FERC Accounting 101
May 14-15, 2020 | Online :: Central Time
The overriding purpose of the Uniform System of Accounts (USofA) is to ensure uniformity and consistency in the reporting of the accounting transactions in the books and records of electric and gas utilities. Uniformity and consistency are important not only for regulators, but also for other parties requiring accounting information, such as utility management, shareholders, creditors and other parties to rate proceedings. Therefore, it is beneficial to anyone whose work involves public utilities to have a basic understanding of the FERC USofA since it is applicable both at the federal and state level.
This training in the basics of the FERC USofA will contain several modules, each one capsulizing a key component of the USofA. The course will highlight the development of the accounting system prescribed by FERC for electric and gas utilities. It will focus on the role of the USofA, the components of the USofA, and the role of USofA in the ratemaking (setting utility prices) process. To provide the attendees hands-on experience with the USofA, the final module in the course will contain classroom problems for the attendees to calculate using USofA accounts for the numerical impact of early retirement of utility plant as well as, calculating a utility’s revenue requirement from USofA account balances.
Upon completion of this course, participants will be able to successfully:
- Define public utilities and how their accounting system are unique
- Describe government agencies’ regulatory authority over public utilities and how they apply the USofA to electric and gas utilities
- Explain the role of accounting in public utilities
- Demonstrate the structure and usage of the FERC Uniform System of Accounts for electric and gas utilities
- Investigate Balance Sheet Accounts
- Identify major categories of plant investments
- Examine Income Statement Accounts
- Explain the accounting for utility property process and depreciation accounting
- List major categories of expenses
- Classify the concepts of capital versus expense
- Review USofA Financial Statements in the FERC Form No. 1 for electric utilities and the FERC Form No. 2 for gas utilities
- Explain the work order process and project accounting
- Examine the key concepts of Public Utility Depreciation
- Review Construction Work in Progress (CWIP) and Allowance of Funds Used During Construction (AFUDC)
- Discuss early retirement of utility plant and its associated accounting impacts
- Define the impairment of utility assets
- List key differences between USofA accounting and Generally Accepted Accounting Principles (GAAP)
- Define the role of the USofA in the ratemaking process
EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET). In obtaining this accreditation, EUCI has demonstrated that it complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.
EUCI is authorized by IACET to offer 1.1 CEUs for this event.
This program will use PowerPoint presentations and group discussions, as well as active participation. Interactive exercises will be provided after each major presentation.
Thursday, May 14, 2020
8:00 – 8:30 a.m. :: Login
8:30 – 8:45 a.m. :: Course Introductions and Objectives
8:45– 9:45 a.m. :: Reviewing Public Utilities Regulations
- Development of Public Utility Regulation
- What is a Public Utility and What Makes their Accounting System Unique?
- Regulating Public Utilities and the Impact on their Accounting Systems
- Books and records
- Accounting entries for requested transactions
- Cost assignment and allocation (CAAM)
- The Role of Accounting in Public Utilities
- Uniformity between utilities for regulatory review
9:45 – 10:00 a.m. :: Morning Break
10:00 a.m. – 12:00 p.m. :: Understanding FERC Uniform System of Accounts (USofA): Electric and Gas Utilities
- Development of the USofA
- FERC USofA
- General instructions
- Plant instructions
- Operating expense instructions
12:00 – 1:00 p.m. :: Lunch Break
1:00 – 1:15 p.m. :: Differentiating between USofA Accounting and Generally Accepted Accounting Principles (GAAP)
- Schedule M Timing – Temporary and Permanent Differences
1:15 – 2:45 p.m. :: Building Balance Sheet Accounts, Part 1
- What are the Balance Sheet Accounts?
- Balance Sheet Accounts Classifications
- Major Categories of Utility Plant
- Electric plant
- Intangible plant
- General plant
- Gas plant
- Intangible plant
- Production plant
- Natural gas storage and processing plant
- General plant
- Electric plant
2:45 – 3:00 p.m. :: Afternoon Break
3:00 – 4:30 p.m. :: Building Balance Sheet Accounts, Part 2
- FERC Form No 1 and No 2 Balance Sheets
- Creating Income Statement Accounts
- What are the Income Statement Accounts?
- How are revenue and expenses accounts classified?
- FERC Form No. 1 and No. 2 Income Statements
- Classifying Capital Versus Expense
Friday, May 15, 2020
8:00 – 8:30 a.m. :: Login
8:30 – 10:15 a.m. :: Accounting for Utility Plant
- Work Order Systems
- What is a work order?
- Work order content
- Initiating the work order
- Closing out the work order
- Records and Progress
- Continuing property records
- What are Continuing Property Records (CPRs)?
- What information is provided by a CPR system?
- What are the uses of CPRs
- Public utility depreciation
- Construction work in progress (CWIP)
- Allowance of funds used during construction (AFUDC)
- Early retirement of utility plant
- Impairment of utility assets
- Regulatory assets
- Regulatory liabilities
- Continuing property records
10:15– 10:30 a.m. :: Morning Break
10:30 a.m. – 12:00 p.m. :: Ratemaking Process and Role of the USofA
- Historical Cost and Ratemaking
- Revenue Requirements
- Problem-solving using USofA
- Calculating the impact of an early retirement of utility property using USofA Financial Statements
- Calculating the revenue requirement for electric and gas utilities using the USofA accounting records
12:00 – 12:15 p.m. :: Wrapping Up: Questions and Concluding Remarks
Bill Steele, President, Bill Steele and Associates
Mr. Steele has over 40 years of experience in public utility regulation in which he has acquired an extensive knowledge of electric, gas and telecommunications industries. Mr. Steele’s has expertise in utility accounting, revenue requirements, cost allocation, class cost-of-service studies, rate design, cost-of-capital, alternative forms of regulation, mergers and acquisitions.
Prior to forming Bill Steele and Associates LLC in May of 2012, he spent 34 years with the Colorado Public Utilities Commission (CPUC) as an advisor to the Commissioners, Mr. Steele served as an advisor to the three Colorado Public Utilities Commissioners and the Commission’s six Administrative Law Judges. Mr. Steele demonstrated his broad expertise in the areas of electricity and natural gas utility regulation, which included the areas of revenue requirements, cost-of-service analysis and rate design. He also served in the role as the Commission’s subject matter expert in utility accounting and finance matters.
In addition, Mr. Steele’s advisory responsibilities included the training of new Commissioners as well as conducting in-house training courses on various utility issues, such as how to apply traditional regulatory principles to emerging issues in public utility regulation.
Prior to becoming a commission advisor, Mr. Steele supervised the Financial Analysts’ in the Commission’s Fixed Utilities Section for 17 years. His duties in that role included the training of new financial analysts, supervising audits of utility accounting systems, management practices, special investigations, as well as, providing expert testimony in over 50 regulatory proceedings on policy issues concerning accounting, financial, and management issues.
On January 5, 2018, Colorado Governor Hickenlooper by Executive Order (A 2008 002) appointed Mr. Steele to serve as a representative of small business on the Utility Consumers Board (UCB). Mr. Steele as a board member of UCB, provides to the Office of Consumer Counsel general policy guidance on matters that involve utility regulation and legislative matters.
We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.
- You will receive a meeting invitation will include a link to join the meeting.
- Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
- You will need to join the appropriate meeting at the appropriate time.
- If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
- The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.
Please Note: Confirmed speakers do not need to register and are encouraged to participate in all sessions of the event. If you are a speaker and have any questions please contact our offices at 1.303.770.8800
Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ
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Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before April 10, 2020 in order to be refunded and will be subject to a US $95.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800