generation and transmission capacity and fuel supplies within the region so that during emergencies the affected utilities can immediately determine the extent and location of likely sources of assistance throughout the region. In this regard, appropriate communication systems and interregional liaison among neighboring regions and utility systems will serve to accomplish similar purposes on an interregional scale. Their full development is encouraged. (b) Public disclosure. Each electric utility system, investor owned, publicly owned, or cooperatively owned, which participates in the work of a regional reliability council, is requested to furnish, upon a voluntary basis, to the Federal Power Commission such contingency plans or procedures as referred to above, for general informational purposes. We contemplate that each affected utility system will determine and state what it regards as its contingency plans or procedures; and that in doing so, various systems may choose to coordinate their activities and report their actions through an appropriate regional reliability council. We ask that two conformed copies of such plans or procedures of each participating system, whether reported individually or through a council, be supplied to this Commission. We ask that they be supplied within 60 days and that all contingency plans or procedures furnished be kept current. Upon request by state public service commissions or any other affected governmental authorities, each electric utility system furnishing its contingency plans or procedures to the Federal Power Commission, is requested to make two conformed copies of such plans and procedures available to the former. [Order 445, 37 F.R. 782, Jan. 19, 1972] § 2.11 Reliability and adequacy of electric service. (a) Participation of Federal Power Commission personnel in regional reliability councils: The Federal Power Commission's responsibilities under section 202(a) of the Federal Power Act, to promote and encourage voluntary efforts by the various segments of the electric utility industry to coordinate their activities, can best be carried out if each regional reliability council or other coordinating organization which is a member of the National Electric Reliability Council permits participation by staff personnel on a nonvoting basis in its deliberations. Accordingly, these organizations are requested to permit nonvoting participation by FPC staff personnel in their principal meetings, and upon occasion, as may be requested by the Chief of the Commission's, Bureau of Power, in their important technical meetings. (b) Participation of State Commission personnel in regional reliability councils: It is the policy of the Commission that personnel of appropriate State commissions be permitted to participate in the meetings of regional reliability councils or other coordinating organizations which are members of the National Electric Reliability Council on the same basis as personnel of the Federal Power Commission. (c) Informational reporting: (1) Advance planning and operating data from all segments of the industry, including those operated by the State or Federal governments or political subdivisions, agencies or instrumentalities thereof, and cooperatively owned associations, all reporting to and coordinated by regional councils, will assist in the accurate forecasting of power demands and in the appropriate and timely installation of generating and transmission facilities to meet these demands. (2) To this end we establish a system for the voluntary reporting by regional councils on an annual basis of current and projected system data for all components of the electric power industry. It is anticipated that power pools and other utility groups that coordinate their planning and operations will report the coordinated data to their respective councils. Individual utilities that are not members of pools will, of course, report directly to their regional councils. Utilities that are not members of regional councils, or not interconnected with other utilities, are requested to furnish to the reliability council representing their geographic area as much of the information specified in Appendix A as may be pertinent to their circumstances. Cooperation in this respect will lay the foundation for improvement in the reliability and adequacy of our national power supply. We ask that the coordinated data be reported by regional councils to the Federal Power Commission and State commissions. (3) Upon receipt and evaluation of the requested data, and determination of any need for clarification or extension of the annual reports, the Chief of the Commission's Bureau of Power may request the regional councils or the National Electric Reliability Council to supplement the information reported or to convene meetings of appropriate utilities or groups of utilities for the purpose of clarifying specific items. (d) The information requested for inclusion in the annual reports is set forth in Appendix A-1 to this section. Initial reporting is to be for the period 19761995, inclusive. The annual report and four conformed copies are to be filed with the commission of each State which is wholly or partly within the geographic boundaries of the reporting council. Reports are to be filed not later than April 1 of each year. APPENDIX A-1 INFORMATION TO BE REPORTED BY REGIONAL COUNCILS ON COORDINATED REGIONAL BULK POWER SUPPLY PROGRAMS Information to be reported annually should include: 1. Estimates of monthly peak loads for the first two years of the projection; estimates of summer and winter peak loads for the following eight years; and monthly gross and net energy requirements for the first two years and annual gross and net energy requirements for the following eight. 2. Itemization of all existing capacity resources in the region and new capacity resources (or retirements) as committed or projected for each year 10 years into the future; including, where known, in-service dates, locations, ownership, types of future generating units, primary fuel and capability for use of alternate fuels including length of time alternate fuel can be used, handling and storage capacity, and capacity exchanges with others at the time of summer and winter peak demands. 3. For each year of the 10-year projection, show the indicated capacity margins for reserves at the time of summer and winter peak loads, based on Items (1) and (2) of this appendix, with an assessment of adequacy of reserves for the first five years of the projection. Include a statement of the criteria now being used in determining reserve requirements by the Council or its appropriate subdivisions: also include an estimate of the magnitude of the capacity which will be unavailable for service due to scheduled maintenance or other known reasons at the time of the summer and winter peaks for the next five years. 4. For each steam generating unit of 300 MW or more, and for which construction has begun or is scheduled to begin within two years from the date of reporting, a status report on the proposed plan of cooling, and for fossil-fired plants, the fuels proposed and the plan for controlling stack emissions; also, the status of principal studies or model tests and the status of consultations with appropriate local, State or Federal authorities concerned. This item is not to be reported on April 1, 1977 for the calendar year 1976, or for any year thereafter. 5. A plan of the bulk power transmission network of the region in service at the time of the report (including interties with adjoining regions) and the general routing of facilities committed or tentatively projected for service within six years including identification of principal substations, operating voltages and projected in-service dates. In addition, show the transmission facilities projected for the balance of the 10-year period based upon the best information available. 6. A plotting and a description of the base case for load flow studies of the bulk power network of the region (or principal subdivisions) as it exists substantially at the time of reporting and as projected four to six years in the future; and a tabulation based upon calculated operating limits specifying the transmission capability between the region and adjacent regions and between subdivisions of the region; and a tabulation and brief statements on the results of a representative number of contingency cases studied; and similarly, information on stability analyses of the network, and including the criteria adopted by the regional council relating to network stability. 7. A description of the principal communication and control systems operating or planned within the region and listing of functions performed by such facilities. 8. For each transmission segment designed to operate at 230 kV (nominal) or higher for which construction has begun or is scheduled to begin within two years from the date of the report, information on the status of consultations with affected local communities and groups and status of applications to State or regional authorities, as appropriate. 9. Information on the following coordinated regional practices: a. Load shedding programs, including estimated steps of load reduction at various steps in declining frequency. b. Emergency power and shutdown facilities to prevent damage to equipment if station loses system power. c. Power facilities available for unit startup in the event of total loss of system power. d. Availability of continuous power independent of system sources for communication and control facilities. e. Provisions for sustaining the operation of generating units on local loads. f. Programs for scheduling maintenance outages of generation and transmission facilities. g. Programs for the selection, setting and maintenance of relays that affect the overall reliability of the interconnected network. h. Operating reserve policy. 10. For each year in the period of 11-20 years in the future show projected load and generating capability which will be neces sary to serve this load. Include a statement as to the percentages of the projected capacity to be installed in the 11-20 year period which will be hydro, nuclear and fossilfueled, respectively. 11. For the tenth year, include a map which shows the general configuration of the transmission network both within the region and the ties to adjacent regions. In addition, state voltage levels of possible transmission overlays being considered and approximate timing of the system overlay during the period 11-20 years in the future. Diagram possible patterns of transmission as of the twentieth year. [Order 383-2, 35 FR 6123. Apr. 15, 1970, as amended by Order 383-4, 41 FR 55174, Dec. 17, 1976] §2.12 Calculation of taxes for prop erty of public utilities and licensees constructed or acquired after January 1, 1970. Pursuant to the provisions of section 441(a)(4) (A) of the Tax Reform Act of 1969, 83 Stat. 487, 625, public utilities and licensees regulated by the Commission under the Federal Power Act which have exercised the option provided by that section to change from flow through accounting will be permitted by the Commission, with respect to liberalized depreciation, to employ a normalization method for computing federal income taxes in their accounts and annual reports with respect to property constructed or acquired after January 1, 1970, to the extent with which such property increases the productive or operational capacity of the utility and is not a replacement of existing capacity. Such normalization will also be permitted for ratemaking purposes to the extent such rates are subject to the Commission's ratemaking authority. As to balances in Account No. 282 of the Uniform System of Accounts, "Accumulated deferred income taxes-liberalized depreciation," it will remain the Commission's policy to deduct such balances from rate base in rate proceedings. (Secs. 205, 206, 301, 302. 304: 49 Stat. 851, 852, 854, 855; 16 U.S.C. 824d, 824e, 825a, 825c) [Order 404, 35 F.R. 7964, May 23, 1970] § 2.13 Design and construction. (a) The Commission recognizes the importance of protecting and enhancing natural, historic, scenic, and recreational values at projects licensed or proposed to be licensed under the Federal Power Act. (b) The Commission has adopted "Guidelines for the Protection of Natu ral, Historic, Scenic, and Recreational Values in the Design and Location of Rights-of-Way and Transmission Facilities" as set forth in Order No. 414 issued November 27, 1970. The Commission will consider these guidelines inter alia, in the determination of whether applications for any licenses under the Federal Power Act are best adapted to a comprehensive plan for developing a waterway. The guidelines may be obtained from the Office of Public Information, Federal Power Commission, 411 G Street NW.. Washington, DC 20426. (c) In furtherance of these polices, the Commission will not (1) permit the amendment of any license for the purpose of construction of additional facilities or (2) authorize the disposition of any interest in project lands for construction of any type, unless a showing is made that the construction will be designed to avoid or minimize conflict with the natural, historic, and scenic values and resources of the project area, including compliance with the Commission's "Guidelines for the Protection of Natural, Historic, Scenic, and Recreational Values in the Design and Location of Rights-of-Way and Transmission Facilities". [Order 414, 35 FR. 18586, Dec. 8, 1970] § 2.14 Conservation of natural resources. (a) Utility initiatives. The Federal Power Commission's responsibilities under section 202(a) of the Federal Power Act, for assuring an abundant supply of electric energy throughout the United States with the greatest possible economy and with regard to the proper utilization and conservation of natural resources, can best be carried out if each electric utility supplier within the United States (investor owned, publicly owned, including federally owned, and cooperatively owned), voluntarily adopts and publicly reports: (1) Policies for the conservation and efficient utilization of natural resources, (2) A program of research and development as it relates to the conservation and efficient utilization of natural resources, and (3) A general implementation plan relative to achieving continually increasing efficiencies in the generation, transmission, distribution and utilization of electric energy, including improvements in system load factors, particu 1 Filed as part of the original document. larly through the flattening of peak loads, increased consumer knowledge of conservation potentials in the use of electric energy or in the substitution of alternate energy forms for electricity, present or proposed rate incentives for more efficient energy utilization, and actions to effect more efficient energy utilization through design changes in equipment buildings, industrial and commercial operations and processes. (b) The nature and application of conservation of natural resources measures. (1) The inherent nature of the electric energy production and consumption processes is that they use parts of an integrated energy resource base comprising numerous, but finite primary energy and non-fuel resources. Accordingly, conservation of electric energy is the conservation of natural resources. Both are the responsibility of all elements of society, the economy and governmental authority, not merely those individuals and organizations who are immediately and directly involved with electric energy production or consumption. (2) The concept of conservation of natural resources is not one of economic growth limitation or diminished use of energy for beneficial purposes. Measures for conservation of natural resources contemplate coordinated activities among all elements of government, industry, commerce and the consuming public and thus operate to serve and advance the Nation's objectives, purposes and policies. (3) The application of electric energy conservation policies necessitates consideration of the optimum balance in the use of primary energy and non-fuel resource applications, the timing of present or deferred use of such resources and all relevant national objectives, purposes and policies whether governmental, economic, environmental or social. In any given circumstance, the application of the conservation of natural resources concept may have the effect of reducing or of increasing the application and consumption of primary energy or other non-fuel resources or of reducing some and of increasing others. That is the essence of the balancing procedure. (c) Informational reporting. To facilitate the widest possible dissemination of information relative to the conservation of natural resources in the production and use of electricity, the Commission establishes a system for the voluntary reporting by all electric utilities through out the United States of data on conservation of natural resources. The Commission asks the cooperation of all electric utility systems, investor owned, publicly owned, including federally owned, and cooperatively owned, in submitting data as set forth in the attached Appendix I to this statement. Where utility systems are engaged in cooperative programs with other utilities for the conservation of natural resources, and all such utilities are actively pursuing such conservation measures, reports may be submitted on a group basis in lieu of individual utility reporting. It further asks that the requested reports be filed with the Secretary of the Federal Power Commission in duplicate on or before December 31, 1973, for the calendar year 1972, and on or before May 31 of each year thereafter for the preceding calendar year. Reports subsequent to the initial reporting year 1972, may be in the form of supplemental reports or addendums to the prior years, showing changes and new developments only. All responses requested and received in respect to this statement of policy will be maintained by the Secretary in a public file of the Commission for general informational purposes. Annually, the Commission's staff will prepare a summary of such filed data to be assembled and published as soon thereafter as practicable. Upon request, copies of any submittals of data, as set forth in Appendix I, will be made available by the Commission's Office of Public Information upon payment of the Commission's document reproduction charge. Established Commission procedures as set forth in § 1.36 of this chapter will apply. APPENDIX I-INFORMATION TO BE SUPPLIED BY Information To Be Reported Annually Should Include The Following: 1. A narrative description of the electric utility's program for the conservation and efficient utilization of natural resources as it relates to electric power production and consumption. The information to be reported should include a fully descriptive statement detailing the utility's conservation policies, its program of research and development as the latter relates to conservation of natural resources, and the utility's general implementation plan to achieve 55 increasing efficiencies in the generation, transmission, distribution and consumption of electric energy. 2. An identification of anticipated electric supply savings arising from the cc.servation and efficient utilization of natural resources by the utility, including physical changes in utility system facilities, generation, heat rates, transmission and distribution losses, monthly and annual peak loads, and monthly and annual system load factors. The information to be reported should quantify these anticipated savings by sources and in terms of BTU equivalents of an identified fuel source, wherever possible. 3. An identification, wherever possible, of anticipated consumption savings arising from the conservation and efficient utilization of natural resources, including changes in ultimate consumer energy use patterns, the substitution of different electric energy consuming devices, design changes in equipment, buildings, industrial and commercial operations and processes and the substitution of other energy forms for electric energy. The information to be reported should quantify these anticipated savings by sources and in terms of Btu equivalents of an identified fuel source, wherever possible. 4. An identification of significant actions or programs initiated by the utility during the year to educate its utility consumers in improved efficiencies which are realizable in respect to the utilization of electric energy. The information to be reported should include copies of the utility's publications or communications with its consumers, governmental authorities or others, explaining these programs. [Order 495, 38 FR 31966, Nov. 20, 1973] § 2.15 Specified reasonable rate of re turn. (a) Pursuant to Section 10(d) of the Federal Power Act, the Commission has determined that the specified reasonable rate of return used in computing amortization reserves for hydroelectric project licenses shall be calculated annually based on current capital ratios developed from an average of 13 monthly balances of amounts properly includible in the licensee's long-term debt and proprietary capital accounts, as listed in the Commission's Uniform System of Accounts. The cost rate for such ratios shall be the weighted average cost of long-term debt and preferred stock for the year, and the cost of common equity shall be the interest rate on 10-year government bonds (reported as the Treasury Department's 10-year constant maturity series) computed on the monthly average for the year in question, plus four percentage points (400 basis points). (b) The Statement of Policy adopted herein shall be effective upon issuance of this order. (c) The Secretary shall cause prompt publication of this order to be made in the FEDERAL REGISTER. (d) All requests and suggestions not specifically dealt with herein are hereby denied. (e) The Secretary is hereby authorized to change the appropriate license article upon application by the licensees to reflect the specified reasonable rate of return as adopted herein. [Order No. 550, 41 FR 27032, July 1, 1976] § 2.16 Inclusion of construction work in progress in rate base of electric utilities. (a) The Commission will allow, upon application, in a rate case filed on or after December 8, 1976, and subject to paragraph (c) of this section, the inclusion in rate base of CWIP on: (1) Pollution control facilities; i.e. including identifiable structures or portions of structures which are designed to reduce the amount of pollution produced by the underlying power facility; Provided, however, That facilities which lessen pollution by substituting a different non-polluting method of generation shall not be included within this definition; and Provided further, That the definition herein prescribed shall not include facilities for generation of additional power necessitated by the operation of pollution control facilities. In determining which facilities qualify as pollution control facilities, the Commission will consider: (i) Whether such facilities fall within the Internal Revenue Service language, 26 U.S.C. 169; i.e. "a new identifiable treatment facility which is used * * * to abate or control water or atmospheric pollution or contamination by [the] removing, altering, disposing or storing of pollutants, contaminants, wastes or heat;" (ii) Whether such facilities have been certified by a local, state, or federal agency as being in conformity with, or required by, a program of pollution control; (iii) Whether such facilities meet the definitions of environmental protection facilities under Sections 4A through 4D of page 501 of FPC Form 1; as well as (iv) Any other relevant evidence tending to show that such facilities are for pollution control; and |