CHAPTER 16
ACCOUNTING
[Prior to 10/8/86, Commerce Commission[250]]
199—16.1(476) Accounting—general information.
	16.1(1) Application of rules. These rules shall apply to any utility operating within the state of Iowa under the jurisdiction of the board pursuant to Iowa Code chapter 476, subject to the following conditions:
	a. 	A utility may request a waiver of any of the rules in this chapter by filing a request for waiver pursuant to 199 IAC 1.3(17A,474,476,78GA,HF2206).
	b. 	The adoption of these rules shall in no way preclude the board from altering or amending them, or from making such modifications with respect to their application as may be found necessary to meet exceptional conditions.
	c. 	These rules shall in no way relieve any utility from any of its duties under the laws of this state.
	16.1(2) Effect of rules. In prescribing uniform systems of accounts for public utilities, the board does not commit itself to the approval or acceptance of any item set out in any account for the purpose of fixing rates or in determining other matters before the board. The prescribed systems of accounts are designed to set out the facts in connection with all sources of funds including incomes and amounts due and receivable from each source, and the amount expended and due for each purpose distinguishing clearly all payments for operating expenses from those of new construction, extensions and additions to property; and to provide for balance sheets showing various assets and liabilities and various forms of proprietary interest under uniform classifications; and, therefrom, the board will determine, in connection with such matters as may be under advisement from time to time, what consideration shall be given to the various items in the several accounts.
	16.1(3) Implementation of rules. Rescinded IAB 6/25/03, effective 7/30/03.
199—16.2(476) Uniform systems of accounts—electric. The uniform systems of accounts for public utilities and licensees subject to the provisions of the Federal Power Act, 18 CFR Part 101 published in the Federal Energy Regulatory Commission’s rules and regulations, in effect on April 1, 2000, and the January 1, 2002, uniform systems of accounts for rural electric cooperatives prescribed for electric borrowers of the Rural Utilities Service, as applicable, are adopted with the following modifications:
	16.2(1) Definition 7 published in 18 CFR Part 101 is changed to read: “Commission” means the board except where reference is made to the licensing authority of the Federal Energy Regulatory Commission (as in definitions 22 and 27), where Commission shall mean the Federal Energy Regulatory Commission. This change does not apply to definitions found in Rural Utilities Service uniform systems of accounts for rural electric cooperatives.
	16.2(2) Definition 29 published in 18 CFR Part 101 is changed to read: “Public Utility” means any natural or legal person, or other entity, defined as a public utility and made subject to the authority of the board by Iowa Code section 476.1. This change does not apply to definitions found in Rural Utilities Service uniform systems of accounts for rural electric cooperatives.
	16.2(3) Rescinded IAB 6/25/03, effective 7/30/03.
	16.2(4) General instruction 1-B of the uniform systems of accounts for electric utilities is modified by adding the following sentence: “Utilities subject to rate regulation by the board shall keep all the accounts of these systems of accounts which are applicable to their affairs, and utilities not subject to rate regulation shall keep the accounts of these systems of accounts for operating revenues only.”
	16.2(5) General instruction 1-D of the uniform systems of accounts for electric utilities is modified by adding the following sentence: “It is recommended but not required that electric utilities not subject to rate regulation, other than electric cooperatives, keep all applicable accounts in accordance with the Federal Energy Regulatory Commission uniform systems of accounts, 18 CFR Part 101.” Rural electric cooperatives not subject to rate regulation may choose to keep all applicable accounts in accordance with the Rural Utilities Service uniform systems of accounts.
	16.2(6) General instruction 2-D of the uniform systems of accounts for electric utilities is modified by adding the following sentence: “This shall not prohibit the electric utilities from using such additional accounts as they are required or permitted to keep for their reporting to other regulatory authorities or to their stockholders providing the board is notified of the nature, amount and purpose of such accounts in the annual report to the board and at such other times as may be requested by the board.”
	16.2(7) The definitions for the uniform systems of accounts for electric utilities, when used in account 424, Promotional Practices, are modified to include the following definitions:
	a. 	The word “affiliate” shall mean any person doing business in this state who directly or indirectly controls or is controlled by or is under common control with a public utility.
	b. 	The word “appliance” or “equipment” shall mean any device, including a fixture, which consumes electric energy and any ancillary device required for its operation.
	c. 	The word “consideration” shall mean any cash, donation, gift, allowance, rebate, bonds, merchandise (new or used), property (tangible or intangible), labor, service conveyance, commitment, right, or other thing of value.
	d. 	The word “financing” shall include acquisition of equity or debt interests, loans, guarantee of loans, advances, sale and repurchase agreements, sale and lease-back agreements, sales on open account, conditional or installment sales contracts, or other investment or extensions of credit.
	e. 	The word “person” shall include an individual, group, firm, partnership, corporation, cooperative, association, or other organization, but not including state or local political subdivisions or municipal corporations.
	f. 	The words “public utility” or “utility” shall include persons defined to be public utilities in Iowa Code section 476.1.
	g. 	The words “promotional practices” shall mean any consideration offered or granted by a public utility or its affiliate to any person for the purpose, express or implied, of inducing such person to select or use the service or additional service of such utility, or to select or install any appliance or equipment designed to use such utility service; provided that the words “promotional practices” shall not include the following activities:
	(1)	Providing repairs and service to appliances or equipment of customers of a public utility in an emergency or to restore service or to prevent hazardous conditions or service interruptions.
	(2)	Inspection and adjustment of appliances or equipment by a public utility.
	(3)	Repairs and other maintenance to appliances or equipment by a public utility that could be performed by an independent appliance dealer or service shop if charges are at a cost or above.
	(4)	Providing service, wiring, piping, appliances, or equipment in accordance with tariffs, rules, or regulations of a public utility on file with and approved by the board.
	(5)	Providing appliances, equipment, or instructional services to an educational institution for the purpose of instructing students in the use or repair of such appliances or equipment.
	(6)	Providing discounts or financing to employees of a public utility to encourage their use of the utility’s service.
	(7)	Merchandising and related inventorying of appliances or equipment for sale at retail and making and fulfilling reasonable warranties against defects in material and workmanship in appliances or equipment existing at the time of delivery; the elimination of hazardous conditions which due to a grandfather provision would not be corrected by the customer and yet would require correction to protect the public and minimize company liability.
	(8)	The replacement of or alterations to a customer’s obsolete or inefficient system.
	(9)	Technical, informational, or educational assistance offered to persons on the use of energy furnished by a public utility or on the use of maintenance of appliances or equipment.
	(10)	Lunches, gifts, door prizes, etc., presented for attendance at informational meetings, conferences, etc., valued at $10 or less shall not be considered to be a promotional practice.
	(11)	Providing appliances or equipment incidental to exhibitions, demonstrations, tests, or experiments of reasonable duration.
	(12)	Any promotional practice, or program which includes a promotional practice, designed to develop or implement programs that promote energy efficiency and are part of the utility’s energy efficiency plan developed pursuant to 199—Chapter 35.
	16.2(8) The uniform systems of accounts for electric utilities are modified to include the following:
	a. 	424 Promotional Practices. This account shall include the cost of labor, materials used, and expenses or losses incurred by the utility or an affiliate (where such costs are charged back to the company) on promotional practices. Promotional practices, or programs which include promotional practices, and the labor, materials, and expenses related to promotional practices which are exempted by subrule 16.7(2) need not be included in this account. The account shall include, but not be limited to, the following items:
	(1)	The financing of land or the construction of any building when the same is not owned or otherwise possessed by the utility or its affiliate, without board written approval.
	(2)	The furnishing of consideration to any person for work done or to be done on property not owned or otherwise possessed by the utility or its affiliate, except for the following: Studies to determine comparative capital or operating costs and expenses, or to show the desirability and feasibility of selecting one form of energy over another, contributions for research and development of new energy sources, etc.
	(3)	The acquisition from any person of any tangible or intangible property or service for a consideration in excess of the value thereof or the furnishing to any person of any tangible property or service for a consideration of less than the value thereof. “Value” in this instance is defined as the fair market price of the property or service under competitive market conditions and under arm’s length conditions.
	(4)	The furnishing of consideration to any person for the sale, installation, or use of appliances or equipment of one form of energy over another. Employees who are paid a commission in lieu of salary for the initial sale of appliances are exempted.
	(5)	The provision of free, or at less than cost or value, wiring, piping, appliances, or equipment to any person; provided that a utility, engaged in an appliance merchandising sales program, shall not be precluded from conducting legitimate closeouts of appliances, clearance sales, or sales of damaged or returned appliances. All items required by service rules of this board are exempted.
	(6)	The provision of free, or at less than cost or value, installation, operation, repair, modification, or maintenance of appliances, equipment, wiring or piping to any person. This would not include services provided for the convenience and safety of customers such as gas leak testing, lighting of furnaces, etc.
	(7)	The granting of a trade-in allowance on the purchase of any appliance or equipment in excess of the reasonable value of the trade-in based on the past experience of a company or the granting of a trade-in allowance for such appliance or equipment when such allowance varies by the type of energy consumed in the trade-in.
	(8)	The financing of the acquisition of any appliance or equipment at a rate of interest or on terms significantly more favorable than those generally applicable to sales by nonutility dealers in such appliances or equipment.
	(9)	The furnishing of consideration to any person for any advertising or publicity purpose, except where appropriately classified to another account.
	(10)	The guaranteeing of the maximum cost of electric utility service, except under published tariffs.
	(11)	Labor items related to promotional practices:
	1.	Salary of employees engaged directly or indirectly in promotional practices defined.
	2.	Clerical and stenographic work performed in relation to promotional practices.
	3.	Fees paid to consultants, agents, attorneys, etc., on related promotional practices.
	(12)	Materials and expenses related to promotional practices:
	1.	Amounts spent on postage, office supplies, displays, posters, exhibits, etc.
	2.	Films, movies, photographs prepared for promotional activities.
	3.	Expenses paid such as lodging, food, entertainment expenses.
	4.	Transportation by company auto or plane and public transportation of any mode.
	b. 	426 Miscellaneous Income Deductions. Immediately following the current text and item list, add the following:
	(1)	Promotional advertising expenses.
	(2)	Institutional or goodwill advertising expenses.
	(3)	Rate justification advertising expenses.
	c. 	426.4 Political Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising whether on a national, regional, or local basis, which are designed to influence public opinion with respect to the election or appointment of public officials or the adoption, repeal, revocation, or modification of referenda, legislation, or ordinances. The account shall also include expenditures for influencing the decisions of public officials, not including expenditures as are directly related to appearances before regulatory or other governmental bodies in connection with the utility’s existing or proposed operations.
	(2)	Entries relating to political advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where political advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.2(8)“c.”
	(4)	Labor items related to political advertising:
	1.	Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting promotional motion pictures, radio, and television programs.
	2.	Preparing booklets, bulletins, etc., used in direct mail.
	3.	Preparing window and other displays.
	4.	Clerical and stenographic work.
	5.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Material and expenses related to political advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Advertising matters such as posters, bulletins, booklets, and related items.
	3.	Fees and expenses of advertising agencies and commercial artists.
	4.	Novelties for general distribution.
	5.	Postage on direct-mail advertising.
	6.	Printing of booklets, dodgers, bulletins, etc.
	7.	Supplies and expenses in preparing advertising materials.
	8.	Office supplies and expenses.
Note:  Franchise advertising and related expenses shall be charged to account 913.5. See paragraph 16.2(8)“k” or FERC account 302.
	d. 	426.7 Promotional Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising designed to promote or retain the use of utility service, except advertising the sale of merchandise, load factor advertising, or advertising which is part of a promotional practice, or a program which includes a promotional practice, designed to develop or implement programs that promote energy efficiency and are part of the utility’s energy efficiency plan developed pursuant to 199—Chapter 35.
	(2)	Entries relating to promotional advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where promotional advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.2(8)“d.”
	(4)	Labor items related to promotional advertising:
	1.	Direct supervision of advertising activities.
	2.	Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	3.	Preparing booklets, bulletins, etc., used in direct mail.
	4.	Preparing window and other displays.
	5.	Clerical and stenographic work.
	6.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and Expenses related to promotional advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Advertising matters such as posters, bulletins, booklets, and related items.
	3.	Fees and expenses of advertising agencies and commercial artists.
	4.	Novelties for general distribution.
	5.	Postage on direct-mail advertising.
	6.	Premiums distributed generally, such as recipe books, etc., when not offered as inducement to purchase appliances.
	7.	Printing of booklets, dodgers, bulletins, etc.
	8.	Supplies and expenses in preparing advertising materials.
	9.	Office supplies and expenses.
Note A:  The cost of advertisements which sets forth the value or advantages of utility service (without reference to specific appliances or if reference is made to appliances from dealers or refers to appliances not carried for sale by the utility), shall be considered sales promotion advertising and charged to this account. However, advertisements which are limited to specific makes of appliances sold by the utility and prices, terms, etc., thereof, without referring to the value or advantages of utility service, shall be considered as merchandise advertising, and the cost shall be charged to FERC account 416, Costs and Expenses of Merchandising, Jobbing, and Contract Work.
Note B:  Advertisements which substantially mention or refer to the value or advantages of utility service, together with specific reference to makes or appliances sold by the utility and the price, terms, etc., thereof, and designed for the joint purpose of increasing the use of utility service and the sales of appliances, shall be considered as a combination advertisement, and the costs shall be distributed between this account and FERC account 416, Costs and Expenses of Merchandising, Jobbing, and Contract Work, on the basis of space, time, or other proportional factors.
	e. 	426.8 Institutional or Goodwill Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising which is designed to create, enhance, or sustain the utility’s image or goodwill to the general public or its customers.
	(2)	Entries relating to institutional or goodwill advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where institutional or goodwill advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.2(8)“e.”
	(4)	Labor items related to institutional or goodwill advertising:
	1.	Supervision of advertising activities.
	2.	Preparing material for newspapers, periodicals, billboards, etc., and preparing or conducting motion pictures, radio, and television programs.
	3.	Preparing booklets, bulletins, etc., used in direct mail.
	4.	Preparing window and other displays.
	5.	Clerical and stenographic work.
	6.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to institutional or goodwill advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Advertising matters such as posters, bulletins, booklets, and related items.
	3.	Fees and expenses of advertising agencies and commercial artists.
	4.	Postage on direct-mail advertising.
	5.	Printing of booklets, dodgers, bulletins, etc.
	6.	Supplies and expenses in preparing advertising materials.
	7.	Office supplies and expenses.
	8.	Novelties for general distribution.
Below are examples of the advertising to be included in this account:
	●	Pronouncements primarily lauding the utility or the area or community it serves.
	●	Advertising activities to inform the ratepayers of the social and economic advantages or status of the area or community it serves.
	●	Advertising activities to inform the public of the utility’s participation in programs to improve the economic condition of the area or community it serves.
	●	Advertising activities to inform the public of the utility’s role of good citizenship.
	●	Information and routine data supplied by the utility to local governments, planning agencies, civic groups, businesses, and the general public which is not inclusive in account 909.3, Informational Consumer Advertising Expenses. See paragraph 16.2(8)“i.”
	●	Advertising activities to inform the public of the utility’s consciousness of, or involvement in, health, safety, conservation, or environmental programs, except as included in accounts 909.1, 909.2, and 909.3.
	f. 	426.9 Rate Justification Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising, whether on a regional or local basis which is designed to promote public acceptance of utility rate increases or the utility’s filed rates. The account shall also include all costs incurred by the utility for advertising in opposition to the decision of the regulatory agency. However, the expenses associated with simply informing customers that new rates have been requested shall be recorded in FERC account 928, Regulatory Commission Expenses.
	(2)	Entries relating to rate justification advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate or any party involved in a discovery proceeding.
	(3)	Where advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.2(8)“f.”
	(4)	Labor items related to rate justification advertising:
	1.	Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	2.	Preparing booklets, bulletins, etc., used in direct mail.
	3.	Preparing window and other displays.
	4.	Clerical and stenographic work.
	5.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to rate justification advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Advertising matters such as posters, bulletins, booklets, and related items.
	3.	Fees and expenses of advertising agencies and commercial artists.
	4.	Postage on direct-mail advertising.
	5.	Printing of booklets, dodgers, bulletins, etc.
	6.	Supplies and expenses in preparing advertising materials.
	7.	Office supplies and expenses.
	g. 	909.1 Conservation Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily inform the customer of the reasons for and methods whereby energy may be conserved and energy consumption reduced by the consumer. Include in this account advertising activity relating to the electric utility which is related directly to the company’s provision of service to the customer during energy, fuel, and related shortages.
	(2)	Entries relating to conservation advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where conservation advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.2(8)“g.”
	(4)	Labor items related to conservation advertising:
	1.	Direct supervision of advertising activities.
	2.	Preparation of materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	3.	Preparation of booklets, bulletins, etc., used in direct mail.
	4.	Preparation of window and other displays.
	5.	Clerical and stenographic work.
	6.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to conservation advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Fees and expenses of advertising agencies and commercial artists.
	3.	Postage on direct-mail advertising.
	4.	Printing of booklets, dodgers, bulletins, etc.
	5.	Supplies and expenses in preparing advertising materials.
	6.	Office supplies and expenses.
	7.	Novelties for general distribution.
Below are examples of the advertising to be included in this account:
	●	Instructions in the proper use of equipment owned by the utility or the customer which will result in less consumption of energy.
	●	Advertising designed to convince consumers to turn down thermostats, turn off lights when not in use, and turn off appliances, television sets, etc., when not in use.
	h. 	909.2 Environmental Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily are designed to inform the public concerning the methods by which customers can participate with the utility in preserving and improving the environment. However, advertising which is primarily designed to laud the utility’s achievements or projects purporting to preserve or enhance the environment, shall be recorded in account 426.8. See paragraph 16.2(8)“e.”
	(2)	Entries relating to environmental advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate or any party involved in a discovery proceeding.
	(3)	Where environmental advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.2(8)“h.”
	(4)	Labor items related to environmental advertising:
	1.	Direct supervision of advertising activities.
	2.	Preparation of materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	3.	Preparation of booklets, bulletins, etc., used in direct mail.
	4.	Preparation of window and other displays.
	5.	Clerical and stenographic work.
	6.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to environmental advertising:
	1.	Advertising in newspapers, periodicals, billboards, etc.
	2.	Fees and expenses of advertising agencies and commercial artists.
	3.	Postage on direct-mail advertising.
	4.	Printing of booklets, dodgers, bulletins, etc.
	5.	Supplies and expenses in preparing advertising materials.
	6.	Office supplies and expenses.
	7.	Novelties for general distribution.
	i. 	909.3 Informational Consumer Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily convey information as to what the utility urges or suggests customers should do in utilizing electric service to protect their health and safety, and to utilize their electric equipment safely and economically.
	(2)	Entries relating to informational advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where informational advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.2(8)“i.”
	(4)	Labor items related to informational consumer advertising:
	1.	Direct supervision of advertising activities.
	2.	Preparing materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	3.	Preparing booklets, bulletins, etc., used in direct mail.
	4.	Preparing window and other displays.
	5.	Clerical and stenographic work.
	6.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to informational consumer advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Fees and expenses of advertising agencies and commercial artists.
	3.	Postage on direct-mail advertising.
	4.	Printing of booklets, dodgers, bulletins, etc.
	5.	Supplies and expenses in preparing advertising materials.
	6.	Office supplies and expenses.
	7.	Novelties for general distribution.
Below are examples of the advertising to be included in this account:
	●	Instructions in the proper use of equipment owned by the utility or the customer which make use of the utility’s service.
	●	Information as to new rates, billing practices, new inspection, or meter-reading schedules.
	●	Notification of emergency conditions and procedures to be followed during the emergency.
	●	Advice concerning hazards associated with the utility’s electric service.
	(6)	Exclude from this account and charge to FERC account 930.2, Miscellaneous General Expenses, the cost of publication of stockholder reports, dividend notices, bond redemption notices, financial statements, and other notices of a general corporate character. Also, exclude all expenses of promotional, institutional, or goodwill, and political advertising. See paragraphs 16.2(8)“c,”, 16.2(8)“d,” and 16.2(8)“e,” which refer to accounts 426.4, Political Advertising Expenses, 426.7, Promotional Advertising Expenses, and 426.8, Institutional or Goodwill Advertising Expenses, respectively.
Advertising expense directly related to obtaining a franchise or renewing an old franchise shall be charged to FERC account 302, Franchise and Consents. Such amounts shall be maintained in a separate subaccount for ready identification.
Advertising expense directly related to securing of new debt financing shall be charged to FERC account 181, Unamortized Debt Expense. Such amounts shall be maintained in a separate subaccount for ready identification.
Advertising expense directly related to securing of new equity financing shall be charged to FERC account 214, Capital Stock Expense. Such amounts shall be maintained in a separate subaccount for ready identification.
	j. 	909.4 Load Factor Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising activities designed to improve load factor so that plant and equipment already installed can be operated more efficiently and to a greater degree of capability, thereby resulting in lower overall costs to the consumer.
	(2)	This shall include advertising expenditures which are designed to further industrial and commercial development of the company’s service area.
	(3)	Entries relating to load factor advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(4)	Where load factor advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.2(8)“j.”
	(5)	Labor items relating to load factor advertising:
	1.	Direct supervision of advertising activities.
	2.	Preparation of advertising materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	3.	Preparation of booklets, bulletins, etc., used in direct mail.
	4.	Preparation of window and other displays.
	5.	Clerical and stenographic work.
	6.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(6)	Materials and expenses related to load factor advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Fees and expenses of advertising agencies and commercial artists.
	3.	Postage on direct-mail advertising.
	4.	Printing of booklets, dodgers, bulletins, etc.
	5.	Supplies and expenses in preparing advertising materials.
	6.	Office supplies and expenses.
	7.	Novelties for general distribution.
Below is an example of the advertising to be included in this account:
	●	Encouragement for manufacturers to go to night operations.
	k. 	913 Advertising Expenses. Delete the entire current text of FERC account 913 and add subaccount 913.5, Franchise Advertising Expenses.
	(1)	This account shall include only reasonable advertising expenditures for the purpose of obtaining approval, modification, or revocation of franchises.
	(2)	Entries relating to reasonable franchise advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising matter shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Labor items related to franchise advertising:
	1.	Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	2.	Preparing booklets, bulletins, etc., used in direct mail.
	3.	Preparing window and other displays.
	4.	Clerical and stenographic work.
	5.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(4)	Materials and expenses related to franchise advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Advertising matters such as posters, bulletins, booklets, and related items.
	3.	Fees and expenses of advertising agencies and commercial artists.
	4.	Novelties for general distribution.
	5.	Postage on direct-mail advertising.
	6.	Printing of booklets, bulletins, etc.
	7.	Supplies and expenses in preparing advertising materials.
	8.	Office supplies and expenses.
	l. 	930.2 Miscellaneous Expenses.
	16.2(9) FERC accounts 421.1 or 421.2 as they are defined and exist in the uniform systems of accounts shall be used to account for the gain or loss on the sale, conveyance, exchange, or transfer of utility or other property, including land and land rights, unless otherwise authorized or required by the board for good cause shown.
	16.2(10) FERC account 105 of the uniform systems of accounts 18 CFR Part 101 is modified in subparagraph “D” by deleting the following language: “in account 411.6 or 411.7, as appropriate except when determined to be significant by the board. Upon such a determination, the amounts shall be transferred to account 256, Deferred Gains from Disposition of Utility Plant, or account 187, Deferred Losses from Disposition of Utility Plant, and amortized to accounts 411.6, Gains from Disposition of Utility Plant, or 411.7, Losses from Disposition of Utility Plant, as appropriate,” and substituting in lieu thereof: “in account 421.1 or 421.2, as appropriate unless otherwise authorized or required by the board for good cause shown.”
199—16.3(476) Uniform systems of accounts—gas. The uniform systems of accounts for natural gas companies subject to the provisions of the Natural Gas Act, 18 CFR Part 201 published in the Federal Energy Regulatory Commission’s rules and regulations, in effect on April 1, 2002, is adopted with the following modifications:
	16.3(1) Definition 7 is changed to read: “Commission” means the board except where reference is made to the authority of the Federal Energy Regulatory Commission (FERC) under the Natural Gas Act and where the board does not have the same or similar authority under Iowa Code chapter 476, where “Commission” shall mean FERC.
	16.3(2) Definition 22 is changed to read: “Natural gas company” means a person furnishing gas by piped distribution system to the public for compensation.
	16.3(3) Rescinded IAB 6/25/03, effective 7/30/03.
	16.3(4) General instruction 1-B of the uniform systems of accounts for gas utilities is modified to add the following sentence: “Gas utilities subject to rate regulation by the board shall keep all the accounts of these systems of accounts which are applicable to their affairs, and gas utilities not subject to rate regulation shall keep the accounts of these systems of accounts for operating revenues only.”
	16.3(5) General instruction 1-D of the uniform systems of accounts for gas utilities is modified by adding the following sentence: “It is recommended but not required that gas utilities not subject to rate regulation keep all applicable accounts in accordance with the FERC uniform systems of accounts 18 CFR Part 201.”
	16.3(6) General instruction 2-D of the uniform systems of accounts for gas utilities is modified by adding the following sentence: “This shall not prohibit the gas utilities from using additional accounts as they are required or permitted to keep for their reporting to other regulatory authorities or to their stockholders, providing the board is notified of the nature, amount and purpose of such accounts in the annual report to the board and at such other times as may be requested.”
	16.3(7) The definitions for the uniform systems of accounts for gas utilities, when used in account 424, Promotional Practices, are modified to include the following definitions:
	a. 	The word “affiliate” shall mean any person doing business in this state who directly or indirectly controls or is controlled by or is under common control with a public utility.
	b. 	The word “appliance” or “equipment” shall mean any device, including a fixture, which consumes electric energy and any ancillary device required for its operation.
	c. 	The word “consideration” shall mean any cash, donation, gift, allowance, rebate, bonds, merchandise (new or used), property (tangible or intangible), labor, service conveyance, commitment, right, or other thing of value.
	d. 	The word “financing” shall include acquisition of equity or debt interests, loans, guarantee of loans, advances, sale and repurchase agreements, sale and lease-back agreements, sales on open account, conditional or installment sales contracts, or other investment or extensions of credit.
	e. 	The word “person” shall include any individual, group, firm, partnership, corporation, cooperative, association, or other organization, but not including state or local political subdivisions or municipal corporations.
	f. 	The words “public utility” or “utility” shall include persons defined to be public utilities in Iowa Code section 476.1.
	g. 	The words “promotional practices” shall mean any consideration offered or granted by a public utility or its affiliate to any person for the purpose, express or implied, of inducing such person to select or use the service or additional service of such utility, or to select or install any appliance or equipment designed to use such utility service; provided that the words “promotional practices” shall not include the following activities:
	(1)	Providing repairs and service to appliances or equipment of customers of a public utility in an emergency or to restore service or to prevent hazardous conditions or service interruptions.
	(2)	Inspection and adjustment of appliances or equipment by a public utility.
	(3)	Repairs and other maintenance to appliances or equipment by a public utility that could be performed by an independent appliance dealer or service shop if charges are at cost or above.
	(4)	Providing service, wiring, piping, appliances, or equipment in accordance with tariffs, rules, or regulations of a public utility on file with and approved by the board.
	(5)	Providing appliances, equipment, or instructional services to an educational institution for the purpose of instructing students in the use or repair of such appliances or equipment.
	(6)	Providing discounts or financing to employees of a public utility to encourage their use of the utility’s service.
	(7)	Merchandising and related inventory of appliances or equipment for sale at retail and making and fulfilling reasonable warranties against defects in material and workmanship in appliances or equipment existing at the time of delivery; the elimination of hazardous conditions which due to a grandfather provision would not be corrected by the customer and yet would require correction to protect the public and minimize company liability.
	(8)	The replacement of or alterations to a customer’s obsolete or inefficient system.
	(9)	Technical, informational, or educational assistance offered to persons on the use of energy furnished by a public utility or on the use of maintenance of appliances or equipment.
	(10)	Lunches, gifts, door prizes, etc., presented for attendance at informational meetings, conferences, etc., valued at $10 or less shall not be considered to be a promotional practice.
	(11)	Providing appliances or equipment incidental to exhibitions, demonstrations, tests, or experiments of reasonable duration.
	(12)	Any promotional practice, or program which includes a promotional practice, designed to develop or implement programs that promote energy efficiency.
	16.3(8) The uniform systems of accounts for gas utilities are modified to include the following:
	a. 	424 Promotional Practices. This account shall include the cost of labor, materials used, and expenses or losses incurred by the utility or an affiliate (where such costs are charged back to the company) on promotional practices. Promotional practices, or programs which include promotional practices, and the labor, materials, and expenses related to promotional practices, which are exempted by subrule 16.7(2) need not be included in this account. The account shall include, but not be limited to, the following items:
	(1)	The financing of land or the construction of any building when the same is not owned or otherwise possessed by the utility or its affiliate without board written approval.
	(2)	The furnishing of consideration to any person for work done or to be done on property not owned or otherwise possessed by the utility or its affiliate, except for the following: Studies to determine comparative capital or operating costs and expenses, or to show the desirability and feasibility of selecting one form of energy over another, contributions for research and development of new energy sources, etc.
	(3)	The acquisition from any person of any tangible or intangible property or service for a consideration in excess of the value thereof or the furnishing to any person of any tangible property or service for a consideration of less than the value thereof. “Value” in this instance is defined as the fair market price of the property or service under competitive market conditions and under arm’s length conditions.
	(4)	The furnishing of consideration to any person for the sale, installation, or use of appliances or equipment of one form of energy over another. Employees who are paid a commission in lieu of salary for the initial sale of appliances are exempted.
	(5)	The provision of free, or at less than cost or value, wiring, piping, appliances, or equipment to any person; provided that a utility, engaged in an appliance merchandising sales program, shall not be precluded from conducting legitimate closeouts of appliances, clearance sales, or sales of damaged or returned appliances. All items required by service rules of this board are exempted.
	(6)	The provision of free, or at less than cost or value, installation, operation, repair, modification, or maintenance of appliances, equipment, wiring or piping to any person. This would not include services provided for the convenience and safety of customers such as gas leak testing, lighting of furnaces, etc.
	(7)	The granting of a trade-in allowance on the purchase of any appliance or equipment in excess of the reasonable value of the trade-in based on the past experience of a company or the granting of a trade-in allowance for such appliance or equipment when such allowance varies by the type of energy consumed in the trade-in.
	(8)	The financing of the acquisition of any appliance or equipment at a rate of interest or on terms significantly more favorable than those generally applicable to sales by nonutility dealers in such appliances or equipment.
	(9)	The furnishing of consideration to any person for any advertising or publicity purpose, except where appropriately classified to another account.
	(10)	The guaranteeing of the maximum cost of gas utility service, except under published tariffs.
	(11)	Labor items related to promotional practices:
	1.	Salary of employees engaged directly or indirectly in promotional practices defined.
	2.	Clerical and stenographic work performed in relation to promotional practices.
	3.	Fees paid to consultants, agents, attorneys, etc., on related promotional practices.
	(12)	Materials and expenses related to promotional practices:
	1.	Amounts spent on postage, office supplies, displays, posters, exhibits, etc.
	2.	Films, movies, photographs prepared for promotional activities.
	3.	Expenses paid such as lodging, food, entertainment expenses.
	4.	Transportation by company auto or plane and public transportation of any mode.
	b. 	426 Miscellaneous Income Deductions. Immediately following the current text and item list, add the following:
	(1)	Promotional advertising expenses.
	(2)	Institutional or goodwill advertising expenses.
	(3)	Rate justification advertising expenses.
	c. 	426.4 Political Advertising Expenses.
	(1)	Account 426.4 pertains to items in subparagraph 16.3(8)“a”(12)“1” and paragraph 16.3(8)“b” listed above. This account shall include the cost of labor, materials used, and expenses incurred in advertising, whether on a national, regional, or local basis, which are designed to influence public opinion with respect to the election or appointment of public officials or the adoption, repeal, revocation, or modification of referenda, legislation, or ordinances. The account shall also include expenditures for influencing the decisions of public officials not including such expenditures which are directly related to appearances before regulatory or other governmental bodies in connection with the utility’s existing or proposed operations.
	(2)	Entries relating to political advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where political advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.3(8)“c.”
	(4)	Labor items related to political advertising:
	1.	Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting promotional motion pictures, radio, and television programs.
	2.	Preparing booklets, bulletins, etc., used in direct mail.
	3.	Preparing window and other displays.
	4.	Clerical and stenographic work.
	5.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to political advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Advertising matters such as posters, bulletins, booklets, and related items.
	3.	Fees and expenses of advertising agencies and commercial artists.
	4.	Novelties for general distribution.
	5.	Postage on direct-mail advertising.
	6.	Printing of booklets, dodgers, bulletins, etc.
	7.	Supplies and expenses in preparing advertising materials.
	8.	Office supplies and expenses.
Note:  Franchise advertising and related expenses shall be charged to account 913.5 shown in paragraph 16.3(8)“j” or FERC account 302.
	d. 	426.7 Promotional Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising designed to promote or retain the use of utility service, except advertising the sale of merchandise, load factor advertising, or advertising which is part of a promotional practice, or a program which includes a promotional practice, designed to develop or implement programs that promote energy efficiency and are part of the utility’s energy efficiency plan developed pursuant to 199—Chapter 35.
	(2)	Entries relating to promotional advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where promotional advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.3(8)“d.”
	(4)	Labor items related to promotional advertising:
	1.	Direct supervision of advertising activities.
	2.	Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	3.	Preparing booklets, bulletins, etc., used in direct mail.
	4.	Preparing window and other displays.
	5.	Clerical and stenographic work.
	6.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to promotional advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Advertising matters such as posters, bulletins, booklets, and related items.
	3.	Fees and expenses of advertising agencies and commercial artists.
	4.	Novelties for general distribution.
	5.	Postage on direct-mail advertising.
	6.	Premiums distributed generally, such as recipe books, etc., when not offered as inducement to purchase appliances.
	7.	Printing of booklets, dodgers, bulletins, etc.
	8.	Supplies and expenses in preparing advertising materials.
	9.	Office supplies and expenses.
Note A:  The cost of advertisements which set forth the value or advantages of utility service (without reference to specific appliances or if reference is made to appliances from dealers or refers to appliances not carried for sale by the utility) shall be considered sales promotion advertising and charged to this account. However, advertisements which are limited to specific makes of appliances sold by the utility and prices, terms, etc., thereof, without referring to the value or advantages of utility service, shall be considered as merchandise advertising, and the cost shall be charged to account 416, Costs and Expenses of Merchandising, Jobbing, and Contract Work.
Note B:  Advertisements which substantially mention or refer to the value or advantages of utility service, together with specific reference to makes or appliances sold by the utility and the price, terms, etc., thereof, and designed for the joint purpose of increasing the use of utility service and the sales of appliances, shall be considered as a combination advertisement, and the costs shall be distributed between this account and account 416, Costs and Expenses of Merchandising, Jobbing, and Contract Work, on the basis of space, time, or other proportional factors.
	e. 	426.8 Institutional or Goodwill Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising which is designed to create, enhance, or sustain the utility’s image or goodwill to the general public or its customers.
	(2)	Entries relating to institutional or goodwill advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where institutional or goodwill advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.3(8)“e.”
	(4)	Labor items related to institutional or goodwill advertising:
	1.	Supervision of advertising activities.
	2.	Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	3.	Preparing booklets, bulletins, etc., used in direct mail.
	4.	Preparing window and other displays.
	5.	Clerical and stenographic work.
	6.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to institutional or goodwill advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Advertising matters such as posters, bulletins, booklets, and related items.
	3.	Fees and expenses of advertising agencies and commercial artists.
	4.	Postage on direct-mail advertising.
	5.	Printing of booklets, dodgers, bulletins, etc.
	6.	Supplies and expenses in preparing advertising materials.
	7.	Office supplies and expenses.
	8.	Novelties for general distribution.
Below are examples of the advertising to be included in this account:
	●	Pronouncements primarily lauding the utility or the area or community it serves.
	●	Advertising activities to inform the ratepayers of the social and economic advantages or status of the area or community it serves.
	●	Advertising activities to inform the public of the utility’s participation in programs to improve the economic condition of the area or community the utility serves.
	●	Advertising activities to inform the public of the utility’s role of good citizenship.
	●	Information and routine data supplied by the utility to local governments, planning agencies, civic groups, businesses, and the general public which are not inclusive in account 909.3, Informational Consumer Advertising Expenses. See paragraph 16.3(8)“i.”
	●	Advertising activities to inform the public of the utility’s consciousness of, or involvement in, health, safety, conservation, or environmental programs, except as included in accounts 909.1, 909.2 and 909.3. See paragraphs 16.3(8)“g,” 16.3(8)“h,” and 16.3(8)“i,” respectively.
	f. 	426.9 Rate Justification Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising, whether on a regional or local basis, which is designed to promote public acceptance of utility rate increases or the utility’s filed rates. The account shall also include all costs incurred by the utility for advertising in opposition to the decision of the regulatory agency. However, the expenses associated with simply informing customers that new rates have been requested shall be recorded in FERC account 928, Regulatory Commission Expenses.
	(2)	Entries relating to rate justification advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.3(8)“f.”
	(4)	Labor items related to rate justification advertising:
	1.	Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	2.	Preparing booklets, bulletins, etc., used in direct mail.
	3.	Preparing window and other displays.
	4.	Clerical and stenographic work.
	5.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to rate justification advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Advertising matters such as posters, bulletins, booklets, and related items.
	3.	Fees and expenses of advertising agencies and commercial artists.
	4.	Postage on direct-mail advertising.
	5.	Printing of booklets, dodgers, bulletins, etc.
	6.	Supplies and expenses in preparing advertising materials.
	7.	Office supplies and expenses.
	g. 	909.1 Conservation Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily inform the customer of the reasons for and methods whereby energy may be conserved and energy consumption reduced by the consumer. Include in this account advertising activity relating to the gas utility, which is related directly to the company’s provision of service to the customer during energy, fuel, and related shortages.
	(2)	Entries relating to conservation advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where conservation advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.3(8)“g.”
	(4)	Labor items related to conservation advertising:
	1.	Direct supervision of advertising activities.
	2.	Preparation of materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	3.	Preparation of booklets, bulletins, etc., used in direct mail.
	4.	Preparation of window and other displays.
	5.	Clerical and stenographic work.
	6.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to conservation advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Fees and expenses of advertising agencies and commercial artists.
	3.	Postage on direct-mail advertising.
	4.	Printing of booklets, dodgers, bulletins, etc.
	5.	Supplies and expenses in preparing advertising materials.
	6.	Office supplies and expenses.
	7.	Novelties for general distribution.
Below are examples of the advertising to be included in this account:
	●	Instructions in the proper use of equipment owned by the utility or the customer which will result in less consumption of energy.
	●	Advertising designed to convince consumers to turn down thermostats, turn off appliances, etc., when not in use.
	h. 	909.2 Environmental Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily are designed to inform the public concerning the methods by which customers can participate with the utility in preserving and improving the environment. However, advertising which is primarily designed to laud the utility’s achievements or projects purporting to preserve or enhance the environment shall be recorded in account 426.8. See paragraph 16.2(3)“e.”
	(2)	Entries relating to environmental advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where environmental advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.3(8)“h.”
	(4)	Labor items related to environmental advertising:
	1.	Direct supervision of advertising activities.
	2.	Preparation of materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	3.	Preparation of booklets, bulletins, etc., used in direct mail.
	4.	Preparation of window and other displays.
	5.	Clerical and stenographic work.
	6.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to environmental advertising:
	1.	Advertising in newspapers, periodicals, billboards, etc.
	2.	Fees and expenses of advertising agencies and commercial artists.
	3.	Postage on direct-mail advertising.
	4.	Printing of booklets, dodgers, bulletins, etc.
	5.	Supplies and expenses in preparing advertising materials.
	6.	Office supplies and expenses.
	7.	Novelties for general distribution.
	i. 	909.3 Informational Consumer Advertising Expenses.
	(1)	This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily convey information as to what the utility urges or suggests customers should do in utilizing gas service to protect their health and safety, and to utilize their gas equipment safely and economically.
	(2)	Entries relating to informational advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Where informational advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account shall be determined in accordance with the text of this account as set forth in paragraph 16.3(8)“i.”
	(4)	Labor items related to informational consumer advertising:
	1.	Direct supervision of advertising activities.
	2.	Preparing materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	3.	Preparing booklets, bulletins, etc., used in direct mail.
	4.	Preparing window and other displays.
	5.	Clerical and stenographic work.
	6.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(5)	Materials and expenses related to informational consumer advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Fees and expenses of advertising agencies and commercial artists.
	3.	Postage on direct-mail advertising.
	4.	Printing of booklets, dodgers, bulletins, etc.
	5.	Supplies and expenses in preparing advertising materials.
	6.	Office supplies and expenses.
	7.	Novelties for general distribution.
Below are examples of the advertising to be included in this account:
	●	Instructions in the proper use of equipment owned by the utility or the customer which makes use of the utility’s service.
	●	Information as to new rates, billing practices, new inspection, or meter-reading schedules.
	●	Notification of emergency conditions and procedures to be followed during the emergency.
	●	Advice concerning hazards associated with the utility’s gas service.
	(6)	Exclude from this account and charge to FERC account 930.2, Miscellaneous General Expenses, the cost of publication of stockholder reports, dividend notices, bond redemption notices, financial statements, and other notices of a general corporate character. Also, exclude all expenses of promotional, institutional, or goodwill, and political advertising. See paragraphs 16.3(8)“c,” 16.3(8)“d,” and 16.3(8)“e,” which refer to accounts 426.4, Political Advertising Expenses, 426.7, Promotional Advertising Expenses, and 426.8, Institutional or Goodwill Advertising Expenses, respectively.
Advertising expense directly related to obtaining a franchise or renewing an old franchise shall be charged to FERC account 302, Franchise and Consents. Such amounts shall be maintained in a separate subaccount for ready identification.
Advertising expense directly related to securing of new debt financing shall be charged to FERC account 181, Unamortized Debt Discount and Expense. Such amounts shall be maintained in a separate subaccount for ready identification.
Advertising expense directly related to securing of new equity financing shall be charged to FERC account 214, Capital Stock Expense. Such amounts shall be maintained in a separate subaccount for ready identification.
	j. 	913.5 Franchise Advertising Expenses.
	(1)	This account shall include only reasonable advertising expenditures for the purpose of obtaining approval, modification, or revocation of franchises.
	(2)	Entries relating to reasonable franchise advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising matter shall be readily available to staff, consumer advocate, or any party involved in a discovery proceeding.
	(3)	Labor items related to franchise advertising:
	1.	Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.
	2.	Preparing booklets, bulletins, etc., used in direct mail.
	3.	Preparing window and other displays.
	4.	Clerical and stenographic work.
	5.	Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.
	(4)	Materials and expenses related to franchise advertising:
	1.	Advertising in newspapers, periodicals, billboards, radio, etc.
	2.	Advertising matters such as posters, bulletins, booklets, and related items.
	3.	Fees and expenses of advertising agencies and commercial artists.
	4.	Novelties for general distribution.
	5.	Postage on direct-mail advertising.
	6.	Printing of booklets, bulletins, etc.
	7.	Supplies and expenses in preparing advertising materials.
	8.	Office supplies and expenses.
	k. 	930.2 Miscellaneous General Expenses.
	16.3(9) FERC accounts 421.1 or 421.2 as they are defined and exist in the uniform systems of accounts shall be used to account for the gain or loss on the sale, conveyance, exchange, or transfer of utility or other property, including land and land rights, unless otherwise authorized or required by the board for good cause shown.
	16.3(10) FERC accounts 105 and 105.1 of the uniform systems of accounts 18 CFR Part 201 are modified in subparagraph “D” by deleting the following language: “in FERC account 411.6 or 411.7, as appropriate except when determined to be significant by the board. Upon such a determination, the amounts shall be transferred to FERC account 256, Deferred Gains from Disposition of Utility Plant, or FERC account 187, Deferred Losses from Disposition of Utility Plant, and amortized to FERC account 411.6, Gains from Disposition of Utility Plant, or FERC account 411.7, Losses from Disposition of Utility Plant, as appropriate,” and substituting in lieu thereof: “in FERC account 421.1 or 421.2, as appropriate, unless otherwise authorized or required by the board for good cause shown.”
199—16.4(476) Uniform systems of accounts—water. The 1996 uniform systems of accounts for Class A, B, and C water utilities published by the National Association of Regulatory Utility Commissioners (NARUC) uniform systems of accounts are adopted with the following modifications:
	16.4(1) Accounting instruction 2-D of the NARUC uniform systems of accounts for water utilities is modified by adding the sentence: “This shall not prohibit water utilities from using such additional accounts as they are required or permitted to keep for their reporting to other regulatory authorities or to their stockholders, providing the board is notified of the nature, amount, and purpose of such accounts in the annual report to the board and at such other times as may be requested by the board.”
	16.4(2) Account 414, as defined and existing in the NARUC uniform systems of accounts 414.A, shall be used to account for the gain or loss on the sale, conveyance, exchange, or transfer of utility or other property to another, unless otherwise authorized or required by the board for good cause shown.
199—16.5(476) Uniform systems of accounts—telephone. Local exchange utilities subject to regulation by the board shall keep accounts consistent with generally accepted accounting principles (GAAP) or the accounting regulations adopted by the Federal Communications Commission. Each local exchange utility shall indicate in its annual report which method of accounting it has adopted and the location of the accounting records associated with Iowa operations.
199—16.6(476) Uniform systems of accounts—telegraph. The uniform systems of accounts for telegraph utilities adopted by the FCC, editorial revision, effective December 7, 1963, are adopted with the following modifications:
The general instructions of the FCC uniform systems of accounts for telegraph companies are modified by adding the following sentence: “This shall not prohibit the telephone companies from using such additional accounts as they are required or permitted to keep for their reporting to other regulatory authorities or to their stockholders, providing the board is notified of the nature, amount and purpose of such accounts in the annual report to the board and at such other times as may be requested by the board.”
199—16.7(476) Filing of present promotional practices. Each public utility subject to rate regulation shall file with the board within 60 days of the effective date of this rule a schedule setting forth each of the promotional practices in which engaged as defined in the board’s uniform systems of accounts. All practices for which the costs are to be charged to account 424 (electric and gas) or 31.324 (telephone) shall be set forth. The accounts currently being charged with these practices shall be so listed. The company shall show the following data for each promotional practice.
	1.	The name, number, or letter designation of each such promotional practice.
	2.	The class of persons to which such promotional practice is being offered or granted.
	3.	Whether such promotional practice is being uniformly offered or granted to the persons within such class.
	4.	A description of such promotional practice which shall include a statement of the terms and conditions governing same.
	5.	A description of the advertising or publicity employed with respect to such promotional practice.
	6.	If such promotional practice is offered or granted, in whole or in part, by an affiliate or other person, the identity of such affiliate or person and the nature of such party’s participation shall be disclosed.
	7.	The expiration date of the practice, if known, or an estimated date.
	8.	Other information relevant to a complete understanding of such promotional practice.
	9.	The date or estimated date of the beginning of such promotional practices.
Any promotional practice proposed subsequent to the initial listing outlined above shall be described in writing by the utility and such documentation provided the board no less than 30 days prior to its expected implementation.
	16.7(1) Annual report. Rescinded IAB 11/6/96, effective 12/11/96.
	16.7(2) Any promotional practice, or program which includes a promotional practice, designed to develop or implement programs that promote energy efficiency and are part of the utility’s energy efficiency plan developed pursuant to 199 IAC 35 shall be deemed not to be a promotional practice for purposes of this rule and shall be exempt from the requirements of this rule.
199—16.8(476) Compiling advertisements and expenses. The burden of compiling and classifying advertisements and promotional expenses consistent with the directions of accounts 426, 426.4, et seq., 913. 1, et seq., Uniform systems of Accounts — Electric and Gas, 31.324, et seq., 31.642, et seq., Uniform systems of Accounts — Telephone, and 910 Uniform systems of Accounts — Water shall be borne by public utility companies. In this connection the burden of proof as to the accuracy of such classifications and expenses, as with other cost items, shall reside with the utility.
Where a given advertisement or group of advertisements may fall within more than one of the categories defined by accounts 426.4, et seq., 913.1, et seq., Uniform systems of Accounts — Electric and Gas, 31.323, et seq., 31.642, et seq., Uniform systems of Accounts — Telephone, and 910 Uniform systems of Accounts — Water, the utilities shall apportion the expenses of such advertisements between the categories.
Every advertisement published, broadcast, or otherwise displayed or disseminated to the public by a public utility which is to be paid for by the utility’s customers and is not required by the board or other state or federal regulation shall include the following statement: “The cost of this ad will be paid for by the customers of (Company Name).” This requirement shall not apply to advertisements for products or services that are or become subject to competition as determined by the board or are treated and accounted for as part of a utility’s unregulated operations. When a public utility determines that the costs of an ad are to be charged in part to the customers and in part to the public utility, the public utility shall display the following notice: “x% of the cost of this ad will be paid for by the customers of (Company Name).” Any statement included in advertisements under this rule shall not affect the ability of the board to determine the proper ratemaking treatment of the cost of the advertisement.
199—16.9(476) Postemployment benefits other than pensions.
	16.9(1) Accrual accounting for postemployment benefits other than pensions in accordance with Statement of Financial Accounting Standard No.	106 (SFAS 106) will be permitted where:
	a. 	The accrued postemployment benefit obligations have been funded in a segregated and restricted account or alternative arrangements have been approved by the board.
	b. 	The net periodic postemployment benefit cost and accumulated postemployment benefit obligations have been determined by an actuarial study completed in accordance with the specific methods required and outlined by SFAS 106.
	c. 	The transition obligation is amortized in accordance with SFAS 106.
	16.9(2) The requirements of this rule do not apply to a local exchange utility regulated by the board if the utility accounts for its postemployment benefits other than pensions in a manner consistent with the regulations of the Federal Communications Commission.
These rules are intended to implement Iowa Code sections 476.1, 476.2, 476.8, 476.9, 476.17, and 546.7.
[Filed January 17, 1964; amended July 9, 1975]
[Filed 8/4/76, Notice 6/1/77—published 8/24/77, effective 9/28/77]
[Filed 1/19/79, Notice 8/23/78—published 2/7/79, effective 3/14/79]
[Filed 7/2/81, Notice 3/4/81—published 7/22/81, effective 8/26/81]
[Filed emergency 4/9/82—published 4/28/82, effective 4/9/82]
[Filed 8/13/82, Notices 11/25/81, 4/28/82—published 9/1/82, effective 10/6/82]
[Filed 8/27/82, Notice 5/12/82—published 9/15/82, effective 10/20/82]
[Filed 8/27/82, Notice 6/9/82—published 9/15/82, effective 10/20/82]
[Filed 10/8/82, Notices 10/28/81, 3/3/82, 4/14/82, 7/21/82—published 10/27/82, effective 12/1/82]
[Filed 2/11/83, Notices 7/21/82, 12/8/82—published 3/2/83, effective 4/6/83]
[Filed emergency 6/3/83—published 6/22/83, effective 7/1/83]
[Filed 9/9/83, Notice 6/22/83—published 9/28/83, effective 11/2/83]
[Filed 11/4/83, Notice 8/31/83—published 11/23/83, effective 1/1/84]
[Filed 11/16/84, Notice 9/12/84—published 12/5/84, effective 1/9/85]1
[Filed 7/26/85, Notices 4/24/85, 6/19/85—published 8/14/85, effective 9/18/85]
[Filed 3/7/86, Notice 12/4/85—published 3/26/86, effective 4/30/86]
[Filed emergency 9/18/86—published 10/8/86, effective 9/18/86]
[Filed 7/10/87, Notice 3/11/87—published 7/29/87, effective 9/2/87, 1/1/88]2
[Filed 9/15/89, Notice 5/31/89—published 10/4/89, effective 11/8/89]
[Filed 4/23/92, Notice 1/22/92—published 5/13/92, effective 6/17/92]
[Filed 12/4/92, Notice 8/5/92—published 12/23/92, effective 1/27/93]
[Filed 1/29/93, Notice 9/2/92—published 2/17/93, effective 3/24/93]
[Filed 10/16/96, Notice 7/3/96—published 11/6/96, effective 12/11/96]
[Filed 6/6/03, Notice 12/25/02—published 6/25/03, effective 7/30/03]
[Filed 7/27/06, Notice 6/7/06—published 8/16/06, effective 9/20/06]
1	Effective date 1/9/85 of rule 16.8 delayed 70 days by the Administrative Rules Review Committee.
2	Subrules 16.5(48) to 16.5(85) shall be effective on the date when Part 32 becomes effective as FCC rules, except subrule 16.5(49), paragraph “c” is effective 9/2/87.