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PA Bulletin, Doc. No. 18-427

NOTICES

PENNSYLVANIA PUBLIC
UTILITY COMMISSION

Corporate Federal Income Tax Rate Changes and the Effects on Pennsylvania Telecommunications Carriers and Ratepayers; Request for Public Comments; M-2018-2641242

[48 Pa.B. 1659]
[Saturday, March 17, 2018]

 On March 2, 2018, the Pennsylvania Public Utility Commission (Commission) issued a Secretarial Letter to alert telecommunications carriers that their existing price cap rates, rates for interconnection service, and rates for other retail and wholesale services are under review as they may not be just and reasonable, as required by 66 Pa.C.S. § 3015(g) (relating to alternative forms of regulation), following the reduction in their Federal income tax rate through the Tax Cuts and Jobs Act (TCJA) (Pub.L. No. 115-97). The Commission seeks to determine the effects of the TCJA on the tax liabilities of Commission-regulated telecommunications public utilities for 2018 and future years and the feasibility of reflecting the impacts in the rates charged to Pennsylvania utility ratepayers.

 Under the TCJA, effective January 1, 2018, various provisions of the Tax Reform Act of 1986 have been repealed or amended and one of these modifications is a reduction in the corporate Federal Income Tax (FIT) rate from 35% to 21%. Commission-regulated public utilities are corporations subject to the FIT. Therefore, the Commission has directed that specified telecommunications carriers provide responses to data requests designed to calculate, among other things, the net effect on income tax expense, price cap rates, rates for interconnections service, and rates for other retail and wholesale services as a result of implementation of the TCJA.

 The Commission has further requested that interested parties submit comments addressing: (1) all provisions, under either 66 Pa.C.S. Chapter 30 (relating to alternative form of regulation of telecommunications services), the telecommunications carriers' alternative regulation plans, or any other provision of 66 Pa.C.S. (relating to Public Utility Code) and Commission regulations affecting the carriers' or the Commission's ability to adjust customer rates to account for the tax changes, including the rate reductions in the TCJA; and (2) whether the Commission should adjust current retail and wholesale rates to reflect the effect of the tax rate reductions. If the answer to the second question is yes, the Commission seeks comment on the appropriate negative surcharge or other methodology to permit immediate modifications to consumer rates and whether such surcharge or other methodology should provide that any refunds to customers due to these tax rate reductions be effective as of January 1, 2018. Responses to the data requests and comments are due on, or before, March 27, 2018.

 The Secretarial Letter and data requests regarding telecommunications public utilities can be found on the Commission's web site under docket number M-2018-2641242.

ROSEMARY CHIAVETTA, 
Secretary

[Pa.B. Doc. No. 18-427. Filed for public inspection March 16, 2018, 9:00 a.m.]



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