RUS Amends Accounting Requirements; Defers Rulemaking on Accounting for Renewable Energy Credits

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June 09, 2008

On May 27, 2008, the Rural Utilities Service (“RUS”) adopted a final rule amending its Accounting Requirements for Rural Development Electric Program Borrowers, as set forth in 7 CFR Part 1767.1 These amendments were in large part based on the proposed rule entitled “Accounting Requirements for RUS Electric Program Borrowers,” published on July 13, 2007.2

The final rule adopted, with minor modifications, for each of the following FERC Orders:

  1. 627, Accounting and Reporting of Financial Instruments, Comprehensive Income, Derivatives and Hedging Activity;
  2. 631, Accounting, Financial Reporting and Rate Filing Requirements for Asset Retirement Obligations; and
  3. 668 and 668A, Accounting Financial Reporting for Public Utilities Including Regional Transmission Organizations.

The final rule also adopts guidance on record retention previously published in Bulletin 180-2, Record Retention Recommendations for Rural Development Electric Borrowers. Provisions regarding storage media (life expectancy, internal controls, indexing, etc.) that were stated as guidelines in Bulletin 180-2 are now mandatory. The rule also includes specific required retention periods for records supporting RUS financial construction, records relating to plant in service and life and mortality study data for depreciation purposes which were not in Bulletin 180-2.

Additionally, RUS amended the accounting interpretations found in 1767.41 for Special Equipment Accounting, Storm Damage, the Rural Economic Development Loan and Grant Program, and Consolidated Financial Statements. The rule also sets forth an accounting interpretation to establish uniform accounting and reporting procedures for Cushion of Credit Accounts.

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Lastly, RUS chose not to adopt the regulations it had proposed with respect to accounting for renewable energy credits. We understand from RUS that it will issue another proposed rule at a later date before adopting a final rule addressing renewable energy credits.

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If you have any questions regarding this alert, or the services we provide, please feel free to contact any of the attorneys listed below or the Sutherland attorney with whom you regularly work.

Dorothy Black Franzoni 404.853.8489 [email protected]
Peter A. Fozzard 404.853.8330 [email protected]
Herbert J. Short, Jr. 404.853.8491 [email protected]

1 See Accounting Requirements for RUS Electric Borrowers, 73 Fed. Reg. 30277 (adopted May 27, 2008).
2 See Accounting Requirements for RUS Electric Program Borrowers, 72 Fed. Reg. 38511 (proposed July 13, 2007).

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