More IOU tax favors. [Investor-owned utilities]
Investor-owned utilities (IOUs), who paid only 5% of their net income in taxes in 1979, are seeking new tax favors from the Reagan administration in the form of access to the 10-5-3 accelerated depreciation and liberalized investment and energy tax credits, tax deferrals on reinvested dividends, tax-exempt bonding for oil-to-coal conversions, and deductions for nuclear-plant decommissioning and fuel disposal. The 10-5-3 proposal is central to IOU plans because long-lived utility equipment would move from the 10-year to the five-year depreciation category and delay tax payments. The Reagan proposals also permit depreciation on construction work in progress (CWIP), but the IOUs want to go further and include CWIP in their rate base. Tax-exempt IOU financing amounts to ratepayers granting interest-free loans. The administration proposes to shift these tax advantages from rural electric cooperatives and the Tennessee Valley Authority to the IOUs by eliminating access to the Federal Financing Banks except for IOUs. 2 tables. (DCK)
- OSTI ID:
- 6432577
- Journal Information:
- Public Power; (United States), Journal Name: Public Power; (United States) Vol. 39:3; ISSN PUPOA
- Country of Publication:
- United States
- Language:
- English
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