Project accounting reporting and optimization

How detailed should your utility’s asset records be?

Tracking infrastructure costs is a major undertaking and one with which utilities of all sizes wrestle. Major costs of utility infrastructure construction are material, labor, direct costs, and overhead costs, including labor, inventory handling, vehicle/equipment usage, administrative, and the cost of capital. What level of tracking detail is needed? Is it possible to reduce the number of assets you’ve historically monitored to increase efficiency without compromising the data you have on those assets?

Utility infrastructure construction cost accumulation

Compatible units

Compatible units (CUs) are standardized assembly units of construction that contains physical materials such as pole, guy wires, and cross arms, labor estimates, vehicle and equipment hours, and overhead costs. CUs facilitate project design, materials management, labor scheduling, estimation, and accounting processes. The types of CUs are based on industry construction standards, and the quantity varies from utility to utility based on internal construction practices and unit design preferences. For electric cooperatives, the Rural Utilities Service (RUS) also provides CU standards for those it funds.

CUs can be small individual units. For example, the construction of a pole could comprise these individual CUs:

  • Forty-five foot wood pole
  • Cross arm
  • Guy wire
  • Transformer
  • Arrester

Alternatively, all of the above items could be combined into a single large compatible unit called a “forty-five foot pole” or “structure”. When using structures, project design becomes more efficient for the engineer or designer. If the utility’s software platform integrates construction design and materials management, reserved inventory pick lists for the project will be more complete and the design process is further streamlined.

Continuing property records

CUs drive how completed project costs are classified in the general ledger as each is mapped to a detailed listing of fixed asset records called continuing property records (CPRs). CPRs are a perpetual record of a plant in service.

For utilities that use the Federal Energy Regulatory Commission’s (FERC) Uniform System of Accounts, costs are segregated by CU type such as poles, overhead lines, and underground lines. Though FERC and RUS do not provide specific requirements, in CPRs should generally contain:

  • Description and identifying number
  • FERC account to which unit is assigned
  • Number of units
  • Average cost of units added for each year (vintage)
  • Number of surviving units
  • The location (GIS record can be used)

An example of a partial CPR listing for FERC Account 364 (poles, towers, and fixtures) follows.

Description Quantity Avg Cost Value
Wood Class 1 50' 77 3,660.15 281,831.55
Wood Class 1 55' 74 3,158.51 233,729.74
Wood Class 1 60' 165 3,253.73 536,865.45
Wood Class 1 65' 78 3,440.76 268,379.28
Wood Class 1 70' 33 5,285.78 174,430.74
Wood Class 1 75' 35 7,986.15 279,515.25
Wood Class 1 80' 6 8,006.42 48,038.52
Wood Class 1 85' 2 8,777.33 17,554.66
FERC Total   27,045 22,096,673.55

Utilities maintain hundreds to thousands of CPRs. Having a large quantity of individual property unit records makes accurately retiring units difficult. To generate an accurate accounting entry, the field crew must provide exact information for the decommissioned item. In this situation, a utility may consider maintaining fewer CPRs and shrinking the number of units. For instance, rather than having multiple different CPRs to differentiate the five different classes of wood poles, all wood poles could be tracked in one property unit record such as in the example below.

Wood pole CRP consolidation

New CPR unit = Pole = Wood

FERC CPR number Current description Quantity Average cost Value
36400 11051050 Wood class 1, 50' 77 3,660.15 281,831.55
36400 11051055 Wood class 1, 55' 74 3,158.51 233,729.74
36400 11051060 Wood class 1, 60' 165 3,253.73 536,865.45
36400 11051065 Wood class 1, 65' 78 3,440.76


36400 11051070 Wood class 1, 70' 33 5,285.78 174.430.74
36400 11052040 Wood class 2, 40' 84 1,682.07 141,293.88
36400 11052045 Wood class 2, 45' 31 716.6065 22,214.80
36400 11053045 Wood class 3, 45' 5,186 1,271.59 6,594,465.74
36400 11056050 Wood class 3, 50' 1,505 1,668.07 2,510,445.35
36400 11053055 Wood class 3, 55' 292 2,292.33 669,360.36
36400 11054040 Wood class 4, 40' 8,989 611.3654 5,495,563.58
36400 11054045 Wood class 4, 45' 662 741.0338 490,567.69
36400 11054050

Wood class 4, 50'

44 948.9505 41,753.82
36400 11055030 Wood class 5, 30' 3,414 493.1375 1,683,571.43
36400 11055035 Wood class 5, 35' 3,580 351.8837 1,259,743.65
36400 11055040 Wood class 5, 40' 1,725 392.6405 677,304.86
      25,939 812.7343 21,081,521.91

In addition, some utilities track CPRs that are very specific to each component of a CU. For example, the CU structure for a pole may include the pole, cross arm, and guy wires. Some utilities have a specific CPR for each of these CUs while others merge them into one CPR unit called “pole”; this latter CPR unit combines all the CU costs.

Best practice considerations

Best practices that support construction standards should drive the creation of high level CUs. Therefore, before overhauling of the CU listing, establish construction standards. Then design engineers, who know best the intricacies of the utility’s construction preferences, should be the motivating force behind creating the minimum number of CUs required. When the potential need for additional CUs is identified, engineering should thoroughly review and assess the proposed CUs before they are approved for use.

As CUs do not need to have a one-to-one relationship with CPRs, multiple levels of CUs can be created. A best practice is to have no more than three levels. Examples of a three level system using the most common pole assembly combinations follow.

Three level system using common pole assembly

The ultimate goal is to have as few compatible units as possible to meet construction needs and maintain design standardization and consistency. When determining what level of detail is right for your utility, consider the required construction standards, common structures that could be utilized, and the detail desired in your continuing property records.

For more information on this topic, or to learn how Baker Tilly energy and utility specialists can help, contact our team.

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