Electric Utility Implements the FERC Uniform System of Accounts
A municipal electric utility faced challenges in accurately assessing its financial health and setting fair customer rates due to its reliance on a city-wide general fund chart of accounts. The structure, designed for municipal operations, did not align with industry best practices for electric utilities, limiting the utility’s ability to track costs, allocate expenses appropriately, and make data-driven financial decisions.
To address this issue, the utility opted to implement the FERC Uniform System of Accounts (USoA)—a standardized framework used by regulated electric utilities to ensure consistency, transparency, and compliance in financial reporting. However, the transition was not straightforward, as the utility still needed to operate within the constraints of the city’s existing software platform.
Working within these limitations, we helped the utility reserve three digits of a 24-digit accounting string to integrate the FERC system while maintaining compatibility with municipal financial reporting. To further support the transition, we assisted in customizing the city’s financial software, ensuring it could generate reports aligned with the FERC chart of accounts without disrupting city-wide operations.
Beyond system integration, we provided staff training on using the new chart of accounts and developed process improvements to ensure a smooth transition. These efforts equipped the utility’s accounting team with the tools and knowledge needed to track costs accurately, improve financial reporting, and enhance regulatory compliance.
With the FERC system now in place, the utility’s next step is conducting a cost-of-service study to establish a baseline for equitable customer rates. This will allow for data-driven rate structures that reflect actual costs while maintaining financial stability for the utility and fairness for customers.
How I Can Assist
We help electric cooperatives and utilities navigate complex accounting challenges, streamline processes, and implement industry best practices in work order accounting and system integration. Let’s connect to explore solutions tailored to your needs. Please contact me with any questions to discuss your goals in more detail.
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