Ferc Account 351

FERC Accounts 351.1, 351.2, and 351.3 record asset retirement obligation costs associated with electric transmission plant.

Definition

Record in these accounts the asset retirement costs for electric transmission plant when a legal obligation exists to retire the asset.

These accounts capture capitalized asset retirement obligation (ARO) costs associated with transmission plant components. When a legal obligation exists to retire transmission plant in a specific manner — such as removing transmission towers with environmental requirements or decommissioning substations — the estimated cost is capitalized and accreted over the asset's life. Account 351.1 covers land and land rights ARO costs, 351.2 covers structures and improvements, and 351.3 covers transmission station equipment.

What is typically included

• Capitalized asset retirement obligation costs for transmission land rights (351.1)
• ARO costs associated with transmission structures and improvements (351.2)
• ARO costs for transmission station equipment requiring special retirement (351.3)
• Legal obligations to restore transmission rights-of-way upon retirement
• Environmental remediation obligations tied to specific transmission assets

What is generally not included

• Normal removal costs not associated with a legal obligation (recorded in removal expense)
• Estimated future costs with no present legal retirement obligation
• Distribution plant ARO costs (recorded in Account 363 series)
• Generation plant ARO costs (recorded in appropriate generation accounts)
• Routine maintenance or repair costs

Why this account matters

• Required under ASC 410 (SFAS 143) for legal asset retirement obligations
• Ensures transmission rate base properly reflects capitalized ARO costs
• Supports accurate depreciation and accretion calculations over asset life
• Provides transparency in FERC Form 1 transmission plant reporting
• Separates legal retirement obligations from ordinary removal cost estimates