7 CFR Part 1730

Rural Utilities Service, USDA

§ 1730.4

American Wood Preservers’ Association, P.O.
Box 286, Woodstock, Maryland 21163,
Phone: (410) 456–3169.
[58 FR 41406, Aug. 3, 1993]

§ 1730.2

PART 1730—ELECTRIC SYSTEM
OPERATIONS AND MAINTENANCE
Subpart A—General
Sec.
1730.1 Introduction.
1730.2 RUS policy.
1730.3 RUS addresses.
1730.4 Definitions.
1730.5–1730.19 [Reserved]

Subpart B—Operations and Maintenance
Requirements
1730.20 General.
1730.21 Inspections and tests.
1730.22 Borrower analysis.
1730.23 Review rating summary, RUS Form
300.
1730.24 RUS review and evaluation.
1730.25 Corrective action.
1730.26 Engineer’s certification.
1730.27–1730.99 [Reserved]
APPENDIX A TO SUBPART B TO PART 1730—REVIEW RATING SUMMARY, RUS FORM 300
AUTHORITY: 7 U.S.C. 901 et seq., 1921 et seq.,
6941 et seq.
SOURCE: 63 FR 3450, Jan. 23, 1998, unless
otherwise noted.

Subpart A—General
§ 1730.1

(c) The Administrator may waive, for
good cause, on a case by case basis, certain requirements and procedures of
this part.

Introduction.

(a) This part contains the policies
and procedures of the Rural Utilities
Service (RUS) related to electric borrowers’ operation and maintenance
practices and RUS’ review and evaluation of such practices.
(b) The policies and procedures included in this part apply to all electric
borrowers (both distribution borrowers
and power supply borrowers) and are
intended to clarify and implement certain provisions of the security instrument and loan contract between RUS
and electric borrowers regarding operations and maintenance. This part is
not intended to waive or supersede any
provisions of the security instrument
and loan contract between RUS and
electric borrowers.

RUS policy.

It is RUS policy to require that all
property of a borrower be operated and
maintained properly in accordance
with the requirements of each borrower’s loan documents. It is also RUS
policy to provide financial assistance
only to borrowers whose operations
and maintenance practices and records
are satisfactory or to those who are
taking corrective actions expected to
make their operations and maintenance practices and records satisfactory to RUS.
§ 1730.3

RUS addresses.

(a) Persons wishing to obtain forms
referred to in this part should contact:
Program Support and Regulatory Analysis, Rural Utilities Service, U.S. Department of Agriculture, Stop 1522, 1400
Independence Ave., SW., Washington,
DC 20250–1522, telephone (202) 720–8674.
Borrowers or others may reproduce any
of these forms in any number required.
(b) Documents required to be submitted to RUS under this part are to
be sent to the office of the borrower’s
assigned RUS General Field Representative (GFR) or such other office as designated by RUS.
§ 1730.4

Definitions.

Terms used in this part have the
meanings set forth in 7 CFR Part
1710.2. References to specific RUS
forms and other RUS documents, and
to specific sections or lines of such
forms and documents, shall include the
corresponding forms, documents, sections and lines in any subsequent revisions of these forms and documents. In
addition to the terms defined in 7 CFR
Part 1710.2, the term Prudent Utility
Practice has the meaning set forth in
Article 1, Section 1.01 of Appendix A to
Subpart B of 7 CFR Part 1718—Model
Form of Mortgage for Electric Distribution Borrowers, for the purposes
of this Part.

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§§ 1730.5–1730.19
§§ 1730.5–1730.19

7 CFR Ch. XVII (1–1–03 Edition)

[Reserved]

Subpart B—Operations and
Maintenance Requirements
§ 1730.20 General.
Each distribution borrower and
power supply borrower shall operate
and maintain its system in compliance
with Prudent Utility Practice, in compliance with its loan documents, and in
compliance with all applicable laws,
regulations and orders, shall maintain
its systems in good repair, working
order and condition, and shall make all
needed repairs, renewals, replacements,
alterations, additions, betterments and
improvements, in accordance with applicable provisions of the borrower’s security instrument. Each borrower is responsible for on-going operations and
maintenance programs, for maintaining records of the physical and electrical condition of its electric system
and for the quality of services provided
to its customers. The borrower is also
responsible for all necessary inspections and tests of the component parts
of its system, and for maintaining
records of such inspections and tests.
Each borrower shall budget sufficient
resources to operate and maintain its
system in accordance with the requirements of this part. For portions of the
borrower’s system that are not operated by the borrower, if any, the borrower is responsible for ensuring that
the operator is operating and maintaining the system properly in accordance with the operating agreement.
§ 1730.21 Inspections and tests.
(a) Each borrower shall conduct all
necessary inspections and tests of the
component parts of its electric system,
and maintain adequate records of such
inspections and tests.
(b) The frequency of inspection and
testing will be determined by the borrower in conformance with applicable
laws, regulations, national standards,
and Prudent Utility Practice. The frequency of inspection and testing will
be determined giving due consideration
to the type of facilities or equipment,
manufacturer’s recommendations, age,
operating environment and hazards to
which the facilities are exposed, con-

sequences of failure, and results of previous inspections and tests. The
records of such inspections and tests
will be retained in accordance with applicable regulatory requirements and
Prudent Utility Practice. The retention period should be of a sufficient
time period to identify long-term
trends. Records must be retained at
least until the applicable inspections
or tests are repeated.
(c) Inspections of facilities must include a determination of whether the
facility complies with the National
Electrical Safety Code, National Electrical Code (as applicable), and applicable State or local regulations. Any serious or life-threatening deficiencies
shall be promptly repaired, disconnected, or isolated in accordance with
applicable codes or regulations. Any
other deficiencies found as a result of
such inspections and tests are to be recorded and those records are to be
maintained until such deficiencies are
corrected or for the retention period
required by paragraph (b) of this section, whichever is longer.
§ 1730.22 Borrower analysis.
(a) Each borrower shall periodically
analyze in writing its operations and
maintenance policies, practices, and
procedures to determine if they are appropriate and if they are being followed. The records of inspections and
tests are also to be reviewed and analyzed to identify any trends which
could indicate deterioration in the
physical condition or the operational
effectiveness of the system or suggest a
need for changes in operations or maintenance practices. For portions of the
borrower’s system that are not operated by the borrower, if any, the borrower’s written analysis would also include a review of the operator’s performance under the operating agreement.
(b) When a borrower’s operations and
maintenance policies, practices, and
procedures are to be reviewed and evaluated by RUS, the borrower shall:
(1) Conduct the analysis required by
paragraph (a) of this section not more
than 90 days prior to the scheduled
RUS review;
(2) Complete RUS Form 300, Review
Rating Summary, and other related

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Rural Utilities Service, USDA

Pt. 1730, Subpt. B, App. A

forms, prior to RUS’ review and evaluation; and
(3) Make available to RUS the borrower’s completed RUS Form 300 (including a written explanation of the
basis for each rating) and records related to the operations and maintenance of the borrower’s system.
(c) For those facilities not included
on the RUS Form 300 (e.g., generating
plants), the borrower shall prepare and
complete an appropriate supplemental
form for such facilities.
§ 1730.23 Review rating summary, RUS
Form 300.
RUS Form 300 in Appendix A shall be
used when required by this part.
§ 1730.24 RUS review and evaluation.
RUS will initiate and conduct a periodic review and evaluation of the operations and maintenance practices of
each borrower for the purpose of assessing loan security and determining
borrower compliance with RUS policy
as outlined in this part. This review
will normally be done at least once
every three years. The borrower will
make available to RUS the borrower’s
policies, procedures, and records related to the operations and maintenance of its complete system. Reports
made by other inspectors (e.g., other
Federal agencies, State inspectors,
etc.) will also be made available, as applicable. RUS will not duplicate these
other reviews but will use their reports
to supplement its own review. RUS
may inspect facilities, as well as
records, and may also observe construction and maintenance work in the
field. Key borrower personnel responsible for the facilities being inspected
are to accompany RUS during such inspections, unless otherwise determined
by RUS. RUS personnel may prepare
an independent summary of the operations and maintenance practices of
the borrower. The borrower’s management will discuss this review and evaluation with its Board of Directors.
§ 1730.25 Corrective action.
(a) For any items on the RUS Form
300 rated unsatisfactory (i.e., 0 or 1) by
the borrower or by RUS, the borrower
shall prepare a corrective action plan
(CAP) outlining the steps (both short

term and long term) the borrower will
take to improve existing conditions
and to maintain an acceptable rating.
The CAP must include a time schedule
and cost estimate for corrective actions, and must be approved by the borrower’s Board of Directors. The CAP
must be submitted to RUS for approval
within 90 days after the completion of
RUS’ evaluation noted in § 1730.24.
(b) The borrower must periodically
report to RUS in writing progress
under the CAP. This report must be
submitted to RUS every six months
until all unsatisfactory items are corrected unless RUS prescribes a different reporting schedule.
§ 1730.26

Engineer’s certification.

Where provided for in the borrower’s
loan documents, RUS may require the
borrower to provide an ‘‘Engineer’s
Certification’’ as to the condition of
the borrower’s system (including, but
not limited to, all mortgaged property.) Such certification shall be in
form and substance satisfactory to
RUS and shall be prepared by a professional engineer satisfactory to RUS. If
RUS determines that the Engineer’s
Certification discloses a need for improvements to the condition of its system or any other operations of the borrower, the borrower shall, upon notification by RUS, promptly undertake to
accomplish such improvements.
§§ 1730.27–1730.99

[Reserved]

APPENDIX A TO SUBPART B OF PART
1730—REVIEW RATING SUMMARY,
RUS FORM 300
Borrower Designation llll
Date Prepared llll
Ratings on form are:
0: Unsatisfactory—no records
1: Unsatisfactory—corrective action needed
2: Acceptable, but should be improved—see
attached recommendations
3: Satisfactory—no additional action required at this time
N/A: Not applicable
PART I—TRANSMISSION and
DISTRIBUTION FACILITIES
1. Substations (Transmission and Distribution)
a. Safety, Clearance, Code Compliance—
Rating: llll

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Pt. 1730, Subpt. B, App. A

7 CFR Ch. XVII (1–1–03 Edition)

b. Physical Condition: Structure, Major
Equipment, Appearance—
Rating: llll
c. Inspection Records Each Substation—
Rating: llll
d. Oil Spill Prevention—Rating: llll
2. Transmission Lines
a. Right-of-Way: Clearing, Erosion, Appearance, Intrusions—
Rating: llll
b. Physical Condition: Structure, Conductor, Guying—Rating: llll
c. Inspection Program and Records—Rating: llll
3. Distribution Lines—Overhead
a. Inspection Program and Records—Rating: llll
b. Compliance with Safety Codes: Clearances—Rating: llll
Compliance with Safety Codes: Foreign
Structures—Rating: llll
Compliance with Safety Codes: Attachments—Rating: llll
c. Observed Physical Condition from Field
Checking: Right-of-Way—Rating: llll
Observed Physical Condition from Field
Checking: Other—Rating: llll
4. Distribution—Underground Cable
a. Grounding and Corrosion Control—Rating: llll
b. Surface Grading, Appearance—
Rating: llll
c. Riser Poles: Hazards, Guying, Condition—Rating: llll
5. Distribution Line Equipment: Conditions
and Records
a. Voltage Regulators—Rating: llll
b. Sectionalizing Equipment—
Rating: llll
c. Distribution Transformers—
Rating: llll
d. Pad Mounted Equipment—Safety: Locking,
Dead
Front,
Barriers—Rating:
llll
Pad
Mounted
Equipment—Appearance:
Settlement, Condition—Rating: llll
e. Kilowatt-hour and Demand Meter Reading and Testing—Rating: llll
PART II—OPERATION AND
MAINTENANCE
6. Line Maintenance and Work Order Procedures
a. Work Planning and Scheduling—
Rating: llll
b. Work Backlogs: Right-of-Way Maintenance—Rating: llll
Work Backlogs: Poles—Rating: llll
Work Backlogs: Retirement of Idle Services—Rating: llll
Work Backlogs: Other—Rating: llll
7. Service Interruptions
a. Average Annual Hours/Consumer by
Cause (Complete for each of the previous
5 years)
1. Power Supplier llll
2. Major Storm llll

3. Scheduled llll
4. All Other llll
5. Total llll
Rating: llll
b. Emergency Restoration Plan—Rating:llll
8. Power Quality
General Freedom from Complaints—Rating:llll
9. Loading and Load Balance
a. Distribution Transformer Loading—Rating:llll
b. Load Control Apparatus—Rating:llll
c. Substation and Feeder Loading—Rating:llll
10. Maps and Plant Records
a. Operating Maps: Accurate and Up-toDate—Rating:llll
b. Circuit Diagrams—Rating:llll
c. Staking Sheets—Rating:llll
PART III—ENGINEERING
11. System Load Conditions and Losses
a. Annual System Loses, llll%—Rating:llll
b. Annual Load Factor, llll%—Rating:llll
c. Power Factor at Monthly Peak,
llll%—Rating:llll
d. Ratio of Individual Substation Peak kW
to kVA, llll—Rating:llll
12. Voltage Conditions
a. Voltage Surveys—Rating:llll
b. Substation Transformer Output Voltage
Spread—Rating:llll
13. Load Studies and Planning
a. Long Range Engineering Plan—Rating:llll
b.
Construction
Work
Plan—Rating:llll
c. Sectionalizing Study—Rating:llll
d. Load Data for Engineering Studies—
Rating:llll
e. Load Forecasting Data—Rating:llll
PART IV—OPERATION AND
MAINTENANCE BUDGETS
For Previous 2 Years:
Normal Operation—Actual $llll
Normal Maintenance—Actual $llll
Total—Actual $llll
For Present Year:
Normal Operation—Budget $llll
Normal Maintenance—Budget $llll
Total—Budget $llll
For Future 3 Years:
Normal Operation—Budget $llll
Normal Maintenance—Budget $llll
Additional (Deferred) Maintenance—Budget
$llll
Total—Budget $llll
14. Budgeting:
Adequacy of Budgets For Needed Work—Rating:llll

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Rural Utilities Service, USDA

§ 1735.1

15. Date Discussed with Board of Directors
llll
Remarks: llll
EXPLANATORY NOTES
Item No. llll Comments llll
Rated by llll llll Title llll Date
llll
Reviewed by llll Manager llll Date
llll
Reviewed by llll RUS GFR llll Date
llll

PART 1735—GENERAL POLICIES,
TYPES OF LOANS, LOAN REQUIREMENTS—TELECOMMUNICATIONS PROGRAM
Subpart A—General

Subpart E—Basic Requirements for Loan
Approval
1735.50 Administrative findings.
1735.51 Required findings.
1735.52 Findings required for particular loan
purposes.
1735.53–1735.59 [Reserved]

Subpart F—Mortgage Controls on
Acquisitions and Mergers
1735.60 Specific provisions.
1735.61 Approval criteria.
1735.62 Approval of acquisitions and mergers.
1735.63–1735.69 [Reserved]

Subpart G—Acquisitions Involving Loan
Funds
1735.70 Use of loan funds.
1735.71 Nonrural areas.
1735.72 Acquisition agreements.
1735.73 Loan design.
1735.74 Submission of data.
1735.75 Interim financing.
1735.76 Acquisition of affiliates.
1735.77 Release of loan funds, requisitions,
advances.
1735.78–1735.79 [Reserved]

Sec.
1735.1 General statement.
1735.2 Definitions.
1735.3 Availability of forms.
1735.4–1735.9 [Reserved]

Subpart B—Loan Purposes and Basic
Policies
1735.10 General.
1735.11 Area coverage.
1735.12 Nonduplication.
1735.13 Location of facilities and service for
nonrural subscribers.
1735.14 Borrower eligibility.
1735.15 Civil rights.
1735.16 Minimum loan amount.
1735.17 Facilities financed.
1735.18 Additional equity.
1735.19 Mergers and consolidations.
1735.20 Acquisitions.
1735.21 Refinancing loans.
1735.22 Loan security.
1735.23–1735.29 [Reserved]

Subpart C—Types of Loans

Subpart H—Acquisitions or Mergers Not
Involving Additional Loan Funds
1735.80 Submission of data.
1735.81–1735.89 [Reserved]

Subpart I—Requirements for All
Acquisitions and Mergers
1735.90 Preliminary approvals.
1735.91 Location of facilities.
1735.92 Accounting considerations.
1735.93 Notes.
1735.94 Final approval and closing procedure.
1735.95 Unadvanced loan funds.
1735.96–1735.99 [Reserved]

Subpart J—Toll Line Acquisitions

1735.30 Hardship loans.
1735.31 RUS cost-of-money and RTB loans.
1735.32 Guaranteed loans.
1735.33 Variable interest rate loans.
1735.34–1735.39 [Reserved]

1735.100
1735.101

Use of loan funds.
With nonloan funds.

AUTHORITY: 7 U.S.C. 901 et seq., 1921 et seq.,
and 6941 et seq.

Subpart D—Terms of Loans

Subpart A—General

1735.40 General.
1735.41 Notes.
1735.42 [Reserved]
1735.43 Payments on loans.
1735.44 Prepayment premiums.
1735.45 Extension of payments.
1735.46 Loan security documents.
1735.47 Rescissions of loans.
1735.48–1735.49 [Reserved]

§ 1735.1 General statement.
(a) Subparts A through E of this part
set forth the general policies, types of
loans and loan requirements under the
Telephone loan program.
(b) The standard RUS security documents (see 7 CFR 1744 subpart D or

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