FERC Requires Public Utilities to Revise Rates to Align with Changes Caused by TCJA

On November 21, 2019, the Federal Energy Regulatory Commission (FERC) issued an Order requiring public utilities with transmission formula rates under an Open Access Transmission Tariff, a transmission owner tariff, or a rate schedule to revise their rates to account for changes caused by the Tax Cuts and Jobs Act of 2017 (TCJA).

FERC is also requiring public utilities to include a mechanism in their transmission formula rates to deduct any excess accumulated deferred income taxes (ADIT) from, or add any deficient ADIT to, their rate bases.

In addition, public utilities are required to incorporate into their transmission formula rates a mechanism to increase or decrease their income tax allowances by any amortized deficient or excess ADIT and a new permanent worksheet that will annually track information related to deficient or excess ADIT.

A copy of the order is available here.