Centerpoint (CTSA) Case Study

CSSB 1364 Schwertner/ Murphy/Deshotel

Relating to the computation of an electric utility’s income taxes.

Longbow partners worked to help secure passage of CSSB 1364, legislation allowing generally accepted regulatory  accounting treatment of federal income taxes in electric utility rate cases. Prior to passage of this legislation, electric utilities were required to take into account tax benefits received by affiliated companies whose operation had nothing to do with regulated utilities. This adjustment, referred to as consolidated tax savings adjustment (CTSA), resulted in the commingling of eclectic utility and non-electric utility costs, a practice prohibited in forty-five other states.

Passage of CSSB 1364 brings Texas electric utilities in line with natural gas utilities and FERC. It also provides for a less costly rate review process, saving ratepayers money while helping to maintain a stable and predictable utility environment in Texas.

This legislation was another example of legislative leadership ensuring its regulated utilities have the tools to provide for a safe and cost effective electric utility regulatory process.