Sec. 181.8. Depreciation accounting

(a) Depreciation, as applied to electric plant, means the net loss in service value not restored by current maintenance, incurred in connection with the consumption or prospective retirement of electric plant in the course of service from causes which are known to be in current operation and against which the utility is not protected by insurance. Among the causes to be given consideration are wear and tear, decay, action of the elements, inadequacy, obsolescence, changes in the art, changes in demand, and requirements of public authorities.

(b) Each utility shall record each month (see also general instruction § 181.3, above) the estimated amount of depreciation on electric plant accrued during that month, by crediting the appropriate subdivision of account 1250, Reserve for Depreciation of Utility Plant, and charging the accounts for the depreciation expense as follows:

Account in Which Electric Plant is Included	Subdivision of Account 1250 to be Credited	Account to be Charged
1101 Electric Plant in Service	1250.1 Reserve for Depreciation of Electric Plant in Service	1503 Depreciation (See notes hereunder.)
1102 Electric Plant Leased to Others	1250.2 Reserve for Depreciation of Electric Plant Leased to Others	1508.2 Expenses of Electric Plant Leased to Others
1104 Electric Plant Held for Future Use	1250.4 Reserve for Depreciation of Electric Plant Held for Future Use	The question to be submitted to the commission
1106 Unclassified Electric Plant	1250.6 Reserve for Depreciation of Unclassified Electric Plant	1503 Depreciation (See notes hereunder.)

Note A:

To the extent that any electric property is used in construction, the depreciation thereon shall be charged to account 1103, Construction Work in Progress; if clearing accounts are used, depreciation of plant (except structures) the maintenance and operation of which are charged to clearing accounts, shall be charged to such clearing accounts.

Note B:

The accounting for depreciation of utility plant in other departments carried in account 1108, Other Utility Plant (§ 190.1), which are subject to regulation by the commission shall be in accordance with the effective system of accounts applicable to such operations.

Note C:

Depreciation accruals on Common plant (see note B under Utility Plant) shall be currently distributed on an equitable basis to the departments making use thereof; the reserve applicable to common plant shall be carried by Class C utilities in subdivisions of account 1250, Reserve for Depreciation of Utility Plant, applicable to the plant account wherein the common plant is carried.

Note D:

See also account 1250, Reserve for Depreciation of Utility Plant and electric plant instruction § 182.2.