1. (1) The following uniform system of accounting will be followed by utilities and other companies making periodic reports to the Commission:

   1. (a) For Classes A and B telephone companies - Uniform System of Accounts as adopted and amended by the Federal Communications Commission.
   2. (b) For Classes C and D telephone companies - Uniform System of Accounts as adopted and amended by the Federal Communications Commission.
   3. (c) For Classes A and B gas companies - Uniform System of Accounts as adopted by the National Association of Railroad and Utilities Commissioners as revised June 30, 1972, and any amendments or revisions pertaining thereto.
   4. (d) For Classes C and D gas companies - Uniform System of Accounts as adopted by the National Association of Railroad and Utilities Commissioners as revised June 30, 1972, and any amendments or revisions pertaining thereto.
   5. (e) For Classes A and B electric companies - Uniform System of Accounts as adopted by the National Association of Railroad and Utilities Commissioners as revised June 30, 1972, or any amendments or revisions pertaining thereto.
   6. (f) For Classes C and D electric companies - Uniform System of Accounts as adopted by the National Association of Railroad and Utilities Commissioners as revised June 30, 1972, or any amendments or revisions pertaining thereto.
   7. (g) For Classes A, B, and C water companies - Uniform System of Accounts as adopted and amended by the National Association of Railroad and Utilities Commissioners.
   8. (h) For Classes A, B, and C sewer companies - Uniform System of Accounts as adopted and amended by the National Association of Railroad and Utilities Commissioners.
2. (2) That this rule shall not apply to utilities deriving less than one percent (1%) of their total gross operating revenues from business in Tennessee and they shall be permitted to keep their accounting records in accordance with the system of accounts prescribed by the State Authority of the State in which a majority of their gross revenues are derived.
3. (3) That each utility subject to the jurisdiction of this Commission shall notify this Commission within thirty (30) days from the date of this order of its election to adopt either the “service life flow-through” method of accounting or the “initial year flow-through” method of accounting for the treatment of the investment tax credit as provided by Section 38 of the 1954 Internal Revenue Code, as amended, and specifically the 1962 and 1964 Revenue Acts.
4. (4) That utilities deriving less than one percent (1%) of their total gross operating revenues from business in Tennessee shall be permitted to keep their accounting records in accordance with the system of accounts prescribed by the State Authority of the State in which a majority of their gross revenues are derived.
5. (5) That the election once made by a utility shall not be subject to change without prior formal approval of this Commission.

Authority: T.C.A. §§ 65-2-102, 65-4-101, 65-4-104, and 65-4-111. Administrative History: Original rule certified May 9, 1974. Amendment filed October 13, 1978; effective November 27, 1978. Amendment filed August 26, 1988; effective November 29, 1988. Editorial changes made by the Secretary of State pursuant to Public Chapter 305 of 1995; “Commission” and references to the “Commission” were changed to “Authority” and references to the “Authority”; effective March 28, 2003. Amendment filed February 11, 2015; effective May 12, 2015. Administrative changes made to this chapter on April 27, 2018 pursuant to Public Chapter 94 of 2017; “Tennessee Regulatory Authority” references were changed to “Tennessee Public Utility Commission,” “Authority” references were changed to “Commission,” “Authority Director” references were changed to “Commissioner,” and “Chief” references were changed to “Director.”