Utilities closely watching FERC ADIT reporting requirements

Comment letters are in, and the waiting game has begun.

On November 15, 2018, FERC initiated RM19-5, a Notice of Proposed Rulemaking that addresses how electric transmission providers, natural gas utilities, and pipelines must reflect the accounting and reporting of excess deferred income taxes resulting from the Tax Cuts and Jobs Act of 2017. Comment letters were due by January 22, 2019. Two items that are closely watched and which have received many comments in the docket are the following:

Permanent ADIT Worksheet
The proposed ADIT worksheet, to be filed in the compliance filing, should include:

1. how any ADIT accounts were re-measured and the excess or deficient ADIT contained in those accounts

2. the accounting of any excess or deficient amounts in Accounts 182.3 and 254

3. whether the excess or deficient ADIT is protected or unprotected

4. the accounts to which excess or deficient ADIT will be amortized

5. the amortization period of the excess or deficient ADIT to be returned or recovered through rates

Financial Statement Disclosures
The following is proposed to be included in the Notes to the Financial Statements:

1. the FERC accounts affected

2. how any ADIT accounts were re-measured in the determination of the excess or deficient ADIT amounts in Accounts 182.3 and 254

3. the related amounts associated with the reversal and elimination of ADIT balances in those accounts

4. the amount of excess and deficient ADIT that is protected and unprotected

5. the accounts to which the excess or deficient ADIT will be amortized

6. the amortization period of the excess and deficient ADIT to be returned or recovered through rates for both protected and unprotected ADIT

Utilities are preparing for adverse rulings.
The adoption of the NOPR as proposed would place a new and significant compliance and reporting burden on many utilities. Lucasys software solutions are purpose-built to facilitate the tracking and reporting of fixed assets and associated accumulated deferred income taxes based on the many and varied jurisdictional requirements in place. Furthermore, as legislative, jurisdictional, and operational requirements change, Lucasys software solutions automatically keep utilities compliant. Visit https://www.lucasys.com/home-solutions to learn more.