comment letters 2001 june 29 v3 whole 1 |
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ESTERN OOPERATIVE LECTRIC Western Cooperative Electric Association, Inc. 635 S. 13th Street, P.O. Box 278, WaKeeney, KS 67672 785-743-5561 800-456-6720 (Kansas) westem@ruraltel.net www.westemcoop.com November 8 2001 Marc Simon Technical Manager, Accounting Standards File 4210.CC American Institute of Certified Public Accountants 1211 Avenue of the Americas New York NY 10036-8775 Regarding Exposure Draft - Proposed Statement of Position, “Accounting for Certain Costs and Activities Related to Property, Plant, and Equipment” Western Cooperative Electric Association Inc appreciates the opportunity to submit written comments regarding the above captioned Proposed Statement of Position (PP&E Accounting Proposal) to the Accounting Standards Executive Committee (AcSEC) of the American Institute of Certified Public Accountants (AICPA). Western is a rural electric cooperative in the state of Kansas providing electricity to 2,205 rural consumer-owners using 4,575 meters in eight northwestern counties. Western holds the dubious honor of having the state’s lowest density of service: 1.5 meters per mile of line. Operating within the capital-intensive electric utility industry, the PP&E Accounting Proposal would significantly impact accounting policy, practices, and Western’s members. Western is required to follow accounting requirements established by the Rural Utilities Service (RUS) of the United States Department of Agriculture. The PP&E Accounting Proposal raises significant ratemaking, operational, and accounting concerns. The most significant of these concerns arise due to accounting inconsistencies between the RUS Uniform System of Accounts and attendant RUS regulations and interpretations (collectively, Electric Cooperative Accounting Requirements), and the PP&E Accounting Proposal. The PP&E Accounting Proposal and the attendant detrimental impacts to Western Cooperative Electric Association Inc include the following: • Electric Cooperative Accounting Requirements specify capitalization of overheads in support of construction projects and permit capitalization of an A Touchstone Energy® Cooperative The power of human connections