162 FERC ¶ 61,224

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Kevin J. McIntyre, Chairman;

 Cheryl A. LaFleur, Neil Chatterjee,

 Robert F. Powelson, and Richard Glick.

Alcoa Power Generating Inc.―Long Sault Division

Alcoa Power Generating Inc.―Tapoco Division

Avista Corporation

Black Hills/Colorado Electric Utility Company, L.P.

Central Hudson Gas & Electric Corporation

Cheyenne Light, Fuel and Power Company

Consolidated Edison Company of New York, Inc.

Cube Yadkin Transmission LLC

DATC Path 15, LLC

Deseret Generation and Transmission Co-operative, Inc.

El Paso Electric Company

Electric Energy, Inc.

Essential Power Rock Springs, LLC

Florida Power & Light Company

Monongahela Power Company

Potomac Edison Company

West Penn Power Company

Nevada Power Company

Sierra Pacific Power Company

New York State Electric & Gas Corporation

NorthWestern Corporation

Ohio Valley Electric Corporation

Orange & Rockland Utilities, Inc.

Pacific Gas and Electric Company

Portland General Electric Company

Rochester Gas and Electric Corporation

Rockland Electric Company

Sky River LLC

Smoky Mountain Transmission LLC

Startrans, IO, LLC

The Dayton Power & Light Company

Trans Bay Cable LLC

Tucson Electric Power Company

Docket Nos. EL18-72-000

EL18-73-000

EL18-75-000

EL18-76-000

EL18-77-000

EL18-79-000

EL18-89-000

EL18-90-000

EL18-91-000

EL18-93-000

EL18-95-000

EL18-96-000

EL18-97-000

EL18-98-000

EL18-101-000

EL18-102-000

EL18-103-000

EL18-104-000

EL18-105-000

EL18-107-000

EL18-108-000

EL18-109-000

EL18-110-000

EL18-111-000

EL18-112-000

EL18-113-000

EL18-115-000

EL18-117-000

EL18-118-000

EL18-119-000

(not consolidated)

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Docket No. EL18-72-000, et al. - 2 -

ORDER TO SHOW CAUSE

(Issued March 15, 2018)

In this order, pursuant to section 206 of the Federal Power Act (FPA)1 1. and Rule 

209(a) of the Commission’s Rules of Practice and Procedure,2 we direct each of the 

above-captioned public utilities (collectively, Respondents) either (1) to propose 

revisions to its stated transmission rates under its open access transmission tariff or 

transmission owner tariff on file with the Commission to reflect the recent change in the

federal corporate income tax rate and describe the methodology used for making those 

revisions, or (2) to show cause why it should not be required to do so.

I. Background

2. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (Tax Cuts and Jobs 

Act)3 was signed into law. The Tax Cuts and Jobs Act, among other things, lowered the 

federal corporate income tax rate from a maximum 35 percent to a flat 21 percent rate, 

effective January 1, 2018. This means that, beginning January 1, 2018, companies, 

including those subject to the Commission’s jurisdiction, will compute income taxes 

owed to the Internal Revenue Service based on a 21 percent tax rate. This tax rate 

reduction will result in lower income tax expense going forward and a reduction in 

accumulated deferred income taxes on the books of rate-regulated companies.4

3. The recovery of federal corporate income taxes is reflected in transmission rates. 

When tax expense decreases, so does the cost of service. The Commission must ensure

that the rates, terms, and conditions of jurisdictional services under the FPA are just, 

reasonable, and not unduly discriminatory or preferential.5 It has been the Commission’s 

policy to allow transmission rates to be established through, among other things, stated 

rates, in which a rate case is filed at the Commission to establish a cost of service revenue 

 1 16 U.S.C. § 824e (2012).

2 18 C.F.R. § 385.209(a) (2017).

3 Tax Cuts and Jobs Act, Pub. L. No. 115-97, 131 Stat. 2054 (2017).

4 A Notice of Inquiry seeking comment on the effect of the Tax Cuts and Jobs Act 

on Commission-jurisdictional rates is being issued in Docket No. RM18-12-000 

concurrently with this order.

5 16 U.S.C. §§ 824d-e (2012).

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requirement, to allocate costs to various customer groups, and to calculate rates. The 

federal corporate income tax rate is a component of the stated transmission rate, which is 

fixed. Absent a change to the stated rate, the current 21 percent federal corporate income 

tax rate would, to the detriment of customers, not be reflected in a transmission revenue

requirement. 

II. Discussion

4. Given the reduction in the federal corporate income tax rate, we have undertaken a 

review of Commission-jurisdictional stated transmission rates under open access 

transmission tariffs or transmission owner tariffs, and we have identified Respondents as 

having such arrangements in effect. Because the federal corporate income tax rate has 

been reduced to 21 percent, absent a change to the stated rates, Respondents’ stated rates 

may not accurately reflect their cost of service. Accordingly, we find that Respondents’ 

stated rates on file with the Commission appear to be unjust, unreasonable, and unduly 

discriminatory or preferential, or otherwise unlawful. Within 60 days of the date of this 

order, each Respondent is directed either (1) to propose revisions to its stated 

transmission rates to reflect the change in the federal corporate income tax rate and 

describe the methodology used for making those revisions,

6 or (2) to show cause why it

should not be required to do so.7 

5. In cases where, as here, the Commission institutes a proceeding on its own motion 

under FPA section 206, section 206(b) requires that the Commission establish a refund 

effective date that is no earlier than the date of publication of the notice of the 

Commission's initiation of its investigation in the Federal Register, and no later than 

five months after the publication date.8 Consistent with our general policy of providing 

maximum protection to customers, we will set the refund effective date at the earliest 

 6 The Commission generally does not permit single-issue ratemaking. However, 

given the limited scope of the revisions needed to reflect the change in the federal 

corporate income tax rate, the Commission will consider proposals to review 

Respondents’ proposed revisions on a single-issue basis. See generally Indicated RTO 

Transmission Owners, 161 FERC ¶ 61,018, at PP 13-14 (2017). See also Rates Changes 

Relating to the Federal Corporate Income Tax Rate for Public Utilities, Order No. 475, 

FERC Stats. & Regs. ¶ 30,752, order on reh’g, 41 FERC ¶ 61,029 (1987) (allowing 

public utilities to use a voluntary, abbreviated rate filing procedure to reduce their rates to 

reflect a reduction in the federal corporate income tax rate on a single-issue basis).

7 For example, Respondents may explain how the reduced tax rate is being 

addressed in another proceeding pending before the Commission.

8 16 U.S.C. § 824e(b) (2012).

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date possible, i.e., the date of publication by the Commission of its notice of intention to 

initiate the above-captioned proceedings in the Federal Register.

9

6. Section 206(b) of the FPA also requires that, if no final decision is rendered by the 

conclusion of the 180-day period commencing upon initiation of the section 206 

proceeding, the Commission shall state the reasons why it has failed to render such a 

decision and state its best estimate as to when it reasonably expects to make such a 

decision.10 Assuming that Respondents file revisions to their stated transmission rates,11

we estimate that we would be able to issue our decision within approximately three

months of the filing of the tariff revisions.

7. Any entity desiring to participate in the proceeding for a particular Respondent 

must file a notice of intervention or a motion to intervene, as appropriate, in the docket 

number identified in the caption of this order in accordance with Rule 214 of the 

Commission’s Rules of Practice and Procedure, 18 C.F.R. § 385.214 (2017), within 

21 days of publication of notice in the Federal Register of the Commission’s initiation of 

the section 206 proceeding. 

The Commission orders:

(A) Pursuant to section 206 of the Federal Power Act, within 60 days of the 

date of this order, each Respondent must either (1) submit proposed revisions to its stated 

transmission rates or stated transmission revenue requirements to reflect the change in the 

federal corporate income tax rate and describe the methodology used for making those 

revisions, or (2) show cause why it should not be required to do so, as discussed in the 

 9 See, e.g., Seminole Elec. Coop., Inc. v. Fla. Power & Light Co., 65 FERC 

¶ 61,413, at 63,139 (1993); Canal Elec. Co., 46 FERC ¶ 61,153, at 61,539, reh’g denied, 

47 FERC ¶ 61,275 (1989). We, however, note that FPA section 206 confers the 

Commission with discretion and does not require that the Commission order refunds in 

every instance. Ameren Servs. Co. v. Midwest Indep. Transmission Sys. Operator, Inc., 

127 FERC ¶ 61,121, at P 154 (2009).

10 16 U.S.C. § 824e(b) (2012).

11 When making an eTariff filing, Respondents should use Type of Filing Code 

1450, which is a new type of filing code established for responses to this proceeding. See

FERC, Type of Filing Rules Table (2018), http://www.ferc.gov/docs-filing/etariff.asp. 

Additionally, Respondents’ filings will receive new root docket numbers. See Electronic 

Tariff Filings, 130 FERC ¶ 61,047, at P 12 (2010). In the event that a Respondent 

chooses to show cause why it should not be required to make such an eTariff filing, such 

response should be submitted in the applicable docket number, listed above.

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body of this order.

(B) Any entity desiring to participate in the proceeding for a particular 

Respondent must file a notice of intervention or a motion to intervene, as appropriate, in 

the docket number identified in the caption of this order in accordance with Rule 214 of 

the Commission’s Rules of Practice and Procedure, 18 C.F.R. § 385.214 (2017), within 

21 days of publication of notice in the Federal Register of the Commission’s initiation of 

the section 206 proceeding. 

(C) The Secretary shall promptly publish in the Federal Register a notice of the 

Commission’s initiation of the section 206 proceedings in Docket Nos. EL18-72-000,

EL18-73-000, EL18-75-000, EL18-76-000, EL18-77-000, EL18-79-000, EL18-89-000, 

EL18-90-000, EL18-91-000, EL18-93-000, EL18-95-000, EL18-96-000, EL18-97-000, 

EL18-98-000, EL18-101-000, EL18-102-000, EL18-103-000, EL18-104-000, EL18-105-

000, EL18-107-000, EL18-108-000, EL18-109-000, EL18-110-000, EL18-111-000, 

EL18-112-000, EL18-113-000, EL18-115-000, EL18-117-000, EL18-118-000, and 

EL18-119-000.

(D) The refund effective date established pursuant to section 206(b) of the FPA 

will be the date of publication in the Federal Register of the notice discussed in Ordering 

Paragraph (C) above.

By the Commission.

( S E A L )

Kimberly D. Bose,

Secretary.

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Document Content(s)

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