Another batch of utility ADIT proposals clear FERC though some tweaks mandated

摘要

The Federal Energy Regulatory Commission approved several utilities’ plans to scrap a method for calculating the component of customers’ rates eventually used to pay corporate income taxes that the commission said was causing “unreasonably higher rates.” The commission, however, rejected provisions in some of those proposals that sought to make tariff changes beyond the elimination of the so-called two-step averaging methodology used by some utilities when calculating their accumulated deferred income taxes, or monies companies collect from customers in anticipation of paying the Internal Revenue Service. Utilities’ ADIT accounts reflect the difference in funds collected from rates to cover income tax expenses and the actual amount they owe the IRS. The amounts diverge as FERC ratemaking policies require income taxes included in rates to be calculated based on straight-line depreciation while the IRS allows utilities to use accelerated depreciation, which generally lowers a company’s tax liability during the early years of an asset’s life but increases it as the asset ages.