FERC Accounts 363.1, 363.2, 363.3 - Asset Retirement Costs for Distribution Plant

FERC Accounts 363.1, 363.2, and 363.3 record capitalized asset retirement obligation costs associated with electric distribution plant.

Definition

Record in these accounts the asset retirement costs for electric distribution plant where a legal obligation exists to retire the asset in a specific manner.

These accounts capture capitalized ARO costs for distribution plant components. Account 363.1 covers distribution station equipment ARO costs, 363.2 covers poles, towers, and fixtures, and 363.3 covers underground distribution conduit. When utilities have legal obligations to retire distribution assets in specific ways — such as environmental cleanup at distribution substations or removal of poles in certain locations — the estimated costs are capitalized and accreted over the asset's useful life.

What is typically included

• Capitalized ARO costs for distribution substation equipment (363.1)
• ARO costs for distribution poles and structures requiring special retirement (363.2)
• ARO costs for underground distribution conduit in environmentally sensitive areas (363.3)
• Legal obligations to restore distribution rights-of-way upon retirement
• Environmental remediation obligations tied to specific distribution assets

What is generally not included

• Transmission plant ARO costs (Accounts 351.1-351.3 and 359.1)
• Estimated removal costs with no underlying legal obligation
• Normal retirement and removal costs included in depreciation rates
• General plant ARO costs (recorded in general plant accounts)
• Generation plant ARO costs (recorded in generation accounts)

Why this account matters

• Required under ASC 410 for legal asset retirement obligations on distribution plant
• Ensures distribution ARO costs are properly capitalized and accreted
• Supports accurate distribution rate base calculations including ARO assets
• Required for FERC Form 1 distribution plant-in-service detail
• Provides separate tracking of ARO costs by distribution plant component type