Blogs

On May 31, APGA held a webinar for its members on Accumulated Deferred Income Tax (ADIT) which represents the accumulation of amounts collected through rates for income taxes but not yet needed to pay income taxes. The Tax Cuts and Jobs Act lowered the corporate tax rate from 35 percent to 21 percent; however pipelines have, and in most if not all cases continue to, collect rates from their customers based on a 35 percent tax rate. As a result, a portion of an ADIT liability that was collected from ratepayers will no longer be due from interstate natural gas pipelines and is considered excess ADIT. The webinar was conducted by Ken Sosnick, a former Federal Energy Regulatory Commission (FERC) staffer now with Concentric Energy Advisors, Inc. APGA had retained Ken to prepare a white paper on the ADIT issue which accompanied comments APGA submitted to FERC on May 22.

During the webinar, Ken discussed FERC’s Elimination of the Master Limited Partnership income tax allowance as well as reporting actions taken in the past related to restating ADIT balances. Ken also addressed the commission’s review of its 1999 Certificate Policy Statement, which addresses the approval process for interstate pipelines.

If you missed the webinar, it is still available for viewing on the APGA website at www.apga.org/webinars In addition, the comments that APGA filed with the Commission on May 22, along with the White Paper developed by Ken, are also available on the website. For questions on this article, please contact Dave Schryver of APGA staff by phone at 202-464-2742 or by email at dschryver@apga.org.