Document ID: FERC-2018-0360-0001
Agency: ferc
Document Type: Notice
Title: Effect of Tax Cuts and Jobs Act on Commission-Jurisdictional Rates
Posted Date: 2018-03-21T04:00Z

[Federal Register Volume 83, Number 55 (Wednesday, March 21, 2018)]
[Notices]
[Pages 12371-12376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-05670]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RM18-12-000]

Inquiry Regarding the Effect of the Tax Cuts and Jobs Act on 
Commission-Jurisdictional Rates

AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Notice of inquiry.

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[[Page 12372]]

SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
seeking comment on the effect of the Tax Cuts and Jobs Act of 2017 on 
Commission-jurisdictional rates. Of particular interest is whether, and 
if so how, the Commission should address changes relating to 
accumulated deferred income taxes and bonus depreciation.

DATES: Comments are due May 21, 2018.

ADDRESSES: Comments, identified by docket number, may be filed 
electronically at http://www.ferc.gov in acceptable native applications 
and print-to-PDF, but not in scanned or picture format. For those 
unable to file electronically, comments may be filed by mail or hand-
delivery to: Federal Energy Regulatory Commission, Secretary of the 
Commission, 888 First Street NE, Washington, DC 20426. The Comment 
Procedures section of this document contains more detailed filing 
procedures.

FOR FURTHER INFORMATION CONTACT: 
Natalie Tingle-Stewart (Technical Information), Office of Energy Market 
Regulation, 888 First Street NE, Washington, DC 20426, (202) 502-8267, 
[email protected]
Kristen Fleet (Technical Information (Electric)), Office of Energy 
Market Regulation, 888 First Street NE, Washington, DC 20426, (202) 
502-8063, [email protected]
Monil Patel (Technical Information (Oil)), Office of Energy Market 
Regulation, 888 First Street NE, Washington, DC 20426, (202) 502-8296, 
[email protected]
James Sarikas (Technical Information (Natural Gas)), Office of Energy 
Market Regulation, 888 First Street NE, Washington, DC 20426, (202) 
502-6831, [email protected]
Steven Hunt (Accounting Information), Office of Enforcement, 888 First 
Street NE, Washington, DC 20426, (202) 502-6084, [email protected]
Jonathan Taylor (Legal Information), Office of the General Counsel, 888 
First Street NE, Washington, DC 20426, (202) 502-6649, 
[email protected]

SUPPLEMENTARY INFORMATION: 
    1. In this Notice of Inquiry (NOI), the Commission seeks comment on 
the effect of the Tax Cuts and Jobs Act of 2017 (Tax Cuts and Jobs Act) 
on Commission-jurisdictional rates. Of particular interest is whether, 
and if so how, the Commission should address changes relating to 
accumulated deferred income taxes (ADIT) and bonus depreciation.

I. Background

A. Tax Cuts and Jobs Act

    2. On December 22, 2017, the President signed into law the Tax Cuts 
and Jobs Act,\1\ which provides a number of changes to the federal tax 
system.\2\ One of the significant changes with widespread effects on 
Commission-jurisdictional rates is the reduction of the federal 
corporate income tax rate from a maximum 35 percent to a flat 21 
percent rate, effective January 1, 2018.\3\ Because of the reduced 
federal corporate income tax rate, the current balance of ADIT, that 
is, the dollar amounts of taxes that public utilities, interstate 
natural gas pipelines, and oil pipelines collected from customers in 
anticipation of paying the Internal Revenue Service (IRS), does not 
accurately reflect the current income tax liability. Additionally, the 
Tax Cuts and Jobs Act prohibits the use of bonus depreciation for 
assets acquired in the trade or business of the furnishing or sale of 
electrical energy or transportation of natural gas by pipeline.
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    \1\ Tax Cuts and Jobs Act, Public Law 115-97, 131 Stat. 2054 
(2017).
    \2\ The Commission has previously addressed a major change in 
the tax law when Congress passed the Tax Reform Act of 1986. See 
Rate Changes Related 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).
    \3\ Section 13001 of the Tax Cuts and Jobs Act.
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B. Requests for Commission Action

    3. In light of the Tax Cuts and Jobs Act, the Commission received 
letters from several entities requesting that the Commission act to 
ensure that the economic benefits related to the reduction in the 
federal corporate income tax rate are passed through to customers.\4\ 
These entities request, among other things, that the Commission 
investigate the continued justness and reasonableness of applicable 
Commission-jurisdictional rates and explore ways to adjust the 
transmission or transportation revenue requirements of Commission-
jurisdictional entities to prevent customers from overpaying for 
service.
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    \4\ These entities include State Advocates (States, state 
agencies, and state consumer advocates), Organization of PJM States, 
Inc., Organization of MISO States, American Public Gas Association, 
Process Gas Consumers Group, Natural Gas Supply Association, Natural 
Gas Indicated Shippers, Liquids Shippers Group, Oklahoma Attorney 
General, Gordon Gooch (pro se consumer), Advanced Energy Buyers 
Group, National Association of State Energy Officials, The R-Street 
Institute, Office of the Ohio Consumers' Counsel, and the Governor 
of Delaware. The Interstate Natural Gas Association of America, 
Edison Electric Institute and the Industrial Energy Consumers of 
America also sent letters to the Commission in reference to the 
effects of the Tax Cuts and Jobs Act.
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C. Commission's Actions

    4. Because the Tax Cuts and Jobs Act, among other things, reduces 
the federal corporate income tax rate from a maximum 35 percent to a 
flat 21 percent rate, beginning January 1, 2018, all public utilities, 
interstate natural gas pipelines, and oil pipelines subject to the 
federal corporate income tax will compute income taxes owed to the IRS 
based on a 21 percent tax rate. Most Commission-jurisdictional electric 
transmission and some non-transmission rates, most interstate natural 
gas transportation rates, and some oil pipeline rates (and Form No. 6, 
page 700) \5\ are based on cost of service, which comprises all 
expenses incurred, including income taxes, plus a reasonable return on 
capital.\6\ When the tax expense decreases, so does the cost of 
service. The Commission must ensure that the rates, terms, and 
conditions of jurisdictional services under the Federal Power Act 
(FPA),\7\ the Natural Gas Act (NGA),\8\ and the Interstate Commerce Act 
\9\ are just, reasonable, and not unduly discriminatory or 
preferential.
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    \5\ Most oil pipeline rates are indexed. However, these indexed 
rates can be challenged on a cost-of-service basis and oil pipelines 
can also file to set their rates on a cost-of-service basis. When 
this document refers to cost-of-service ratemaking for oil 
pipelines, it also refers to the reporting practices oil pipelines 
use in the cost-of-service summary on Form No. 6, page 700.
    \6\ Pub. Sys. v. FERC, 709 F.2d 73, 75 (DC Cir. 1983).
    \7\ 16 U.S.C. 824d-e.
    \8\ 15 U.S.C. 717-717w (2012).
    \9\ 49 app. U.S.C. 1 et seq (1988).
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    5. Because the federal corporate income tax rate has been reduced 
to 21 percent, the electric transmission rates of entities with stated 
rates or formula rates with fixed line items for the income tax rate 
will not accurately reflect their cost of service. Similarly, the 
transportation rates of interstate natural gas pipelines will not 
accurately reflect their cost of service.
    6. As such, in order to provide more immediate relief to customers 
of public utilities, pursuant to section 206 of the FPA,\10\ the 
Commission is concurrently issuing orders to show cause directing 
certain entities to propose revisions to the transmission rates in 
their open access transmission tariffs or transmission owner tariffs to 
reflect the change in the federal corporate income tax rate, or show 
cause why they should not be required to do so.\11\
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    \10\ 16 U.S.C. 824e.
    \11\ AEP Appalachian Transmission Company, Inc., 162 FERC ] 
61,225 (2018); Alcoa Power Generating Inc.--Long Sault Division, 162 
FERC ] 61,224 (2018).

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[[Page 12373]]

    7. The Commission also is concurrently issuing a Notice of Proposed 
Rulemaking (NOPR) \12\ regarding natural gas pipelines. In the NOPR, 
the Commission proposes to require interstate natural gas pipelines to 
make an informational filing with the Commission regarding the effect 
on their revenue requirements of the (a) Tax Cuts and Jobs Act and (b) 
the Revised Policy Statement on Treatment of Income Taxes.\13\ The 
Revised Policy Statement establishes a policy that master limited 
partnerships (MLP) are not permitted to recover an income tax allowance 
in their cost of service. The NOPR proposes to collect financial 
information to evaluate the impact of the Tax Cuts and Jobs Act and the 
Revised Policy Statement on interstate natural gas pipelines' revenue 
requirement, and to permit such pipelines to voluntarily file rate 
reductions to reflect the decrease in the federal corporate income tax 
pursuant to the Tax Cuts and Jobs Act or the elimination of the MLP tax 
allowance, explain why no action is needed, or take no action other 
than filing the informational filing.
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    \12\ Interstate and Intrastate Natural Gas Pipelines; Rate 
Changes Relating to Federal Income Tax Rate, 162 FERC ] 61,226 
(2018).
    \13\ Inquiry Regarding the Commission's Policy for Recovery of 
Income Tax Costs, 162 FERC ] 61,227 (2018) (Revised Policy 
Statement).
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    8. Unlike public utilities and interstate natural gas pipelines, 
the majority of oil pipelines set their rates using indexing, not cost-
of-service ratemaking using an oil pipeline's particular costs. Under 
indexing, oil pipelines may adjust their rates annually, so long as 
those rates remain at or below the applicable ceiling levels. The 
ceiling levels change every July 1 based on an index that tracks 
industry-wide cost changes.\14\ Under currently effective requirements 
governing the schedule for indexing changes, the index will be re-
assessed in 2020 based upon industry-wide oil pipeline cost changes 
between 2014 and 2019.\15\ While the Commission is not taking similar 
industry-wide action regarding oil pipeline rates, when oil pipelines 
file Form No. 6, page 700, they must report an income tax allowance and 
cost of service consistent with the Revised Policy Statement \16\ and 
the Tax Cuts and Jobs Act.
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    \14\ 18 CFR 342.3 (2017). Currently, the index level is based 
upon the Producer's Price Index for Finished Goods plus 1.23.
    \15\ See, e.g., Five-Year Review of the Oil Pipeline Index, 153 
FERC ] 61,312 (2015), aff'd, Assoc. of Oil Pipe Lines v. FERC, 876 
F.3d 336 (DC Cir. 2017).
    \16\ See Revised Policy Statement, 162 FERC ] 61,227.
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II. Request for Comments

A. Accumulated Deferred Income Taxes

    9. ADIT balances are accumulated on the regulated books and records 
of public utilities, interstate natural gas pipelines, and oil 
pipelines based on the requirements of the Uniform System of Accounts. 
ADIT arises from differences between the method of computing taxable 
income for reporting to the IRS and the method of computing income for 
regulatory accounting and ratemaking purposes.
    10. There are numerous items that are treated differently for IRS 
purposes and regulatory accounting and ratemaking purposes, the most 
familiar of which is depreciation expense. The following example uses 
depreciation expense to illustrate the accumulation of ADIT balances.
    11. Under Commission ratemaking policies, income taxes included in 
rates are determined based on the return on net rate base, with the 
accumulated depreciation offset to rate base calculated using straight-
line depreciation.\17\ However, in calculating the amount of income 
taxes due to the IRS, public utilities, interstate natural gas 
pipelines, and oil pipelines generally are able to take advantage of 
accelerated depreciation. Accelerated depreciation usually lowers 
income taxes payable during the early years of an asset's life followed 
by corresponding increases in income taxes payable during the later 
years of an asset's life. This means that a public utility's, 
interstate natural gas pipeline's, and oil pipeline's income taxes 
payable to the IRS during any period differ from its income tax 
allowance for ratemaking purposes during the same period. The 
difference between the income taxes based on straight-line depreciation 
and the actual income taxes paid by a public utility and interstate 
natural gas pipeline generally are reflected in the Uniform System of 
Accounts, Account 282 (Accumulated Deferred Income Taxes--Other 
Property) \18\ and for oil pipelines in the Uniform System of Accounts, 
Account 64 (Accumulated Deferred Income Tax Liabilities).\19\
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    \17\ See, e.g., Pub. Serv. Co. of Colo., 155 FERC ] 61,028, at P 
2 (2016); PJM Interconnection, L.L.C., 147 FERC ] 61,254 (2014), 
order on compliance, 154 FERC ] 61,126, at P 2 (2016).
    \18\ See 18 CFR parts 101 and 201.
    \19\ See id. part 352.
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    12. Generally, ADIT liabilities are reductions to rate base, while 
ADIT assets may be additions to rate base, depending on the nature of 
the items that gave rise to the ADIT asset. In the example above, 
because the resulting ADIT effectively provides the public utility, 
interstate natural gas pipeline, and oil pipeline with cost-free 
capital, the Commission subtracts the ADIT from the rate base of the 
public utility, interstate natural gas pipeline, and oil pipeline, 
thereby reducing customer charges. This method of passing the benefits 
from accelerated depreciation on to customers throughout the asset's 
life is referred to as tax normalization.\20\
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    \20\ See Midcontinent Indep. Sys. Operator, Inc., 157 FERC ] 
61,250, at P 2 (2016).
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    13. As a result of the Tax Cuts and Jobs Act reducing the federal 
corporate income tax rate from 35 percent to 21 percent, a portion of 
an ADIT liability that was collected from customers will no longer be 
due from public utilities, interstate natural gas pipelines, and oil 
pipelines to the IRS and is considered excess ADIT, which must be 
returned to customers in a cost-of-service ratemaking context. The 
Commission expects that a similar effect would be reflected in the 
cost-of-service summary in oil pipeline Form No. 6, page 700. For 
public utilities, interstate natural gas pipelines, and oil pipelines 
that have an ADIT asset, the Tax Cuts and Jobs Act will result in a 
reduction to the ADIT asset, and public utilities, interstate natural 
gas pipelines, and oil pipelines may seek to reflect in rates a portion 
of such reductions. Public utilities, interstate natural gas pipelines, 
and oil pipelines are required to adjust their ADIT assets and ADIT 
liabilities for the effect of the change in tax rates in the period 
that the change is enacted.\21\ That is, public utilities and 
interstate natural gas pipelines are required to re-measure their ADIT 
balances at the 21 percent rate and record a regulatory asset (Account 
182.3) associated with deficient ADIT that is probable of future rate 
recovery and/or a regulatory liability (Account 254) associated with 
excess ADIT that is probable of future refund to customers.\22\ For oil 
pipelines, the relevant accounts are Account 44 (Other Deferred 
Charges) and Account 63 (Other Noncurrent Liabilities), respectively.
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    \21\ See 18 CFR 35.24 and 154.305; see also Tax Normalization 
for Certain Items Reflecting Timing Differences in the Recognition 
of Expenses or Revenues for Ratemaking and Income Tax Purposes, 
Order No. 144, FERC Stats. & Regs. ] 30,254 (1981), order on reh'g, 
Order No. 144-A, FERC Stats. & Regs. ] 30,340 (1982).
    \22\ See Accounting for Income Taxes, Docket No. AI93-5-000, at 
8 (1993).
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1. Effect on Rate Base
    14. As a result of the federal corporate income tax rate change, 
public utilities, interstate natural gas pipelines, and oil pipelines 
will re-measure their ADIT

[[Page 12374]]

liabilities and assets, and establish regulatory liabilities and 
assets, as appropriate. Public utilities' stated and formula rates and 
interstate natural gas pipelines' stated rates may not include 
comparable provisions allowing rate base to be reduced for regulatory 
liabilities and increased for regulatory assets. Similar issues may 
affect individual oil pipeline cost-of-service rate proceedings or the 
summary cost of service filed by oil pipelines on Form No. 6, page 700. 
Therefore, the Commission seeks comment on how to ensure that rate base 
continues to be treated in a manner similar to that prior to the Tax 
Cuts and Jobs Act (i.e., how to preserve rate base neutrality), until 
excess and deficient ADIT have been fully settled in a just and 
reasonable manner.
    15. The Commission seeks comment on whether, and if so how, public 
utilities, interstate natural gas pipelines, and oil pipelines should 
make adjustments so that rate base may be appropriately adjusted by 
excess ADIT and deficient ADIT. Commenters should address whether 
public utilities with formula rates could add a line item to their 
adjustments to rate base such that rate base would be decreased by any 
excess ADIT placed in Account 254 and increased by any deficient ADIT 
placed in Account 182.3. With regard to stated rates, commenters should 
address whether, and if so how, public utilities and interstate natural 
gas pipelines could make adjustments to ensure that regulatory 
liabilities and regulatory assets are treated comparably to the ADIT 
liability and asset accounts. Oil pipelines should discuss how these 
issues pertain to Form No. 6, page 700 reporting practices and, as 
relevant, to cost-of-service ratemaking.
    16. Given that the Tax Cuts and Jobs Act took effect on January 1, 
2018, there may be a lag in implementing any adjustments to rate base 
to reflect excess and deficient ADIT. The Commission believes that it 
may be appropriate for public utilities and interstate natural gas 
pipelines to include interest on excess and deficient ADIT, for the 
time period from January 1, 2018 until any adjustments to rate base are 
implemented, and seeks comment on this topic.
2. Flow-Back or Recovery of Plant-Based ADIT
    17. Under the Tax Cuts and Jobs Act, public utilities and 
interstate natural gas pipelines may flow back the excess ADIT 
associated with utility plant assets (excess plant-based ADIT) no more 
rapidly than over the life of the underlying assets.\23\ Specifically, 
public utilities and interstate natural gas pipelines are generally not 
permitted, in computing costs of service for ratemaking purposes and 
reflecting operating results in their regulated books of account, to 
flow-back excess plant-based ADIT more rapidly or greater than the 
reductions permitted by the Average Rate Assumption Method, which 
requires amortization of the excess tax reserve over the remaining 
regulatory lives of the property that gave rise to the ADIT. 
Alternatively, if the books and records of public utilities and 
interstate pipelines do not contain the vintage data necessary to apply 
the Average Rate Assumption Method, they are required to use an 
alternative method, e.g., the Reverse South Georgia Method,\24\ to flow 
back excess plant-based ADIT over the remaining regulatory life of the 
property.\25\ The Commission seeks comment on how the Average Rate 
Assumption Method, and alternatively, the Reverse South Georgia Method 
or South Georgia Method, as appropriate, will be implemented and used 
to adjust the tax allowance or expense included in cost-of-service 
rates to reflect the amortization of excess and deficient plant-based 
ADIT.
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    \23\ Section 1561(d) of the Tax Cuts and Jobs Act.
    \24\ Under the South Georgia method, a calculation is taken of 
the difference between the amount actually in the deferred account 
and the amount that would have been in the account had normalization 
continuously been followed. Any deficiency is collected from 
ratepayers (i.e., South Georgia Method), and any excess is returned 
to ratepayers (i.e., Reverse South Georgia Method), over the 
remaining depreciable life of the plant that caused the difference. 
Memphis Light, Gas and Water Div. v. FERC, 707 F.2d 565, 569 (DC 
Cir. 1983).
    \25\ Section 1561(d) of the Tax Cuts and Jobs Act.
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    18. While the Commission's understanding is that the Internal 
Revenue Code does not apply the same standard to oil pipelines,\26\ the 
amortization of excess plant-based ADIT also may affect oil pipeline 
cost-of-service ratemaking. Accordingly, the Commission also seeks 
comment on this issue as to oil pipelines.
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    \26\ See id.; 26 U.S.C. 168(i)(9) & (10) (not including oil 
pipelines among the list of public utilities subject to the 
normalization requirement and the prohibition against flowing 
through to ratepayers accelerated depreciation in cost-of-service 
rates).
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3. Flow-Back or Recovery of Non-Plant Based ADIT
    19. Because the normalization requirement under the Tax Cuts and 
Jobs Act applies only to plant-based ADIT, the Commission seeks comment 
on how quickly excess or deficient non-plant based ADIT should be 
flowed back to or recovered from customers. Specifically, commenters 
should address whether a regulatory asset or regulatory liability 
recorded by a public utility or interstate natural gas pipeline 
associated with non-plant based excess or deficient ADIT should be 
amortized over a shorter (e.g., five-year) period. Oil pipeline 
commenters should also address how quickly any excess non-plant based 
ADIT should be flowed back in the data reported on Form No. 6, page 700 
and in any cost-of-service proceeding as the issue arises.
4. Assets Sold or Retired After December 31, 2017
    20. Under the Commission's accounting requirements, when assets are 
sold or retired, the original cost and accumulated depreciation of 
those assets are removed from the books of a public utility, interstate 
natural gas pipeline, or oil pipeline. Additionally, any associated 
ADIT is concurrently removed from a public utility's, interstate 
natural gas pipeline's, or oil pipeline's books because any previously 
deferred tax effects related to the assets are now triggered as part of 
the computation of gains or losses associated with the sale or 
retirement (i.e., the deferred taxes are now payable to the IRS). The 
excess ADIT resulting from the tax rate change of the Tax Cuts and Jobs 
Act is also removed from the books. The Commission seeks comment on 
whether, and if so how, it should address excess ADIT that is removed 
from the books of public utilities, oil pipelines and interstate 
natural gas pipelines after December 31, 2017, as a result of assets 
being sold or retired.
5. Amortization of Excess and Deficient ADIT
    21. Commenters should address how public utilities with stated or 
formula rates and interstate natural gas pipelines with stated rates 
should adjust their income tax allowance such that the allowance would 
be decreased or increased by the amortization of excess and deficient 
ADIT. Likewise, commenters should address for oil pipelines how these 
issues should be applied in cost-of-service ratemaking and in the cost-
of-service summary on Form No. 6, page 700.
    22. The Commission also seeks comment on whether a public utility 
or interstate natural gas pipeline should record the amortization by 
recording a reduction to the regulatory asset or regulatory liability 
account and recording an offsetting entry to Account 407.3 (Regulatory 
Debits) or Account 407.4 (Regulatory Credits). For oil pipelines, the 
Commission seeks comment whether this information should be recorded in 
Account 665

[[Page 12375]]

(Unusual or Infrequent Items (Debit)) or Account 645 (Unusual or 
Infrequent Items (Credit)).
6. Supporting Worksheets
    23. The Commission seeks comment on whether it should require 
public utilities, interstate natural gas pipelines, and oil pipelines 
to provide to the Commission, on a one-time basis, additional 
information, such as supporting worksheets, to show the computation of 
excess or deficient ADIT and the corresponding flow-back of excess ADIT 
to customers or recovery of deficient ADIT from customers. Commenters 
should address what types of information public utilities, interstate 
natural gas pipelines, and oil pipelines already record for ADIT-
related accounting and whether balances and amortization of regulatory 
liability and asset accounts, computation of excess and deficient ADIT, 
delineation between plant assets and non-plant assets, and a 
description of the allocation method used to determine the 
transmission-related portion of excess or deficient ADIT would be 
appropriate to include in a supporting worksheet.
7. Treatment of ADIT for Partnerships
    24. In the Revised Policy Statement, the Commission determined that 
MLPs will no longer be permitted to recover an income tax allowance. 
Following the United Airlines decision,\27\ the Commission concluded 
that MLP investors' tax costs were already reflected in the return on 
equity, and thus, permitting an income tax allowance for MLPs would 
lead to a double recovery of such tax costs. The Commission also stated 
that other pass-through entities would need to address the double 
recovery concern.
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    \27\ United Airlines, Inc. v. FERC, 827 F.3d 122 (2016).
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    25. The Commission seeks comment on the effect of the elimination 
of the income tax allowance for MLPs on ADIT. Likewise, the Commission 
seeks comment regarding the treatment of ADIT to the extent the income 
tax allowance is eliminated for other non-MLP pass-through entities. 
For such MLPs and pass-through entities, commenters should address 
whether previously accumulated sums in ADIT should be eliminated 
altogether from cost of service or whether those previously accumulated 
sums should be placed in a regulatory liability account and returned to 
ratepayers. Commenters should address specifically how their approach 
would be applied in the MLP's or other pass-through entity's cost of 
service.

B. Bonus Depreciation

    26. Generally, bonus depreciation is a tax incentive given to 
companies to encourage certain types of investment. Bonus depreciation 
allows companies to deduct a percentage of the cost of a qualified 
property in the year the property is placed into service, in addition 
to other depreciation deductions. That is, a company that purchases a 
qualified business property and places it into service within a taxable 
year can take a first year deduction in addition to any depreciation 
deduction available.
    27. The Tax Cuts and Jobs Act increases the 50 percent bonus 
depreciation allowance to 100 percent for qualified property placed in 
service after September 1, 2017, and before January 1, 2023. Full bonus 
depreciation is phased down by 20 percent each year for property placed 
in service after December 31, 2022, and before January 1, 2027. Bonus 
depreciation applies to new and used property, and must be acquired in 
an arm's length transaction. It is not available for assets acquired in 
the trade or business of the furnishing or sale of electrical energy, 
water, or sewage disposal services; gas or steam through a local 
distribution system; or transportation of gas or steam by pipeline.\28\
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    \28\ Section 13301 of the Tax Cuts and Jobs Act.
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    28. The Commission seeks comment on the effect of the bonus 
depreciation change under the Tax Cuts and Jobs Act. The Commission 
also seeks comment on whether, and if so how, the Commission should 
take action to address bonus depreciation-related issues. Commenters 
should address the practical application of their proposals, including, 
among other things, what type of action the Commission should take and 
whom the Commission should target with its action.

C. Additional Inquiries

    29. In addition, the Commission seeks comment on whether, and if so 
how, it should take further action to address the change in the federal 
corporate income tax rate. With respect to public utilities, the 
Commission seeks comment on whether, in addition to the transmission 
rates addressed in the orders to show cause being issued concurrently, 
other jurisdictional transmission rates or non-transmission rates 
should be revised to address the change in the federal income tax rate, 
and identify the types of these other rates to the extent possible. The 
Commission also seeks comment on effects of the Tax Cuts and Jobs Act 
on Commission-jurisdictional rates of non-public utilities. Finally, 
the Commission seeks comment on any other effects of the Tax Cuts and 
Jobs Act, and whether, and if so how, the Commission should address 
them.

III. Comment Procedures

    30. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this NOI, including any related 
matters or alternative proposals that commenters may wish to discuss. 
Comments are due May 21, 2018. Comments must refer to Docket No. RM18-
12-000, and must include the commenter's name, the organization they 
represent, if applicable, and their address in their comments. To 
facilitate the Commission's review of the comments, commenters are 
requested to provide an executive summary of their position. Additional 
issues the commenters wish to raise should be identified separately. 
The commenters should double space their comments.
    31. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's website at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    32. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE, 
Washington, DC 20426.
    33. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

IV. Document Availability

    34. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
internet through the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE, Room 2A, 
Washington, DC 20426.
    35. From the Commission's Home Page on the internet, this 
information is available on eLibrary. The full text of

[[Page 12376]]

this document is available on eLibrary in PDF and Microsoft Word format 
for viewing, printing, and/or downloading. To access this document in 
eLibrary, type the docket number excluding the last three digits of 
this document in the docket number field.
    36. User assistance is available for eLibrary and the Commission's 
website during normal business hours from the Commission's Online 
Support at 202-502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
[email protected].

    By direction of the Commission.

    Issued: March 15, 2018.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2018-05670 Filed 3-20-18; 8:45 am]
 BILLING CODE 6717-01-P