FERC Uniform System of Accounts

The Federal Energy Regulatory Commission (FERC) regulates the rates electric utilities, natural-gas pipelines, oil pipelines, and gas-service companies can charge under cost-of-service ratemaking — and cost-of-service ratemaking only works if everyone keeps their books the same way. Since 1937 (for electric) and 1940 (for gas), FERC's Uniform System of Accounts (USoA) has imposed a mandatory chart of accounts on every public utility and licensee subject to its jurisdiction. The rules live at 18 CFR Parts 101, 201, 352, and 367 (one Part per industry segment) and are some of the most detailed accounting prescriptions in federal regulation — 200+ accounts each, with prescribed contents, depreciation methods, capitalization thresholds, and reporting formats.

Current Rule (2026)

Legal Authority

• 16 U.S.C. § 825c — Federal Power Act § 301: authorizes FERC to prescribe a uniform system of accounts for public utilities and licensees subject to FPA jurisdiction; the foundational authority for 18 CFR Part 101 (electric utilities)
• 15 U.S.C. § 717g — Natural Gas Act § 8: authorizes FERC to prescribe a uniform system of accounts for natural gas companies subject to NGA jurisdiction; the authority for 18 CFR Part 201
• 49 U.S.C. § 60502 — Interstate Commerce Act for oil pipelines: authorizes FERC to prescribe accounts for oil pipeline companies subject to its jurisdiction under the Interstate Commerce Act, codified at 18 CFR Part 352

Key Mechanics

FERC's Uniform System of Accounts (USoA) prescribes a mandatory chart of accounts — approximately 200 numbered accounts in each Part — for every public utility, natural gas company, oil pipeline, and centralized service company subject to FERC jurisdiction. The USoA is what makes cost-of-service ratemaking function: when FERC sets a utility's rates based on its "prudently incurred costs plus a reasonable return on rate base," both "costs" and "rate base" only have determinate meaning if every utility uses the same definitions for what is capitalized versus expensed, the same depreciation methods, and the same account boundaries. Without uniformity, utilities could game their allowed return by shifting costs between categories. The USoA prevents this by specifying exactly what belongs in each account — what types of equipment are capitalized in Account 101 (Plant in Service), what operations and maintenance expenses belong in Account 500 series, and how gains and losses on asset disposals are recorded. FERC examiners use USoA compliance as a central audit tool in rate cases.

What the System Does

The USoA is FERC's answer to a fundamental problem of regulated industries: utilities have monopoly franchise rights and the right to charge customers rates calculated as prudently incurred costs plus a reasonable return on rate base. But "costs" and "rate base" only have stable meaning if every utility uses the same definitions, the same depreciation methods, the same capitalization rules, and the same boundaries between operating expense and capital. Without uniformity, a utility could shift costs between accounting categories to game its allowed return — moving operating expenses into rate base to earn a return on them, or moving capital into expense to recover costs faster.

USoA prevents that by prescribing exactly what goes into each of ~200 standard accounts. For an electric utility under Part 101:

• Accounts 100–199: Utility plant (the rate base) — generation plant, transmission plant, distribution plant, general plant, intangible plant, broken down by FERC-defined functional categories (steam production, hydraulic production, nuclear production, wholesale transmission, retail distribution, customer accounts, customer service, sales, administrative & general)
• Accounts 200–299: Other property and investments (non-utility property, special funds, investments in subsidiaries)
• Accounts 300–399: Current and accrued assets (cash, receivables, materials & supplies inventory, prepayments)
• Accounts 400–499: Operating revenues (residential sales, commercial sales, industrial sales, wholesale sales, transmission service revenue, etc.)
• Accounts 500–599: Operating expenses by function (fuel, purchased power, operations labor, maintenance, depreciation, amortization)
• Accounts 600–699: Income deductions (interest expense, lease payments, miscellaneous deductions)
• Accounts 700–999: Stockholders' equity, long-term debt, taxes accrued

Each account has a one-paragraph description in the regulation that defines exactly what gets recorded in it. For example, 18 CFR 101 Account 320 — Distribution Plant — Land and Land Rights records the cost of land and land rights used in connection with distribution operations, with cross-references to electric plant Accounts 360–399.

The Four Parts

• Part 101 — Public Utilities and Licensees (electric utilities and hydropower licensees): roughly 250 accounts; the original USoA from 1937
• Part 201 — Natural Gas Companies: parallel structure to Part 101, adapted for gas transmission and storage
• Part 352 — Oil Pipeline Companies: simpler chart reflecting that oil pipelines are largely common carriers regulated under the Interstate Commerce Act tradition rather than the Federal Power Act
• Part 367 — Centralized Service Companies (PUHCA 2005): governs how multi-state utility holding companies' service companies must account for inter-affiliate transactions; created by Order No. 668 (2005) when PUHCA 2005 transferred service-company oversight from SEC to FERC

How It Connects to Ratemaking

FERC USoA isn't just bookkeeping — it's the source data for every rate case at FERC. When a utility files for a rate increase, it must submit financial data drawn directly from its USoA accounts on standardized forms (FERC Form 1 for electric, FERC Form 2 for natural gas, FERC Form 6 for oil pipelines). FERC staff and intervenors then use those accounts to compute:

• Rate base — the sum of utility plant in service (Account 101) less accumulated depreciation (Account 108) plus working capital and other adjustments
• Net operating income — operating revenues less operating expenses, depreciation, and taxes
• Cost of service — operating expenses + depreciation + taxes + return on rate base
• Rate of return — net operating income ÷ rate base

The accounts are also the basis for incentive ratemaking mechanisms FERC has authorized over the past two decades — formula rates, performance-based rates, and the various transmission incentive adders all reference specific USoA accounts as input variables.

Required Reports

USoA registrants must file annually:

• FERC Form 1 (electric utility): comprehensive financial and operating statistics, filed by April 18 each year for the prior calendar year, public 60 days after filing
• FERC Form 2 (major natural-gas pipeline): parallel to Form 1
• FERC Form 6 (oil pipeline): annual financial and operating data
• FERC Form 3-Q (quarterly): condensed financial statements
• FERC Form 60 (service companies under PUHCA 2005)
• FERC Form 715 (transmission planning data, separate from USoA)

These forms are publicly available on eLibrary at https://elibrary.ferc.gov/ and are heavily used by analysts, intervenors, and academics studying utility cost structures.

How It Affects You

If you're a ratepayer of a FERC-jurisdictional utility: USoA is the framework that determines what costs are eligible to be in your rate base and what costs are recoverable as operating expense. When your utility files for a transmission rate increase or a wholesale power purchase agreement, the costs it can include are exactly the accounts FERC has approved as legitimately incurred utility expenses under the USoA classification. Intervenors (state attorneys general, industrial customer groups, environmental groups) routinely scrutinize the account-level data to identify costs that have been improperly capitalized, double-counted, or otherwise shifted to ratepayers in ways the USoA's plain reading wouldn't allow.

If you work in utility finance, regulatory, or accounting: USoA compliance is mandatory and FERC takes it seriously. Misclassification can be the basis for refunds, disallowances, or enforcement action under FERC's audit authority. The Office of Enforcement's Division of Audits conducts both desk reviews and on-site audits, with findings reported in publicly available audit reports. Specific areas of frequent scrutiny include affiliate transaction pricing (Part 367), capitalization of internal labor and overheads, recovery of pre-construction costs in CWIP (construction work in progress), and the boundary between operating expense and capital improvement.

If you trade utility securities or analyze utility credit: FERC Form 1 / Form 2 / Form 6 data is the most granular public financial information available for U.S. utility companies — more detailed than SEC 10-K filings because the USoA functional categories aren't reported separately under GAAP. Rate-base estimates, regulatory return forecasts, and capital expenditure projections in equity research are typically built on Form 1 data with USoA-account-level breakouts.

State Variations

• States have their own USoAs for the retail-rate-regulated portion of utility operations — typically adopted by reference to the FERC USoA with state-specific modifications. NARUC (National Association of Regulatory Utility Commissioners) publishes a state-aligned USoA that most state commissions track closely.
• A single utility can be subject to both FERC USoA (for wholesale and interstate operations) and a state USoA (for retail). The accounting must be consistent between the two — utilities maintain a single set of books, with FERC and state regulators each looking at the slices relevant to their jurisdiction.
• Public Utility Holding Company Act of 2005 (PUHCA 2005) consolidated centralized service-company oversight at FERC; before that, SEC had jurisdiction under PUHCA 1935. This explains why Part 367 is younger and more focused than Parts 101/201.

Statutory Authority

This rule implements:

• 16 U.S.C. § 825c (Federal Power Act § 301) — directs FERC to prescribe a uniform system of accounts for electric utilities and hydropower licensees
• 15 U.S.C. § 717g (Natural Gas Act § 8) — parallel authority for natural-gas companies
• 49 U.S.C. § 60502 — oil pipeline accounting and reporting (legacy ICC authority transferred to FERC)
• 42 U.S.C. § 16451 et seq. (PUHCA 2005) — service-company books and records

Recent Rulemakings

• 2005 Order No. 668: created Part 367 to implement PUHCA 2005's centralized service company books-and-records requirements
• 2024 accounting releases: FERC has issued periodic Accounting Releases through the Chief Accountant to address treatment of specific issues (storm restoration costs, securitization proceeds, hedging gains/losses, asset retirement obligations) without formal rulemaking. Releases are advisory but practically binding.
• Pending: FERC has signaled it may modernize Part 101 to better reflect distributed energy resources, energy storage, and renewable generation — none of which fit cleanly into the 1937-era functional categories built around centralized generation and one-way distribution.

Pending Action

Related Pages

• FERC Energy Regulation — overall FERC jurisdiction and authority
• Federal Power Act Hydroelectric — the FPA framework that USoA implements for electric utilities
• Oil and Gas Pipeline Regulation — pipeline rate regulation that uses Part 201 and Part 352 USoA
• Housing Finance GSEs — a parallel example of a mandatory financial-reporting framework