Plaintiff, a natural gas pipeline company, filed a petition for review of a Federal Power Commission ruling in a rate proceeding under section 4(e) of the Natural Gas Act. Plaintiff argued that Congress did not intend tax deferrals arising from liberalized depreciation to be shared by producers and consumers and that, consequently, accumulated tax reserves should be included in the company's rate base at an ordinary rate of return. The FPC ruled that the petitioner could include its tax reserves in the rate base, but that the rate of return on the reserves would be limited to one and one-half percent. On review of the order, held, affirmed, by a five-to-four decision. The FPC may fix any rate of return on tax reserves so long as it gives the company an incentive to use liberalized depreciation. Panhandle E. Pipe Line Co. v. FPC, 316 F.2d 659 (D.C. Cir.), cert. denied, 375 U.S. 881 (1963).
Harry T. Edwards,
Administrative Law-Rate-Making-Authority of FPC to Limit Rate of Return on Tax Reserves Resulting From Liberalized Depreciation,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol62/iss6/5