Accounting for Change: Federal Energy Regulatory Commission Proposes Accounting and Financial Reporting Reforms to Address Renewable Energy Assets
The authors review a Notice of Proposed Rulemaking issued recently by the Federal Energy Regulatory Commission regarding whether the agency’s Uniform System of Accounts adequately accounts for renewal energy assets.
The Federal Energy Regulatory Commission (“FERC” or “Commission”) recently issued a Notice of Proposed Rulemaking (“NOPR”) to address industry concerns that FERC’s current Uniform System of Accounts (“USofA”) does not adequately account for renewable energy assets. The NOPR, which was released during the last Commission open meeting, proposes the following four categories of amendments to the USofA, as well as conforming revisions to FERC’s accounting reports:
- Creating new production accounts specifically dedicated for wind, solar, and other non-hydro renewable assets;
- Creating a single dedicated functional class for energy storage accounts;
- Specifying the accounting treatment of renewable energy credits (“RECs”) and similar instruments by codifying prior Commission guidance; and
- Adding new dedicated accounts for hardware, software, and communication equipment within existing functions in the USofA.
Additionally, the NOPR requests feedback on whether the FERC Chief Accountant should issue accounting guidance related to hydrogen. Comments in response to the NOPR were due 45 days after publication in the Federal Register.
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“Accounting for Change: Federal Energy Regulatory Commission Proposes Accounting and Financial Reporting Reforms to Address Renewable Energy Assets,” by Mark R. Haskell, Brett A. Snyder, and Lamiya N. Rahman was published in the October 2022 edition of Pratt’s Energy Law Report (Vol. 22, No. 9), an A.S. Pratt Publication, LexisNexis. Reprinted with permission.
This article was first published as a Blank Rome Energy client advisory in August 2022.