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FERC FINANCIAL REPORT
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This report is mandatory under the Public Utility Holding Company Act of 2005, Section 1270,
Section 309 of the Federal Power Act and 18 C.F.R. § 366.23. Failure to report may result in
criminal fines, civil penalties, and other sanctions as provided by law. The Federal Energy
Regulatory Commission does not consider this report to be of a confidential nature.
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Exact Legal Name of Respondent (Company) |
Year/Period of Report: End of: |
FERC FORM NO.
REPORT OF CENTRALIZED SERVICE COMPANIES |
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Identification |
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01 Exact Legal Name of Respondent
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02 Year / Period of Report
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03 Previous Name (if name changed during the year)
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04 Date of Name Change
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05 Address of Principal Office at End of Year (Street, City, State, Zip Code)
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06 Name of Contact Person
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07 Title of Contact Person
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08 Address of Contact Person
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09 Telephone Number of Contact Person
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10 E-mail Address of Contact Person
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11 This Report is An Original / A Resubmission (1) ☑ An Original (2) ☐ A Resubmission |
12 Resubmission Date (Month, Day, Year) |
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13 Date of Incorporation
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14 If Not Incorporated, Date of Organization
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15 State or Sovereign Power Under Which Incorporated or Organized
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16 Name of Principal Holding Company Under Which Reporting Company is Organized:
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CORPORATE OFFICER CERTIFICATION | ||||
The undersigned officer certifies that: I have examined this report and to the best of my knowledge, information, and belief all statements of fact contained in this report are correct statements of the business affairs of the respondent and the financial statements, and other financial information contained in this report, conform in all material respects to the Uniform System of Accounts. | ||||
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19 Signature of Signing Officer
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20 Date Signed (Month, Day, Year)
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Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
List of Schedules |
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Line No. |
Description (a) |
Page Reference (b) |
Remarks (c) |
1 |
ScheduleComparativeBalanceSheetAbstract Schedule I - Comparative Balance Sheet |
101 | |
2 |
ScheduleServiceCompanyPropertyAbstract Schedule II - Service Company Property |
103 | |
3 |
ScheduleAccumulatedProvisionForDepreciationAndAmortizationOfServiceCompanyPropertyAbstract Schedule III - Accumulated Provision for Depreciation and Amortization of Service Company Property |
104 | |
4 |
ScheduleInvestmentsAbstract Schedule IV - Investments |
105 | |
4.1 |
ScheduleOtherInvestmentsAbstract Schedule IV - Investments - Other Investments |
105 | |
4.2 |
ScheduleOtherSpecialFundsAbstract Schedule IV - Investments - Other Special Funds |
105 | |
4.3 |
ScheduleTemporaryCashInvestmentsAbstract Schedule IV - Investments - Temporary Cash Investments |
105 | |
5 |
ScheduleAccountsReceivableFromAssociateCompaniesAbstract Schedule V - Accounts Receivable from Associate Companies |
106 | |
6 |
ScheduleFuelStockExpensesUndistributedAbstract Schedule VI - Fuel Stock Expenses Undistributed |
107 | |
7 |
ScheduleStoresExpenseUndistributedAbstract Schedule VII - Stores Expense Undistributed |
108 | |
8 |
ScheduleMiscellaneousCurrentAndAccruedAssetsAbstract Schedule VIII - Miscellaneous Current and Accrued Assets |
109 | |
9 |
ScheduleMiscellaneousDeferredDebitsAbstract Schedule IX - Miscellaneous Deferred Debits |
110 | |
10 |
ScheduleResearchDevelopmentOrDemonstrationExpendituresAbstract Schedule X - Research, Development, or Demonstration Expenditures |
111 | |
11 |
ScheduleProprietaryCapitalAbstract Schedule XI - Proprietary Capital |
201 | |
12 |
ScheduleLongTermDebtAbstract Schedule XII - Long-Term Debt |
202 | |
13 |
ScheduleCurrentAndAccruedLiabilitiesAbstract Schedule XIII - Current and Accrued Liabilities |
203 | |
14 |
ScheduleNotesToFinancialStatementsAbstract Schedule XIV - Notes to Financial Statements |
204 | |
15 |
ScheduleStatementOfIncomeAbstract Schedule XV - Comparative Income Statement |
301 | |
16 |
ScheduleAnalysisOfChargesForServiceAssociateAndNonAssociateCompaniesAbstract Schedule XVI - Analysis of Charges for Service - Associate and Nonassociate Companies |
303 | |
17 |
ScheduleAnalysisOfBillingAssociateCompaniesAbstract Schedule XVII - Analysis of Billing - Associate Companies (Account 457) |
307 | |
18 |
ScheduleAnalysisOfBillingNonAssociateCompaniesAbstract Schedule XVIII - Analysis of Billing - Non-Associate Companies (Account 458) |
308 | |
21 |
ScheduleMiscellaneousGeneralExpensesAbstract Schedule XIX - Miscellaneous General Expenses - Account 930.2 |
309 | |
23 |
ScheduleOrganizationChartAbstract Schedule XX - Organization Chart |
401 | |
24 |
ScheduleMethodsOfAllocationAbstract Schedule XXI - Methods of Allocation |
402 |
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule I - Comparative Balance Sheet |
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Line No. |
Account Number (a) |
Description (b) |
Reference Page No. (c) |
As of Dec 31 Current (d) |
As of Dec 31 Prior (e) |
1 |
ServiceCompanyPropertyAbstract Service Company Property |
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2 |
101 |
ServiceCompanyPropertyGross Service Company Property |
103 |
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3 |
101.1 |
PropertyUnderCapitalLeases Property Under Capital Leases |
103 |
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4 |
106 |
CompletedConstructionNotClassified Completed Construction Not Classified |
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5 |
107 |
ConstructionWorkInProgress Construction Work In Progress |
103 |
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6 |
Property Total Property (Total Of Lines 2-5) |
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7 |
108 |
AccumulatedProvisionforDepreciationofServiceCompanyProperty Less: Accumulated Provision for Depreciation of Service Company Property |
104 |
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8 |
111 |
AccumulatedProvisionforAmortizationofServiceCompanyProperty Less: Accumulated Provision for Amortization of Service Company Property |
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9 |
ServiceCompanyPropertyNet Net Service Company Property (Total of Lines 6-8) |
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10 |
InvestmentsAbstract Investments |
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11 |
123 |
InvestmentInAssociateCompanies Investment In Associate Companies |
105 |
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12 |
124 |
OtherInvestments Other Investments |
105 |
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13 |
128 |
OtherSpecialFunds Other Special Funds |
105 |
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14 |
Investments Total Investments (Total of Lines 11-13) |
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15 |
CurrentAndAccruedAssetsAbstract Current And Accrued Assets |
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16 |
131 |
Cash Cash |
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17 |
134 |
OtherSpecialDeposits Other Special Deposits |
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18 |
135 |
WorkingFunds Working Funds |
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19 |
136 |
TemporaryCashInvestments Temporary Cash Investments |
105 |
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20 |
141 |
NotesReceivable Notes Receivable |
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21 |
142 |
CustomerAccountsReceivable Customer Accounts Receivable |
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22 |
143 |
OtherAccountsReceivable Accounts Receivable |
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23 |
144 |
AccumulatedProvisionForUncollectibleAccountsCredit Less: Accumulated Provision for Uncollectible Accounts |
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23.1 |
145 |
NotesReceivableFromAssociatedCompanies Notes Receivable From Associate Companies |
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24 |
146 |
AccountsReceivableFromAssociateCompanies Accounts Receivable From Associate Companies |
106 |
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25 |
152 |
FuelStockExpensesUndistributed Fuel Stock Expenses Undistributed |
107 |
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26 |
154 |
MaterialsAndOperatingSupplies Materials And Supplies |
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27 |
163 |
StoresExpenseUndistributed Stores Expense Undistributed |
108 |
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28 |
165 |
Prepayments Prepayments |
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29 |
171 |
InterestAndDividendsReceivable Interest And Dividends Receivable |
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30 |
172 |
RentsReceivable Rents Receivable |
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31 |
173 |
AccruedRevenues Accrued Revenues |
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32 |
174 |
MiscellaneousCurrentAndAccruedAssets Miscellaneous Current and Accrued Assets |
109 |
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33 |
175 |
DerivativeInstrumentAssets Derivative Instrument Assets |
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34 |
176 |
DerivativeInstrumentAssetsHedges Derivative Instrument Assets - Hedges |
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35 |
CurrentandAccruedAssets Total Current and Accrued Assets (Total of Lines 16-34) |
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36 |
DeferredDebitsAbstract Deferred Debits |
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37 |
181 |
UnamortizedDebtExpense Unamortized Debt Expense |
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38 |
182.3 |
OtherRegulatoryAssets Other Regulatory Assets |
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39 |
183 |
PreliminarySurveyAndInvestigationCharges Preliminary Survey And Investigation Charges |
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40 |
184 |
ClearingAccounts Clearing Accounts |
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41 |
185 |
TemporaryFacilities Temporary Facilities |
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42 |
186 |
MiscellaneousDeferredDebits Miscellaneous Deferred Debits |
110 |
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43 |
188 |
ResearchDevelopmentOrDemonstrationExpenditures Research, Development, or Demonstration Expenditures |
111 |
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44 |
189 |
UnamortizedLossOnReacquiredDebt Unamortized Loss on Reacquired Debt |
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45 |
190 |
AccumulatedDeferredIncomeTaxes Accumulated Deferred Income Taxes |
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46 |
DeferredDebits Total Deferred Debits (Total of Lines 37-45) |
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47 |
AssetsAndOtherDebits TOTAL ASSETS AND OTHER DEBITS (TOTAL OF LINES 9, 14, 35 and 46) |
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48 |
ProprietaryCapitalAbstract Proprietary Capital |
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49 |
201 |
CommonStockIssued Common Stock Issued |
201 |
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50 |
204 |
PreferredStockIssued Preferred Stock Issued |
201 |
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51 |
211 |
MiscellaneousPaidInCapital Miscellaneous Paid-In-Capital |
201 |
(b) |
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52 |
215 |
AppropriatedRetainedEarnings Appropriated Retained Earnings |
201 |
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53 |
216 |
UnappropriatedRetainedEarnings Unappropriated Retained Earnings |
201 |
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54 |
219 |
AccumulatedOtherComprehensiveIncome Accumulated Other Comprehensive Income |
201 |
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55 |
ProprietaryCapital Total Proprietary Capital (Total of Lines 49-54) |
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56 |
LongTermDebtAbstract Long-Term Debt |
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57 |
223 |
AdvancesFromAssociateCompanies Advances From Associate Companies |
202 |
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58 |
224 |
OtherLongTermDebt Other Long-Term Debt |
202 |
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59 |
225 |
UnamortizedPremiumonLongTermDebt Unamortized Premium on Long-Term Debt |
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60 |
226 |
UnamortizedDiscountonLongTermDebtDebit Less: Unamortized Discount on Long-Term Debt-Debit |
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61 |
LongTermDebt Total Long-Term Debt (Total of Lines 57-60) |
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62 |
OtherNoncurrentLiabilitiesAbstract Other Non-current Liabilities |
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63 |
227 |
ObligationsUnderCapitalLeaseNoncurrent Obligations Under Capital Leases-Non-current |
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64 |
228.2 |
AccumulatedProvisionForInjuriesAndDamages Accumulated Provision for Injuries and Damages |
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65 |
228.3 |
AccumulatedProvisionForPensionsandBenefits Accumulated Provision For Pensions and Benefits |
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66 |
230 |
AssetRetirementObligations Asset Retirement Obligations |
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67 |
OtherNoncurrentLiabilities Total Other Non-current Liabilities (Total of Lines 63-66) |
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68 |
CurrentandAccruedLiabilitiesAbstract Current and Accrued Liabilities |
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69 |
231 |
NotesPayable Notes Payable |
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70 |
232 |
AccountsPayable Accounts Payable |
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71 |
233 |
NotesPayableToAssociateCompanies Notes Payable to Associate Companies |
203 |
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72 |
234 |
AccountsPayableToAssociateCompanies Accounts Payable to Associate Companies |
203 |
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73 |
236 |
TaxesAccrued Taxes Accrued |
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74 |
237 |
InterestAccrued Interest Accrued |
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75 |
241 |
TaxCollectionsPayable Tax Collections Payable |
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76 |
242 |
MiscellaneousCurrentAndAccruedLiabilities Miscellaneous Current and Accrued Liabilities |
203 |
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77 |
243 |
ObligationsUnderCapitalLeasesCurrent Obligations Under Capital Leases - Current |
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78 |
244 |
DerivativeInstrumentLiabilities Derivative Instrument Liabilities |
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79 |
245 |
DerivativeInstrumentLiabilitiesHedges Derivative Instrument Liabilities - Hedges |
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80 |
CurrentAndAccruedLiabilities Total Current and Accrued Liabilities (Total of Lines 69-79) |
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81 |
DeferredCreditsAbstract Deferred Credits |
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82 |
253 |
OtherDeferredCredits Other Deferred Credits |
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83 |
254 |
OtherRegulatoryLiabilities Other Regulatory Liabilities |
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84 |
255 |
AccumulatedDeferredInvestmentTaxCredits Accumulated Deferred Investment Tax Credits |
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85 |
257 |
UnamortizedGainOnReacquiredDebt Unamortized Gain on Reacquired Debt |
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86 |
282 |
AccumulatedDeferredIncomeTaxesOtherProperty Accumulated deferred income taxes-Other property |
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87 |
283 |
AccumulatedDeferredIncomeTaxesOther Accumulated deferred income taxes-Other |
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88 |
DeferredCredits Total Deferred Credits (Total of Lines 82-87) |
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89 |
LiabilitiesAndProprietaryCapital TOTAL LIABILITIES AND PROPRIETARY CAPITAL (TOTAL OF LINES 55, 61, 67, 80, AND 88) |
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FOOTNOTE DATA |
(a) Concept: FuelStockExpensesUndistributed | ||||||||||||||||||
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(b) Concept: MiscellaneousPaidInCapital | ||||||||||||||||||
The Miscellaneous Paid-In Capital for $7,052,116 is made up of three capital contributions.
The first capital contribution of $99,500 represents the net investment of Central and South West Services, LP with AEPSC when the two service corporations combined as a result of the merger of Central and South West Corporation and American Electric Power in June of 2000.
The second capital contribution of $8,123,156 was due to an American Electric Power Company Inc. board resolution in April 2009 which transferred a parking garage to AEPSC. The resolution approved the contribution of the Marconi Street Unassigned Parking Garage to AEPSC as a capital contribution in the amount of the net book value of the property. The contribution of the unassigned garage to AEPSC was proposed to align its ownership with its primary user i.e. AEPSC.
In association with the AEP Texas Inc. merger and pursuant to a December 2016 American Electric Power Company Inc. board resolution, the liabilities associated with the Central and South West’s Corporate Directors Compensation Plan and its Deferred Compensation Plan were transferred to AEPSC. This transaction was treated as a distribution of paid-in capital because AEPSC assumed the liabilities with these plans. |
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule II - Service Company Property |
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Line No. |
Account # (a) |
Title of Account (b) |
Balance at Beginning of Year (c) |
Additions (d) |
Retirements or Sales (e) |
Other Changes (f) |
Balance at End of Year (g) |
1 |
301 |
Organization |
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2 |
303 |
Miscellaneous Intangible Plant |
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3 |
306 |
Leasehold Improvements |
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4 |
389 |
Land and Land Rights |
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5 |
390 |
Structures and Improvements |
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6 |
391 |
Office Furniture and Equipment |
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7 |
392 |
Transportation Equipment |
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8 |
393 |
Stores Equipment |
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9 |
394 |
Tools, Shop and Garage Equipment |
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10 |
395 |
Laboratory Equipment |
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11 |
396 |
Power Operated Equipment |
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12 |
397 |
Communications Equipment |
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13 |
398 |
Miscellaneous Equipment |
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14 |
399 |
Other Tangible Property |
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15 |
399.1 |
Asset Retirement Costs |
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16 |
Total Service Company Property (Total
of Lines 1-15) |
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17 |
107 |
Construction Work in Progress: |
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18 | |||||||
19 | |||||||
20 | |||||||
31 |
Total Account 107 (Total of Lines 18-30) |
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32 |
Total (Lines 16 and Line 31) |
(a) |
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(c) |
FOOTNOTE DATA |
(a) Concept: ServiceCompanyPropertyIncludingConstructionWorkInProgress | |||||||||||||||||||||||||||||||||||
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(b) Concept: ServiceCompanyPropertyIncludingConstructionWorkInProgressAdjustments | |||||||||||||||||||||||||||||||||||
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(c) Concept: ServiceCompanyPropertyIncludingConstructionWorkInProgress | |||||||||||||||||||||||||||||||||||
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Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule III - Accumulated Provision for Depreciation and Amortization of Service Company Property |
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Line No. |
Account Number (a) |
Description (b) |
Balance at Beginning of Year (c) |
Additions Charged To Account 403-403.1 404-405 (d) |
Retirements (e) |
Other Changes Additions (Deductions) (f) |
Balance at Close of Year (g) |
1 |
301 |
Organization |
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2 |
303 |
Miscellaneous Intangible Plant |
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3 |
306 |
Leasehold Improvements |
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4 |
389 |
Land and Land Rights |
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5 |
390 |
Structures and Improvements |
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6 |
391 |
Office Furniture and Equipment |
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7 |
392 |
Transportation Equipment |
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8 |
393 |
Stores Equipment |
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9 |
394 |
Tools, Shop and Garage Equipment |
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10 |
395 |
Laboratory Equipment |
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11 |
396 |
Power Operated Equipment |
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12 |
397 |
Communications Equipment |
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13 |
398 |
Miscellaneous Equipment |
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14 |
399 |
Other Tangible Property |
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15 |
399.1 |
Asset Retirement Costs |
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16 |
Total |
(a) |
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(b) |
(c) |
FOOTNOTE DATA |
(a) Concept: AccumulatedProvisionForDepreciationAndAmortizationServiceCompanyProperty | ||||||||||||||||||||
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(b) Concept: AccumulatedProvisionForDepreciationAndAmortizationServiceCompanyPropertyAdjustments | ||||||||||||||||||||
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(c) Concept: AccumulatedProvisionForDepreciationAndAmortizationServiceCompanyProperty | ||||||||||||||||||||
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Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule IV - Investments |
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Line No. |
Account Number (a) |
Title of Account (b) |
Balance at Beginning of Year (c) |
Balance at Close of Year (d) |
1 |
123 |
Investment In Associate Companies |
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2 |
124 |
Other Investments |
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3 |
128 |
Other Special Funds |
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4 |
136 |
Balance at close of year |
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5 |
(Total of Line 1-4) |
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(a) |
FOOTNOTE DATA |
(a) Concept: InvestmentsIncludingTemporaryCashInvestments | ||||||||||||||||||||||||||||||||||||||||||||||
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Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule IV - Investments - Other Investments |
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Line No. |
Investment Description (a) |
Name of Issuing Company (b) |
Number of Shares Held (c) |
Principal Investment Amount (d) |
1 | ||||
2 | ||||
3 | ||||
4 | ||||
5 | ||||
6 | ||||
7 | ||||
8 | ||||
9 | ||||
10 | ||||
11 | ||||
12 | ||||
13 | ||||
14 | ||||
15 | ||||
16 | ||||
17 | ||||
18 | ||||
19 | ||||
20 |
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule IV - Investments - Other Special Funds |
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Line No. |
Investment Description (a) |
Name of Issuing Company (b) |
Number of Shares Held (c) |
Principal Investment Amount (d) |
1 | ||||
2 | ||||
3 | ||||
4 | ||||
5 | ||||
6 | ||||
7 | ||||
8 | ||||
9 | ||||
10 | ||||
11 | ||||
12 | ||||
13 | ||||
14 | ||||
15 | ||||
16 | ||||
17 | ||||
18 | ||||
19 | ||||
20 |
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule IV - Investments - Temporary Cash Investments |
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Line No. |
Investment Description (a) |
Balance at Close of
Year (b) |
1 | ||
2 | ||
3 | ||
4 | ||
5 | ||
6 | ||
7 | ||
8 | ||
9 | ||
10 | ||
11 | ||
12 | ||
13 | ||
14 | ||
15 | ||
16 | ||
17 | ||
18 | ||
19 | ||
20 |
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule V - Accounts Receivable from Associate Companies |
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Line No. |
Account Number (a) |
AssociateCompanyName Title of Account (b) |
AccountsReceivableFromAssociateCompanies Balance at Beginning of Year (c) |
AccountsReceivableFromAssociateCompanies Balance at Close of Year (d) |
PaymentsFromAssociateCompanies Total Accommodation or Convenience Payments (e) |
1 |
146 |
Accounts Receivable From Associate Companies |
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2 |
Associate Company: |
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3 |
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(a) |
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40 |
Total |
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FOOTNOTE DATA |
(a) Concept: AccountsReceivableFromAssociateCompanies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule VI - Fuel Stock Expenses Undistributed |
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Line No. |
Account Number (a) |
Title of Account (b) |
FuelStockExpensesUndistributedLabor Labor (c) |
FuelStockExpensesUndistributedExpenses Expenses (d) |
FuelStockExpensesUndistributed Total (e) |
1 |
152 |
Fuel Stock Expenses Undistributed |
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2 |
Associate Company: |
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3 |
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4 |
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5 |
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6 |
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7 |
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8 |
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9 |
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10 |
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|
|
11 |
|
|
|
|
|
40 |
Total |
FOOTNOTE DATA |
(a) Concept: FuelStockExpensesUndistributed | ||||||||||||||||||
|
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule VII - Stores Expense Undistributed |
|||||
|
|||||
Line No. |
Account Number (a) |
Title of Account (b) |
FuelStockExpensesUndistributedLabor Labor (c) |
FuelStockExpensesUndistributedExpenses Expenses (d) |
FuelStockExpensesUndistributed Total (e) |
1 |
163 |
Stores Expense Undistributed |
|||
2 |
Associate Company: |
||||
3 |
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4 |
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5 |
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6 |
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7 |
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8 |
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9 |
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10 |
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11 |
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12 |
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13 |
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14 |
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15 |
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16 |
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17 |
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18 |
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19 |
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20 |
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21 |
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22 |
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23 |
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24 |
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25 |
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26 |
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27 |
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28 |
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29 |
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30 |
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31 |
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32 |
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33 |
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34 |
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35 |
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36 |
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37 |
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38 |
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39 |
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40 |
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41 |
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42 |
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43 |
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44 |
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45 |
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46 |
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47 |
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48 |
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49 |
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50 |
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51 |
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52 |
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53 |
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54 |
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55 |
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56 |
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57 |
|
|
|
|
|
40 |
Total |
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule VIII - Miscellaneous Current and Accrued Assets |
||||
|
||||
Line No. |
Account Number (a) |
Title of Account (b) |
MiscellaneousCurrentAndAccruedAssets Balance at Beginning of Year (c) |
MiscellaneousCurrentAndAccruedAssets Balance at Close of Year (d) |
1 |
174 |
Miscellaneous Current and Accrued Assets |
||
2 |
Item List: |
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3 |
|
|
||
40 |
Total |
|
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule IX - Miscellaneous Deferred Debits |
||||
|
||||
Line No. |
Account Number (a) |
Title of Account (b) |
MiscellaneousDeferredDebits Balance at Beginning of Year (c) |
MiscellaneousDeferredDebits Balance at Close of Year (d) |
1 |
186 |
Miscellaneous Deferred Debits |
||
2 |
Item List: |
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3 |
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||
4 |
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||
5 |
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6 |
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7 |
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8 |
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|
9 |
|
|
|
|
40 |
Total |
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|
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule X - Research, Development, or Demonstration Expenditures |
||||
|
||||
Line No. |
Account Number (a) |
Title of Account (b) |
ResearchDevelopmentOrDemonstrationExpenditures Amount (c) |
|
1 |
188 |
Research, Development, or Demonstration Expenditures |
||
2 |
Project List: |
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3 |
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4 |
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5 |
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6 |
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7 |
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8 |
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9 |
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10 |
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11 |
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12 |
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13 |
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14 |
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15 |
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16 |
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17 |
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18 |
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19 |
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20 |
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21 |
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22 |
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23 |
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24 |
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||
25 |
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||
40 |
Total |
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule XI - Proprietary Capital |
||||
|
||||
Line No. |
Account Number (a) |
Title of Account (b) |
Description (c) |
Amount (d) |
1 |
201 |
Common Stock Issued |
Number of Shares Authorized |
|
2 |
Par or Stated Value per Share |
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||
3 |
Outstanding Number of Shares |
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||
4 |
Close of Period Amount |
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||
5 |
204 |
Preferred Stock Issued |
Number of Shares Authorized |
|
6 |
Par or Stated Value per Share |
|||
7 |
Outstanding Number of Shares |
|||
8 |
Close of Period Amount |
|||
9 |
211 |
Miscellaneous Paid-In Capital |
(a) |
|
10 |
215 |
Appropriated Retained Earnings |
||
11 |
219 |
Accumulated Other Comprehensive Income |
||
12 |
216 |
Unappropriated Retained Earnings |
Balance at Beginning of Year |
|
13 |
Net Income or (Loss) |
|||
14 |
Dividend Paid |
|||
15 |
Balance at Close of Year |
Dividends paid during the year | ||||||
Line No. |
DividendsPaidDescription Dividend Paid Description (a) |
DividendRate Dividend Rate (b) |
Dividendpaid Dividend Paid Amount (c) |
DividendDeclaredDate Dividend Declared Date (d) |
DividendPaidDate Dividend Paid Date (e) |
|
1 | ||||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
6 | ||||||
7 | ||||||
8 | ||||||
9 | ||||||
10 | ||||||
11 | ||||||
12 | ||||||
13 | ||||||
14 | ||||||
15 | ||||||
16 | ||||||
17 | ||||||
18 | ||||||
19 | ||||||
20 | ||||||
21 | ||||||
22 | ||||||
23 | ||||||
24 | ||||||
25 | ||||||
26 | ||||||
27 | ||||||
28 | ||||||
29 | ||||||
30 |
FOOTNOTE DATA |
(a) Concept: MiscellaneousPaidInCapital |
The Miscellaneous Paid-In Capital for $7,052,116 is made up of three capital contributions.
The first capital contribution of $99,500 represents the net investment of Central and South West Services, LP with AEPSC when the two service corporations combined as a result of the merger of Central and South West Corporation and American Electric Power in June of 2000.
The second capital contribution of $8,123,156 was due to an American Electric Power Company Inc. board resolution in April 2009 which transferred a parking garage to AEPSC. The resolution approved the contribution of the Marconi Street Unassigned Parking Garage to AEPSC as a capital contribution in the amount of the net book value of the property. The contribution of the unassigned garage to AEPSC was proposed to align its ownership with its primary user i.e. AEPSC.
In association with the AEP Texas Inc. merger and pursuant to a December 2016 American Electric Power Company Inc. board resolution, the liabilities associated with the Central and South West’s Corporate Directors Compensation Plan and its Deferred Compensation Plan were transferred to AEPSC. This transaction was treated as a distribution of paid-in capital because AEPSC assumed the liabilities with these plans. |
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule XII - Long-Term Debt |
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|
||||||||||
Line No. |
Account Number (a) |
Title of Account (b) |
Term of Obligation (c) |
Class & Series of Obligation (d) |
Date of Maturity (e) |
Interest Rate (f) |
Amount Authorized (g) |
Balance at Beginning of Year (h) |
Additions Deductions (i) |
Balance at Close of Year (j) |
1 |
223 |
Advances from Associate Companies |
||||||||
2 |
Associate Company: |
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3 | ||||||||||
4 | ||||||||||
5 | ||||||||||
6 | ||||||||||
7 | ||||||||||
8 | ||||||||||
9 | ||||||||||
10 | ||||||||||
11 | ||||||||||
12 | ||||||||||
13 |
Total |
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14 |
224 |
Other Long Term Debt |
||||||||
15 |
List Creditor: |
|||||||||
16 | ||||||||||
17 | ||||||||||
18 | ||||||||||
19 | ||||||||||
20 | ||||||||||
21 | ||||||||||
22 | ||||||||||
23 | ||||||||||
24 | ||||||||||
25 | ||||||||||
26 | ||||||||||
27 | ||||||||||
28 |
Total |
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule XIII - Current and Accrued Liabilities |
||||
|
||||
Line No. |
Account Number (a) |
Title of Account (b) |
Balance at Beginning of Year (c) |
Balance at Close of Year (d) |
1 |
233 |
Notes Payable to Associate Companies |
||
2 |
Associate Company: |
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3 | ||||
4 | ||||
5 | ||||
6 | ||||
7 | ||||
8 | ||||
9 | ||||
10 | ||||
11 | ||||
12 | ||||
13 | ||||
14 | ||||
15 | ||||
16 | ||||
17 | ||||
18 | ||||
19 | ||||
20 | ||||
21 | ||||
23 |
Subtotal (Total of Lines 3-22) |
|
|
|
24 |
234 |
Accounts Payable to Associate Companies |
||
25 |
Associate Company: |
|||
26 | ||||
27 | ||||
28 | ||||
29 | ||||
30 | ||||
31 | ||||
32 | ||||
33 | ||||
34 | ||||
35 | ||||
36 | ||||
37 | ||||
38 | ||||
39 | ||||
40 | ||||
41 | ||||
40 |
Subtotal (Total of Lines 26-39) |
|
|
|
41 |
242 |
Miscellaneous Current and Accrued Liabilities |
||
42 | Items List: | |||
43 | ||||
44 | ||||
45 | ||||
46 | ||||
47 | ||||
48 | ||||
49 |
Subtotal (Total of Lines 43-48) |
|
|
|
50 |
TOTAL (LINES 23, 40, AND 49) |
|
|
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule XIV - Notes to Financial Statements |
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AEPSC is a wholly-owned subsidiary of AEP. AEPSC provides certain managerial and professional services, including administrative and engineering services, to affiliated companies in the AEP System and periodically to nonaffiliated companies. AEPSC also acts as an agent on behalf of affiliated companies in the AEP System for certain contractual arrangements, such as purchases and sales of risk management assets and liabilities. The activity associated with the agency relationship is excluded from AEPSC’s financial statements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Rates and Service Regulation AEPSC’s intercompany service billings, which are AEPSC’s fully allocated cost, including taxes, are regulated by the FERC under the 2005 Public Utility Holding Company Act and the Federal Power Act. The FERC also has jurisdiction over the issuances and acquisitions of securities of public utility subsidiaries, the acquisition or sale of certain utility assets and mergers with another electric utility or holding company. In addition, both the FERC and state regulatory commissions are permitted to review and audit the relevant books and records of companies within a public utility holding company system. Accounting for the Effects of Cost-Based Regulation As a cost-based regulated entity, AEPSC’s financial statements reflect the actions of regulators that result in the recognition of certain revenues and expenses in different time periods than enterprises that are not rate-regulated. In accordance with accounting guidance for “Regulated Operations,” AEPSC records regulatory assets (deferred expenses) and regulatory liabilities (deferred revenue reductions or refunds) in accordance with regulatory actions to match expenses and revenues in cost-based rates. Regulatory assets are expected to be recovered in future periods through billings to affiliated companies and regulatory liabilities are expected to reduce future billings to affiliated companies. In the event that a portion of AEPSC’s business no longer met those requirements, all amounts would be recoverable from affiliated companies. In the event AEPSC would require financing or other support outside the cost reimbursement billings, this financing would be provided by AEP. Costs charged to capitalized projects of AEPSC customers are included in the financial statements of AEPSC. Use of Estimates The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates include, but are not limited to, the effects of regulation, the effects of contingencies and certain assumptions made in accounting for pension and postretirement benefits. The estimates and assumptions used are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results could ultimately differ from those estimates.
Cash and Cash Equivalents Cash and Cash Equivalents include temporary cash investments with original maturities of three months or less.
Accounts Receivable
Accounts Receivable primarily includes receivables from affiliated companies for professional services rendered. AEPSC bills affiliated companies for services rendered on a monthly basis based on a work order system that is in accordance with the 2005 Public Utility Holding Company Act. The affiliated companies generally remit these payments within 30 days.
Property and Equipment
Property is stated at original cost. Depreciation is provided on a straight-line basis over the estimated useful lives of the property. The annual composite depreciation rate was 1.5% and 1.6% for the years ended December 31, 2018 and 2017, respectively.
Long-lived assets are required to be tested for impairment when it is determined that the carrying value of the assets may no longer be recoverable or when the assets meet the held-for-sale criteria under the accounting guidance for “Impairment or Disposal of Long-Lived Assets.”
The fair value of an asset is the amount at which that asset could be bought or sold in a current transaction between willing parties, as opposed to a forced or liquidation sale. Quoted market prices in active markets are the best evidence of fair value and are used as the basis for the measurement, if available. In the absence of quoted prices for identical or similar assets in active markets, fair value is estimated using various internal and external valuation methods including cash flow analysis and appraisals.
Deferred Compensation
Investments include the cash surrender value of trust-owned life insurance policies held under a grantor trust to provide funds for nonqualified deferred compensation plans that AEPSC sponsors.
Valuation of Nonderivative Financial Instruments
The book values of Cash and Cash Equivalents, Advances to/from Affiliates, Accounts Receivable and Accounts Payable approximate fair value because of the short-term maturity of these instruments.
Fair Value Measurements of Assets and Liabilities
The accounting guidance for “Fair Value Measurements and Disclosures” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. When quoted market prices are not available, pricing may be completed using comparable securities, dealer values, operating data and general market conditions to determine fair value. Valuation models utilize various inputs such as commodity, interest rate and, to a lesser degree, volatility and credit that include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, market corroborated inputs (i.e. inputs derived principally from, or correlated to, observable market data) and other observable inputs for the asset or liability.
AEP utilizes its trustee’s external pricing service to estimate the fair value of the underlying investments held in the benefit plan trusts. AEP’s investment managers review and validate the prices utilized by the trustee to determine fair value. AEP’s investment managers perform their own valuation testing to verify the fair values of the securities. AEP receives audit reports of the trustee’s operating controls and valuation processes. The trustee uses multiple pricing vendors for the assets held in the trusts.
Assets in the benefits trusts are classified using the following methods. Equities are classified as Level 1 holdings if they are actively traded on exchanges. Items classified as Level 1 are investments in money market funds, fixed income and equity mutual funds and equity securities. They are valued based on observable inputs primarily unadjusted quoted prices in active markets for identical assets. Items classified as Level 2 are primarily investments in individual fixed income securities. Fixed income securities generally do not trade on exchanges and do not have an official closing price but their valuation inputs are based on observable market data. Pricing vendors calculate bond valuations using financial models and matrices. The models use observable inputs including yields on benchmark securities, quotes by securities brokers, rating agency actions, discounts or premiums on securities compared to par prices, changes in yields for U.S. Treasury securities, corporate actions by bond issuers, prepayment schedules and histories, economic events and, for certain securities, adjustments to yields to reflect changes in the rate of inflation. Other securities with model-derived valuation inputs that are observable are also classified as Level 2 investments. Investments with unobservable valuation inputs are classified as Level 3 investments. Investments classified as Other are valued using Net Asset Value as a practical expedient. Items classified as Other are primarily cash equivalent funds, common collective trusts, commingled funds, structured products, private equity, real estate, infrastructure and alternative credit investments. These investments do not have a readily determinable fair value or they contain redemption restrictions which may include the right to suspend redemptions under certain circumstances. Redemption restrictions may also prevent certain investments from being redeemed at the reporting date for the underlying value.
Revenues and Expenses
AEPSC provides certain managerial and professional services to both affiliated and nonaffiliated companies. The costs of the services are billed on a direct-charge basis, whenever possible. Costs incurred to perform services that benefit more than one company are allocated to the benefiting companies using one of 80 FERC accepted allocation factors. The allocation factors used to bill for services performed by AEPSC are based upon formulae that consider factors such as number of customers, number of employees, number of transmission pole miles, number of invoices and other factors. The data upon which these formulae are based are updated monthly, quarterly, semi-annually or annually, depending on the particular factor and its volatility. The billings for services are made at cost and include no compensation for a return on investment.
Income Taxes and Investment Tax Credits
AEPSC uses the liability method of accounting for income taxes. Under the liability method, deferred income taxes are provided for all temporary differences between the book and tax basis of assets and liabilities which will result in a future tax consequence. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. AEPSC revalued deferred tax assets and liabilities at the new federal corporate income tax rate of 21% in December 2017. See Note 6 - Income Taxes for additional information related to Tax Reform.
When the flow-through method of accounting for temporary differences is required by a regulator to be reflected in regulated revenues (that is, when deferred taxes are not included in the cost of service for determining regulated rates), deferred income taxes are recorded and related regulatory assets and liabilities are established to match the regulated revenues and tax expense.
AEPSC applies the deferral methodology for the recognition of ITC. Deferred ITC is amortized to income tax expense over the life of the asset that generated the credit. Amortization of deferred ITC begins when the asset is placed into service, except where regulatory commissions reflect ITC in the rate-making process, then amortization begins when the cash tax benefit is recognized.
AEPSC accounts for uncertain tax positions in accordance with the accounting guidance for “Income Taxes.” AEPSC classifies interest expense or income related to uncertain tax positions as interest expense or income as appropriate and classifies penalties as Other Operation expense.
Pension and OPEB Plans
AEPSC participates in an AEP sponsored qualified pension plan and two unfunded nonqualified pension plans. Substantially all of AEPSC’s employees are covered by the qualified plan or both the qualified and nonqualified pension plans. AEPSC also participates in OPEB plans sponsored by AEP to provide health and life insurance benefits for retired employees. AEPSC accounts for its participation in the AEP sponsored pension and OPEB plans using multiple- employer accounting. See Note 5 - Benefit Plans for additional information including significant accounting policies associated with the plans.
Investments Held in Trust for Future Liabilities AEP has several trust funds with significant investments intended to provide for future payments of pension and OPEB benefits. All of the trust funds’ investments are diversified and managed in compliance with all laws and regulations. The investment strategy for the trust funds is to use a diversified portfolio of investments to achieve an acceptable rate of return while managing the investment risk of the assets relative to the associated liabilities. To minimize investment risk, the trust funds are broadly diversified among classes of assets, investment strategies and investment managers. Management regularly reviews the actual asset allocations and periodically rebalances the investments to targeted allocations when appropriate. Investment policies and guidelines allow investment managers in approved strategies to use financial derivatives to obtain or manage market exposures and to hedge assets and liabilities. The investments are reported at fair value under the “Fair Value Measurements and Disclosures” accounting guidance.
Benefit Plans
All benefit plan assets are invested in accordance with each plan’s investment policy. The investment policy outlines the investment objectives, strategies and target asset allocations by plan.
The investment philosophies for AEP’s benefit plans support the allocation of assets to minimize risks and optimize net returns. Strategies used include:
The investment policy for each benefit plan contains various investment limitations. The investment policies establish concentration limits for securities and prohibit the purchase of securities issued by AEP (with the exception of proportionate and immaterial holdings of AEP securities in passive index strategies). However, the investment policies do not preclude the benefit trust funds from receiving contributions in the form of AEP securities, provided that the AEP securities acquired by each plan may not exceed the limitations imposed by law.
For equity investments, the concentration limits are as follows:
For fixed income investments, each investment manager’s portfolio is compared to investment grade, diversified long and intermediate benchmark indices.
A portion of the pension assets is invested in real estate funds to provide diversification, add return and hedge against inflation. Real estate properties are illiquid, difficult to value and not actively traded. The pension plan uses external real estate investment managers to invest in commingled funds that hold real estate properties. To mitigate investment risk in the real estate portfolio, commingled real estate funds are used to ensure that holdings are diversified by region, property type and risk classification. Real estate holdings include core, value-added and opportunistic classifications and some investments in Real Estate Investment Trusts, which are publicly traded real estate securities.
A portion of the pension assets is invested in private equity. Private equity investments add return and provide diversification and typically require a long-term time horizon to evaluate investment performance. Private equity is classified as an alternative investment because it is illiquid, difficult to value and not actively traded. The pension plan uses limited partnerships and commingled funds to invest across the private equity investment spectrum. The private equity holdings are with multiple general partners who help monitor the investments and provide investment selection expertise. The holdings are currently comprised of venture capital, buyout and hybrid debt and equity investment instruments.
AEP participates in a securities lending program with BNY Mellon to provide incremental income on idle assets and to provide income to offset custody fees and other administrative expenses. AEP lends securities to borrowers approved by BNY Mellon in exchange for collateral. All loans are collateralized by at least 102% of the loaned asset’s market value and the collateral is invested. The difference between the rebate owed to the borrower and the collateral rate of return determines the earnings on the loaned security. The securities lending program’s objective is to provide modest incremental income with a limited increase in risk. As of December 31, 2018 and 2017, the fair value of securities on loan as part of the program was $240.7 million and $491.8 million, respectively. Cash and securities obtained as collateral exceeded the fair value of the securities loaned as of December 31, 2018 and 2017.
Trust owned life insurance (TOLI) underwritten by The Prudential Insurance Company is held in the OPEB plan trusts. The strategy for holding life insurance contracts in the taxable Voluntary Employees’ Beneficiary Association trust is to minimize taxes paid on the asset growth in the trust. Earnings on plan assets are tax-deferred within the TOLI contract and can be tax-free if held until claims are paid. Life insurance proceeds remain in the trust and are used to fund future retiree medical benefit liabilities. With consideration to other investments held in the trust, the cash value of the TOLI contracts is invested in two diversified funds. A portion is invested in a commingled fund with underlying investments in stocks that are actively traded on major international equity exchanges. The other portion of the TOLI cash value is invested in a diversified, commingled fixed income fund with underlying investments in government bonds, corporate bonds and asset-backed securities.
Cash and cash equivalents are held in each trust to provide liquidity and meet short-term cash needs. Cash equivalent funds are used to provide diversification and preserve principal. The underlying holdings in the cash funds are investment grade money market instruments including commercial paper, certificates of deposit, treasury bills and other types of investment grade short-term debt securities. The cash funds are valued each business day and provide daily liquidity.
Stock-Based Compensation Plans
As of December 31, 2018, AEPSC had performance units and restricted stock units outstanding under the American Electric Power System 2015 Long-Term Incentive Plan (2015 LTIP). Upon vesting, performance units awarded prior to 2017 are settled in cash and restricted stock units are settled in AEP common shares, except for restricted stock units granted after January 1, 2013 and prior to January 1, 2017 that vest to executive officers, which are settled in cash. All performance units and restricted stock units awarded after January 1, 2017 will be settled in AEP common shares.
AEPSC maintains a variety of tax qualified and nonqualified deferred compensation plans for employees that include, among other options, an investment in or an investment return equivalent to that of AEP common stock. This includes AEP career shares maintained under the American Electric Power System Stock Ownership Requirement Plan (SORP), which facilitates executives in meeting minimum stock ownership requirements assigned to them by the Human Resources Committee of AEP’s Board of Directors. AEP career shares are derived from vested performance units granted to employees under the 2015 LTIP. AEP career shares accrue additional dividend shares in an amount equal to dividends paid on AEP common shares at the closing market price on the dividend payments date. All AEP career shares are paid out in AEP common stock after the executive’s service with AEP ends.
Performance units awarded after January 1, 2017 are classified as temporary equity in the Mezzanine Equity section on the Parent’s balance sheets. These awards may be settled in cash upon an employee’s qualifying termination due to a change in control. Because such event is not solely within the control of the company, these awards are classed outside of permanent equity.
AEPSC measures and recognizes compensation expense for all share-based payment awards to employees based on estimated fair values. For share-based payment awards with service only vesting conditions, AEPSC recognizes compensation expense on a straight-line basis. Stock-based compensation expense recognized on AEPSC’s statements of operations for the years ended December 31, 2018 and 2017 is based on the number of outstanding awards at the end of each period without a reduction for estimated forfeitures. AEPSC accounts for forfeitures in the period in which they occur.
For the years ended December 31, 2018 and 2017, compensation cost is included in Net Income for the performance units, career shares and restricted stock units. Compensation cost may also be capitalized. See Note 9 - Stock-based Compensation for additional information.
Contract Software Liabilities
On May 31, 2017, AEPSC entered into a 10-year strategic agreement with Oracle. The agreement provides perpetual unlimited deployment rights to Oracle’s catalog of on premise licenses, as long as support payments continue to be made in accordance with the contract terms. In total, $255 million (excluding sales tax) will be paid over the 10-year term for licenses and technical support. A capitalized software asset of $110 million, including sales tax, was recorded in June 2017 for the value of the licenses, and will depreciate over the 10-year term.
Subsequent Events
Management reviewed subsequent events through March 28, 2019, the date that AEPSC’s 2018 Annual Report was available to be issued.
During FASB’s standard-setting process and upon issuance of final pronouncements, management reviews the new accounting literature to determine its relevance, if any, to AEPSC’s business. The following pronouncements will impact the financial statements.
ASU 2014-09 “Revenue from Contracts with Customers” (ASU 2014-09) In May 2014, the FASB issued ASU 2014-09 changing the method used to determine the timing and requirements for revenue recognition on the statements of operations. Under the new standard, an entity must identify the performance obligations in a contract with a customer, determine the transaction price and allocate the price to specific performance obligations to recognize the revenue when the obligation is completed. The amendments in this update also require disclosure of sufficient information to allow users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.
Management adopted ASU 2014-09 effective January 1, 2018, by means of the modified retrospective approach for all contracts within the scope of the new standard. The adoption of ASU 2014-09 did not have a material impact on results of operations, financial position or cash flows. In that regard, the application of the new standard did not cause any significant differences in any individual financial statement line items had those line items been presented in accordance with the guidance that was in effect prior to the adoption of the new standard. Further, given the lack of material impact to the financial statements, the adoption of the new standard did not give rise to any material changes in AEPSC’s previously established accounting policies for revenue. See Note 10 - Revenue from Contracts with Customers for additional disclosures required by the new standard.
ASU 2016-02 “Accounting for Leases” (ASU 2016-02)
In February 2016, the FASB issued ASU 2016-02 increasing the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheets and disclosing key information about leasing arrangements. Under the new standard, an entity must recognize an asset and liability for operating leases on the balance sheets. Additionally, a capital lease will be known as a finance lease going forward. Leases with terms of 12 months or longer will be subject to the new requirements. Fundamentally, the criteria used to determine lease classification will remain the same, but will be more subjective under the new standard.
New leasing standard implementation activities included the identification of the lease population within the AEP System as well as the sampling of representative lease contracts to analyze accounting treatment under the new accounting guidance. Based upon the completed assessments, management also prepared a gap analysis to outline new disclosure compliance requirements.
Management adopted ASU 2016-02 effective January 1, 2019 by means of a cumulative-effect adjustment to the balance sheet. Management elected the following practical expedients upon adoption:
Management concluded that the result of adoption would not materially change the volume of contracts that qualify as leases going forward. The adoption of the new standard did not materially impact results of operations or cash flows, but did have a material impact on the balance sheet. The impact to the balance sheet has been estimated for the first quarter of 2019 as $80.5 million.
ASU 2016-13 “Measurement of Credit Losses on Financial Instruments” (ASU 2016-13)
In June 2016, the FASB issued ASU 2016-13 requiring an allowance to be recorded for all expected credit losses for financial assets. The allowance for credit losses is based on historical information, current conditions and reasonable and supportable forecasts. The new standard also makes revisions to the other than temporary impairment model for available-for-sale debt securities. Disclosures of credit quality indicators in relation to the amortized cost of financing receivables are further disaggregated by year of origination.
The new accounting guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted for interim and annual periods beginning after December 15, 2018. The amendments will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. Management is analyzing the impact of this new standard and, at this time, cannot estimate the impact of adoption on results of operations. Management plans to adopt ASU 2016-13 and related implementation guidance effective January 1, 2020.
ASU 2017-07 “Compensation - Retirement Benefits” (ASU 2017-07)
In March 2017, the FASB issued ASU 2017-07 requiring that an employer report the service cost component of pension and postretirement benefits in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented on the statements of operations separately from the service cost component and outside of a subtotal of loss from operations. In addition, only the service cost component is eligible for capitalization as applicable following labor.
Management adopted ASU 2017-07 effective January 1, 2018. Presentation of the non-service components on a separate line outside of operating loss was applied on a retrospective basis, using the amounts disclosed in the benefit plan note for the estimation basis as a practical expedient. Capitalization of only the service cost component was applied on a prospective basis.
ASU 2018-14 “Disclosure Framework: Changes to the Disclosure Requirements for Defined Benefit Plans” (ASU 2018-14)
In August 2018, the FASB issued ASU 2018-14 modifying the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments in this Update to Subtopic 715-20 remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures and add disclosure requirements identified as relevant.
See Note 5 - Benefit Plans for updates to the disclosures required by the new standard.
ASU 2018-15 “Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (ASU 2018-15)
In August 2018, the FASB issued ASU 2018-15 aligning the requirements for capitalizing implementation costs incurred in a cloud computing arrangement (hosting arrangement) that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new standard requires an entity (customer) in a hosting arrangement that is a service contract to follow the accounting guidance for “Internal-Use Software” to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. To eliminate diversity in practice, the new standard changes the presentation of implementation costs for cloud service arrangements that are service contracts without the purchase of a license. Implementation costs for cloud service contracts will be presented on the balance sheets in the same manner as a prepayment. AEPSC currently presents implementation costs in property, plant and equipment on the balance sheets. Under the new standard, amortization of capitalized implementation costs of a hosting arrangement will be recorded in Operation and Maintenance expense over the term of the cloud service arrangement, rather than Depreciation and Amortization expense on the statements of operations. Payments for capitalized implementation costs in the statements of cash flows will be classified in the same manner as payments made for fees associated with the hosting element.
The new accounting guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The amendments may be applied either retrospectively or prospectively to applicable implementation costs incurred after the date of adoption. Management is analyzing the impact of this new standard and at this time, cannot estimate the impact of adoption on results of operations, financial position or cash flows. Management plans to adopt ASU 2018-15 prospectively, effective January 1, 2020.
Recognized regulatory assets and liabilities are comprised of the following items:
(b) Refunded using Average Rate Assumption Method.
AEPSC is subject to certain claims and legal actions arising in its ordinary course of business. The ultimate outcome of such pending or potential litigation cannot be predicted. For current proceedings not specifically discussed below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the financial statements.
COMMITMENTS
AEPSC has construction commitments to support its operations. In managing the overall construction program and in the normal course of business, AEPSC contractually commits to third-party construction vendors for certain material purchases and other construction services. AEPSC also purchases materials, supplies, services and property, plant and equipment under contract as part of its normal course of business. Certain supply contracts contain penalty provisions for early termination. In accordance with the accounting guidance for “Commitments”, AEPSC had the following contractual commitments as of December 31, 2018 and 2017 relating to contract software liabilities. See “Contract Software Liabilities” section of Note 1 for additional information.
GUARANTEES Liabilities for guarantees are recorded in accordance with the accounting guidance for “Guarantees.” There is no collateral held in relation to any guarantees. In the event any guarantee is drawn, there is no recourse to third parties unless specified below.
Letters of Credit
AEPSC enters into standby letters of credit with third parties. These letters of credit were issued in the ordinary course of business and cover items such as construction contracts, insurance programs, security deposits and debt service reserves. As of December 31, 2018, the maximum future payments of the letters of credit were $26.4 million with maturities ranging from February 2019 to December 2019.
Indemnifications and Other Guarantees
Contracts
AEPSC enters into certain types of contracts which require indemnifications. Typically, these contracts include, but are not limited to, sale agreements, lease agreements, purchase agreements and financing agreements. Generally, these agreements may include, but are not limited to, indemnifications around certain tax, contractual and environmental matters. With respect to sale agreements, exposure generally does not exceed the sale price. As of December 31, 2018, there were no material liabilities recorded for any indemnifications.
Lease Agreements
AEPSC leases certain equipment under master lease agreements. See “Master Lease Agreements” section of Note 7 for additional information on disclosure of lease residual value guarantees.
CONTINGENCIES
Insurance and Potential Losses
AEPSC maintains insurance coverage normal and customary for electric utilities, subject to various deductibles. AEPSC also maintains property and casualty insurance that may cover certain physical damage or third-party injuries caused by cyber security incidents. Insurance includes coverage for all risks of physical loss or damage to AEPSC assets, subject to insurance policy conditions and exclusions. Covered property generally includes AEPSC facilities. The insurance programs also generally provide coverage against loss arising from certain claims made by third parties. Coverage is generally provided by a combination of the protected cell of Energy Insurance Services and/or various industry mutual and/or commercial insurance carriers.
Some potential losses or liabilities may not be insurable or the amount of insurance carried may not be sufficient to meet potential losses and liabilities. Future losses or liabilities, if they occur, which are not completely insured, would be recovered from affiliated companies.
For a discussion of investment strategy, investment limitations, target asset allocations and the classification of investments within the fair value hierarchy, see “Fair Value Measurements of Assets and Liabilities” and “Investments Held in Trust for Future Liabilities” sections of Note 1.
AEPSC participates in an AEP sponsored qualified pension plan and two unfunded nonqualified pension plans. Substantially all of AEPSC’s employees are covered by the qualified plan or both the qualified and nonqualified pension plans. AEPSC also participates in OPEB plans sponsored by AEP to provide health and life insurance benefits for retired employees.
AEPSC recognizes the funded status associated with defined benefit pension and OPEB plans on its balance sheets. Disclosures about the plans are required by the “Compensation - Retirement Benefits” accounting guidance. AEPSC recognizes an asset for a plan’s overfunded status or a liability for a plan’s underfunded status. AEPSC records a regulatory asset instead of other comprehensive income for qualifying benefit costs of regulated operations that will be billed to affiliated companies.
Actuarial Assumptions for Benefit Obligations
The weighted-average assumptions used in the measurement of benefit obligations are shown in the following table: Pension Plans OPEB December 31,
(a) Rates are for base pay only. In addition, an amount is added to reflect target incentive compensation for exempt employees and overtime and incentive pay for nonexempt employees. NA Not applicable.
A duration-based method is used to determine the discount rate for the plans. A hypothetical portfolio of high quality corporate bonds is constructed with cash flows matching the benefit plan liability. The composite yield on the hypothetical bond portfolio is used as the discount rate for the plan.
For 2018, the rate of compensation increase assumed varies with the age of the employee, ranging from 3.5% per year to 12% per year, with an average increase of 4.9%.
Actuarial Assumptions for Net Periodic Benefit Costs
The weighted-average assumptions used in the measurement of benefit costs are shown in the following table: Pension Plans OPEB Years Ended December 31,
(a) Rates are for base pay only. In addition, an amount is added to reflect target incentive compensation for exempt employees and overtime and incentive pay for nonexempt employees. NA Not applicable.
The expected return on plan assets was determined by evaluating historical returns, the current investment climate (yield on fixed income securities and other recent investment market indicators), rate of inflation, third party forecasts and current prospects for economic growth.
The health care trend rate assumptions used for OPEB plans measurement purposes are shown below: December 31, Health Care Trend Rates 2018 2017
Significant Concentrations of Risk within Plan Assets
In addition to establishing the target asset allocation of plan assets, the investment policy also places restrictions on securities to limit significant concentrations within plan assets. The investment policy establishes guidelines that govern maximum market exposure, security restrictions, prohibited asset classes, prohibited types of transactions, minimum credit quality, average portfolio credit quality, portfolio duration and concentration limits. The guidelines were established to mitigate the risk of loss due to significant concentrations in any investment. Management monitors the plans to control security diversification and ensure compliance with the investment policy. As of December 31, 2018, the assets were invested in compliance with all investment limits. See “Investments Held in Trust for Future Liabilities” section of Note 1 for limit details.
Benefit Plan Obligations, Plan Assets and Funded Status
For the year ended December 31, 2018, the pension and OPEB plans had an actuarial gain due to an increase in the discount rate as well as updated estimates for future medical expenses in the OPEB plans. For the year ended December 31, 2017, the pension plans had an actuarial loss due to a decrease in the discount rate. The OPEB plans had an actuarial gain primarily due to a change in medical benefits for retirees which was partially offset by a decrease in the discount rate. The following table provides a reconciliation of the changes in the plans’ benefit obligations, fair value of plan assets and funded status. The benefit obligation for the defined benefit pension and OPEB plans are the projected benefit obligation and the accumulated benefit obligation, respectively. Pension Plans OPEB 2018 2017 2018 2017 Change in Benefit Obligation (in thousands)
(a) Contributions to the qualified pension plan were $0 and $35 million for the years ended December 31, 2018 and 2017, respectively. Contributions to the nonqualified pension plans were $9.4 million and $4.8 million for the years ended December 31, 2018 and 2017, respectively.
Amounts Recognized on the Balance Sheets
Determination of Pension Expense
The determination of pension expense or income is based on a market-related valuation of assets which reduces year- to-year volatility. This market-related valuation recognizes investment gains or losses over a five-year period from the year in which they occur. Investment gains or losses for this purpose are the difference between the expected return calculated using the market-related value of assets and the actual return.
Pension and OPEB Assets
The fair value tables within Pension and OPEB Assets presents the classification of assets for AEP within the fair value hierarchy. All Level 1, 2, 3 and Other amounts can be allocated to AEPSC using the percentages in the table below:
The following table presents the classification of pension plan assets for AEP within the fair value hierarchy as of December 31, 2018:
The following table presents the classification of OPEB plan assets for AEP within the fair value hierarchy as of December 31, 2018:
The following table presents the classification of pension plan assets for AEP within the fair value hierarchy as of December 31, 2017:
The following table sets forth a reconciliation of changes in the fair value of AEP’s assets classified as Level 3 in the fair value hierarchy for the pension assets:
(a) The classification of Level 3 assets from the prior year was corrected in the current year presentation and included within the fair value hierarchy table as of December 31, 2017 as “Other” investments for which fair value is measured using net asset value per share in accordance with ASU 2015-07, Disclosure for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). Management concluded that these disclosure errors were immaterial individually and in the aggregate to all prior periods presented.
The following table presents the classification of OPEB plan assets for AEP within the fair value hierarchy as of December 31, 2017:
Accumulated Benefit Obligation
The accumulated benefit obligation for the pension plans is as follows:
Obligations in Excess of Fair Values
The tables below show the underfunded pension plans that had obligations in excess of plan assets.
Projected Benefit Obligation
Estimated Future Benefit Payments and Contributions
AEPSC expects contributions and payments for the pension and OPEB plans of $68.4 million and $702 thousand, respectively, during 2019. For the pension plans, this amount includes the payment of unfunded nonqualified benefits plus contributions to the qualified trust fund of at least the minimum amount required by the Employee Retirement Income Security Act. For the qualified pension plan, AEPSC may also make additional contributions to maintain the funded status of the plan. The table below reflects the total benefits expected to be paid from the plan or from AEPSC’s assets. The payments include the participants’ contributions to the plan for their share of the cost. Future benefit payments are dependent on the number of employees retiring, whether the retiring employees elect to receive pension benefits as annuities or as lump sum distributions, future integration of the benefit plans with changes to Medicare and other legislation, future levels of interest rates and variances in actuarial results. The estimated payments for pension benefits and OPEB are as follows: Estimated Payments Pension Plans OPEB (in thousands)
Components of Net Periodic Benefit Cost
The following table provides the components of net periodic benefit cost (credit):
American Electric Power System Retirement Savings Plan
AEPSC participates in an AEP sponsored defined contribution retirement savings plan, the American Electric Power System Retirement Savings Plan, for substantially all employees. This qualified plan offers participants an opportunity to contribute a portion of their pay, includes features under Section 401(k) of the Internal Revenue Code and provides for company matching contributions. The matching contributions to the plan are 100% of the first 1% of eligible employee contributions and 70% of the next 5% of contributions. The cost for matching contributions totaled $26.9 million in 2018 and $27.4 million in 2017.
Federal Tax Reform and Legislation
In December 2017, Tax Reform legislation was signed into law. Tax Reform includes significant changes to the Internal Revenue Code of 1986, as amended, including lowering the corporate federal income tax rate from 35% to 21%. As a result of this rate change, AEPSC’s deferred tax assets and liabilities were remeasured using the newly enacted rate of 21% in December 2017. In response to Tax Reform, the SEC staff issued Staff Accounting Bulletin 118 (SAB 118) in December 2017. SAB 118 provided for up to a one year period (the measurement period) in which to complete the required analyses and accounting required by Tax Reform.
During 2017, AEPSC recorded provisional amounts for the income tax effects of Tax Reform. Throughout 2018, AEPSC continued to assess the impacts of legislative changes in the tax code as well as interpretative changes of the tax code. The measurement period adjustments recorded during 2018 were immaterial.
The measurement period under SAB 118 ended in December 2018. However, Tax Reform uncertainties still remain and AEPSC will continue to monitor income tax effects that may change as a result of future legislation and further interpretation of Tax Reform based on proposed U.S. Treasury regulations and guidance from the IRS and state tax authorities.
Federal Legislation
The IRS has proposed new regulations that provide guidance regarding the additional first-year depreciation deduction under Section 168(k). The proposed regulations reflect changes as a result of Tax Reform and affect taxpayers with qualified depreciable property acquired and placed in service after September 27, 2017. Generally, AEPSC’s regulated businesses will not be eligible for any bonus depreciation for property acquired and placed in service after January 1, 2018. However, for self-constructed property and other property placed in service in 2018 for which construction began prior to January 1, 2018, taxpayers are required to evaluate the contractual terms to determine if these additions qualify for 100% expensing under Tax Reform or 50% bonus depreciation as provided under prior tax law.
During the fourth quarter of 2018, the IRS proposed new regulations that reflect changes as a result of Tax Reform concerning potential limitations on the deduction of business interest expense. These regulations require an allocation of net interest expense between regulated and competitive businesses within the consolidated tax return. This allocation is based upon net tax basis, and the proposed regulations provide a de minimis test under which all interest is deductible if less than 10% is allocable to the competitive businesses. Management continues to review and evaluate the proposed regulations and at this time expect to be able to deduct materially all business interest expense under this de minimis provision.
Section 162(m) of the Internal Revenue Code generally limits the amount of compensation a company can deduct annually to $1 million for certain executive officers. The exemption from Section 162(m)’s deduction limit for performance-based compensation was repealed by Tax Reform, effective for taxable years ending after December 31, 2017. Management continues to evaluate whether any of its compensation plans qualify for transitional relief, such that payments made pursuant to these plans might be deductible.
Income Tax Expense
The details of AEPSC’s income taxes as reported are as follows:
The following is a reconciliation of the difference between the amount of federal income taxes computed by multiplying book income before income taxes by the federal statutory tax rate and the amount of income taxes reported:
The following table shows elements of AEPSC’s net deferred tax liability and significant temporary differences:
AEP System Tax Allocation Agreement
AEPSC joins in the filing of a consolidated federal income tax return with its affiliates in the AEP System. The allocation of the AEP System’s current consolidated federal income tax to the AEP System companies allocates the benefit of current tax losses to the AEP System companies giving rise to such losses in determining their current tax expense. The consolidated net operating loss of the AEP System is allocated to each company in the consolidated group with taxable losses. The tax benefit of the Parent is allocated to its subsidiaries with taxable income. With the exception of the allocation of the consolidated AEP System net operating loss and the loss of the Parent and tax credits, the method of allocation reflects a separate return result for each company in the consolidated group.
Federal and State Income Tax Audit Status
AEPSC and other AEP subsidiaries are no longer subject to U.S. federal examination for years before 2011. The IRS examination of years 2011 through 2013 started in April 2014. AEPSC and other AEP subsidiaries received a Revenue Agents Report in April 2016, completing the 2011 through 2013 audit cycle indicating an agreed upon audit. The 2011 through 2013 audit was submitted to the Congressional Joint Committee on Taxation for approval. The Joint Committee referred the audit back to the IRS exam team for further consideration. To resolve the issue under consideration, AEPSC and other AEP subsidiaries and the IRS exam team agreed to utilize the Fast Track Settlement Program in December 2017. The program was completed in March 2018 and tax years 2014 and 2015 were added to the IRS examination to reflect the impact of the Fast Track changes that were carried forward to 2014 and 2015. In June 2018, AEPSC and other AEP subsidiaries settled all outstanding issues under audit for tax years 2011-2015. The Joint Committee approved the settlement in November 2018. The settlement did not materially impact AEPSC’s net income, cash flows or financial condition. The IRS examination of 2016 began in October 2018.
AEPSC and other AEP subsidiaries file income tax returns in various state and local jurisdictions. These taxing authorities routinely examine the tax returns. AEPSC and other AEP subsidiaries are currently under examination in several state and local jurisdictions. However, it is possible that previously filed tax returns have positions that may be challenged by these tax authorities. Management believes that adequate provisions for income taxes have been made for potential liabilities resulting from such challenges and that the ultimate resolution of these audits will not materially impact net income. AEPSC is no longer subject to state or local income tax examinations by tax authorities for years before 2007.
Net Income Tax Operating Loss Carryforward
As of December 31, 2018 and 2017, AEPSC had a state income tax operating loss carryforwards of $27.2 million and $21.9 million, respectively, for Oklahoma. As of December 31, 2018, AEPSC has recorded $1.6 million of deferred state income tax benefits. Management anticipates future taxable income will be sufficient to realize the state net income tax operating loss tax benefits before the state carryforward expires for Oklahoma.
Uncertain Tax Positions
AEPSC recognizes interest accruals related to uncertain tax positions in interest income or expense as applicable and penalties in Operation and Maintenance expense in accordance with the accounting guidance for “Income Taxes.”
AEPSC’s reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $447 thousand and $368 thousand for 2018 and 2017, respectively. Management believes there will be no significant net increase or decrease in unrecognized tax benefits within 12 months of the reporting date.
State Tax Legislation
In June 2018, the United States Supreme Court issued a decision which eliminated a physical presence requirement for the imposition of sales and use tax and instead applied an economic nexus concept. Although this case was specific to sales and use taxes, many states are beginning to consider whether they could also apply this economic nexus concept to income taxes. Management continues to monitor state legislation to determine whether it could create any income tax liability in any states in which AEPSC currently does not file.
Leases of structures, improvements, office furniture and miscellaneous equipment are for periods of up to 10 years and require payments of related property taxes, maintenance and operating costs. The majority of the leases have purchase or renewal options and will be renewed or replaced by other leases.
Lease rentals for both operating and capital leases are generally charged to Operation and Maintenance expense. The components of rental costs are as follows: Years Ended December 31,
The following table shows the property and equipment under capital leases and related obligations recorded on AEPSC’s balance sheets:
December 31, 2018 2017
Future minimum lease payments consisted of the following as of December 31, 2018:
Noncancelable Future Minimum Lease Payments Capital Leases Operating Leases
(in thousands)
Estimated Present Value of Future Minimum Lease Payments $ 91,471
Master Lease Agreements
AEPSC leases certain equipment under master lease agreements. Under the lease agreements, the lessor is guaranteed a residual value up to a stated percentage of the equipment cost at the end of the lease term. If the actual fair value of the leased equipment is below the guaranteed residual value at the end of the lease term, AEPSC is committed to pay the difference between the actual fair value and the residual value guarantee. Historically, at the end of the lease term the fair value has been in excess of the amount guaranteed. As of December 31, 2018, the maximum potential loss for these lease agreements was approximately $6.1 million assuming the fair value of the equipment is zero at the end of the lease term.
Corporate Borrowing Program – AEP System
The AEP System uses a corporate borrowing program to meet the short-term borrowing needs of AEP’s subsidiaries. AEP has a direct financing relationship with AEPSC to meet its short-term needs. The amounts of outstanding borrowings from AEP as of December 31, 2018 and 2017 are included in Advances from Affiliates on AEPSC’s balance sheets. AEPSC’s direct borrowing activity with AEP is described in the following table:
Maximum, minimum and average interest rates for funds borrowed from AEP are summarized in the following table:
The amounts of interest expense related to direct borrowing activity with AEP included in Interest Expense on AEPSC’s statements of operations are in the following table:
AEPSC participates in AEP’s long-term incentive plan. The Amended and Restated American Electric Power System Long-Term Incentive Plan (the “Prior Plan”), was replaced prospectively for new grants by the American Electric Power System 2015 Long-Term Incentive Plan (the “2015 LTIP”) effective in April 2015. The 2015 LTIP was subsequently amended in September 2016. No new awards may be granted under the Prior Plan. The 2015 LTIP awards may be stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units, cash-based awards and other stock-based awards. AEPSC employees comprise the majority of participants and they hold the majority of shares and units outstanding under AEP’s share-based compensation plans. The following sections provide further information regarding each type of stock-based compensation award granted under these plans.
Stock Options
AEP did not grant stock options in 2018 or 2017. As of December 31, 2018, AEP has no outstanding stock options.
Performance Units
Performance units granted prior to 2017 are settled in cash rather than AEP common stock and do not reduce the aggregate share authorization. These performance units have a fair value upon vesting equal to the average closing market price of AEP common stock for the last 20 trading days of the performance period. Performance units granted from 2017 on will be settled in AEP common stock and will reduce the aggregate share authorization. In all cases the number of performance units held at the end of the three-year performance period is multiplied by the performance score for such period to determine the actual number of performance units that participants realize. The performance score can range from 0% to 200% and is determined at the end of the performance period based on performance measures, which include both performance and market conditions, established for each grant at the beginning of the performance period by the Human Resources Committee of AEP’s Board of Directors (HR Committee).
Certain employees must satisfy stock ownership requirements. If those employees have not met their stock ownership requirements, a portion or all of their performance units are mandatorily deferred as AEP career shares to the extent needed to meet their stock ownership requirement. AEP career shares are a form of non-qualified deferred compensation that has a value equivalent to shares of AEP common stock. AEP career shares are settled in AEP common stock after the participant’s termination of employment.
Amounts equivalent to cash dividends on both performance units and AEP career shares accrue as additional units. Management records compensation cost for performance units over an approximately three-year vesting period. The liability for the pre 2017 performance units is recorded in Employee Benefits and Pension Obligations on the balance sheet and is adjusted for changes in value. Performance units settled in shares are recorded as mezzanine equity on the Parent’s balance sheets and compensation cost is calculated at fair value using two metrics. Half is based on the total shareholder return measure, which is determined based on a third party Monte Carlo valuation. That metric does not change over the three-year vesting period. The other half is based on a three-year cumulative earnings per share metric which is adjusted quarterly for changes in performance relative to a target approved by the HR Committee.
The HR Committee awarded performance units and reinvested dividends on outstanding performance units and AEP Career Shares to AEPSC employees are as follows:
Performance scores and final awards are determined and approved by the HR Committee in accordance with the pre- established performance measures within approximately one month after the end of the performance period. The performance scores for all performance periods were dependent on two equally-weighted performance measures: (a) three-year total shareholder return measured relative to a peer group of similar companies and (b) three-year cumulative earnings per share measured relative to a target approved by the HR Committee.
The certified performance scores and units earned by AEPSC employees for the three-year period ended December 31, 2018 and 2017 were as follows: Years Ended December 31,
The settlements to AEPSC employees were as follows: Years Ended December 31, AEPSC Performance Units and AEP Career Shares 2018 2017 (in thousands) Cash Settlements for Performance Units $ 52,590 $ 51,031 Cash Settlements for Career Share Distributions — 27 AEP Common Stock Settlements for Career Share Distributions 5,106 297
Monte Carlo Valuation
AEP engages a third party for a Monte Carlo valuation to calculate half of the fair value for the performance units awarded during and after 2017. The valuations use a lattice model and the expected volatility assumptions used were the historical volatilities for AEP and the members of their peer group. The Assumptions used in the Monte Carlo valuations for the years ended December 31, 2018 and 2017 were as follows: Years Ended December 31,
Restricted Stock Units
The HR Committee grants restricted stock units (RSUs), which generally vest, subject to the participant’s continued employment, over at least three years in approximately equal annual increments. The RSUs accrue dividends as additional RSUs. The additional RSUs granted as dividends vest on the same date as the underlying RSUs. RSUs are converted into shares of AEP common stock upon vesting, except that RSUs granted prior to 2017 that vest to AEP’s executive officers are settled in cash. Executive officers are those officers who are subject to the disclosure requirements set forth in Section 16 of the Securities Exchange Act of 1934. For RSUs settled in shares, compensation cost is measured at fair value on the grant date and recorded over the vesting period. Fair value is determined by multiplying the number of RSUs granted by the grant date market closing price. For RSUs settled in cash, compensation cost is recorded over the vesting period and adjusted for changes in fair value until vested. The fair value at vesting is determined by multiplying the number of RSUs vested by the 20-day average closing price of AEP common stock. The maximum contractual term of outstanding RSUs is approximately 40 months from the grant date.
The HR Committee awarded RSUs, including additional units awarded as dividends as follows:
The total fair value and total intrinsic value of restricted stock units vested were as follows:
(a) Intrinsic value is calculated as market price at exercise date.
A summary of the status of AEP’s nonvested RSUs and changes during the year are as follows:
AEP’s total aggregate intrinsic value of nonvested RSUs as of December 31, 2018 was $37 million and the weighted average remaining contractual life was 1.65 years.
Share-based Compensation Plans
For share-based payment arrangements the compensation cost, the actual tax benefit from the tax deductions for compensation cost recognized in income and the total compensation cost capitalized were as follows:
(a) Compensation cost for share-based payment arrangements is included in Operation and Maintenance expenses on AEPSC’s statements of operations (b) In December 2017, Tax Reform modified Section 162(m) of the Internal Revenue Code. Beginning after 2017, AEPSC can no longer deduct compensation expense in excess of $1 million for certain named executive officers. This will reduce the tax benefit going forward.
During the years ended December 31, 2018 and 2017, there were no significant modifications affecting any of AEP’s share-based payment arrangements.
As of December 31, 2018, AEPSC had $51 million of total unrecognized compensation cost related to unvested share- based compensation arrangements granted under the 2015 LTIP and Prior Plan. Unrecognized compensation cost related to unvested share-based arrangements will change as the fair value of performance units are adjusted each period and forfeitures for all award types are realized. AEPSC’s unrecognized compensation cost will be recognized over a weighted-average period of 1.26 years.
Under the 2015 LTIP and Prior Plan, AEP is permitted to use authorized but unissued shares, treasury shares, shares acquired in the open market specifically for distribution under these plans, or any combination thereof to fulfill share commitments. AEP’s current practice is to use authorized but unissued shares to fulfill share commitments. The number of shares used to fulfill share commitments is generally reduced to offset AEP’s tax withholding obligation.
Disaggregated Revenues from Contracts with Customers AEPSC’s revenue consists of revenue from providing certain managerial and professional services, including administrative and engineering services, primarily to affiliated companies which represent revenues from contracts with customers. AEPSC did not have alternative revenues for the year ended December 31, 2018.
Performance Obligations
AEPSC has performance obligations as part of its normal course of business. A performance obligation is a promise to transfer a distinct good or service, or a series of distinct goods or services that are substantially the same and have the same pattern of transfer to a customer. The invoice practical expedient within the accounting guidance for “Revenue from Contracts with Customers” allows for the recognition of revenue from performance obligations in the amount of consideration to which there is a right to invoice the customer and when the amount for which there is a right to invoice corresponds directly to the value transferred to the customer.
The purpose of the invoice practical expedient is to depict an entity’s measure of progress toward completion of the performance obligation within a contract and can only be applied to performance obligations that are satisfied over time and when the invoice is representative of services provided to date. AEPSC elected to apply the invoice practical expedient to recognize revenue for performance obligations satisfied over time as the invoices from the respective revenue streams are representative of services or goods provided to date to the customer. Performance obligations for AEPSC are summarized as follows:
Sales to AEP Affiliates
AEPSC has performance obligations to provide certain managerial and professional services, including administrative and engineering services, to affiliated companies in the AEP System and periodically to nonaffiliated companies. AEPSC’s intercompany service billings, which are AEPSC’s fully allocated cost, including taxes, are regulated by the Federal Energy Regulatory Commission under the 2005 Public Utility Holding Company Act and the Federal Power Act.
Fixed Performance Obligations
As of December 31, 2018, there are no fixed performance obligations related to AEPSC.
Contract Assets and Liabilities
Contract assets are recognized when AEPSC has a right to consideration that is conditional upon the occurrence of an event other than the passage of time, such as future performance under a contract. AEPSC did not have any material contract assets as of December 31, 2018.
When AEPSC receives consideration, or such consideration is unconditionally due from a customer prior to transferring goods or services to the customer under the terms of a sales contract, they recognize a contract liability on the balance sheet in the amount of that consideration. Revenue for such consideration is subsequently recognized in the period or periods in which the remaining performance obligations in the contract are satisfied. AEPSC did not have any material contract liabilities as of December 31, 2018.
Accounts Receivable from Contracts with Customers
Amount of affiliated accounts receivable from contracts with customers included in Accounts Receivable - Affiliated Companies on the balance sheets were immaterial as of December 31, 2018 and January 1, 2018.
Contract Costs
Contract costs to obtain or fulfill a contract are accounted for under the guidance for “Other Assets and Deferred Costs” and presented as a single asset and are neither bifurcated nor reclassified between current and noncurrent assets on AEPSC’s balance sheets. Contract costs to acquire a contract are amortized in a manner consistent with the transfer of goods or services to the customer in Operation and Maintenance on AEPSC’s statements of operations. AEPSC did not have material contract costs as of December 31, 2018. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule XV - Comparative Income Statement |
||||
Line No. |
Account Number (a) |
Title of Account (b) |
Current Year (c) |
Prior Year (d) |
1 |
OperatingRevenuesAbstract SERVICE COMPANY OPERATING REVENUES |
|||
2 |
400 |
OperatingRevenues Service Company Operating Revenues |
|
|
3 |
OperatingExpensesAbstract SERVICE COMPANY OPERATING EXPENSES |
|||
4 |
401 |
OperationExpense Operation Expenses |
|
|
5 |
402 |
MaintenanceExpense Maintenance Expenses |
|
|
6 |
403 |
DepreciationExpense Depreciation Expenses |
|
|
7 |
403.1 |
DepreciationExpenseForAssetRetirementCosts Depreciation Expense for Asset Retirement Costs |
||
8 |
404 |
AmortizationOfLimitedTermProperty Amortization of Limited-Term Property |
|
|
9 |
405 |
AmortizationOfOtherProperty Amortization of Other Property |
||
10 |
407.3 |
RegulatoryDebits Regulatory Debits |
||
11 |
407.4 |
RegulatoryCredits Regulatory Credits |
||
12 |
408.1 |
TaxesOtherThanIncomeTaxesOperatingIncome Taxes Other Than Income Taxes, Operating Income |
|
|
13 |
409.1 |
IncomeTaxesOperatingIncome Income Taxes, Operating Income |
|
|
14 |
410.1 |
ProvisionForDeferredIncomeTaxesOperatingIncome Provision for Deferred Income Taxes, Operating Income |
|
|
15 |
411.1 |
ProvisionForDeferredIncomeTaxesCreditOperatingIncome Provision for Deferred Income Taxes - Credit , Operating Income |
(a) |
(b) |
16 |
411.4 |
InvestmentTaxCreditAdjustmentsServiceCompanyProperty Investment Tax Credit, Service Company Property |
|
|
17 |
411.6 |
GainsFromDispositionOfServiceCompanyPlant Gains from Disposition of Service Company Plant |
||
18 |
411.7 |
LossesFromDispositionOfServiceCompanyPlant Losses from Disposition of Service Company Plant |
||
19 |
411.10 |
AccretionExpense Accretion Expense |
||
20 |
412 |
CostAndExpensesOfConstructionOrOtherServices Costs and Expenses of Construction or Other Services |
|
|
21 |
416 |
CostsAndExpensesOfMerchandisingJobbingAndContractWork Costs and Expenses of Merchandising, Jobbing, and Contract Work |
||
22 |
OperatingExpenses TOTAL SERVICE COMPANY OPERATING EXPENSES (Total of Lines 4-21) |
|
|
|
23 |
OperatingIncomeNet NET SERVICE COMPANY OPERATING INCOME (Total of Lines 2 less 22) |
|
|
|
24 |
OtherIncomeAbstract OTHER INCOME |
|||
25 |
418.1 |
EquityInEarningsOfSubsidiaryCompanies Equity in Earnings of Subsidiary Companies |
||
26 |
419 |
InterestAndDividendIncome Interest and Dividend Income |
|
|
27 |
419.1 |
AllowanceForOtherFundsUsedDuringConstruction Allowance for Other Funds Used During Construction |
||
28 |
421 |
MiscellaneousNonoperatingIncome Miscellaneous Income or Loss |
|
|
29 |
421.1 |
GainOnDispositionOfProperty Gain on Disposition of Property |
||
30 |
OtherIncome TOTAL OTHER INCOME (Total of Lines 25-29) |
|
|
|
31 |
OtherIncomeAndDeductionsAbstract OTHER INCOME DEDUCTIONS |
|||
32 |
421.2 |
LossOnDispositionOfProperty Loss on Disposition of Property |
||
33 |
425 |
MiscellaneousAmortization Miscellaneous Amortization |
||
34 |
426.1 |
Donations Donations |
|
|
35 |
426.2 |
LifeInsurance Life Insurance |
||
36 |
426.3 |
Penalties Penalties |
|
|
37 |
426.4 |
ExpendituresForCertainCivicPoliticalAndRelatedActivities Expenditures for Certain Civic, Political and Related Activities |
|
|
38 |
426.5 |
OtherDeductions Other Deductions |
|
|
39 |
OtherIncomeDeductions TOTAL OTHER INCOME DEDUCTIONS (Total of Lines 32-38) |
|
|
|
40 |
TaxesApplicableToOtherIncomeAndDeductionsAbstract TAXES APPLICABLE TO OTHER INCOME AND DEDUCTIONS |
|||
41 |
408.2 |
TaxesOtherThanIncomeTaxesOtherIncomeAndDeductions Taxes Other Than Income Taxes, Other Income and Deductions |
|
|
42 |
409.2 |
IncomeTaxesOtherIncomeAndDeductions Income Taxes, Other Income and Deductions |
||
43 |
410.2 |
ProvisionForDeferredIncomeTaxesOtherIncomeAndDeductions Provision for Deferred Income Taxes, Other Income and Deductions |
||
44 |
411.2 |
ProvisionForDeferredIncomeTaxesCreditOtherIncomeAndDeductions Provision for Deferred Income Taxes - Credit, Other Income and Deductions |
||
45 |
411.5 |
InvestmentTaxCreditAdjustmentsNonutilityOperations Investment Tax Credit, Other Income Deductions |
||
46 |
TaxesApplicableToOtherIncomeAndDeductions TOTAL TAXES APPLICABLE TO OTHER INCOME AND DEDUCTIONS (Total of Lines 41-45) |
|
|
|
47 |
InterestChargesAbstract INTEREST CHARGES |
|||
48 |
427 |
InterestOnLongTermDebt Interest on Long-Term Debt |
||
49 |
428 |
AmortizationOfDebtDiscountAndExpense Amortization of Debt Discount and Expense |
||
50 |
429 |
AmortizationOfPremiumOnDebtCredit (less) Amortization of Premium on Debt- Credit |
||
51 |
430 |
InterestOnDebtToAssociateCompanies Interest on Debt to Associate Companies |
|
|
52 |
431 |
OtherInterestExpense Other Interest Expense |
|
|
53 |
432 |
AllowanceForBorrowedFundsUsedDuringConstructionCredit (less) Allowance for Borrowed Funds Used During Construction-Credit |
|
|
54 |
InterestCharges TOTAL INTEREST CHARGES (Total of Lines 48-53) |
|
|
|
55 |
IncomeBeforeExtraordinaryItems NET INCOME BEFORE EXTRAORDINARY ITEMS (Total of Lines 23, 30, minus 39, 46, and 54) |
|||
56 |
ExtraordinaryItemsAbstract EXTRAORDINARY ITEMS |
|||
57 |
434 |
ExtraordinaryIncome Extraordinary Income |
||
58 |
435 |
ExtraordinaryDeductions (less) Extraordinary Deductions |
||
59 |
NetExtraordinaryItems Net Extraordinary Items (Line 57 less Line 58) |
|||
60 |
409.4 |
IncomeTaxesExtraordinaryItems (less) Income Taxes, Extraordinary |
||
61 |
ExtraordinaryItemsAfterTaxes Extraordinary Items After Taxes (Line 59 less Line 60) |
|||
62 |
NetIncomeLoss NET INCOME OR LOSS/COST OF SERVICE (Total of Lines 55 and 61) |
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule XVI - Analysis of Charges for Service - Associate and Nonassociate Companies |
|||||||||||
|
|||||||||||
Line No. |
Account Number (a) |
Title of Account (b) |
Associate Company Direct Cost (c) |
Associate Company Indirect Cost (d) |
Associate Company Total Cost (e) |
Nonassociate Company Direct Cost (f) |
Nonassociate Company Indirect Cost (g) |
Nonassociate Company Total Cost (h) |
Total Charges for Services Direct Cost (i) |
Total Charges for Services Indirect Cost (j) |
Total Charges for Services Total Cost (k) |
1 |
403-403.1 |
Depreciation Expense |
|
|
|
|
|||||
2 |
404-405 |
Amortization Expense |
|
|
|
|
|||||
3 |
407.3-407.4 |
Regulatory Debits/Credits - Net |
|||||||||
4 |
408.1-408.2 |
Taxes Other Than Income Taxes |
|
|
|
|
|||||
5 |
409.1-409.3 |
Income Taxes |
|
|
|
|
|||||
6 |
410.1-410.2 |
Provision for Deferred Taxes |
|
|
|
|
|||||
7 |
411.1-411.2 |
Provision for Deferred Taxes - Credit |
|
|
|
|
|||||
8 |
411.6 |
Gain from Disposition of Service Company Plant |
|||||||||
9 |
411.7 |
Losses from Disposition of Service Company Plant |
|||||||||
10 |
411.4-411.5 |
Investment Tax Credit Adjustment |
|
|
|
|
|||||
11 |
411.10 |
Accretion Expense |
|||||||||
12 |
412 |
Costs and Expenses of Construction or Other
Services |
|
|
|
|
|
|
|||
13 |
416 |
Costs and Expenses of Merchandising, Jobbing,
and Contract Work for Associated Companies |
|||||||||
14 |
418 |
Non-operating Rental Income |
|||||||||
15 |
418.1 |
Equity in Earnings of Subsidiary Companies |
|||||||||
16 |
419 |
Interest and Dividend Income |
|
|
|
|
|||||
17 |
419.1 |
Allowance for Other Funds Used During
Construction |
|||||||||
18 |
421 |
Miscellaneous Income or Loss |
|
|
|
|
|
|
|||
19 |
421.1 |
Gain on Disposition of Property |
|||||||||
20 |
421.2 |
Loss on Disposition Of Property |
|||||||||
21 |
425 |
Miscellaneous Amortization |
|||||||||
22 |
426.1 |
Donations |
|
|
|
|
|||||
23 |
426.2 |
Life Insurance |
|||||||||
24 |
426.3 |
Penalties |
|
|
|
|
|||||
25 |
426.4 |
Expenditures for Certain Civic, Political and
Related Activities |
|
|
|
|
|
|
|||
26 |
426.5 |
Other Deductions |
|
|
|
|
|
|
|||
27 |
427 |
Interest On Long-Term Debt |
|||||||||
28 |
428 |
Amortization of Debt Discount and Expense |
|||||||||
29 |
429 |
Amortization of Premium on Debt - Credit |
|||||||||
30 |
430 |
Interest on Debt to Associate Companies |
|
|
|
|
|||||
31 |
431 |
Other Interest Expense |
|
|
|
|
|||||
32 |
432 |
Allowance for Borrowed Funds Used During
Construction |
|
|
|
|
|||||
33 |
500-509 |
Total Steam Power Generation Operation
Expenses |
|
|
|
|
|
|
|||
34 |
510-515 |
Total Steam Power Generation Maintenance
Expenses |
|
|
|
|
|
|
|||
35 |
517-525 |
Total Nuclear Power Generation Operation
Expenses |
|
|
|
|
|
|
|||
36 |
528-532 |
Total Nuclear Power Generation Maintenance
Expenses |
|
|
|
|
|
|
|||
37 |
535-540.1 |
Total Hydraulic Power Generation Operation
Expenses |
|
|
|
|
|
|
|||
38 |
541-545.1 |
Total Hydraulic Power Generation Maintenance
Expenses |
|
|
|
|
|
|
|||
39 |
546-550.1 |
Total Other Power Generation Operation
Expenses |
|
|
|
|
|
|
|||
40 |
551-554.1 |
Total Other Power Generation Maintenance
Expenses |
|
|
|
|
|
|
|||
41 |
555-557 |
Total Other Power Supply Operation Expenses |
|
|
|
|
|
|
|||
42 |
560 |
Operation Supervision and Engineering |
|
|
|
|
|
|
|||
43 |
561.1 |
Load Dispatch-Reliability |
|
|
|
|
|
|
|||
44 |
561.2 |
Load Dispatch-Monitor and Operate Transmission
System |
|
|
|
|
|
|
|||
45 |
561.3 |
Load Dispatch-Transmission Service and
Scheduling |
|
|
|
|
|||||
46 |
561.4 |
Scheduling, System Control and Dispatch Services |
|
|
|
|
|||||
47 |
561.5 |
Reliability Planning and Standards Development |
|
|
|
|
|
|
|||
48 |
561.6 |
Transmission Service Studies |
|
|
|
|
|
|
|||
49 |
561.7 |
Generation Interconnection Studies |
|||||||||
50 |
561.8 |
Reliability Planning and Standards Development
Services |
|||||||||
51 |
562 |
Station Expenses (Major Only) |
|
|
|
|
|
|
|||
51.1 |
562.1 |
Operation of Energy Storage Equipment |
|||||||||
52 |
563 |
Overhead Line Expenses (Major Only) |
|
|
|
|
|
|
|||
53 |
564 |
Underground Line Expenses (Major Only) |
|||||||||
54 |
565 |
Transmission of Electricity by Others (Major Only) |
|||||||||
55 |
566 |
Miscellaneous Transmission Expenses (Major
Only) |
|
|
|
|
|
|
|||
56 |
567 |
Rents |
|
|
|
|
|||||
57 |
567.1 |
Operation Supplies and Expenses (Nonmajor
Only) |
|||||||||
58 |
Total Transmission Operation Expenses |
|
|
|
|
|
|
||||
59 |
568 |
Maintenance Supervision and Engineering (Major
Only) |
|
|
|
|
|
|
|||
60 |
569 |
Maintenance of Structures (Major Only) |
|
|
|
|
|
|
|||
61 |
569.1 |
Maintenance of Computer Hardware |
|
|
|
|
|
|
|||
62 |
569.2 |
Maintenance of Computer Software |
|
|
|
|
|
|
|||
63 |
569.3 |
Maintenance of Communication Equipment |
|
|
|
|
|
|
|||
64 |
569.4 |
Maintenance of Miscellaneous Regional
Transmission Plant |
|||||||||
65 |
570 |
Maintenance of Station Equipment (Major Only) |
|
|
|
|
|
|
|||
65.1 |
570.1 |
Maintenance of Energy Storage Equipment |
|||||||||
66 |
571 |
Maintenance of Overhead Lines (Major Only) |
|
|
|
|
|
|
|||
67 |
572 |
Maintenance of Underground Lines (Major Only) |
|
|
|
|
|
|
|||
68 |
573 |
Maintenance of Miscellaneous Transmission Plant
(Major Only) |
|
|
|
|
|
|
|||
69 |
574 |
Maintenance of Transmission Plant (Nonmajor
Only) |
|||||||||
70 |
Total Transmission Maintenance Expenses |
|
|
|
|
|
|
||||
71 |
575.1-575.8 |
Total Regional Market Operation Expenses |
|||||||||
72 |
576.1-576.5 |
Total Regional Market Maintenance Expenses |
|||||||||
73 |
580-589 |
Total Distribution Operation Expenses |
|
|
|
|
|
|
|||
74 |
590-598 |
Total Distribution Maintenance Expenses |
|
|
|
|
|
|
|||
75 |
Total Electric Operation and Maintenance Expenses |
|
|
|
|
|
|
||||
76 |
700-798 |
Production Expenses (Provide selected accounts
in a footnote) |
|||||||||
77 |
800-813 |
Total Other Gas Supply Operation Expenses |
|||||||||
78 |
814-826 |
Total Underground Storage Operation Expenses |
|||||||||
79 |
830-837 |
Total Underground Storage Maintenance
Expenses |
|||||||||
80 |
840-842.3 |
Total Other Storage Operation Expenses |
|||||||||
81 |
843.1-843.9 |
Total Other Storage Maintenance Expenses |
|||||||||
82 |
844.1-846.2 |
Total Liquefied Natural Gas Terminaling and
Processing Operation Expenses |
|||||||||
83 |
847.1-847.8 |
Total Liquefied Natural Gas Terminaling and
Processing Maintenance Expenses |
|||||||||
84 |
850 |
Operation Supervision and Engineering |
|||||||||
85 |
851 |
System Control and Load Dispatching |
|||||||||
86 |
852 |
Communication System Expenses |
|||||||||
87 |
853 |
Compressor Station Labor and Expenses |
|||||||||
88 |
854 |
Gas for Compressor Station Fuel |
|||||||||
89 |
855 |
Other Fuel and Power for Compressor Stations |
|||||||||
90 |
856 |
Mains Expenses |
|||||||||
91 |
857 |
Measuring and Regulating Station Expenses |
|||||||||
92 |
858 |
Transmission and Compression of Gas By Others |
|||||||||
93 |
859 |
Other Expenses |
|||||||||
94 |
860 |
Rents |
|||||||||
95 |
Total Gas Transmission Operation Expenses |
||||||||||
96 |
861 |
Maintenance Supervision and Engineering |
|||||||||
97 |
862 |
Maintenance of Structures and Improvements |
|||||||||
98 |
863 |
Maintenance of Mains |
|||||||||
99 |
864 |
Maintenance of Compressor Station Equipment |
|||||||||
100 |
865 |
Maintenance of Measuring And Regulating Station
Equipment |
|||||||||
101 |
866 |
Maintenance of Communication Equipment |
|||||||||
102 |
867 |
Maintenance of Other Equipment |
|||||||||
103 |
Total Gas Transmission Maintenance Expenses |
||||||||||
104 |
870-881 |
Total Distribution Operation Expenses |
|||||||||
105 |
885-894 |
Total Distribution Maintenance Expenses |
|||||||||
106 |
Total Natural Gas Operation and Maintenance Expenses |
||||||||||
107 |
901 |
Supervision |
|
|
|
|
|
|
|||
108 |
902 |
Meter reading expenses |
|
|
|
|
|
|
|||
109 |
903 |
Customer records and collection expenses |
|
|
|
|
|
|
|||
110 |
904 |
Uncollectible accounts |
|
|
|
|
|||||
111 |
905 |
Miscellaneous customer accounts expenses |
|
|
|
|
|
|
|||
112 |
Total Customer Accounts Operation Expenses |
|
|
|
|
|
|
||||
113 |
907 |
Supervision |
|
|
|
|
|
|
|||
114 |
908 |
Customer assistance expenses |
|
|
|
|
|
|
|||
115 |
909 |
Informational And Instructional Advertising
Expenses |
|
|
|
|
|||||
116 |
910 |
Miscellaneous Customer Service And
Informational Expenses |
|
|
|
|
|
|
|||
117 |
Total Service and Informational Operation Accounts |
|
|
|
|
|
|
||||
118 |
911 |
Supervision |
|
|
|
|
|
|
|||
119 |
912 |
Demonstrating and Selling Expenses |
|
|
|
|
|
|
|||
120 |
913 |
Advertising Expenses |
|||||||||
121 |
916 |
Miscellaneous Sales Expenses |
|||||||||
122 |
Total Sales Operation Expenses |
|
|
|
|
|
|
||||
123 |
920 |
Administrative and General Salaries |
|
|
|
|
|
|
|||
124 |
921 |
Office Supplies and Expenses |
|
|
|
|
|
|
|||
125 |
923 |
Outside Services Employed |
|
|
|
|
|
|
|||
126 |
924 |
Property Insurance |
|
|
|
|
|||||
127 |
925 |
Injuries and Damages |
|
|
|
|
|
|
|||
128 |
926 |
Employee Pensions and Benefits |
|
|
|
|
|
|
|||
129 |
928 |
Regulatory Commission Expenses |
|
|
|
|
|
|
|||
130 |
930.1 |
General Advertising Expenses |
|
|
|
|
|
|
|||
131 |
930.2 |
Miscellaneous General Expenses |
|
|
|
|
|
|
|
|
|
132 |
931 |
Rents |
|
|
|
|
|||||
133 |
Total Administrative and General Operation Expenses |
|
|
|
|
|
|
|
|
|
|
134 |
935 |
Maintenance of Structures and Equipment |
|
|
|
|
|
|
|||
135 |
Total Administrative and General Maintenance Expenses |
|
|
|
|
|
|
|
|
|
|
136 |
Total Cost of Service |
|
|
|
|
|
|
|
|
|
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule XVII - Analysis of Billing - Associate Companies (Account 457) |
|||||
|
|||||
Line No. |
AssociateCompanyName Name of Associate Company (a) |
DirectCostsChargedToAssociateCompanies Account 457.1
Direct Costs Charged (b) |
IndirectCostsChargedToAssociateCompanies Account 457.2
Indirect Costs Charged (c) |
CompensationForUseOfCapitalAssociateCompanies Account 457.3
Compensation for Use of Capital (d) |
ServicesRenderedToAssociateCompanies Total Amount Billed (e) |
1 |
|
|
|
|
|
2 |
|
|
|
|
|
3 |
|
|
|
|
|
4 |
|
|
|
|
|
5 |
|
|
|
|
|
6 |
|
|
|
|
|
7 |
|
|
|
|
|
8 |
|
|
|
|
|
9 |
|
|
|
|
|
10 |
|
|
|
|
|
11 |
|
|
|
|
|
12 |
|
|
|
|
|
13 |
|
|
|
|
|
14 |
|
|
|
|
|
15 |
|
|
|
|
|
16 |
|
|
|
|
|
17 |
|
|
|
|
|
18 |
|
|
|
|
|
19 |
|
|
|
|
|
20 |
|
|
|
|
|
21 |
|
|
|
|
|
22 |
|
|
|
|
|
23 |
|
|
|
|
|
24 |
|
|
|
|
|
25 |
|
|
|
|
|
26 |
|
|
|
|
|
27 |
|
|
|
|
|
28 |
|
|
|
|
|
29 |
|
|
|
|
|
30 |
|
|
|
|
|
31 |
|
|
|
|
|
32 |
|
|
|
|
|
33 |
|
|
|
|
|
34 |
|
|
|
|
|
35 |
|
|
|
|
|
36 |
|
|
|
|
|
37 |
|
|
|
|
|
38 |
|
|
|
|
|
39 |
|
|
|
|
|
40 |
|
|
|
|
|
41 |
|
|
|
|
|
42 |
|
|
|
|
|
43 |
|
|
|
|
|
44 |
|
|
|
|
|
45 |
|
|
|
|
|
46 |
|
|
|
|
|
47 |
|
|
|
|
|
48 |
|
|
|
|
|
49 |
|
|
|
|
|
50 |
|
|
|
|
|
51 |
|
|
|
|
|
52 |
|
|
|
|
|
53 |
|
|
|
|
|
54 |
|
|
|
|
|
55 |
|
|
|
|
|
56 |
|
|
|
|
|
57 |
|
|
|
|
|
58 |
|
|
|
|
|
59 |
|
|
|
|
|
60 |
|
|
|
|
|
61 |
|
|
|
|
|
62 |
|
|
|
|
|
63 |
|
|
|
|
|
64 |
|
|
|
|
|
65 |
|
|
|
|
|
66 |
|
|
|
||
67 |
|
|
|
||
68 |
|
|
|
|
|
69 |
|
|
|
|
|
70 |
|
|
|
|
|
71 |
|
|
|
|
|
72 |
|
|
|
|
|
73 |
|
|
|
|
|
74 |
|
|
|
|
|
75 |
|
|
|
|
|
76 |
|
|
|
|
|
77 |
|
|
|
|
|
78 |
|
|
|
|
|
79 |
|
|
|
|
|
80 |
|
|
|
|
|
81 |
|
|
|
|
|
82 |
|
|
|
|
|
40 | Total |
(a) |
(b) |
(c) |
(d) |
FOOTNOTE DATA |
(a) Concept: DirectCostsChargedToAssociateCompanies |
(b) Concept: IndirectCostsChargedToAssociateCompanies |
(c) Concept: CompensationForUseOfCapitalAssociateCompanies |
(d) Concept: ServicesRenderedToAssociateCompanies |
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule XVIII - Analysis of Billing - Non-Associate Companies (Account 458) |
||||||
|
||||||
Line No. |
NonAssociateCompanyName Name of Non-associate Company (a) |
DirectCostsChargedToNonAssociateCompanies Account 458.1
Direct Costs Charged (b) |
IndirectCostsChargedToNonAssociateCompanies Account 458.2
Indirect Costs Charged (c) |
CompensationForUseOfCapitalNonAssociateCompanies Account 458.3
Compensation for Use of Capital (d) |
ExcessOrDeficiencyOnServicingNonAssociateUtilityCompanies Account 458.4
Excess or Deficiency on Servicing Non-associate Utility Companies (e) |
ServicesRenderedToNonAssociateCompanies Total Amount Billed (f) |
1 |
|
|
(a) |
|||
2 |
|
|
|
(b) |
||
3 |
|
|
(c) |
|||
4 |
|
|
|
(d) |
||
40 | Total |
|
|
|
FOOTNOTE DATA |
(a) Concept: ServicesRenderedToNonAssociateCompanies | |||||
| |||||
(b) Concept: ServicesRenderedToNonAssociateCompanies | |||||
| |||||
(c) Concept: ServicesRenderedToNonAssociateCompanies | |||||
| |||||
(d) Concept: ServicesRenderedToNonAssociateCompanies | |||||
|
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule XIX - Miscellaneous General Expenses - Account 930.2 |
|||||
|
|||||
Line No. |
MiscellaneousGeneralExpensesDescription Title of Account (a) |
MiscellaneousGeneralExpenses Amount (b) |
|||
1 |
|
|
|||
2 |
|
|
|||
3 |
|
|
|||
4 |
|
|
|||
5 |
|
|
|||
6 |
|
|
|||
7 |
|
|
|||
8 |
|
|
|||
40 |
Total |
|
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule XX - Organization Chart |
||||
|
||||
|
Name of Respondent: |
This Report Is: (1) ☑ An Original (2) ☐ A Resubmission |
Resubmission Date
(Mo, Da, Yr) |
Year/Period of Report: End of: |
Schedule XXI - Methods of Allocation |
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