operating revenue differs significantly from its overall cost of service including allowances for claimed return and income taxes, the filing public utility shall show the amounts available for return and taxes on income and return expressed as a percentage of rate base.

Statement M-Allocated cost of service. For the test period show the cost of service allocated to the sales or services for which the increased rate or charge is proposed, including the principal determinants used for allocation purposes. In connection therewith, the following data should be submitted:

(1) In the event the filing public utility considers certain special facilities as being devoted entirely to the service involved, it shall show, in addition to the over-all cost of service, the cost of service related to such special facilities.

(2) Computations showing the energy responsibility of the service, based upon considerations of energy sales under the proposed rate schedules and the kwh delivered from the filing public utility's supply system.

(3) Computations showing the demand responsibility of the service, based upon considerations of the monthly maximum demands supplied from the seller's system, the maximum demands of the service under the proposed rate schedules, and the demands of the service at the time of the maximum system demand. Such non-coincident and coincident demand data, including date and hour for the system and for the service, should be shown for each month of the test period together with a statement explaining how the demand ratio used in the filing party's cost study was derived.

(4) Estimated peak hour and annual energy losses applicable to sales under the proposed rate schedule expressed as a percentage of system output.

Statement N-Comparison of cost of service. For the test period compare the allocated cost of service shown in Statement L above with revenues under the proposed rates. If the amount of revenue under the proposed new rates differs significantly from allocated cost of service including allowances for claimed return and income taxes, the filing public utility shall show the amounts available for return and taxes on income, and shall show return expressed as a percentage of rate base allocated to the service concerned.

(1) In the event the filing public utility considers certain special facilities as being devoted entirely to the service involved, it shall show, in addition to the over-all cost of service, the cost of service related to such special facilities.

Statement O-Fuel cost adjustment factor. If the rate schedule embodies a fuel clause,

show the derivation of the fuel cost adjustment factor as stated therein.

(c) If a rate schedule required to be on file with this Commission is not required to be supported by cost of service data as set forth in this section but such data may be needed for Commission analysis, these regulations contemplate that each filing public utility may be required, by letter of the Secretary, to submit specified cost data.

(d) Filing public utilities in completing the supporting cost of service data herein required should be guided by applicable Commission precedents and policy statements considered in the light of their respective operating conditions and sales and services subject to this Commission's regulatory jurisdiction. [Order 271, 28 F.R. 10573, Oct. 2, 1963, as amended at 28 F.R. 11404, Oct. 24, 1963]

OTHER FILING REQUIREMENTS

§ 35.14 Fuel cost adjustment clauses.

(a) Fuel adjustment clauses which are not in conformity with the principles set out below are not in the public interest. These regulations contemplate that the filing of proposed rate schedules which embody fuel clauses failing to conform to the following principles may result in suspension of those parts of such rate schedules:

(1) It shall be the intent of the fuel clause to reflect changes in the fuel component (and fuel only) per kilowatt hour of delivered energy cost. Where the adjustment does not automatically reflect changes in the system heat rate, the public utility shall make appropriate amendments as significant changes occur in system operations, and at least every five years, and such amendments shall be filed with the Commission in accordance with § 35.13.

(2) The base cost of fuel, which cost shall include no items other than those in Account 151, of the Commission's Uniform System of Accounts for Public Utilities and Licensees, shall be stated in cents per million B.t.u.

(3) The fuel adjustment shall not apply to any part of that energy generated by hydro-electric generating stations.

(b) Any change in the fuel adjustment factor or in the base cost of fuel shall be submitted with supporting data as a filed rate change.

When a rate schedule or part thereof required to be on file with the Commission is proposed to be cancelled or is to terminate by its own terms and no new rate schedule or part thereof is to be filed in its place, each party required to file the schedule shall notify the Commission of the proposed cancellation or termination on the form indicated in § 131.53 of this chapter at least thirty days but not more than ninety days prior to the date such cancellation or termination is proposed to take effect. A copy of such notice to the Commission shall be duly posted. With such notice each filing party shall submit a statement giving the reasons for the proposed cancellation or termination, and a list of the affected purchasers to whom the notice has been mailed. For good cause shown, the Commission may by order provide that the notice of cancellation or termination shall be effective as of a date prior to the date of filing or prior to the date the filing would become effective in accordance with these rules.

Whenever the name of a public utility is changed, or its operating control is transferred to another public utility in whole or in part, or a receiver or trustee is appointed to operate any public utility, the exact name of the public utility, receiver, or trustee which will operate the property thereafter shall be filed within 30 days thereafter with the Commission on the form indicated in § 131.51 of this chapter. § 35.17

Changes relating to suspended rate schedules or parts thereof. (a) Withdrawal of suspended rate schedules or parts thereof. Where a rate schedule or part thereof has been suspended by the Commission, it may be withdrawn during the period of suspension only by special permission of the Commission granted upon application therefor and for good cause shown. If permitted to be withdrawn, any such rate schedule may be refiled with the Commission within a one-year period thereafter only with special permission

• See General Policy and Interpretations, § 2.4, of this Chapter.

of the Commission for good cause shown.

(b) Changes in suspended rate schedules or parts thereof. A public utility may not, within the period of suspension, file any change in a rate schedule or part thereof which has been suspended by order of the Commission except by special permission of the Commission granted upon application therefor and for good cause shown.

(c) Changes in rate schedules or parts thereof continued in effect and which were proposed to be changed by the suspended filing. A public utility may not, within the period of suspension, file any change in a rate schedule or part thereof continued in effect by operation of an order of suspension and which was proposed to be changed by the suspended filing, except by special permission of the Commission granted upon application therefor and for good cause shown. § 35.18 Rates established by order of the Commission.

Every rate schedule filed to make effective the rates, charges, classifications or services, or any rule, regulation, practice or contract relating thereto, established in conformity with an order of the Commission shall bear the following additional notation on the title page:

Filed in Compliance with an Order of the Federal Power Commission Docket No. Entered Day of

§ 35.19 Submission of information by

reference.

If all or any portion of the information called for in this part has already been submitted to the Commission, substantially in the form prescribed above, specific reference thereto may be made in lieu of re-submission in response to the requirements of this part.

§ 35.20 Filing of rate schedules, notices, etc., by persons authorized to transmit electric energy from the United States to a foreign country.

Persons authorized to transmit electric energy from the United States to a foreign country and required by the provisions of § 32.38 of this chapter, to file all rate schedules, supplements, notices of succession in ownership or operation, notices of cancellation, and certificates of concurrence with respect to such en

ergy shall do so in the form and manner specified in § 35.1 through 35.16 as applicable to public utilities.

§ 35.21 Applicability to licensees and others subject to section 19 or 20 of the Federal Power Act.

Upon further order of this Commission issued upon its own motion or upon complaint or request by any person or State within the meaning of sections 19 or 20 of the Federal Power Act, the provisions of §§ 35.1-35.19 shall be operative as to any licensee or others who are subject to this Commission's jurisdiction in respect to services and the rates and charges of payment therefor by reason of the requirements of sections 19 or 20 of the Federal Power Act. The requirement of this section for compliance with the provisions of §§ 35.1 through 35.19 shall be in addition to and independent of any obligation for compliance with those regulations by reason of the provisions of sections 205 and 206 of the Federal Power Act. For purposes of applying this section "Electric Service" as otherwise defined in § 35.2(a) shall mean: Services to customers or consumers of power within the meaning of sections 19 or 20 of the Federal Power Act which may be comprised of various classes of capacity and energy and/or transmission services subject to the jurisdiction of this Commission. "Electric Service" shall include the utilization of facilities owned or operated by any licensee or others to effect any of the foregoing sales or services whether by leasing or other arrangements. As defined herein "Electric Service" is without regard to the form of payment or compensation for the sales or services rendered, whether by purchase and sale, interchange, exchange, wheeling charge, facilities charge, rental or otherwise. For purposes of applying this section, "Rate Schedule" as otherwise defined in § 35.2 (b) shall mean: A statement of (1) electric service as defined in this § 35.21 (2) rates and charges for or in connection with that service, and (3) all classifications, practices, rules, regulations, or contracts which in any manner affect or relate to the aforementioned service, rates and charges. This statement shall be in writing and may take the physical form of a contractual document, pur

41.10

41.11 41.12

CERTIFICATION OF COMPLIANCE WITH

ACCOUNTING REGULATIONS

Examination of accounts.
Report of certification.

Qualifications of accountants.

AUTHORITY: The provisions of this Part 41 issued under sec. 4(b), 41 Stat. 1065, as amended, secs. 301, 308, 309, 49 Stat. 854, 858; 16 U.S.C. 797(b), 825, 825g, 825h, unless otherwise noted.

SOURCE: The provisions of this Part 41 contained in Order 141, 12 F.R. 8500, Dec. 19, 1947, unless otherwise noted.

CROSS REFERENCE: For rules of practice and procedure, see Part 1 of this chapter. ADJUSTMENTS OF ACCOUNTS AND REPORTS § 41.1 Notice of deficiencies.

If, as the result of an examination by a representative of the Commission of the accounts of a person subject to the act and to the Commission's accounting requirements, or of an examination of any statement or report submitted by such person, it appears that the accounts, or any books or records pertaining to or in support thereof, are not being kept and maintained as required by the Commission, or that the statements or reports prepared and submitted are not in proper form, the failure or deficiency will be called to the attention of such person either formally or informally as the circumstances appear to warrant. § 41.2 Response to notification.

If, as the result of such formal or informal notice, the matter is not adjusted 5 See footnote 1 on p. 141.

within the time fixed by said notice, or within a reasonable time in case no date is specified, or if there is a disagreement between such person and the Commission or its representative respecting the application or interpretation of the act or requirements of the Commission with respect to the matter at issue, such person will be requested to advise the Commission in writing within a time to be specified whether it consents to the disposition of the questions involved under the shortened procedure provided in this part.

§ 41.3 Facts and argument.

If the person consents to the matter being handled under such shortened procedure, the person and any other parties interested, including representatives of the Commission, shall submit to the Commission, within 30 days after the receipt of notice from the Coinmission to do so, a memorandum of the facts and, separately stated, of the argument relied upon, to sustain the position taken respecting the matter at issue together with copies in sufficient number to enable the Commission to retain three copies for its own use and make service in accordance with § 1.17 of this chapter, upon all parties designated in said notice. Twenty days will be allowed in which to file a reply by any party who filed an original memorandum.

§ 41.4 Form and style.

All memoranda must conform to the requirements of § 1.15 of this chapter, and each copy must be complete in itself. All pertinent data should be set forth fully, and each memorandum should set out the facts and argument as prescribed for briefs in § 1.29 of this chapter. § 41.5

Verification.

The facts stated in the memorandum must be sworn to by persons having knowledge thereof, which latter fact must affirmatively appear in the affidavit. Except under unusual circumstances, such persons should be those who would appear as witnesses if hearing were had to testify as to the facts stated in the memorandum.

The burden of proof to justify every accounting entry shall be on the person making, authorizing, or requiring such entry.

CERTIFICATION OF COMPLIANCE WITH ACCOUNTING REGULATIONS

§ 41.10 Examination of accounts.

All Class A and B public utilities and licensees shall secure, for the year 1968 and each year thereafter, the services of an independent certified public accountant, or independent licensed public accountant, certified or licensed by a regulatory authority of a State or other political subdivision of the United States, to test compliance in all material respects, of those schedules as are indicated in the General Instructions set out in the Annual Report, Form No. 1, with the Commission's applicable Uniform System of Accounts and published accounting releases. The Commission expects that identification of questionable matters by the independent accountant will facilitate their early resolution and that the independent accountant will seek advisory rulings by the Commission on such items. This examination shall be deemed supplementary to periodic Commission examinations of compliance.

(Sec. 304, 49 Stat. 855; 16 U.S.C. 825c) [Order 356, 33 F.R. 143, Jan. 5, 1968]

§ 41.11

Report of certification. Each Class A or B public utility or licensee shall 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. The letter or report shall also set forth which, if any, of the examined schedules do not conform to the Commission's requirements and shall describe the discrepancies that exist. The Commission shall not be bound by a certification of compliance made by an independent accountant pursuant to this paragraph.

(Sec. 304, 49 Stat. 855; 16 U.S.C. 825c) [Order 356, 33 F.R. 143, Jan. 5, 1968]

§ 41.12

Qualifications of accountants.

The Commission will not recognize any certified public accountant or public accountant who is not in fact independent. For example, an accountant will not be considered independent with respect to any person or any of its parents or subsidiaries in whom he has, or had during the period of report, any direct financial interest or any material indirect financial interest. The Commission will determine the fact of independence by considering all the relevant circumstances including evidence bearing on the relationships between the accountant and that person or any affiliate thereof. (Sec. 304, 49 Stat. 855; 16 U.S.C. 825c) [Order 356, 33 F.R. 143, Jan. 5, 1968]

An order authorizing the holding of positions as provided by section 305 (b) of the Federal Power Act (49 Stat. 856; 16 U.S.C. 825d (b)) will be granted only upon application therefor made as provided in this part by the person seeking to hold such positions (hereinafter referred to as "applicant").

§ 45.2 Positions requiring authorization.

(a) The positions subject to this part shall include those of any person elected or appointed to perform the duties or functions ordinarily performed by a president, vice president, secretary, treasurer, general manager, comptroller, chief purchasing agent, director or partner, or to perform any other similar executive duties or functions, in any corporation1 within the purview of section 305(b) of the act. With respect to positions not herein specifically mentioned which applicant holds and which are invested with executive authority, applicant shall state in the application the source of such executive authority, whether by bylaws, action of the board of directors, or otherwise.

(b) Corporations1 within the purview of section 305 (b) of the act include:

(1) Any public utility under the act, which means any person who owns or operates facilities for the transmission of electric energy in interstate commerce, or any person who owns or operates facilities for the sale at wholesale of electric energy in interstate commerce.

1 "Corporation" means any corporation, joint-stock company, partnership, association, business trust, organized group of persons, whether incorporated or not, or a receiver or receivers, trustee or trustees of any of the foregoing. It shall not include "municipalities" as defined in the Federal Power Act (sec. 3, 49 Stat. 838; 16 U.S.C. 796).