[Code of Federal Regulations]
[Title 18, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 18CFR154.401]

[Page 496]
 
           TITLE 18--CONSERVATION OF POWER AND WATER RESOURCES
 
  CHAPTER I--FEDERAL ENERGY REGULATORY COMMISSION, DEPARTMENT OF ENERGY
 
PART 154_RATE SCHEDULES AND TARIFFS--Table of Contents
 
                     Subpart E_Limited Rate Changes
 
Sec. 154.401  RD&D expenditures.

    (a) Requirements. Upon approval by the Commission, a natural gas 
company may file to recover research, development, and demonstration 
(RD&D) expenditures in its rates under this subpart.
    (b) Applications for rate treatment approval. (1) An application for 
advance approval of rate treatment may be filed by a natural gas company 
for RD&D expenditures related to a project or group of projects 
undertaken by the company or as part of a project undertaken by others. 
When more than one company supports an RD&D organization, the RD&D 
organization may submit an application that covers the organization's 
RD&D program. Approval by the Commission of such an RD&D application and 
program will constitute approval of the individual companies' 
contributions to the RD&D organization.
    (2) An application for advance approval of rate treatment must 
include a 5-year program plan and must be filed at least 180 days prior 
to the commencement of the 5-year period of the plan.
    (3) A 5-year program plan must include at a minimum:
    (i) A statement of the objectives for the 5-year period that relates 
the objectives to the interests of ratepayers, the public, and the 
industry and to the objectives of other major research organizations.
    (ii) Budget, technical, and schedule information in sufficient 
detail to explain the work to be performed and allow an assessment of 
the probability of success and a comparison with other organizations' 
research plans.
    (iii) The commencement date, expected termination date, and expected 
annual costs for individual RD&D projects to be initiated during the 
first year of the plan.
    (iv) A discussion of the RD&D efforts and progress since the 
preparation of the program plan submitted the previous year and an 
explanation of any changes that have been made in objectives, 
priorities, or budgets since the plan of the previous year.
    (v) A statement identifying all jurisdictional natural gas companies 
that will support the program and specifying the amounts of their 
budgeted support.
    (vi) A statement identifying those persons involved in the 
development, review, and approval of the plan and specifying the amount 
of effort contributed and the degree of control exercised by each.
    (c) Applications must describe the RD&D projects in such detail as 
to satisfy the Commission that the RD&D expenditures qualify as valid, 
justifiable, and reasonable.
    (d) Within 120 days of the filing of an application for rate 
treatment approval and a 5-year program plan, the Commission will state 
its decision with respect to acceptance, partial acceptance, or 
rejection of the plan, or, when the complexity of issues in the plan so 
requires, will set a date certain by which a final decision will be 
made, or will order the matter set for hearing. Partial rejection of a 
plan by the Commission will be accompanied by a decision as to the 
partial level of acceptance which will be proportionally applied to all 
contributions listed for jurisdictional companies in the plan. Approval 
by the Commission of a 5-year plan constitutes approval for rate 
treatment of all projects identified as starting during the first year 
of the approved plan. Continued rate treatment will depend upon review 
and evaluation of subsequent annual applications and 5-year program 
plans.