Federal Energy Regulatory Commission Cost Accounting Date: Fri, 03 Sep 1999 10:24:56 -0400 To: "DC - All District Chiefs", "B - Branch Chiefs and Offices", "Alice A Sabatini, Administrative Officer, Reston, VA" From: Kelly Bradley Subject: Re: Federal Energy Regulatory Commission Cost Accounting Cc: "AO - All Administrative Officers", "Kym Y Elliott, Secretary, Reston, VA" , "Kelly L Bradley, Chief, FORS, Reston, VA" We have been receiving phone calls requesting clarification of this office's August 31, 1999, request (copy attached) that district offices provide cost-accounting information for the Federal Energy Regulatory Commission (FERC). This email is an attempt to clarify our August 31 request. The costs, described in the AUGUST 31 memorandum, that require documentation are costs incurred by USGS during the preliminary assessment phase of the FERC licensing and relicensing processes. During this process, FERC may contact the USGS to do Preliminary Evaluations of particular sites (e.g. hydropower or steam electric generating facilities) where water quantity/quality may be threatened. USGS is required by law to do the preliminary evaluation and provide this information free of charge to FERC and the power authority along with a breakdown of the costs for the Preliminary Evaluation to FERC. FERC in turn bills the power authority for our work and the funds go to Treasury with no compensation to USGS. In contrast to the unfunded work (at least from the USGS's point of view) described above, power authorities have the right to and often do request USGS to conduct a variety of work (e.g. streamgaging, water-quality sampling, etc.) and, if appropriate, USGS may conduct such work under the authority of their FERC license through a reimbursable agreement. For such work USGS bills the power authority and the collections go directly to USGS. FERC does not (nor does this office) require special documentation of such reimbursable work conducted by USGS in support of properly licensed power authorities. Again, the August 31 request pertains only to the Preliminary Evaluation process where funds from power authorities for work by USGS go directly to Treasury. It is for this type work only that OMB is requesting that USGS provide better cost information to justify FERC'S billing of power authorities. Streamgaging and other work done for power authorities where USGS bills and receives payment from the these authorities is unaffected by the August 31 request. Hope this helps to clarify. Thanks, Kelly At 12:10 PM 08/31/1999 -0400, Alice A. Sabatini, Division Administrative Officer wrote: > REPLY REQUESTED NO LATER THAN MARCH 31, 2000 > >Recently, the Federal Energy Regulatory Commission (FERC) informed the >Office of Management and Budget (OMB) that they are not being provided with >information from agencies necessary to support billings to power companies >for the licensing or relicensing of hydroelectric projects under the >Federal Power Act. The OMB plans to ask that each bureau within the >Departments of Interior, Agriculture and Commerce provide hydropower >licensing cost data annually to FERC. > >FERC collects fees for the costs other Federal agencies incur during the >licensing process. These costs are primarily related to environmental >studies amounting to about $7 million per year. They believe that this >amount will double in the next few years because over 200 hydroelectric >projects will become due for relicensing. The FERC alleges that agencies >have little incentive to provide this data to FERC because the monies >collected go the US Treasury and not the agencies. Historically, agencies >have provided FERC with a single cost figure that FERC has allocated to >individual licensees based on a regulatory formula. Licensees are now >appealing the billings with FERC alleging that FERC has no evidence to >support the billings. FERC believes that if the licensees pursue >litigation, courts are likely to rule in their favor. > >It is my understanding that the USGS provides cost information directly to >FERC and the licensee during the licensing process. However, beginning in >FY 2000, we will be asked to provide this information to the FERC, through >the Department of the Interior, on an annual basis, no later than May 15 >each fiscal year providing cost reports for the preceding fiscal year. In >order for us to meet this requirement and DOI deadlines, your information >should be submitted to Kelly Bradley (email kbradley) no later than March >31 of each year. > >Agencies shall retain supporting documentation for this amount. The >information required is: > >1. Costs of administering the Federal Power Act, broken out by type of >applicant (state, municipal, or non-municipal applicant), based on time >spent on applicant type. > >2. Description of work performed and costs outlined by management category >(e.g., salaries, travel, etc.). > >3. Certification that the costs are accurate for the related work performed. > >To make this accounting easier, we suggest that you accumulate these costs >in a unique subaccount in your cost center. We will be required to submit >this report for FY 1999 activities, making it necessary for cost centers to >segment these costs at the close of this FY. > > >