.C., M.A.T., Mathematics, 1972; and University of Nevada, Reno, Nevada, BS, Mathematics, 1971.

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Commissioner Kelly Suedeen G. Kelly is a Commissioner at the Federal Energy Regulatory Commission, affirmed to a term that lapses June 30, 2009. Beforehand she was a Professor of Law at the University of New Mexico School of Law, where she showed vitality law, open utility direction, authoritative law and administrative process. She likewise worked with the law office of Modrall, Sperling, Roehl, Harris & Sisk in Albuquerque from 2000 through 2003. In 2000, Ms. Kelly served as advice to the California Independent System Operator. In 1999, she filled in as a Legislative Aide to U.S. Congressperson Jeff Bingaman. She got a B.A. With Distinction in Chemistry from the University of Rochester and a J.D. cum laude from Cornell Law School. She is admitted to the bars of New Mexico and the District of Columbia.

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Commissioner Moeller Commissioner Philip D. Moeller was named by President Bush, and sworn into office on July 24, 2006, by Chief Justice of the United States John Roberts, for a term terminating June 30, 2010. From 1997 through 2000, Mr. Moeller served as a vitality strategy consultant to U.S. Representative Slade Gorton (R-Washington) where he chipped away at power arrangement, electric framework dependability, hydropower, vitality productivity, atomic waste, vitality and water apportionments and other vitality enactment. Preceding joining Senator Gorton's staff, he served as the Staff Coordinator for the Washington State Senate Committee on Energy, Utilities and Telecommunications, where he was in charge of an extensive variety of approach zones that included vitality, media communications, protection, water, and atomic waste. Mr. Moeller got a B.A. in Political Science from Stanford University.

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Commissioner Spitzer Marc Spitzer was selected by President Bush to the Federal Energy Regulatory Commission and affirmed by the U.S. Senate for a term lapsing June 30, 2011. Mr. Spitzer was chosen in 2000 to the Arizona Corporation Commission (ACC) and in 2002 was chosen ACC Chairman by his associates. As ACC Chairman, he concentrated on approaches empowering extension of common gas framework, particularly dissemination and capacity; making a request side administration strategy; improving the ACC's renewables standard; and propelling buyer protection worries in media communications. As ACC Chairman, he built up a legacy of adjusting contending interests, while guaranteeing Arizonans get sheltered, efficient and dependable utility administrations. In the wake of moving on from Dickinson College in Carlisle, Pennsylvania, he went to the University of Michigan School of Law.

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AGENDA Commission Members Accounting Actions Enforcement Actions Commission Actions

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FERC Staff's Comments to the SEC IFRS Roadmap Request the SEC to urge the IASB to receive a bookkeeping standard like SFAS No. 71 SFAS No. 71 fundamental for cost-based, rate controlled elements in view of the level of dependence on budgetary explanations for cost-based ratemaking SFAS No. 71 determines clashes amongst administrative and SEC monetary reporting

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FERC Staff's Comments to the SEC IFRS Roadmap Without SFAS No. 71 Economic substance of a controller's activities on the managed element are not appeared in the money related explanations Regulated elements might be required to derecognize reported deferrals Results of operations answered to controllers may contrast extraordinarily from those answered to freely issued

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Capitalization of Underground Cable Assessment Costs IMCORP, Docket No. AC09-27-000 Filed December 23, 2008 Request for affirmation that the cost of underground link appraisal innovation might be promoted when it is utilized as a part of association with restoration ventures Costs caused to expand the valuable existence of the framework with regards to a one-time recovery program, as represented in the Commission's Notice of Proposed Accounting Release, Accounting for Pipeline Assessment Costs (Docket No. AI05-1-000)

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Capitalization of Underground Cable Assessment Costs Notice of Proposed Accounting Release Clarifies and outlines the best possible representing pipeline evaluation Costs identified with a progressing uprightness administration projects are expensed Cost identified with a noteworthy recovery venture might be promoted Project brings about huge substitutions and adjustments Project augments the general pipeline framework's valuable life Example No. 3 represents these ideas

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Capitalization of Underground Cable Assessment Costs Chief Accountant Determination Principles connected to pipeline appraisal expenses may likewise be connected to underground link evaluations Capitalization Principles Part of a one-time real restoration extend bringing about huge repairs and substitutions Enhance and increment the life of the electric link framework past its unique helpful life Incurred ensuing to deciding the requirement for a noteworthy recovery program

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Capitalization of Underground Cable Assessment Costs Capitalization Principles, proceeded with General motivation behind the appraisals to decide the particular area of links should have been repaired Internal controls to recognize costs caused identified with continuous appraisal exercises and those identified with the recovery extend Expense Ongoing appraisal exercises Assessment costs before deciding the requirement for a recovery extend Letter Order issued March 9, 2009

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Accounting for Emission Allowances National Grid plc, Docket No. AC08-146-000 Filed July 11, 2008 (Amended August 22, 2008 & October 24, 2008) Proposed diary sections on the merger of KeySpan Corporation into National Grid National Grid utilized the buy technique for bookkeeping and pushed down buy bookkeeping changes in accordance with the books of KeySpan's jurisdictional auxiliaries KeySpan Generation, LLC (Genco) & KeySpan LNG, LP

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Accounting for Emission Allowances National Grid, proceeded with Push down bookkeeping balanced Genco's outflow stipends to reasonable esteem Recognized $296.2 million for remittances held and future recompenses through 2027 Account 158.1, Allowance Inventory Recognized $251.5 million risk for recompenses to be utilized by Genco or payable to Long Island Power Authority from the offer of any abundance discharge stipends Account 253, Other Deferred Credits

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Accounting for Emission Allowances National Grid, proceeded with Chief Accountant assurance Emission remittances in Account 158.1 ought to be recorded at verifiable cost, i.e., the sum Genco paid for its recompenses Difference between reasonable estimation of recompenses and authentic cost might be recorded in Account 186, Miscellaneous Deferred Debits Purchase bookkeeping passages ought to just perceive recompenses Genco claimed at the merger date Letter arrange issued December 23, 2008

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Allowance For Funds Used During Construction (AFUDC) Rate Pacific Gas and Electric Company, Docket No. AC09-29-000 Filed January 9, 2009 Request to prohibit fleeting obligation used to fund atomic fuel from the equation used to ascertain AFUDC rate CPUC obliges Pacific to utilize transient obligation to back atomic fuel Chief Accountant approved Pacific's ask for on March 3, 2009.

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Income Tax Accounting for Pass-Through Entities PATH West Virginia, LLC and PATH Allegheny, LLC (PATH Companies), Docket No. AC09-3-000 Filed October 8, 2008, supplemented December 15, 2008 Request endorsement to clear to Retained Earnings Current measure of pay duties payable Current measure of conceded assessment resources made in the present duty year and perceived on the pay expense form of its individuals

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Income Tax Accounting for Pass-Through Entities PATH Companies proceeded with, PATH Companies are start-up restricted risk organizations composed to back, develop, possess, work, and keep up a portion of a 290-mile transmission line, planned to be finished in 2013 Recover an arrival on 100 percent of development work in advance in rate base amid the development of the transmission line Treated as enterprises for ratemaking purposes and gathers a wage charge recompense for the duty obligation eventually paid Must keep up books of record in light of the Commission's Uniform System of Accounts (USofA) as though they were a corporati

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