IX. P.U. Code §455.5.

As we have discussed, it is important that the regulated utilities use their assets efficiently, and dispose of their assets when they are no longer useful for the provision of utility service. It is also important that this Commission be informed when an asset is taken out of service. P.U. Code §455.5 requires that utilities report periodically to this Commission whenever any portion of an"electric, gas, heat, or water generation or production facility" is out of service, and immediately when a portion of such facility has been out of service for nine consecutive months. Section 455.5 states, in pertinent part:

(a) In establishing rates for any electrical, gas, heat, or water corporation, the commission may eliminate consideration of the value of any portion of any electric, gas, heat, or water generation or production facility which, after having been placed in service, remains out of service for nine or more consecutive months, and may disallow any expenses related to that facility. . . .

 
(b) Every electrical, gas, heat, and water corporation shall periodically, as required by the commission, report to the commission on the status of any portion of any electric, gas, heat, or water generation or production facility which is out of service and shall immediately notify the commission when any portion of the facility has been out of service for nine consecutive months.
 
(c) Within 45 days of receiving the notification specified in subdivision (b), the commission shall institute an investigation to determine whether to reduce the rates of the corporation to reflect the portion of the electric, gas, heat, or water generation or production facility which is out of service. . . .

This section also discusses ratemaking issues associated with the change in status of the facilities, as well as the potential for restoration of these assets to utility use.

Section 455.5(b) says that specified utilities are to report assets that are out of service "as required by the commission." The Commission has not yet unambiguously required the cognizant utilities to submit the reports required under §455.5. This information is important for the purposes of accurate and timely ratemaking. We therefore propose to require utilities with electrical, gas, heat, or water generation or production facilities to inform the Commission about any such facility or portion thereof taken out of service the previous calendar year. We also propose that the utilities be required to estimate the effect of this action on their revenue requirement and ratebase. This proposed report is to be provided through an Advice Letter filed either within 9 months of the assets's cessation of use or by March 30 of each year. The Advice Letter is to be served on parties to the last filed GRC or PBR. Further, we propose to prohibit any public utility from selling any capital asset for which such Advice Letter has not been filed and to render void ab initio any sale not complying with this rule.

Subsection f of §455.5 states:

(f) For purposes of this section, an electric, gas, heat, or water generation or production facility includes only such a facility that the commission determines to be a major facility of the corporation, and does not include any facility determined by the commission to constitute a plant held for future use.

We propose to define a "major facility" as any asset that has an initial acquisition price of $500,000 or more. Note that this Code section refers not only to these facilities, but to any portion of the facility as well. The acquisition price of this portion may be less than $500,000, but the requirements of this section would still apply.