DEPARTMENT OF COMMERCE MICHIGAN PUBLIC SERVICE COMMISSION UNIFORM SYSTEM OF ACCOUNTS FOR MAJOR AND NONMAJOR GAS UTILITIES This rule takes effect 15 days after filing with the Secretary of State (by authority conferred upon the public service commission by Section 5 or Act No. 419 of the Public Acts of 1919, as amended, being Section 460.55 of the Michigan Compiled Laws). R 460.9021 Uniform system of accounts for major and nonmajor Gas utilities. R 460.9021, as noted on page 4825 of the 1979 Michigan Administrative Code, is amended to read as follows: The following uniform system of accounts shall apply to major and nonmajor privately owned gas utilities engaged in producing, transmitting, delivering, or furnishing gas for heating or lighting purposes for the public use: Classification of Gas Utilities For the purpose of applying this system of accounts, gas utilities are divided into 2 classes, as follows: Major. A gas company having annual natural gas sales of over 50 million MCF at 14.73 PSI (60EF). Nonmajor. A gas company having annual natural gas sales at or below 50 million MCF at 14.73 PSI (60EF). The class to which any utility belongs shall originally be determined by the average of its annual gas sales for the last 3 consecutive years. Subsequent changes in classification shall be made when the annual gas sales for each of the 3 immediately preceding years exceeds the upper limit, or is less than the lower limit of the classification previously applicable to the utility. Any utility may, at its option, adopt the system of accounts prescribed by the Commission for any larger class of utilities. This system applies to both major and nonmajor natural gas companies. Where the instructions and accounts are designated with the notations "major" and "nonmajor", they shall apply to major and nonmajor natural gas companies respectively. TABLE OF CONTENTS I. GENERAL INSTRUCTIONS 1 - 14 II. GAS PLANT INSTRUCTIONS 15 - 33 III. OPERATING EXPENSE INSTRUCTIONS 34 - 36 IV. BALANCE SHEET ACCOUNTS (Index) 37 - 40 1. Utility Plant 41 - 53 2. Other Property and Investments 53 - 56 3. Current and Accrued Assets 56 - 69 4. Deferred Debits 69 - 74 5. Proprietary Capital 75 - 79 6. Long-Term Debt 79 - 81 7. Other Non-current Liabilities 81 - 83 8. Current and Accrued Liabilities 83 - 86 9. Deferred Credits 87 - 88 V. GAS PLANT ACCOUNTS (Index) 94 - 97 1. Intangible Plant 97 - 98 2. Production Plant 98 - A. Manufactured Gas Production Plant B1.Natural Gas Production and Gathering Plant 111 - 117 B2.Products Extraction Plant 117 - 120 C. Synthetic Natural Gas Production Plant 120 - 121 3. Storage Plant 121 - A. Underground Storage Plant - 126 B. Other Storage Plant 126 - 129 C. Base load liquefied Natural Gas Terminaling and processing plant 129 - 133 4. Transmission Plant 133 - 136 5. Distribution Plant 136 - 143 6. General Plant 143 - 147 VI. INCOME ACCOUNTS (Index) 147 - 150 1. Utility Operation Income 151 - 159 2. Other Income and Deductions 159 - 164 3. Interest Charges 164 - 166 4. Extraordinary Items 166 - 167 VII. RETAINED EARNINGS ACCOUNTS 167 - 168 VIII. OPERATING REVENUE ACCOUNTS (Index) 169 1. Sales of Gas 169 - 171 2. Other Operating Revenues 171 - 174 IX. OPERATION AND MAINTENANCE EXPENSE ACCOUNTS (Index) 175 - 182 1. Production Expenses 183 A. Manufactured Gas Production Expenses 183 A1.Steam Production 183 - 185 A2.Manufactured Gas Production 185 - 198 B. Natural Gas Production Expenses 198 B1.Natural Gas Production and Gathering 198 - 208 B2.Products Extraction 208 - 213 C. Exploration and Development Expenses 213 - 215 D. Other Gas Supply Expenses 215 - 220 2. Natural Gas Storage Expenses 221 A. Underground Storage Expenses 221 - 229 B. Other Storage Expenses 229 - 232 C. Liquefied Natural Gas Terminaling and processing expenses 232 - 240 3. Transmission Expenses 240 - 248 4. Distribution Expenses 248 - 260 5. Customer Accounts Expenses 260 - 263 6. Customer Communication Expenses 263 - 266 7. Sales Expenses 266 - 269 8. Administrative and General Expenses 268 - 278 GENERAL INSTRUCTIONS 1. Definitions. When used in this system of accounts: 1. "Accounts" means the accounts prescribed in this system of accounts. 2. "Actually issued," as applied to securities issued or assumed by the utility, means those which have been sold to bona fide purchasers for a valuable consideration, those issued as dividends on stock, and those which have been issued in accordance with contractual requirements direct to trustees of sinking funds. 3. "Actually outstanding," as applied to securities issued or assumed by the utility, means those which have been actually issued and are neither retired nor held by or for the utility; provided, however, that securities held by trustees shall be considered as actually outstanding. 4. "Amortization" means the gradual extinguishment of an amount in an account by distributing such amount over a fixed period, over the life of the asset or liability to which it applies, or over the period during which it is anticipated the benefit will be realized. 5. A. "Associated companies" means companies or persons that directly, or indirectly, through one or more intermediaries, control, or are controlled by, or are under common control with, the accounting company. This also includes related parties. B. "Control" (including the terms "controlling," "controlled by," and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a company, whether such power is exercised through one or more intermediary companies, or alone, or in conjunction with or pursuant to an agreement, and whether such power is established through a majority or minority ownership or voting of securities, common directors, officers, or stockholders, voting trusts, holding trusts, associated companies, contract or any other direct or indirect means. C. "Related parties" means a party is a related party if it can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. 6. "Book cost" means the amount at which property is recorded in these accounts without deduction of related provisions for accrued depreciation, depletion, amortization, or for other purposes. 7. "Commission," unless otherwise indicated by the context, means the Michigan Public Service Commission. 8. "Cost" means the amount of money actually paid for property or services. When the consideration given is other than cash, in a purchase or sale transaction, as distinguished from a transaction involving the issuance of common stock in a merger or a pooling of interest, the value of such consideration shall be determined on a cash basis. 9. "Cost of removal" means the cost of demolishing, dismantling, tearing down or otherwise removing gas plant, including the cost of transportation and handling incidental thereto. 10. "Debt expense" means all expenses in connection with the issuance and initial sale of evidences of debt, such as fees for drafting mortgages and trust deeds; fees and taxes for issuing or recording evidences of debt; cost of engraving and printing bonds and certificates of indebtedness; fees paid trustees; specific costs of obtaining governmental authority; fees for legal services; fees and commissions paid underwriters, brokers, and salesmen for marketing such evidences of debt; fees and expenses of listing on exchanges; and other like costs. 11. A. "Depletion," as applied to natural gas producing land and land rights, means the loss in service value incurred in connection with the exhaustion of the natural resource in the course of service. B. "Depreciation," as applied to depreciable gas plant, means the loss in service value not restored by current maintenance, incurred in connection with the consumption or prospective retirement of gas plant in the course of service from causes which are known to be in current operation and against which the utility is not protected by insurance. Among the causes to be given consideration are wear and tear, decay, action of the elements, inadequacy, obsolescence, changes in the art, changes in demand and requirements of public authorities, and, in the case of natural gas companies, the exhaustion of natural resources. This commission has the authority to revise, approve or disapprove the depreciation rates for all depreciable plant accounts. 12. "Development costs," when used with respect to hydrocarbons, include all costs incurred in the readying of hydrocarbon deposits for commercial production including developmental well drilling costs. 13. "Discount," as applied to the securities issued or assumed by the utility, means the excess of the par (stated value of no-par stocks) or face value of the securities plus interest or dividends accrued at the date of the sale over the cash value of the consideration received from their sale. 14. "Exploration costs" include all costs in proving the existence of hydrocarbon deposits including geological, geophysical, lease acquisition (including delay rentals), administrative and general, and exploratory well drilling costs. 15. "Lease, capital" means a lease of property used in utility or nonutility operations, which meets one or more of the criteria stated in General Instruction 16. 16. "Lease, operating" means a lease of property used in utility or nonutility operations, which does not meet any of the criteria stated in General Instruction 16. 17. "Full-cost accounting for exploration and development costs" means the capitalization of all exploration and development costs incurred on or related to hydrocarbon leases, on properties in the contiguous 48 States and the State of Alaska acquired on or after the effective date of this system of accounts or at an earlier date as appropriate for the utility. 18. "Investment advances" means advances, represented by notes or by book accounts only, with respect to which it is mutually agreed or intended between the creditor and debtor that they shall be settled by the issuance of securities or shall not be subject to current settlement. 19. "Minor items of property" means the associated parts or items of which retirement units are composed. 20. "Natural gas" means either natural gas unmixed, or any mixture of natural and artificial gas. 21. "Natural gas company" means a person engaged in the transportation of natural gas, or the sale of such gas. 22. "Net salvage value" means the salvage value of property retired less the cost of removal. 23. "Nominally issued," as applied to securities issued or assumed by the utility, means those which have been signed, certified, or otherwise executed, and placed with the proper officer for sale and delivery, or pledged, or otherwise placed in some special fund of the utility, but which have not been sold, or issued direct to trustees of sinking funds in accordance with contractual requirements. 24. "Nominally outstanding," as applied to securities issued or assumed by the utility, means those which after being actually issued, have been reacquired by or for the utility under circumstances which require them to be considered as held alive and not retired, provided, however, that securities held by trustees shall be considered as actually outstanding. 25. "Operating system" means property consisting of a complete generating, transmission or distribution facility or combination thereof, either in service or capable of being economically put into service upon restoration to current standards. 26. "Original cost," as applied to gas plant, means the cost of such property to the person first devoting it to public service. 27. "Person" means an individual, a corporation, a partnership, an association, a joint stock company, a business trust, or any organized group of persons, whether incorporated or not, or any receiver or trustee. 28. "Premium," as applied to securities issued or assumed by the utility, means the excess of the cash value of the consideration received from their sale over the sum of their par (stated value of no-par stocks) or face value and interest or dividends accrued at the date of sale. 29. "Production, transmission, and distribution plant." For the purposes of this system of accounts: A. "Production System" shall consist of plant and equipment used in the production of gas. It shall include producing lands and leaseholds, gas rights, other land rights, structures, drilling and clearing equipment, gas wells, well head equipment, separation and other facilities used in the production of natural gas. The production system ends where the gas enters a gathering system, transmission system or distribution system, as applicable, in accordance with the practices in the pricing area where such system is located. B. "Transmission System" means the land, structures, mains, valves, meters, boosters, regulators, tanks, compressors, and their driving units and appurtenances, and other equipment used primarily for transmitting gas from a production plant, delivery point of purchased gas, gathering system, storage area, or other wholesale source of gas, to one or more distribution areas. The transmission system begins at the outlet side of the valve at the connection to the last equipment in a manufactured gas plant, the connection to gathering lines or delivery point of purchased gas, and includes the equipment at such connection that is used to bring the gas to transmission pressure, and ends at the outlet side of the equipment which meters or regulates the entry of gas into the distribution system or into a storage area. It does not include storage land, structures or equipment. Pipeline companies, including those companies which measure deliveries of gas to their own distribution systems, shall include city gate and main line industrial measuring and regulating stations in the transmission function. C. "Distribution System" means the mains which are provided primarily for distributing gas within a distribution area, together with land, structures, valves, regulators, services and measuring devices, including the mains for transportation of gas from production plants or points of receipt located within such distribution area to other points therein. The distribution system owned by companies having no transmission facilities connected to such distribution system begins at the inlet side of the distribution system equipment which meters or regulates the entry of gas into the distribution system and ends with and includes property on the customer's premises. For companies which own both transmission and distribution facilities on a continuous line, the distribution system begins at the outlet side of the equipment which meters or regulates the entry of gas into the distribution system and ends with and includes property on the customer's premises. The distribution system does not include storage land, structures, or equipment. D. "Distribution Area" means a metropolitan area or other urban area comprising one or more adjacent or nearby cities, villages or unincorporated areas, including developed areas contiguous to main highways. 30. "Property retired," as applied to gas plant, means property which has been removed, sold, abandoned, destroyed, or which for any cause has been withdrawn from service. 31. A. "Replacing" or "replacement," when not otherwise indicated in the context, means the construction or installation of gas plant in place of property retired, together with the removal of the property retired. B. "Research and Development," in the case of major utilities means expenditures incurred by natural gas companies either directly or through another person or organization (such as research institute, industry association, foundation, university, engineering company or similar contractor) in pursuing research and development activities including experiment, design, installation, construction or operation. Such research and development costs should be reasonably related to the existing or future utility business, broadly defined, of the company or to the environment in which it operates or expects to operate. The term includes but is not limited to: all such costs incidental to the design, development or implementation of an experimental facility, a plant process, a product, a formula, an invention, a system or similar items, and the improvement of already existing items of a like nature; amounts expended in connection with the proposed development and/or proposed delivery of substitute or synthetic gas supplies (alternate fuel sources for example, an experimental coal gasification plant or an experimental plant synthetically producing gas from liquid hydrocarbons); and the costs of obtaining its own patent, such as attorney's fees expended in making and perfecting a patent application. The term does not include expenditures for efficiency surveys; studies of management, management techniques and organization; consumer surveys, advertising, promotions, or items of a like nature. 32. "Retained Earnings" (formerly earned surplus) means the accumulated net income of the utility less distribution to stockholders and transfers to other capital accounts. 33. "Retirement units" means those items of gas plant which, when retired, with or without replacement, are accounted for by crediting the book cost thereof to the gas plant account in which included. 34. "Salvage value" means the amount received for property retired, less any expenses incurred in connection with the sale or in preparing the property for sale; or, if retained, the amount at which the material recoverable is chargeable to materials and supplies, or other appropriate account. 35. "Service life" means the time between the date gas plant is includible in gas plant in service or gas plant leased to others and the date of its retirement. If depreciation is accounted for on a production basis rather than on a time basis, then service life should be measured in terms of the appropriate unit of production. 36. "Service value" means the difference between original cost and net salvage value of gas plant. 37. "Subsidiary Company," means a company which is controlled by the utility through ownership of voting stock. (See "Definitions" - item 5B "Control"). A corporate joint venture in which a corporation is owned by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group is a subsidiary company for the purposes of this system of accounts. 38. "Unsuccessful Exploration and Development Costs" are exploration and development costs related to efforts which do not directly result in the discovery of commercially recoverable hydrocarbon reserves. 39. "Utility," as used herein and when not otherwise indicated in the context, means any natural gas company to which this system is applicable. 2. Records. A. Each utility shall keep its books of account, and all other books, records, and memoranda which support the entries in such books of account, so as to be able to furnish readily full information as to any item included in any account. Each entry shall be supported by such detailed information as will permit ready identification, analysis and verification of all facts relevant thereto. B. The books and records referred to herein include not only accounting records in a limited technical sense, but all other records, such as minute books, stock books, reports, correspondence, memoranda, etc., which may be useful in developing the history of or facts regarding any transaction. C. No utility shall destroy any such books or records unless the destruction thereof is permitted by rules and regulations of the Commission. D. In addition to prescribed accounts, clearing accounts, temporary or experimental accounts, and subdivisions of any accounts may be kept, provided the integrity of the prescribed accounts is not impaired. E. All amounts included in the accounts prescribed herein for gas plant and operating expenses shall be just and reasonable and any payments or accruals by the utility in excess of just and reasonable charges shall be included in Account 426.5, Other deductions. F. The arrangement or sequence of the accounts prescribed herein shall not be controlling as to the arrangement or sequence in report forms which may be prescribed by the Commission. 3. Numbering system. A. The account numbering plan used herein consists of a system of three-digit whole numbers as follows: 100-199 Assets and other debits. 200-299 Liabilities and other credits. 300-399 Plant accounts. 400-432, 434-435 Income accounts. 433, 436-439 Retained earnings accounts. 480-499 Revenue accounts. 700-899 Production, transmission and distribution expenses. 900-949 Customer accounts, customer service and informational, sales and general and administrative expenses. B. In certain instances, numbers have been skipped in order to allow for possible later expansion or to permit better coordination with the numbering system for other utility departments. C. The numbers prefixed to account titles are to be considered as part of the titles. Each utility, however, may adopt for its own purposes a different system of account numbers (See Also General Instruction 2D) provided that the numbers herein prescribed shall appear in the descriptive headings of the ledger accounts and in the various sources of original entry; however, if a utility uses a different group of account numbers and it is not practicable to show the prescribed account numbers in the various sources of original entry, such reference to the prescribed account numbers may be omitted from the various sources of original entry. Moreover, each utility using different account numbers for its own purposes shall keep readily available a list of such account numbers which it uses and a reconciliation of such account numbers with the account numbers provided herein. It is intended that the utility's records shall be so kept as to permit ready analysis by prescribed accounts (by direct reference to sources of original entry to the extent practicable) and to permit preparation of financial and operating statements directly from such records at the end of each accounting period according to the prescribed accounts. 4. Accounting period. Each utility shall keep its books on a monthly basis so that for each month all transactions applicable thereto, as nearly as may be ascertained, shall be entered in the books of the utility. Amounts applicable or assignable to specific utility departments shall be so segregated monthly. Each utility shall close its books at the end of each calendar year unless otherwise authorized by the Commission. 5. Submittal of questions. To maintain uniformity of accounting, utilities shall submit questions of doubtful interpretation to the Commission for consideration and decision. 6. Item lists. Lists of "items" appearing in the texts of the accounts or elsewhere herein are for the purpose of more clearly indicating the application of the prescribed accounting. The lists are intended to be representative, but not exhaustive. The appearance of an item in a list warrants the inclusion of the item in the account mentioned only when the text of the account also indicates inclusion inasmuch as the same item frequently appears in more than one list. The proper entry in each instance must be determined by the texts of the accounts. 7. Extraordinary items. It is the intent that net income shall reflect all items of profit and loss during the period with the exception of prior period adjustments as described in paragraph 7.1. Those items related to the effects of events and transactions which have occurred during the current period and which are of unusual nature and infrequent occurrence shall be considered extraordinary items. Accordingly, they will be events and transactions of significant effect which are abnormal and significantly different from the ordinary and typical activities of the company, and which would not reasonably be expected to recur in the foreseeable future. (In determining significance, items should be considered individually and not in the aggregate. However, the effects of a series of related transactions arising from a single specific and identifiable event or plan of action should be considered in the aggregate.) To be considered as extraordinary under the above guidelines, an item should have an effect of more than approximately 5 percent on income, computed before extraordinary items. Commission approval must be obtained to treat an item of less than 5 percent as extraordinary. (See Accounts 434 and 435.) 7.1 Prior period items. A. Items of profit and loss related to the following shall be accounted for as prior period adjustments and excluded from the determination of net income for the current year. (1)Correction of an error in the financial statements of a prior year. (2)Adjustments that result from realization of income tax benefits of pre-acquisition operating loss carryforwards of purchased subsidiaries. B. All other items of profit and loss recognized during the year shall be included in the determination of net income for that year. 8. Unaudited items (major natural gas companies). Whenever a financial statement is required by the Commission, if it is known that a transaction has occurred which affects the accounts but the amount involved in the transaction and its effect upon the accounts cannot be determined with absolute accuracy, the amount shall be estimated and such estimated amount included in the proper accounts. The utility is not required to anticipate minor items which would not appreciably affect the accounts. 9. Distribution of pay and expenses of employees. The charges to gas plant, operating expense and other accounts for services and expenses of employees engaged in activities chargeable to various accounts, such as construction, maintenance, and operations, shall be based upon the actual time engaged in the respective classes of work, or in case that method is impracticable, upon the basis of a study of the time actually engaged during a representative period. 10. Payroll distribution. Underlying accounting data shall be maintained so that the distribution of the cost of labor charged direct to the various accounts will be readily available. Such underlying data shall permit a reasonably accurate distribution to be made of the cost of labor charged initially to clearing accounts so that the total labor cost may be classified among construction, cost of removal, gas operating functions (manufactured gas production, natural gas production and gathering, products extraction, underground storage, transmission, distribution, etc.), and nonutility operations. 11. Records for each plant (major natural gas companies). A. Separate records shall be maintained by gas plant accounts of the book cost of each plant owned, including additions by the utility to plant leased from others, and of the cost of operating and maintaining each plant owned or operated. The term "plant," as here used, means each manufactured gas production plant, the wells and gathering lines of each distinct production area, each system of interconnected transmission mains, each system of wells and lines of an underground storage project, each large purification or dehydration plant, each compressor station other than a distribution compressor station, and each products extraction plant. B. A natural gas company may, with the approval of the Commission, group certain of its systems of gathering lines and wells, small compressor stations, systems of underground storage lines and wells, and systems of interconnected transmission mains for the purpose of complying with the portion of this instruction requiring a segregation of the cost of operating and maintaining each plant. NOTE A - Where manufactured gas is produced by 2 or more processes at one location, each process shall be accounted for separately. NOTE B - Each natural gas company shall maintain operating or accounting records for each well showing (a) acreage on which drilled, (b) dates of drilling period, (c) cost of drilling, (d) depth of well, (e) particulars and depth of each stratum drilled through, (f) geological formation from which gas is obtained, (g) initial rock pressure and open flow capacity, (h) sizes of casing used and the lengths of each size, (i) total cost of well as recorded in gas plant accounts, (j) date well abandoned, for wells once productive, (k) date transferred to underground storage plant, for wells converted to storage use, and (l) date drilling discontinued, for wells determined to be nonproductive. The foregoing data, as appropriate, shall also be maintained for each subsequent change in the depth of each well. 12. Accounting for other departments. If the utility also operates other utility departments, such as electric, water, etc., it shall keep such accounts for the other departments as may be prescribed by proper authority, and in the absence of prescribed accounts, it shall keep such accounts as are proper or necessary to reflect the results of operating each such department. It is not intended that proprietary and similar accounts which apply to the utility as a whole shall be departmentalized. 13. Transactions with associated companies (major natural gas companies). Each utility shall keep its accounts and records so as to be able to furnish accurately and expeditiously statements of all transactions with associated companies. The statements may be required to show the general nature of the transactions, the amounts involved therein and the amounts included in each account prescribed herein with respect to such transactions. Transactions with associated companies shall be recorded in the appropriate accounts for transactions of the same nature. Nothing herein contained, however, shall be construed as restraining the utility from subdividing accounts for the purpose of recording separately transactions with associated companies. 14.Contingent assets and liabilities (major natural gas companies). Contingent assets represent a possible source of value to the utility contingent upon the fulfillment of conditions regarded as uncertain. Contingent liabilities include items which may under certain conditions become obligations of the utility but which are neither direct nor assumed liabilities at the date of the balance sheet. The utility shall be prepared to give a complete statement of significant contingent assets and liabilities (including cumulative dividends on preference stock) in its annual report and at such other times as may be requested by the Commission. 15. Long-term debt: premium, discount and expense, and gain or loss on reacquisition. A. Premium, discount and expense - a separate premium, discount and expense account shall be maintained for each class and series of long-term debt (including receivers' certificates) issued or assumed by the utility. The premium will be recorded in Account 225, Unamortized premium on long-term debt, the discount will be recorded in Account 226, Unamortized discount on long-term debt-Debit, and the expense of issuance shall be recorded in Account 181, Unamortized debt expense. The premium, discount and expense shall be amortized over the life of the respective issues under a plan which will distribute the amounts equitably over the life of the securities. The amortization shall be on a monthly basis, and amounts thereof relating to discount and expense shall be charged to Account 428, Amortization of debt discount and expense. The amounts relating to premium shall be credited to Account 429, Amortization of premium on debt-Credit. The utility may, however, accelerate the writing off of premium, discount and expense where the amounts are insignificant. B. Reacquisition, without refunding - when long-term debt is reacquired or redeemed without being converted into another form of long-term debt and when the transaction is not in connection with a refunding operation (primarily redemptions for sinking fund purposes), the difference between the amount paid upon reacquisition and the face value, plus any unamortized premium less any related unamortized debt expense and reacquisition costs; or less any unamortized discount, related debt expense and reacquisition costs applicable to the debt redeemed, retired and canceled, shall be recognized currently in income and recorded in Account 421, Miscellaneous nonoperating income, or Account 426.5, Other deductions. C. Reacquisition, with refunding - when the redemption of one issue or series of bonds or other long-term obligations is financed by another issue or series before the maturity date on the first issue, the difference between the amount paid upon refunding and the face value, plus any unamortized premium less related debt expense or less any unamortized discount and related debt expense applicable to the debt refunded, shall be included in Account 189, Unamortized loss on reacquired debt, or Account 257, Unamortized gain on reacquired debt, as appropriate. The utility may elect, without Commission approval, to account for such amounts as follows: (1)Write them off immediately when the amounts are insignificant. (2)Amortize them by equal monthly amounts over the remainder of the original life of the issue retired. (3)Amortize them by equal monthly amounts over the life of the new issue. (4)Amortize them by equal monthly amounts over the savings experienced in net annual interest and amortization charges. Once an election is made, it shall be applied on a consistent basis. The amounts in (1), (2) or (3) above shall be charged to Account 428.1, Amortization of loss on reacquired debt, or credited to Account 429.1, Amortization of gain on reacquired debt-Credit, as appropriate. The amounts in 4 above shall be accounted for as follows: (1) There is charged to account 426.5, Other deductions, in the year of refunding, any amounts of unamortized discount and expenses or redemption premiums relating to bonds or other long-term obligations previously refunded by the refunded bonds under immediate considerations, such amounts sometimes being referred to as "grandfather items"; and (2) The utility proceeds to amortize by equal monthly charges, from the date of refunding, the remainder of the charges associated with the refunded bonds, over a period not longer than that in which the saving in net annual interest and amortization charges equals the remainder of charges to be amortized, after taking into consideration the estimated additional taxes on income attributable to the saving in net annual interest and amortization charges. D. Premium, discount, or expense on debt shall not be included as an element in the cost of construction or acquisition of property (tangible or intangible), except under the provisions of Account 419.1, Allowance for other funds used during construction. 16. Criteria for classifying leases. A. If at its inception a lease meets one or more of the following criteria, the lease shall be classified as a capital lease. Otherwise, it shall be classified as an operating lease. (1)The lease transfers ownership of the property to the lessee by the end of the lease term. (2)The lease contains a bargain purchase option. (3)The lease term is equal to 75 percent or more of the estimated economic life of the leased property. However, if the beginning of the lease term falls within the last 25 percent of the total estimated economic life of the leased property, including earlier years of use, this criterion shall not be used for purposes of classifying the lease. (4)The present value at the beginning of the lease term of the minimum lease payments, excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon, equals or exceeds 90 percent of the excess of the fair value of the leased property to the lessor at the inception of the lease over any related investment tax credit retained by the lessor and expected to be realized by the lessor. However, if the beginning of the lease term falls within the last 25 percent of the total estimated economic life of the lease property, including earlier years of use, this criterion shall not be used for purposes of classifying the lease. The lessee utility shall compute the present value of the minimum lease payments using its incremental borrowing rate, unless (a) it is practicable for the utility to learn the implicit rate computed by the lessor, and (b) the implicit rate computed by the lessor is less than the lessee's incremental borrowing rate. If both of those conditions are met, the lessee shall use the implicit rate. B. If at any time the lessee and lessor agree to change the provisions of the lease, other than by renewing the lease or extending its term, in a manner that would have resulted in a different classification of the lease under the criteria in paragraph a had the changed terms been in effect at the inception of the lease, the revised agreement shall be considered as a new agreement over its term, and the criteria in paragraph a shall be applied for purposes of classifying the lease. Likewise, any action that extends the lease beyond the expiration of the existing lease term, such as the exercise of a lease renewal option other than those already included in the lease term, shall be considered as a new agreement, and shall be classified according to the above provisions. Changes in estimates (for example, changes in estimates of the economic life or of the residual value of the leased property) or changes in circumstances (for example, default by the lessee), shall not give rise to a new classification of a lease for accounting purposes. 17. Accounting for leases. A. All leases shall be classified as either capital or operating leases. The accounting for capitalized leases is effective January 1, 1987, except for the retroactive classification of certain leases which, in accordance with FASB No. 71, will not be required to be capitalized until after one year transition period. For the purpose of reporting to the commission the transition period shall be deemed to end December 31, 1987. B. The utility shall record a capital lease as an asset in Account 101.1, Property under capital leases (or Account 121, Nonutility property, if appropriate), and an obligation in Account 227, Obligations under capital leases - Noncurrent, or Account 243, Obligations under capital leases - Current, at an amount equal to the present value at the beginning of the lease term of minimum lease payments during the lease term, excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, together with any profit thereon. However, if the amount so determined exceeds the fair value of the leased property at the inception of the lease, the amount recorded as the asset and obligation shall be the fair value. C. Rental payments on all leases shall be charged to rent expense, fuel expense, construction work in progress, or other appropriate accounts as they become payable. D. For a capital lease, for each period during the lease term, the amounts recorded for the asset and obligation shall be reduced by an amount equal to the portion of each lease payment which would have been allocated to the reduction of the obligation, if the payment had been treated as a payment on an installation obligation (liability) and allocated between interest expense and a reduction of the obligation so as to produce a constant periodic rate of interest on the remaining balance. 18. Gas well records (nonmajor natural gas companies). Each utility with natural gas operations shall maintain operating or accounting records for each well showing: (a) acreage on which drilled, (b) dates of drilling period, (c) cost of drilling, (d) depth of well, (e) particulars and depth of each stratum drilled through, (f) geological formation from which gas is obtained, (g) initial rock pressure and open flow capacity, (h) sizes of casing used and lengths of each size, (i) total cost of well as recorded in gas plant accounts, (j) date well abandoned, for wells once productive, (k) date transferred to underground storage plant, for wells converted to storage use, and (l) date drilling discontinued, for wells determined to be nonproductive. the foregoing data, as appropriate, shall also be maintained for each subsequent change in the depth of each well. 19. Exchange of securities. Before recording journal entries which it is proposed to spread upon the company's books to record the requirement of capital stock or other securities issued or assumed by the company under a plan for the issuance in exchange therefor of the company's securities, a statement indicating the plan of accounting proposed by the company shall be presented to the commission for consideration and approval. Such statement shall provide the basis upon which the amounts have been determined. GAS PLANT INSTRUCTIONS 1. Classification of gas plant at effective date of system of accounts (major natural gas companies). A. The gas plant accounts provided herein are generally the same as those contained in the prior system of accounts. The balances in the various plant accounts, as determined under the prior system of accounts, should be carried forward. Any remaining balance of plant which has not yet been classified, pursuant to the requirements of the prior system, shall be classified in accordance with the following instructions. B.The cost to the utility of its unclassified plant shall be ascertained by analysis of the utility's records. Adjustments shall not be made to record in utility plant accounts amounts previously charged to operating expenses or to income deductions in accordance with the uniform system of accounts in effect at the time or in accordance with the discretion of management as exercised under a uniform system of accounts, or under accounting practices previously followed. C. The detailed gas plant accounts (301 to 399, inclusive) shall be stated on the basis of cost to the utility of plant constructed by it and the original cost, estimated if not known, of plant acquired as an operating unit or system. The difference between the original cost, as above, and the cost to the utility of gas plant after giving effect to any accumulated provisions for depreciation, depletion or amortization, shall be recorded in Account 114, Gas plant acquisition adjustments. The original cost of gas plant shall be determined by analysis of the utility's records or those of the predecessor or vendor companies with respect to gas plant previously acquired as operating units or systems and the differences between the original cost so determined, less accumulated provisions for depreciation, depletion and amortization, and the cost to the utility, with necessary adjustments for retirements from the date of acquisition, shall be entered in Account 114, Gas plant acquisition adjustments. Any difference between the cost of gas plant and its book cost, when not properly includible in other accounts, shall be recorded in Account 116, Other gas plant adjustments. D. Plant acquired by lease which qualifies as capital lease property under General Instruction 16, Criteria for classifying leases, shall be recorded in Account 101.1, Property under capital leases. 2. Gas plant to be recorded at cost. A. All amounts included in the accounts for gas plant acquired as an operating unit or system, except as otherwise provided in the texts of the intangible plant accounts, shall be stated at the cost incurred by the person who first devoted the property to utility service. All other gas plant shall be included in the accounts at the cost incurred by the utility except for property acquired by lease which qualifies as capital lease property under General Instruction 16, Criteria for classifying leases, and is recorded in Account 101.1, Property under capital leases. Where the term "cost" is used in the detailed plant accounts, it shall have the meaning stated in this paragraph. B. When the consideration given for property is other than cash, the value of such consideration shall be determined on a cash basis. (See, however, Definition 8.) In the entry recording such transaction, the actual consideration shall be described with sufficient particularity to identify it. The utility shall be prepared to furnish the Commission the particulars of its determination of the cash value of the consideration if other than cash. C. When property is purchased under a plan involving deferred payments, no charge shall be made to the gas plant accounts for interest, insurance, or other expenditures occasioned solely by such form of payment. D. The gas plant accounts shall not include the cost or other value of gas plant contributed to the company. Contributions in the form of money or its equivalent toward the construction of gas plant shall be credited to the accounts charged with the cost of such construction. Plant constructed from contributions of cash or its equivalent shall be shown as a reduction to gross plant constructed when assembling cost data in work orders for posting to plant ledger of accounts. The accumulated gross costs of plant accumulated in the work order shall be recorded as a debit in the plant ledger of accounts along with the related amount of contributions concurrently being recorded as a credit. 3. Components of construction cost. A. For major natural gas companies, the cost of construction properly includible in the gas plant accounts shall include, where applicable, the direct and overhead costs as listed and defined hereunder: (1)"Contract work" includes amounts paid for work performed under contract by other companies, firms, or individuals, costs incident to the award of such contracts, and the inspection of such work. (2)"Labor" includes the pay and expenses of employees of the utility engaged on construction work, and related worker's compensation insurance, payroll taxes and similar items of expense. It does not include the pay and expenses of employees which are distributed to construction through clearing accounts nor the pay and expenses included in other items hereunder. (3)"Materials and supplies" includes the purchase price at the point of free delivery plus customs duties, excise taxes, the cost of inspection, loading and transportation, the related stores expenses, and the cost of fabricated materials from the utility's shop. In determining the cost of materials and supplies used for construction, proper allowance shall be made for unused materials and supplies, for materials recovered from temporary structures used in performing the work involved, and for discounts allowed and realized in the purchase of materials and supplies. NOTE: The cost of individual items of equipment of small value (for example, $500 or less) or of short life (less than 3 years), including small portable tools and implements, shall not be charged to gas plant accounts unless the correctness of the accounting therefor is verified by current inventories. The cost shall be charged to the appropriate operating expense or clearing accounts, according to the use of such items, or, if such items are consumed directly in construction work, the cost shall be included as part of the cost of the construction. (4) "Transportation" includes the cost of transporting employees, materials and supplies, tools, purchased equipment, and other work equipment (when not under own power) to and from points of construction. It includes amounts paid to others as well as the cost of operating the utility's own transportation equipment. (See Item 5 Following.) (5) "Special machine service" includes the cost of labor (optional), materials and supplies, depreciation, and other expenses incurred in the maintenance, operation and use of special machines, such as steam shovels, pile drivers, derricks, ditchers, scrapers, material unloaders, and other laborsaving machines; also expenditures for rental, maintenance and operation of machines of others. It does not include the cost of small tools and other individual items of small value or short life which are included in the cost of materials and supplies. (See Item 3, Above.) When a particular construction job requires the use for an extended period of time of special machines, transportation or other equipment, the net book cost thereof, less the appraised or salvage value at time of release from the job, shall be included in the cost of construction. (6) "Shop service" includes the proportion of the expense of the utility's shop department assignable to construction work except that the cost of fabricated materials from the utility's shop shall be included in "materials and supplies." (7) "Protection" includes the cost of protecting the utility's property from fire or other casualties and the cost of preventing damages to others, or to the property of others, including payments for discovery or extinguishment of fires, cost of apprehending and prosecuting incendiaries, witness fees in relation thereto, amounts paid to municipalities and others for fire protection, and other analogous items of expenditures in connection with construction work. (8) "Injuries and damages" includes expenditures or losses in connection with the construction work on account of injuries to persons and damages to the property of others; also the cost of investigation of and defense against actions for such injuries and damages. Insurance recovered or recoverable on account of compensation paid for injuries to persons incident to construction shall be credited to the account or accounts to which such compensation is charged. Insurance recovered or recoverable on account of property damages incident to construction shall be credited to the account or accounts charged with the cost of the damages. (9) "Privileges and permits" includes payments for and expenses incurred in securing temporary privileges, permits or rights in connection with construction work, such as for the use of private or public property, streets, or highways, but it does not include rents, or amounts chargeable as franchises and consents for which see Account 302, Franchises and consents. (10)"Rents" includes amounts paid for the use of construction quarters and office space occupied by construction forces and amounts properly includible in construction costs for such facilities jointly used. (11)"Engineering and supervision" includes the portion of the pay and expenses of engineers, surveyors, draftsmen, inspectors, superintendents and their assistants applicable to construction work. (12)"General administration capitalized" includes the portion of the pay and expenses of the general officers and administrative and general expenses applicable to construction work. (13)"Engineering services" includes amounts paid to other companies, firms, or individuals engaged by the utility to plan, design, prepare estimates, supervise, inspect, or give general advice and assistance in connection with construction work. (14)"Insurance" includes premiums paid or amounts provided or reserved as self-insurance for the protection against loss and damages in connection with construction, by fire or other casualty, injury to or death of persons other than employees, damages to property of others, defalcation of employees and agents, and the nonperformance of contractual obligations of others. It does not include worker's compensation or similar insurance on employees included as "labor" in item 2, above. (15)"Law expenditures" includes the general law expenditures incurred in connection with construction and the court and legal costs directly related thereto, other than law expenses included in protection, item 7, and in injuries and damages, item 8. (16)"Taxes" includes taxes on physical property (including land) during the period of construction and other taxes properly includible in construction costs before the facilities become available for service. (17)"Allowance for funds used during construction" (major and non-major natural gas companies) includes the net cost for the period of construction of borrowed funds used for construction purposes and a reasonable rate on other funds when so used. No allowance for funds used during construction (AFUDC) shall be included in these accounts upon expenditures for construction projects which have been abandoned. NOTE: When a part only of a plant or project is placed in operation or is completed and ready for service but the construction work as a whole is incomplete, that part of the cost of the property placed in operation, or ready for service, shall be treated as "gas plant in service" and AFUDC thereon as a charge to construction shall cease. AFUDC on that part of the cost of the plant which is incomplete may be continued as a charge to construction until such time as it is placed in operation or is ready for service, except as limited in Item 17 above. i. The AFUDC rate utilized to record amounts in Account 419.1 and Account 432 in aggregate shall be as prescribed by the commission. In the case of combination utilities' common plant, the AFUDC rate for such common plant shall be as prescribed by the commission for a major utility department. A major utility department is one that generates more than 25% of total utility revenue. ii. The AFUDC treatment shall apply to construction projects which are expected to be under on-site construction for a period, and which have a total estimated cost, as prescribed by the commission. (18)"Earnings and expenses during construction" includes (a) all revenues derived during the construction period from property which is included in the cost of a project under construction and (b) all expenses which are attributable to the revenues received. (19)"Training costs" (major and nonmajor natural gas companies) When it is necessary that employees be trained to operate or maintain plant facilities that are being constructed and such facilities are not conventional in nature, or are new to the company's operations, these costs may be capitalized as a component of construction cost. Once plant is placed in service, the capitalization of training costs shall cease and subsequent training costs shall be expended. (See Operating Expenses Instruction 4.) (20)"Studies" includes the costs of studies such as operational, safety or environmental studies relative to plant under construction. Studies mandated by regulatory bodies relative to facilities in service, shall be charged to Account 183.2, other preliminary survey and investigation charges. B. For non-major natural gas companies, the cost of construction of property chargeable to the gas plant accounts shall include, where applicable, fees for construction certificate applications paid after grant of certificate, the cost of labor, materials and supplies, transportation, work done by others for the company, injuries and damages incurred in construction, privileges and permits, special machine service, allowance for funds used during construction, in accordance with paragraph (17) of this instruction; training costs and such portion of general engineering, administrative salaries and expenses, insurance, taxes, and other analogous items as may be properly includible in construction costs. (See Operating Expense Instruction 4.) 4. Overhead construction costs. A. All overhead construction costs, such as engineering, supervision, general office salaries and expenses, construction engineering and supervision by others than the accounting utility, law expenses, insurance, injuries and damages, relief and pensions, taxes and interest, shall be charged to particular jobs or units on the basis of the amounts of such overheads reasonably applicable thereto, to the end that each job or unit shall bear its equitable proportion of such costs and that the entire cost of the unit, both direct and overhead, shall be deducted from the plant accounts at the time the property is retired. B. As far as practicable, the determination of payroll charges includible in construction overheads shall be based on time card distributions thereof. Where this procedure is impractical, special studies shall be made periodically of the time of supervisory employees devoted to construction activities to the end that only such overhead costs as have a definite relation to construction shall be capitalized. The addition to direct construction costs of arbitrary percentages or amounts to cover assumed overhead costs is not permitted. C. For major natural gas companies, the records supporting the entries for overhead construction costs shall be so kept as to show the total amount of each overhead for each year, the nature and amount of each overhead expenditure charged to each construction work order and to each gas plant account, and the bases of distribution of such costs. 5. Gas plant purchased or sold. A. When gas plant constituting an operating unit or system is acquired by purchase, merger, consolidation, liquidation, or otherwise, after the effective date of this system of accounts, the costs of acquisition, including expenses incidental thereto properly includible in gas plant, shall be charged to Account 102, Gas plant purchased or sold. B. The accounting for the acquisition shall then be completed as follows: (1)The original cost of plant, estimated if not known, shall be credited to Account 102, Gas plant purchased or sold, and concurrently charged to the appropriate gas plant in service accounts and to Account 104, Gas plant leased to others, Account 105, Gas plant held for future use, Account 105.1, Production properties held for future use, and Account 107, Construction work in progress - Gas, as appropriate. (2)The depreciation, depletion and amortization applicable to the original cost of the properties purchased shall be charged to Account 102, Gas plant purchased or sold, and concurrently credited to the appropriate account for accumulated provision for depreciation, depletion or amortization. (3)The cost to the utility of any property includible in Account 121, Nonutility property, shall be transferred thereto. (4)The amount remaining in Account 102, Gas plant purchased or sold, shall then be closed to Account 114, Gas plant acquisition adjustments. C. If property acquired in the purchase of an operating unit or system is in such physical condition when acquired that it is necessary to rehabilitate it substantially in order to bring the property up to the standards of the utility, the cost of such work, except replacements, shall be accounted for as part of the purchase price of the property. D. When any property acquired as an operating unit or system includes duplicate or other plant which will be retired by the accounting utility in the reconstruction of the acquired property or its consolidation with previously owned property, the proposed accounting for such property shall be presented to the Commission. E. In connection with the acquisition of gas plant constituting an operating unit or system, the utility shall procure, if possible, all existing records relating to the property acquired, or certified copies thereof, and shall preserve such records in conformity with regulations or practices governing the preservation of records of its own construction. F. When gas plant constituting an operating unit or system is sold, conveyed, or transferred to another by sale, merger, consolidation or otherwise, the book cost of the property sold or transferred to another shall be credited to the appropriate gas plant accounts, including amounts carried in Account 114, Gas plant acquisition adjustments, and the amounts (estimated if not known) carried with respect thereto in the accounts for accumulated provisions for depreciation, depletion, and amortization and in Account 252, Customer advances for construction, shall be charged to such accounts and the contra entries made to Account 102, Gas plant purchased or sold. Unless otherwise ordered by the Commission, the difference, if any, between (a) the net amount of debits and credits and (b) the consideration received for the property (less commissions and other expenses of making the sale) shall be included in Account 421.1, Gain on disposition of property, or Account 421.2, Loss on disposition of property. (See Account 102, Gas plant purchased or sold.) NOTE: In cases where existing utilities merge or consolidate because of financial or operating reasons or statutory requirements rather than as a means of transferring title of purchased properties to a new owner, the accounts of the constituent utilities, with the approval of the Commission, may be combined. In the event original cost has not been determined, the resulting utility shall proceed to determine such cost as outlined herein. G. When regulated utility property with an original cost of $100,000 or more is sold, conveyed or transferred to a subsidiary or associated company, or when a subsidiary or associated company sells, conveys or transfers property with an original cost of $100,000 or more to the regulated utility business, the utility shall furnish the commission the particulars of its determination of the value of the property and request approval of the proposed journal entries to record the transaction. This information shall be filed within six months from the date of acquisition or sale of the property. 6. Expenditures on leased property. A. The cost of substantial initial improvements (including repairs, rearrangements, additions, and betterments) made in the course of preparing for utility service property leased for a period of more than one year, and the cost of subsequent substantial additions, replacements, or betterments to such property, shall be charged to the gas plant account appropriate for the class of property leased. If the service life of the improvements is terminable by action of the lease, the cost, less net salvage, of the improvements shall be spread over the life of the lease by charges to account 404.3, Amortization of other limited-term gas plant (for nonmajor companies, Account 404, Amortization of limited term gas plant). However, if the service life is not terminated by action of the lease but by depreciation proper, the cost of the improvements, less net salvage, shall be accounted for as depreciable plant. The provisions of this paragraph are applicable to property leased under either capital leases or operating leases. B. If improvements made to property leased for a period of more than one year are of relatively minor cost, or if the lease is for a period of not more than one year, the cost of the improvements shall be charged to the account in which the rent is included, either directly or by amortization thereof. 7. Land and land rights. A. The accounts for land and land rights shall include the cost of land owned in fee by the utility and rights, interests, and privileges held by the utility in land owned by others, such as leaseholds, easements, rights of way, natural gas rights, and other like interests in land. Do not include in the accounts for land and land rights and rights-of-way costs incurred in connection with first clearing and grading of land and rights-of-way and the damage costs associated with the construction and installation of plant. Such costs shall be included in the appropriate plant accounts directly benefited. B. Where special assessments for public improvements provide for deferred payments, the full amount of the assessments shall be charged to the appropriate land account and the unpaid balance shall be carried in an appropriate liability account. Interest on unpaid balances shall be charged to the appropriate interest account. If any part of the cost of public improvements is included in the general tax levy, the amount thereof shall be charged to the appropriate tax account. C. The net profit from the sale of timber, cord wood, or other property acquired with rights-of-way or other lands shall be credited to the appropriate plant account to which related. Where land is held for a considerable period of time and timber and other natural resources on the land at the time of purchases increases in value, the net profit (after giving effect to the cost of the natural resources) from the sales of timber or its products or other natural resources shall be credited to the appropriate utility operating income account when such land has been recorded in Account 105, Gas plant held for future use or in the case of major companies, Account 105.1, Production properties held for future use (major only) or classified as plant in service, otherwise to Account 421, Miscellaneous nonoperating income. D. Separate entries shall be made for the acquisition, transfer or retirement of each parcel of land, and each land right, or gas right (except rights-of-way for distribution mains), having a life of more than one year. A record shall be maintained showing the nature of ownership, full legal description, area, map reference, purpose for which used, city, county, and tax district in which situated, from whom purchased or to whom sold, payment given or received, other costs, contract date and number, date of recording of deed, and book and page of record. Entries transferring or retiring land or land rights shall refer to the original entry recording its acquisition. In the case of major companies, a parcel of land acquired and carried on the books as a unit is not required to be subdivided with transfers to other land accounts merely because of the erection thereon of an incidental structure to be used in gas operations but for a purpose differing from that for which the land is chiefly employed; for example, a small storehouse on production plant land. E. Any difference between the amount received from the sale of land or land rights, less agents' commissions and other costs incident to the sale, and the book cost of such land or rights, shall be included in Account 411.6, Gains from disposition of utility plant, or 411.7, Losses from disposition of utility plant, when such property has been recorded in Account 105, Gas plant held for future use or in the case of major companies, Account 105.1, Production properties held for future use, otherwise to Account 421.1, Gain on disposition of property or 421.2, Loss on disposition of property, as appropriate, unless a reserve therefor has been authorized and provided. Appropriate adjustments of the accounts shall be made with respect to any structures or improvements located on land sold. F. The cost of buildings and other improvements (other than public improvements) shall not be included in the land accounts. If at the time of acquisition of an interest in land such interest extends to buildings or other improvements (other than public improvements), which are then devoted to utility operations, the land and improvements shall be separately appraised and the cost allocated to land and buildings or improvements on the basis of the appraisals. If the improvements are removed or wrecked without being used in operations, the cost of removing or wrecking shall be charged and the salvage credited to the account in which the cost of the land is recorded. G. When the purchase of land for utility operations requires the purchase of more land than needed for such purposes, the charge to the specific land account shall be based upon the cost of the land purchased, less the fair market value of that portion of the land which is not to be used in utility operations. The portion of the cost measured by the fair market value of the land not to be used shall be included in Account 105, Gas plant held for future use, or in the case of major companies, Account 121, Nonutility property, as appropriate. Regarding land and land rights held for the production of natural gas, Account 101, Gas plant in service, shall include (1) the cost of lands owned in fee upon which producing natural gas wells are located or lands owned in fee which are being drained through the operation by the utility of wells on the other land, and (2) the first cost of lands held under lease upon which the utility pays royalties for the natural gas obtained therefrom. The cost of all other land and land rights held for the production of natural gas under a documented plan for such use shall be included in Account 105, Gas plant held for future use, or 105.1, Production properties held for future use, as appropriate. NOTE: In addition to the accounting records prescribed herein, supplemental records of land and land rights held for future use shall be kept in such manner as to permit the segregation within a reasonable time of the land and land rights constituting (1) productive but non-producing fields, (2) unproven or undeveloped fields, and (3) storage fields, and to show the following data with respect to each natural gas lease, regardless of the accounting treatment accorded the lease costs: (a) name of lessor, (b) location of leasehold and number of other identification assigned thereto, (c) date and period of lease agreement, (d) first cost of lease including details of the elements of such cost, (e) annual rental provisions, (f) date and cost of drilling, (g) date gas determined to exist, (h) date of completion of first well drilled by the utility in each pool of gas, (i) royalty provisions, (j) amortization and depletion provisions, and (k) date of abandonment of lease. H. Provision shall be made for amortizing amounts carried in the accounts for limited-term interest in land, so as to apportion equitably the cost of each interest over the life thereof. For the purpose of amortization of natural gas rights, separate interests in land which comprise an interest in a production area may be grouped to form a depletion unit. (for major companies see Account 111, Accumulated provision for amortization and depletion of gas utility plant, Account 404.1, Amortization and depletion of producing natural gas land and land rights, and Account 404.3. Amortization of other limited-term gas plant. for nonmajor companies, see Account 403.1, Depreciation and depletion expense, and Account 110, Accumulated provision for depreciation, depletion and amortization of gas utility plant. See also Account 797, Abandoned leases, for the accounting for abandonments of natural gas leases which have never been productive.) I. The items of cost to be included in the accounts for land and land rights are as follows: (1) Bulkheads, buried, not requiring maintenance or replacement. (2)Cost, first, of acquisition including mortgages and other liens assumed (but not subsequent interest thereon.) (3) (Reserved) (4) Condemnation proceedings, including court and counsel costs. (5) Consents and abutting damages, payment for. (6) Conveyancers' and notaries' fees. (7) Fees, commissions, and salaries to brokers, agents, and others in connection with the acquisition of the land or land rights. (8) (Reserved) (9) Leases, cost of voiding upon purchase to secure possession of land. (10) Removing, relocating, or reconstructing, property of others, such as buildings, highways, railroads, bridges, cemeteries, churches, telephone and power lines, etc., in order to acquire quiet possession. (11) Retaining walls unless identified with structures. (12) Special assessments levied by public authorities for public improvements on the basis of benefits for new roads, new bridges, new sewers, new curbing, new pavements, and other public improvements, but not taxes levied to provide for the maintenance of such improvements. (13) Surveys in connection with the acquisition, but not amounts paid for topographical surveys and maps where such costs are attributable to structures or plant equipment erected or to be erected or installed on such land. (14) Taxes assumed, accrued to date of transfer of title. (15) Title, examining, clearing, insuring, and registering in connection with the acquisition and defending against claims relating to the period prior to the acquisition. (16) Appraisals prior to closing title. (17) Cost of dealing with distributees or legatees residing outside of the state or county, such as recording power of attorney, recording will or exemplification of will, recording satisfaction of state tax. (18) Filing satisfaction of mortgage. (19) Documentary stamps. (20) Photographs of property at acquisition. (21) Fees and expenses incurred in the acquisition of water rights and grants. (22) Cost of fill to extend bulkhead line over land under water, where riparian rights are held, which is not occasioned by the erection of a structure. (23) Sidewalks and curbs constructed by the utility on public property. (24) Labor and expenses in connection with securing rights of way, where performed by company employees and company agents. J. Land rights placed in gas service on or after January 1, 1986 shall be segregated from land and recorded separately in the appropriate "land rights" accounts. Land rights placed in gas service prior to January 1, 1986 may be segregated from land and recorded separately. 8. Structures and improvements. A. The accounts for structures and improvements shall include the cost of all buildings and facilities to house, support, or safeguard property or persons, including all fixtures permanently attached to and made a part of buildings and which cannot be removed therefrom without cutting into the walls, ceilings, or floors, or without in some way impairing the buildings, and improvements of a permanent character on or to land. Also include those costs incurred in connection with the first clearing and grading of land and rights-of-way, and the damage costs associated with construction and installation of plant. B. The cost of specially provided foundations not intended to outlast the machinery or apparatus for which provided, and the cost of angle irons, castings, etc., installed at the base of an item of equipment, shall be charged to the same account as the cost of the machinery, apparatus, or equipment. C. Minor buildings and structures may be considered a part of the facility in connection with which constructed or operated and the cost thereof accounted for accordingly when the nature of the structure and facility indicates the correctness of such accounting. D. Where furnaces and boilers are used primarily for furnishing steam for some particular department and only incidentally for furnishing steam for heating a building and operating the equipment therein, the entire cost of such furnaces and boilers shall be charged to the appropriate plant account, and no part to the building account. E. The cost of disposing of materials excavated in connection with construction of structures shall be considered as a part of the cost of such work, except as follows: (a) when such material is used for filling, the cost of loading, hauling, and dumping shall be equitably apportioned between the work in connection with which the removal occurs and the work in connection with which the material is used; (b) when such material is sold, the net amount realized from such sales shall be credited to the work in connection with which the removal occurs. If the amount realized from the sale of excavated materials exceeds the removal costs and the costs in connection with the sale, the excess shall be credited to the land account in which the site is carried. F. Lighting or other fixtures temporarily attached to buildings for purposes of display or demonstration shall not be included in the cost of the building but in the appropriate equipment account. G. The items of cost to be included in the accounts for structures and improvements are as follows: (1) Architects' plans and specifications including supervision. (2) Ash pits (when located within the building) (major natural gas companies). (3) Athletic field structures and improvements. (4) Boilers, furnaces, piping, wiring, fixtures, and machinery for heating, lighting, signaling, ventilating, and air conditioning systems, plumbing, vacuum cleaning systems, incinerator and smoke pipe, flues, etc. (5) Bulkheads, including dredging, riprap fill, piling, decking, concrete, fenders, etc., when exposed and subject to maintenance and replacement. (6)Chimneys (major natural gas companies) (7)Coal bins and bunkers. (8)Commissions and fees to brokers, agents, architects and others. (9)Conduit (not to be removed) with its contents. (10)Damages to abutting property during construction. (11)Docks (major natural gas companies). (12)Door checks and door stops (major natural gas companies). (13)Drainage and sewerage systems. (14)Elevators, cranes, hoists, etc., and the machinery for operating them. (15)Excavation, including shoring, bracing, bridging, refill, and disposal of excess excavated material, cofferdams around foundation, pumping water from cofferdam during construction, and test borings. (16) Fences and fence curbs (not including protective fences isolating items of equipment, which shall be charged to the appropriate equipment account.) (17) Fire protection systems when forming a part of a structure. (18) Flagpole (major natural gas companies). (19) Floor covering (permanently attached) (major natural gas companies). (20) Foundations and piers for machinery, constructed as a permanent part of a building or other item listed herein. (21) Grading and clearing when directly occasioned by the building of a structure. (22) Holders -- relief (major natural gas companies). (23) Intrasite communication system, poles, pole fixtures, wire and cables. (24) Landscaping, lawns, shrubbery, etc. (25) Leases, voiding upon purchase to secure possession of structures. (26) Leased property, expenditures on. (27) Lighting fixtures and outside lighting system. (28) Mail chutes when part of a building (major natural gas companies). (29) Marquee, permanently attached to building (major natural gas companies). (30) Painting, first coat. (31) Permanent paving, concrete, brick, flagstone, asphalt, etc. within the property lines. (32) Partitions, including movable (major natural gas companies). (33) Permits and privileges. (34) Platforms, railings and gratings when constructed as a part of a structure. (35) Power boards for services to a building (major natural gas companies). (36) Refrigerating systems for general use (major natural gas companies). (37) Retaining walls except when identified with land. (38) Roadways, railroads, bridges, and trestles, intrasite, except railroads provided for in equipment accounts. (39) Roofs (major natural gas companies). (40) Scales, connected to and forming a part of a structure (major natural gas companies). (41) Screens (major natural gas companies). (42) Sewer systems, for general use (major natural gas companies). (43) Sidewalks, culverts, curbs and streets constructed by the utility on its property. (44) Sprinkling systems (major natural gas companies). (45) Sump pumps and pits (major natural gas companies). (46) Stacks -- brick, steel, or concrete, when set on foundation forming part of general foundation and steel work of a building. (47) Steel inspection during construction (major natural gas companies). (48) Storage facilities constituting a part of a building. (49) Storm doors and windows (major natural gas companies). (50) Subways, areaways, and tunnels, directly connected to and forming part of a structure. (51) Tanks, constructed as part of a building or as a distinct structural unit. (52) Temporary heating during construction (net cost) (major natural gas companies). (53) Temporary water connection during construction (net cost) (major natural gas companies). (54) Temporary shanties and other facilities used during construction (net cost). (55) Topographical maps (major natural gas companies). (56) Tunnels, intake and discharge, when constructed as part of a structure, including sluice gates, and those constructed to house mains. (57)Vaults constructed as part of a building. (58)Watchmen's sheds and clock systems (net cost when used during construction only) (major natural gas companies). (59)Water basins or reservoirs. (60)Water front improvements (major natural gas companies). (61)Water meters and supply system for a building or for general company purposes (major natural gas companies). (62)Water supply piping, hydrants and wells (major natural gas companies). (63) Wharves. (64) Window shades and ventilators (major natural gas companies). (65) Yard drainage system (major natural gas companies). (66) Yard lighting system (major natural gas companies). (67) Yard surfacing, gravel, concrete, or oil (First cost only.) (major natural gas companies). NOTE: Structures and improvements accounts shall be credited with the cost of coal bunkers, stacks, foundations, subways, tunnels, etc., the use of which has terminated with the removal of the equipment with which they are associated even though they have not been physically removed. 9. Equipment. A. The cost of equipment chargeable to the gas plant accounts, unless otherwise indicated in the text of an equipment account, includes the net purchase price thereof, sales taxes, investigation and inspection expense necessary to such purchase, expenses of transportation when borne by the utility, labor employed, materials and supplies consumed, and expenses incurred by the utility in unloading and placing the equipment in readiness to operate. Also include those costs incurred in connection with the first clearing and grading of land and rights-of-way and the damage costs associated with construction and installation of plant. B. Exclude from equipment accounts hand and other portable tools which are likely to be lost or stolen or which have relatively small value (for example, $500 or less) or short life (less than 3 years), unless the correctness of the accounting therefor as gas plant is verified by current inventories. Special tools acquired and included in the purchase price of equipment shall be included in the appropriate plant account. Portable drills and similar tool equipment when used in connection with the operation and maintenance of a particular plant or department, such as production, transmission, distribution, etc., or in "stores," shall be charged to the plant account appropriate for their use. C. The equipment accounts shall include angle irons and similar items which are installed at the base of an item of equipment, but piers and foundations which are designed to be as permanent as the buildings which house the equipment, or which are constructed as part of the building and which cannot be removed without cutting into the walls, ceilings or floors or without in some way impairing the building, shall be included in the building accounts. D. The equipment accounts shall include the necessary costs of testing or running a plant or part thereof during an experimental or test period prior to becoming available for service. The utility shall furnish the Commission with full particulars of and justification for any test or experimental run extending beyond a period of 30 days. E. The cost of efficiency or other tests made subsequent to the date equipment becomes available for service shall be charged to the appropriate expense accounts, except that tests to determine whether equipment meets the specifications and requirements as to efficiency, performance, etc., guaranteed by manufacturers, made after operations have commenced and within the period specified in the agreement or contract of purchase, may be charged to the appropriate gas plant account. 10. Additions and retirements of gas plant. A. For the purpose of avoiding undue refinement in accounting for additions to and retirements and replacements of gas plant, all property shall be considered as consisting of (1) retirement units and (2) minor items of property. Each utility shall use such list of retirement units as is in use by it at the effective date hereof or as may be prescribed by the Commission, with the option, however, of using smaller units, provided the utility's practice in this respect is consistent. Each utility shall file with the commission any changes on its list of retirement units. B. The addition and retirement of retirement units shall be accounted for as follows: (1) When a retirement unit is added to gas plant, the cost thereof shall be added to the appropriate gas plant account, except that when units are acquired in the acquisition of any gas plant constituting an operating system, they shall be accounted for as provided in Gas Plant Instruction 5. (2) When a retirement unit is retired from gas plant, with or without replacement, the book cost thereof shall be credited to the gas plant account in which it is included, determined in the manner set forth in paragraph D, below. If the retirement unit is of a depreciable class, the book cost of the unit retired and credited to gas plant shall be charged to the accumulated provision for depreciation applicable to such property. The cost of removal and the salvage shall be charged or credited, as appropriate, to such depreciation account. C. The addition and retirement of minor items of property shall be accounted for as follows: (1) When a minor item of property which did not previously exist is added to plant, the cost thereof shall be accounted for in the same manner as for the addition of a retirement unit, as set forth in paragraph B(1), above, if a substantial addition results, otherwise the charge shall be to the appropriate maintenance expense account. (2) When a minor item of property is retired and not replaced, the book cost thereof shall be credited to the gas plant account in which it is included; and, in the event the minor item is a part of depreciable plant, the account for accumulated provision for depreciation shall be charged with the book cost and cost of removal and credited with the salvage. If, however, the book cost of the minor item retired and not replaced has been or will be accounted for by its inclusion in the retirement unit of which it is a part when such unit is retired, no separate credit to the property account is required when such minor item is retired. (3) When a minor item of depreciable property is replaced independently of the retirement unit of which it is a part, the cost of replacement shall be charged to the maintenance account appropriate for the item, except that if the replacement effects a substantial betterment (the primary aim of which is to make the property affected more useful, more efficient, or of greater durability, or of greater capacity), the excess cost of the replacement over the estimated cost at current prices of replacing without betterment shall be charged to the appropriate gas plant account. D. The book cost of gas plant retired shall be the amount at which such property is included in the gas plant accounts, including all components of construction costs. The book cost shall be determined from the utility's records and if this cannot be done, it shall be estimated. When it is impracticable to determine the book cost of each unit, due to the relatively large number or small cost thereof, an appropriate average book cost of the units, with due allowance for any differences in size and character, shall be used as the book cost of the units retired. E. The book cost of land retired shall be credited to the appropriate land account. If the land is sold, the difference between the book cost (less any accumulated provision for depreciation, depletion or amortization therefor which has been authorized and provided) and the sale price of the land (less commissions and other expenses of making the sale) shall be recorded in Account 411.6, Gains from disposition of utility plant, or 411.7, Losses from disposition of utility plant, when the property has been recorded in Account 105, Gas plant held for future use, or in the case of major companies, Account 105.1, Production properties held for future use, otherwise to Accounts 421.1, Gain on disposition of property, or 421.2, Loss on disposition of property, as appropriate. If the land is not used in utility service but is retained by the utility, the book cost shall be charged to Account 105, Gas plant held for future use, or Account 121, Nonutility property, as appropriate. F. The book cost less net salvage of depreciable gas plant retired shall be charged in its entirety to Account 108, Accumulated provision for depreciation of gas plant in service (Account 110, Accumulated provision for depreciation, depletion and amortization of gas utility plant, in the case of non-major companies). Any amounts which, by approval or order of the Commission, are charged to Account 182.1, Extraordinary property losses, shall be credited to Account 108 (Account 110 for non-major companies). G. In the case of major companies, the accounting for the retirement of amounts included in Account 302, Franchises and consents, and Account 303, Miscellaneous intangible plant, and the items of limited-term interest in land included in the accounts for land and land rights shall be as provided for in the text of Account 111, Accumulated provision for amortization and depletion of gas utility plant, Account 404.3, Amortization of other limited-term gas plant, and Account 405, Amortization of other gas plant. 11. Work order and property record system required. A. Each utility shall record all construction and retirements of gas plant by means of work orders or job orders. Separate work orders may be opened for additions to and retirements of gas plant or the retirements may be included with the construction work order, provided, however, that all items relating to the retirements shall be kept separate from those relating to construction and provided, further, that any maintenance costs involved in the work shall likewise be segregated. B. Each utility shall keep its work order system so as to show the nature of each addition to or retirement of gas plant, the total cost thereof, the source or sources of costs, and the gas plant account or accounts to which charged or credited. Work orders covering jobs of short duration may be cleared monthly. C. In the case of major companies, each utility shall maintain records in which, for each plant account, the amounts of the annual additions and retirements subsequent to the effective date of this system of accounts, are classified so as to show the number and cost of the various record units or retirement units. 12. Transfers of property. When property is transferred from one gas plant account to another, from one utility department to another, such as from gas to electric, from one operating division or area to another, to or from Accounts 101, Gas plant in service, 104, Gas plant leased to others, 105, Gas plant held for future use, 105.1, Production properties held for future use, (in the case of major companies) and 121, Nonutility property, the transfer shall be recorded by transferring the original cost thereof from the one account, department, or location to the other. Any related amounts carried in the accounts for accumulated provisions for depreciation, depletion, or amortization shall be transferred in accordance with the segregation of such accounts. NOTE: (major companies) Amounts included in Account 111, Accumulated provision for amortization and depletion of gas utility plant, shall not be related to a particular natural gas lease, and, therefore, shall not be transferred under the provisions of this instruction. 13. Jointly owned property. A. With respect to jointly owned property, there shall be shown in the continuing property record, or records supplemental thereto: 1. The identity of all joint owners. 2. The percentage owned by the accounting company. B. When regulated plant is constructed under arrangements for joint ownership, the amount received by the constructing company from the other joint owner or owners shall be credited as a reduction of the gross cost of the plant in place. C. When a sale of a part interest in regulated plant is made, the fractional interest sold shall be treated as a retirement and the amount received shall be treated as salvage. The continuing property record or records supplemental thereto shall be so maintained as to identify separately retirements of this nature from physical retirements of jointly owned plant. D. If jointly owned regulated property is substantial in relation to the total of the same kind of regulated property owned wholly by the company, such jointly owned regulated property shall be appropriately segregated in the continuing property record. 14. Common utility plant. A. If the utility is engaged in more than one utility service such as gas, electric and water, and any of its utility plant is used in common for several utility services or for other purposes to such an extent and in such manner that it is impracticable to segregate it by utility services currently in the accounts, such property, with the approval of the Commission, may be designated and classified as "common utility plant". B. The book amount of utility plant designated as common plant shall be included in Account 118, Other utility plant, and if applicable in part to gas department, shall be segregated and accounted for in subaccounts as gas plant is accounted for in Accounts 101 to 107, inclusive, and gas plant adjustments in Account 116; any amounts classifiable as common plant acquisition adjustments or common plant adjustments shall be subject to disposition as provided in paragraph C and B of Accounts 114 and 116, respectively, for amounts classified in those accounts. The original cost of common utility plant in service shall be classified according to detailed utility plant accounts appropriate for the property. C. The utility shall be prepared to show at any time and to report to the Commission annually, or more frequently, if required, and by utility plant accounts (301 to 399) the following: (1) the book cost of common utility plant, (2) the allocation of such cost to the respective departments using the common utility plant, and (3) the basis of the allocation. D. The accumulated provision for depreciation and amortization of the utility shall be segregated so as to show the amount applicable to the property classified as common utility plant. E. The expenses of operation, maintenance, rents, depreciation and amortization of common utility plant shall be recorded in the accounts prescribed herein, but designated as common expenses, and the allocation of such expenses to the departments using the common utility plant shall be supported in such manner as to reflect readily the basis of allocation used. 15. Employee villages and living quarters (major natural gas companies). Where employee villages or living quarters are provided for operators and attendants of a functional installation such as a compressor station or gasoline plant, the structures and improvements shall be classified in the related functional structures and improvements account. The furnishings of such residential and recreational facilities shall be classified in the equipment account of the related function. OPERATING EXPENSE INSTRUCTIONS (major natural gas companies) 1. Supervision and engineering. The supervision and engineering includible in the operating expense accounts shall consist of the pay and expense of superintendents, engineers, clerks, other employees and consultants engaged in supervising and directing the operation and maintenance of each utility function. Wherever allocations are necessary in order to arrive at the amount to be included in any account the method and basis of allocation shall be reflected by underlying records. ITEMS Labor: 1. Special tests to determine efficiency of equipment operation. 2. Preparing or reviewing budgets, estimates, and drawings relating to operation or maintenance for departmental approval. 3. Preparing instructions for operations and maintenance activities. 4. Reviewing and analyzing operating results. 5. Establishing organizational setup of departments and executing changes therein. 6. Formulating and reviewing routines of departments and executing changes therein. 7. General training and instruction of employees by supervisors whose pay is chargeable hereto. Specific instruction and training in a particular type of work is chargeable to the appropriate functional account. 8. Secretarial work for supervisory personnel, but not general clerical and stenographic work chargeable to other accounts. Expenses: 9. Consultants' fees and expenses. 10. Meals, traveling and incidental expenses. 2. Maintenance. A. The cost of maintenance chargeable to the various operating expense and clearing accounts includes labor, materials, overheads and other expenses incurred in maintenance work. A list of work operations applicable generally to utility plant is included hereunder. Other work operations applicable to specific classes of plant are listed in functional maintenance expense accounts. B. Materials recovered in connection with the maintenance of property shall be credited to the same account to which the maintenance cost was charged. C. If the book cost of any property is carried in Account 102, Gas plant purchased or sold, the cost of maintaining such property shall be charged to the accounts for maintenance of property of the same class and use, the book cost of which is carried in other gas plant in service accounts. Maintenance of property leased from others shall be treated as provided in Operating Expense Instruction 3. ITEMS 1. Direct field supervision of maintenance. 2. Inspecting, testing, and reporting on condition of plant specifically to determine the need for repairs, replacements, rearrangements and changes and inspecting and testing the adequacy of repairs which have been made. 3. Work performed specifically for the purpose of preventing failure, restoring serviceability or maintaining life of plant. 4. Rearranging and changing the location of plant not retired. 5. Repairing for reuse materials recovered from plant. 6. Testing for, locating and clearing trouble. 7. Net cost of installing, maintaining, and removing temporary facilities to prevent interruptions in service. 8. Replacing or adding minor items of plant which do not constitute a retirement unit. (See Gas Plant Instruction 10). 3. Rents. A. The rent expense accounts provided under the several functional groups of expense accounts shall include all rents, including taxes paid by the lessee on leased property, for property used in utility operations, except (1) minor amounts paid for occasional or infrequent use of any property or equipment and all amounts paid for use of equipment that, if owned, would be includible in plant accounts 391 to 398, inclusive, which shall be treated as an expense item and included in the appropriate functional account and (2) rents which are chargeable to clearing accounts, and distributed therefrom to the appropriate account. If rents cover property used for more than one function, such as production and transmission, or by more than one department, the rents shall be apportioned to the appropriate rent expense or clearing accounts of each department on an actual, or, if necessary, an estimated basis. B . When a portion of property or equipment rented from others for use in connection with utility operations is subleased, the revenue derived from such subleasing shall be credited to the rent revenue account in operating revenues; provided, however, that in case the rent was charged to a clearing account, amounts received from subleasing the property shall be credited to such clearing account. C. The cost, when incurred by the lessee, of operating and maintaining leased property, shall be charged to the accounts appropriate for the expense if the property were owned. D. The cost incurred by the lessee of additions and replacements to gas plant leased from others shall be accounted for as provided in Gas Plant Instruction 6. 4. Training costs. When it is necessary that employees be trained to specifically operate or maintain plant facilities that are being constructed, the related costs shall be accounted for as a current operating and maintenance expense. These expenses shall be charged to the appropriate functional accounts currently as they are incurred. However, when the training costs involved relate to facilities which are not conventional in nature, or are new to the company's operations, then see Gas Plant Instruction 3 (19), for accounting. INDEX OF ACCOUNTS Balance Sheet Accounts Assets and Other Debits 1. Utility Plant Account Number 101. Gas plant in service. 101.1 Property under capital leases. 102. Gas plant purchased or sold. 103. Experimental gas plant unclassified (major only). 103.1 Gas plant in process of reclassification (non-major only). 104. Gas plant leased to others. 105. Gas plant held for future use. 105.1 Production properties held for future use (major only). 106. Completed construction not classified-Gas (major only). 107. Construction work in progress-Gas. 108. Accumulated provision for depreciation of gas utility plant (major only). 109. (Reserved) 110. Accumulated provision for depreciation, depletion and amortization of gas utility plant (non-major only). 111. Accumulated provision for amortization and depletion of gas utility plant (major only). 111.1 (Reserved) 111.2 (Reserved) 112. (Reserved) 113.1 (Reserved) 113.2 (Reserved) 114. Gas plant acquisition adjustments. 115. Accumulated provision for amortization of gas plant acquisition adjustments (major only). 116. Other gas plant adjustments. 117. Gas stored underground - noncurrent (major only). 118. Other utility plant. 119. Accumulated provision for depreciation and amortization of other utility plant. 2. Other Property and Investments. 121. Nonutility property. 122. Accumulated provision for depreciation and amortization of nonutility property. 123. Investment in associated companies. 123.1 Investment in subsidiary companies. 124. Other investments. 125. Sinking funds (major only). 126. Depreciation fund (major only). 128. Other special funds (major only). 129. Special funds (non-major only). 3. Current and Accrued Assets. 130. Cash and working funds (non-major only). 131. Cash (major only). 132. Interest special deposits (major only). 133. Dividend special deposits (major only). 134. Other special deposits (major only). 135. Working funds (major only). 136. Temporary cash investments. 141. Notes receivable. 142. Customer accounts receivable. 143. Other accounts receivable. 144. Accumulated provision for uncollectible accounts-Credit. 145. Notes receivable from associated companies. 146. Accounts receivable from associated companies. 151. Fuel stock (major only). 152. Fuel stock expenses undistributed (major only). 153. Residuals and extracted products (major only). 154. Plant materials and operating supplies. 155. Merchandise (major only). 156. Other materials and supplies (major only). 163. Stores expense undistributed (major only). 164.1 Gas stored underground-Current. 164.2 Liquefied natural gas stored. 164.3 Liquefied natural gas held for processing (major only). 165. Prepayments. 166. Advances for gas exploration, development, and production (major only). 167. Other advances for gas (major only). 171. Interest and dividends receivable (major only). 172. Rents receivable (major only). 173. Accrued utility revenues (major only). 174. Miscellaneous current and accrued assets (major only). 4. Deferred Debits. 181. Unamortized debt expense. 182.1 Extraordinary property losses. 182.2 Unrecovered plant and regulatory study costs. 183.1 Preliminary natural gas survey and investigation charges (major only). 183.2 Other preliminary survey and investigation charges (major only). 184. Clearing accounts (major only). 185. Temporary facilities (major only). 186. Miscellaneous deferred debits. 187. Deferred losses from disposition of utility plant. 188. Research, development and demonstration expenditures (major only). 189. Unamortized loss on reacquired debt. 190. Accumulated deferred income taxes. Liabilities and Other Credits 5. Proprietary Capital 201. Common stock issued. 202. Common stock subscribed (major only). 203. Common stock liability for conversion (major only). 204. Preferred stock issued. 205. Preferred stock subscribed (major only). 206. Preferred stock liability for conversion (major only). 207. Premium on capital stock (major only). 208. Donations received from stockholders (major only). 209. Reduction in par or stated value of capital stock (major only). 210. Gain on resale or cancellation of reacquired capital stock (major only). 211. Miscellaneous paid-in capital. 212. Installments received on capital stock. 213. Discount on capital stock. 214. Capital stock expense. 215. Appropriated retained earnings. 216 Unappropriated retained earnings. 216.1 Unappropriated undistributed subsidiary earnings (major only). 217. Reacquired capital stock. 218. Noncorporate proprietorship (nonmajor only). 6. Long-Term Debt 221. Bonds. 222. Reacquired bonds (major only). 223. Advances from associated companies. 224. Other long-term debt. 225. Unamortized premium on long-term debt. 226. Unamortized discount on long-term debt-Debit. 7. Other non-current liabilities 227. Obligations under capital leases - noncurrent. 228.1 Accumulated provision for property insurance. 228.2 Accumulated provision for injuries and damages. 228.3 Accumulated provision for pensions and benefits. 228.4. Accumulated miscellaneous operating provisions. 229 Accumulated provision for rate refunds. 8. Current and Accrued Liabilities 231. Notes payable. 232. Accounts payable. 233. Notes payable to associated companies. 234. Accounts payable to associated companies. 235. Customer deposits. 236. Taxes accrued. 237. Interest accrued. 238. Dividends declared (major only). 239. Matured long-term debt (major only). 240. Matured interest (major only). 241. Tax collections payable (major only). 242. Miscellaneous current and accrued liabilities. 243. Obligations under capital leases - current. 244. Federal income taxes accrued for prior years. 244.1 Michigan single business taxes accrued for prior years. 245. Federal income taxes accrued for prior years - adjustment. 245.1 Michigan single business taxes accrued for prior years - adjustment. 9. Deferred Credits 252. Customer advances for construction. 253. Other deferred credits. 255. Accumulated deferred investment tax credits. 256. Deferred gains from disposition of utility plant. 257. Unamortized gain on reacquired debt. 281. Accumulated deferred income taxes-Accelerated amortization. 282. Accumulated deferred income taxes-other property. 283. Accumulated deferred income taxes-Other. 284. Accumulated deferred income taxes - temporary. BALANCE SHEET ACCOUNTS 1. Utility Plant 101. Gas plant in service. A. This account shall include the original cost of gas plant, included in Accounts 301 to 399 prescribed herein, owned and used by the utility in its gas operations, and having an expectation of life in service of more than one year from date of installation, including such property owned by the utility but held by nominees. (See also Account 106 for unclassified construction costs of completed plant actually in service.) B. The cost of additions to and betterments of property leased from others, which are includible in this account, shall be recorded in subdivisions separate and distinct from those relating to owned property. (See Gas Plant Instruction 6.) 101.1 Property under capital leases. A. This account shall include the amount recorded under capital leases for plant leased from others and used by the utility in its utility operations. B. The gas property included in this account shall be classified separately according to the detailed accounts (301 to 399) prescribed for gas plant in service. C. Records shall be maintained with respect to each capital lease reflecting: (a) name of lessor, (b) basic details of lease, (c) terminal date, (d) original cost or fair market value of property leased, (e) future minimum lease payments, (f) executory costs, (g) present value of minimum lease payments, (h) the amounts representing interest and the interest rate used, and (i) expenses paid. 102. Gas plant purchased or sold. A. This account shall be charged with the cost of gas plant acquired as an operating unit or system by purchase, merger, consolidation, liquidation, or otherwise, and shall be credited with the selling price of like property transferred to others pending the distribution to appropriate accounts in accordance with Gas Plant Instruction 5. B. Within six months from the date of acquisition or sale of property recorded herein, the utility shall file with the Commission the proposed journal entries to clear from this account the amounts recorded herein. 103. Experimental gas plant unclassified (major only). A. This account shall include the cost of gas plant which was constructed as a research, development, and demonstration project under the provisions of paragraph c, Account 107, Construction work in progress-gas, and due to the nature of the plant it is desirous to operate it for a period of time in an experimental status. B. Amounts in this account shall be transferred to Account 101, Gas plant in service, or Account 121, Nonutility property, as appropriate, when the project is no longer considered as experimental. Prior to transfer to Account 101 the subject plant must be certified by the commission for use as gas plant in service. C. The depreciation on property in this account shall be charged to Account 403, Depreciation expense, and credited to Account 108, Accumulated provision for depreciation of gas utility plant. The amounts herein shall be depreciated over a period which would correspond to the estimated useful life of the relevant project considering the experimental characteristics involved. However, when projects are transferred to Account 101, Gas plant in service, a new depreciation rate based on the remaining service life and undepreciated amounts, will be established. D. Records shall be maintained with respect to each unit of experiment so that full details may be obtained as to the cost, depreciation, and the experimental status. E. Should it be determined that experimental plants recorded in this account will fail to satisfactorily perform its function, the costs thereof shall be accounted for as directed or authorized by the commission. 103.1 Gas plant in process of reclassification (nonmajor only). A. This account shall include temporarily the balance of gas plant as of the effective date of the prior system of accounts, which has not yet been reclassified as of the effective date of this system of accounts. The detail or primary accounts in support of this account employed prior to such date shall be continued pending reclassification into the gas plant accounts herein prescribed (301-399), but shall not be used for additions, betterments, or new construction. B. No charges other than as provided in paragraph a, above, shall be made to this account, but retirements of such unclassified gas plant shall be credited hereto and to the supporting (old) fixed capital accounts until the reclassification shall have been accomplished. 104. Gas plant leased to others. A. This account shall include the original cost of gas plant owned by the utility, but leased to others as operating units or systems, where the lessee has exclusive possession. B. The property included in this account shall be classified according to detailed accounts (301-399) prescribed for gas plant in service and this account shall be maintained in such detail as though the property were used by the owner in its utility operations. 105. Gas plant held for future use. A. This account shall include the original cost of gas plant (except land and land rights) owned and held for future use in gas service under a definite plan for such use, to include: (1) Property acquired (except land and land rights) but never used by the utility in gas service, but held for such service in the future under a definite plan, and (2) property (except land and land rights) previously used by the utility in gas service, but retired from such service and held pending its reuse in the future, under a definite plan, in gas service. This includes production properties relating to leases acquired before the adoption of full cost accounting. B. This account shall also include the original cost of land and land rights owned and held for future use in gas service relating to leases acquired before the adoption of full cost accounting, under a documented plan for such use, to include land and land rights: (1) Acquired but never used by the utility in gas service, but held for such service in the future under a documented plan, and (2) previously held by the utility in gas service, but retired from such service and held pending its reuse in the future under a documented plan, in gas service. (See Gas Plant Instruction 7.) C. In the event that property recorded in this account shall no longer be needed or appropriate for future utility operations, the company shall request Commission approval of journal entries to remove such property from this account when the gain realized from the sale or other disposition of the property is $100,000 or more prior to their being recorded. Such filings shall include the description and original cost of individual properties removed from this account, the accounts charged upon removal, and any associated gains realized upon disposition of such property. D. Gains or losses from the sale of land and land rights or other disposition of such property previously recorded in this account and not placed in utility service shall be recorded directly in Accounts 411.6 or 411.7, as appropriate, except when determined to be significant by the Commission. Upon such a determination, the amounts shall be transferred to Account 256, Deferred gains from disposition of utility plant, or Account 187, Deferred losses from Disposition of utility plant, and amortized to Accounts 411.6, Gains from disposition of utility plant, or 411.7, Losses from disposition of utility plant, as appropriate. E. The property included in this account shall be classified according to the detail accounts (301 to 399) prescribed for gas plant in service and the account shall be maintained in such detail as though the property were in service. NOTE A: Materials and supplies, meters and house regulators held in reserve, and normal spare capacity of plant in service shall not be included in this account. NOTE B: Include in this account natural gas wells shut in after construction which have not been connected with the line; also, natural gas wells which have been connected with the line but which are shut in for any reason excepting seasonal excess capacity or governmental proration requirements or for repairs, provided that the related production leases were acquired before the adoption of full cost accounting. NOTE C: The utility must obtain commission approval of journal entries to remove such property from "plant held for future use" prior to their being recorded only if such plant is currently in the rate base or was in the rate base prior to being transferred to "plant held for future use". 105.1 Production properties held for future use (major only). A. This account shall include the cost of production properties (except land and land rights) relating to leases acquired on or after the adoption of full cost accounting, held under a definite plan for future use to insure a future supply of natural gas for use in natural gas company operations, to include: (1) Production property (except land and land rights) acquired but never used by the utility in gas service, but held for such service in the future under a definite plan, and (2) production property (except land and land rights) previously used by the utility in gas service, but retired from such service and held pending its reuse in the future, under a definite plan, in gas service. B. This account shall also include the original cost of land and land rights held under a documented plan for future use to insure a future supply of natural gas for use in natural gas company operations, relating to leases acquired on or after the adoption of full cost accounting to include land and land rights: (1) acquired but never used by the utility in gas service but held for service in the future under a documented plan, and (2) previously used by the utility in gas service but retired from such service and held pending its reuse in the future under a documented plan, in gas service. (See Gas Plant Instruction 7.) C. In the event that property recorded in this account shall no longer be needed or appropriate for future utility operations, the company shall request Commission approval of journal entries to remove such property from this account when the gain realized from the sale or other disposition of the property is $100,000 or more prior to their being recorded. Such filings shall include the description and original cost of individual properties removed from this account, the accounts charged upon removal, and any associated gains realized upon disposition of such property. D. Gains or losses from the sale of land and land rights or other disposition of such property previously recorded in this account and not placed in utility service shall be recorded directly in Accounts 411.6 or 411.7, as appropriate, except when determined to be significant by the Commission. Upon such determination, the amounts shall be transferred to Account 256, Deferred gains from sale of utility plant, or Account 187, Deferred losses from sale of utility plant, and amortized to Accounts 411.6, Gains from disposition of utility plant, or 411.7, Losses from disposition of utility plant, as appropriate. E. The property included in this account shall be classified according to the detailed accounts prescribed for natural gas production and gathering plant in service and such classification shall be maintained in the same detail as though the property were in service. NOTE A: Unsuccessful exploration and development costs incurred on leases acquired after the adoption of full cost accounting shall be charged to Account 338, Unsuccessful exploration and development costs. NOTE B: The utility must obtain commission approval of journal entries to remove such property from "plant held for future use" prior to their being recorded only if such plant is currently in the rate base or was in the rate base prior to being transferred to "plant held for future use". 106. Completed construction not classified-Gas (major only). At the end of the year or such other date as a balance sheet may be required by the Commission, this account shall include the total of the balances of work orders for gas plant which has been completed and placed in service but which work orders have not been classified for transfer to the detailed gas plant accounts. NOTE: For the purpose of reporting to the Commission the classification of gas plant in service by accounts is required, the utility shall also report the balance in this account tentatively classified as accurately as practicable according to prescribed account classifications. The purpose of this provision is to avoid any significant omissions in reported amounts of gas plant in service. 107. Construction work in progress-Gas. A. This account shall include the total of the balances of work orders for gas plant in process of construction. B. Work orders shall be cleared from this account as soon as practicable after completion of the job. Further, if a project, such as a gas production plant, a compressor station, or a transmission line, is designed to consist of two or more units which may be placed in service at different dates, any expenditures which are common to and which will be used in the operation of the project as a whole shall be included in gas plant in service upon the completion and the readiness for service of the first unit. Any expenditures which are identified exclusively with units of property not yet in service shall be included in this account. C. Expenditures on research and development projects for construction of utility facilities are to be included in a separate subdivision in this account. Records must be maintained to show separately each project along with complete detail of the nature and purpose of the research and development project together with the related costs. NOTE: Unsuccessful exploration and development costs incurred on leases acquired after the adoption of full cost accounting shall be transferred to Account 338, Unsuccessful exploration and development costs. 108. Accumulated provision for depreciation of gas utility plant (major only). A. This account shall be credited with the following: (1) Amounts charged to Account 403, Depreciation expense, or to clearing accounts for current depreciation expense for gas plant in service. (2) Amounts charged to Account 421, Miscellaneous nonoperating income, for depreciation expense on property included in Account 105, Gas plant held for future use, or 105.1, Production properties held for future use. Include also, the balance of accumulated provision for depreciation on property when transferred to Account 105 or 105.1 from other property accounts. Normally, Account 108 will not be used for current depreciation provisions because, as provided herein, the service life during which depreciation is computed commences with the date property is includible in gas plant in service; however, if special circumstances indicate the propriety of current accruals for depreciation, such charges shall be made to Account 421, Miscellaneous nonoperating income. (3) Amounts charged to Account 413, Expenses of gas plant leased to others, for gas plant included in Account 104, Gas plant leased to others. (4) Amounts charged to Account 416, Costs and expenses of merchandising, jobbing and contract work, or to clearing accounts for current depreciation expense. (5) Amounts of depreciation applicable to gas properties acquired as operating units or systems. (See Gas Plant Instruction 5) (6) Amounts charged to Account 182, Extraordinary property losses, when authorized by the Commission. (7) Amounts of depreciation applicable to gas plant donated to the utility. (The utility shall maintain separate subaccounts for depreciation applicable to gas plant in service, gas plant leased to others and gas plant held for future use.) B. At the time of retirement of depreciable gas utility plant, this account shall be charged with the book cost of the property retired and the cost of removal, and shall be credited with the salvage value and any other amounts recovered, such as insurance. When retirements, cost of removal and salvage are entered originally in retirement work orders, the net total of such work orders may be included in a separate subaccount hereunder. Upon completion of the work order, the proper distribution to subdivisions of this account shall be made as provided in the following paragraph. C. For general ledger and balance sheet purposes, this account shall be regarded and treated as a single composite provision for depreciation. For purposes of analysis, however, each utility shall maintain subsidiary records in which this account is segregated according to the following functional classification for gas plant: (1) Production-manufactured gas, (2) Production and gathering-natural gas, (3) Products extraction-natural gas, (4) Underground gas storage, (5) Other storage, (6) Transmission, (7) Distribution, and (8) General. These subsidiary records shall reflect the current credits and debits to this account in sufficient detail to show separately for each such functional classification (a) the amount of provision for depreciation, (b) the book cost of property retired, (c) cost of removal, (d) salvage, and (e) other items, including recoveries from insurance. The salvage value and cost of removal entries shall be based on the records required by Account 403, Depreciation expense, for each account or subdivision thereof, of depreciable utility plant. D. When transfers of plant are made from one gas plant account to another, or from or to another utility department, or from or to nonutility property accounts, the accounting for the related accumulated provision for depreciation shall be as provided in Gas Plant Instruction 12. E. The utility is restricted in its use of the provisions for depreciation to the purposes set forth above. It shall not transfer any portion of this account to retained earnings or make any other use thereof without authorization by the Commission. 109. (Reserved). 110. Accumulated provision for depreciation, depletion, and amortization of gas utility plant (nonmajor only). A. This account shall be credited with the following: (1) Amounts charged to Account 403, Depreciation and depletion expense, to Account 404, Amortization of limited-term gas plant, to Account 405, Amortization of other gas plant, to Account 413, Expenses of gas plant leased to others, to Account 416, Costs and expenses of merchandising, jobbing and contract work, or to clearing accounts for currently accruing depreciation, depletion, and amortization. (2) Amounts of depreciation, depletion or amortization applicable to gas properties acquired as operating units or systems. (See Gas Plant Instruction 4.) (3) Amounts chargeable to Account 182, Extraordinary property losses, when authorized by the commission. (4) Amounts of depreciation applicable to gas plant donated to the utility. B. At the time of retirement of gas plant, this account shall be charged with the book cost of the property retired and the cost of removal, and shall be credited with the salvage value and any other amounts recovered, such as insurance. When retirements, cost of removal and salvage are entered originally in retirement work orders, the net total of such work orders may be included in a separate subaccount hereunder. Upon completion of the work order, the property distribution to subdivisions of this account shall be made as provided in the following paragraph. C. For general ledger and balance sheet purposes, this account shall be regarded and treated as a single composite provision for depreciation. The account shall be subdivided to show the amount, applicable to gas plant in service, gas plant leased to others, and gas plant held for future use. These subsidiary records shall show the current credits and debits to this account in sufficient detail to show separately for each subdivision, (1) the amount of accrual for depreciation or amortization, (2) the book cost of property retired, (3) cost of removal, (4) salvage and (5) other items, including recoveries from insurance. The utility also shall maintain subsidiary records in accordance with these provisions for accumulated depletion and amortization provisions for natural gas land and land rights in service. D. When transfers of plant made from one gas plant account to another, or from or to nonutility property, the accounting shall be as provided in Gas Plant Instruction 10. E. The utility is restricted in its use of the accumulated provision for depreciation, depletion and amortization to the purposes set forth above. It shall not transfer any portion of this account to retained earnings or make any other use thereof without authorization by the commission. 111. Accumulated provision for amortization and depletion of gas utility plant (major only). A. This account shall be credited with the following: (1) Amounts charged to Account 404.1, Amortization and depletion of producing natural gas land and land rights, for current amortization and depletion of such land and land rights. (2) Amounts charged to Account 404.2, Amortization of underground storage land and land rights, for current amortization. (3) Amounts charged to Account 404.3, Amortization of other limited-term gas plant, for the current amortization of limited-term gas plant. (4) Amounts charged to Account 421, Miscellaneous nonoperating income, for amortization expense on property included in Account 105, Gas plant held for future use, or 105.1, Production properties held for future use. Include also, the balance of accumulated provision for amortization on property when transferred to Account 105 or 105.1 from other property accounts. NOTE: See also paragraph A(2), of Account 108, Accumulated provision for depreciation of gas utility plant. (5) Amounts charged to Account 405, Amortization of other gas plant. (6) Amounts charged to Account 413, Expenses of gas plant leased to others, for current amortization thereof. (7) Amounts charged to Account 797, Abandoned leases, to provide for the abandonment of nonproductive natural gas leases. (8) Amounts charged to Account 425, Miscellaneous amortization, for the amortization of intangible or other gas plant which does not have a definite or terminable life and is not subject to charges for depreciation expense, with Commission approval. (The utility shall maintain subaccounts of this account for the amortization applicable to producing natural gas land and land rights, other gas plant in service, gas plant leased to others, abandonment of leases and gas plant held for future use.) B. When any property to which this account applies is sold, relinquished, or otherwise retired from service, this account shall be charged with the amount previously credited in respect to such property. The book cost of the property so retired less the amount chargeable to this account and less the net proceeds realized at retirement shall be included in Account 421.1, Gain on disposition of property, or Account 421.2, Loss on disposition of property, as appropriate. C. For general ledger and balance sheet purposes, this account shall be regarded and treated as a single composite provision for amortization. For purposes of analysis, however, each utility shall maintain subsidiary records in which this account is segregated according to the following functional classification for gas plant: (1) Production-manufactured gas, (2) Production and gathering-natural gas, (3) Products extraction natural gas, (4) Underground gas storage, (5) Other storage, (6) Transmission, (7) Distribution, and (8) General. These subsidiary records shall reflect the current credits and debits to this account in sufficient detail to show separately for each such functional classification (a) the amount of provision for amortization, (b) the book cost of property retired, (c) cost of removal, (d) salvage, and (e) other items, including recoveries from insurance. Records shall be maintained so as to show separately the balance applicable to each item of land and land rights which is being amortized or depleted except that natural gas land and land rights which comprise an interest in a production area may be grouped to form a unit for amortization and depletion and the accumulated provision applicable thereto need not be segregated to show the amount related to each gas right included therein. Records shall also be maintained so as to show separately the balance applicable to each underground gas storage project. D. The utility is restricted in its use of the accumulated provision for amortization to the purposes set forth above. It shall not transfer any portion of this account to retained earnings or make any other use thereof without authorization by the Commission. 111.1 (Reserved) 111.2 (Reserved) 112. (Reserved) 113.1 (Reserved) 113.2 (Reserved) 114. Gas plant acquisition adjustments. A. This account shall include the difference between (a) the cost to the accounting utility of gas plant acquired as an operating unit or system by purchase, merger, consolidation, liquidation, or otherwise, and (b) the original cost, estimated, if not known, of such property, less the amount or amounts credited by the accounting utility at the time of acquisition to accumulated provisions for depreciation, depletion, and amortization and contributions in aid of construction with respect to such property. B. With respect to acquisitions after the effective date of this system of accounts, this account shall be subdivided so as to show the amounts included herein for each property acquisition and to gas plant in service, gas plant held for future use and gas plant leased to others. (See Gas Plant Instruction 5.) C. Debit amounts recorded in this account related to plant and land acquisition may be amortized to Account 425, Miscellaneous amortization, over a period not longer than the estimated remaining life of the properties to which such amounts relate. Amounts related to the acquisition of land only may be amortized to Account 425 over a period of not more than 15 years. Should a utility wish to account for debit amounts in this account in any other manner, it shall petition the Commission for authority to do so. Credit amounts recorded in this account shall be accounted for as directed by the Commission. 115. Accumulated provision for amortization of gas plant acquisition adjustments (major only). This account shall be credited or debited with amounts which are includible in Account 406, Amortization of utility plant acquisition adjustments, or Account 425, Miscellaneous amortization, for the purpose of providing for the extinguishment of amounts in Account 114, Gas plant acquisition adjustments, in instances where the amortization of Account 114 is not being made by direct write-off of the account. 116. Other gas plant adjustments. A. This account shall include the difference between the original cost, estimated if not known, and the book cost of gas plant to the extent that such difference is not properly includible in Account 114, Gas plant acquisition adjustments. (See Gas Plant Instruction 1C.) B. Amounts included in this account shall be classified in such manner as to show the origin of each amount and shall be disposed of as the Commission may approve or direct. NOTE: The provisions of this account shall not be construed as approving or authorizing the recording of appreciation of gas plant. 117. Gas stored underground - noncurrent (major only) NOTE: This account may be used as an optional account for Account 358. A. This account shall include the cost of recoverable gas purchased or produced by the utility which is stored in depleted or partially depleted gas or oil fields, or other underground reservoirs, and held for use in meeting service requirements of the utility's customers. B. Gas stored during the year shall be priced at cost according to generally accepted methods of cost determination consistently applied from year to year. Transmission expenses for facilities of the utility used in moving the gas to the storage area and expenses of storage facilities shall not be included in the inventory of gas except as may be authorized or directed by the commission. NOTE B-1: In general, gas stored from the supply in an integrated system shall be priced at the average cost of the gas constituting the common supply of the system, although this general rule may be departed from where conditions of system operation of gas supply and utilization permit a valid presumption that the gas stored may be considered to be from specified sources, as indicated below. NOTE B-2: When in harmony with the over-all system operation of gas supply and utilization, and the presumption is consistently observed from year to year, gas stored during the year may be presumed to be from total gas purchases, or from purchases from specified sources. When either of these presumptions is proper, the cost of gas stored shall be priced at the weighted average cost of all gas purchased, or at the weighted average cost of purchases from the specified sources, as appropriate. The weighted average cost may be the average for the preceding twelve months, except where a significant change occurs in the cost of gas, the full effect of such change shall be reflected for the period after the change is effective. NOTE B-3: When in harmony with the over-all system operation of gas supply and utilization, and the presumptions are consistently observed from year to year, gas stored during the year may be presumed to be from identified sources of the utility's own production. Such stored gas shall be priced at the weighted average cost of gas produced from the specified production areas. Where this presumption is made, or where the stored gas is identified as a matter of fact under circumstances which do not permit a proper application of the theory of displacement, the utility shall maintain separate records of the cost of gas produced from such areas and the derivation of the cost used for stored gas from such sources. NOTE B-4: Where gas is purchased specifically for storage, or a price concession received because of the storing of purchased gas, such gas shall be priced at the net contract price of the gas so purchased and stored. NOTE B-5: The provisions of this instruction and the related footnotes shall not be construed as permitting or authorizing a restatement of the amounts at which stored gas inventories are stated on the utility's books at the effective date of this instruction, except as may be authorized by the commission. C. Withdrawals of gas may be priced according to the first-in-first-out, last-in-first-out, or weighted average cost method, in connection with which a "base stock" may be employed provided the method adopted by the utility is used consistently from year to year and the inventory records are maintained in accordance therewith. Approval of the commission must be obtained for any other pricing method, or change in the pricing method adopted by the utility. D. If the gas of any storage project is withdrawn below the amount established as "base stock" or encroaches upon native gas of a storage reservoir, and such gas is to be replaced within 12 months, it shall be permissible to price such gas at the estimated cost of replacement with purchased gas and to record a deferred credit therefor. For the purpose of this instruction, Account 808, Gas withdrawn from storage--debit, shall be charged with the estimated cost of such replacement gas and Account 253, other deferred credits, credited. When replacement of the gas is made the amount in Account 253 shall be cleared and this account credited. This accounting will not affect normal accounting for inputs and withdrawals from storage. E. Separate records shall be maintained for each storage project of the mcf of gas delivered to storage, withdrawn from storage, and remaining in storage. The projects shall be grouped, however, for the purpose of maintaining inventory cost records of the cost of gas in storage. Exceptions to this general rule are permitted in any of the following circumstances: (a) projects at the supply end of long transmission lines, (b) projects located on separate non-interconnected pipeline systems, and (c) projects which by contractual arrangements approved by the commission are devoted exclusively to the service of specified customers, and no portion of the gas withdrawals from any such project becomes part of the common system gas supply by displacement or otherwise. Where the utility establishes specified volumes of gas as "base stock", separate inventory cost records by projects shall be maintained therefor. F. Amounts debited to this account for gas placed in storage shall be credited to Account 809, Gas delivered to storage -- credit. Amounts credited to this account for gas withdrawn from storage shall be debited to Account 808, Gas withdrawn from storage -- debit. G. Adjustments for inventory losses due to cumulative inaccuracies of gas measurements, or from other causes, shall be charged to Account 823, gas losses. In the operation of storage projects, the utility shall maintain such procedures of verification as will disclose and result in prompt accounting recognition of significant losses. This account shall be credited with an amount equal to that debited to Account 164.1, Gas stored underground -- current, to classify for balance sheet purposes such portion of the total inventory of gas stored underground as constitutes a current asset according to conventional rules for classification of current assets. (See Account 164.1) 118. Other utility plant. This account shall include the balance in accounts for utility plant, other than gas plant, such as electric, railway, etc. 119. Accumulated provision for depreciation and amortization of other utility plant. This account shall include the accumulated provision for depreciation and amortization applicable to utility property other than gas plant. 2. Other Property and Investments 121. Nonutility property. A. This account shall include the book cost of land, structures, equipment or other tangible or intangible property owned by the utility, but not used in utility service and not properly includible in Account 105, Gas plant held for future use. B. This account shall also include the amount recorded under capital leases for property leased from others and used by the utility in its nonutility operations. Records shall be maintained with respect to each lease reflecting: (a) name of lessor, (b) basic details of lease, (c) terminal date, (d) original cost or fair market value of property leased, (e) future minimum lease payments, (f) executory costs, (g) present value of minimum lease payments, (h) the amount representing interest and the interest rate used, and (i) expenses paid. C. This account shall be subdivided so as to show the amount of property used in operations which are nonutility in character but nevertheless constitute a distinct operating activity of the company (such as operation of an ice department where such activity is not classed as a utility) and the amount of miscellaneous property not used in operations. The records in support of each subaccount shall be maintained so as to show an appropriate classification of the property. NOTE: In the event of the subsequent sale or other disposition of property included in this account which had been previously recorded in Account 105, Gas plant held for future use, or Account 105.1, Production properties held for future use, such property costs shall be accounted for in accordance with paragraph c of accounts 105 AND 105.1, respectively. 122. Accumulated provision for depreciation and amortization of nonutility property. This account shall include the accumulated provision for depreciation and amortization applicable to nonutility property. 123. Investment in associated companies. A. This account shall include the book cost of investments in securities issued or assumed by associated companies and investment advances to such companies, including interest accrued thereon when such interest is not subject to current settlement, provided that the investment does not relate to a subsidiary company. (If the investment relates to a subsidiary company it shall be included in Account 123.1, Investment in subsidiary companies.) Include herein the offsetting entry to the recording of amortization of discount or premium on interest bearing investments. (See Account 419, Interest and dividend income.) B. The account shall be maintained in such manner as to show the investment in securities of, and advances to, each associated company together with full particulars regarding any of such investments that are pledged. NOTE A: Securities and advances of associated companies owned and pledged shall be included in this account, but such securities, if held in special deposits or in special funds, shall be included in the appropriate deposit or fund account. A complete record of securities pledged shall be maintained. NOTE B: Securities of associated companies held as temporary cash investments are includible in Account 136, Temporary cash investments. NOTE C: Balances in open accounts with associated companies, which are subject to current settlement, are includible in Account 146, Accounts receivable from associated companies. NOTE D: The utility may write down the cost of any security in recognition of a decline in the value thereof. Securities shall be written off or written down to a nominal value if there be no reasonable prospect of substantial value. Fluctuations in market value shall not be recorded but a permanent impairment in the value of securities shall be recognized in the accounts. When securities are written off or written down, the amount of the adjustment shall be charged to Account 426.5, Other deductions, or to an appropriate account for accumulated provisions for loss in value established as a separate subdivision of this account. 123.1 Investment in subsidiary companies. A. This account shall include the cost of investments in securities issued or assumed by subsidiary companies and investment advances to such companies, including interest accrued thereon when such interest is not subject to current settlement plus the equity in undistributed earnings or losses of such subsidiary companies since acquisition. This account shall be credited with any dividends declared by such subsidiaries. B. This account shall be maintained in such a manner as to show separately for each subsidiary: the cost of such investments in the securities of the subsidiary at the time of acquisition; the amount of equity in the subsidiary's undistributed net earnings or net losses since acquisition; advances or loans to such subsidiary; and full particulars regarding any such investments that are pledged. 124. Other investments. A. This account shall include the book cost of investments in securities issued or assumed by non-associated companies, investment advances to such companies, and any investments not accounted for elsewhere. Include also the offsetting entry to the recording of amortization of discount or premium on interest bearing investments. (See Account 419, Interest and dividend income.) B. The cost of capital stock of the utility reacquired by it under a definite plan for resale pursuant to authorization by the Board of Directors may, if permitted by statutes, be included in a separate subdivision of this account. (See also Account 210, Gain on resale or cancellation of reacquired capital stock, and Account 217, Reacquired capital stock.) C. The records shall be maintained in such manner as to show the amount of each investment and the investment advances to each person. NOTE A: Securities owned and pledged shall be included in this account, but securities held in special deposits or in special funds shall be included in appropriate deposit or fund accounts. A complete record of securities pledged shall be maintained. NOTE B: Securities held as temporary cash investments shall not be included in this account. NOTE C: See Note D of Account 123. 125. Sinking funds (major only). This account shall include the amount of cash and book cost of investments held in sinking funds. A separate account, with appropriate title, shall be kept for each sinking fund. Transfers from this account to special deposit accounts may be made as necessary for the purpose of paying matured sinking-fund obligations, or obligations called for redemption but not presented, or the interest thereon. 126. Depreciation fund (major only). This account shall include the amount of cash and the book cost of investments which have been segregated in a special fund for the purpose of identifying such assets with the accumulated provisions for depreciation. 128. Other special funds (major only). This account shall include the amount of cash and book cost of investments which have been segregated in special funds for insurance, employee pensions, savings, relief, hospital, and other purposes not provided for elsewhere. A separate account, with appropriate title, shall be kept for each fund. NOTE: Amounts deposited with a trustee under the terms of an irrevocable trust agreement for pensions or other employee benefits shall not be included in this account. 129. Special funds (nonmajor only). This account shall include the amount of cash and book cost of investments which have been segregated in special funds for bond retirements, property additions and replacements, insurance, employees' pensions, savings, relief, hospital, and other purposes not provided for elsewhere. A separate account, with appropriate title, shall be kept for each fund. NOTE: Amounts deposited with a trustee under the terms of an irrevocable trust agreement for pensions or other employees' benefits shall not be included in this account. 3. Current and Accrued Assets Current and accrued assets are cash, those assets which are readily convertible into cash or are held for current use in operations or construction, current claims against others, payment of which is reasonably assured, and amounts accruing to the utility which are subject to current settlement, except such items for which accounts other than those designated as current and accrued assets are made therefor. There shall not be included in the group of accounts designated as current and accrued assets any item, the amount or collectibility of which is not reasonably assured, unless an adequate provision for possible loss has been provided. Items of current character but of doubtful value may be written down and for record purposes carried in these accounts at nominal value. 130. Cash and working funds (nonmajor only). This account shall include the amount of cash on hand and in banks and cash advanced to officers, agents, employees, and others as petty cash or working funds. Special cash deposits for payment of interest, dividends or other special purposes shall be included in this account in separate subdivisions which shall specify the purpose for which each such special deposit is made. NOTE: Special deposits for more than one year, which are not offset by current liabilities, shall not be charged to this account but to Account 129, Special funds. 131. Cash (major only). This account shall include the amount of current cash funds except working funds. 132. Interest special deposits (major only). This account shall include special deposits with fiscal agents or others for the payment of interest. 133. Dividend special deposits (major only). This account shall include special deposits with fiscal agents or others for the payment of dividends. 134. Other special deposits (major only). This account shall include deposits with fiscal agents or others for special purposes other than the payment of interest and dividends. Such special deposits may include cash deposited with federal, state, or municipal authorities as a guaranty for the fulfillment of obligations; cash deposited with trustees to be held until mortgaged property sold, destroyed, or otherwise disposed of is replaced; cash realized from the sale of the accounting utility's securities and deposited with trustees to be held until invested in property of the utility, etc. Entries to this account shall specify the purpose for which the deposit is made. NOTE: Assets available for general corporate purposes shall not be included in this account. Further, deposits for more than one year, which are not offset by current liabilities, shall not be charged to this account but to Account 128, Other special funds. 135. Working funds (major only). This account shall include cash advanced to officers, agents, employees, and others as petty cash or working funds. 136. Temporary cash investments. A. This account shall include the book cost of investments, such as demand and time loans, bankers' acceptances, United States treasury certificates, marketable securities, and other similar investments, acquired for the purpose of temporarily investing cash. B. This account shall be so maintained as to show separately temporary cash investments in securities of associated companies and of others. Records shall be kept of any pledged investments. 141. Notes receivable. This account shall include the book cost, not includible elsewhere, of all collectible obligations in the form of notes receivable and similar evidences (except interest coupons) of money due on demand or within one year from the date of issue, except, however, notes receivable from associated companies. (See Account 136, Temporary cash investments, and Account 145, Notes receivable from associated companies.) NOTE: The face amount of notes receivable discounted, sold or transferred without releasing the utility from liability as endorser thereon, shall be credited to a separate subdivision of this account and appropriate disclosure shall be made in financial statements of any contingent liability arising from such transactions. 142. Customer accounts receivable. A. This account shall include amounts due from customers for utility service, and for merchandising, jobbing, and contract work. This account shall not include amounts due from associated companies. B. This account shall be maintained so as to permit ready segregation of amounts due for merchandising, jobbing and contract work. 143. Other accounts receivable. A. This account shall include amounts due the utility upon open accounts, other than amounts due from associated companies and from customers for utility services and merchandising, jobbing, and contract work. B. This account shall be maintained so as to show separately amounts due on subscriptions to capital stock and from officers and employees, but the account shall not include amounts advanced to officers or others as working funds. (See Account 135, Working funds.) 144. Accumulated provisions for uncollectible accounts-Cr. A. This account shall be credited with amounts provided for losses on accounts receivable which may become uncollectible, and also with collections on accounts previously charged hereto. Concurrent charges shall be made to Account 904, Uncollectible accounts, for amounts applicable to utility operations, and to corresponding accounts for other operations. Records shall be maintained so as to show the write-offs of accounts receivable for each utility department. B. This account shall be subdivided to show the provision applicable to the following classes of accounts receivable: Utility customers Merchandising, jobbing, and contract work Officers and employees Others NOTE A: Accretions to this account shall not be made in excess of a reasonable provision against losses of the character provided for. NOTE B: If provisions for uncollectible notes receivable or for uncollectible receivables from associated companies are necessary, separate subaccounts therefor shall be established under the account in which the receivable is carried. 145. Notes receivable from associated companies. 146. Accounts receivable from associated companies. These accounts shall include notes and drafts upon which associated companies are liable and which mature and are expected to be paid in full not later than one year from date of issue, together with any interest thereon, and debit balances subject to current settlement in open accounts with associated companies. Items which do not bear a specified due date but which have been carried for more than twelve months and items which are not paid within twelve months from due date shall be transferred to Account 123, Investment in associated companies. NOTE A: On the balance sheet, accounts receivable from an associated company may be set off against accounts payable to the same company. NOTE B: The face amount of notes receivable discounted, sold or transferred without releasing the utility from liability as endorser thereon, shall be credited to a separate subdivision of this account and appropriate disclosure shall be made in financial statements of any contingent liability arising from such transactions. 151. Fuel stock (major only). This account shall include the book cost of fuel on hand. ITEMS 1. Invoice price of fuel less any cash or other discounts. 2. Freight, switching, demurrage and other transportation charges, not including, however, any charges for unloading from the shipping medium. 3. Excise taxes, purchasing agents' commissions, insurance and other expenses directly assignable to cost of fuel. 152. Fuel stock expenses undistributed (major only). A. This account shall include the cost of labor and of supplies used and expenses incurred in unloading fuel from the shipping medium and in the handling thereof prior to its use, if such expenses are sufficiently significant in amount to warrant being treated as a part of the cost of fuel inventory rather than being charged direct to expense as incurred. B. Amounts included herein shall be charged to expense as the fuel is used to the end that the balance herein shall not exceed the expenses attributable to the inventory of fuel on hand. ITEMS Labor: 1. Procuring and handling of fuel. 2. All routine fuel analyses. 3. Unloading from shipping facility and putting in storage. 4. Moving of fuel in storage and transferring from one station to another. 5. Handling from storage or shipping facility to first bunker, hopper, bucket, tank or holder of boiler house structure. 6. Operation of mechanical equipment, such as locomotives, trucks, cars, boats, barges, cranes, etc. Supplies and expenses: 7. Tools, lubricants and other supplies. 8. Operating supplies for mechanical equipment. 9. Transportation and other expenses in moving fuel. 10. Stores expenses applicable to fuel. 153. Residuals and extracted products (major only). This account shall include the book cost of residuals or extracted products produced in the manufacture of gas or in natural gas products extraction operations including like products purchased for resale. 154. Plant materials and operating supplies. A. This account shall include the cost of materials purchased primarily for use in the utility business for construction, operation and maintenance purposes except meters and house regulators. For nonmajor utilities, this account shall also include the cost of fuel on hand and unapplied materials and supplies. For both major and nonmajor utilities, it shall include also the book cost of materials recovered in connection with construction, maintenance or the retirement of property, such materials being credited to construction, maintenance or accumulated depreciation provision, respectively, and included herein as follows: (1) Reusable materials consisting of large individual items shall be included in this account at original cost, estimated if not known. The cost of repairing such items shall be charged to the maintenance account appropriate for the previous use. (2) Reusable materials consisting of relatively small items, the identity of which (from the date of original installation to the final abandonment or sale thereof) cannot be ascertained without undue refinement in accounting, shall be included in this account at current prices new for such items. The cost of repairing such items shall be charged to the appropriate expense account as indicated by previous use. (3) Scrap and nonusable materials included in this account shall be carried at the estimated net amount realizable therefrom. The difference between the amounts realized for scrap and nonusable materials sold and the net amount at which the materials were carried in this account, as far as practicable, shall be adjusted to the accounts credited when the materials were charged to this account. B. Materials and supplies issued shall be credited hereto and charged to the appropriate construction, operating expense, or other account on the basis of a unit price determined by the use of cumulative average, first-in-first-out, or such other method of inventory accounting as conforms with accepted accounting standards consistently applied. C. For nonmajor utilities, physical inventories of materials, supplies, fuel, etc., shall be taken at least bi-annually and the necessary adjustments shall be made to bring this account into agreement with the actual inventories. In effecting the adjustments, large differences which can be assigned to important classes of materials shall be equitably adjusted among the accounts to which such classes of materials have been charged since the previous inventory. Other differences shall be equitably apportioned among the accounts to which materials have been charged. ITEMS 1. Invoice price of materials less cash or other discounts. 2. Freight, switching or other transportation charges when practicable to include as part of the cost of particular materials to which they relate. 3. Customs duties and excise taxes. 4. Costs of inspection and special tests prior to acceptance. 5. Insurance and other directly assignable charges. NOTE A: Where expenses applicable to materials purchased cannot be directly assigned to particular purchases, they may be charged to a stores expense clearing account (Account 163, Stores expenses undistributed, in the case of major utilities), and distributed therefrom to the appropriate account. NOTE B: When materials and supplies are purchased for immediate use, they need not be carried through this account but may be charged directly to the appropriate gas plant or expense account. 155. Merchandise (major only). This account shall include the book cost of materials and supplies and appliances and equipment held primarily for merchandising, jobbing and contract work. The principles prescribed in accounting for utility materials and supplies shall be observed in respect to items carried in this account. 156. Other materials and supplies. (major only). This account shall include the book cost of materials and supplies held primarily for nonutility purposes. The principles prescribed in accounting for utility materials and supplies shall be observed in respect to items carried in this account. 163. Stores expense undistributed (major only). A. This account shall include the cost of supervision, labor and expenses incurred in the operation of general storerooms, including purchasing, storage, handling and distribution of materials and supplies. B. This account shall be cleared by adding to the cost of materials and supplies issued a suitable loading charge which will distribute the expense equitably over stores issues. The balance in the account at the close of the year shall not exceed the amount of stores expenses reasonably attributable to the inventory of materials and supplies exclusive of fuel, as any amount applicable to fuel costs should be included in Account 152, Fuel stock expenses undistributed. ITEMS Labor: 1. Inspecting and testing materials and supplies when not assignable to specific items. 2. Unloading from shipping facility and putting in storage. 3. Supervision of purchasing and stores department to extent assignable to materials handled through stores. 4. Getting materials from stock and in readiness to go out. 5. Inventorying stock received or stock on hand by stores employees but not including inventories by general department employees as part of internal or general audits. 6. Purchasing department activities in checking material needs, investigating sources of supply, analyzing prices, preparing and placing orders, and related activities to extent applicable to materials handled through stores. (Optional: Purchasing department expenses may be included in administrative and general expenses.) 7. Maintaining stores equipment. 8. Cleaning and tidying storerooms and stores offices. 9. Keeping stock records, including recording and posting of material receipts and issues and maintaining inventory record of stock. 10. Collecting and handling scrap materials in stores. Supplies and expenses: 11. Adjustments of inventories of materials and supplies but not including large differences which can readily be assigned to important classes of materials and equitably distributed among the accounts to which such classes of materials have been charged since the previous inventory. 12. Cash and other discounts not practically assignable to specific materials. 13. Freight, express, etc., when not assignable to specific items. 14. Heat, light and power for storerooms and store offices. 15. Brooms, brushes, sweeping compounds and other supplies used in cleaning and tidying storerooms and stores offices. 16. Injuries and damages. 17. Insurance on materials and supplies and on stores equipment. 18. Losses due to breakage, leakage, evaporation, fire or other causes, less credits for amounts received from insurance, transportation companies or others in compensation of such losses. 19. Postage, printing, stationery and office supplies. 20. Rent of storage space and facilities. 21. Communication service. 22. Excise and other similar taxes not assignable to specific materials. 23. Transportation expense on inward movement of stores and on transfer between storerooms but not including charges on materials recovered from retirements which shall be accounted for as part of cost of removal. NOTE: A physical inventory of each class of materials and supplies shall be made at least every two years. 164.1 Gas stored underground - current. A. This account shall include the cost of such portion of gas purchased or produced by the utility which is stored in depleted or partially depleted gas or oil fields, or other underground reservoirs, for use in meeting service requirements of the utility's customers. B. Gas stored during the year shall be priced at cost according to generally accepted methods of cost determination consistently applied from year to year. Transmission expenses for facilities of the utility used in moving the gas to the storage area and expenses of storage facilities shall not be included in the inventory of gas except as may be authorized or directed by the Commission. NOTE B-1: In general, gas stored from the supply in an integrated system shall be priced at the average cost of the gas constituting the common supply of the system, although this general rule may be departed from where conditions of system operation of gas supply and utilization permit a valid presumption that the gas stored may be considered to be from specified sources, as indicated below. NOTE B-2: When in harmony with the overall system operation of gas supply and utilization, and the presumption is consistently observed from year to year, gas stored during the year may be presumed to be from total gas purchases, or from purchases from specified sources. When either of these presumptions is proper, the cost of gas stored shall be priced at the weighted average cost of all gas purchased, or at the weighted average cost of purchases from the specified sources, as appropriate. The weighted average cost may be the average for the preceding twelve months, except where a significant change occurs in the cost of gas, the full effect of such change shall be reflected for the period after the change is effective. NOTE B-3: When in harmony with the overall system operation of gas supply and utilization, and the presumptions are consistently observed from year to year, gas stored during the year may be presumed to be from identified sources of the utility's own production. Such stored gas shall be priced at the weighted average cost of gas produced from the specified production areas. Where this presumption is made, or where the stored gas is identified as a matter of fact under circumstances which do not permit a proper application of the theory of displacement, the utility shall maintain separate records of the cost of gas produced from such areas and the derivation of the cost used for stored gas from such sources. NOTE B-4: Where gas is purchased specifically for storage, or a price concession received because of the storing of purchased gas, such gas shall be priced at the net contract price of the gas so purchased and stored. NOTE B-5: The provisions of this instruction and the related footnotes shall not be construed as permitting or authorizing a restatement of the amounts at which stored gas inventories are stated on the utility's books at the effective date of this instruction, except as may be authorized by the Commission. C. Withdrawals of gas may be priced according to the first-in-first-out, last-in-first-out, or weighted average cost method, provided the method adopted by the utility is used consistently from year to year and the inventory records are maintained in accordance therewith. Approval of the Commission must be obtained for any other pricing method, or change in the pricing method adopted by the utility. D. If the gas of any storage project is withdrawn below the amount established as "noncurrent" or encroaches upon native gas of a storage reservoir and such gas is to be replaced within twelve months, it shall be permissible to price such gas at the estimated cost of replacement with purchased gas and to record a deferred credit therefor. For the purpose of this instruction, Account 808.1, Gas withdrawn from underground storage-Debit, shall be charged with the estimated cost of such replacement gas and Account 253, Other deferred credits, credited. When replacement of the gas is made the amount in Account 253 shall be cleared and this account credited. This accounting will not affect normal accounting for inputs and withdrawals from storage. E. Separate records shall be maintained for each storage project of the Mcf of gas delivered to storage, withdrawn from storage, and remaining in storage. The projects shall be grouped, however, for the purpose of maintaining inventory cost records of the cost of gas in storage. Exceptions to this general rule are permitted in any of the following circumstances: (a) Projects at the supply end of long transmission lines, (b) Projects located on separate noninterconnected pipeline system, and (c) Projects which by contractual arrangements approved by the Commission are devoted exclusively to the service of specified customers, and no portion of the gas withdrawals from any such project becomes part of the common system gas supply by displacement or otherwise. F. Amounts debited to this account for gas placed in storage shall be credited to Account 808.2, Gas delivered to underground storage-Credit. Amounts credited to this account for gas withdrawn from storage shall be debited to Account 808.1, Gas withdrawn from underground storage-Debit. G. Adjustments for inventory losses due to cumulative inaccuracies of gas measurements, or from other causes, shall be charged to Account 823, Gas losses. In the operation of storage projects the utility shall maintain such procedures of verification as will disclose and result in prompt accounting recognition of significant losses. 164.2 Liquefied natural gas stored. A. This account shall include the cost of liquefied natural gas stored in above or below ground facilities. B. Natural gas purchased in a liquefied form shall be priced at the cost of such gas to the utility. Natural gas liquefied by the utility shall be priced according to generally accepted methods of cost determination consistently applied from year to year. Transmission expenses for facilities of the utility used in moving the gas to the storage facilities shall not be included in the inventory of gas except as may be authorized by the Commission. C. Amounts debited to this account for natural gas placed in storage shall be credited to Account 808.2, Gas delivered to storage-Credit. Amounts credited to this account for gas withdrawn from storage shall be debited to Account 808.1, Gas withdrawn from storage-Debit. D. Withdrawals of gas may be priced according to the first-in-first-out, last-in-first-out, or weighted average cost method provided the method adopted by the utility is used consistently from year to year and inventory records are maintained in accordance therewith. Commission approval must be obtained for any other pricing method or for any change in the pricing method adopted by the utility. Separate records shall be maintained for each storage project of the Mcf of gas delivered to storage and remaining in storage. E. Adjustments for inventory losses shall be charged to Account 842.3, Gas losses. 164.3 Liquefied natural gas held for processing (major only). A. This account shall include the cost of base load liquefied natural gas available for vaporization and injection into the utility's natural gas system. B. Natural gas purchased in a liquefied form shall be priced at the cost of such gas to the utility. C. Amounts debited to this account for liquefied natural gas purchased for processing shall be credited to Account 809.2, Deliveries of natural gas for processing-credit. Amounts credited for liquefied natural gas processed shall be debited to Account 809.1, Withdrawals of liquefied natural gas held for processing-debit. D. Withdrawals of gas held for vaporization may be priced according to the first-in-first-out, last-in-first-out or weighted average cost method provided the method adopted by the utility is used consistently from year to year and inventory records are maintained in accordance therewith. Commission approval must be obtained for any other pricing method or for any change from the pricing method adopted by the utility. Separate records shall be maintained for Mcf (or Btu) of gas purchased for processing, processed, and remaining for processing. E. Adjustments for inventory losses shall be charged to Account 846.1, Gas losses. 165. Prepayments. A. This account shall include payments for undelivered gas and other prepayments of rents, taxes, insurance, interest, and like disbursements made prior to the period to which they apply. Prepayments for gas are those amounts paid to a seller of gas under "take or pay" provisions of a gas purchase contract for a sale certificated by the Commission where future makeup of the gas not taken in the current period is provided for by the contract. B. As the periods covered by such prepayments expire, credit this account and charge the proper operating expense or other appropriate account with the amount applicable to the period. C. This account shall be kept or supported in such a manner as to disclose the amount of each class of prepayments. 166. Advances for gas exploration, development and production (major only). A. This account shall include all advances made within the lower 48 states for gas (whether called "advances," "contribution," or otherwise) to others, including advances to affiliated or associated companies; for exploration, development or production (but not to include lease acquisition) of natural gas, when such advances are to be repaid in full by either delivery of gas or other consideration. Under each agreement with payee, such payments must be made prior to initial gas deliveries, or if the agreement provides for advances on a well by well basis, each incremental payment must be made prior to deliveries from an incremental well, or prior to Federal and/or State authorization, as appropriate. Noncurrent advances not to be repaid within a two-year period shall be reclassified and transferred to Account 124, Other investments, for balance sheet purposes. This transfer is for reporting purposes only and has no effect on accounting and ratemaking. B. When a utility obtains a working interest as a result of funds advanced to producers, such amounts shall be included in appropriate production accounts. When an affiliated or associated company obtains a working interest as a result of funds advanced from a utility, the utility shall include such amounts in Account 123, Investment in associated companies, or Account 146, Accounts receivable from associated companies, as appropriate. C. Outstanding advances shall be fully reduced within five years, or as otherwise authorized by the Commission, from the date gas deliveries commence or the date it is determined that recovery will be in other than gas. This account shall be credited with advances not fully recovered within the five-year period, and the unrecovered portion charged directly to Account 426.5, Other deductions. A sufficient portion of all gas taken should be credited to the related outstanding advance so as to eliminate the advance within the five-year period or as otherwise authorized by the Commission upon request by the utility. The reduction of the outstanding advance should not be dependent on a buyer's purchasing more than 100 percent of the minimum take or pay quantity provided in the contract. D. Where recovery is by gas, the recovered advance shall be credited to this account and charged to the appropriate gas purchase account. E. When an advance results in a source of proven reserves of natural gas, and gas deliveries commence but no gas flows to the utility making such advance, the amount of the advance shall be removed from this account and recorded in Account 167. Any revenues collected as a result of the advance being included in rate base shall be refunded by the utility to its customers within 12 months after the removal of the advance from this account, unless otherwise directed by the Commission. Where there is partial recovery of the advance by gas, in this situation, the amount of the advance transferred from this account to Account 167 and the amount of revenues refunded shall be appropriately apportioned. F. However, if five years elapses from the time the advance has been included in this account and during such time no gas deliveries have commenced or no determination has been made that the recovery will be in economic consideration other than gas, the utility shall, at the end of the five-year period, transfer the advance from this account to Account 167, unless otherwise directed by the Commission. G. Whenever, as a result of an advance included in this account, a utility receives any amount in excess of a full recovery of the advance, e.g. interest income, such amount must be credited to Account 813, Other gas supply expenses or as otherwise directed by the Commission. If the income or return is received in other than money it shall be included at the market value of the assets received. H. If the recipient of an advance is unable to repay it in full, through no fault of the utility or contractual provisions, in gas or other assets, the unpaid or nonrecoverable portion must be credited to this account at the time such amount is recognized as nonrecoverable. Nonrecoverable advances significant in amount must be eliminated within five years from the date of determination as nonrecoverable by either a charge to Account 435, Extraordinary deductions, or when authorized by the Commission, by a transfer to Account 186, Miscellaneous deferred debits, and amortization to Account 813, Other gas supply expenses. Nonrecoverable advances insignificant in amount should be charged directly to Account 813 in the year recognized as nonrecoverable. I. No transfers shall be made to or from this account to any other accounts, unless otherwise provided herein, except as specifically authorized by the Commission upon request by the utility. NOTE A: This account shall not include advances expended for delay rentals, nonproductive well drilling or abandoned leases where such advances are related to lease acquisition. NOTE B: To keep the Commission informed when an advance is nonrecoverable by any means the company must submit the full details including copies of Federal and State plugging and abandonment reports involved as soon as such fact becomes known. 167. Other advances for gas (major only). This account shall include all advances not properly includible in Account 166, exclusive of amounts advanced where a working interest is obtained. 171. Interest and dividends receivable (major only). This account shall include the amount of interest on bonds, mortgages, notes, commercial paper, loans, open accounts, deposits, etc., the payment of which is reasonably assured, and the amount of dividends declared or guaranteed on stocks owned. NOTE A: Interest which is not subject to current settlement shall not be included herein but in the account in which is carried the principal on which the interest is accrued. NOTE B: Interest and dividends receivable from associated companies shall be included in Account 146, Accounts receivable from associated companies. 172. Rents receivable (major only). This account shall include rents receivable or accrued on property rented or leased by the utility to others. NOTE: Rents receivable from associated companies shall be included in Account 146, Accounts receivable from associated companies. 173. Accrued utility revenues (major only). At the option of the utility, the estimated amount accrued for service rendered, but not billed at the end of any accounting period, may be included herein. In case accruals are made for unbilled revenues, they shall be made likewise for unbilled expenses, such as for the purchase of gas. 174. Miscellaneous current and accrued assets (major only). This account shall include the book cost of all other current and accrued assets, appropriately designated and supported so as to show the nature of each asset included herein. Include in this account any underrecovery resulting from the gas cost recovery factors. 4. Deferred Debits 181. Unamortized debt expense. This account shall include expenses related to the issuance or assumption of debt securities. Amounts recorded in this account shall be amortized over the life of each respective issue under a plan which will distribute the amount equitably over the life of the security. The amortization shall be on a monthly basis, and the amounts thereof shall be charged to Account 428, Amortization of debt discount and expense. Any unamortized amounts outstanding at the time that the related debt is prematurely reacquired shall be accounted for as indicated in General Instruction 15. 182.1 Extraordinary property losses. A. When authorized or directed by the Commission, this account shall include extraordinary losses, which could not reasonably have been anticipated and which are not covered by insurance or other provisions, such as unforeseen damages to property. B. Application to the Commission for permission to use this account shall be accompanied by a statement giving a complete explanation with respect to the items which it is proposed to include herein, the period over which, and the accounts to which it is proposed to write-off the charges, and other pertinent information. 182.2 Unrecovered plant and regulatory study costs. A. This account shall include: (1) nonrecurring costs of studies and analyses mandated by regulatory bodies related to plants in service, transferred from Account 183.2, Other preliminary survey and investigation charges, not resulting in construction; and (2) when authorized by the Commission, significant unrecovered costs of plant facilities where construction has been cancelled or which have been prematurely retired. B. This account shall be credited and Account 407.1, Amortization of property losses, unrecovered plant and regulatory study costs, shall be debited, over the period specified by the Commission. C. Any additional costs incurred, relative to the cancellation or premature retirement, may be included in this account and amortized over the remaining period of the original amortization period. Should any gains or recoveries be realized relative to the cancelled or prematurely retired plant, such amounts shall be used to reduce the unamortized amount of the costs recorded herein. D. In the event that the recovery of costs included herein is disallowed in rate proceedings, the disallowed costs shall be charged to Account 426.5, Other deductions, or Account 435, Extraordinary deductions, in the year of such disallowance. 183.1 Preliminary natural gas survey and investigation charges (major only). A. This account shall be charged with all expenditures for preliminary surveys, plans, investigations, etc., made for the purpose of determining the feasibility of acquiring land and land rights to provide a future supply of natural gas. If such land or land rights are acquired, this account shall be credited and the appropriate gas plant account (See Gas Plant Instruction 7-G) charged with the amount of the expenditures related to such acquisition. If a project is abandoned involving a natural gas lease acquired before the adoption of full cost accounting, the expenditures related thereto shall be charged to Account 798, Other exploration. If a project is abandoned involving a lease acquired after the adoption of full cost accounting, the expenditures related thereto shall be charged to Account 338, Unsuccessful exploration and development costs. B. The records supporting the entries to this account shall be so kept that the utility can furnish, for each investigation, complete information as to the identification and location of the territory investigated, the number or other identification assigned to the land tract or leasehold acquired, and the nature and respective amounts of the charges. NOTE: The amount of preliminary survey and investigation charges transferred to gas plant shall not exceed the expenditures which may reasonably be determined to contribute directly and immediately and without duplication to gas plant. 183.2 Other preliminary survey and investigation charges (major only). A. This account shall be charged with all expenditures for preliminary surveys, plans, investigations, etc., made for the purpose of determining the feasibility of utility projects under contemplation, other than the acquisition of land and land rights to provide a future supply of natural gas. If construction results, this account shall be credited and the appropriate utility plant account charged. If the work is abandoned, the charge shall be made to Account 426.5, Other deductions, or the appropriate operating expense account. B. This account shall also include costs of studies and analyses mandated by regulatory bodies related to plant in service. If construction results from such studies, this account shall be credited and the appropriate utility plant account charged with an equitable portion of such study costs directly attributable to new construction. The portion of such study costs not attributable to new construction or the entire cost if construction does not result shall be charged to Account 182.2, Unrecovered plant and regulatory study costs, or the appropriate operating expense account. The costs of such studies relative to plant under construction shall be included directly in Account 107, Construction work in progress - Gas. C. The records supporting the entries to this account shall be so kept that the utility can furnish complete information as to the nature and the purpose of the survey, plans, or investigations and the nature and amounts of the several charges. NOTE: The amount of preliminary survey and investigation charges transferred to utility plant shall not exceed the expenditures which may reasonably be determined to contribute directly and immediately and without duplication to utility plant. 184. Clearing accounts (major only). This caption shall include undistributed balances in clearing accounts at the date of the balance sheet. Balances in clearing accounts shall be substantially cleared not later than the end of the calendar year unless items held therein relate to a future period. 185. Temporary facilities (major only). This account shall include amounts shown by work orders for plant installed for temporary use in utility service for periods of less than one year. Such work orders shall be charged with the cost of temporary facilities and credited with payments received from customers and net salvage realized on removal of the temporary facilities. Any net credit or debit resulting shall be cleared to Account 488, Miscellaneous service revenues. 186. Miscellaneous deferred debits. A. For major companies this account shall include all debits not elsewhere provided for, such as miscellaneous work in progress, and unusual or extraordinary expenses, not included in other accounts, which are in process of amortization and items the proper final disposition of which is uncertain. B. For nonmajor companies, this account shall include the following classes of items: (1) Expenditures for preliminary surveys, plans, investigations, etc., made for the purpose of determining the feasibility of projects under contemplation. If construction results, this account shall be credited with the amount applicable thereto and the appropriate plant accounts shall be charged with an amount which does not exceed the expenditures which may reasonably be determined to contribute directly and immediately and without duplication to plant. If the work is abandoned, the charge shall be to Account 426.5, Other deductions, or to the appropriate operating expense accounts. (2) Expenditures for preliminary surveys, plans, investigations, etc., made for the purpose of determining the feasibility of acquiring land and land rights to provide a future supply of natural gas. If such land or land rights are acquired, this account shall be credited and the appropriate gas plant account (See Gas Plant Instruction 7G) charged with the amount of expenditures related to such acquisition. Such preliminary survey and investigation charges transferred to gas plant shall not exceed the expenditures which may reasonably be determined to contribute directly and immediately and without duplication to the Gas Plant. If a project is abandoned involving a natural gas lease acquired before the adoption of full-cost accounting, the expenditures related thereto shall be charged to Account 798, Other exploration. If a project is abandoned involving a lease acquired after the adoption of full-cost accounting, the expenditures related thereto shall be charged to Account 338, Unsuccessful exploration and development costs. (3)Undistributed balances in clearing accounts at the date of the balance sheet. Balances in clearing accounts shall be substantially cleared not later than the end of the calendar year unless items held therein relate to a future period. (4)Balances representing expenditures for work in progress other than on utility plant. This includes jobbing and contract work in progress. (5)Other debit balances, the proper final disposition of which is uncertain, and unusual or extraordinary expenses, not included in other accounts, which are in process of being written off. C. The records supporting the entries to this account shall be so kept that the utility can furnish full information as to each deferred debit included herein. (In the case of non-major companies, the records supporting entries for preliminary natural gas surveys and investigations shall be so kept that the utility can furnish, for each investigation, complete information as to identification and location of the territory investigated, the number of other identification assigned to the land tract or leasehold acquired, and the nature and respective amounts of the charges.) 187. Deferred losses from disposition of utility plant. This account shall include losses from the sale or other disposition of property previously recorded in Account 105, Gas plant held for future use, and Account 105.1, Production properties held for future use, under the provisions of paragraph B, C, and D thereof, where such losses are significant and are to be amortized over a period of five years, unless otherwise authorized by the Commission. The amortization of the amounts in this account shall be made by debits to Account 411.7, Losses from disposition of utility plant. Subdivision of this account shall be maintained so that amounts relating to Account 105, Gas plant held for future use, and Account 105.1, Production properties held for future use, can be readily identifiable. (See Accounts 105, Gas plant held for future use, and 105.1, Production properties held for future use.) 188. Research, development and demonstration expenditures (major only). A. This account shall include the cost of all expenditures coming within the meaning of Definition 31.B of the Uniform System of Accounts, except those properly includible in Account 107, Construction work in progress - Gas. B. Costs that are minor or of a general or recurring nature shall be transferred from this account to the appropriate operating expense function or if such costs are common to the overall operations or cannot be feasibly allocated to the various operating accounts, then such costs shall be recorded in Account 930, Miscellaneous general expenses. C. In certain instances a company may incur large and significant research expenditures which are nonrecurring and which would distort the annual research and development charges for the period. In such a case the portion of such amounts that cause the distortion may be amortized to the appropriate operating expense account over a period not to exceed five years unless otherwise authorized by the Commission. D. The entries in this account must be so maintained as to show separately each project along with complete detail of the nature and purpose of the research and development project together with the related costs. 189. Unamortized loss on reacquired debt. This account shall include the losses on long-term debt reacquired or redeemed. The amounts in this account shall be amortized in accordance with General Instruction 15. 190. Accumulated deferred income taxes. A. This account, when its use has been authorized by the Commission pursuant to a notice giving the opportunity for a hearing shall be debited and Account 411.1, Provision for deferred income taxes - Credit, utility operating income, or Account 411.2, Provision for deferred income taxes - Credit, other income and deductions, as appropriate, shall be credited with an amount equal to that by which income taxes payable for the year are higher because of the inclusion of certain items in income for tax purposes, which items for general accounting purposes will not be fully reflected in the utility's determination of annual net income until subsequent years. B. This account shall be credited and Account 410.1, Provision for deferred income taxes, utility operating income, or Account 410.2, Provision for deferred income taxes, other income and deductions, as appropriate, shall be debited with an amount equal to that by which income taxes payable for the year are lower because of prior payment of taxes as provided by paragraph A above, because of difference in timing for tax purposes of particular items of income or income deductions from that recognized by the utility for general accounting purposes. Such credit to this account and debit to Account 410.1 or 410.2 shall, in general, represent the effect on taxes payable in the current year of the smaller amount of book income recognized, or the larger deduction permitted, for tax purposes as compared to the amount recognized in the utility's current accounts with respect to the item or class of items for which deferred tax concept of accounting has been authorized by this Commission. C. Vintage year records with respect to entries to this account, as described above, and the account balance shall be so maintained as to show the factor of calculation with respect to each annual amount of the item or class of items for which deferred tax accounting by the utility is utilized. D. The utility is restricted in its use of this account to the purposes set forth above. It shall not make use of the balance in this account or any portion thereof except as provided in the text of this account, without prior approval of the Commission. Any remaining deferred tax account balance with respect to an amount for any prior year's tax deferral, the amortization of which or other recognition in the utility's income accounts has been completed, or other disposition made, shall be debited to Account 410.1, Provision for deferred income taxes, utility operating income, or Account 410.2, Provision for deferred income taxes, other income and deductions, as appropriate, or otherwise disposed of as the Commission may authorize or direct. LIABILITIES AND OTHER CREDITS 5. Proprietary Capital 201. Common stock issued. 202. Common stock subscribed (major only). 203. Common stock liability for conversion (major only). 204. Preferred stock issued. A. These accounts shall include the par value or the stated value of stock without par value if such stock has a stated value, and, if not, the cash value of the consideration received for such nonpar stock, of each class of capital stock actually issued, including the par or stated value of such capital stock in Account 124, Other investments, and Account 217, Reacquired capital stock. B. When the actual cash value of the consideration received is more or less than the par or stated value of any stock having a par or stated value, the difference shall be credited or debited, as the case may be, to the premium or discount account for the particular class and series. C. When capital stock is retired, these accounts shall be charged with the amount at which such stock is carried herein. D. A separate ledger account, with a description title, shall be maintained for each class and series of stock. The supporting records shall show the shares nominally issued, actually issued, and nominally outstanding. NOTE: When a levy or assessment, except a call for payment on subscriptions, is made against holders of capital stock, the amount collected upon such levy or assessment shall be credited to Account 207, Premium on capital stock (for non-major companies: Account 211, Miscellaneous paid-in capital); provided, however, that the credit shall be made to Account 213, Discount on capital stock, to the extent of any remaining balance of discount on the issue of stock. 205. Preferred stock subscribed (major only). A. These accounts shall include the amount of legally enforceable subscriptions to capital stock of the utility. They shall be credited with the par or stated value of the stock subscribed, exclusive of accrued dividends, if any. Concurrently, a debit shall be made to subscriptions to capital stock, included as a separate subdivision of Account 143, Other accounts receivable, for the agreed price and any discount or premium shall be debited or credited to the appropriate discount or premium account. When properly executed stock certificates have been issued representing the shares subscribed, this account shall be debited, and the appropriate capital stock account credited, with the par or stated value of such stock. B. The records shall be kept in such manner as to show the amount of subscriptions to each class and series of stock. 206. Preferred stock liability for conversion (major only). A. These accounts shall include the par value or stated value, as appropriate, of capital stock which the utility has agreed to exchange for outstanding securities of other companies in connection with the acquisition of properties of such companies under terms which allow the holders of the securities of the other companies to surrender such securities and receive in return therefor capital stock of the accounting utility. B. When the securities of the other companies have been surrendered and capital stock issued in accordance with the terms of the exchange, these accounts shall be charged and Accounts 201, Common stock issued, or 204, Preferred stock issued, as the case may be, shall be credited. C. The records shall be kept so as to show separately the stocks of each class and series for which a conversion liability exists. 207. Premium on capital stock (major only). A. This account shall include, in a separate subdivision for each class and series of stock, the excess of the actual cash value of the consideration received on original issues of capital stock over the par or stated value and accrued dividends of such stock, together with assessments against stockholders representing payments required in excess of par or stated values. B. Premium on capital stock shall not be set off against expenses. Further, a premium received on an issue of a certain class or series of stock shall not be set off against expenses of another issue of the same class or series. C. When capital stock which has been actually issued is retired, the amount in this account applicable to the shares retired shall be transferred to Account 210, Gain on resale or cancellation of reacquired capital stock. 208. Donations received from stockholders (major only). This account shall include the balance of credits for donations received from stockholders consisting of capital stock of the utility, cancellation or reduction of debt of the utility, and the cash value of other assets received as a donation. 209. Reduction in par or stated value of capital stock (major only). This account shall include the balance of credits arising from a reduction in the par or stated value of capital stock. 210. Gain on resale or cancellation of reacquired capital stock (major only). This account shall include the balance of credits arising from the resale or cancellation of reacquired capital stock. (See Account 217, Reacquired capital stock.) 211. Miscellaneous paid-in capital. This account shall include the balance of all other credits for paid-in capital which are not properly includible in the foregoing accounts. This account may include all commissions and expenses incurred in connection with the issuance of capital stock. (In the case of nonmajor companies, this account shall be kept so as to show the source of the credits includible herein.) ITEMS (nonmajor only) 1. Premium received on original issues of capital stock. 2. Donations received from stockholders or reduction of debt of the utility, and the cash value of other assets received as a donation. 3. Reduction in par or stated value of capital stock. 4. Gain on resale or cancellation of reacquired capital stock. NOTE A: (major companies) Amounts included in capital surplus at the effective date of this system of accounts which cannot be classified as to the source thereof shall be included in this account. NOTE B: (nonmajor companies) Premium on capital stock shall not be set off against expenses. Further, a premium received on an issue of a certain class or series of stock shall not be set off against expense of another issue of the same class or series. 212. Installments received on capital stock. A. This account shall include in a separate subdivision for each class and series of capital stock the amount of installments received on capital stock on a partial or installment payment plan from subscribers who are not bound by legally enforceable subscription contracts. B. As subscriptions are paid in full and certificates issued, this account shall be charged and the appropriate capital stock account credited with the par or stated value of such stock. Any discount or premium on an original issue shall be included in the appropriate discount or premium account. 213. Discount on capital stock. A. This account shall include in a separate subdivision for each class and series of capital stock all discounts on the original issuance and sale of capital stock, including additional capital stock of a particular class or series as well as first issues. B. When capital stock which has been actually issued is retired, the amount in this account applicable to the shares retired shall be written off to Account 210, Gain on resale or cancellation of reacquired capital stock, provided, however, that the amount shall be charged to Account 439, Adjustments to retained earnings, to the extent that it exceeds the balance in Account 210. 214. Capital stock expense. A. This account shall include in a separate subdivision for each class and series of stock all commissions and expenses incurred in connection with the original issuance and sale of capital stock, including additional capital stock of a particular class or series as well as first issues. Expenses applicable to capital stock shall not be deducted from premium on capital stock. B. When capital stock which has been actually issued by the utility is retired, the amount in this account applicable to the shares retired shall be written off to Account 210, Gain on resale or cancellation of reacquired capital stock, provided, however, that the amount shall be charged to Account 439, Adjustments to retained earnings, to the extent that it exceeds the balance in Account 210. NOTE A: Expenses in connection with the reacquisition or resale of the utility's capital stock shall not be included herein. NOTE B: The utility may write off capital stock expense in whole or in part by charges to Account 211, Miscellaneous paid-in capital. 215. Appropriated retained earnings. This account shall include the amount of retained earnings which has been appropriated or set aside for specific purposes. Separate subaccounts shall be maintained under such titles as will designate the purpose for which each appropriation was made. 216. Unappropriated retained earnings. This account shall include the balance, either debit or credit, of unappropriated retained earnings arising from earnings. This account shall not include any amounts representing the undistributed earnings of subsidiary companies. 216.1 Unappropriated undistributed subsidiary earnings (major only). This account shall include the balances, either debit or credit, or undistributed retained earnings of subsidiary companies since their acquisition. When dividends are received from subsidiary companies and the balances have been included in this account, this account shall be debited and Account 216, Unappropriated retained earnings, credited. 217. Reacquired capital stock. A. This account shall include in a separate subdivision for each class and series of capital stock, the cost of capital stock actually issued by the utility and reacquired by it and not retired or canceled, except, however, stock which is held by trustees in sinking or other funds. B. When reacquired capital stock is retired or canceled, the difference between its cost, including commissions and expenses paid in connection with the reacquisition, and its par or stated value plus any premium and less any discount and expenses applicable to the shares retired, shall be debited or credited, as appropriate, to Account 210, Gain on resale or cancellation of reacquired capital stock, provided, however, that debits shall be charged to Account 439, Adjustments to retained earnings, to the extent that they exceed the balance in Account 210. C. When reacquired capital stock is resold by the utility, the difference between the amount received on the resale of the stock, less expenses incurred in the resale, and the cost of the stock included in this account shall be accounted for as outlined in paragraph B. NOTE A: See Account 124, Other investments, for permissive accounting treatment of stock reacquired under a definite plan for resale. NOTE B: The accounting for reacquired stock shall be as prescribed herein unless otherwise specifically required by statute. 218. Noncorporate proprietorship (nonmajor only). This account shall include the investment in an unincorporated utility by the proprietor thereof, and shall be charged with all withdrawals from the business by its proprietor. At the end of each calendar year the net income for the year, as developed in the income account, shall be transferred to this account. (See optional accounting procedure provided in Notice C, hereunder.) NOTE A: Amounts payable to the proprietor as just and reasonable compensation for services performed shall not be charged to this account but to appropriate operating expense or other accounts. NOTE B: When the utility is owned by a partnership, a separate account shall be kept to show the net equity of each member therein and the transactions affecting the interest of each such partner. NOTE C: This account may be restricted to the amount considered by the proprietor to be the permanent investment in the business, subject to change only by additional investment by the proprietor or the withdrawal of portions thereof not representing net income. When this option is taken, the retained earnings accounts shall be maintained and entries thereto shall be made in accordance with the texts thereof. 6. Long-term Debt 221. Bonds. This account shall include in a separate subdivision for each class and series of bonds the face value of the actually issued and unmatured bonds which have not been retired or canceled; also the face value of such bonds issued by others the payment of which has been assumed by the utility. 222. Reacquired bonds (major only). A. This account shall include the face value of bonds actually issued or assumed by the utility and reacquired by it and not retired, or canceled. The account for reacquired debt shall not include securities which are held by trustee in sinking or other funds. B. When bonds are reacquired, the difference between the face value, adjusted for unamortized discount, expenses or premium, and the amount paid upon reacquisition, shall be included in Account 189, Unamortized loss on reacquired debt, or Account 257, Unamortized gain on reacquired debt, or Account 421, Miscellaneous nonoperating income, as appropriate. (See General Instruction 15.) 223. Advances from associated companies. A. This account shall include the face value of notes payable to associated companies and the amount of open book accounts representing advances from associated companies. It does not include notes and open accounts representing indebtedness subject to current settlement which are includible in Account 233, Notes payable to associated companies, or Account 234, Accounts payable to associated companies. B. The records supporting the entries to this account shall be so kept that the utility can furnish complete information concerning each note and open account. 224. Other long-term debt. A. This account shall include, until maturity, all long-term debt not otherwise provided for. This covers such items as receivers' certificates, real estate mortgages executed or assumed, assessments for public improvements, notes and unsecured certificates of indebtedness not owned by associated companies, receipts outstanding for long-term debt, and other obligations maturing more than one year from date of issue or assumption. B. Separate accounts shall be maintained for each class of obligation, and records shall be maintained to show for each class all details as to date of obligation, date of maturity, interest dates and rates, security for the obligation, etc. NOTE: Miscellaneous long-term debt reacquired shall be accounted for in accordance with the procedure set forth in Account 222, Reacquired bonds. 225. Unamortized premium on long-term debt. A. This account shall include the excess of the cash value of consideration received over the face value of consideration received upon the issuance or assumption of long-term debt securities. B. Amounts recorded in this account shall be amortized over the life of each respective issue under a plan which will distribute the amount equitably over the life of the security. The amortization shall be on a monthly basis, with the amounts thereof to be credited to Account 429, Amortization of premium on debt - Credit. (See General Instruction 15.) 226. Unamortized discount on long-term debt - Debit. A. This account shall include the excess of the face value of long-term debt securities over the cash value of consideration received therefor, related to the issue or assumption of all types and classes of debt. B. Amounts recorded in this account shall be amortized over the life of the respective issues under a plan which will redistribute the amount equitably over the life of the securities. The amortization shall be on a monthly basis, with the amounts thereof charged to Account 428, Amortization of debt discount and expense. (See General Instruction 15.) 7. Other noncurrent liabilities 227. Obligations under capital leases - noncurrent. This account shall include the portion not due within one year, of the obligations recorded for the amounts applicable to leased property recorded as assets in Account 101.1, Property under capital leases, or Account 121, nonutility property. 228.1 Accumulated provision for property insurance. A. This account shall include amounts reserved by the utility for losses through accident, fire, flood, or other hazards to its own property or property leased from others, not covered by insurance. The amounts charged to Account 924, Property insurance, or other appropriate accounts to cover such risks shall be credited to this account. A schedule of risks covered shall be maintained, giving a description of the property involved, the character of the risks covered and the rates used. B. Charges shall be made to this account for losses covered, not to exceed the account balance. Details of these charges shall be maintained according to the year the casualty occurred which gave rise to the loss. 228.2 Accumulated provision for injuries and damages. A. This account shall be credited with amounts charged to Account 925, Injuries and damages, or other appropriate accounts, to meet the probable liability, not covered by insurance, for deaths or injuries to employees and others, and for damages to property neither owned nor held under lease by the utility. B. When liability for any injury or damage is admitted by the utility either voluntarily or because of the decision of a court or other lawful authority, such as a worker's compensation board, the admitted liability shall be charged to this account and credited to the appropriate current liability account. details of these charges shall be maintained according to the year the casualty occurred which gave rise to the loss. NOTE: Recoveries or reimbursements for losses charged to this account shall be credited hereto; the cost of repairs to property of others if provided for herein shall be charged to this account. 228.3 Accumulated provision for pensions and benefits. A. This account shall include provisions made by the utility and amounts contributed by employees for pensions, accident and death benefits, savings, relief, hospital and other provident purposes, where the funds are included in the assets of the utility either in general or in segregated fund accounts. B. Amounts paid by the utility for the purposes for which this liability is established shall be charged hereto. C. A separate account shall be kept for each kind of provision included herein. NOTE: If employee pension or benefit plan funds are not included among the assets of the utility but are held by outside trustees, payments into such funds, or accruals therefor, shall not be included in this account. 228.4 Accumulated miscellaneous operating provisions. A. This account shall include all operating provisions which are not provided for elsewhere. B. This account shall be maintained in such manner as to show the amount of each separate provision and the nature and amounts of the debits and credits thereto. NOTE: This account includes only provisions as may be created for operating purposes and does not include any reservations of income the credits for which should be carried in Account 215, Appropriated retained earnings. 229. Accumulated provision for rate refunds. A. This account shall be credited with amounts which are not current in nature charged to Account 485, Provision for rate refunds, to provide for estimated refunds where the utility is collecting amounts in rates subject to refund. B. When a refund of any amount recorded in this account is ordered by a regulatory authority, such amount shall be charged hereto and credited to Account 242, Miscellaneous current and accrued liabilities. C. Records supporting the entries to this account shall be kept so as to identify each amount recorded by the respective rate filing docket number. 8. Current and Accrued Liabilities Current and accrued liabilities are those obligations which have either matured or which become due within one year from the date thereof; except, however, bonds, receivers' certificates and similar obligations which shall be classified as long-term debt until date of maturity; accrued taxes, such as income taxes, which shall be classified as accrued liabilities even though payable more than one year from date; compensation awards, which shall be classified as current liabilities regardless of date due; and minor amounts payable in installments which may be classified as current liabilities. If a liability is due more than one year from date of issuance or assumption by the utility, it shall be credited to a long-term debt account appropriate for the transaction, except, however, the current liabilities previously mentioned. 231. Notes payable. This account shall include the face value of all notes, drafts, acceptances, or other similar evidences of indebtedness, payable on demand or within a time not exceeding one year from date of issue, to other than associated companies. 232. Accounts payable. This account shall include all amounts payable by the utility within one year, which are not provided for in other accounts. 233. Notes payable to associated companies. 234. Accounts payable to associated companies. These accounts shall include amounts owing to associated companies on notes, drafts, acceptances, or other similar evidences of indebtedness, and open accounts payable on demand or not more than one year from date of issue or creation. NOTE: Exclude from these accounts notes and accounts which are includible in Account 223, Advances from associated companies. 235. Customer deposits. This account shall include all amounts deposited with the utility by customers as security for the payment of bills. 236. Taxes accrued. A. This account shall be credited with the amount of taxes accrued during the accounting period, corresponding debits being made to the appropriate accounts for tax charges. Such credits may be based upon estimates, but from time to time during the year as the facts become known, the amount of the periodic credits shall be adjusted so as to include as nearly as can be determined in each year the taxes applicable thereto. Any amount representing a prepayment of taxes applicable to the period subsequent to the date of the balance sheet, shall be shown under Account 165, Prepayments. B. If accruals for taxes are found to be insufficient or excessive, correction therefor shall be made through current tax accruals. C. Accruals for taxes shall be based upon the net amounts payable after credit for any discounts, and shall not include any amounts for interest on tax deficiencies or refunds. Interest received on refunds shall be credited to Account 419, Interest and dividend income, and interest paid on deficiencies shall be charged to Account 431, Other interest expense. D. The records supporting the entries to this account shall be kept so as to show for each class of taxes, the amount accrued, the basis for the accrual, the accounts to which charged, and the amount of tax paid. 237. Interest accrued. This account shall include the amount of interest accrued but not matured on all liabilities of the utility not including, however, interest which is added to the principal of the debt on which incurred. Supporting records shall be maintained so as to show the amount of interest accrued on each obligation. 238. Dividend declared (major only). This account shall include the amount of dividends which have been declared but not paid. Dividends shall be credited to this account when they become a liability. 239. Matured long-term debt (major only). This account shall include the amount of long-term debt (including any obligation for premiums) matured and unpaid, without specific agreement for extension of the time of payment and bonds called for redemption but not presented. 240. Matured interest (major only). This account shall include the amount of matured interest on long-term debt or other obligations of the utility at the date of the balance sheet unless such interest is added to the principal of the debt on which incurred. 241. Tax collections payable (major only) This account shall include the amount of taxes collected by the utility through payroll deductions or otherwise pending transmittal of such taxes to the proper taxing authority. NOTE: Do not include liability for taxes assessed directly against the utility which are accounted for as part of the utility's own tax expense. 242. Miscellaneous current and accrued liabilities. This account shall include the amount of all other current and accrued liabilities not provided for elsewhere appropriately designated and supported so as to show the nature of each liability. Include in this account any overrecovery resulting from the gas cost recovery factors. ITEMS (nonmajor only). 1. Dividends declared but not paid. 2. Matured long-term debt. 3. Matured interest. 4. Taxes collected through payroll deductions or otherwise pending transmittal to the proper taxing authority. 243. Obligations under capital leases - current. This account shall include the portion due within one year, of the obligations recorded for the amounts applicable to leased property recorded as assets in Account 101.1, Property under capital lease, or Account 121, non-utility property. 244. Federal income taxes accrued for prior years. This account may be credited annually with an amount equal to the average federal income tax arising from irs audit disallowances and refunds for the most recent five years examined and settled or closed without IRS audit. This provision shall not include amounts for federal income tax expense already provided for in the income tax normalization process. Upon settlement of an audit of one or more prior years' federal income tax returns, this account shall be charged with the tax assessed upon the disallowances or credited with refunds received as finally settled with IRS. This account shall also be charged or credited, as appropriate, with amounts paid or refunds received as a result of the filing of an amended federal income tax return. The contra entry shall be to Account 409.1 or the appropriate nonutility subaccount of Account 409. 244.1 Michigan single business taxes accrued for prior years. This account may be credited annually with an amount equal to the average Michigan single business tax arising from the treasury audit disallowances and refunds for the most recent five years examined and settled or closed without the treasury audit. Upon settlement of an audit of one or more prior years' Michigan single business tax returns, this account shall be charged with the tax assessed upon the disallowances or credited with refunds as finally settled with the treasury. This account shall also be charged or credited, as appropriate, with amounts paid or refunds received as a result of the filing of an amended single business tax return. The contra entry shall be to Account 408.1 or the appropriate nonutility subaccount of Account 408. 245. Federal income taxes accrued for prior years - adjustment. This account may be credited or debited with an amount for possible deficiency assessments arising from audits by the internal revenue service of federal income tax returns of prior years in amounts greater or lesser than that provided for in Account 244 above, which are reasonably required to meet such deficiency assessments. These amounts should be separately identified by vintage year. The contra entry shall be to Account 409.1 or the appropriate non-utility subaccount of Account 409. 245.1 Michigan single business taxes accrued for prior years - adjustment. This account may be credited or debited with an amount for possible deficiency assessments arising from audits by the Michigan Department of Treasury of Michigan single business tax returns of prior years in amounts greater or lesser than that provided for in Account 244.1 above, which are reasonably required to meet such deficiency assessments. These amounts should be separately identified by vintage year. The contra entry shall be to Account 408.1 or the appropriate non-utility subaccount of Account 408. 9. Deferred Credits 252. Customer advances for construction. This account shall include advances by customers for construction which are to be refunded either wholly or in part. When a customer is refunded the entire amount to which he is entitled according to the agreement or rule under which the advance was made, the balance, if any, remaining in this account shall be credited to the respective plant account. 253. Other deferred credits. This account shall include advance billings and receipts and other deferred credit items, not provided for elsewhere, including amounts which cannot be entirely cleared or disposed of until additional information has been received. 255. Accumulated deferred investment tax credits. A. This account shall be credited with all investment tax credits deferred by companies which have elected to follow deferral accounting, partial or full, rather than recognizing in the income statement the total benefits of the tax credits as realized. After such election, a company may not transfer amounts from this account, except as authorized herein and in Accounts 411.4, Investment tax credit adjustments, utility operations, 411.5, Investment tax credits adjustments, nonutility operations, and 420, Investment tax credits, or with approval of the Commission. B. Where the company's accounting provides that investment tax credits are to be passed on to customers, this account shall be debited and Account 411.4 credited with a proportionate amount determined in relation to the average useful life of gas utility property to which the tax credits relate or such lesser period of time as may be adopted and used by the company. If however, the deferral procedure provides that investment tax credits are not to be passed on to customers, the proportionate restorations to income shall be credited to Account 420. C. If any of the investment tax credits to be deferred are related to utility operations other than gas or to nonutility operations, appropriate subdivisions of this account shall be maintained. Contra entries affecting such subdivisions shall be appropriately recorded in Account 413, Expenses of gas plant leased to others; or 414, Other utility operating income. D. Records shall be maintained identifying the properties related to the investment tax credits for each year, the weighted average service life of such properties, and any unused balance of such credits. Such records are not necessary unless the credits are deferred. 256. Deferred gains from disposition of utility plant. This account shall include gains from the sale or other disposition of property previously recorded in Account 105, Gas plant held for future use, and Account 105.1, Production properties held for future use, under the provisions of paragraphs B, C, and D thereof, where such gains are significant and are to be amortized over a period of five years, unless otherwise authorized by the Commission. The amortization of the amounts in this account shall be made by credits to Accounts 411.6, Gains from disposition of utility plant. Subdivision of this account shall be maintained so that amounts relating to Account 105, Gas plant held for future use and Account 105.1, Production properties held for future use, can be readily identifiable. (See Accounts 105, Gas plant held for future use and Account 105.1, Production properties held for future use.) 257. Unamortized gain on reacquired debt. This account shall include the amounts of discount realized upon reacquisition of long-term debt. The amounts in this account shall be amortized in accordance with General Instruction 15. SPECIAL INSTRUCTIONS Accumulated Deferred Income Taxes The texts of these accounts are designed primarily to cover deferrals of Federal income taxes. However, they are also to be used when making deferrals of state and local taxes. Natural gas companies which, in addition to a gas utility department, have another utility department, electric, water, etc., and nonutility property which have deferred taxes on income with respect thereto shall separately classify such deferrals in the accounts provided below so as to allow ready identification of items relating to each utility department and to Other Income and Deductions. Account 283, Accumulated deferred income taxes - Other, is provided for those specific types of tax deferrals approved by the Commission, which do not relate to accelerated amortization recorded in Account 281, Accumulated deferred income taxes - Accelerated amortization, or liberalized depreciation recorded in Account 282, Accumulated deferred income taxes - Other property. 281. Accumulated deferred income taxes - Accelerated amortization. A. This account shall be credited and Account 410.1, Provision for deferred income taxes, utility operating income, or 410.2, Provision for deferred income taxes, other income and deductions, as appropriate, shall be debited with an amount equal to that by which taxes on income payable for the year are lower because of the use of accelerated (5-year) amortization of (1) certified defense facilities in computing such taxes, as permitted by Section 168 of the Internal Revenue Code and (2) certified pollution control facilities in computing such taxes, as permitted by Section 169 of the Internal Revenue Code of 1954, as compared to the depreciation deduction otherwise appropriate and allowable for tax purposes according to the straight line or other non-accelerated depreciation method and appropriate estimated useful life for such property. B. This account shall be debited and Account 411.1, Provision for deferred income taxes - Credit, utility operating income, or 411.2, Provision for deferred income taxes - Credit, other income and deductions, as appropriate, shall be credited with an amount equal to that by which taxes on income payable for the year are greater because of the use in prior years of accelerated (5-year) amortization of (1) certified defense facilities and (2) pollution control facilities, instead of nonaccelerated or nonliberalized depreciation otherwise appropriate for income tax purposes, and deferral of taxes in such prior years as described in paragraph A above. Such debit to this account and credit to Account 411.1 or 411.2 shall, in general, represent the effect on taxes payable for the current year of the unavailability of a depreciation deduction for tax purposes, or a reduced amount, with respect to any depreciable property for which accelerated amortization was used in prior years, as compared to the depreciation deduction otherwise available and appropriate for such property, considering its estimated useful life according to the depreciation method ordinarily used by the utility for similar property in computing depreciation for tax purposes by a nonaccelerated or nonliberalized depreciation method. C. Records with respect to entries to this account, as described above, and the account balance, shall be so maintained as to show the factors of calculation and the separate amounts applicable to the facilities of each certification or authorization of accelerated amortization for tax purposes. D. The use of this account and the accounting described above are not mandatory for any utility which, in accordance with a consistent policy, elects not to follow deferred tax accounting even though accelerated amortization is used in computing taxes on income. If, however, deferred tax accounting is initiated with respect to any certified facility, the accounting shall not be suspended or discontinued on the property covered by that certificate, without approval of the Commission. E. The utility is restricted in its use of this account to the purposes set forth above. It shall not transfer the balance in this account or any portion thereof to retained earnings or make any use thereof except as provided in the text of this account without prior approval of the Commission. Upon the disposition by sale, exchange, transfer, abandonment or premature retirement of plant on which there is a related balance herein, this account shall be charged with an amount equal to the related income tax expense, if any, arising from such disposition and Account 411.1, Provision for deferred income taxes - Credit, utility operating income, or 411.2, Provision for deferred income taxes - Credit, other income and deductions, as appropriate, shall be credited. When the remaining balance, after consideration of any related income tax expense, is less than $25,000, this account shall be charged and Account 411.1 or 411.2, as appropriate, credited with such balance. If after consideration of any related income tax expense, there is a remaining amount of $25,000 or more, the Commission shall authorize or direct how such amount shall be accounted for at the time approval for the disposition of accounting is granted. When plant is disposed of by transfer to a wholly owned subsidiary the related balance in this account shall also be transferred. When the disposition related to retirement of an item or items under a group method of depreciation where there is no tax effect in the year of retirement, no entries are required in this account if it can be determined that the related balances would be necessary to be retained to offset future group item tax deficiencies. 282. Accumulated deferred income taxes - Other property. A. This account shall be credited and Account 410.1, Provision for deferred income taxes, utility operating income, or 410.2, Provision for deferred income taxes, other income and deductions, as appropriate, shall be debited with an amount equal to that by which taxes on income payable for the year are lower because of the use of accelerated methods of depreciation in computing such taxes, as permitted by Sections 167 and 168 of the Internal Revenue Code, as compared to the depreciation deduction otherwise appropriate and allowable for tax purposes for similar property of the same estimated useful life according to the straight line or other non-accelerated method of depreciation; to include those accumulated tax deferrals arising from the use of the Class Life Asset Depreciation Range as provided and required by the Revenue Act of 1971, the accelerated cost recovery system as provided and required by the Economic Recovery Tax Act of 1981, and any future revisions to Internal Revenue Code. B. This account shall be debited and Account 411.1, Provision for deferred income taxes - Credit, utility operating income, or 411.2, Provision for deferred income taxes - Credit, other income and deductions, as appropriate, shall be credited with an amount equal to that by which taxes on income payable for the year are greater because of the use in prior years of accelerated methods of depreciation for income tax purposes, and deferral of taxes in such prior years as described in paragraph A above. Such debit to this account and credit to Account 411.1 or 411.2 shall, in general, represent the effect on taxes payable for the current year of the smaller amount of depreciation permitted for tax purposes for the current year with respect to any depreciable property for which accelerated methods of depreciation were used in prior years, as compared to the depreciation deduction otherwise appropriate and available for similar property of the same estimated useful life according to the straight line or other nonaccelerated depreciation method ordinarily used by the utility in computing depreciation for tax purposes. C. This account shall also include tax deferrals, other than depreciation, resulting from adoption of interperiod income tax allocation as described in Account 283, Related to all property other than accelerated amortization property, when its use has been authorized by the Commission pursuant to a notice giving the opportunity for a hearing. D. Records with respect to entries to this account, as described above, and account balance, shall be so maintained as to show the factors of calculation and the separate amounts applicable to the plant additions of each vintage year for each class, group, or unit as to which different liberalized depreciation methods and estimated useful lives have been used. The underlying calculations to segregate and associate deferred tax amounts with the respective vintage years may be based on reasonable methods of approximation, if necessary, consistently applied. E. The use of this account and the accounting described above are not mandatory for any utility, which in accordance with a consistent policy, elects not to follow deferred tax accounting even though accelerated depreciation is used in computing taxes on income. If, however, deferred tax accounting is initiated with respect to any property, such accounting shall not be discontinued on that property without approval of the Commission. F. The utility is restricted in its use of this account to the purposes set forth above. It shall not transfer the balance in this account or any portion thereof to retained earnings or make any use thereof except as provided in the text of this account without prior approval of the Commission. Upon the disposition by sale, exchange, transfer, abandonment or premature retirement of plant on which there is a related balance herein, this account shall be charged with an amount equal to the related income tax expense, if any, arising from such disposition and Account 411.1, Income taxes deferred in prior years - Credit, utility operating income, or 411.2, Income taxes deferred in prior years - Credit, other income and deductions, shall be credited. When the remaining balance, after consideration of any related tax expenses, is less than $25,000, this account shall be charged and Account 411.1 or 411.2, as appropriate, credited with such balance. If after consideration of any related income tax expense, there is a remaining amount of $25,000 or more, the Commission shall authorize or direct how such amount shall be accounted for at the time approval for the disposition of accounting is granted. When plant is disposed of by transfer to a wholly owned subsidiary, the related balance in this account shall also be transferred. When the disposition relates to retirement of an item or items under a group method of depreciation where there is no tax effect in the year of retirement, no entries are required in this account if it can be determined that the related balance would be necessary to be retained to offset future group item tax deficiencies. 283. Accumulated deferred income taxes - Other. A. This account, when its use has been authorized by the Commission pursuant to a notice giving the opportunity for a hearing shall be credited and Account 410.1, Provision for deferred income taxes, utility operating income, or 410.2, Provision for deferred income taxes, other income and deductions, as appropriate, shall be debited with an amount equal to that by which taxes on income payable for the year are lower because of the current use of deductions other than accelerated amortization or liberalized depreciation, in the computation of income taxes which deductions for general accounting purposes will not be fully reflected in the utility's determination of annual net income until subsequent years. B. This account shall be debited and Account 411.1, Provision for deferred income taxes - Credit, utility operating income, or 411.2, Provision for deferred income taxes - Credit, other income and deductions, as appropriate, shall be credited with an amount equal to that by which taxes on income payable for the year are greater because of deferral of taxes on income in previous years as provided by paragraph A, above, because of difference in timing for tax purposes of particular income deductions from that recognized by the utility for general accounting purposes, other than with respect to accelerated amortization or liberalized depreciation. Such debit to this account and credit to Account 411.1 or 411.2 shall, in general, represent the effect on taxes payable in the current year of the smaller deduction permitted for tax purposes as compared to the amount recognized in the utility's general accounting purposes, other than with respect to the item or class of items for which deferred tax accounting by the utility was authorized by the Commission. C. Records with respect to entries in this account, as described above, and the account balance, shall be maintained so as to show the factors of calculation with respect to each annual amount of the items or class of items. D. The utility is restricted in its use of this account to the purpose set forth above. It shall not transfer the balance in this account or any portion thereof to retained earnings or to any other account or make any use thereof except as provided in the text of this account, without prior approval of the Commission. Upon the disposition by sale, exchange, transfer, abandonment or premature retirement of items on which there is a related balance herein, this account shall be charged with an amount equal to the related income tax effect, if any, arising from such disposition and Account 411.1, Income taxes deferred in prior years - Credit, utility operating income, or 411.2, Income taxes deferred in prior years - Credit, other income and deductions, as appropriate, shall be credited. When the remaining balance, after consideration of any related tax expenses, is less than $25,000, this account shall be charged and Account 411.1 or 411.2, as appropriate, credited with such balance. If after consideration of any related income tax expense, there is a remaining amount of $25,000 or more, the Commission shall authorize or direct how such amount shall be accounted for at the time approval for the disposition of accounting is granted. When plant is disposed of by transfer to a wholly owned subsidiary, the related balance in this account shall also be transferred. When the disposition relates to retirement of an item or items under a group method of depreciation where there is no tax effect in the year of retirement, no entries are required in this account if it can be determined that the related balance would be necessary to be retained to offset future group item tax deficiencies. 284. Accumulated deferred income taxes, temporary. This account shall be charged or credited on a temporary basis with deferred income taxes related to new, temporary items for which deferred income tax accounting is appropriate, provided that prior to March 31 of the year following the first use of Account 284 for new items, proper application is made to the Commission requesting authorization to utilize Account 190, Accumulated deferred income taxes, or Account 283, Accumulated deferred income taxes, Other. The contra entry shall be recorded in a segregate subaccount of Account 410 or Account 411 as appropriate. Such deferred items shall be deleted from this account and any applicable contra account upon Commission decision resulting from the aforementioned application, unless the Commission determines otherwise. GAS PLANT ACCOUNTS 1. Intangible Plant 301. Organization. 302. Franchises and consents. 303. Miscellaneous intangible plant. 2. Production Plant A. Manufactured Gas Production Plant 304.1 Land. 304.2 Land rights. 305. Structures and improvements. 306. Boiler plant equipment. 307. Other power equipment. 308. Coke ovens. 309. Producer gas equipment. 310. Water gas generating equipment. 311. Liquefied petroleum gas equipment. 312. Oil gas generating equipment. 313. Generating equipment--other processes. 314. Coal, coke, and ash handling equipment. 315. Catalytic cracking equipment. 316. Other reforming equipment. 317. Purification equipment. 318. Residual refining equipment. 319. Gas mixing equipment. 320. Other equipment. B. Natural Gas Production Plant B.1. Natural Gas Production and Gathering Plant 325.1 Producing lands. 325.2 Producing leaseholds. 325.3 Gas rights. 325.4 Rights-of-way. 325.5 Other land. 325.6 Other land rights. 326. Gas well structures. 327. Field compressor station structures. 328. Field measuring and regulating station structures. 329. Other structures. 330. Producing gas wells--well construction. 331. Producing gas wells--well equipment. 332. Field lines. 333. Field compressor station equipment. 334. Field measuring and regulating station equipment. 335. Drilling and cleaning equipment. 336. Purification equipment. 337. Other equipment. 338. Unsuccessful exploration and development costs. B.2. Products Extraction Plant 340.1 Land. 340.2 Land rights. 341. Structures and improvements. 342. Extraction and refining equipment. 343. Pipe lines. 344. Extracted products storage equipment. 345. Compressor equipment. 346. Gas measuring and regulating equipment. 347. Other equipment. C. Synthetic Natural Gas Production Plant 349.1 Land. 349.1a Land rights. 349.2 Structures and improvements. 349.3 Raw material (feedstock) preparation and storage equipment. 349.4 Gasification, purification and gas upgrading equipment. 349.5 Compressor station equipment. 349.6 Other equipment. 3. Storage Plant A. Underground Storage Plant 350.1 Land. 350.2 Rights-of-way. 351. Structures and improvements. 352. Wells. 352.1 Storage leaseholds and rights. 352.2 Reservoirs. 352.3 Nonrecoverable natural gas. 353. Lines. 354. Compressor station equipment. 355. Measuring and regulating equipment. 356. Purification equipment. 357. Other equipment. 358. Gas in underground storage -- noncurrent. B. Other Storage Plant 360.1 Land. 360.2 Land rights. 361. Structures and improvements. 362. Gas holders. 363. Purification equipment (major only). 363.1 Liquefaction equipment (major only). 363.2 Vaporizing equipment (major only). 363.3 Compressor equipment (major only). 363.4 Measuring and regulating equipment (major only). 363.5 Other equipment. C. Base load liquefied natural gas terminaling and processing plant 364.1 Land (major only). 364.1a Land rights (major only). 364.2 Structures and improvements (major only). 364.3 LNG processing terminal equipment (major only). 364.4 LNG transportation equipment (major only). 364.5 Measuring and regulating equipment (major only). 364.6 Compressor station equipment (major only). 364.7 Communication equipment (major only). 364.8 Other equipment (major only). 4. Transmission Plant 365.1 Land. 365.2 Land rights. 365.3 Rights-of-way. 366. Structures and improvements. 367. Mains. 368. Compressor station equipment. 369. Measuring and regulating station equipment. 370. Communication equipment. 371. Other equipment. 5. Distribution Plant 374.1 Land. 374.2 Land rights. 375. Structures and improvements. 376. Mains. 377. Compressor station equipment. 378. Measuring and regulating station equipment--general. 379. Measuring and regulating station equipment--city gate check stations. 380. Services. 381. Meters. 382. Meter installations. 383. House regulators. 384. House regulator installations. 385. Industrial measuring and regulating station equipment. 386. Other property on customers' premises. 387. Other equipment. 6. General Plant 389.1 Land. 389.2 Land rights. 390. Structures and improvements. 391. Office furniture and equipment. 391.1 Computers and computer related equipment. 392. Transportation equipment. 393. Stores equipment. 394. Tools, shop and garage equipment. 395. Laboratory equipment. 396. Power operated equipment. 397. Communication equipment. 398. Miscellaneous equipment. 399. Other tangible property. GAS PLANT ACCOUNTS 1. Intangible Plant 301. Organization. This account shall include all fees paid to federal or state governments for the privilege of incorporation and expenditures incident to organizing the corporation, partnership, or other enterprises and putting it into readiness to do business. ITEMS 1. Cost of obtaining certificates authorizing an enterprise to engage in the public utility business. 2. Fees and expenses for incorporation. 3. Fees and expenses for mergers or consolidations. 4. Office expenses incident to organizing the utility. 5. Stock and minute books and corporate seal. NOTE A: This account shall not include any discounts upon securities issued or assumed; nor shall it include any costs incident to negotiating loans, selling bonds or other evidences of debt, or expenses in connection with the authorization, issuance, or sale of capital stock. NOTE B: Exclude from this account and include in the appropriate expense account the cost of preparing and filing papers in connection with the extension of the term of incorporation unless the first organization costs have been written off. When charges are made to this account for expenses incurred in mergers, consolidations, or reorganizations, amounts previously included herein or in similar accounts in the books of the companies concerned shall be excluded from this account. 302. Franchises and consents. A. This account shall include amounts paid to the federal government, to a state or to a political subdivision thereof in consideration for franchises, consents, or certificates, running in perpetuity or for a specified term of more than one year, together with necessary and reasonable expenses incident to procuring such franchises, consents, or certificates of permission and approval, including expenses of organizing and merging separate corporations, where statutes require, solely for the purpose of acquiring franchises. B. If a franchise, consent, or certificate is acquired by assignment, the charge to this account in respect thereof shall not exceed the amount paid therefore or by the utility to the assignor, nor shall it exceed the amount paid by the original grantee, plus the expense of acquisition to such grantee. Any excess of the amount actually paid by the utility over the amount above specified shall be charged to Account 426.5, Other deductions. C. When any franchise has expired, the book cost thereof shall be credited hereto and charged to Account 426.5, Other deductions, or to Account 111, Accumulated provision for amortization and depletion of gas utility plant. (For nonmajor companies, Account 110, Accumulated provisions for depreciation, depletion and amortization of gas utility plant). D. Records supporting this account shall be kept so as to show separately the book cost of each franchise or consent. NOTE: Annual or other periodic payments under franchises shall not be included herein but in the appropriate operating expense account. 303. Miscellaneous intangible plant. A. This account shall include the cost of patent rights, licenses, privileges, and other intangible property necessary or valuable in the conduct of the utility's gas operations and not specifically chargeable to any other account. B. When any item included in this account is retired or expires, the book cost thereof shall be credited hereto and charged to Account 426.5, Other deductions, or Account 111, Accumulated provision for amortization and depletion of gas utility plant, as appropriate. (For nonmajor companies, Account 110, Accumulated provisions for depreciation, depletion and amortization of gas utility plant). C. This account shall be maintained in such a manner that the utility can furnish full information with respect to the amounts included herein. 2. Production Plant A. Manufactured Gas Production Plant 304.1 Land. This account shall include the cost of land used in connection with manufactured gas production. (See Gas Plant Instruction 7.) 304.2 Land rights. This account shall include the cost of land rights used in connection with manufactured gas production. (See Gas Plant Instruction 7.) 305. Structures and improvements. This account shall include the cost of structures and improvements used in connection with manufactured gas production. (See Gas Plant Instruction 8.) NOTE: Include relief holders in this account. 306. Boiler plant equipment. This account shall include the cost installed of furnaces, boilers, steam and feed water piping, boiler apparatus, and accessories used in the production of steam at gas production plants. ITEMS 1. Accumulators. 2. Air preheaters, including fans and drives, and ducts not part of building. 3. Ash disposal equipment, including sluiceways not part of a building, pumps and piping, crane, ash bucket conveyor and drives, ash cars, etc. 4. Belt conveyors, including drives. 5. Blast gate valves. 6. Blow-down tanks and piping. 7. Boilers, including valves attached thereto, casings, safety valves, soot blowers, soot hoppers, superheaters, and feed water regulators. 8. Cinder and dust catcher system, including mechanical and electric types. 9. Coal and coke handling equipment, including hoppers, lorries, etc., used wholly for boilers. 10. Combustion control system, including all apparatus installed for the regulation and control of the supply of fuel or air to boilers. 11. Control apparatus. 12. Cranes, hoists, etc., wholly identified with apparatus listed herein. 13. Desuperheaters and reducing valves. 14. Draft apparatus, including forced, induced, and other draft systems, with blowers, fans, and ducts not part of the building. 15. Economizers. 16. Emergency lighting systems, not part of building, keep-a-lite systems, etc. 17. Emergency signal systems, in connection with boiler operation. 18. Feed water heaters, including primary and stage. 19. Flues, uptakes, and breeching, whether or not stacks are included in this account. 20. Foundations and settings, specially constructed for and not intended to outlast the apparatus for which provided. 21. Furnaces. 22. Gas firing system, including gas lines, burners, etc., for gas fired boilers. 23. Injectors. 24. Mechanical stoker and feeding systems, clinker grinders, including drives. 25. Meters, gauges, recording instruments, etc. 26. Oil burning equipment, including tanks, heaters, pumps with drives, burner equipment, piping, and conditioning apparatus. 27. Painting, first cost. 28. Panels, control (for operating apparatus listed herein.) 29. Piping system, steam header and exhaust header, including accessory pipe hangers, steam traps, etc., make-up water, feed water, drip, blow-off, water pipe lines used for steam plant, and valve control system. 30. Platforms, railings, steps, gratings, etc., appurtenant to apparatus listed herein. 31. Pulverizing equipment. 32. Pumps and driving units, for feed water, heater condensate, condenser water, and drip. 33. Stacks--brick, steel, and concrete, when set on separate foundations independent of substructure or super-structure of building. 34. Steam reheaters. 35. Steelwork, especially constructed for apparatus listed herein. 36. Tanks, including surge, weighing, return, blow-off, feed water storage. 37. Tar burning equipment for utilization of tar as boiler fuel, including tanks, pumps, burner equipment, piping, etc. 38. Waste heat boilers and accessories--stack valve and stack irrespective of location. 39. Water treatment system, including purifiers, settling tanks, filters, chemical mixing and dosing apparatus, etc. NOTE A: This account shall not include boilers or steam pipes whose primary purpose is the heating of buildings. NOTE B: When the system for supplying boiler or condenser water is elaborate, as when it includes a dam, reservoir, canal, or pipeline, the cost shall not be charged to this account but to a special subdivision of account 305, Structures and improvements - manufactured gas. 307. Other power equipment. A. This account shall include the cost installed of electric generating and accessory equipment used for supplying electricity in gas production plants. B. This account shall also include the cost installed of miscellaneous power equipment at gas production plants which is not included in any other account. ITEMS 1. Acid proofing of battery rooms. 2. Air duct runs in battery rooms. 3. Air pump, steamjet. 4. Batteries for control and general station use. 5. Belts, pulleys, hangers, shafts, and countershafts. 6. Cables between generators and switchboards. 7. Cabinets, control. 8. Compartments, including buses, connections and items permanently attached. 9. Enclosure equipment not an integral part of building. 10. Engines, including steam rotary or reciprocating, steam turbines, and internal combustion engines. 11. Foundations and settings, specially constructed for and not intended to outlast the apparatus for which provided. 12. Generators, A.C. or D.C., including excitation system. 13. Ground connections, for main station ground. 14. Lightning arresters. 15. Motor generators, frequency changers, and converters. 16. Overhead power lines, including poles, crossarms, insulators, conductors, etc. 17. Panels, control, including supports and instruments. 18. Piping applicable to apparatus listed herein. 19. Reactors. 20. Rectifiers. 21. Safety equipment, including rubber mats, remote closing devices, glove cabinets. 22. Switchboards, including frames, panels, meters, and instruments. 23. Switching equipment, including oil circuit breakers, disconnecting switches, and connections. 24. Synchronous converters. 25. Transformers, including transformer platforms. 26. Underground conduit system, including manholes and conductors. NOTE: When any unit of equipment listed herein is wholly used to furnish power to equipment included in another single account, its cost shall be included in such account. 308. Coke ovens. This account shall include the cost installed of coke ovens used for the production of gas. ITEMS 1. Apparatus for placing coal in ovens. 2. Bins, if not part of a building. 3. Cabinets, control. 4. Calorimeters. 5. Cars, quenching. 6. Charging lorry. 7. Clay mixers. 8. Coke guide. 9. Coke and pusher benches. 10. Collecting mains. 11. Control apparatus. 12. Conveyor, flight. 13. Cover lifting machinery. 14. Door handling machine. 15. Door luting machine. 16. Driving units for coke oven machinery. 17. Enclosures for machinery. 18. Engines, when not an integral part of the driven equipment. 19. Firing equipment. 20. Flues, uptakes, and breeching. 21. Foundations. 22. Fuel handling equipment used exclusively for coal to be carbonized in ovens. 23. Fuel systems under ovens. 24. Hot coke wharves. 25. Hot coke cars. 26. Instruments or meters, electrical. 27. Locomotives. 28. Mud mill. 29. Motor control equipment. 30. Ovens. 31. Panel, control. 32. Piping, including ascension pipes, hydraulic main, liquor flushing decanter tank, liquor pump, and return line to hydraulic main. 33. Pushers, including tracks and driving equipment. 34. Quenching station including structure, tank, well, piping, etc. 35. Quenching towers, piping, etc. 36. Regenerator, from bottom of oven floor tile to battery foundation. 37. Reversing machine, with enclosure. 38. Scale, platform. 39. Signal system. 40. Skip hoist. 41. Stacks. 42. Steel and iron work supports, platforms, stairways, etc. 43. Switches and switchboards. 309. Producer gas equipment. This account shall include the cost installed of equipment used for the production of producer gas. ITEMS 1. Ash handling equipment, used exclusively for producers. 2. Blast apparatus, including blowers, driving units, and blast mains. 3. Control apparatus. 4. Coolers and scrubbers. 5. Driving apparatus for producers. 6. Foundations and settings, specially constructed for and not intended to outlast the apparatus for which provided. 7. Fuel handling equipment, used exclusively for producers. 8. Humidifiers. 9. Piping--air, steam (commencing at steam header), water (inside of building), and producer gas (up to outlet of final piece of apparatus in building). 10. Producer boosters, including driving units. 11. Producers. 12. Water separators. 310. Water gas generating equipment. This account shall include the cost installed of equipment used in the generation of water gas. ITEMS 1. Automatic operation equipment. 2. Back-run installations. 3. Blast equipment, including blowers and driving units, piping and supports. 4. Bridge, coal shed to generator house. 5. Carburetors. 6. Charging equipment, fuel. 7. Circulating water pumps. 8. Concrete or brick pits, including cover, not part of building. 9. Control apparatus. 10. Conveyors. 11. Dust collectors. 12. Enclosures for equipment (barriers, fire walls, guards, housings, screens, etc.). 13. Flow meters. 14. Foundations and settings, specially constructed for and not intended to outlast the apparatus for which provided. 15. Fuel handling equipment used exclusively for fuel for this account. 16. Gauges, indicating and recording. 17. Generators. 18. Hot valves. 19. Hydraulic operation equipment. 20. Instruments and meters, electrical. 21. Oil handling and storage apparatus used solely for water gas apparatus (tanks, pumps and oil lines, oil heaters, manholes, valve pits, regulators, strainers, etc.). 22. Oil spray. 23. Operating floors and supports, stairways, etc. 24. Piling under foundations. 25. Piping and valves--steam (commencing at steam header), tar (to decanter), water (inside of building), and gas (up to outlet of final pieces of apparatus in building). 26. Pressure regulators. 27. Scales, when used in connection with items in this account. 28. Seal pots. 29. Superheaters and superheater stacks. 30. Tanks, hydraulic pressure. 31. Valve operating mechanisms. 32. Wash boxes. 311. Liquefied petroleum gas equipment. A. This account shall include the cost installed of equipment used for the production of gas from petroleum derivatives, such as propane, butane, or gasoline. B. Subdivisions of this account shall be maintained for each producing process for which this account is provided. A separate subaccount shall be maintained also for bottling equipment included herein. ITEMS 1. Blowers. 2. Boilers. 3. Calorimixer. 4. Carbureting equipment. 5. Compression equipment. 6. Controller 7. Control apparatus. 8. Enclosures and protective fences. 9. Foundations and settings, specially constructed for and not intended to outlast the apparatus for which provided. 10. Heat exchanger. 11. Gauges and instruments. 12. Mixing or proportioning equipment. 13. Motors, not an integral part of driven equipment. 14. Odorizing equipment. 15. Oil separator. 16. Piping--steam (commencing at steam header), water (inside of building), oil (from supply tank), and gas (up to outlet of final piece of apparatus in building). 17. Pits. 18. Prime movers. 19. Pumps, including driving units. 20. Regulator. 21. Stairs, platforms, and ladders. 22. Storage equipment, tanks, etc. 23. Superheater. 24. Traps. 25. Valves--regulating and check. 26. Vaporizing equipment. 312. Oil gas generating equipment. This account shall include the cost installed of equipment used for generating oil gas. ITEMS 1. Air blast equipment, including blowers and driving units, piping and supports. 2. Air inlet louvers and filters. 3. Foundations and settings, specially constructed for and not intended to outlast the apparatus for which provided. 4. Generating equipment, including automatic cycle controls, generators, operating floor, superheaters and wash boxes. 5. Instruments and instrument boards, complete with signal lights and thermocouples and including gauge board, pressure gauges and pyrometers. 6. Meters and regulators, such as air flow meter, generator oil meter, steam flow meter and steam regulator. 7. Piping and valves, air, steam (commencing at steam header), water (inside building), and oil gas (up to outlet of final piece of apparatus in building). 8. Pumps, hydraulic and oil. 9. Tanks, hydraulic accumulator, hydraulic return, oil and steam accumulator. 313. Generating equipment--other processes. This account shall include, with subdivisions for each type of gas produced, the cost installed of generating equipment which is not included in any of the foregoing accounts, such as benches and retorts for the production of coal gas, equipment used for generating acetylene gas, etc. ITEMS As to coal gas production equipment: 1. Benches. 2. Charging and drawing machines. 3. Control apparatus. 4. Equipment for steaming retorts. 5. Flues, uptakes and breeching, whether or not stacks are included in this account. 6. Foundations. 7. Fuel handling equipment used exclusively for retorts, including weight lorries, tracks, etc., and grinders, breakers and screens located in retort house. 8. Fuel system under retorts, including built-in producers. 9. Piping, including ascension pipes, hydraulic main, liquor flushing decanter tank, liquor pump, and return line to hydraulic main. 10. Primary atmospheric condensers. 11. Retorts. 12. Stack--brick, steel, and concrete when set on separate foundations independent of substructure or superstructure of buildings, including lightning arresters. 314. Coal, coke and ash handling equipment. This account shall include the cost installed of structures or equipment used for the transportation, storage, washing, and treatment of coal, coke, and ashes, when used for general gas plant operations. ITEMS 1. Bins--mixing, refuse, storage, etc. 2. Boom operating mechanism. 3. Breaker equipment. 4. Bridges, bridge track, and machinery. 5. Bucket conveyors and supports. 6. Capstan. 7. Cars. 8. Chutes. 9. Circuit breakers. 10. Coal loaders. 11. Coal preparation machinery, including washing and drying equipment. 12. Conduit, electrical. 13. Conveyors and supports. 14. Crane, caterpillar. 15. Driving apparatus for equipment listed herein. 16. Elevators. 17. Enclosure equipment. 18. Engines, not an integral part of driven equipment. 19. Foundations and settings, specially constructed for and not intended to outlast the apparatus for which provided. 20. Gravity swing unloader. 21. Hoppers. 22. Instruments or meters, electrical. 23. Ladders, fixed. 24. Loading towers and equipment. 25. Locomotives. 26. Motor generators used only for equipment in this account. 27. Panel, control. 28. Pits. 29. Pulverizing equipment. 30. Railroad sidings and yard tracks. 31. Sampling equipment. 32. Scales. 33. Screens. 34. Sheds and fencing. 35. Shuttle boom. 36. Signal system equipment. 37. Silo. 38. Skip hoist. 39. Stairs, railings, etc. 40. Transfer cars and trucks. 41. Trestles. 42. Turntable. 43. Unloaders. 44. Weighometer. 315. Catalytic cracking equipment. This account shall include the cost installed of equipment used for producing gas by the catalytic cracking process. ITEMS 1. Caloric meters. 2. Catalytic furnace, including catalyst and foundation. 3. Combustion air blowers. 4. Compressors, air. 5. Control equipment. 6. Cooling coils, including foundations. 7. Cooling towers, including foundations. 8. Enclosures. 9. Fractionalizing units. 10. Piping and valves. 11. Preheaters. 12. Pressure regulators. 13. Proportioning controls. 14. Tanks. 15. Vaporizers. 316. Other reforming equipment. This account shall include the cost installed of equipment, other than catalytic cracking equipment, used primarily for reforming gas with resultant changes in its chemical composition and calorific value. ITEMS 1. Blast equipment, including blowers and driving units, piping, and supports. 2. Control apparatus. 3. Foundations and settings, specially constructed for and not intended to outlast the apparatus for which provided. 4. Fuel and ash handling equipment, used wholly in reforming gas. 5. Oil gas apparatus, used for reforming gas. 6. Piping--steam (commencing at steam header), water (inside of building), and gas (up to outlet of final piece of apparatus in building). 7. Pumps and driving units. 8. Purifiers for gas to be reformed. 9. Regulators. 10. Water gas generators, used primarily for reforming gas. 317. Purification equipment. This account shall include the cost installed of apparatus used for the removal of impurities from gas and apparatus for conditioning gas, including pumps, wells, and other accessory apparatus. ITEMS 1. Blowers for revivifying. 2. Blowers for activators. 3. Condensers and washer coolers. 4. Control apparatus--conduit, cable, cabinets, switchboards, etc. 5. Crane or cover lifting equipment, not part of the structure. 6. Dehydrators. 7. Engines, not an integral part of driven equipment. 8. Foundations and settings, specially constructed for and, not intended to outlast the equipment for which provided. 9. Instruments and meters, electric. 10. Lubricators. 11. Naphthalene and light oil scrubbers. 12. Other accessory equipment such as coolers, spray ponds, pumps, platforms, railings, stairs. 13. Oxide elevators and pits, platforms, tables, and trenches. 14. Piping--air, steam, water, gas, condensate, liquor, tar, etc., from inlet valve of first piece of apparatus to outlet valve of final piece of apparatus (or, in building, from entrance to building to exit from building). 15. Precipitators. 16. Purifiers--iron oxide or liquid, including first filling. 17. Recording gauges and thermometers. 18. Revivifying air ducts. 19. Saturator with auxiliary equipment. 20. Scrubbers. 21. Seal and drip pots. 22. Signal system identified with equipment herein. 23. Sulphur removal apparatus. 24. Tar extractors and Cottrell precipitators. 25. Tar pumps and tanks. 26. Track runs for cranes and hoists. 27. Wash boxes. 28. Water meters, for cooling water. 318. Residual refining equipment. This account shall include the cost installed of apparatus used in refining and handling of residuals except where the apparatus is necessary for the operation of property included in account 317, Purification equipment. ITEMS 1. Ammonia stills, condensers, saturators, etc. 2. Apparatus for removal of residuals from purifier liquids. 3. Coke filter. 4. Coke handling and storage facilities, used solely for coke held for sale. 5. Condensers. 6. Control apparatus. 7. Coolers. 8. Decanters. 9. Foundations specially constructed for and not intended to outlast the apparatus for which provided. 10. Gauges. 11. Heating equipment for apparatus included in this account. 12. Instruments. 13. Light oil stills, washers, etc. 14. Piping and pumps. 15. Platforms, stairs, and ladders. 16. Separators. 17. Storage tanks. 18. Supports. 19. Tar dehydrators, stills, etc. 319. Gas mixing equipment. This account shall include the cost installed of equipment used for mixing manufactured and natural gas, or the mixing of other gases incident to delivery of such mixed gases to the distribution system. ITEMS 1. Alcohol units. 2. Automatic mixing controls. 3. Btu adjuster. 4. Calorimeter. 5. Calorimixer. 6. Compressor. 7. Gas heater. 8. Gas scrubber (air filter, dust cleaner). 9. Gauges and instruments. 10. Meters. 11. Mixing chambers. 12. Odorizing equipment. 13. Oil pump units. 14. Panel and control equipment. 15. Piping and valves. 16. Regulators, pressure and ratio. 17. Safety alarm equipment. 320. Other equipment. This account shall include the cost installed of equipment used in the production of gas, when not assignable to any of the foregoing accounts. ITEMS 1. Cabinet, control. 2. Compressed air system. 3. Fire hose carts. 4. First aid room equipment. 5. Foamite system. 6. Foundations and settings, specially constructed for and not intended to outlast the apparatus for which provided. 7. Gasoline pumps. 8. Hand pumps. 9. Machine shop equipment, such as lathes, pipe cutting and threading machines, vice grinders, power saw, shop motors, shafting and belting, drill press, shapers, milling machines, planes, etc. 10. Odorizing equipment. 11. Office furniture and equipment. 12. Oil foggers. 13. Panel, control. 14. Piping--yard, when not includible in other accounts. 15. Pits. 16. Platforms. 17. Portable scaffolds, ladders, etc. 18. Power shovels. 19. Production laboratory equipment. 20. Scales, not associated with other equipment. 21. Special signal equipment. 22. Tractors for general plant use. 23. Works exhauster including driving unit and governor. 24. Works station meters, including gauges, piping and accessories. B. Natural Gas Production Plant B.1 Natural Gas Production and Gathering Plant Special Instructions--Costs Related to Leases Acquired After the Adoption of Full Cost Accounting. The net book value of amounts recorded in the natural gas production accounts incurred on or related to leases acquired after the adoption of full cost accounting shall, in general, not exceed the net realizable value (estimated selling price less estimated costs of extraction, completion, and disposal) of recoverable hydrocarbon reserves discovered on such leases. After initiation of exploration and development on leases acquired after the adoption of full cost accounting, the utility must determine after a reasonable period of time, and annually thereafter, whether the net realizable value of such recoverable reserves on such leases will be sufficient to absorb the net book value of amounts in the production accounts. If the net realizable value of recoverable reserves is not sufficient to absorb the net book value of amounts in the production accounts, the utility shall reduce the net book value of the amounts in the accounts to net realizable value of recoverable reserves. The reduction shall be done by first reducing the unamortized amounts recorded in Account 338, Unsuccessful exploration and development costs, by debiting Account 404.1, Amortization and depletion of producing natural gas land and land rights. (For nonmajor companies, 403.1, Depreciation and depletion expense). Next, if the net book value related to successful costs exceeds the net realizable value of the recoverable reserves, the production plant accounts shall be written down to such net realizable value by appropriate charges and credits to the expense and valuation accounts. 325.1 Producing lands. This account shall include the cost of lands held in fee on which producing natural gas wells are located, and lands held in fee which are being drained of natural gas through the operation by the utility of wells on other land. (See Gas Plant Instruction 7-G.) 325.2 Producing leaseholds. A. This account shall include the cost of acquiring leaseholds on which the utility pays royalties for natural gas obtained therefrom. (See Gas Plant Instruction 7-G.) B. Exclude from this account rents paid periodically for rights obtained under leases. Exclude also from this account the cost of leaseholds which terminate in one year or less after they become effective. 325.3 Gas rights. This account shall include the cost of natural gas rights used in producing natural gas, whereby the utility obtains ownership in gas underlying land not owned or leased by the utility. It does not provide for gas rights which are leased and which are properly chargeable to Account 325.2, Producing leaseholds. 325.4 Rights-of-way. This account shall include the cost of all interests in land which terminate more than one year after they become effective and on which are located gathering pipe lines, telephone pole lines, and like property used in connection with the production of natural gas. (See Gas Plant Instruction 7.) 325.5 Other land. This account shall include the cost of land used in connection with the production of natural gas, when not properly assignable to any of the foregoing accounts. (See Gas Plant Instruction 7.) 325.6 Other land rights. This account shall include the cost of land rights used in connection with the production of natural gas, when not properly assignable to any of the foregoing accounts. (See Gas Plant Instruction 7.) 326. Gas well structures. This account shall include the cost of well structures and improvements used in connection with the housing of permanent bailers and other equipment necessary to keep the wells in operation. (See Gas Plant Instruction 8.) 327. Field compressor station structures. This account shall include the cost of structures and improvements used in connection with the housing of compressor station equipment used to raise the pressure of natural gas before it is conveyed to the terminus of the field lines. (See Gas Plant Instruction 8.) 328. Field measuring and regulating station structures. This account shall include the cost of structures and improvements used in connection with the housing of meters, regulators, and appurtenant appliances for measuring and regulating natural gas before the point where it enters the transmission or distribution system. (See Gas Plant Instruction 8.) 329. Other structures. This account shall include the cost of structures and improvements used in connection with natural gas production and gathering not provided for elsewhere. (See Gas Plant Instruction 8.) 330. Producing gas wells--well construction. This account shall include the cost of drilling producing gas wells. ITEMS 1. Clearing well site. 2. Hauling, erecting, dismantling, and removing boilers, portable engines, derricks, rigs, and other equipment and tools used in drilling. 3. Drilling contractors' charges. 4. Drive pipe. 5. Fuel or power. 6. Labor. 7. Rent of drilling equipment. 8. Water used in drilling, obtained either by driving wells, piping from springs or streams, or by purchase. 9. Hauling well equipment. 10. Shooting, fracturing, acidizing. 331. Producing gas wells--well equipment. This account shall include the cost of equipment in producing gas wells. ITEMS 1. Bailing equipment. 2. Boilers and drives permanently connected. 3. Casing. 4. Derrick. 5. Fence, when solely an enclosure for equipment. 6. Fittings, including shut-in valves, bradenheads and casing heads. 7. Packing. 8. Tank, oil or water, etc. 9. Tubing. 332. Field lines. This account shall include the cost installed of field lines used in conveying natural gas from the wells to the point where it enters the transmission or distribution system. ITEMS 1. Gathering lines, including pipe, valves, fittings, and supports. 2. Cathodic protection equipment. 3. Creek crossings, suspension bridges and other special construction. 4. Line drips and separators. 5. Line pack gas. (optional) 333. Field compressor station equipment. This account shall include the cost installed of compressor station equipment and associated appliances used to raise the pressure of natural gas before it is conveyed to the terminus of the field lines. ITEMS 1. Boiler plant, coal handling and ash handling equipment for steam powered compressor station. 2. Compressed air system equipment. 3. Compressor equipment and driving units, including auxiliaries, foundations, guard rails and enclosures, etc. 4. Electric system equipment, including generating equipment and driving units, power wiring, transformers, regulators, battery equipment, switchboard, etc. 5. Fire fighting equipment. 6. Gas lines and equipment, including fuel supply lines, cooling tower and pond and associated equipment, dehydrators, fuel gas mixers, special pipe bends and connections, and associated scrubbers, separators, tanks, gauges and instruments. 7. Laboratory and testing equipment. 8. Lubricating oil system, including centrifuge, filter, tanks, purifier, and lubricating oil piping, etc. 9. Office furniture and fixtures and general equipment such as heating boilers, steel lockers, first-aid equipment, gasoline dispensing equipment, lawn mowers, incinerators, etc. 10. Shop tools and equipment. 11. Water supply and circulation system, including water well, tank, water piping, cooling tower, spray fence, and water treatment equipment, etc., but not including water system equipment solely for domestic and general use. 334. Field measuring and regulating station equipment. This account shall include the cost installed of meters, gauges, and other equipment used in measuring and regulating natural gas collected in field lines before the point where it enters the transmission or distribution system. ITEMS 1. Automatic control equipment. 2. Boilers, heaters, etc. 3. Foundations, pits, etc. 4. Gas cleaners, scrubbers, separators, dehydrators, etc. 5. Gauges and instruments, including piping, fittings, wiring, etc., and panel boards. 6. Headers. 7. Meters, orifice or positive, including piping and connections. 8. Oil fogging equipment. 9. Odorizing equipment. 10. Regulators or governors, including controls and instruments. 11. Structures of a minor nature or portable type. 335. Drilling and cleaning equipment. This account shall include the cost of implements and equipment used in drilling and cleaning natural gas wells. ITEMS 1. Bailers. 2. Bits and other drilling tools. 3. Boilers. 4. Derricks. 5. Drilling cables. 6. Drilling machines. 7. Engines. 8. Motors. 9. Pulling machines. 10. Pumps. 11. Rigs. 12. Tanks. 336. Purification equipment. This account shall include the cost installed of apparatus used for the removal of impurities from gas and apparatus for conditioning gas. ITEMS 1. Condensers and washer coolers. 2. Dehydrators. 3. Foundations and settings, specially constructed for and not intended to outlast the equipment for which provided. 4. Other accessory equipment, such as coolers, spray ponds, pumps, platforms, railings, stairs. 5. Piping, from inlet valve or first piece of apparatus to outlet valve of final piece of apparatus (or, in building, from entrance to building to exit from building). 6. Scrubbers. 7. Sulphur removal apparatus. 8. Water supply system. NOTE: In general, this account shall include all dehydrators located in or adjacent to production areas which are used to remove water and other stray liquids from gas produced by the utility or purchased in or adjacent to production areas. In some instances, such dehydrators may be located some distance from the production sources of the gas. Where, however, the utility has no production and gathering facilities with respect to any of the gas passing through the dehydrators, such as at the purchase point at the head of a transmission pipe line company, the dehydrators may be included in Account 368, Compressor station equipment, or Account 367, Mains, whichever is the most practicable and reasonable under the circumstances. Dehydrators which are an adjunct to products extraction operations shall be included in Account 342, Extraction and refining equipment. Dehydrators used in connection with underground gas storage operations shall be included in Account 356, Purification equipment. 337. Other equipment. This account shall include the cost installed of equipment used in the production and gathering of natural gas, when not assignable to any of the foregoing accounts. ITEMS 1. Calorimeter. 2. Control installation. 3. Crane. 4. Laboratory equipment. 5. Odorizing unit. 6. Office furniture and equipment. 7. Oil fogger. 338. Unsuccessful exploration and development costs. A. This account shall include unsuccessful exploration and development costs incurred on or related to hydrocarbon leases, on properties in the contiguous 48 States and the State of Alaska, acquired after the adoption of full cost accounting. It shall also include costs of a preliminary nature incurred in the search for natural gas in such areas after the adoption of full cost accounting. B. The costs recorded in this account shall be amortized by debiting Account 404.1, Amortization and depletion of producing natural gas land and land rights, and crediting this account using the unit-of-production or other acceptable method of amortization as hydrocarbons are extracted from producing wells. C. In general, the unamortized costs recorded in this account shall not exceed the net realizable value (estimated selling price less estimated costs of extraction, completion, and disposal) of proven hydrocarbon reserves on leases acquired after the adoption of full cost accounting. (See "Special Instructions--Costs Related to Leases Acquired After the Adoption of Full Cost Accounting." above.) B.2 Products Extraction Plant 340.1 Land. This account shall include the cost of land used in connection with the processing of natural gas for removal of gasoline, butane, propane, or other salable products. (See Gas Plant Instruction 7.) 340.2 Land rights. This account shall include the cost of land rights used in connection with the processing of natural gas for removal of gasoline, butane, propane, or other salable products. (See Gas Plant Instruction 7.) 341. Structures and improvements. This account shall include the cost of structures and improvements used in connection with the processing of natural gas for removal of gasoline, butane, propane, or other salable products. (See Gas Plant Instruction 8.) 342. Extraction and refining equipment. This account shall include the cost installed of equipment used for the extraction from natural gas of gasoline, butane, propane, or other salable products and for the refining of such products. ITEMS 1. Boiler plant equipment, including boiler, boiler setting, heat exchangers, etc. 2. Compressed air system, including air compressor, air storage tank, etc. 3. Cooling equipment such as coolers, cooling tower and accessories for gas, extracted products, etc. 4. Cranes, trolleys, and hoists. 5. Electrical system, including generator and driving unit, power lines, transformers, switchboard, yard lighting systems, etc. 6. Extraction and refining equipment, such as absorbers, reabsorbers, stills, dephlegmators, fractionating towers, stabilizing columns, supports for equipment items not intended to outlast the equipment for which provided. 8. Fuel regulating and measuring equipment. 9. Gasoline blending equipment including dye pot, educator pumps, lead storage tanks, weighing device, etc. 10. Gauges and instruments. 11. Loading racks and associated other equipment. 12. Lubricating oil system. 13. Pumps of various types, such as boiler feed water pumps, loading and transfer pumps, drip still pumps, oil pumps, skimmer basin pumps, etc. 14. Tanks of various types such as accumulator and dewatering tanks, separator tanks, gasoline feed tanks, compressed air tanks, oil surge tanks, etc., except tanks classifiable as storage equipment, Account 344. 15. Water supply system including water well, water tank and supports, water softener or purification apparatus, traveling water screen and drive. 16. Yard piping, gas, water, steam, compressed air, fuel, vapor, extracted products, including headers, valves, etc., but not including off-site lines includible in Account 343, Pipe lines. 343. Pipe lines. This account shall include the cost installed of gas and liquids pipe lines used in connection with the processing of natural gas for the removal of gasoline, butane, propane, or other salable products, exclusive of runs of pipe appropriately includible in other equipment accounts, embracing principally off-site gas, gasoline gathering, and loading lines not includible as yard piping in Account 342, Extraction and refining equipment. ITEMS 1. Gas lines, off-site, relating solely to extraction operations. 2. Gasoline gathering lines connecting with off-site sources. 3. Gathering line drips. 4. Instruments, indicating and recording. 5. Loading lines connecting with remote off-site loading racks or storage facilities. 6. Pumps and driving units. 344. Extracted products storage equipment. This account shall include the cost installed of storage tanks and associated equipment used in the storing, prior to sale, of gasoline, butane, propane, and other salable products extracted from natural gas. ITEMS 1. Foundations. 2. Instruments. 3. Regulators. 4. Storage tanks for partially or fully processed products. 5. Valves. 345. Compressor equipment. This account shall include the cost installed of compressor equipment and associated appliances used in connection with the receipt, processing, and return of natural gas processed for removal of gasoline, butane, propane, or other salable products. ITEMS (See Account 333) 346. Gas measuring and regulating equipment. This account shall include the cost installed of meters, gauges, and other equipment used in measuring or regulating natural gas received and/or returned from processing for removal of gasoline, butane, propane, or other salable products. ITEMS 1. Automatic control equipment. 2. Boilers, heaters, etc. 3. Foundations, pits, etc. 4. Gas cleaners, scrubbers, separators, dehydrators, etc. 5. Gauges and instruments, including piping, fittings, wiring, etc., and panel boards. 6. Headers. 7. Meters, orifice or positive, including piping and connections. 8. Oil fogging equipment. 9. Odorizing equipment. 10. Regulators or governors, including controls and instruments. 11. Structures of a minor nature or portable type. 347. Other equipment. This account shall include the cost installed of equipment used in processing natural gas and refining gasoline, butane, propane, and other salable products extracted from natural gas, when not assignable to any of the foregoing accounts. ITEMS 1. Fire fighting equipment. 2. Laboratory and testing equipment. 3. Miscellaneous equipment, such as first-aid cabinet, gasoline dispensing pump, heating boiler, incinerator, lawn mower, warehouse truck. 4. Office furniture and equipment. 5. Shop tools and equipment. C. Synthetic Natural Gas Production Plants 349.1 Land. This account shall include the cost of land used in connection with SNG facilities. 349.1a Land rights. This account shall include the cost of land rights used in connection with SNG facilities. 349.2 Structures and improvements. This account shall include the cost in place of structures and improvements used in connection with SNG facilities. 349.3 Raw material (feedstock) preparation and storage equipment. This account shall include the cost installed of equipment used in connection with the preparation and processing of raw material (feedstock) used to produce SNG, such as: Agitators, blowers, chlorinators, contaminant removal, conveyors, cooling towers, crude units, crushers, desalters, distillation filters, foundations, HDS units, heat exchangers, hypochlorinators, lime hoppers, mining equipment, piping, pumps, refrigeration, sizing equipment, tanks, valves, vessels, washing equipment, wells and reservoirs for storage of raw materials (feedstock). 349.4 Gasification, purification and gas upgrading equipment. This account shall include the cost installed of equipment used in connection with the process necessary to gasify, purify and upgrade the raw material (feedstock), such as: Boilers, coolers, foundations, gas coolers, gas producers, heat exchangers, heaters, hydrogasifiers, piping, pumps, reactors, residue producing equipment, shift converters, valves, water/steam generating equipment, absorbers, CO2 removal units, dehydrators, foundations, fractionation units, fuel oil storage tanks, heaters, heaters and pumps, piping, precoolers and/or aftercoolers, scrubbers, valves, condensate coolers, deacidifiers, ejectors, extractors, flash vessels, foundations, gas liquor tanks, methanation units, piping, pre-wash towers, reboilers, recycle pumps, scrubbers, strippers. 349.5 Compressor station equipment. This account shall include the cost installed of equipment used in connection with compressing of SNG, such as: Compressors, foundations, piping, prime movers, valves. 349.6 Other equipment. This account shall include the cost installed of equipment used in the SNG production plant when not properly assignable to other production accounts, such as: Measuring and regulating equipment, blowdown and flare-regeneration and quench systems, cooling water systems, electrical, foundations, fuel gas production equipment, fuel systems and sulfur recovery units, instrumentation, interconnecting piping, marine facilities, power, steam, storage and fire-water systems, sulfur storage and loading, tankage, waste water treating, water supply treating. 3. Storage Plant SPECIAL INSTRUCTIONS Accounts 350.1 through 363.5 These accounts are to be used by both transmission and distribution companies for natural gas storage facilities. If the utility operates both transmission and distribution systems, subaccounts shall be maintained classifying the storage facilities to the transmission or distribution function. A. Underground Storage Plant 350.1 Land. This account shall include the cost of lands held in fee on which underground storage wells are located, and other lands held in fee within an area utilized for the underground storage of gas. (See Gas Plant Instruction 7-G.) 350.2 Rights-of-Way. This account shall include the cost of all interests in land which do not terminate until more than one year after they become effective and on which are located underground storage lines, telephone pole lines, and like property used in connection with underground gas storage operations. (See Gas Plant Instruction 7.) 351. Structures and improvements. A. This account shall include the cost in place of structures and improvements used wholly or predominantly in connection with underground storage of natural gas. (See Gas Plant Instruction 8.) B. This account shall be subdivided as follows: 351.1 Well structures. 351.2 Compressor station structures. 351.3 Measuring and regulating station structures. 351.4 Other structures. 352. Wells. This account shall include the drilling cost of wells used for injection and withdrawal of gas from underground storage projects, including wells kept open and used for observation. ITEMS Drilling: 1. Clearing well site. 2. Hauling, erecting, dismantling, and removing boilers, portable engines, derricks, rigs, and other equipment and tools used in drilling. 3. Drilling contractors' charges. 4. Drive pipe. 5. Fuel or power. 6. Labor. 7. Rent of drilling equipment. 8. Water used in drilling, obtained either by driving wells, piping from springs or streams, or by purchase. 9. Hauling well equipment. 10. Shooting, fracturing, acidizing. Equipment: 11. Bailing equipment. 12. Boilers and drives permanently connected. 13. Casing. 14. Derrick. 15. Fence, when solely an enclosure for equipment. 16. Fittings, including shut-in valves, bradenheads and casing heads. 17. Packing. 18. Tank, oil or water, etc. 19. Tubing. 352.1 Storage leaseholds and rights. A. This account shall include the cost of leaseholds, storage rights, mineral deeds, etc. on lands for the purpose of utilizing subsurface reservoirs for underground gas storage operations. (See Gas Plant Instruction 7-G.) B. Exclude from this account rents or other charges paid periodically for use of subsurface reservoirs for underground gas storage purposes. NOTE: Items such as buildings, wells, lines, equipment and recoverable gas used in storage operations acquired with land or storage leaseholds and rights are to be classified in the appropriate accounts. 352.2 Reservoirs. This account shall include costs to prepare underground reservoirs for the storage of natural gas. ITEMS 1. Geological, geophysical and seismic costs. 2. Plugging abandoned wells. 3. Fuel and power. 4. Drilling and equipping fresh water wells, disposal wells, and solution wells. 5. Leaching of salt dome caverns. 6. Rentals on storage rights and leases incurred during construction and development period. 7. Gas used during the development period. 8. Costs incident to maintaining covenants of production leaseholds during the period required to convert them to storage leaseholds. 9. Other rehabilitation work. 352.3 Nonrecoverable natural gas. A. This account shall include the cost of gas in underground reservoirs, including depleted gas or oil fields and other underground caverns or reservoirs used for the storage of gas which will not be recoverable. B. Such nonrecoverable gas shall be priced at the acquisition cost of native gas or, when acquired for storage by purchase or presumed to be supplied from the utility's own production, priced as outlined in paragraph B of Account 117, Gas stored underground - noncurrent (For nonmajor companies, Account 164.1, Gas stored underground). After devotion to storage, the cost of the gas shall not be restated to effect subsequent price changes in purchased gas or changes in the cost of gas produced by the utility. When the utility has followed the practice of adjusting nonrecoverable gas to the weighted-average cost of gas purchased or supplied from its own production, cost shall be the weighted-average cost of such gas at the effective date of this account. 353. Lines. This account shall include the cost installed of gas pipe lines used wholly or predominantly for conveying gas from point of connection with transmission or field lines to underground storage wells and from underground storage wells to the point where the gas enters the transmission or distribution system. ITEMS 1. Cathodic protection equipment. 2. Creek crossings, suspension bridges and other special construction. 3. Lines, including pipe, valves, fittings and supports. 4. Line drips and separators. 5. Line pack gas (optional). 354. Compressor station equipment. This account shall include the cost installed of compressor station equipment used wholly or predominantly for the purpose of raising the pressure of gas for delivery to underground storage or to raise the pressure of gas withdrawn from underground storage for delivery to the transmission or distribution system. ITEMS 1. Boiler plant, coal handling and ash handling equipment for steam powered compressor station. 2. Compressed air system equipment. 3. Compressor equipment and driving units, including auxiliaries, foundations, guard rails and enclosures, etc. 4. Electric system equipment, including generating equipment and drying units, power wiring, transformers, regulators, battery equipment, switchboard, etc. 5. Fire fighting equipment. 6. Gas lines and equipment, including fuel supply lines, cooling tower and pond and associated equipment, dehydrators, fuel gas mixers, special pipe bends and connections, and associated scrubbers, separators, tanks, gauges, and instruments. 7. Laboratory and testing equipment. 8. Lubricating oil system, including centrifuge, filter, tanks, purifier, and lubricating oil piping, etc. 9. Office furniture and fixtures and general equipment such as steel lockers, first-aid equipment, gasoline dispensing equipment, lawn mowers, incinerators, etc. 10. Shop tools and equipment. 11. Water supply and circulation system, including water well, tank, water piping, cooling tower, spray fence, and water treatment equipment, etc., but not including water system equipment solely for domestic and general use. 355. Measuring and regulating equipment. This account shall include the cost installed if equipment used wholly or predominantly for the purpose of measuring and regulating deliveries of gas to underground storage and withdrawals of gas from underground storage. ITEMS 1. Automatic control equipment. 2. Boilers, heaters, etc. 3. Foundations, pits, etc. 4. Gas cleaners, scrubbers, separators, dehydrators, etc. 5. Gauges and instruments, including piping, fittings, wiring, etc., and panel boards. 6. Headers. 7. Meters, orifice or positive, including piping and connections. 8. Oil fogging equipment. 9. Odorizing equipment. 10. Regulators or governors, including controls and instruments. 11. Structures of a minor nature or portable type. 356. Purification equipment. This account shall include the cost installed of apparatus used wholly or predominantly for the removal of impurities from and the conditioning of gas delivered to or removed from underground storage fields. ITEMS 1. Condensers and washer coolers. 2. Dehydrators. 3. Foundations and settings, specially constructed for and not intended to outlast the equipment for which provided. 4. Other accessory equipment, such as coolers, spray ponds, pumps, platforms, railings, stairs. 5. Piping, from inlet valve of first piece of apparatus to outlet valve of final piece of apparatus (or, in building, from entrance to building to exit from building). 6. Scrubbers. 7. Sulphur removal apparatus. 8. Water supply system. 357. Other equipment. This account shall include the cost installed of equipment used wholly or predominantly in connection with underground storage of gas, when not assignable to any of the foregoing accounts. ITEMS 1. Calorimeter. 2. Control installation. 3. Crane. 4. Odorizing unit. 5. Office furniture and equipment. 6. Oil fogger. 358. Gas in underground storage -- noncurrent. A. Includes the cost of noncurrent gas in underground storage fields not ordinarily available for withdrawal to meet current service requirements of the utility's customers (see Account 164.1, Gas stored underground - current). B. Gas injected into undeveloped storage fields to bring them to base pressure shall be priced in accordance with instructions contained in Account 164.1, Gas stored underground - current. C. This account may be used to substitute for Account 117, Gas stored underground - non-current. Once election has been made, this account shall be used in a consistent manner. B. Other Storage Plant 360.1 Land. This account shall include the cost of land used in connection with storage of gas in holders. (See Gas Plant Instruction 7.) 360.2 Land rights. This account shall include the cost of land rights used in connection with storage of gas in holders. (See Gas Plant Instruction 7.) 361. Structures and improvements. This account shall include the cost in place of structures and improvements used in connection with storage of gas. (See Gas Plant Instruction 8.) 362. Gas holders. This account shall include the cost installed of holders and associated appliances used in the storage of gas above ground, or in underground receptacles. ITEMS 1. Alarm systems. 2. Buried piping, tanks or other underground construction for gas storage. 3. Flood and fire control equipment. 4. Foundations. 5. Holder pistons. 6. Holders--waterless, including elevators, tar apparatus, and inlet and outlet connections. 7. Holders--waterseal, including oil skimmer, heating equipment, drips, and inlet and outlet connections. 8. Hortonspheres and high-pressure tanks, including inlet and outlet connections, access equipment, etc. 9. Lighting. 10. Pumps. 11. Ventilating equipment. 12. Walkways. NOTE A: If the utility stores gas by the liquefaction process, the holders for such liquids, whether above or below ground, shall be included in a separate subaccount hereunder. NOTE B: Relief holders used in connection with manufactured gas operations shall be included in Account 305, Structures and improvements. 363. Purification equipment (major only). This account shall include the cost installed of apparatus used for the removal of impurities from gas and apparatus for conditioning gas. ITEMS 1. Condensers and washer coolers. 2. Dehydrators. 3. Foundations and settings, specially constructed for and not intended to outlast the equipment for which provided. 4. Other accessory equipment, such as coolers, spray ponds, pumps, platforms, railings, stairs. 5. Piping from inlet valve of first piece of apparatus to outlet valve of final piece of apparatus (or, in building, from entrance to building to exit from building). 6. Scrubbers. 7. Sulphur removal apparatus. 8. Water supply system. 363.1 Liquefaction equipment (major only). This account shall include the cost installed of equipment used in liquefaction of natural gas. ITEMS 1. Cold box. 2. Heat exchanger. 3. Condensers. 4. Pumps. 5. Tanks. 363.2 Vaporizing equipment (major only). This account shall include the cost installed of vaporizing equipment used in connection with liquefied natural gas storage. 363.3 Compressor equipment (major only). This account shall include the cost installed of compressor equipment and associated appliances used in connection with other storage plant. 363.4 Measuring and regulating equipment (major only). This account shall include the cost installed of equipment used to measure deliveries of gas to other storage and withdrawals of gas from other storage. ITEMS 1. Automatic control equipment. 2. Boilers, heaters, etc. 3. Foundations, pits, etc. 4. Gas cleaners, scrubbers, separators, dehydrators, etc. 5. Gauges and instruments, including piping, fittings, wiring, etc., and panel boards. 6. Headers. 7. Meters, orifice or positive, including piping and connections. 8. Oil fogging equipment. 9. Odorizing equipment. 10. Regulators or governors, including controls and instruments. 11. Structures of a minor nature or portable type. 363.5 Other equipment. This account shall include the cost installed of other equipment used in connection with the storage of gas in holders. ITEMS 1. Complete inlet and outlet connections. 2. Compressor. 3. Foundation. 4. Gauges and instruments. 5. Regulating apparatus. 6. Line pack gas. (optional) C. Base load liquefied natural gas terminaling and processing plant 364.1 Land (major only). This account shall include the cost of land used in connection with liquefied natural gas terminaling and processing operations. (See Gas Plant Instruction 7.) 364.1a Land rights. This account shall include the cost of land rights used in connection with liquefied natural gas terminaling and processing operations. (See Gas Plant Instruction 7.) 364.2 Structures and improvements (major only). A. This account shall include the cost in place of structures and improvements used in connection with liquefied natural gas terminaling and processing operations. (See Gas Plant Instruction 8.) B. This account shall be subdivided as follows: 1. Docking and harbor facilities. 2. LNG processing terminal structures. 3. Measuring and regulating structures. 4. Compressor station structures. 5. Other structures. 364.3 LNG processing terminal equipment (major only). This account shall include the cost installed of equipment used to receive, hold, and regasify liquefied natural gas for delivery into the utility's transmission or distribution system. ITEMS 1. Aftercoolers. 2. Air compressors. 3. Air coolers. 4. Alarm systems. 5. Blowers. 6. Cold box, condensers. 7. Controls and control apparatus. 8. Dikes. 9. Drums. 10. Electrical power and ignition circuits including wiring and conduits. 11. Emission control equipment. 12. Fire control devices and equipment. 13. Foundations. 14. Generators. 15. Heat exchangers. 16. Heaters and reheaters. 17. Instrumentation. 18. Intercoolers. 19. Liquefaction compressors. 20. Liquefied gas holders and storage tanks. 21. Nitrogen system equipment. 22. Plant piping including pipe supports. 23. Pollution control facilities. 24. Pumps and driving units. 25. Stacks. 26. Tanks, other LNG storage tanks (including ladders, stairs, walkways, and lighting). 27. Unloading and loading arms, and appurtenant equipment. 28. Valves. 29. Vaporizers. 30. Waste heat recovery units. 31. Water craft not to include LNG tankers and barges. 32. Miscellaneous other equipment. 33. Line pack gas. (optional) 364.4 LNG transportation equipment (major only). This account shall include the cost of vehicles used for the transportation of liquefied natural gas. ITEMS 1. LNG barges. 2. LNG maritime tankers. 3. LNG tank trucks. 4. Other LNG transportation equipment. 364.5 Measuring and regulating equipment (major only). This account shall include the cost installed of meters, gauges and other equipment used in base load LNG operations for measuring or regulating natural gas prior to its entrance into the utility's transmission or distribution system. ITEMS 1. Automatic control equipment. 2. Boiler, heaters, etc. 3. Foundation, pits, etc. 4. Gas analyzer equipment. 5. Gas cleaners, scrubbers, separators, dehydrators, etc. 6. Gauges and instruments, including piping, fittings, wiring, etc., and panel boards. 7. Headers. 8. Meters, orifice or positive, including controls and instruments. 9. Oil fogging equipment. 10. Odorizing equipment. 11. Regulators or governors, including controls and instruments. 12. Stabilization equipment. 13. Structures of a minor or portable type. 14. Other equipment. 364.6. Compressor station equipment (major only). This account shall include the cost installed of compressor station equipment and associated appliances used in connection with liquefied natural gas operations prior to entrance of vaporized gas into the utility's transmission or distribution system. ITEMS 1. Boiler plant, coal handling, and ash handling equipment for steam powered compressor station. 2. Compressed air system equipment. 3. Compressor equipment and driving units, including auxiliaries, foundations, guard rails, and enclosures, etc. 4. Electric system equipment, including generating equipment and driving units, power wiring, transformers, regulators, battery equipment, switchboards, etc. 5. Fire fighting equipment. 6. Gas lines and equipment, including fuel supply lines, cooling tower and pond and associated equipment, dehydrators, fuel gas mixers, special pipe bends and connections, and associated scrubbers, separators, tanks, gauges, and instruments. 7. Laboratory and testing equipment. 8. Lubricating oil system, including centrifuge, filter, tanks, purifier, and lubricating oil piping, etc. 9. Office furniture and fixtures and general equipment such as steel lockers, first-aid equipment, gasoline dispensing equipment, lawn mowers, incinerators, etc. 10. Shop tools and equipment. 11. Water supply and circulation system, including water well, tank, water pipeline, cooling tower, spray fence, and water treatment equipment, etc., but not including water system equipment used solely for domestic and general use. 12. Other equipment. 364.7 Communication equipment (major only). This account shall include the cost installed of radio, telephone, microwave, and other equipment used wholly or predominantly in connection with the operation and maintenance of the liquefied natural gas system. (See also Accounts 370 and 397, Communication equipment.) ITEM 1. Carrier terminal equipment including repeaters, power supply equipment, transmitting and receiving sets. 2. Microwave equipment, including power supply equipment, transmitters, amplifiers, paraboloids, towers, reflectors, receiving equipment, etc. 3. Radio equipment, fixed and mobile, including antenna, power equipment, transmitter units. 4. Telephone equipment including switchboards, power and testing equipment, conductors, pole lines, etc. 5. Other equipment. 364.8 Other equipment (major only). This account shall include the cost installed of equipment used in liquefied natural gas operations, when not assignable to any of the foregoing accounts. ITEMS 1. Garage and service equipment. 2. General tools, including power operated equipment. 3. Laboratory equipment. 4. Materials handling equipment. 5. Office furniture and equipment. 6. Power generation equipment. 7. Shop equipment. 8. Tools, other than small hand tools. 9. Other equipment. 4. Transmission Plant 365.1 Land. This account shall include the cost of land except rights-of-way used in connection with transmission operations. (See Gas Plant Instruction 7.) 365.2 Land rights. This account shall include the cost of land rights except rights-of-way used in connection with transmission operations. (See Gas Plant Instruction 7.) 365.3 Rights-of-way. This account shall include the cost of rights-of-way used in connection with transmission operations. (See Gas Plant Instruction 7.) 366. Structures and improvements. A. This account shall include the cost in place of structures and improvements used in connection with transmission operations. (See Gas Plant Instruction 8.) B. This account shall be subdivided as follows: 366.1 Compressor station structures. 366.2 Measuring and regulating station structures. 366.3 Other structures. 367. Mains. A. This account shall include the cost installed of transmission systems mains. B. The records supporting this account shall be so kept as to show separately the cost of mains of different sizes and types and of each tunnel, bridge, or river crossing. ITEMS 1. Anti-freeze lubricating equipment. 2. Automatic valve operating mechanisms, including pressure tanks, etc. 3. By-pass assembly. 4. Caissons, tunnels, trestles, etc., for submarine mains. 5. Cathodic protection equipment. 6. Drip lines and pots. 7. Excavation, including shoring, bracing, bridging, pumping, backfill, and disposal of excess excavated material. 8. Foundations. 9. Gas cleaners, scrubbers, etc., when not part of compressor station or measuring and regulating equipment. 10. Leak clamps (See gas plant instruction 10-C (1).) 11. Line pack gas. (optional) 12. Linewalkers' bridges. 13. Manholes. 14. Municipal inspection. 15. Pavement disturbed, including cutting and replacing pavement, pavement base, and sidewalks. 16. Permits. 17. Pipe coatings. 18. Pipe and fittings. 19. Pipe laying. 20. Pipe supports. 21. Protection of street openings. 22. River, highway, and railroad crossings, including revetments, pipe anchors, etc. 23. Valves. 24. Welding. 368. Compressor station equipment. This account shall include the cost installed of compressor station equipment and associated appliances used in connection with transmission system operations. ITEMS 1. Boiler plant, coal handling and ash handling equipment for steam powered compressor station. 2. Compressed air system equipment. 3. Compressor equipment and driving units, including auxiliaries, foundations, guard rails and enclosures, etc. 4. Electric system equipment, including generating equipment and driving units, power wiring, transformers, regulators, battery equipment, switchboard, etc. 5. Fire fighting equipment. 6. Gas lines and equipment, including fuel supply lines, cooling tower and pond and associated equipment, dehydrators, fuel gas mixers, special pipe bends and connections, and associated scrubbers, separators, tanks, gauges and instruments. 7. Laboratory and testing equipment. 8. Lubricating oil system, including centrifuge, filter, tanks, purifier, and lubricating oil piping, etc. 9. Office furniture and fixtures and general equipment such as steel lockers, first-aid equipment, gasoline dispensing equipment, lawn mowers, incinerators, etc. 10. Shop tools and equipment. 11. Water supply and circulation system, including water well, tank, water piping, cooling tower, spray fence, and water treatment equipment, etc., but not including water system equipment solely for domestic and general use. 369. Measuring and regulating station equipment. This account shall include the cost installed of meters, gauges, and other equipment used in measuring or regulating gas in connection with transmission system operations. ITEMS 1. Automatic control equipment. 2. Boilers, heaters, etc. 3. Foundations, pits, etc. 4. Gas cleaners, scrubbers, separators, dehydrators, etc. 5. Gauges and instruments, including piping, fittings, wiring, etc., and panel boards. 6. Headers. 7. Meters, orifice or positive, including piping and connections. 8. Oil fogging equipment. 9. Odorizing equipment. 10. Regulators or governors, including controls and instruments. 11. Structures of a minor nature or portable type. NOTE: Pipeline companies, including companies who measure deliveries of gas to their own distribution system, shall include in the transmission function classification city gate and main line industrial measuring and regulating stations. 370. Communication equipment. This account shall include the cost installed of radio, telephone, microwave, and other equipment used wholly or predominantly in connection with the operation and maintenance of the gas transmission system. (See also Account 397, Communication equipment.) ITEMS 1. Carrier terminal equipment including repeaters, power supply equipment, transmitting and receiving sets. 2. Microwave equipment, including power supply equipment, transmitters, amplifiers, paraboloids, towers, reflectors, receiving equipment, etc. 3. Radio equipment, fixed and mobile, including antenna, power equipment, transmitters and receivers, and portable receiver-transmitter units. 4. Telephone equipment including switchboards, power and testing equipment, conductors, pole lines, etc. 371. Other equipment. This account shall include the cost installed of equipment used in transmission system operations, when not assignable to any of the foregoing accounts. 5. Distribution Plant 374.1 Land. This account shall include the cost of land used in connection with distribution operations. (See Gas Plant Instruction 7.) 374.2 Land rights. This account shall include the cost of land rights used in connection with distribution operations. (See Gas Plant Instruction 7.) 375. Structures and improvements. This account shall include the cost in place of structures and improvements used in connection with distribution operations. (See Gas Plant Instruction 8.) 376. Mains. A. This account shall include the cost installed of distribution system mains. B. The records supporting this account shall be so kept as to show separately the cost of mains of different sizes and types and each tunnel, bridge, or river crossing. ITEMS 1. Caissons, tunnels, trestles, etc., for submarine mains. 2. Clamps, leak (bell and spigot) when installed at time of construction; when clamps are installed subsequent to construction, the accounting shall be in accordance with gas plant instruction 10, paragraph (C) 1. 3. Drip lines and pots. 4. Electrolysis tests, in connection with new construction. 5. Excavation, including shoring, bracing, bridging, pumping, backfill, and disposal of excess excavated material. 6. Hauling, unloading, and stringing pipe. 7. Lamping and watching new construction. 8. Line pack gas. (optional) 9. Municipal inspection. 10. Pavement disturbed, including cutting and replacing pavement, pavement base, and sidewalks. 11. Permits. 12. Pipe coating. 13. Pipe and fittings. 14. Pipe laying. 15. Pipe supports. 16. Protection of street openings. 17. Relocating city storm and sanitary sewers, catch basins, etc., for protecting same in connection with new construction. 18. Replacement of municipal drains and culverts in connection with new construction. 19. Roadway boxes. 20. Shifting excavated material due to traffic conditions in connection with new construction. 21. Sleeves and couplings. 22. Special crossovers, bridges and foundations for special construction. 23. Surveying and staking lines. 24. Valves not associated with pumping or regulating equipment. 25. Welding. 26. Wood blocking. 377. Compressor station equipment. This account shall include the cost installed of compressor station equipment and associated appliances used in connection with distribution system operations. ITEMS 1. Boiler plant, coal handling and ash handling equipment for steam powered compressor station. 2. Compressed air system equipment. 3. Compressor equipment and driving units, including auxiliaries, foundations, guard rails and enclosures, etc. 4. Electric system equipment, including generating equipment and driving units, power wiring, transformers, regulators, battery equipment, switchboard, etc. 5. Fire fighting equipment. 6. Gas lines and equipment, including fuel supply lines, cooling tower and pond and associated equipment, dehydrators, fuel gas mixers, special pipe bends and connections, and associated scrubbers, separators, tanks, gauges and instruments. 7. Laboratory and testing equipment. 8. Lubricating oil system, including centrifuge, filter, tanks, purifier, and lubricating oil piping, etc. 9. Office furniture and fixtures and general equipment such as steel lockers, first-aid equipment, gasoline dispensing equipment, lawn mowers, incinerators, etc. 10. Shop tools and equipment. 11. Water supply and circulation system, including water well, tank water piping, cooling tower, spray fence and water treatment equipment, etc., but not including water system equipment solely for domestic and general use. 378. Measuring and regulating station equipment--general. This account shall include the cost installed of meters, gauges, and other equipment used in measuring and regulating gas in connection with distribution system operations other than the measurement of gas deliveries to customers. ITEMS 1. Automatic control equipment. 2. Foundations. 3. Gauges and instruments. 4. Governors or regulators. 5. Meters. 6. Odorizing equipment. 7. Oil fogging equipment. 8. Piping. 9. Pressure relief equipment. 10. Vaults or pits, including valves contained therein. NOTE: By-passes outside governor pits are includible in Account 376, Mains. 379. Measuring and regulating station equipment--city gate check stations. This account shall include the cost installed of meters, gauges, and other equipment used in measuring and regulating the receipt of gas at entry points to distribution system. NOTE: Pipeline companies, including companies who measure deliveries of gas to their own distribution system, shall include in the transmission function classification city gate and main line industrial measuring and regulating stations. ITEMS (See Account 378 for items) 380. Services. A. This account shall include the cost installed of service pipes and accessories leading to the customer's premises. B. A complete service begins with the connection on the main and extends to but does not include the connection with the customer's meter. A stub service extends from the main to the property line, or the curb stop. C. Services which have been used but have become inactive shall be retired from utility plant in service immediately if there is no prospect for reuse, and, in any event, shall be retired by the end of the second year following that during which the service became inactive unless reused in the interim. ITEMS 1. Curb valves and curb boxes. 2. Excavation, including shoring, bracing, bridging, pumping, backfill, and disposal of excess excavated material. 3. Landscaping, including lawns and shrubbery. 4. Municipal inspection. 5. Pavement disturbed, including cutting and replacing pavement, pavement base, and sidewalks. 6. Permits. 7. Pipe and fittings, including saddle, T, or other fitting on street main. 8. Pipe coating. 9. Pipe laying. 10. Protection of street openings. 11. Service drips. 12. Service valves, at head of service, when installed or furnished by the utility. NOTE: When a customer pays all or a part of the cost of the service and such cost is properly includible in this account, the amount borne or contributed by the customer shall be credited to appropriate plant account. 381. Meters. A. This account shall include the cost installed of meters or devices and appurtenances thereto, for use in measuring gas delivered to users, whether actually in service or held in reserve. B. When a meter is permanently retired from service, the installed cost included herein shall be credited to this account. C. The records of meters shall be so kept that the utility can furnish information as to the number of meters of each type and capacity in service and in reserve as well as the location of each meter. ITEMS 1. Meters, including badging and initial testing. Meter installations: 2. Cocks. 3. Labor. 4. Locks. 5. Meter bars. 6. Pipe and fittings. 7. Seals. 8. Shelves. 9. Swivels and bushings. 10. Transportation. NOTE A: At the option of the utility, costs of meter installations may be accounted for separately from the cost of meters in accordance with the provisions of Account 382, Meter installations. The practice of the utility, however, shall be consistent from year to year and throughout the utility's system. NOTE B: The cost of removing and resetting meters shall be charged to Account 878, Meter and house regulator expenses. 382. Meter installations. A. This account shall include the cost of labor and materials used and expenses incurred in connection with the original installation of customer meters. B. When a meter installation is permanently retired from service, the cost thereof shall be credited to this account. ITEMS 1. Cocks. 2. Locks. 3. Labor. 4. Meter bars. 5. Pipe and fittings. 6. Seals. 7. Shelves. 8. Swivels and bushings. 9. Transportation. NOTE: At the option of the utility, meter installations may be accounted for as part of the cost installed of meters, in accordance with the provisions of Account 381, Meters. The practice of the utility, however, shall be consistent from year to year and throughout the utility's system. 383. House regulators. A. This account shall include the cost installed of house regulators whether actually in service or held in reserve. B. When a house regulator is permanently retired from service, the installed cost thereof shall be credited to this account. ITEMS 1. House regulator. House regulator installations: 2. Cocks. 3. Labor. 4. Locks. 5. Pipe and fittings. 6. Regulator vents. 7. Swivels and bushings. 8. Transportation. NOTE: At the option of the utility, costs of house regulator installations may be accounted for separately from the cost of house regulators in accordance with the provisions of Account 384, House regulator installations. The practice of the utility, however, shall be consistent from year to year and throughout the utility's system. 384. House regulator installations. A. This account shall include the cost of labor and materials used and expenses incurred in connection with the original installation of house regulators. B. When a house regulator installation is permanently retired from service, the cost thereof shall be credited to this account. ITEMS 1. Cocks. 2. Labor. 3. Locks. 4. Pipe and fittings. 5. Regulator vents. 6. Swivels and bushings. 7. Transportation. NOTE: At the option of the utility, costs of house regulator installations may be accounted for as part of the cost installed of house regulators in accordance with the provisions of Account 383, House regulators. The practice of the utility, however, shall be consistent from year to year throughout the utility's system. 385. Industrial measuring and regulating station equipment. This account shall include the cost of special and expensive installations of measuring and regulating station equipment, located on the distribution system, serving large industrial customers. ITEMS (See Account 378 for items.) NOTE A: Do not include in this account measuring and regulating station equipment serving main line industrial customers. (See Account 369.) NOTE B: By-passes outside of governor pits are includible in Account 376, Mains. 386. Other property on customers' premises. This account shall include the cost, including first setting and connecting, of equipment owned by the utility installed on customer premises which is not includible in other accounts. 387. Other equipment. This account shall include the cost installed of all other distribution system equipment not provided for in the foregoing accounts, including street lighting equipment. ITEMS 1. Carbon monoxide tester and indicator. 2. Explosimeters. 3. Fire extinguisher. 4. Gas masks. 5. Lockers. 6. Portable pump. 7. Recording gauges. 8. Street lighting equipment. 9. Test meters. 10. Watchmen's clocks. 6. General Plant 389.1 Land. This account shall include the cost of land used for utility purposes, the cost of which is not properly includible in other land and land rights accounts. (See Gas Plant Instruction 7.) 389.2 Land rights. This account shall include the cost of land rights used for utility purposes, the cost of which is not properly includible in other land and land rights accounts. (See Gas Plant Instruction 7.) 390. Structures and improvements. This account shall include the cost in place of structures and improvements used for utility purposes, the cost of which is not properly includible in other structures and improvements accounts. (See Gas Plant Instruction 8.) 391. Office furniture and equipment. This account shall include the cost of office furniture and equipment owned by the utility and devoted to utility service, and not permanently attached to buildings, except the cost of such furniture and equipment which the utility elects to assign to other plant accounts on a functional basis. ITEMS 1. Book cases and shelves. 2. Desks, chairs, and desk equipment. 3. Drafting-room equipment. 4. Filing, storage, and other cabinets. 5. Floor covering. 6. Library and library equipment. 7. Mechanical office equipment such as accounting machines, typewriters, etc. 8. Safes. 9. Tables. 391.1 Computers and computer related equipment This account shall include the cost of computers and computer related equipment owned by the utility and devoted to utility service. 1. Computers. 2. Control units. 3. Disk drives. 4. Display terminals. 5. Modems. 6. Printers. 7. Word processor. 392. Transportation equipment. This account shall include the cost of transportation vehicles used for utility purposes. ITEMS 1. Airplanes. 2. Automobiles. 3. Bicycles. 4. Electrical vehicles. 5. Motor trucks. 6. Motorcycles. 7. Repair cars or trucks. 8. Tractors and trailers. 9. Other transportation vehicles. 393. Stores equipment. This account shall include the cost of equipment used for the receiving, shipping, handling and storage of materials and supplies. ITEMS 1. Chain falls. 2. Counters. 3. Cranes (portable). 4. Elevating and stacking equipment (portable). 5. Hoists. 6. Lockers. 7. Scales. 8. Shelving. 9. Storage bins. 10. Trucks, hand and power driven. 11. Wheelbarrows. 394. Tools, shop, and garage equipment. This account shall include the cost of tools, implements, and equipment used in construction, repair work, general shops and garages and not specifically provided for or includible in other accounts. ITEMS 1. Air compressors. 2. Anvils. 3. Automobile repair shop equipment. 4. Battery charging equipment. 5. Belts, shafts and countershafts. 6. Boilers. 7. Cable pulling equipment. 8. Concrete mixers. 9. Derricks. 10. Drill presses. 11. Electric equipment. 12. Engines. 13. Forges. 14. Foundations and settings specially constructed for equipment in this account and not expected to outlast the equipment for which provided. 15. Furnaces. 16. Gas producers. 17. Gasoline pumps, oil pumps, and storage tanks. 18. Greasing tools and equipment. 19. Hoists. 20. Ladders. 21. Lathes. 22. Machine tools. 23. Motor driven tools. 24. Motors. 25. Pipe threading and cutting tools. 26. Pneumatic tools. 27. Pumps. 28. Riveters. 29. Smithing equipment. 30. Tool racks. 31. Vises. 32. Welding apparatus. 33. Work benches. 395. Laboratory equipment. This account shall include the cost installed of laboratory equipment used for general laboratory purposes and not specially provided for or includible in other departmental or functional plant accounts. ITEMS 1. Balances and scales. 2. Barometers. 3. Calorimeters--bomb, flow, recording types, etc. 4. Electric furnaces. 5. Gas burning equipment. 6. Gauges. 7. Glassware, beakers, burettes, etc. 8. Humidity testing apparatus. 9. Laboratory hoods. 10. Laboratory tables and cabinets. 11. Muffles. 12. Oil analysis apparatus. 13. Piping. 14. Specific gravity apparatus. 15. Standard bottles for meter prover testing. 16. Stills. 17. Sulphur and ammonia apparatus. 18. Tar analysis apparatus. 19. Thermometers--indicating and recording. 20. Any other item of equipment for testing gas, fuel, flue gas, water, residuals, etc. 396. Power operated equipment. This account shall include the cost of power operated equipment used in construction or repair work exclusive of equipment includible in other accounts. Include, also, the tools and accessories acquired for use with such equipment and the vehicle on which such equipment is mounted. ITEMS 1. Air compressors, including driving unit and vehicle. 2. Back filling machines. 3. Boring machines. 4. Bulldozers. 5. Cranes and hoists. 6. Diggers. 7. Engines. 8. Pile drivers. 9. Pipe cleaning machines. 10. Pipe coating or wrapping machines. 11. Tractors--crawler type. 12. Trenchers. 13. Other power operated equipment. NOTE: It is intended that this account include only such large units as are generally self-propelled or mounted on movable equipment. 397. Communication equipment. This account shall include the cost installed of telephone, telegraph and wireless equipment for general use in connection with the utility's gas operations. (See Account 370 for communication equipment used wholly or predominantly in connection with operation and maintenance of the transmission system.) ITEMS 1. Carrier terminal equipment including repeaters, power supply equipment, transmitting and receiving sets. 2. Microwave equipment, including power supply equipment, transmitters, amplifiers, paraboloids, towers, reflectors, receiving equipment, etc. 3. Radio equipment, fixed and mobile, including antenna, power equipment, transmitters and receivers, and portable receiver-transmitter units. 4. Telephone equipment, including switchboards, power and testing equipment, conductors, pole lines, etc. 398. Miscellaneous equipment. This account shall include the cost of equipment, apparatus, etc., used and useful in gas operations, which is not includible in any other account. ITEMS 1. Hospital and infirmary equipment. 2. Kitchen equipment. 3. Operator's cottage furnishings. 4. Radios. 5. Recreation equipment. 6. Restaurant equipment. 7. Soda fountains. 8. Other miscellaneous equipment. NOTE: Miscellaneous equipment of the nature indicated above wherever practicable shall be assigned to the utility plant accounts on a functional basis. 399. Other tangible property. This account shall include the cost of tangible utility plant not provided for elsewhere. INCOME ACCOUNTS 1. Utility Operating Income 400. Operating revenues. Operating expenses: 401. Operation expense. 402. Maintenance expense. 403. Depreciation expense (major only). 403.1 Depreciation and depletion expense (nonmajor only). 404. Amortization of limited-term gas plant (nonmajor only). 404.1 Amortization and depletion of producing natural gas land and land rights (major only). 404.2 Amortization of underground storage land and land rights (major only). 404.3 Amortization of other limited-term utility plant (major only). 405. Amortization of other utility plant. 406. Amortization of gas plant acquisition adjustments. 407.1 Amortization of extraordinary property losses, unrecovered plant and regulatory study costs. 407.2 Amortization of conversion expenses. 408.1 Taxes other than income taxes, utility operating income. 409.1 Income taxes, utility operating income. 410.1 Provision for deferred income taxes, utility operating income. 411.1 Provision for deferred income taxes--Credit, utility operating income. 411.4 Investment tax credit adjustments, utility operations. 411.6 Gains from disposition of utility plant. 411.7 Losses from disposition of utility plant. Total operating expenses. Operating income: 412. Revenues from gas plant leased to others. 413. Expenses of gas plant leased to others. 414. Other utility operating income. Total operating income. 2. Other Income and Deductions A. Other Income 415. Revenues from merchandising, jobbing and contract work. 416. Costs and expenses of merchandising, jobbing and contract work. 417. Revenues from nonutility operations. 417.1 Expenses of nonutility operations. 418. Nonoperating rental income. 418.1 Equity in earnings of subsidiary companies (major only). 419. Interest and dividend income. 419.1 Allowance for other funds used during construction. 421. Miscellaneous nonoperating income. 421.1 Gain on disposition of property. Total other income. Total income. B. Other Income Deductions 421.2 Loss on disposition of property. 425. Miscellaneous amortization. 426.1 Donations. 426.2 Life insurance. 426.3 Penalties. 426.4 Expenditures for certain civic, political and related activities. 426.5 Other deductions. Total other income deductions. Total other income and deductions. C. Taxes Applicable to Other Income and Deductions 408.2 Taxes other than income taxes, other income and deductions. 409.2 Income taxes, other income and deductions. 410.2 Provision for deferred income taxes, other income and deductions. 411.2 Provision for deferred income taxes--Credit, other income and deductions. 411.5 Investment tax credit adjustments, nonutility operations. 420. Investment tax credits. Total taxes on other income and deductions. Net other income and deductions. 3. Interest Charges 427. Interest on long-term debt. 428. Amortization of debt discount and expense. 428.1 Amortization of loss on reacquired debt. 429. Amortization of premium on debt-Credit. 429.1 Amortization of gain on reacquired debt-Credit. 430. Interest on debt to associated companies. 431. Other interest expense. 432. Allowance for borrowed funds used during construction - credit. 4. Extraordinary Items 434. Extraordinary income. 435. Extraordinary deductions. 409.3 Income taxes, extraordinary items. Net income. INCOME ACCOUNTS 1. Utility Operating Income 400. Operating Revenues. There shall be shown under this caption the total amount included in the gas operating revenue accounts provided herein. 401. Operation expense. There shall be shown under this caption the total amount included in the gas operation expense accounts provided herein. (See note to operating expense instruction 3.) 402. Maintenance expense. There shall be shown under this caption the total amount included in the gas maintenance expense accounts provided herein. 403. Depreciation expense (major only). A. This account shall include the amount of depreciation expense for all classes of depreciable utility plant in service except such depreciation expense as is chargeable to clearing accounts or to Account 416, Costs and expenses of merchandising, jobbing and contract work. B. The utility shall keep such records of property and property retirements as will reflect the service life of property which has been retired and aid in estimating probable service life by mortality, turnover, or other appropriate methods; and also such records as will reflect the dollars and percentage of salvage and cost of removal for property retired from each account, or subdivision thereof, for depreciable utility plant. NOTE A: Depreciation expense applicable to property included in Account 104, Gas plant leased to others, shall be charged to Account 413, Expenses of gas plant leased to others. NOTE B: Depreciation expense applicable to transportation equipment, shop equipment, tools, work equipment, power operated equipment and other general equipment may be charged to clearing accounts as necessary, in order to obtain a proper distribution of expenses between construction and operation. 403.1 Depreciation and depletion expense (nonmajor only). A. This account shall include the amount of depreciation expense for all classes of depreciation gas plant in service except such depreciation expense as is chargeable to clearing accounts or to Account 416, Costs and expenses of merchandising, jobbing and contract work. It shall also include depletion and amortization expense with respect to producing natural gas lands and land rights. B. The utility shall keep such records of property and property retirements as will reflect the service life of property which has been retired, and also such records as will reflect the percentage of salvage and cost of removal for property retired. C. The charges to this account for amortization and depletion of producing natural gas land and land rights shall be made in such a manner as to distribute the cost of producing natural gas land and land rights over the period of their benefit to the utility, based upon the exhaustion of the natural gas deposits recoverable from such land and land rights. NOTE A: Depreciation expense applicable to property included in Account 104, Gas plant leased to others, shall be charged to Account 413, Expenses of gas plant leased to others. NOTE B: Depreciation expense applicable to transportation equipment, shop equipment, tools, work equipment, power operated equipment, and other general equipment may be charged to clearing accounts as necessary, in order to obtain a proper distribution of expenses between construction and operation. 404. Amortization of limited-term gas plant (nonmajor only). This account shall include amortization charges applicable to amounts included in the gas plant accounts for limited-term franchises, licenses, patent rights, limited-term interests in land other than land rights held for the production of natural gas, and expenditures on leased property where the service life of the improvements is terminable by action of the lease. The charges to this account shall be such as to distribute the book cost of each investment as evenly as may be over the period of its benefit to the utility. (See Account 110, Accumulated provision for depreciation, depletion, and amortization of gas utility plant). 404.1 Amortization and depletion of producing natural gas land and land rights (major only). A. This account shall include charges for amortization and depletion of producing natural gas land and land rights. (See Account 111, Accumulated provision for amortization and depletion of gas utility plant.) B. The charges to this account shall be made in such manner as to distribute the cost of producing natural gas land and land rights over the period of their benefit to the utility, based upon the exhaustion of the natural gas deposits recoverable from such land and land rights. 404.2 Amortization of underground storage land and land rights. (major only). A. This account shall include charges for amortization of land and land rights of underground storage projects for natural gas. (See Account 111, Accumulated provision for amortization and depletion of gas utility plant.) B. The charges to this account shall be made in such manner as to distribute the cost of amortizable land and land rights over the period of their benefit to the utility, and with respect to any land or land rights which include native gas in the storage reservoir, such amounts shall be amortized or depleted on the basis of production of such native gas after the volume of stored gas has been withdrawn from the reservoir. 404.3 Amortization of other limited-term utility plant (major only). This account shall include amortization of charges applicable to amounts included in the utility plant accounts for limited-term franchises, licenses, patent rights, limited-term interests in land, and expenditures on leased property where the service life of the improvements is terminable by action of the lease, and training costs. The charges to this account shall be such as to distribute the book cost of each investment as evenly as may be over the period of its benefit to the utility. (See Account 111, Accumulated provision for amortization and depletion of gas utility plant.) 405. Amortization of other utility plant. A. When authorized by the Commission, this account shall include charges for amortization of intangible or other gas utility plant which does not have a definite or terminable life and which is not subject to charges for depreciation expense. B. This account shall be supported in such detail as to show the amortization applicable to each investment being amortized, together with the book cost of the investment and the period over which it is being written off. 406. Amortization of gas plant acquisition adjustments. This account shall be debited or credited, as the case may be, with amounts includible in operating expenses, pursuant to approval or order of the Commission, for the purpose of providing for the extinguishment of the amount in Account 114, Gas plant acquisition adjustments. 407.1 Amortization of extraordinary property losses, unrecovered plant and regulatory study costs. This account shall be charged with amounts credited to Account 182.1, extraordinary property losses, and Account 182.2, Unrecovered plant and regulatory study costs, when the Commission has authorized the amounts in these accounts to be amortized by charges to operating expenses. 407.2 Amortization of conversion expenses. This account shall be charged with amortization of amounts authorized by the Commission to be included in Account 186, Miscellaneous deferred debits, for expenses incurred in the conversion of distribution plant from manufactured gas service to natural gas service. SPECIAL INSTRUCTIONS Accounts 408.1 and 408.2 A. These accounts shall include the amounts of ad valorem, gross revenue or gross receipts taxes, state unemployment insurance, franchise taxes, federal excise taxes, social security taxes, and all other taxes assessed by federal, state, county, municipal, or other local governmental authorities, except income taxes. B. These accounts shall be charged in each accounting period with the amounts of taxes which are applicable thereto, with concurrent credits to Account 236, Taxes accrued, or Account 165, Prepayments, as appropriate. When it is not possible to determine the exact amounts of taxes, the amounts shall be estimated and adjustments made in current accruals as the actual tax levies become known. C. The charges to these accounts shall be made or supported so as to show the amount of each tax and the basis upon which each charge is made. In the case of a utility rendering more than one utility service, taxes of the kind includible in these accounts shall be assigned directly to the utility department the operation of which gave rise to the tax in so far as a specific utility department, it shall be distributed among the utility departments or nonutility operations on an equitable basis after appropriate study to determine such basis. NOTE A: Special assessments for street and similar improvements shall be included in the appropriate utility plant or nonutility property account. NOTE B: Taxes specifically applicable to construction shall be included in the cost of construction. NOTE C: Gasoline and other sales taxes shall be charged as far as practicable to the same amount as the materials on which the tax is levied. NOTE D: Social security and other forms of so-called payroll taxes shall be distributed to utility departments and to nonutility functions on a basis related to payroll. Amounts applicable to construction shall be charged to the appropriate plant accounts. NOTE E: Interest on tax refunds or deficiencies shall not be included in these accounts but in Account 419, Interest and dividend income, or 431, Other interest expense, as appropriate. 408.1 Taxes other than income taxes, utility operating income. This account shall include those taxes other than income taxes which relate to utility operating income. This account shall be maintained so as to allow ready identification of the various classes of taxes relating to Utility Operating Income (by department), Utility Plant Leased to Others and Other Utility Operating Income. 408.2 Taxes other than income taxes, other income and deductions. This account shall include those taxes other than income taxes which relate to Other Income and Deductions. SPECIAL INSTRUCTIONS Accounts 409.1, 409.2, and 409.3 A. These accounts shall include the amounts of local, state and federal income taxes on income properly accruable during the period covered by the income statement to meet the actual liability for such taxes. Concurrent credits for the tax accruals shall be made to Account 236, Taxes accrued, and as the exact amounts of taxes become known, the current tax accruals shall be adjusted by charges or credits to these accounts unless such adjustments are properly includible in Account 439, Adjustments to retained earnings, so that these accounts as nearly as can be ascertained shall include the actual taxes payable by the utility. (See General Instruction 7.1 for prior period adjustments.) B. The accruals for income taxes shall be apportioned among utility departments and to Other Income and Deductions so that, as nearly as practicable, each tax shall be included in the expenses of the utility department or Other Income and Deductions, the income from which gave rise to the tax. The tax effects relating to Interest Charges shall be allocated between utility and nonutility operations. The basis for this allocation shall be the ratio of net investment in utility plant to net investment in nonutility plant. NOTE A: Taxes assumed by the utility on interest shall be charged to Account 431, Other interest expense. NOTE B: Interest on tax refunds or deficiencies shall not be included in these accounts but in Account 419, Interest and dividend income, or Account 431, Other interest expense, as appropriate. 409.1 Income taxes, utility operating income. This account shall include the amount of those local, state and federal income taxes which relate to utility operating income. This account shall be maintained so as to allow ready identification of tax effects (both positive and negative) relating to Utility Operating Income (by department), Utility Plant Leased to Others and Other Utility Operating Income. 409.2 Income taxes, other income and deductions. This account shall include the amount of those local, state and federal income taxes (both positive and negative), which relate to Other Income and Deductions. 409.3 Income taxes, extraordinary items. This account shall include the amount of those local, state and federal income taxes (both positive and negative), which relate to Extraordinary Items. SPECIAL INSTRUCTIONS Accounts 410.1, 410.2, 411.1 and 411.2 A. Accounts 410.1 and 410.2 shall be debited, and Accumulated Deferred Income Taxes shall be credited with amounts equal to any current deferrals of taxes on income or any allocations of deferred taxes originating in prior periods, as provided by the texts of Accounts 190, 281, 282, 283 and 284. There shall not be netted against entries required to be made to these accounts any credit amounts appropriately includible in Accounts 411.1 or 411.2. B. Accounts 411.1 and 411.2 shall be credited, and Accumulated Deferred Income Taxes shall be debited with amounts equal to any allocations of deferred taxes originating in prior periods or any current deferrals of taxes on income, as provided by the texts of Accounts 190, 281, 282, 283 and 284. There shall not be netted against entries required to be made to these accounts any debit amounts appropriately includible in Accounts 410.1 or 410.2. 410.1 Provision for deferred income taxes, utility operating income. This account shall include the amounts of those deferrals of taxes and allocations of deferred taxes which relate to Utility Operating Income (by department). 410.2 Provision for deferred income taxes, other income and deductions. This account shall include the amounts of those deferrals of taxes and allocations of deferred taxes which relate to other income and deductions. 411.1 Provision for deferred income taxes--Credit, utility operating income. This account shall include the amounts of those allocations of deferred taxes and deferrals of taxes, credit, which relate to Utility Operating Income (by department). 411.2 Provision for deferred income taxes--Credit, other income and deductions. This account shall include the amounts of those allocations of deferred taxes and deferrals of taxes, credit, which relate to Other Income and Deductions. SPECIAL INSTRUCTIONS Accounts 411.4 and 411.5 A. Account 411.4 shall be debited with the amounts of investment tax credits related to gas utility property that are credited to Account 255, Accumulated deferred investment tax credits, by companies which do not apply the entire amount of the benefits of the investment credit as a reduction of the overall income tax expense in the year in which such credit is realized (see Account 255). B. Account 411.4 shall be credited with the amounts debited to Account 255 for the proportionate amounts of tax credit deferrals allocated over the average useful life of gas utility property to which the tax credits relate or such lesser period of time as may be adopted and consistently followed by the company. C. Account 411.5 shall also be debited and credited as directed in paragraphs A and B, for investment tax credits related to nonutility property. 411.4 Investment tax credit adjustments, utility operations. This account shall include the amount of those investment tax credit adjustments related to property used in Utility Operations (by department). 411.5 Investment tax credit adjustments, nonutility operations. This account shall include the amount of those investment tax credit adjustments related to property used in Nonutility Operations. 411.6 Gains from disposition of utility plant. This account shall include, as approved by the Commission, amounts relating to gains from the disposition of future use utility plant including amounts which were previously recorded in and transferred from Account 105, Gas plant held for future use, and Account 105.1, Production properties held for future use, under the provisions of paragraphs B, C, and D thereof. Income taxes relating to gains recorded in this account shall be recorded in Account 409.1, Income taxes, utility operating income. 411.7 Losses from disposition of utility plant. This account shall include, as approved by the Commission, amounts relating to the losses from the disposition of future use utility plant including amounts which were previously recorded in and transferred from Account 105, Gas plant held for future use, and Account 105.1, Production properties held for future use, under the provisions of paragraphs B, C, and D thereof. Income taxes relating to losses recorded in this account shall be recorded in Account 409.1, Income taxes, utility operating income. 412. Revenues from gas plant leased to others. 413. Expenses of gas plant leased to others. A. These accounts shall include respectively, revenues from utility property constituting a distinct operating unit or system leased by the utility to others, and which property is properly includible in Account 104, Gas plant leased to others, and the expenses attributable to such property. B. The detail of expenses shall be kept or supported so as to show separately the following: Operation Maintenance Depreciation Amortization 414. Other utility operating income. A. This account shall include the revenues received and expenses incurred in connection with the operations of utility plant, the book cost of which is included in Account 118, Other utility plant. B. The expenses shall include every element of cost incurred in such operations, including depreciation, rents, and insurance. NOTE: Related taxes shall be recorded in Account 408.1, Taxes other than income taxes, utility operating income, or Account 409.1, Income taxes, utility operating income, as appropriate. 2. Other Income and Deductions 415. Revenues from merchandising, jobbing and contract work. 416. Costs and expenses of merchandising, jobbing and contract work. A. These accounts shall include, respectively, all revenues derived from the sale of merchandise and jobbing or contract work, including any profit or commission accruing to the utility on jobbing work performed by it as agent under contracts whereby it does jobbing work for another for a stipulated profit or commission, and all expenses incurred in such activities. B. Records in support of these accounts shall be so kept as to permit ready summarization of revenues, costs and expenses by such major items as are feasible. NOTE A: The classification of revenues, costs and expenses of merchandising, jobbing and contract work as non-operating, and thus inclusion in this account, is for accounting purposes. It does not preclude consideration for justification to the contrary for ratemaking or other purpose. NOTE B: Related taxes shall be recorded in Account 408.2, Taxes other than income taxes, other income and deductions, or Account 409.2, Income taxes, other income and deductions, as appropriate. ITEMS Account 415: 1. Revenues from sale of merchandise and from jobbing and contract work. 2. Discounts and allowances made in settlement of bills for merchandise and jobbing work. Account 416: Labor: 1. Canvassing and demonstrating appliances in homes and other places for the purpose of selling appliances. 2. Demonstrating and selling activities in sales rooms. 3. Installing appliances on customer premises where such work is done only for purchasers of appliances from the utility. 4. Installing piping or other property work, on a jobbing or contract basis. 5. Preparing advertising materials for appliance sales purposes. 6. Receiving and handling customer orders for merchandise or for jobbing services. 7. Cleaning and tidying sales rooms. 8. Maintaining display counters and other equipment used in merchandising. 9. Arranging merchandise in sales rooms and decorating display windows. 10. Reconditioning repossessed appliances. 11. Bookkeeping and other clerical work in connection with merchandise and jobbing activities. 12. Supervising merchandise and jobbing operations. Materials and expenses: 13. Advertising in newspapers, periodicals, radio, television, etc. 14. Cost of merchandise sold and of materials used in jobbing work. 15. Stores expenses on merchandise and jobbing stocks. 16. Fees and expenses of advertising and commercial artists' agencies. 17. Printing booklets, dodgers, and other advertising data. 18. Premiums given as inducement to buy appliances. 19. Light, heat, and power. 20. Depreciation on equipment used primarily for merchandise and jobbing operations. 21. Rent of sales rooms or of equipment. 22. Transportation expense in delivery and pick-up of appliances by utility's facilities or by others. 23. Stationary and office supplies and expenses. 24. Losses from uncollectible merchandise and jobbing accounts. 417. Revenues from nonutility operations. 417.1 Expenses of nonutility operations. A. Accounts 417 and 417.1 shall include revenues and expenses applicable to operations which are nonutility in character but nevertheless constitute a distinct operating activity of the enterprise as a whole, such as the operation of an ice department where applicable statutes do not define such operation as a utility, or the operation of a servicing organization for furnishing supervision, management, engineering, and similar services to others. B. The expenses shall include all elements of costs incurred in such operations, and the accounts shall be maintained so as to permit ready summarization as follows: Operation. Maintenance. Rents. Depreciation. Amortization. NOTE: Related taxes shall be recorded in Account 408.2, Taxes other than income taxes, other income and deductions, or Account 409.2, Income taxes, other income and deductions, as appropriate. 418. Nonoperating rental income. A. This account shall include all rent revenues and related expenses of land, buildings, or other property included in Account 121, Nonutility property, which is not used in operations covered by Accounts 417 or 417.1. B. The expenses shall include all elements of costs incurred in the ownership and rental of property and the accounts shall be maintained so as to permit ready summarization as follows: Operations. Maintenance. Rents. Depreciation. Amortization. NOTE: Related taxes shall be recorded in Account 408.2, Taxes other than income taxes, other income and deductions, or Account 409.2, Income taxes, other income and deductions, as appropriate. 418.1 Equity in earnings of subsidiary companies (major only). This account shall include the utility's equity in the earnings or losses of subsidiary companies for the year. 419. Interest and dividend income. A. This account shall include interest revenues on securities, loans, notes, advances, special deposits, tax refunds and all other interest-bearing assets, and dividends on stocks of other companies, whether the securities on which the interest and dividends are received are carried as investments or included in sinking or other special fund accounts. B. This account may include the pro rata amount necessary to extinguish (during the interval between the date of acquisition and the date of maturity) the difference between the cost to the utility and the face value of interest-bearing securities. Amounts thus credited or charged shall be concurrently included in the accounts in which the securities are carried. C. Where significant in amount expenses, excluding operating taxes and income taxes, applicable to security investments and to interest and dividend revenues thereon shall be charged hereto. NOTE A: Related taxes shall be recorded in Account 408.2, Taxes other than income taxes, other income and deductions, or Account 409.2, Income taxes, other income and deductions, as appropriate. NOTE B: Interest accrued, the payment of which is not reasonably assured, dividends receivable which have not been declared or guaranteed, and interest or dividends upon reacquired securities issued or assumed by the utility shall not be credited to this account. 419.1 Allowance for other funds used during construction. This account shall include concurrent credits for allowance for other funds used during construction, not to exceed amounts computed in accordance with AFUDC rate as described in Gas Plant Instruction 3(17). 420. Investment tax credits. This account shall be credited as follows with investment tax credit amounts not passed on to customers: A. By amounts equal to debits to Accounts 411.4, Investment tax credit adjustments, utility operations, and 411.5, Investment tax credit adjustments, nonutility operations, for investment tax credits used in calculating income taxes for the year when the company's accounting provides for nondeferral of all or a portion of such credits; and, B. By amounts equal to debits to Account 255, Accumulated deferred investment tax credits, for proportionate amounts of tax credit deferrals allocated over the average useful life of the property to which the tax credits relate, or such lesser period of time as may be adopted and consistently used by the company. 421. Miscellaneous nonoperating income. This account shall include all revenue and expense items except taxes properly includible in the income account and not provided for elsewhere. Related taxes shall be recorded in Account 408.2, Taxes other than income taxes, other income and deductions, or Account 409.2, Income taxes, other income and deductions, as appropriate. ITEMS 1. Profit on sale of timber. (See Gas Plant Instruction 7C.) 2. Profits from operations of others realized by the utility under contracts. 3. Gains on disposition of investments. Also, gains on reacquisition and resale or retirement of utility's debt securities. (See General Instruction 15.) 421.1 Gain on disposition of property. This account shall be credited with the gain on the sale, conveyance, exchange or transfer of utility or other property to another. Amounts relating to gains on land and land rights held for future use recorded in Accounts 105, Gas plant held for future use, and 105.1, Production properties held for future use (major only), will be accounted for as prescribed in paragraphs B, C, and D thereof. (See Gas Plant Instructions 5F, 7E, and 10E.) Income taxes on gains recorded in this account shall be recorded in Account 409.2, Income taxes, other income and deductions. 421.2 Loss on disposition of property. This account shall be charged with the loss on the sale, conveyance, exchange or transfer of utility or other property to another. Amounts relating to losses on land and land rights held for future use recorded in Accounts 105, Gas plant held for future use, and 105.1, Production properties held for future use (major only), will be accounted for as prescribed in paragraphs B, C, and D thereof. (See Gas Plant Instructions 5F, 7E, and 10E.) The reduction in income taxes attributable to losses recorded in this account shall be recorded in Account 409.2, Income taxes, other income and deductions. 425. Miscellaneous amortization. This account shall include amortization charges not includible in other accounts which are properly deductible in determining the income of the utility before interest charges. Charges includible herein, if significant in amount, must be in accordance with an orderly and systematic amortization program. ITEMS 1. Amortization of utility plant acquisition adjustments, or of intangibles included in utility plant in service when not authorized to be included in utility operating expenses by the Commission. 2. Other miscellaneous amortization charges allowed to be included in this account by the commission. SPECIAL INSTRUCTIONS Accounts 426.1, 426.2, 426.3, 426.4 and 426.5 These accounts shall include miscellaneous expense items which are non-operating in nature but which are properly deductible before determining total income before interest charges. NOTE: The classification of expenses as nonoperating and their inclusion in these accounts is for accounting purposes. It does not preclude Commission consideration of proof to the contrary for ratemaking or other purposes. 426.1 Donations. This account shall include all payments or donations for charitable, social or community welfare purposes. 426.2 Life insurance. This account shall include all payments for life insurance of officers and employees where company is beneficiary (net premiums less increase in cash surrender value of policies). 426.3 Penalties. This account shall include payments by the company for penalties or fines for violation of any regulatory statutes by the company or its officials. 426.4 Expenditures for certain civic, political and related activities. This account shall include expenditures for the purpose of influencing public opinion with respect to the election or appointment of public officials, referenda, legislation, or ordinances (either with respect to the possible adoption of new referenda, legislation or ordinances or repeal or modification of existing, referenda, legislation or ordinances) such as Chamber of Commerce dues or approval, modification, or revocation of franchises; or for the purpose of influencing the decisions of public officials, but shall not include such expenditures which are directly related to appearances before regulatory or other governmental bodies in connection with the reporting utility's existing or proposed operations. 426.5 Other deductions. This account shall include other miscellaneous expenses which are non-operating in nature, but which are properly deductible before determining total income before interest charges. ITEMS 1. Loss relating to investments in securities written-off or written-down. 2. Loss on sale of investments. 3. Loss on reacquisition, resale or retirement of utility's debt securities (See General Instruction 15.) 4. Preliminary survey and investigation expenses related to abandoned projects, when not written-off to the appropriate operating expense account. 5. Costs of preliminary abandonment costs recorded in Accounts 182.1, extraordinary property losses, and 182.2, Unrecovered plant and regulatory study costs, not allowed to be amortized to Account 407.1, Amortization of property losses, unrecovered plant and regulatory study costs. 3. Interest Charges 427. Interest on long-term debt. A. This account shall include the amount of interest on outstanding long-term debt issued or assumed by the utility, the liability for which is included in Account 221, Bonds, or Account 224, Other long-term debt. B. This account shall be so kept or supported as to show the interest accruals on each class and series of long-term debt. NOTE: This account shall not include interest on nominally issued or nominally outstanding long-term debt, including securities assumed. 428. Amortization of debt discount and expense. A. This account shall include the amortization of unamortized debt discount and expense on outstanding long-term debt. Amounts charged to this account shall be credited concurrently to Account 181, Unamortized debt expense, and Account 226, Unamortized discount on long-term debt-Debit. B. This account shall be so kept or supported as to show the debt discount and expense on each class and series of long-term debt. 428.1 Amortization of loss on reacquired debt. A. This account shall include the amortization of the losses on reacquisition of debt. Amounts charged to this account shall be credited concurrently to Account 189, Unamortized loss on reacquired debt. B. This account shall be maintained so as to allow ready identification of the loss amortized applicable to each class and series of long-term debt reacquired. (See General Instruction 15.) 429. Amortization of premium on debt-Credit. A. This account shall include the amortization of unamortized net premium on outstanding long-term debt. Amounts credited to this account shall be charged concurrently to Account 225, Unamortized premium on long-term debt. B. This account shall be so kept or supported as to show the premium on each class and series of long-term debt. 429.1 Amortization of gain on reacquired debt-Credit. A. This account shall include the amortization of the gains realized from reacquisition of debt. Amounts credited to this account shall be charged concurrently to Account 257, Unamortized gain on reacquired debt. B. This account shall be maintained so as to allow ready identification of the gains amortized applicable to each class and series of long-term debt reacquired. (See General Instruction 15.) 430. Interest on debt to associated companies. A. This account shall include interest accrued on amounts included in Account 223, Advances from associated companies, and on all other obligations to associated companies. B. The records supporting the entries to this account shall be so kept as to show to whom the interest is to be paid, the period covered by the accrual, the rate of interest and the principal amount of the advances or other obligations on which the interest is accrued. 431. Other interest expense. This account shall include all interest charges not provided for elsewhere. ITEMS 1. Interest on notes payable on demand or maturing one year or less from date and on open accounts, except notes and accounts with associated companies. 2. Interest on customers' deposits. 3. Interest on claims and judgments, tax assessments, and assessments for public improvements past due. 4. Income and other taxes levied upon bondholders of utility and assumed by it. 5. Interest accrued on any overrecovery or underrecovery resulting from the gas cost recovery factors. 432. Allowance for borrowed funds used during construction - credit. This account shall include concurrent credits for allowance for borrowed funds used during construction, not to exceed amounts computed in accordance with Paragraph (A) and (B) of Gas Plant Instruction 3(17). 4. Extraordinary Items 434. Extraordinary income. This account shall be credited with gains of unusual nature and infrequent occurrence, which would significantly distort the current year's income computed before Extraordinary Items, if reported other than as extraordinary items. Income tax relating to the amounts recorded in this account shall be recorded in Account 409.3, Income taxes, extraordinary items. (See General Instruction 7.) 435. Extraordinary deductions. This account shall be debited with losses of unusual nature and infrequent occurrence, which would significantly distort the current year's income computed before Extraordinary Items, if reported other than as extraordinary items. Income taxes relating to amounts recorded in this account shall be recorded in Account 409.3, Income taxes, extraordinary items. (See General Instruction 7.) RETAINED EARNINGS ACCOUNTS 216 Unappropriated retained earnings (at beginning of period). 433 Balance transferred from income. 436 Appropriations of retained earnings. 437 Dividends declared--preferred stock. 438 Dividends declared--common stock. 439 Adjustments to retained earnings. 216 Unappropriated retained earnings (at end of period). Retained Earnings Accounts 433. Balance transferred from income. This account shall include the net credit or debit transferred from income for the year. 436. Appropriations of retained earnings. This account shall include appropriations of retained earnings for purposes not provided for elsewhere. ITEMS 1. Appropriations of income required under terms of mortgages, orders of courts, contracts or other agreements. 2. Appropriations of income required by action of regulatory authorities. 3. Miscellaneous appropriations of income made at option of utility for specified purposes. 437. Dividends declared--preferred stock. A. This account shall include amounts declared payable out of retained earnings as dividends on actually outstanding preferred or prior lien capital stock issued by the utility. B. Dividends shall be segregated for each class and series of preferred stock as to those payable in cash, stock and other forms. If not payable in cash, the medium of payment shall be described with sufficient detail to identify it. 438. Dividends declared--common stock. A. This account shall include amounts declared payable out of retained earnings as dividends on actually outstanding common capital stock issued by the utility. B. Dividends shall be segregated for each class of common stock as to those payable in cash, stock and other forms. If not payable in cash, the medium of payment shall be described with sufficient detail to identify it. 439. Adjustments to retained earnings. A. This account shall, with prior commission approval, include significant nonrecurring transactions accounted for as prior period adjustments, as follows: (1) Correction of an error in the financial statements of a prior year. (2) Adjustments that result from realization of income tax benefits of pre-acquisition operating loss carryforwards of purchased subsidiaries. All other items of profit and loss recognized during a year shall be included in the determination of net income for that year. B. Adjustments, charges, or credits due to losses on reacquisition, resale or retirement of the company's own capital stock shall be included in this account. (See Account 210, Gain on resale or cancellation of reacquired capital stock, for the treatment of gains.) OPERATING REVENUE ACCOUNTS 1. Sales of Gas 480. Residential sales. 481. Commercial and industrial sales. 482. Other sales to public authorities (major only). 483. Sales for resale. 484. Interdepartmental sales. 485. Provision for rate refunds 2. Other Operating Revenues 487. Forfeited discounts. 488. Miscellaneous service revenues. 489. Revenues from transportation of gas of others. 490. Sales of products extracted from natural gas. 491. Revenues from natural gas processed by others. 492. Incidental gasoline and oil sales. 493. Rent from gas property. 494. Interdepartmental rents. 495. Other gas revenues. OPERATING REVENUE ACCOUNTS 1. Sales of Gas 480. Residential sales. A. This account shall include the net billing for gas supplied for residential or domestic purposes. B. Records shall be maintained so that the quantity of gas sold and the revenues received under each rate schedule shall be readily available. NOTE: When gas supplied through a single meter is used for both residential and commercial purposes, the total revenue shall be included in this account or Account 481, Commercial and industrial sales, according to the rate schedule which is applied. If the same rate schedules are applicable to both residential and commercial service, classification shall be according to principal use. 481. Commercial and industrial sales. A. This account shall include the net billing for gas supplied to commercial and industrial customers. B. Records shall be maintained so that the quantity of gas sold and revenue received under each rate schedule shall be readily available. C. (major companies) Records shall be maintained so as to show separately the revenues from commercial and industrial customers as follows: Large commercial and industrial sales (Wherein shall be included the revenues from customers which use large volumes of gas, generally in excess of 200,000 Mcf per year or approximately 800 Mcf per day of normal requirements. Reasonable deviations are permissible in order that transfers of customers between the large and small classifications may be minimized.) Small commercial and industrial sales (Wherein shall be included the revenues from customers which use volumes of gas generally less than 200,000 Mcf per year or less than approximately 800 Mcf per day of normal requirements.) NOTE: When gas supplied through a single meter is used for both commercial and residential purposes, the total revenue shall be included in this account or in Account 480, Residential sales, according to the rate schedule which is applied. If the same rate schedules are applicable to both residential and commercial service, classification shall be according to principal use. 482. Other sales to public authorities (major only). A. This account shall include the net billing for gas supplied to municipalities or divisions or agencies of federal or state governments, under special contracts or agreements or service classifications, applicable only to public authorities, for general governmental and institutional purposes, except any revenues under rate schedules the revenues from which are includible in Account 481 or 483, and except any revenues from gas used for purposes such as power plant fuel for publicly owned electric systems, manufacturing processes or arsenals, etc., and other major uses of gas which appropriately may be classified in Account 481, Commercial and industrial sales. B. Records shall be maintained so that the quantity of gas sold and the revenue received from each customer and from each major special contract shall be readily available. 483. Sales for resale. A. This account shall include the net billing for gas supplied to other gas utilities or to public authorities for resale purposes. B. Records shall be maintained so that there shall be readily available the revenues for each customer under each revenue schedule and the billing determinants, as applicable, i.e., volume of gas (actual and billing), contract demand, maximum actual demand, billing demand, and Btu adjustment factor. NOTE: Revenues from gas supplied to other public utilities for use by them and not for distribution, shall be included in Account 481, Commercial and industrial sales, unless supplied under the same contract as and not readily separable from revenues includible in this account. 484. Interdepartmental sales. A. This account shall include amounts charged by the gas department at tariff or other specified rates for gas supplied by it to other utility departments. B. Records shall be maintained so that the quantity of gas supplied each other department and the charge made therefor shall be readily available. 485. Provision for rate refunds. A. This account shall be charged with provisions for the estimated pretax effects on net income of the portions of amounts being collected subject to refund which are estimated to be required to be refunded. Such provisions shall be credited to Account 229, Accumulated provision for rate refunds. B. This account shall also be charged with amounts refunded when such amounts had not been previously accrued. C. Income tax effects relating to the amounts recorded in this account shall be recorded in Account 410.1, Provision for deferred income taxes, utility operating income, or Account 411.1, Provision for deferred income taxes - credit, utility operating income, as appropriate. D. This account shall also include provisions for estimated amounts expected to be collected from or refunded to customers pursuant to under-recovery resulting from the gas cost recovery factors. Such provisions shall be debited to Account 174, Miscellaneous current and accrued assets. 2. Other Operating Revenues 487. Forfeited discounts. This account shall include the amount of discounts forfeited or additional charges imposed because of the failure of customers to pay gas bills on or before a specified date. 488. Miscellaneous service revenues. This account shall include revenues from all miscellaneous services and charges billed to customers which are not specifically provided for in other accounts. ITEMS 1. Fees for changing, connecting, or disconnecting service. 2. Profit on maintenance of appliances, piping, gas firing and other utilization facilities, or other installations on customers' premises. 3. Net credit or debit (cost less net salvage and less payment from customers) on closing work orders for plant installed for temporary service of less than 1 year. (for major companies, see Account 185, Temporary facilities.) 4. Recovery of expenses in connection with gas diversion cases. (Billing for the gas consumed shall be included in the appropriate gas revenue account.) 5. Services performed for other gas companies for testing and adjusting meters, changing charts, etc. 489. Revenues from transportation of gas of others. This account shall include revenues from transporting gas for other companies through the production, transmission, and distribution lines, or compressor stations of the utility. 490. Sales of products extracted from natural gas. A. This account shall include revenues from sales of gasoline, butane, propane, and other products extracted from natural gas, net of allowances, adjustments, and discounts, including sales of similar products purchased for resale. B. Records shall be maintained so that the quantity, sales price, and revenues for each type of product sold to each purchaser shall be readily available. 491. Revenues from natural gas processed by others. A. This account shall include revenues from royalties and permits, or other bases of settlement, for permission granted others to remove products from natural gas of the utility. B. The records supporting this account shall be so maintained that full information concerning determination of the revenues will be readily available concerning each processor of gas of the utility, including as applicable (a) the Mcf of gas and approximate average Btu content thereof per cubic foot delivered to such other party for processing, (b) the Mcf of gas and approximate average Btu content thereof per cubic foot of gas received back from the processor, (c) the field, general production area, or other source of the gas processed, (d) Mcf of gas used for processing fuel, etc., which is chargeable to the utility, (e) total gallons of each product recovered by the processor and the utility's share thereof, (f) the revenues accruing to the utility, and (g) the basis of determination of the revenues accruing to the utility. Such records shall be maintained even though no revenues are derived from the processor. 492. Incidental gasoline and oil sales. This account shall include revenues from natural gas gasoline produced direct from gas wells or recovered from drips or obtained in connection with purification or dehydration processes, and revenues from oil obtained from wells which produce oil and gas, the investment in which is carried in Accounts 330, Producing gas wells--well construction, and 331, Producing gas wells--well equipment. 493. Rent from gas property. A. This account shall include rents received for the use by others of land, buildings, and other property devoted to gas operations by the utility. B. When property owned by the utility is operated jointly with others under a definite arrangement for sharing the actual expenses among the parties to the arrangement, any amount received by the utility for interest or return or in reimbursement of taxes or depreciation on the property shall be credited to this account. NOTE: Do not include rent from property constituting an operating unit or system in this account. (See Account 412, Revenues from gas plant leased to others.) 494. Interdepartmental rents. This account shall include credits for rental charges made against other departments of the utility. In the case of property operated under a definite arrangement to allocate actual costs among the departments using the property, any allowance to the gas department for interest or return and depreciation and taxes shall be credited to this account. 495. Other gas revenues. This account shall include revenues derived from gas operations not includible in any of the foregoing accounts. ITEMS 1. Commission on sale or distribution of gas of others when sold under rates filed by such others. 2. Compensation for minor or incidental services provided for others such as customer billing, engineering, etc. 3. Profit or loss on sale of material and supplies not ordinarily purchased for resale and not handled through merchandising and jobbing accounts. 4. Steam, water, or electricity, including sales or transfers to other departments of the utility. 5. Service charges for storing gas of others. 6. Miscellaneous royalties received. 7. Revenues from dehydration and other processing of gas of others, except products extraction where products are received as compensation and sales of such are includible in Account 490, Sales of products extracted from natural gas, and except compression of gas of others, revenues from which are includible in Account 489, Revenues from transportation of gas of others. OPERATION AND MAINTENANCE EXPENSE ACCOUNTS 1. Production Expenses A. Manufactured Gas Production Expenses A.1 Steam Production Operation 700. Operation supervision and engineering (major only). 701. Operation labor (major only). 702. Boiler fuel (major only). 703. Miscellaneous steam expenses (major only). 704. Steam transferred -- Credit (major only). Maintenance 705. Maintenance supervision and engineering (major only). 706. Maintenance of structures and improvements (major only). 707. Maintenance of boiler plant equipment (major only). 708. Maintenance of other steam production plant (major only). A.2. Manufactured Gas Production Operation 710. Operation supervision and engineering. Production labor and expenses 711. Steam expenses (major only). 712. Other power expenses (major only). 713. Coke oven expenses (major only). 714. Producer gas expenses (major only). 715. Water gas generating expenses (major only). 716. Oil gas generating expenses (major only). 717. Liquefied petroleum gas expenses (major only). 718. Other process production expenses (major only). Gas fuels 719. Fuel under coke ovens (major only). 720. Producer gas fuel (major only). 721. Water gas generator fuel (major only). 722. Fuel for oil gas (major only). 723. Fuel for liquefied petroleum gas process (major only). 724. Other gas fuels (major only). 724.1 Fuel (nonmajor only). Gas raw materials 725. Coal carbonized in coke ovens (major only). 726. Oil for water gas (major only). 727. Oil for oil gas (major only). 728. Liquefied petroleum gas (major only). 729. Raw materials for other gas processes (major only). 729.1 Raw material (non-major only). 730. Residuals expenses (major only). 731. Residuals produced--credit. 732. Purification expenses (major only). 733. Gas mixing expenses (major only). 734. Duplicate charges--credit (major only). 735. Miscellaneous production expenses (major only). 736. Rents. 737. Operation supplies and expenses (nonmajor only). Maintenance 740. Maintenance supervision and engineering (major only). 741. Maintenance of structures and improvements (major only). 742. Maintenance of production equipment (major only). 743. Maintenance of production plant (nonmajor only). B. Natural Gas Production Expenses B.1. Natural Gas Production and Gathering Operation 750. Operation supervision and engineering. 751. Production maps and records (major only). 752. Gas wells expenses (major only). 753. Field lines expenses (major only). 754. Field compressor station expenses (major only). 755. Field compressor station fuel and power. 756. Field measuring and regulating station expenses (major only). 757. Purification expenses (major only). 758. Gas well royalties. 759. Other expenses. 760. Rents. Maintenance 761. Maintenance supervision and engineering (major only). 762. Maintenance of structures and improvements (major only). 763. Maintenance of producing gas wells. 764. Maintenance of field lines. 765. Maintenance of field compressor station equipment (major only). 766. Maintenance of field measuring and regulating station equipment (major only). 767. Maintenance of purification equipment (major only). 768. Maintenance of drilling and cleaning equipment (major only). 769. Maintenance of other equipment (major only). 769.1 Maintenance of other plant (nonmajor only). B.2. Products Extraction Operation 770. Operation supervision and engineering (major only). 771. Operation labor (major only). 772. Gas shrinkage (major only). 773. Fuel (major only). 774. Power (major only). 775. Materials (major only). 776. Operation supplies and expenses 777. Gas processed by others (major only). 778. Royalties on products extracted (major only). 779. Marketing expenses (major only). 780. Products purchased for resale (major only). 781. Variation in products inventory (major only). 782. Extracted products used by the utility--Credit (major only). 783. Rents (major only). Maintenance 784. Maintenance supervision and engineering (major only). 785. Maintenance of structures and improvements (major only). 786. Maintenance of extraction and refining equipment (major only). 787. Maintenance of pipe lines (major only). 788. Maintenance of extracted products storage equipment (major only). 789. Maintenance of compressor equipment (major only). 790. Maintenance of gas measuring and regulating equipment (major only). 791. Maintenance of other equipment (major only). 792. Maintenance of products extraction plant (nonmajor only). C. Exploration and Development Expenses Operation 795. Delay rentals. 796. Nonproductive well drilling. 797. Abandoned leases. 798. Other exploration. 799. Natural gas purchases (nonmajor only) D. Other Gas Supply Expenses Operation 800. Natural gas well head purchases (major only). 801. Natural gas field line purchases (major only). 802. Natural gas gasoline plant outlet purchases (major only). 803. Natural gas transmission line purchases (major only). 803.1 Off-system gas purchases. 804. Natural gas city gate purchases (major only). 804.1 Liquefied natural gas purchases (major only). 805. Other gas purchases. 806. Exchange gas (major only). 807. Purchased gas expenses. 808.1 Gas withdrawn from underground storage - Debit. 808.2 Gas delivered to underground storage - Credit. 809.1 Withdrawals of liquefied natural gas held for processing - debit (major only). 809.2 Deliveries of natural gas for processing - credit (major only). 810. Gas used for compressor station fuel - Credit (major only). 811. Gas used for products extraction - Credit (major only). 812. Gas used for other utility operations - Credit (major only). 812.1 Gas used in utility operations - credit (nonmajor only). 813. Other gas supply expenses. 813.1 Synthetic gas supply expenses. 813.2 Gas cost recovery expenses - royalties. 2. Natural Gas Storage Expense A. Underground Storage Expenses Operation 814. Operation supervision and engineering. 815. Maps and records (major only). 816. Wells expenses (major only). 817. Lines expenses (major only). 818. Compressor station expenses (major only). 819. Compressor station fuel and power (major only). 820. Measuring and regulating station expenses (major only). 821. Purification expenses (major only). 822. Exploration and development (major only). 823. Gas losses. 824. Other expenses (major only). 825. Storage well royalties. 826. Rents. 827. Operation supplies and expenses (nonmajor only). Maintenance 830. Maintenance supervision and engineering (major only). 831. Maintenance of structures and improvements (major only). 832. Maintenance of reservoirs and wells. 833. Maintenance of lines (major only). 834. Maintenance of compressor station equipment (major only). 835. Maintenance of measuring and regulating station equipment (major only). 836. Maintenance of purification equipment (major only). 837. Maintenance of other equipment (major only). 838. Maintenance of other underground storage plant (nonmajor only). B. Other Storage Expenses Operation 840. Operation supervision and engineering (major only). 841. Operation labor and expenses (major only). 842. Rents (major only). 842.1 Fuel (major only). 842.2 Power (major only). 842.3 Gas losses (major only). Maintenance 843.1 Maintenance supervision and engineering (major only). 843.2 Maintenance of structures and improvements (major only). 843.3 Maintenance of gas holders (major only). 843.4 Maintenance of purification equipment (major only). 843.5 Maintenance of liquefaction equipment (major only). 843.6 Maintenance of vaporizing equipment (major only). 843.7 Maintenance of compressor equipment (major only). 843.8 Maintenance of measuring and regulating equipment (major only). 843.9 Maintenance of other equipment (major only). 848.4 Maintenance of other storage plant (nonmajor only). C. Liquefied natural gas terminaling and processing expenses Operation 844.1 Operation supervision and engineering (major only). 844.2 LNG Processing terminal labor and expenses (major only). 844.3 Liquefaction processing labor and expenses (major only). 844.4 LNG Transportation labor and expenses (major only). 844.5 Measuring and regulating labor and expenses (major only). 844.6 Compressor station labor and expenses (major only). 844.7 Communication system expenses (major only). 844.8 System control and load dispatching (major only). 845.1 Fuel (major only). 845.2 Power (major only). 845.3 Rents (major only). 845.4 Demurrage charges (major only). 845.5 Wharfage receipts -- credit (major only). 845.6 Processing liquefied or vaporized gas by others (major only). 846.1 Gas losses (major only). 846.2 Other expenses (major only). Maintenance 847.1 Maintenance supervision and engineering (major only). 847.2 Maintenance of structures and improvements (major only). 847.3 Maintenance of LNG processing terminal equipment (major only). 847.4 Maintenance of LNG transportation equipment (major only). 847.5 Maintenance of measuring and regulating equipment (major only). 847.6 Maintenance of compressor station equipment (major only). 847.7 Maintenance of communication equipment (major only). 847.8 Maintenance of other equipment (major only). 3. Transmission Expenses Operation 850. Operation supervision and engineering. 851. System control and load dispatching (major only). 852. Communication system expenses (major only). 853. Compressor station labor and expenses (major only). 853.1 Compressor station fuel and power (nonmajor only). 854. Gas for compressor station fuel (major only). 855. Other fuel and power for compressor stations (major only). 856. Mains expenses (major only). 857. Measuring and regulating station expenses (major only). 857.1 Operation supplies and expenses (nonmajor only). 858. Transmission and compression of gas by others. 859. Other expenses (major only). 860. Rents. Maintenance 861. Maintenance supervision and engineering (major only). 862. Maintenance of structures and improvements (major only). 863. Maintenance of mains. 864. Maintenance of compressor station equipment. 865. Maintenance of measuring and regulating station equipment (major only). 866. Maintenance of communication equipment (major only). 867. Maintenance of other equipment (major only). 868. Maintenance of other plant (nonmajor only). 4. Distribution Expenses Operation 870. Operation supervision and engineering. 871. Distribution load dispatching (major only). 872. Compressor station labor and expenses (major only). 873. Compressor station fuel and power (major only). 874. Mains and services expenses. 875. Measuring and regulating station expenses--general (major only). 876. Measuring and regulating station expenses--industrial (major only). 877. Measuring and regulating station expenses--city gate check stations (major only). 878. Meter and house regulator expenses. 879. Customer installations expenses. 880. Other expenses (major only). 880.1 Miscellaneous distribution expenses (nonmajor only). 881. Rents. Maintenance 885. Maintenance supervision and engineering (major only). 886. Maintenance of structures and improvements (major only). 887. Maintenance of mains (major only). 888. Maintenance of compressor station equipment (major only). 889. Maintenance of measuring and regulating station equipment - general (major only). 890. Maintenance of measuring and regulating station equipment - industrial (major only). 891. Maintenance of measuring and regulating station equipment - city gate check stations (major only). 892. Maintenance of services (major only). 892.1 Maintenance of lines (nonmajor only). 893. Maintenance of meters and house regulators. 894. Maintenance of other equipment (major only). 895. Maintenance of other plant (nonmajor only). 5. Customer Accounts Expenses Operation 901. Supervision (major only). 902. Meter reading expenses. 903. Customer records and collection expenses. 904. Uncollectible accounts. 905. Miscellaneous customer accounts expenses (major only). 6. Customer Communication Expenses Operation 906. Customer service and informational expenses (nonmajor only). 907. Supervision (major only). 908. Customer assistance expenses (major only). 909. Customer informational and instructional expenses (major only). 910. Miscellaneous customer assistance expenses (major only). 7. Sales Promotion Expenses Operation 911. Supervision (major only). 912. Demonstrating and selling expenses (major only). 913. Advertising expenses (major only). 914. (Reserved) 915. (Reserved) 916. Miscellaneous sales expenses (major only). 917. Sales expenses (nonmajor only). 8. Administrative and General Expenses Operation 920. Administrative and general salaries. 921. Office supplies and expenses. 922. Administrative expenses transferred - Cr. 923. Outside services employed. 924. Property insurance. 925. Injuries and damages. 926. Employee pensions and benefits. 927. Franchise requirements. 928. Regulatory commission expenses. 929. Duplicate charges - Cr. 930.1 General advertising expenses 930.2 Miscellaneous general expenses. 931. Rents. Maintenance 933. Transportation expenses (non-major only). 935. Maintenance of general plant. OPERATION AND MAINTENANCE EXPENSE ACCOUNTS 1. Production Expenses A. Manufactured Gas Production Expenses A.1 Steam Production Operation 700. Operation supervision and engineering (major only). This account shall include the cost of labor and expenses incurred in the general supervision and direction of the operation of steam production. (See Operating Expense Instruction 1.) 701. Operation labor (major only). This account shall include the cost of labor used in boiler rooms and elsewhere about the premises engaged in the production of steam or assignable to the production of steam. ITEMS 1. Blowing flues. 2. Cleaning boilers. 3. Handling coal, coke and breeze from place of storage to boilers. 4. Janitorial, messenger, watchmen and similar services. 5. Operating boilers. 6. Operating elevators. 7. Pulverizing coal. 8. Pumping tar from storage tank to boilers. 9. Removing ashes. 10. Testing steam meters, gauges and other instruments. 702. Boiler fuel (major only). A. This account shall include the cost of coal, oil, gas, or other fuel used in the production of steam, including applicable amounts of fuel stock expenses. It shall also include the net cost of, or the net amount realized from, the disposal of ashes. B. Records shall be maintained to show the quantity and cost of each type of fuel used. Respective amounts of fuel stock and fuel stock expenses shall be readily available. NOTE: The cost of fuel, except gas, and related fuel stock expenses, shall be charged initially to appropriate fuel accounts carried under Accounts 151, Fuel stock, and 152, Fuel stock expenses undistributed, and cleared to this account on the basis of fuel used. See Accounts 151 and 152 for basis of fuel costs and includible items of fuel stock expenses. 703. Miscellaneous steam expenses (major only). This account shall include the cost of materials used and expenses incurred in the production of steam, not includible in the foregoing accounts. ITEMS 1. Boiler compounds. 2. Building service expenses. 3. Chemicals. 4. Communication service. 5. Lubricants. 6. Miscellaneous supplies. 7. Pumping supplies and expenses. 8. Purification supplies and expenses. 9. Tools, hand. 10. Waste. 11. Water purchased. 12. Research, development, and demonstration expenses. 704. Steam transferred -- Credit (major only). A. This account shall include such portion of the cost of producing steam as is charged to other gas operating expense accounts, or to others or to a coordinate department under a joint facility arrangement. B. The records supporting the entries to this account shall be so kept that the utility can furnish readily an explanation of the bases of the credits to this account and the amounts charged to (1) other gas accounts, (2) other utility departments, and (3) outside parties under a joint facility arrangement. The records shall show, likewise, the amounts of steam production operation and steam production maintenance expenses, respectively, chargeable to each of the foregoing. NOTE A: If the utility produces gas by a single process at only one plant, credits need not be made to this account for the cost of steam used in such gas production facility. NOTE B: Where steam is produced by producer gas equipment or waste heat boilers, and such steam becomes part of the general plant supply, this account should be charged and the steam expense account in the appropriate functional group of accounts (coal gas production, water gas production, etc.) credited with the value of such steam. However, if the steam so produced is used in the same functional operation as that through which derived, such entries need not be made. Maintenance 705. Maintenance supervision and engineering (major only). This account shall include the cost of labor and expenses incurred in the general supervision and direction of maintenance of steam production facilities. Direct field supervision of specific jobs shall be charged to the appropriate maintenance accounts. (See Operating Expense Instruction 1.) 706. Maintenance of structures and improvements (major only). This account shall include the cost of labor, materials used and expenses incurred in the maintenance of structures and improvements used in steam production operations, the book cost of which is includible in Account 305, Structures and improvements. (See Operating Expense Instruction 2.) 707. Maintenance of boiler plant equipment (major only). This account shall include the cost of labor, materials used and expenses incurred in the maintenance of equipment used in steam production the book cost of which is includible in Account 306, Boiler plant equipment. (See Operating Expense Instruction 2.) 708. Maintenance of other steam production plant (major only). This account shall include the cost of labor, materials used and expenses incurred in the maintenance of equipment used in steam production operations, the book cost of which is includible in Account 314, Coal, coke, and ash handling equipment, or Account 320, Other equipment. (See Operating Expense Instruction 2.) A.2. Manufactured Gas Production Operation 710. Operation supervision and engineering A. For major companies, this account shall include the cost of labor and expenses incurred in the general supervision and direction of the operation of manufactured gas stations. Direct supervision of specific activities such as steam production and power operations, coke oven operations, water gas generation, etc., shall be charged to the appropriate account. (See Operating Expense Instruction 1.) B. For nonmajor companies, this account shall include the cost of supervision and labor in the operation of manufactured gas production plants. ITEMS (nonmajor only) 1. Supervising. 2. Operating or attending equipment and controls including boiler plant, power equipment and other auxiliaries. 3. Cleaning, lubricating and oiling equipment and auxiliaries. 4. Loading and unloading and other handling of coal, coke, other fuels, raw materials, residuals, waste materials, etc. 5. Observing, testing, checking and adjusting meters, gauges, and other instruments and equipment. 6. Keeping plant logs and other records and preparing reports on plant operations. 7. Cleaning boiler room, other buildings and yards. 8. Repacking glands and replacing gauge glasses and other similar work if work is of a minor nature and performed by regular operating crews. Where work is of a major character, such as that performed on high pressure boilers, the work shall be considered maintenance. 9. Testing water, etc. 10. Janitorial, messenger, watchman and similar services. 11. Clerical and stenographic work at plant. 711. Steam expenses (major only). A. This account shall include the cost of steam used in manufactured gas production. This includes the cost of steam transferred from the gas department's own supply and charges for steam transferred from others or from coordinate departments under joint facility arrangements. (See Account 704, Steam transferred--credit.) B. This account shall be so kept as to show separately for each source of steam the point of delivery, the quantity, the charges therefor, and the bases of such charges. 712. Other power expenses (major only). This account shall include the cost of electricity or other power, except steam, used in manufactured gas operation. This includes the cost of power purchased, the operation cost of electricity or other power, such as compressed air, produced by the gas department and charges from others or from coordinate departments for power produced under joint facility arrangements. 713. Coke oven expenses (major only). This account shall include the cost of labor used and expenses incurred in the operation of coke ovens for the production of coal gas, exclusive of the cost of fuel for the coke ovens and coal carbonized. ITEMS Labor: 1. Supervising. 2. Work of the following character in operation of coke ovens: a. Charging and levelling coal. b. Heating ovens to produce coke. c. Pushing, transporting, quenching, and dumping coke on wharf. d. Reclaiming coke spillage, removing, replacing and luting oven doors and lids. e. Handling and mixing luting mud. f. Controlling oven heats and gas heating value with dilution gas. g. Controlling flue temperature, stack drafts, collecting main pressure and the flow of flushing liquor and drains. h. Operating, cleaning, and lubricating equipment not incidental to maintenance work, such as: charger, pusher, door operating and luting, mud mixing, gas reversal, transportation machinery and equipment, quenching pumps and tower, together with valves, instruments, meters, controls, gauges, and records connected with their operation. i. Tar chasing (spooning tar in hot drains). j. Cleaning doors, jambs, and stand pipes. 3. Handling and transporting coal from storage or boats to battery bins. 4. Operating, cleaning and lubricating mechanical equipment, such as: hoist machines, conveyors and their housing, hammermills and breakers, mixing and battery bins, together with their control valves, instruments, etc. 5. Wetting and handling coke to the coke wharf or storage including cleaning and lubricating of equipment not incident to maintenance. 6. Pumping gas from ovens and maintaining the proper pressures on the collecting main and throughout the apparatus train, including cleaning and lubricating the oven gas exhausters and revivifying blowers, not incident to maintenance. 7. Removing and disposing of carbon, fines, sediment, and waste material. 8. Cleaning ovens and exhauster house, including janitor service in the employees' locker and wash room within this operating area. Materials and expenses: 9. Packing, waste, lubricants, etc. 10. Small hand tools. 11. Building service, communication service, transportation. 714. Producer gas expenses (major only). This account shall include the cost of labor used and expenses incurred in making producer gas exclusive of the cost of fuel for producer gas. ITEMS Labor: 1. Supervising. 2. Work of the following character in connection with operation of producer gas sets (excepting the waste heat boiler and auxiliaries): a. Inspecting, testing, clinkering, lighting and starting set. b. Controlling fire and heats with fuel charges. c. Barring, measuring and rodding fires. d. Observing pyrometers, pressures and CO2 in stack gases. e. Regulating input materials, such as coke, steam and air and making required flow rate and operating cycle changes. f. Cleaning and removal of ash, dust, sediment and materials from the set and connections, seal pots, duct pockets, bootlegs, collectors and pumps. g. Cleaning and reluting producer set doors. h. Operating, cleaning and lubricating fuel charging lorries, grates, jackets and auxiliaries, ash removal apparatus, and associated instruments, meters, gauges, controls, etc. 3. Handling fuel from storage into bins with conveyors. 4. Operating, cleaning and lubricating auxiliary equipment, not incident to maintenance work, such as coolers, pumps, blowers, exhausters or boosters, fuel handling equipment, etc. 5. Removing and disposing of ashes, sediment and other waste material. 6. Cleaning the producer and booster houses including janitorial and similar services. Materials and Expenses: 7. Packing, waste, lubricants, etc. 8. Small hand tools. 9. Building service, communication service, transportation. 715. Water gas generating expenses (major only). This account shall include the cost of labor used and expenses incurred in the operation of water gas sets exclusive of the cost of fuel and oil for water gas production. ITEMS Labor: 1. Supervising. 2. Work of the following character in connection with the operation of water gas sets (excepting the waste heat boiler and auxiliaries): a. Inspecting, testing, clinkering, lighting and starting up. b. Controlling fire and heats with fuel charges, barring and rodding fires, operating grates and jackets, taking stains, observing pyrometers, pressures, seal pot water flow and stack gases, regulating input materials such as coke, oil, natural gas, steam and air. c. Making required flow rate and operating cycle changes. d. Cleaning and removing ashes, carbon and sediment from the set and connections, the wash box, seal pot, oil spray, duct pockets, bootlegs, and collectors, and cleaning and reluting producer set doors. e. Operating, cleaning and lubricating fuel charging lorries, blowers, valves, automatic operators, and grates, together with their instruments, gauges and controls, also the ash belt. 3. Operating, cleaning and lubricating auxiliary equipment, such as hydraulic pumps, circulating water pumps, oil pumps from storage to sets, steam accumulators and regulators and reducers on natural gas for reforming, exhausters, revivifying air blowers, and purifier exhausters. 4. Handling fuel from storage into bins with conveyors. 5. Removing and disposing of ashes, carbon, sediment, and other waste material. 6. Cleaning of generator and exhauster houses, including janitorial and similar services. Materials and expenses: 7. Packing, waste, lubricants, etc. 8. Small hand tools. 9. Building service, communication service, transportation. 716. Oil gas generating expenses (major only). This account shall include the cost of labor used and expenses incurred in the operation of equipment for the production of oil gas exclusive of cost of the oil. ITEMS Labor: 1. Supervising. 2. Cleaning, firing and operating oil gas machines. 3. Handling oil from place of storage to oil gas sets. 4. Measuring oil. 5. Removing and disposing of carbon deposits, and other cleaning and incidental labor. Materials and expenses: 6. Packing, waste, lubricants, etc. 7. Small hand tools. 8. Building service, communication service, transportation. 717. Liquefied petroleum gas expenses (major only). This account shall include the cost of labor used and expenses incurred in the operation of equipment used for vaporizing petroleum derivatives such as propane, butane or gasoline exclusive of cost of the materials vaporized or used for fuel in the vaporizing process. ITEMS Labor: 1. Supervising. 2. Operating, cleaning and lubricating liquid petroleum vaporizers and injectors. 3. Taking pressures and temperatures, and reading gauges on storage tanks. 4. Inspecting and testing equipment and setting and adjusting controls and regulators. 5. Watching pressure gauges, maintaining pressures and relieving excess pressures through lines. 6. Repressuring storage tanks. Materials and expenses: 7. Packing, waste, lubricants, etc. 8. Small hand tools. 9. Building service, communication service, transportation. 718. Other process production expenses (major only). This account shall include the cost of labor used and expenses incurred in operating equipment used for the production of gas by processes not provided for in the foregoing accounts. 719. Fuel under coke ovens (major only). A. This account shall include the cost of gas, other than coke oven gas or producer gas, or other fuel used under coke ovens for making coal gas. Concurrent credits shall be made to Account 734, Duplicate charges--credit, for gas made by the utility and so used, or Account 812, Gas used for other utility operations--credit, for other gas used under coke ovens. B. Records shall be kept to show the quantity and cost of each type of fuel used and fuel handling expenses. ITEMS 1. Gas made by the utility and used under coke ovens. 2. Natural and other purchased gas used under coke ovens. 720. Producer gas fuel (major only). A. This account shall include the cost of fuel used in making producer gas including applicable amounts of fuel stock expenses. It shall also include the net cost of, or the net amount realized from, the disposal of ashes. B. Records shall be kept to show the quantity and the cost of each type of fuel used. Respective amounts of fuel stock and fuel stock expenses shall be readily available. NOTE: The cost of fuel and related fuel stock expenses shall be charged initially to the appropriate fuel accounts carried under Accounts 151, Fuel stock, and 152, Fuel stock expenses undistributed, and cleared to this account on the basis of fuel used. See Accounts 151 and 152 for basis of fuel costs and includible items of fuel stock expenses. 721. Water gas generator fuel (major only). A. This account shall include the cost of fuel used in making water gas, including applicable amounts of fuel stock expenses. It shall also include the net cost of, or net proceeds from, the disposal of ashes. B. Records shall be kept to show the quantity and cost of each type of fuel used. Respective amounts of fuel stock and fuel stock expenses shall be readily available. NOTE: The cost of fuel and related fuel stock expenses shall be charged initially to the appropriate fuel accounts carried under Accounts 151, Fuel stock, and 152, Fuel stock expenses undistributed, and cleared to this account on the basis of fuel used. See Accounts 151 and 152 for basis of fuel costs and includible items of fuel stock expenses. 722. Fuel for oil gas (major only). This account shall include the cost of fuel for the manufacture of gas by the oil gas process. 723. Fuel for liquefied petroleum gas process (major only). This account shall include the cost of fuel for vaporization of liquefied petroleum gas and for the compression of air in liquefied petroleum gas process. 724. Other gas fuels (major only). This account shall include the cost of fuel for the manufacture of gas by processes not provided for in the above fuel accounts. 724.1 Fuel (nonmajor only). A. This account shall include the cost, delivered alongside works, of coal, oil, gas, or other fuel used in manufactured gas processes, and for making steam or generating electricity. It shall also include the net cost of, or the amount realized from, the disposal of ashes. (See Account 154, materials and supplies.) B. Records shall be maintained to show the quantity and cost of each type of fuel used. 725. Coal carbonized in coke ovens (major only). A. This account shall include the cost of coal used in coke ovens for making coal gas, including applicable amounts of fuel stock expenses. B. Records shall be kept to show the type, quantity, and cost of coal used. Respective amounts of fuel stock and fuel stock expenses shall be readily available. NOTE: The cost of coal carbonized and related fuel stock expenses shall be charged initially to the appropriate account carried under Accounts 151, Fuel stock, and 152, Fuel stock expenses undistributed, and cleared to this account on the basis of fuel used. See Accounts 151 and 152 for basis of fuel costs and includible items of fuel stock expenses. 726. Oil for water gas (major only). A. This account shall include the cost of oil used in carbureting water gas, including applicable amounts of fuel stock expenses. B. Records shall be kept to show the type, quantity, and cost of oil used. Respective amounts of fuel stock and fuel stock expenses shall be readily available. NOTE: The cost of oil and related fuel stock expenses shall be charged initially to the appropriate account carried under Accounts 151, Fuel stock, and 152, Fuel stock expenses undistributed, and cleared to this account on the basis of fuel used. See Accounts 151 and 152 for basis of fuel costs and includible items of fuel stock expenses. 727. Oil for oil gas (major only). A. This account shall include the cost of oil used in making oil gas, including applicable amounts of fuel stock expenses. B. Records shall be kept to show the type, quantity, and cost of oil used. Respective amounts of fuel stock and fuel stock expenses shall be readily available. NOTE: The cost of oil and related fuel stock expenses shall be charged initially to the appropriate raw materials account carried under Accounts 151, Fuel stock, and 152, Fuel stock expenses undistributed, and cleared to this account on the basis of fuel used. See Accounts 151 and 152 for basis of fuel costs and includible items of fuel stock expenses. 728. Liquefied petroleum gas (major only). A. This account shall include the cost of liquefied petroleum gas, such as propane, butane, or gasoline, vaporized for mixing with other gases or for sale unmixed, including applicable amounts of fuel stock expenses. B. Records shall be kept to show the type, quantity, and cost of liquefied petroleum gas. Respective amounts of fuel stock and fuel stock expenses shall be readily available. NOTE: The cost of liquefied petroleum gas and related fuel stock expenses shall be charged initially to the appropriate account under Accounts 151, Fuel stock, and 152, Fuel stock expenses undistributed, and cleared to this account on the basis of fuel used. See Accounts 151 and 152 for basis of fuel costs and includible items of fuel stock expenses. 729. Raw materials for other gas processes (major only). A. This account shall include the cost of raw materials used in the production of manufactured gas by any process not provided for by the foregoing accounts including the production of coal gas by use of retorts, including applicable amounts of fuel stock expenses. B. Records shall be kept to show the type, quantity, and cost of each raw material used, comparable to the accounting specified in the foregoing accounts for specified types of gas processes. Respective amount of fuel stock and fuel stock expense shall be readily available. NOTE: The cost of raw materials and fuel stock expenses shall be charged initially to the appropriate accounts carried under Accounts 151, Fuel stock, and 152, Fuel stock expenses undistributed, and cleared to this account on the basis of raw materials used. See Accounts 151 and 152 for basis of raw materials costs and includible items of fuel stock expenses. 729.1 Raw materials (nonmajor only). A. This account shall include the cost, delivered alongside works, of coal, oil, liquefied petroleum gas, gas enricher, and other materials used as raw materials in the manufacture of gas, including raw materials for manufacture of gas by reforming. (See Account 154, Materials and supplies.) B. Records shall be maintained to show the quantity and cost of each type of raw material used. 730. Residuals expenses (major only). A. This account shall include the cost of labor, materials used and expenses incurred, including uncollectible accounts, in obtaining, handling, preparing, refining, and marketing residuals produced in manufactured gas production processes. B. Divisions of this account shall be maintained for each of the principal types of expenses chargeable hereto and for each residual or by-product carried in Account 731, Residuals produced - credit. 731. Residuals produced - credit. A. This account shall be credited and the appropriate subdivision of Account 153, Residuals and extracted products, (For nonmajor companies, Account 154, Plant materials and operating supplies) debited monthly with the estimated value of residuals and other by-products obtained in connection with the production of manufactured gas, whether intended for sale or for use in operations. B. If the net amount realized from the sale of residuals is greater or less than the amount at which they were originally credited hereto, an adjusting entry shall be made crediting or debiting this account and charging or crediting the appropriate subdivision of Account 153, Residuals and extracted products, (for nonmajor companies, Account 154, Plant materials and operating supplies) with the difference. 732. Purification expenses (major only). This account shall include the cost of labor, materials used and expenses incurred in operating purification equipment and apparatus used for conditioning manufactured gas. ITEMS Labor: 1. Supervising. 2. Operating conveyors, condensers, coolers, tar extractors and precipitators, shaving scrubbers and naphthalene and light oil scrubbers. 3. Emptying, rearranging, shifting, cleaning, purging, and refilling purifier boxes. 4. Removing spent oxide to refuse pile. 5. Revivifying oxide. 6. Oiling dip sheets of purifier boxes. 7. Inspecting, testing, controlling adjustments, and taking stains. 8. Cleaning and lubricating purification equipment. Materials and expenses: 9. Iron oxide. 10. Unslacked lime. 11. Shavings. 12. Soda ash for liquid purifiers. 13. Wash oil for naphthalene scrubber. 14. Sulfuric acid. 733. Gas mixing expenses (major only). This account shall include the cost of labor, materials used and expenses incurred in operating equipment for mixing natural and manufactured gas, or vaporized liquefied petroleum gases for delivery to the distribution system. ITEMS Labor: 1. Supervising. 2. Mixing enrichment gas and other gases or air, including mixing of liquid petroleum gas with air in a liquid petroleum air gas plant, and operation of air jetting equipment and controls. 3. Operating, cleaning and lubricating of cleaners, reducers, calorimeters, calorimixers, appliances and mixing apparatus with their related recorders, gauges, valves and controls, and gravitometers. 4. Inspecting, testing and adjusting mixing equipment. 5. Reading instruments and gauges, changing charts, and recording instrument and gauge readings. Materials and expenses: 6. Packing, waste, lubricants, etc. 7. Small hand tools. 8. Building service, communication service, transportation. 734. Duplicate charges - credit (major only). This account shall include concurrent credits for charges which are made to manufactured gas production operating expenses for manufactured gas not entering common system supply, steam or electricity used for which there is no direct money outlay. NOTE: For manufactured gas used from the common system supply, concurrent credits shall be made to Account 812, Gas used for other utility operations - credit. 735. Miscellaneous production expenses (major only). This account shall include the cost of labor, materials used and expenses incurred in manufactured gas production operations not includible in any of the foregoing accounts. ITEMS Labor: 1. Supervising. 2. Cleaning gas works yard of coke dust and other waste materials. 3. Humidifying gas or oil fogging gas at the production plant. 4. Cutting grass and care of the grounds around the gas works. 5. Clearing gas works yard of snow. 6. Janitor service and messenger service. 7. Operating elevators and other conveyances for general use at the gas works. 8. General clerical and stenographic work at gas works. 9. Guarding and patrolling plant and yard. 10. Testing plant instruments not elsewhere provided for. 11. Laboratory labor, except that chargeable to other accounts. 12. Reading manufactured gas meters, and calculating and recording hourly volumes produced. 13. Pumping drips (water) at plant (not provided for elsewhere). 14. Odorizing manufactured gas. 15. Operating, cleaning, and lubricating of air compressors with their tanks, instruments, meters, gauges, and controls when used to supply compressed air into the plant's air system. 16. Operating effluent water treatment systems, including chemical treatment ozonation, filter, and related equipment, including treatment of carbon and residual sludge, and removing spent oxide, and spent filtering materials. 17. Pumping water for cooling and condensing. 18. Cleaning filters and other operating duties of water system. Materials and expenses: 19. Producer gas transferred from coke oven plant to water gas plant for dilution purposes. 20. Building service, communication service, transportation. 21. First aid supplies and safety equipment. 22. Office supplies, printing and stationery. 23. Meals, travelling and incidental expenses. 24. Fuel for heating plant, water for fire protection or general use, and similar items. 25. Lubricants, packing, waste, etc. 26. Odorizing chemicals. 27. Hand tools, drills, saw blades, files, etc. 28. Fire protection supplies. 29. Fogging oils, alcohol, etc. 30. Chemicals, filter materials, etc., and payments to others for disposal of plant effluents and waste. 31. Chemicals for water treatments. 32. Research and development expenses. 736. Rents. This account shall include rents for property of others used, occupied or operated in connection with manufactured gas production operations. (See Operating Expense Instruction 3.) 737. Operation supplies and expenses (nonmajor only). This account shall include the cost of supplies used and expenses incurred in manufactured gas production operation not includible in any of the foregoing accounts. ITEMS 1. Lubricants, packing waste, etc. 2. Water purchased. 3. Water purification supplies and expenses. 4. Tools, hand. 5. Gas purification supplies and expenses. 6. Oil for oil fogging process. 7. Royalties for purification process, etc. 8. Building service, communication service, transportation. Maintenance 740. Maintenance supervision and engineering (major only). This account shall include the cost of labor and expenses incurred in the general supervision and direction of maintenance of manufactured gas production facilities. Direct field supervision of specific jobs shall be charged to the appropriate maintenance accounts. (See Operating Expense Instruction 1.) 741. Maintenance of structures and improvements (major only). This account shall include the cost of labor, materials used and expenses incurred in the maintenance of structures, the book cost of which is includible in Account 305, Structures and improvements. (See Operating Expense Instruction 2.) 742. Maintenance of production equipment (major only). This account shall include the cost of labor, materials used and expenses incurred in the maintenance of equipment for the production of manufactured gas, the book cost of which is included in Accounts 306 to 320, inclusive, except such equipment as is used for the production of steam, the maintenance of which is includible in Accounts 707, Maintenance of boiler plant equipment, and 708, Maintenance of other steam production plant. (See Operating Expense Instruction 2.) 743. Maintenance of production plant (nonmajor only). This account shall include the cost of labor, materials used and expenses incurred in the maintenance of manufactured gas production plant the book cost of which is includible in plant accounts 305 to 320,inclusive. (See Operating Expense Instruction 1.) B. Natural Gas Production Expenses B.1. Natural Gas Production and Gathering Operation 750. Operation supervision and engineering. A. For major companies, this account shall include the cost of labor and expenses incurred in the general supervision and direction of the operation of production and gathering systems. Direct supervision of specific activities such as turning on and shutting off wells, operating measuring and regulating stations, etc., shall be charged to the appropriate account. (See Operating Expense Instruction 1.) B. For nonmajor companies, this account shall include the cost of supervision and labor in the operation of gas wells, lines, compressors and other equipment of the natural gas production and gathering system including miscellaneous labor such as care of grounds, building service, and general clerical and stenographic work at field offices. ITEMS Major and nonmajor 1. Supervision. (See Operating Expense Instruction 1.) 2. Gas depletion and gas reserve activities. 3. Geological activities in connection with gas production. 4. Rights-of-way office activities and supervision, not in connection with construction or retirement work, or storage. Nonmajor only: 5. Gas well labor: Turning wells on and off, bailing, swabbing, blowing wells, etc. 6. Preparing and maintaining production maps and land records, including surveys. 7. Field line labor: Patrolling, attending and lubricating valves and other equipment, blowing and cleaning lines and drips, taking line pressures, etc. 8. Field compressor station labor: Operating, attending, lubricating and servicing equipment, recording pressures, replacing charts, etc. 9. Measuring and regulating labor: Recording pressures, changing charts, calculating gas volumes except for purchased gas and sales, adjusting and calibrating measuring equipment, taking gas samples and testing gas, inspecting and pumping drips, dewatering manholes and pits, etc. 10. Purification labor: Attending and servicing purification apparatus, emptying, cleaning and refilling purifier boxes, unloading and storing glycol, etc. 11. Inspecting and testing equipment, not specifically to determine necessity for repairs or replacement of parts. 12. Lubricating equipment, valves, etc. 13. Hauling operating employees, materials, supplies, etc. 14. Moving equipment, minor structures, etc., not in connection with construction, retirement or maintenance work. 15. Keeping log and other operating records, preparing reports of operations, etc. 16. Cleaning structures, cutting grass and weeds, and minor grading around stations. 17. Cleaning debris, cutting grass and weeds on rights-of-way. 18. Cleaning and repairing tools. 19. Building and repairing gate boxes, foot bridges, stiles, tool boxes, etc. 20. Janitorial, watchmen and messenger services. 21. Clerical and stenographic work. 751. Production maps and records (major only). This account shall include the cost of labor, materials used and expenses incurred in the preparation and maintenance of production maps and records. ITEMS Labor: With respect to production maps: 1. Supervising. 2. Preparing farm maps, field inventory maps, well location plats, and other maps used in connection with natural gas production and gathering operations. 3. Posting changes and making corrections of maps. 4. Maintaining files of maps and tracings. 5. Surveying deeds, leases, rights-of-way, well locations, etc., for map revisions. 6. Reproducing maps (blueprints, photostats, etc.). With respect to land records: 7. Supervising. 8. Abstracting titles to date for extension and renewal of leases. 9. Adjusting land and well rentals. 10. Checking free gas rights. 11. Maintaining land and lease records. 12. Delivering rental and royalty checks. 13. Assigning, pooling, merging, renewing, and extending leases. 14. Patrolling land. 15. Preparing expiration calendars. 16. Replacing leases (not involving additional consideration). 17. Transferring payees. Materials and expenses: 18. Blueprints, photostats, etc. 19. Drafting materials and supplies. 20. Surveying materials and supplies. 21. Employee transportation and travel expenses. 22. Freight, express, parcel post, trucking, and other transportation. 23. Janitor and washroom supplies, etc. 24. Office supplies, stationery and printed forms. 25. Utility services: light, water, and telephone. 752. Gas wells expenses (major only). This account shall include the cost of labor, materials used and expenses incurred in operating producing gas wells. ITEMS Labor: 1. Supervising. 2. Testing, bailing, swabbing, blowing and gauging producing gas wells. 3. Cleaning off old well locations. 4. Painting signs, etc. 5. Minor upkeep of well roads and fences, etc. 6. Turning wells off and on. 7. Pumping wells. Materials and expenses: 8. Gas, gasoline, and oil used in pumping, bailing, heating, and swabbing. 9. Lumber, nails, and other materials used for upkeep of fences, making signs, etc. 10. Materials for upkeep of well roads, etc. 11. Well swabs. 12. Employees' transportation and travel expenses. 13. Freight, express, parcel post, trucking and other transportation. 14. Transportation: company and rented vehicles. 753. Field lines expenses (major only). This account shall include the cost of labor, materials used and expenses incurred in operating field lines. ITEMS Labor: 1. Supervising. 2. Walking or patrolling lines. 3. Attending valves, lubricating valves and other equipment, blowing and cleaning lines and drips, draining water from lines, operating and cleaning scrubbers, thawing freezes. 4. Taking line pressures, changing pressure charts, operating alarm gauges. 5. Building and repairing gate boxes, foot bridges, stiles, tool boxes, etc., used in line operations, erecting line markers and warning signs, repairing old line roads. 6. Cleaning debris, cutting grass and weeds on rights-of-way. 7. Inspecting and testing not specifically to determine necessity for repairs. 8. Protecting utility property during work by others. 9. Standby time of emergency crews, responding to fire calls, etc. 10. Locating valve boxes or drip riser boxes. 11. Cleaning and repairing tools used in mains operations, making tool boxes, etc. 12. Cleaning structures and equipment. 13. Driving trucks. Materials and expenses: 14. Line markers and warning signs. 15. Lumber, nails, etc., used in building and repairing gate boxes, foot bridges, stiles, tool boxes, etc. 16. Charts. 17. Scrubber oil. 18. Hand tools. 19. Lubricants, wiping rags, waste, etc. 20. Freight, express, parcel post, trucking and other transportation charges. 21. Employees' transportation and travel expenses. 22. Janitor and washroom supplies. 23. Utility services: light, water, telephone. 24. Gas used in field line operations. 754. Field compressor station expenses (major only). This account shall include the cost of labor, materials used, except fuel, and expenses incurred in operating field compressor stations. ITEMS Labor: 1. Supervising. 2. Operating and checking engines, equipment valves, machinery, gauges, and other instruments, including cleaning, wiping, polishing, and lubricating. 3. Operating boilers and boiler accessory equipment, including fuel handling and ash disposal, recording fuel used, and unloading and storing coal and oil. 4. Repacking valves and replacing gauge glasses, etc. 5. Recording pressures, replacing charts, keeping logs, and preparing reports of station operations. 6. Inspecting and testing equipment when not specifically to determine necessity for repairs or replacement of parts. 7. Pumping drips at the station. 8. Taking dew point readings. 9. Testing water. 10. Cleaning structures, cutting grass and weeds, and minor grading around station. 11. Cleaning and repairing hand tools used in operations. 12. Driving trucks. 13. Watching during shut downs. 14. Clerical work at station. Materials and expenses: 15. Scrubber oil. 16. Lubricants, wiping rags, and waste. 17. Charts and printed forms, etc. 18. Gauge glasses. 19. Chemicals to test waters. 20. Water tests and treatment by other than employees. 21. Janitor and washroom supplies, first aid supplies, landscaping supplies, etc. 22. Employees' transportation and travel expenses. 23. Freight, express, parcel post, trucking, and other transportation. 24. Utility services: Light, water, telephone. 755. Field compressor station fuel and power. A. This account shall include the cost of gas, coal, oil, or other fuel, or electricity, used for the operation of field compressor stations (including in the case of major companies applicable amounts of fuel stock expenses). B. Records shall be maintained to show the quantity of each type of fuel consumed or electricity used at each compressor station, the average Btu content per fuel unit, and the cost of such fuel or power. For major companies, respective amounts of fuel stock and fuel stock expenses shall be readily available. NOTE 1: (Major companies) The cost of fuel, except gas, and related fuel stock expenses, shall be charged initially to appropriate fuel accounts carried under Accounts 151, Fuel stock, and 152, Fuel stock expenses undistributed, and cleared to this account on the basis of fuel used. See Accounts 151 and 152 for basis of fuel costs and includible items of fuel stock expenses. NOTE 2: (Nonmajor companies) The cost of fuel, except gas, shall be charged initially to Account 154, Plant materials and operating supplies, and cleared to this account on the basis of fuel used. 756. Field measuring and regulating station expenses (major only). This account shall include the cost of labor, materials used and expenses incurred in operating field measuring and regulating stations. ITEMS Labor: 1. Supervising. 2. Recording pressures and changing charts, reading meters, etc. 3. Estimating lost meter registrations, etc., except gas purchases and sales. 4. Calculating gas volumes from meter charts, except for gas purchases and sales. 5. Adjusting and calibrating measuring equipment, changing meters, orifice plates, gauges, clocks, etc., not in connection with maintenance or construction. 6. Testing gas samples, inspecting and testing gas sample tanks and other meter engineer's equipment determining specific gravity and Btu content of gas. 7. Inspecting and testing equipment not specifically to determine necessity for repairs including pulsation tests. 8. Cleaning and lubricating equipment. 9. Keeping log and other operating records, preparing reports of operations, etc. 10. Attending boilers and operating other accessory equipment. 11. Installing and removing district gauges for pressure survey. 12. Thawing freeze in gauge pipes. 13. Inspecting and pumping drips, dewatering manholes and pits, inspecting sumps, cleaning pits, etc., blowing meter drips. 14. Moving equipment, minor structures, etc., not in connection with construction, retirement, or maintenance work. Materials and expenses: 15. Charts and printed forms, stationery and office supplies, etc. 16. Lubricants, wiping rags, waste, etc. 17. Employees' transportation and travel expenses. 18. Freight, express, parcel post, trucking and other transportation. 19. Utility services: light, water, telephone. 757. Purification expenses (major only). This account shall include the cost of labor, materials
