Utility Financial & Accounting Basics for Third Party Attachment Agreements

Abstract Description: Third party attachment agreements are unique for utility companies and have provided wide-range opportunities for utilities to increase and improve clientele, community relations, infrastructure, real estate, and job creation. Like many, Utilities bill third parties and document the transactions differently from each other. The Telecommunications Act of 1996 created the foundation for third party co-location, where utilities allow for attachments to their infrastructure by third parties. The Federal Energy Regulatory Commission (FERC) has established regulatory accounting and financial reporting requirements for its jurisdictional entities in the electric, natural gas, and oil pipeline industries. Electric Public Utilities & Licensees, Natural Gas, and Oil Pipeline companies within FERC jurisdiction are required to maintain their books and records, in accordance with the Commission's Uniform System of Accounts (USofA).

This presentation will review common scenarios of what take place after a third party attachment agreement is executed. Each utility may have its own billing standards. Therefore, this is a general approach to the different processes of third-party billing and its associated accounting methods / resources, internal resources, and accounting systems.