Lakes Region Water Company, Inc., 052720 NHPUC, 26, 360

Docket Nº:Order 26, 360
Opinion Judge:Dianne Martin, Chairwoman.
Judge Panel:Kathryn M. Bailey, Michael S. Giaimo Commissioners.
Case Date:May 27, 2020


Order No. 26, 360

DW 18-056

New Hampshire Public Utilities Commission

May 27, 2020

Investigation to Determine Rate Effects of Federal and State Corporate Tax Reductions

Order Denying Motion for Rehearing

Dianne Martin, Chairwoman.

This order denies the Motion for Rehearing of Order No. 26, 340 filed by Lakes Region Water Company, Inc.



On January 3, 2018, in IR 18-001, the Commission issued Order No. 26, 096. That Order directed all public utilities to record a deferred liability to account for the estimated change in tax expense resulting from corporate tax reductions that went into effect on January 1, 2018. The Commission also directed utilities to file company specific proposals by April 1, 2018, on how the reduced expense should be treated and indicated the proposals would be considered in separate dockets.

Lakes Region Water Company, Inc. (Lakes Region or the Company) did not file its proposal in a timely manner. Instead, the Company filed a motion on February 9, 2018, to extend its filing requirements until June 1. In response, the Commission opened this separate docket to consider Lakes Region's proposal. On October 9, after two additional extensions, Lakes Region filed a revised set of settlement schedules based on its most recent rate proceeding. Although the schedules calculated tax savings, the Company failed to propose a plan for the prospective establishment of a revenue requirement reflective of the tax law changes. The Company also failed to address excess deferred income taxes as required by Order No. 26, 096. On July 29, 2019, following a period of discovery, Commission Staff (Staff) filed a recommendation, and on August 9, Lakes Region filed a response.

In Order No. 26, 340 (March 26, 2020), the Commission required Lakes Region to record specific annual and cumulative regulatory liabilities to track tax savings realized from corporate tax rate decreases. The Commission also ordered the Company to record a regulatory liability equivalent to its calculated excess deferred income tax reserve.

Lakes Region filed a Motion for Rehearing on April 27, 2020 (Motion). Staff objected to the Motion (Objection). The Company followed with a Motion for Leave to Reply to the Objection (Reply). Additional procedural history is described in Order No. 26, 340.

The Company's initial proposal and subsequent docket...

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