5 compelling reasons your electric cooperative or electric utility should use regulatory accounting (ASC 980 or GASB 62)
- Jul 5, 2021 1:08 am GMT
Regulatory accounting? That sounds like something dull and/or imposed on an organization, i.e., something you would not do unless you had to.
Not so! Regulatory accounting is your friend when it comes to events that cannot be recovered in customer rates. Events like unexpected major storms, increases in power costs, contributed assets, long-term pension obligations, and commodity mark-to-market gains or losses can impact current cash flows but not be collected from customers until a future rate change. The “rules” for using regulatory accounting - FASB ASC 980 (IOUs and cooperatives), GASB 62 (municipal utilities, joint action agencies, CCAs), and FERC (Account 182.3) allow deferring these events and adding them to customer rates when approved by the organization’s oversight body.
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