Income tax in power rates calculation

We wish to clarify a certain item in the letter (“ERC defies SC ruling on income tax,” 7/30/13) of Romeo “Butch” Junia.

The letter raised concerns that the Energy Regulatory Commission, in adopting the PBR (performance-based regulation) methodology, allowed income tax to be included in the calculation of the utilities’ rates and recovered from the electric consumers.

We wish to clarify that while income tax is considered one of the components of the revenue requirement, which is the basis for calculating the utilities’ rates, income tax was set to zero. Thus, the utilities’ rates do not effect any recovery for their income tax payments.

—ZENAIDA G. CRUZ-DUCUT,
chair and CEO,
Energy Regulatory Commission