OLR Bill Analysis

sSB 889

AN ACT CONCERNING THE ALLOWANCE OF MUNICIPAL PROPERTY TAX EXPENSE FOR PUBLIC SERVICE COMPANIES.

SUMMARY:

This bill specifies how the Department of Public Utility Control (DPUC) must treat property taxes when a utility applies to change its rates in a rate case. In a rate case, DPUC determines the utility's revenue requirements, i. e. , the amount of money it needs to cover its costs. The bill requires DPUC, in determining the utility's revenue requirements for the first 12 months that the rate schedule will be in place, to include an allowance for municipal property taxes based on the level of the most recent actual property tax payments paid by the company.

Because the rates for some utilities, such as telephone companies, are set in proceedings other than rate cases. The bill's provisions do not apply to those proceedings. Similarly, some components of rates for utilities that undergo rate cases, such as the mechanism that adjusts gas rates to reflect changes in purchased gas costs, are also set in other types of proceedings.

EFFECTIVE DATE: July 1, 2009, and applicable to tax years commencing on or after January 1, 2009.

COMMITTEE ACTION

Energy and Technology Committee

Joint Favorable