J656 111 mil lilt II" Ml $B 175 ^114 STATE OF NEW YORK Public Service Commission SECOND DISTRICT Albany, December 2, 1908. To. The following order has been adopted by this Commission, and is hereby served on you. Please acknowledge receipt at once. Yours very truly. State op New York, ©ftlcc Of tbe t)ublic Service Commission }■ **•• SECOND DISTRICT I have compared the following copy with the original on file in this office, and I do HEREBY CERTIFY the same to be a correct transcript therefrom and of the whole thereof. IKIlitneSS my hand and the Seal of Office of the Public Ser- vice Commission, Second District, at the City of Albany, this second day of December, one thousand nine hufvd red ,ayd eight.' '.'/ ,-•.'• • -• ••" ^•. State of New York, Public Service Commission. Seconti Dtstrtct. At a sudsion of the Public Service Lommission, Second District, lield at the Capitol, Albany, on the 21st day of October, 1908. Present : ' Frank W. Stevens, Chairman, Thomas M. Osborne, Martin S. Decker, James E. Sague, John B. Olmsted, Commissioners. Ordered: That, except as hereinafter provided: 1. On and after January 1, 1909, every electrical corporation shall keep upon its books the accounts prescribed or defined in the hereto annexed schedule marked " Schedule A", so far as the said accounts are pertinent to the facts and circumstances of the said corporation. The term electrical cor- poration is used herein in the sense defined in the Public Service Commissions Law. 2. On and after the date of service of this order on any such electrical corporation, such corporation shall not charge to any account representing cost of property any discount or commission on securities issued by the said corporation, but shall charge all such discounts, commissions, and other expense connected with the issue of securities subsequent to the said date of service, in accordance with the directions contained in the definitions of the account named Organization, and the account named Unamortized Debt Dis- count and Expense, in the said " Schedule A". 3. On and after January 1, 1909, every said electrical corporation shall keep upon its books the accounts prescribed or defined in the hereto annexed schedule marked " Schedule B ", so far as the same are pertinent to the facts and circumstances of the said corporation. 4. During the year beginning January 1, 1909, any said corporation may for purposes of comparison with prior years keep on its books any account pertaining to revenues, revenue deductions, income deductions, and appro- priations ( as defined in the said " Schedule B " ) which it had on its books during the year begun January 1, 1908; provided that on or before January 1, 1909, there be filed with the Public Service Commission a statement con- taining a list of the said accounts pertaining to the year begun January 1, 1908, and definitions of such accounts. 5. For purposes of improving the efficiency of administration and operation, any corporation may, unless or until otherwise ordered, keep upon its books any temporary or experimental accounts and any accounts covering particular divisions of its operations, provided that in respect of each siicli temporarj', experimental, or divisional account, the said corporation shall (ile with the Public Service Commission, at least ten days in advance of the time when [3] 4 .FiJ.Bilp ^EfiVlCE G'OMMISSION, SecOXD DlSTfilCT the said account is to be instituted, a statement showing the name of the said account, the date when it is to be instituted, the purpose for which it ia to be kept, the period of time during which it is to be kept, and a clear and accurate definition of the classes of items and facts to be contained in the said account; and in case of a divisional account, the definition of the division covered. Upon compliance with the provisions of this paragraph, any account herein prescribed or defined in either said " Schedule A" or said " Schedule B " may be subdivided. 6. All notices herein required to be filed concerning accounts shall be upon sheets 9i^ inches by 12 inches in size, and shall be entitled in the name of the corporation filing said notices, followed by a brief statement of the charac- ter of the accounts covered by the notice. SCHEDULE A. bala:n'ce sheet or ikdicant accounts. 1. Electrical Corporations and Electric Operations defined. — Section 2 of the Public Service Commissions Law defines electrical corporation as follows : I 2. . . . The term " electrical corporation "... includes everj' corpora- tion, company, association, joint stock association, partnership and person, their lessees, trustees or receivers appointed by any court whatsoever (other than a rail- road or street railroad corporation generating electricity for its own use exclu- sively), owning, operating, managing or controlling any plant or property for' generating and distributing, or generating and selling for distribution, or distribut- ing electricity for light, heat or power or for the transmission of electric current for such purposes. Electric operations, as the term is hereinafter used, include all acts and transactions directly connected with the operation of a plant for the produc- tion of electric energy, the transmission thereof and the supply thereof to consumers for light, heat, or power, and all operations incident thereto, in- cluding the collection of revenues therefor and the disposition of byproducts produced in connection therewith. 2. Accounts to be kept by double-entry method. — All accounts kept by any corporation or person within the scope of the present order shall on and after January 1, 1909, be kept by the double-entry method. Note. — This requirement is not Intended to apply to purely statistical accounts. CAPITAL ACCOUNTS. 3. Capital defined. — As the term is used herein, by capital of a corporation is meant all property devoted to the rendering of the services or the pro- duction of the commodities which are within the purposes of the corporation. 4. Fixed Capital defined. — Capital which has an expectation of life in service of more than one year (exception being made of hand and other small portable tools liable to be lost or stolen*) is called fixed capital. 5. Floating Capital defined. — Capital other than fixed capital is called float- ing capital. 6. General Capital and Departmental Capital defined. — Fixed capital is di- visible into general capital and departmental capital, general capital being that which is indiscriminately available for the use of two or more classes of operations, while departmental capital is that assigned solely or principally to a single class of operations. ' Hand and other small portable tools liable to he lost or stolen shall, when first acquired and before Issued for use, be carried In a suitable Materials and Supplies account ; when Issued they shall be charged to the appropriate expense account. Portable tools and apparatus of special value may, however, be charged to the appropriate tangible capital account, and remain therein so long as record is kept of the persons to whom such tools and apparatus are issued and such persons are made responsible therefor. [5] 6 Public Service Commission, Second Disteict 7. Landed Capital and Non-Iandsd Capital defined. — Fixed capital is also divisible into landed capital and non-landed capital. Landed capital includes all interests in land (exclusive of improvements thereon) the term of which is more than one year. All other fixed capital is herein cai>ed non-landed capital. 8. Intangible and Tangible Capital distinguished. — Non-landed capital is divisible into intangible and tangible. Intangible capital comprises organ- ization, franchises, patent-rights, and all other intangible property within the definition of fixed non-landed capital as above stated. Tangible capital comprises structures and equipment having an expectation of life in service of more than one year. Because of their liability to loss or theft, hand and other small portable tools are excepted from tangible capital, and the cost of such tools when issued is required to be treated as a part of ths operating expenses.' 9. Further Classification of Capital. — Capital is also divisible into original capital, additions, betterments, and reneicals and replacements, as defined below. Charges to capital accounts shall show these divisions as set forth in paragraph 21, infra. 10. Original Capital defined. — Original Capital is that put into service at the outset of an enterprise. 11. Additions defined. — Additions include additional structures, facilities, or equipment not taking the place of anything previously existing. 12. Betterments defined. — Betterments include the enlargement or improve- ment of existing structures, facilities, and equipment. 13. Renewals defined. — Renewals include all extensions of terms of years in land and tangible fixed capital, and all extensions of the life period of franchises and other intangible fixed capital. 14. Replacements defined. — Replacements include all substitutions for capi- tal exhausted or become inadequate in service, the substitutes having sub- stantially no greater capacity than the things for which they were substi- tuted. When a substitute has a substantially greater capacity than that for which it is substituted, the cost of substitution of one of the same capacity as the thing replaced should be charged as a replacement, and the remaining portion of the cost of .the actual substitute should be charged as a betterment. 15. Repairs defined. — Wlien through wear and tear or through casualty it becomes necessary to replace some part of any structure, facility, or unit of equipment, and the extent of such replacement does not amount to a aub- stantial change of identity in such structure, facility, or unit of equipment, the replacement of such part is to be considered a repair, and the cost of such repair is to be treated as an operating expense and must not be charged as a replacement in any capital account. > Hand and other »mall portable tools liable to be lost or stolen shall, when first acquired and before Issued for use, be carried in a suitable Materials and Supplies account ; when issued tlie.v shall be oharKed to the appropriate expense account. Portable tools and apparatus of special value may, however, be charged to the approi)rlafe tangible capital account, and remain therein so long as record is kept of the per.sons to whom Hueh tools and apparatus are issued and such persons are made responsible therefor. Accounts for Electrical Corporations 1 i6. First entries must enable identification. — Throughout all capital ac- counts, the first entry in respect of any particular thing shall describe it with such particularity as to enable its identification, and shall give it a distinguishing name, number, or other designation by which it shall there- after be designated in every entry in any capital account which in any way concerns it. In the case of continuous structures like railroad track, or electric line, or pipe line, such structures shall be itemized to the extent that no item shall contain more than one operating division or more than one type ef construction, and the entry in relation to any item shall describe the size, weight, type, and other principal physical characteristics of the chief constituent parts, together with their spacing if discontinuous. 17. Costs of new capital to be actual money costs. — All charges made to capital or other accounts on or after January 1, 1909, shall be the actual money cost of the things in respect of which they are made. When the con- sideration actually given for the thing in respect of which a charge to a capital account is made is anything other than money, the actual considera- tion shall be described in the entry with sufficient fullness and particularity to identify it, and the amount charged shall be the actual money value of such consideration at the time of the transaction. 1 8. Discounts upon securities not to be charged to capital accounts. — Dis- counts upon securities and other commercial paper issued in payment for capital are to be provided for in other accounts and must in no case be charged to the capital accounts. ig. Costs of labor, materials, and supplies. — Cost of labor (employed in con- struction) includes not only wages, salaries, and fees paid emploj'ees, but also such personal expenses of employees as are borne by the corporation. Cost of material and supplies consumed in construction is the cost at the places where they enter into construction, including cost of transportation and inspection when specifically assignable. If such materials and supplies are passed through storehouses, their cost entered in the account may include a suitable proportion of store expense. 20. Withdrawals or retirements. — When anything is withdrawn or retired from service, the amount at which such thing stood charged in the capital account shall be credited to the capital account in which it stood charged at the time of withdrawal, and the entry of such credit shall cite by name and page of book or other record the original entry of cost of the thing withdrawn. If there is no such original entry, that fact shall be stated in connection with the credit entry, and the actual amount orig>ially charged shall be credited. If such amount is not known, it shall be estimated, the facts upon which the estimate is based shall be shown, and the amount thus estimated to be the original charge in respect of such thing withdrawn shall be credited. 21. Particulars required to be shown in entries. — Every charge made to a capital account on or after January 1, 1909, shall show whether the thing in respect of which the charge is made is original capital, or an iuldition. a betterment, a renewal, or a replacement. If the thing is a betterment, the entry shall designate the thing enlarged or improved and shall cite by name and page of book or other record the original entry of cost of such thing enlarged or improved. If the thing to which any charge hereafter made re- 8 Public Service Commission, Second District lates. is a renewal or a replacement, the entry made in respect thereof shall designate the thing renewed or replaced and shall cite by name and page of book or other record the original entry or entries of cost of such thing renewed or replaced. If there is no entry in the accounts of the corporation showing the cost (to the corporation) of the thing bettered, renewed, or re- placed, that fact shall be stated in the entry describing the betterment, renewal, or replacement, and the original cost of such tiling to the corpora- tion shall be stated. Such cost shall be estimated if not known, and when estimated the basis of such estimation shall be shown. 22. Betterments Involving partial destruction of thing bettered. — If any betterment involves the partial destruction or partial reconstruction of the thing bettered, only such portion of the cost of the change shall be charged as a betterment as will when added to the original cost (estimated if not known) of the thing betjtered give the cost of reconstruction or replacement of the thing as bettered, and the remainder of the cost of the change (account being taken of any salvage) shall be charged to the appropriate repair account. E. g., a biilldinK, original cost unknown but estimated to be $15,000, Is bettered by the construction of an elevator shaft, and its stairways are modified so as to be fireproof ; the actual expenditure for these changes is .$.3.000 ; the estimated cost of replacement of the building (as modified) with one equally serviceable and with an equal expectation of life Is $16,000; the charge to capital account as a better- ment should be $1,000, and the remainder ($2,000) of the expenditure should be charged to the appropriate repairs account. 23. Plant and equipment and other capital purchased. — When any fixed capital in the form of a going or completed plant is purchased, an appraisal of such capital so acquired shall be made, and the different constituent ele- ments of the plant (and equipment, if any) or other capital acquired shall be appraised at their structural value; that is to say, at the estimated cost of replacement or reproduction less deterioration to the then existing condi- tion through wear and tear, obsolescence, and inadequacy. If the actual money value of the consideration given for the plant or other capital was at the time of the acquisition in excess of such appraised value, the excess shall be charged to the account " Other Intangible Electric Capital," and the appraised values of the constituent elements shall be charged to the appro- priate accounts as designated in tlic following definitions of accounts for fixed capital. If the actual money value of the consideration given was not in excess of such appraised value, such actual money value sliall be distributed through the said accounts in proportion to the said appraised value of the constituent elements appropriate to the respective accounts. Full report of the contract of acquisition, the consideration given therefor, the determina- tion of the actual money value of such consideration, the appraisal, and the amounts charged to the respective accounts for each plant or other such fi.xed capital purchased, will be required to be made to the Public Service Commis- sion, and the purchaser will be required to procure in connection with the acquisition of any such plant or other fixed capital all existing records, memo- randa, and accounts in the posst^ssion or control of the grantor relating to the construction and improvement of sut-h plant, and to preserve such records, memoranda, and accounts until authorized by law to destroy or otherwi84 dispose of them. Accounts fob Electrical Corporations 9 24. Definitions of Fixed Capital accounts. — In the following definitions of accounts the letters and numbers prefixed to the titles are inserted solely for convenience of reference and are no part of the titles or of the definitions: ElOO. Fixed Capital, December 31, 1908. Charge to this account all the Fixed Capital of the accounting person or corporation devoted to electric operations as such capital stood at' the close of December 31, 1908. Such charges shall be made at the figures at which such capital was carried on the books of the said person or corporation on that date. When any capital included in such account is retired from service, the amount at which it is charged therein shall be credited to this account; the amount of depreciation or other amortization thereon appli- cable to the period subsequent to December 31, 1908, shall be charged to account No. 374, "Accrued Amortization of Capital," proper account shall be taken of any salvage, and the remainder of the amount originally charged to capital shall be concurrently charged to the Corporate Surplus or Deficit account (or equivalent account carried on the books on December 31, 1908), unless there was carried on the books at that date a reserve to cover retire- ment of capital from service, in which case the said concurrent charge shall be made to such retirement reserve account. If the amount at which the said capital in service on December 31, 1908, and subsequently retired from service, was included in the said account is not disclosed on the books and records of the accounting person or corporation and is not within the knowledge of such person or corporation or officers or other employees thereof, it shall be estimated, and such estimated amount shall be treated as is above directed for the actual amount, the fact of estimation being stated in the entry. Note. — Corporations will be required to carry as sub-accounts of the account " Fixed Capital, December 31, 1908," the several accounts on their hooks on that date which are combined to make up the said account, and to furnish information concerning such sub-accounts in their annual reports. The following capital accounts are prescribed for transactions subsequent to December 31, 1908: EllO. Land Devoted to Electric Operations. Charge to this account the cost of the accounting corporation's landed capital which is devoted to electric operations as hereinbefore defined. This includes land occupied by generating stations and their appurtenances, rigl/ts of way for transmission and distribution lines and other electric operations; also those for canal and pipe lines, water rights, and rights of pondage, flow- age, and submersion, where such rights have lives in excess of one year from the date when such land is placed in service. Such cost includes, when assumed or paid by the purchaser in its own behalf, cost of registration of title, cost of examination of title, conveyancer's and notary's fees, purchasing agent's commissions or fees, or proportion of purchasing agent's salary, taxes accrued to date of transfer of title, and all liens upon the title acquired; also costs of obtaining consents and payments for abutting damages. Note A. — Cost of buildings and other improvements must not be included in this account. Note B. — If at the time of acquisition of an Interest in lands It extends to buildings or other Improvements thereon, which improvements are devoted by the corporation to its electric operations, and the contract of acquisition does not de- termine the price of such improvements, they shall be appraised at their fair cash value for use in such operations, and such appraised value shall be charged to the 10 Public Service Commission, Second Distkict appropriate structures account, and excluded from the account " Land Devoted to i:i»*ctiic Operations ". If such Improvements are not devoted to electric opcratlono l>ut are devoted to other operations or held as Investments, the cost (or appraised value If the cost is not determined In the contract of acquisition) shall be charged to the appropriate investment account or capital account for other operations. If the improvements are removed or wrecked, the salvage (less the cost of removal or wreckage) shall be excluded from the account " Land Devoted to Electric Opera- tions ". The entries in this account must be made In such wise as to enable th»» corporation to show in its annual report to the Public Service Commission the subdivision of the cost of its land devoted to electric operations Into the following. Land Occupied by Generating Stations. Land Occupied by Outside Substations. Water Rights. Other Land Devoted to Electric Operations. 101. Okoanization. Charge to this account all fees paid to governments for the privilege of incorporation, and all office and other expenditure incident to organizing the corporation or other enterprise and putting it in readiness to do business. This includes cost of preparing and distributing prospectuses, cost of solicit- ing subscriptions for stock (but not for loans nor for the purchase of bonds or otlier evidence of indebtedness), cash fees paid to promoters, and the actual cash value at the time of organization of securities paid to promoters for their services in organizing the enterprise, counsel fees, cost of preparing and issu- ing certificates of stock, and cost of procuring certificates of necessity from state authorities, and other like costs. Like costs incident to preparing and filing certificates of authorization of increase of capital stock, and to the negotiation and issue of stock thereunder, shall be classed as additions. Cost of preparing and filing certificates of amendment of articles of incorporation shall be classed as a betterment. Cost of preparing and filing papers in con- nection with the extension of the term of incorporation or with reincorporation consequent upon reorganization sliall be classed as a renewal. This account sliall not include any discounts upon stocks or other securities i.ssued, nor sliall it include any costs incident to negotiating loans or selling bonds or other evidence of indebtedness. E102. Fbanciiises (Electric). To this account shall be charged "the amount (exclusive of any tax or an- nua/ charge) actually paid to the State or to a political subdivision thereof as the consideration for the grant of such franchise or riglit " (section C9 of tiie Public Service Commissions Law) as is necessary to the conduct of the corporation's electric operations. If any such franchise is acquired by mesne assignment, the ciiarge to this account in respect thereof must not exceed the amount actually paid therefor by the corporation to its as signor, nor shall it exceed the amount specified in the statute above quotetl. Any excess of the amount actually paid by the corporation over the amount specified in the statute shall be cliarged to the account " Other Intangibl.- Electric Capital ". If any such franchise has a life of not more than one year after the date when it is placed in service, it shall not be charged to thif. ac- count but to the appropriate accounts in " Operating Expenses," and in " Pre- payments " if extending beyond the fiscal year. Payments made to the State or to some subdivision thereof as a considera- tion for granting an extension for more than one year of the life period of it franchise shall be classed as renewals. Those made as a consideration for Accounts for Ei.ectuical Coi:i'01{ations 11 franchises or extensions thereof covering adrlitioiial territory to be operate^! as a part of an existing system shall be classed as betterments. If the fran- chises cover separate and distinct new enterprises, the payments therefor snail be classed as original. Note. — Annual or more frequent paj-ments in respect of franchises must not be charged to this account but to the appropriate tax or operating expense account. E103. Patent-rights (Electric). Charge to this account the cost of all rights (having a life of more than one year from the date when placed in service) acquired by the corporation in or under valid patents granted by the United States to inventors for in- ventions and discoveries which are necessary to the economical conduct of the corporation's electric operations. If any such right is extended to cover a further period of time than that covered by the original grant, the cost of such extension shall be classed as a renewal. A patent-right acquired for usu in an existing system and necessary to the economical operation thereof shall be classed as an addition. El 04. Other Intangible Electric Capital. Charge to this account the cost of all other property coming within the definition of intangible capital and devoted to electric operations. All entries of charges to this account shall describe the acquired property with sufficient particularity clearly to identify it, and shall also show specifically the j)rincipal from whom acquired and all agents representing such principal in the transaction; also th3 term of life of such property, estimated if not known, and if estimated, the facts upon which the estimate is based. E121. General Structures. Charge to this account the cost of all buildings and other structures of a permanent character devoted to general corporate purposes, not restricted to electric operations and not includible in any of the departmental accounts; also of all fixtures permanently attached thereto and made a part thereof, such as water pipes and fixtures, steam pipes and fixtures for warming and ventilating, gas pipes and fixtures for lighting, etc., electric wiring and fix- tures for lighting, signaling, etc.; elevators, etc., and the engines and motors specially provided for operating them; furnaces, boilers, etc., specially pro- vided for producing steam for such engines and for heating ; electric gen- erators specially provided for producing current for lighting such buildings, etc. This account includes such piers and other foundations for machinery and apparatus as are designed to be as permanent as the buildings in (or in connection with) which they are constructed, and to outlast the first ma- chinery or apparatus mounted thereon. Note A. — Among such l)uildings may be mentioned general office buildings, gen- eral shop buildings, general storehouses, general stable buildings, etc. AVliere general offices, shops, storehouses, stables, etc., are in buildings includible i:i « departmental account, as e. g., in a power station building, no part of the cost of such building shall be charged to this account. This account is provided for struc- tures of a general or miscellaneous character not assignable to any particular department. Note B. — When furnaces and boilers are used primarily for furnishing steam for some particular department and only incidontaily for furnishing steam for heating a general building and operating the equipment therein, the entire cost of such furnaces and boilers shall be charged to the appropriate departmental capital account, and no part to the account " General Structures ". 12 Public Service Commission, Second District Note C. — The cost of specially provided foundations, not expected to outlast the machinery or apparatus mounted thereon, should be charged to the same account as is the cost of the machinery or apparatus for which they are provided. E122. General Equipment. Charge to this accoimt the cost of all equipment of general structures, as provided under the following heads: a. General Office Equipment : This includes the cost of all equipment of general offices, such as desks, chairs, tables, movable safes, filing cases, drafting room equipment, and other like ollice appliances and equipment; also engi- neering instruments. b. (jleneral Shop Equipment: This includes the cost of all equipment specially provided for general sliops, such as furnaces, boilers, gas producers, engines, electric generators, and other power apparatus used in operating machinery in such shops; machine tools, cianes, hoists, shafting, belts, and the like shop equipment; also such smithing equipment in general shops aa is used principally for other general purposes than shoeing horses and repairing vehicles. NoTK. — Hand and other small portable tools liable to be lost or stolen shall not be included herein, but portable tools and apparatus of special value may be charged to this account and remain herein so long as record is kept of the person* to whom such tools and apparatus are issued and such persons are made respon- sible therefor. c. General Store Equipment: This includes the cost of all equipment of general store structures, such as movable counters, movable shelving and other movable equipment of like nature, carts, barrows, trucks, etc., and other apparatus and appliances used in handling materials and supplies. Note. — Counters, shelving and the lilce which are permanently attached to the structure shall be charged to account No. E121, "General Structures," and not to this account. d. General Stable Equipment : This includes the cost of all equipment of general stables, including horses, harness, drays, wagons, automobiles and other vehicles, equipment of shoeing sliops,. harness repair shops, vehicle re- pair shops, etc. E131. Dams, Canals, and Pipe Lines. Charge to this account the cost of all dams, canals, aqueducts, and pipe lines devoted to the utilization of water power and the delivery of the water to the headgate of the turbine or water-wheel ; also that of all wasteways from the outlet of the draft-tube to the point of final discharge. This in- cludes all gates, valves, and other accessories of such dams ; also wasteways, sluices, forebays, grids, walls, fences, etc., for the protection of such canals and pipe lines, and all trestles and other supporting structures; also all viaducts, bridges, foot-bridges, etc., over and accessory to or necessitated by such canals, aqueducts, and pipe lines. E132. PowEB Plant Buildings. Charge to this account the coat of material used and labor expended in erecting buildings to be used for housing power generating plants. This ac- count includes cost of excavations, permanent foundations, drainage, gas and water pipes and connections, grading grounds, and furniture and fi.Ktures when permanently attached to and made a part of the building; also the cost of architects' plans, and of auperintendence of construction. Accounts fob Electeical Cokpokations 13 E141a. FuBNACEs, Boilees, and Accessories. Charge to this account the cost of all furnaces, boilers, and boiler apparatus and accessories devoted to the production of steam for use in generating electric energy. This includes boilers and valves thereto attached, appurtenant furnaces and grates, and flues leading to smokestacks and chimneys, and the specially provided foundations and settings of such boilers and appurtenances; also iron smokestacks. It also includes mechanical stokers and other like apparatus for regulating the supply of fuel, etc., feed and hot water heaters and economizers, injectors, filters, feed pumps, blower engines, coal conveyors, ash conveyors, water pipes, steam traps, drains, and separators, and pipes for conducting steam from the boiler to the engine or to the gas producers, ex- haust pipes, etc. It does not include steam pipes whose primary purpose is the heating of buildings. E141b. Steam Engines. Charge to this account the cost of all steam engines devoted to the produc- tion of electric energy. This includes the specially provided foundations and settings of such engines. The engine, whether reciprocating or rotary (such as steam turbines), shall be considered to include the throttle or inlet valve and the governor; also condensers, air and circulating pumps, lubricating systems, etc., but not the steam pipe leading from the boiler, nor the exhaust pipe. Where the electric rot(>r is mounted on the engine shaft, the shaft shall be considered a part of the steam engine and the electric rotor thereon shall be considered a part of the electric equipment. E142. Turbines ani? Wateb-wheels. Charge to this account the cost of all turbines and water-wheels devoted to the conversion of water power into mechanical power for the production of electric energy. This includes the specially provided foundations and settings of such engines, also tlieir governors and all other appurtenant apparatus attached thereto from and inclusive of the headgates and governors to (but exclusive of) the wasteway. Where the electric rotor is mounted on (not merely coupled to) the shaft of the hydraulic engine, the shaft shall be con- sidered a part of the hydraulic engine and the electric rotor thereon shall be considered a part of the electric equipment. E143a. Gas Pboducers and Accessories. Charge to this account the cost of producers and accessories devoted to the production of gas for the purpose of operating electric generators, including the cost of specially provided foundations and settings for such producers and accessories. This account includes producers, economizers, regenerators, vaporizers, steam injectors, scrubbers, exhauster outfits, seals, specially pro- vided boilers and pumps, flues and piping, blower engines, pipes for the con- duction of gas fiom such producers to holders and to gas engines, holders for producer gas, exhaust pipes from gas engines, etc. It does not include pipfes whose primary purpose' is the warming of buildings; nor does it in- clude power transmission apparatus, or water pipes, steam pipes, water pumps, or inspirators. El 43b. Gas Engines. Charge to this account the cost of all gas engines devoted to the produc- tion of electric energy, including the specially provided foundations and set- tings of such engines. The engine includes the inlet valve, governor, and ignition and starting apparatus, but not the pipe leading from the gas holder, 14: Public Service Commission, Second District nor the exhaust pipe. Where the electric rotor is mounted on the engine shaft, the shaft shall be considered a part of the engine and the electric rotor thereon shall be considered a part of the electric equipment. El 44a. Electric Generators. Charge to this account the cost of all electric generating apparatus driven by engines operated by steam, water, or gas; and rotaries and motor generat- ing sets, exciters, etc., when not installed in connection with transmission sys- tems. This includes the specially provided foundations and settings of sucV. apparatus. Where the electric rotor of such apparatus is mounted on the sliaft of the steam, hydraulic, or gas engine, the rotor is to be included Iierein, but not the shaft. Belts, countershafts, and other like interniipdiaries between such engines and the generators are also to be excluded herefrom. Note. — Regarding transmission and distribution, see the note to account No. I01O3, "Transmission System". (See page 15.) E144b. Accessory Electric Power Equipment. Charge to this account the cost of all electric equipment of generating stations not includible in the last foregoing account. This account includes bus-bars, regulators, station switchboards and equipment, such as circuit- breakers, switches, ammeters, voltmeters, wattmeters, and the like, and their foundations and settings; also headgate motors, pump motors, air com- pressor motors, etc., and special high-tension transmission equipment at power stations, such as high-tension bus-bars, high-tension switchboards, high-tension switches, high-tension current transformers, high-tension light- ning arresters, high-tension potential transformers, high-tension reactive coils, high-tension choke coils, high-tension grounding devices and resistances, high- tension raising and lowering transformers, etc. E145. Miscellaneous Power Plant Equipment. Charge to this account the cost of all miscellaneous equipment at power plants which is not includible in any of the foregoing accounts. This includes such mechanical apparatus as belts, pulleys, hangers, countershafts, and otlier apparatus intermediary between the prime mover and the electric generator, cranes, hoists, etc., and machine tools and such other tools at power plantsi as are proper to be capitalized, etc. Note. — This account should not include any sub-station equipment. E151. Sub-station Buildings. Charge to this account the cost of material used and labor expended in erecting buildings to be used for power sub-station purposes, including ex- cavations, permanent foundations, drainage, gas and water pipes and connec- tions, grading grounds, and furniture and fixtures when permanently attached to and made a part of the building; also the cost of architects' plans, and of superintendence of construction. XoTE. — No charge should bo made to this account in respect of a power plant building, even though such building also contnlns sub-station apparatus. El 52. Sub-station Equipment. Charge to this account the cost of all equipment of sub-stations. Such equipment includes not only electric machinery and apparatus, including storage batteries, in sub-stations, but also all other fiirniture and equipment, such as furnaces, boilers, stoves, elevators, etc., permanently assigned to such stations but not affixed to the structures thereof. It does not include labora- tory instruments and apparatus not permanently assigned thereto, nor dues it include tools only temporarily assigned to such stations. Accounts for Electrical Cokfokatioj^s 15 E161. Poles and Fixtures. Charge to this account the cost of towers, structures, poles, cross-arms. muI insulator pins; braces, brackets, and other pole fixtures; gujs and oilier siij* ports for holding the towers, structures, and poles in position; and all labor expended in connection with the construction of pole lines or structures for carrying the transmission and distribution systems. E162. Undergboukd Conduits. Charge to this account the cost of conduits required for underground wires and cables, including manholes, ducts and pipes, sewer connections, sewer traps, and all material necessary for the completion of the underground con- duit system devoted to the protection of the transmission and distribution systems. E163. Transmission System. Charge to this account the cost of the transmission system, including cables, wires, insulators, and insulating material. Note. — When the electric current generated (or received from another corpo- ration) is conducted, eitlier at tlie voltage of generation (or receipt) or at a higher voltage, to a point where it is (a) lowered in voltage by means of step- down transformers, or changed as to kind or frequency by means of (b) motor generator sets, (c) rotary converters, or (d) frequency changers, that portion of the outside line or conductor system antecedent to the said stepdown transformers, motor generator sets, rotary converters, or frequency changers, shall be classed as the Transmission System ; except, however, that primary wiring in lighting systems at not to exceed 4,400 volts, 4-wire, 3-p'.iase, shall be classed as a part of the Distribution System. Tie-lines between generating stations and sub-stations shall follow the same rule. Line transformei-s are not included among the " stepdown transformers " above mentioned. El 64. Distribution System. Charge to this account the cost of all distribution main conductors and feeders, including the cost (in place) of all cables, wires, insulators, and insulating material. This account shall be subdivided so as to show separately the following: a. Overhead Distribution System; b. Edison Tube ISystem, including the cost in place of all the Edison tube system material, such as junction boxes, tubing material and conductors, coupling boxes, etc.; c. Other U nderyround Distribution System. NoTH A. — The amounts charged to the subdivisions above stated will be required to be separately reported in the annual reports of the corporation to the Public Service Commission. Note B. — For the distinction batween the transmission system and the distribu- tion system, see the note to account No. E1G3, •' Transmission System ". ElGo. Line TiJANSFOrmeus and Devices. Charge to this account the cost of all line transformers (both overhead and underground), pole, line lightning arresters, transformer cut-out boxes, line cut-out switches, etc., in the distribution system. NoTK. — Upon tiling with the Public Service Commission a notice thereof, the accounting corporation may also include in this account the cost of line trans- formers and devices temporaiUu withdrawn from service. El 66. Electric Services. Charge to this account the cost of all conductors (and appurtenant in- sulation, ducts, and supports) connecting the distribution mains with electric apparatus and appliiuces in the possession of consumers. Note. — Cost of renewing or modifying services shall not be charged to this account. IG Public Service Commission, Second District El 67a. Electric Meters. Charge to this account the cost of meters used in determining the amount of electric energy delivered to the several consumers to whom it is supplied. Note A. — Cost of setting, removiag, or re-setting such meters shall not be charged to this account. Note B. — Upon filing with the Public Service Commission a notice thereof, the accounting corporation may also include in this account the cost of consumers' meters temporarily withdrawn from service. El 67b. Elect«ic Meter Installation. Charge to this account the cost of the first setting of meters for determining the amount of electric energy delivered upon the premises of consumers, in case it is the policy of the corporation to capitalize the cost of such setting. Note A. — Cost of removing such meters and of setting other meters substituted for them shall not be charged to this account but to account No. E533, " Setting and Removing Meters and Transformers". (See page 41). Note B. — This account must not Include at any time the cost of Installation of a greater number of consumers' meters than are actually in service. E171. Municipal Street Lighting System (Electric). Charge to this account the cost (in place) of all property of the company in poles, cross-arms, pins, braces, insulators, etc., arc circuits, lamps, and out- fits and suspensions, specially provided for the municipal street lighting system. Such cost includes cost of material, transportation, setting poles, etc., and restoring the surface of the street to the condition required by the municipality. This account does not include any part of the general dis- tribution system, but only things in the utilization plant beyond the service and devoted to the municipal service. Note A. — Where the municipality requires for its special benefit the extension of mains and services for street lighting, such extensions may, so long as used solely for street lighting, be charged to this account, provided a full description of the extensions so charged and the amounts charged in respect thereof be filed with the Public Service Commission on or before the date when the entry thereof Is made upon the books of the corporation. Note B. — If the corporation uses in its street lighting system the same type of arc lamps that it uses in its commercial lighting system, and uses them inter* changeably, it will be permitted, upon filing with the Public Service Commission a notice thereof, to charge the cost of all arc lamps in its street lighting system to account No. EI72, " Commercial Arc Lamps ". E172. Commercial Arc Lamps. Charge to this account the cost of all property of the company in commer- cial arc lamps supplied to consumers (including municipal buildings) where such lamps have an expectancy of life in service of more than one year. Note A. — Meters supplied to consumers are provided for in a foregoing account and should not be Included herein. Note B. — Upon filing with the Public Service Commission a notice thereof, the accounting corporation mny also include in this account the cost of arc lamps temporarUy withdrawn from service. E173. Glower Lamps. Charge to this account the cost of all property of the company in electric glower lamps supplied to -consumers (including municipal buildings) where such lamps have an expectancy of life in service of more than one year. Note A. — Meters supplied to consumers are provided for In a foregoing account and should not be Included herein. Note B.— This account is restricted to long-life Incandescent, or glower lampi such as the Nerust. and does not Include the ordinary carbon filamont Incandesceut tampa. Short-life incandescent lamps (i. e., those having aa expectancy of life of ACCOUKTS FOK ELECTltiCAL CoKPOBATIONS 17 not more than one year) shall be charged to the appropriate operating expense account when issued for use, and prior to that time they shall be carried iu the appropriate •'Materials and Supplies" account. Note C. — L'pon filing with the Public Service Commission a notice thereof, the accounting corporation may also include in this account the cost of long-life in- candescent lamps temporarily withdrawn from service. E174. Electric Motoes and Heaters. Charge to this account the cost of all property of the company in electric motors and heaters leased to consumers (including municipalities), and of all appurtenances thereof, such as fans, etc. NoTi:. — Upon filing with the Public Service Commission a notice thereof, the ac- counting corporation may also Include in this account the cost of electric motors and heaters temporarily withdrawn from service. E175. Electric Tools and Implements. Charge to this account the cost of all tools and implements coming within the scope of the definition (see note, page 5) of electric fixed capital and not covsred by any of the foregoing equipment accounts, E176. Electric Laroratory Equipment. Charge to this account the cost of all testing apparatus and laboratory equipment not elsewhere provided for. Xdtk. — This account includes all electric testing apparatus and equipment in laboratories. It does not include such instruments as are permanently assigned to generating stations, sub-stations, and the like, such as station ammeters, volt- meters, and wattmeters, etc. E177. Other Tangible Electric Capital. Charge to this account tlie cost of all tangible electric capital not elsewhere provided for. E281. Engineering and Superintendence. Charge to this account all expenditures for services of engineers, drafts- men, and superintendents employed on preliminary and construction work, and all expenses incident to tlie work, when such disbursements can not be assigned to specific construction. Note. — When employees enumerated above are engaged m work not chargeable to constriictlon, their pay and expenses shall be charged to the specific work on which engaged. E2S2. Law Expenditures During Construction. Charge to this account general expenditures of the following nature, in- curred in connection with the construction of an electric plant, namely: the pay ond expenses of all counsel, solicitors, and attorneys, their clerks and attendants, and expenses of their oflice5= ; printing briefs, legal forms, testi- mony, reports, etc.; payments to arbitrators for the settlement of disputed questions; costs of suit and payments of special fees, notarial fees, and witness tees; and expenses connected with taking depositions; also all legal and court expenses. When any of the expenditures above enumerated can be charged directly to the account for which incurred, they shall be so charged and not to this ac- count. Expenditures in connection with the acquisition of the right of way or other land shall be charged to account No. EllO, "Land Devoted to Electric Operations ". Law expenditures in connection with the organization of the corporation shall be charged to account No. 101, " Organization ". E283. Injuries During Construction. Charge to this account all expenditures incident to injuries to persons when caused directly in connection with construction of electric plant and equip 18 Public Service Commission, Second Distkiot ment ; proportion of salaries and expenses of physicians and surgeons ; nursing and hospital attendance, medical and surgical supplies, artificial limbs, rail- road and carnage fares for conveying injured persons and attendants; funeral expenses (including payments to undertakers) ; proportion of pay and ex- penses of claim adjusters and their clerks, and pay and expenses of employees and others called in consultation in relation to the adjustment of claims coming under this head; also witness fees and amount of final judgments. E284. Taxes During Constbuction. Charge to this account all taxes and assessments levied and paid on prop- erty belonging to the corporation while under construction and before the plant is opened for commercial operation, except special taxes assessed for street and other improvements, such as grading, sewering, curbing, gutterin<;. paving, sidewalks, etc., which shall be charged to the account to which the property benefited is charged. E285. Miscellaneous Construction Expenditures. Charge to this account the salaries and expenses of executive and general officers of an electric plant under construction; clerks in general offices en- gaged on construction accounts or work; rent and repair of general offices when rented, with the office expenses; insurance during construction; also all construction and equipment items of a special and incidental nature which can not properly bo charged to any other account in this classification. Note A. — This account may include a suitable proportion of store expenses when such expenses are not assignable to specific materials. Note B. — This account shall not include any costs of organization, or any costs or discounts connected with the issue and disposal of stocks, funded debt, or other securities, and commercial paper. E286. Interest During Construction. Charge to this account the interest accrued upon all moneys (and credits available upon demand) acquired for use in connection with the construction and equipment of the property from the time of such acquisition until the construction is ready for use. Interest receivable accrued upon such moneys and credits shall be credited to this account. To this account shall also be credited discounts realized through prompt payment of bills for materials and supplies used in construction unless such discounts are credited to the particular bills. Olio. Land in Other Departments. Charge to this account the cost of the corporation's interests in land (exclusive of improvements thereon) devoted to operations other than electric operations, gas operations, railroad operations, and street railroad operations.' Such cost includes, when assumed or when paid by the purchaser in its own behalf, cost of registration of title, cost of examination of title, conveyancer's and notary's fees, purchasing agent's commissions or fees, or proportion of purchasing agent's salary, taxes accrued to date of transfer of title, ai:d all liens upon the title acquired. If at the time of acquisition of such interest > Note. — Gas Capital, Railroad Capital, and Street Railroad Capital. — For the accounts to which shall be charged the cost of capital devoted to gas operations, see the Uniform System of Accounts for Gas Corporations ; for steam railroad operations, see the Uniform System of Accounts for Expenditures for Uoad and Equipment, etc., as established for Steam Railroad Corporations by the Public Service Commission ; and for electric railroad and street railroad operations, set the Uniform System of Accounts for Street Railroad Corporations. Accounts for Electric ai. Corporations 19 in lands it extends to b*iildings or other improvements thereon, which im- provements are devoted by tlie corporation to operations other than the four classes above mentioned, and the contract of acquisition does not determine the price of such improvements, they shall be appraised at their fair cash value, and such appraised value shall be charged to tiie appropriate accounts and excluded from the account " Land in Other Departments ". If such im- provements ar"^ held as investments, the cost (or appraised value at time of acquisition of title if the cost to the corporation is not determined in the contract of acquisition) shall be charged to the appropriate investment ac- count. If the improvements are removed or wrecked, the salvage (less the cost of removal or wreckage) shall be excluded from the account " Land in Other Departments ". O102. Franchises in Other Departments. Charge to this account "the amount (exclusive of any tax or annual charge) actually paid to the State or to a political subdivision thereof as the consideration for the grant of such franchise or right " as is necessary to the conduct of the corporation's operations other than electric, gas, rail- road, and street railroad. O103. Patent-rights in Other Departments. Charge to this account the cost of all rights (having a life of more than one year from the date when placed in service) acquired by the corporation in or under valid patents granted by the United States to inventors for in- ventions and discoveries which are necessary to the economical conduct of the corporation's operations other than electric, gas, railroad, and street rail- road. O104. Other Intangible Capital in Other Departments. Charge to this account the cost of all property of the corporation coming within the definition of intangible capital devoted to its operations other than electric, gas, railroad, and street railroad, and not includible under any of the foregoing accounts. O120. Tangible Capital in Other Departments. Charge to this account the cost of all property of the corporation coming within the definition of tangible capital devoted to its operations other than electric, gas, railroad, and street railroad. 25. Floating Capital divided into two groups. — Floating capital is divided into two great groups, of which the first is herein called "Materials and Sup- plies," and the second, " Current Assets ". 26. Definitions of Floating Capital accounts. — In the following definitions the letters and figures prefixed to the titles of the accounts are no part of the titles and are inserted merely for convenience of reference: ElO. Materials and Supplies. Charge to this account the cost (including transportation) of all materials and supplies acquired by the corporation, regardless of whetiier the same are intended to be consumed in constryction or in operation, or later to be sold. Where discounts recovered through prompt payment are not credited to the particular bills, the cost at which such materials and supplies shall be charged shall be the invoice cost, and any discounts recovered throu<»h prompt payment of bills for such materials and supplies shall be credited to 20 Public Seevice Commission, Second Distsict account No. E28G, " Interest During Construction," or to account No. E852, •' Undistributed Adjustments — Balance," according as such materials and supplies are intended for construction or for operation. The scrap value of things retired from service shall be charged to an appro- priate sub-account in this account while such things remain the property of the corporation. If such scrap value is not known and can not readily be determined it shall be estimated, and errors in such estimates when deter- mined shall be adjusted through the accounts involved if during the year in whJch the estimates were made; if later, then through the " Corporate Surplus or Deficit " account. Inventories of materials and supplies shall be taken at least annually, and any shortages or overages disclosed by such inventories shall be credited or debited to this account and debited or credited to the operating expense ac- count No. E852, "Undistributed Adjustments — Balance," in case thoy can not be assigned to specific accounts. Shortages may, however, be chargetl tlirectly to " Corporate Surplus or Deficit ". Where such materials and sup plies have been used in construction, a suitable proportion of such shortage.* or overages may be debited or credited to account No. E285, " Miscellaneous Construction Expenditures ". XoTK. — It is not required that the transportation element of cost shall be iissiKDod with a greater degree of accuracy than to the nearest cent per unit of iii.n ferial or supply. Where a single transportation Item covers a multitude of tilings the portion of the expense not assigned to specific things should be charged to the same account that store expenses are charged to. 1. Cash. Charge to this account all money coming into the possession of the corpora- tion and in which the corporation has the beneficial interest. This includes coin of the United States, United States treasury notes, gold and silver cer- tificates and greenbacks, and bank bills payable to bearer. Also charge to it all bank credits, checks and drafts receivable, subject to satisfaction or . transfer upon demand (whether payable to bearer or to order). Credit thi? account with all cash ^disbursements of the corporation. 2. Bills Receivable. : .* Charge to this account the cost of all bills receivable (except as below provided) which are the property of the corporation and upon which solvent concerns are liable or which are sufficiently secured to be considered good. This account includes demand notes, drafts, etc., issued by others than banks, and time notes, drafts, etc., by whomever issued. This account does not in- clude investments (for which see page 21) ; nor does it include interest coupons. 3. Accounts Receivable. Charge to this account all amounts owing to the corporation upon ac- counts with solvent concerns (other than banks) ; also the cost of all accounts and claims upon which responsibility is acknowledged by solvent concerns or which are sufficiently secured to be considered good, and of all judj^nientn against solvent concerns where the judgment is not appealable or suspended through appeal. This account does not include negotfables. 4. Intebest and Dividends Reckivable. Whenever the income account is stated t!ie ap])ro|)riatc sub-.nccount therein shall be credited, and this account shall be chmged witli all accrued but Accounts fob Electrical Cokpoeations 21 not yet collected interest upon all commercial paper and accounts considered collectible held by or for the benefit of the corporation; also all divideiuls declared or guaranteed by solvent concerns but not yet collected, the right to which is in the corporation. 5. Otheb Current Assets, Charge to this account the cost of all current assets of the corporation which are not includible under any of the last four foregoing accounts. By current assets are meant only those things which are readily convertible into money and which are held with the intent of being presently converted into money and not as investments. 27. Investments defined. — By Investments, as here used, are meant all prop- erties acquired not for use in present operations, but as a means of obtaining or exercising control over other corporations, or for income to be derived from them, or for a rise in value, or for devotion to future operations at a time when it seems probable that they can not be so advantageously acquired as at the time of actual acquisition. By hound investments are meant those held subject to a lien of some character; by free investments are meant tnose held free of all liens. 300. Investments. The cost of the corporation's title to any property held as an investment shall be charged to an account entitled " Investments ". Note. — In the annual reports to be made to the Public Service Commission by the corporations and other persons engaged in electric operations, investments, whether bound or free, will be required to be classified with at least the following detail : Bound investments will be required to be divided into the three classes : " Mort- gaged or Pledged Investments," " Contractual Fund Investments," and " Other Bound Investments ". Each of these three classes, and the class " Fi'ee Invest- ments," will be required to be subdivided into the following : Funded Debt of Con- trolling Corporations. Funded Debt of Affiliated Corporations, Funded Debt of Con- trolled Corporations, Stocks of Controlling Corporations, Stocks of Affiliated Cor- porations, Stocks of Controlled Corporations, Advances to Controlled Corporations, Funded Debt of Other Corporations, Stocks of Other Corporations, Land, Improve- ments on Land, and Other Investments. 28. Special Deposits defined. — By Special Deposits, as here used, are meant amounts of money and bank credits in the hands of fiscal and other agents of the corporation for the payment of coupons, dividends, or other special purposes. Credits at banks subject to check of the corporation or its agents for general purposes, deposits at banks whether withdrawable at pleasure or after a specified time, amounts of money in safety deposit vaults, etc., so long as they are available for general purposes of the corporation, shall be excluded herefrom. 311. Coupon Special Deposits. Charge to this account all moneys and bank credits specially deposited in the hands of fiscal agents or other agents of the corporation for the payment of interest coupons when presented. Such coupons when paid from such deposits shall be credited to this account and charged to the appropriate matured interest account. Payments to trustees (or other agents) of the holders of bonds or other securities of the interest accrued thereon which op- erate under the terms of the securities (or of mortgages support in;^ such securities) as a release of the paying corporation from further liability for such interest shall not be charged to this account, but to the appropriate " Interest Accrued " account. 22 Public Seevice Commission, Second Distbict 312. Dividend Special Deposits. Charge to this account all moneys and bank credits specially deposited in the hands of fiscal agents or other agents of the corporation for the payment of dividends upon the corporation's stocks. Such dividends when paid from such deposits shall be credited to this account and charged to the appropriate dividend account. 313. Other Special Deposits. Charge to this account all moneys and bank credits deposited in the hands of fiscal agents or other agents of the corporation for other special purposes than the payment of interest coupons and dividends. Charges to this account shall specify the purpose for which the deposit is made. When such purposes are satisfied this account shall be credited with the amount specially deposited to provide such satisfaction. 29. Prepayments. — When pa3'ments for taxes, insurance, rents, and the like are made in advance of the actual accrual thereof, the amount of the advance payment shall be charged to the appropriate account in this group. As such taxes, etc., accrue, the appropriate prepayment account shall be credited and the appropriate expense or other income account shall be charged. Note. — By the accrual of taxes, Insurance, rents, etc., is meant their accumula- tion when considered as spread uniformly over the period to which they apply. Thus, if the rent fixed by contract of lease for a certain property is $600 for a calendar year, this accrues at the rate of $50 each month (unless it is desired to base the accrual on days, when of course the varying lengths of the months would require to be consioered), regardless of the actual times when the rent matures; $50 should thus (if the rent has been prepaid) be credited each month to the account " Prepaid Rents," and concurrently charged to the appropriate account In the " Income " account. Similarly in the case of other prepayments. 321. Prepaid Taxes. When taxes are paid in advance of their accrual, the amount prepaid shall be charged to this account. As the taxes thus prepaid accrue, they shall be credited at monthly intervals to this account and charged to the appropriate taxes account. This account must not include any so called taxes, like water taxes, drainage taxes, fire taxes, etc., which are payments for special benefits received. Such payments for special benefits, where finally chargeable to operating expenses, must, when prepaid, be charged to account No. 324, " Other Prepayments ". 322. Prepaid Insurance. When premiums on insurance policies are paid in advance of their accrual, the amoimt prepaid (whether paid in cash or by the issue of notes or other negotiable paper) shall be charged to this account. As such premiums accrue they shall be credited at monthly intervals to this account and charged to the appropriate expense account. 323. Prepaid Rents. When rents are paid in advance of the enjoyment of the term, the amount prepaid (whether paid in cash or by the issue of notes or other negotiable paper) shall be charged to this account. As the term is consumed, this account shall be credited at monthly intervals and the appropriate rent account in the income account shall be charged. 324. Other Prepayments. When prepayments are made for any other thing than taxes, insurance, and rents, above provided for, such prepayments shall be charged to this account; Accounts fob Electbical Cobpokations 23 and as the purpose of the prepayment is satisfied, proportionate amounts shall be credited quarterly to this account and charged to the appropriate • expense or income account. 30. Suspense. — When any expenditure is made, the appropriate disposition of which is not yet determinable, or when any loss occurs which under the rules of the Public Service Commission may be spread over a period of time, or when any debit made for any other reason may be amortized through charges made to expense or other income accounts at intervals over a period of time, such expenditure, loss, or other debit shall, except as herein other- wise directed, be charged to an appropriate account in this group of accounts. Note. — Bj " amortization " of any charge or credit is meant its gradual ex- tinction. Tiie word is broader than the word " depreciation," since the latter is restricted ordinarily to taugible property. The word " depreciation " also imports more of the idea of fluctuating value and is complicated somewhat with the question of cost of replacement at market prices. Because it is considered unnecessary in connection with the gradual consumption or expiration of life of capital to con- sider the question of cost of replacement until the replacement is actually made, at which time the cost of replacement is duly charged to the appropriate account, and because provision is necessary for the gradual extinction of certain charges (such as those for some Itlnds of capital, those for extraordinary casualties, for discount ou debt, etc.), to which the term "depreciation" does not well apply, it is considered advisable to use the term " amortization " in connection with the extinction of such charges, and of certain corresponding credits, such as premiums on debt outstanding. 331. Unamortized Debt Discount and Expense. When funded debt securities and other evidences of indebtedness are dis- posed of for a consideration whose cash value is less than the sum of the par value of the securities or other evidences of indebtedness and the interest thereon accrued at the time the transfer takes place, the excess of such sum of the par value and accrued interest over the cash value of the consideratioii received shall be charged to this account. To this account shall also be charged all expense connected with the issue and sale of evidences of debt, such as fees for drafting mortgages and trust deeds, fees and taxes for record ing mortgages and trust deeds, cost of engraving and printing bonds, certifi cates of indebtedness, and other commercial paper having a life of more than one year, fees paid trustees provided for in mortgages and trust deeds, fees and commissions paid underwriters and brokers for marketing such evidences of debt, and other like expense. At or before the close of each fiscal period thereafter, a proportion of such discount and expense based upon the life of the security to maturity shall be credited to this account and charged t<» account No. 928, "Amortization of Debt Discount and Expense ". Such dis- count and expense may, if desired, be amortized more rapidly through charges of all or any part of it, either at the time of issue or later, .o the account " Other Deductions from Surplus ". 332. Other Suspense. To this account shall be made all debits not elsewhere provided for and the proper final disposition of which is imcertain. This will include all such matters as expense of preliminary surveys, plans, investigations, etc., made for determining the feasibility of projects under contemplation. Should ajiy such project later be carried to completion, such amounts shall be credited to this account and charged to the proper capital account; should it be abandoned, such amounts shall be charged to " Corporate Surplus or Deficit ". 24 Public Service Commission, Second District When the proper disposition of any matter charged to this account is deter- mined, it shall be credited to this account and charged to the appropriate account. 31. Securities Actually Issued and Later Re-acquired, — For the case of securities actually issued by the corporation and later re-acquired by it, the following account is provided: 340. Re-acquired Securities. When securities, whetlier funded debt or stocks, have been actually issuel, ''Commercial Administration — Electric". (See page 43.) ES3.5. (JE^EKAL Office Supplies and Expenses. Charge to this account the cost of office supplies, repairs of office furniture, and renewals of suoh furniture as has not been capitalized; wages of jani- tors, porters, and messengers; rent of rooms in office buildings, repairs of such rented rooms, and all other miscellaneous expenses of general offices. Office expenses of departmental officers must be charged to the proper depart- mental accounts. NoTK. — Rents charged to this account will be required to be reported separately. E836. General Law Expenses. Charge to this account all law expenses excejjt those incurred in the de- fense and settlement of damage claims. This includes salaries and expenses of all counsel, solicitors, and attorneys, their clerks and attendants, and expenses of their offices; cost of law books, printing briefs, legal forms, testimony, reports, etc.; fees and retainers for services of attorneys not regu- lar employees; court costs and payments of special, notarial, and witness fees not provided for elsewhere; expenses connected with taking depositions, and all law and court expenses not provided for elsewhere. Note. — Tlie compensation of the general solicitor or counsel or other attorneys engaged partly in the defense or settlement of damage suits and partly in other legal work, should be properly apportioned between this account and account No. E847b, " Law Expenses Connected with Damages ". E837. Miscellaneous General Expenses. Charge to this account the cost of telephone service, telegrams, and other miscellaneous expenses (including all expense specially incurred in connection with the utilization and sale of byproducts, such as battery and other chem- ical waste, etc.) connected with the general management not otherwise pro- vided for. E838. Insurance. Charge to this account premiums paid to insurance companies for fire, fidelity, boiler, casualty, burglar, and all other insurance; also amounts set aside as an insurance reserve. Note. — In their reports to the I'ublic Service Commission corporations will be re- quired to report the charges made to this account for the various kinds of insur- ance, and for self -insurance. ES39a. Relief Department Expenses. Charge to this account all salaries and e.xpenses incurred in connection with conducting a relief department; also contributions made to such de- partment. E839^b. Pensions. Charge to this account all pensions paid to retired employees, and expenses in connection therewith. E840. Electric Franchise Requirements. Charge to this account the cost of all energy and materials and supplies furnished to municipal corporations in compliance with franchise require- ments and for which no payment is received by the corporation; also of all direct expense, such as paving and other like matters, incurred in compliance with such requirements and for which no reimbursement is received by the 46 Public Service Commission, Second District corporation. Amounts charged to this account for which there is no direct mosey outlay shall be credited to the below provided account, Xo. E853, "Duplicate Electric Charges — Cr." (See page 48.) E842. General Amortization — Electric. Charge to this account montli by month the amount estimated to be neces- sary to cover such wear and tear and obsolescence and inadequacy as have accrued during the month in the tangible electric capital of the corporation, such portion of the life of intangible fixed capital as has expired or been consumed during the month, and the amount estimated to be necessary to provide a reserve to cover the cost of property destroyed by extraordinary casualties; less the amounts chargad for that month to the various repair accounts in Electric Operating Expenses. The amount charged (or credited) to this account shall be concurrently credited (or charged) to the reserve account No. 374, "Accrued Amortization of Capital "'. (See page 27.) Note A. — Until otherwise ordered, the " amount estimated to be necessary to cover such wear and tear and obsolescence and inadequacy as have accrued dur- ing " any month shall be based on a rule determined by the accounting corporation. Such rule may be derived from a consideration of the said corporation's history and experience during the preceding five years, and the accrual may be on the basis of kilowatt-hours sold. Amortization of intangible capital shall likewise be based on rule. Whatever may be its basis, such rules and a sworn statement of the facts and expert opinions and estimates upon which they are based shall be filed with the Public Service Commission on or before January 1, 1909; each amendment of any such rule and a sworn statement of the facts and expert opinions and estimates upon which such amendment is based shall be filed with the Public Service Commission before it is used by the accounting corporation, and shall show the date when it is to be effective. Such rules and statements shall be filed upon sheets 9% inches by 12 inches and shall be entitled " Rule of the (here naming the accounting corporation) concerning Amortization of Capital". NoTK B. — When any capital is retired from service, the amount (estimated if not known) originally charged to a capital account in respect thereof shall be credited to such capital account, and (except as provided in account No. ElOO, " Fixed Capital, December 31, 190S,") the original money cost of such capital, less salvage, if any, shall be charged to the reserve account, "Accrued Amortization of Capital," any necessary adjusting entry being made in the proper account under '• Corporate Surplus or Deficit ". Where capital Is substantially continuous and can not be satisfactorily Individualized, it shall be kept in efficient operating con- dition through repair, and the renewals and replacements of parts thereof shall be considered repairs. In the case of buildings, towers, bridges, trestles, and other separate structures capable of l>eing readily individualized, charges to this account must be sufficient to provide (In respect of such capital and except as provided in account No. ElOO, " Fixed Capital, December 31, 1908,") in the account "Accrued Amortization of Capital " by the time such structures go out of service a reserve equal to the original money cost thereof, less salvage, to which account such original cost, less salvage, shall be charged. E845. Electric Expenses Transferred — Or. Credit to this account the proportion of operating expenses (including depreciation and other amortization as well as repairs) chargeable to other coordinate departments (such as gas or street railroad) within the same corporation, but defrayed in the first instance by the electric department. NoTK. — Do not credit to this account any allowance in the nature of rent or return upon the cost or value of property. E84G. Joint Operating Expense — Cr. When any plant or equipment is maintained or operated by the accounting corporation for the joint benefit of itself and others under an arrangement Accounts foe Electbicai. Coepoeations 47 for apportioning (on the basis of the relative amounts of benefit to the several participants) the operating expenses, the portion of such expenses chargeable to others under the arrangement shall be credited to this account. The portion so credited must not include any allowance for profit or return upon the value of such property. Note A. — The foregoing should be read in connection with the definition of revenue account No. 425, "Joint Electric Rent Uevenue ". (See page 33.) Note B. — In the case of the production of power part of which is transferred to another, If the arrangement under which such production occurs does not provide for the apportionment of expenses, the entire amount charged for the portion sup- plied is to be ci'edited to the appropriate revenue account covering the sale of power. (See accounts Nos. 404, 407, 409, 410, and 411, page 32.) E847a. Accidents and Damaok.s. Charge to this account all expenses (other than law expenses provided for in the succeeding account) on account of persons killed or injured and property damaged in connection with the operation of the plant, as enumer- ated under the following heads, which must be separately shown in annual reports to the Public Service Commission: a. Claim Department Expense: This head includes salaries and expenses of claim agents, investigators, adjusters, and others engaged in the investi- gation of accidents and adjustment of claims. b. Medical Expenses: This head includes salaries, fees, and expenses of surgeons and doctors; nursing, hospital attendance, medical and surgical supplies; fees and expenses of coroners and undertakers; and contributions to hospitals. c. Injuries to Employees: This head includes amounts paid in settle- ment of claims of employees for injuries arising in the course of their em- ployment; also wages paid to disabled employees while off duty. d. Other Personal Injuries and Property Damage: This head includes amounts paid in settlement of claims of persons other than employees for personal injuries sustained in connection with the operation of the plant; also amounts paid in settlement of claims for damage to property not owned by the accounting corporation. e. Other Accident Expenses. Note. — If It is desired that the charge to operating expenses on account of in- juries and damages shall he upon some arbitrary basis, the amount so charged shall be credited to account No. 381, " Casualties and Insurance Reserve," and the actual disbursements above enumerated shall be charged against such reserve account. E847b. Law Expenses Connected with Damages. Charge to this account all law expenses in connection with the defense or settlement of damage claims, including — a. Salaries and Expenses of Attorneys: A proper proportion of the salary and expenses of the general solicitor or counsel, and salaries, fees, and expenses of attorneys engaged in this work. b. Court Costs and Expenses: Fees of court stenographers, expenses con- nected with taking depositions, and other court expenses. c. Law Printing: Cost of law books, and cost of pr'nting briefs, court records, and similar papeis. Note A. — In their annual reports to the Public Service Commlssfoj corporations will be required to classify the charges to this account under the thee heads, (a), (b) and (c), above i;ivcn. 48 PcBLic Seuvice Commission, Second District NoTK B. — The fomiK'Hsation of the g<'n(MMl sdlicitor or counsel and other attor- neys engaffed partly in the defense or settlement of damase suits and partly In other legal work should be properly apportioned between this aecount and account No. E836, "General Law Expenses". Note C. — If It is desired that the charge to operating expenses on account of law expenses In connection with damages shall be upon some arbitrary basis, the amount so charged shall be credited to account No. 381, " Casualties and Insurance Reserve," and the actual disbursements above enumerated shall be charged against such reserve account. E848. Gk.nkral Stationery and Pbinting. Charge to this account all expenses for stationery and printing, stationery supplies, and postage, except as hereinafter provided: The cost of printing briefs and other legal papers shall be charged to account No. E8.3G, "General Law Expenses," or No. E847b, "Law Ex|)enses Connected with Damages," in accordance with the purpose of the printing. The cost of printing signs, posters, and other advertising matter shall be charged to account No. E5o3, "Advertising — Electric". The cost of such mechanical calculators, typewriters, duplicating machines, and other ollice appliances as are not properlj' capitalized, shall, if for use in general offices, be cluugi'd to account No. E835, " General Oflice Supplies and Expenses"; or if for the use of departmental offices, to the proper depart- mental accounts. E850. Store ICxpenses. Charge to this account all salaries and expenses in connection with store- rooms, including cost of sending material and supplies from general store- rooms to branch storerooms, and the collection of scrap material.' E85L SxABLii Expenses. Charge to this account the cost of feed, keep, and shoeing of horses, wages of stablemen, hostlers, veterinary expenses, and all other expenses of stabling horses; also the cost of repairing harness and vehicles. Note. — The cost of horses purchased to replace others should be cha:y:cd to account No. El 22, " General Equipment ". E852. Undistributed Adjustments — Balance. At least once a year an inventory of materials and supplies shall be taken, and the diff'erence (in respect of any particular class of materials and sup- plies) between the ledger and inventory balances debited or credited to thii account in case it can not be a.ssigne E501c. Producer Labor 35 E50id. Engine T^abor 35 E501e. Electric Labor 35 E502a. P\iel for Steam 35 E502b. Fuel for Producer Gas 35 E503a. Water for Steam Power and Gas 35 E503b. Water for Hydraulic Power 35 E504. Lubricants for Power 35 E505a. Production Supplies 36 E505b. Station Expense 36 E507. Repairs of Power Plant Buildings 36 E508a. Repairs of Furnaces and Boilers 36 E508b. Repairs of Boiler Apparatus 36 E508e. Repairs of Steam Accessories 36 E509a. Repairs of Reciprocating Engines 37 E509b. Repairs of Steam Turbines 37 E50f)c. Repairs of Other Steam Engine Equipment 37 E510a. Repairs of Dams, Canals, and Pipe Lines 37 E510b. Repairs of Turbines and Water-wheels 37 E511a. Repairs of Gas Producers and Accessories 37 E511b. Repairs of Gas Engines 37 IC512a. Repairs of Electric Generators 37 E512b. Repairs of Accessory Electric Equipment 37 E513a. Repairs of Station Tools and Implements 38 E513b. Repairs of Miscellaneous Station Equipment 38 E514. Steam from Other Sources 38 E515. Power Gas from Other Sources 38 E516. Electric Energy from Other Sources 38 II. Transmission Expanses. E521a. Transmission Subway Rent 38 E522a. Transmission Pole and Fixture Repairs 39 E523a. Transmission Underground Conduit Repairs 39 " E524a. Overhead Transmission System Repairs 39 E524b. Underground Transmission System Repairs 39 B525. Sub-station Labor 39 E526. Sub-station Supplies and Expenses 39 E527. Repairs of Sub-station Buildings 40 F528. Repairs of Sub-station Equipment 40 /// . Elei trie Storage Expert es. E529a. Storage Battery Labor , 40 E529b. Storage Battery Supplies 40 E529c. Storage Battery Renewals 40 E529d. Repairs of Storage Battery Accessories 40 IV. Distribution, Expenses. E531. Electric Dlstrilnition Si;perintendence 40 E532a. Electric Distribution Maps and IJecords 40 R532b. Electric Distribution Office Expense 40 60 Public See vice Commission, Second Distkict FAOK E533. Setting and Removing Meters and Transformers 41 E521b. Distribution Subway Rent 41 E522b. Distribution Pole and Fixture Repairs 41 E523b. Distribution Underground Conduit Repairs 41 E534a. Overhead Distribution System Repairs 41 E534b. Edison Tube System Repairs 41 E534e. Other Underground Distribution System Repairs 41 E535a. Repairs of Electric Services 41 E535b. Repairs of Transformers 42 E536a. Electric Meter Operation 42 E536b. Electric Meter Repairs 42 V. Utilization Expc: scs. 541a. Commercial Arc Labor 42 541b. Commercial Arc Supplies 42 542. Commercial Arc Repairs 42 543a. Commercial Incandescent Installation 42 543b. Commercial Incandescent Renewals 42 544a. Inspection of Consumers' Premises 42 544b. Repairs of Consumers' Installations. 42 545a. Municipal Street Arc Labor 43 545b. Municipal Street Arc Supplies 43 546. Municipal Street Arc Repairs 43 547a. Municipal Street Incandescent Installation 43 547b. Municipal Street Incandescent Renewals 43 548. Municipal Street Incandescent Repairs 43 VI. Commercial Expenses. 10551. Commercial Administration — Electric 43 F552. Promotion Office Expense — Electric 44 E553. Advertising — Electric 44 E554. Canvassing and Soliciting — Electric 4i E555. Promotion Wiring and Devices 44 VII. General and Miscellaneous Expenses. E833. Salaries and Expenses of General Officers 44 10834. Salaries and Expenses of General Office Clerks 44 13835. General Office Supplies and Expenses 45 E836. General Law Expenses 45 E837. Miscellaneous General Expenses 45 E838. Insurance 45 E839a. Relief Department Expenses 45 E839b. Pensions 45 E840. Electric Franchise Requirements 45 E842. General Amortization — Electric 46 E845. Electric Expenses Transferred — Cr 46 E846. Joint Operating Expense — Cr 46 E847a. Accidents and Damages 47 E847b. Law Expenses Connected with Damages 47 E848. General Stationery and Printing 48 E850. Store Expenses 48 E851. Stable Expenses 48 E852. Undistributed Adjustments — Balance 48 E853. Duplicate Electric Charges — Cr 48 Taxes. E860. Taxes 40 E870. Uncollectible Electric Bills 4U Non-operating Revenues. E901a. Rent Accrued from Lease of Electric Plant 49 EOOld. Miscellaneous Rent Revenues 50 902. Interest Revenues 50 903. Dividend Revebiios 50 904. Profits from Operations of Others 51 905. Miscellaneous Non-operating Revenues 61 List OF'-Aet'o^xTs *•.■■*:*%:'•; :/.\ 61 NOX-OrERATIXG REVENUE DEDUCTIONS. PAGE. 910. Non-operatinj? Reveuiie Deductions 51 a. Kent Expense .• 51 b. Interest lOxpense 51 e. Dividend Expense 51 d. Others' Operations Expense 51 e. Miscellaneous Non-operating Expense 52 f. Non-operating Taxes 52 g. Uncollectible Non-operating Revenues 52 Income Deductions. 921. Interest Deductions 52 922a. Rent for Lease of Other Electric Plant 53 922f. Joint Facility Rents 53 022g. Miscellaneous Rent Deductions 53 923. Sinking Fund Accruals 53 924. Guaranties of Periodic Payments 53 925. Loss on Operations of Others 54 926^ Other Contractual Deductions from Income 54 927. Amortization of Landed Capital 54 928. Amortization of Debt Discount and Expense 54 929. Amortization of Premium on Debt — Cr 54 Appropriation Accounts. 931a. Bad Debts Collected '. 55 931b. Other Additions to Surplus 55 932. Expenses Elsewhere Unprovided for 55 933. Dividends on Outstanding Stocks 55 934. Amortization Elsewhere Unprovided for 55 935. Appropriations to Reserves 56 936. Gifts to Controlled Corporations 56 937. Other Appropriations 56 938. Bad Debts Written Off 56 939. Other Deductions from fe^nrplus 56 ■^t,>^