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Fortnightly Magazine - February 1 1995

Tax Corner

Developers of independent power projects in foreign countries often try to set up the local-owner company to qualify as a partnership for U.S. tax purposes, even if the company is a corporation in the eyes of its government. This strategy enables the developer to defer U.S. taxes on his earnings from the project for as long as he is willing to keep the earnings abroad.

Under new IRS guidelines (Revenue Procedure 95-10) issued January 17, 1995, a foreign company qualifying as a partnership must have at least two shareholders.

Byline: 
Keith Martin
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Power Marketers Flex at FERC

Electric utilities beware. Power marketers are not only here to stay, but their ranks are growing. The Federal Energy Regulatory Commission (FERC) logged approximately 100 applications in 1994, compared to nine in 1993. About half have been acted on already.

The fledgling industry is also staking out its regulatory territory. Notably, on December 14, the FERC ordered the Tennessee Valley Authority (TVA) to provide nonfirm transmission service to AES Power Inc.

Byline: 
W. Lynn Garner and Lori A. Burkhart
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FERC Sets Guides for SO2 Emission Allowance Cost Recovery

The Federal Energy Regulatory Commission (FERC) has approved a policy statement and interim rule establishing guidelines for recovering the cost of sulphur dioxide (SO2) emission allowances in wholesale rates. The FERC also ruled that utilities do not need its approval to sell or transfer emission allowances, because allowances are related to electric generation, which lies beyond FERC jurisdiction (Docket No. PL95-1-000).
Byline: 
Lori A. Burkhart
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FERC Claims Power to Order Dam

The Federal Energy Regulatory Commission (FERC) has adopted a policy statement on hydroelectric plant decommissioning, claiming authority to deny new project licenses when existing licenses expire and to order owners to remove a dam during the relicensing process. These measures would only be applied if the FERC concludes that a project, no matter how many conditions were imposed, could no longer meet the comprehensive development standard of the Federal Power Act (FPA) (Docket No. RM93-23-000).

The statement was one of three hydroelectric orders considered as a group.

Byline: 
Lori A. Burkhart
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