(1) When establishing schedules and rates under ORS § 757.210 for an electricity or natural gas utility, the Public Utility Commission shall act to balance the interests of the customers of the utility and the utility’s investors by setting fair, just and reasonable rates that include amounts for income taxes. Subject to subsections (2) and (3) of this section, amounts for income taxes included in rates are fair, just and reasonable if the rates include current and deferred income taxes and other related tax items that are based on estimated revenues derived from the regulated operations of the utility.

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(2) During ratemaking proceedings conducted pursuant to ORS § 757.210, the Public Utility Commission must ensure that the income taxes included in the electricity or natural gas utility’s rates:

(a) Include all expected current and deferred tax balances and tax credits made in providing regulated utility service to the utility’s customers in this state;

(b) Include only the current provision for deferred income taxes, accumulated deferred income taxes and other tax related items that are based on revenues, expenses and the rate base included in rates and on the same basis as included in rates;

(c) Reflect all known changes to tax and accounting laws or policy that would affect the calculated taxes;

(d) Are reduced by tax benefits generated by expenditures made in providing regulated utility service to the utility’s customers in this state, regardless of whether the taxes are paid by the utility or an affiliated group;

(e) Contain all adjustments necessary in order to ensure compliance with the normalization requirements of federal tax law; and

(f) Reflect other considerations the commission deems relevant to protect the public interest.

(3) During a ratemaking proceeding conducted under ORS § 757.210 for an electricity or natural gas utility that pays taxes as part of an affiliated group, the Public Utility Commission may adjust the utility’s estimated income tax expense based upon:

(a) Whether the utility’s affiliated group has a history of paying federal or state income taxes that are less than the federal or state income taxes the utility would pay to units of government if it were an Oregon-only regulated utility operation;

(b) Whether the corporate structure under which the utility is held affects the taxes paid by the affiliated group; or

(c) Any other considerations the commission deems relevant to protect the public interest.

(4)(a) Because tax information of unregulated nonutility business in an electricity or natural gas utility’s affiliated group is commercially sensitive, and public disclosure of such information could provide a commercial advantage to other businesses, the Public Utility Commission may not use the tax information obtained under this section for any purpose other than those described in this section, in ORS § 757.511 and as necessary for the implementation and administration of this section and ORS § 757.511.

(b) The commission shall adopt rules to implement paragraph (a) of this subsection that:

(A) Identify all documents and tax information that an electricity or natural gas utility must file in its initial filing in a proceeding to change rates that include amounts for income taxes, recognizing that any party may object to providing such documents on the grounds that they are not relevant; and

(B) Determine the procedures under which intervenors in such proceedings may obtain and use documents and tax information to fully participate in the proceeding.

(5) As used in this section, ‘affiliated group’ means a group of corporations of which the public utility is a member and that files a consolidated federal income tax return. [2011 c.137 § 1]

757.269 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS Chapter 757 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

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