News Digest

 

Courts

Rate Discount Contracts. A Kansas court upheld a state commission rate case ruling that refused to impute revenues to UtiliCorp to offset revenues lost in offering rate discount contracts to large-volume electric customers, despite arguments by a consumer group that UtiliCorp was shifting costs to build its unregulated Aquila merchant energy business, since the commission earlier had OK'd the flexible tariffs that allowed such contracts, without challenge.

Yet the court acknowledged arguments that opponents could not have fought the tariffs without actual data showing their effects, and expressed concern that state regulators had not examined possible economic effects of rate discounts when the tariffs were approved. .-B.W.R.

Ad Valorem Taxes. A Louisiana appeals court instructed a state trial court to hear a suit by a gas pipeline that attacked the state's policy of levying ad valorem taxes on 25 percent of fair market value of utility property, compared to only 15 percent of the value of nonutility property. .-B.W.R.

Property Taxes. A Kansas court ruled that while state tax assessors had used the "income," "cost," and "market" approaches to set the value of property for an interstate gas pipeline, it was unlawful to calculate the intrastate Kansas share by reference only to original cost, since state law required tax assessments to reflect fair market value. .-B.W.R.