Eastern Gas Transmission and Storage, Inc. Responds to Data Request

Eastern Gas Transmission and Storage, Inc. has submitted a response to a data request from the Federal Energy Regulatory Commission (FERC), addressing questions regarding the Capital Area Project's pre-tax return calculation. The company provided detailed Microsoft Excel workpapers to support their response, including calculations for the pre-tax return, federal income tax rate, state income tax rate, and cost of debt.

Key Takeaways:

• EGTS used a pre-tax return of 12.13% in their filing, which was calculated based on the settlements approved in Docket Nos. RP97-406 and RP21-1187.
• The company confirmed that the 13.7% pre-tax return approved in Docket No. RP97-406 was used as a reference point for their calculation.
• EGTS used a federal income tax rate of 21% in their calculation, which was introduced by the Tax Cuts and Jobs Act (TCJA) of 2017.
• The effective state income tax rate used in the calculation was 5.44%, which includes apportionment from multiple states.
• The cost of debt rate used in the calculation was 4.39%.
• EGTS provided detailed workpapers supporting their responses, including calculations for Accumulated Deferred Taxes.

Statistics:

• Pre-tax return used in the filing: 12.13%
• Federal income tax rate used in the calculation: 21%
• Effective state income tax rate used in the calculation: 5.44%
• Cost of debt rate used in the calculation: 4.39%
• Accumulated Deferred Taxes for the first year of cost of service: ($552,531)

Sources:

• CNG Transmission Corp., 85 FERC P 61,261 (1998)
• Eastern Gas Transmission and Storage, Inc., 181 FERC P 61,168 (2022)
• Microsoft Excel workpapers provided by EGTS
• FERC Docket No. CP25-29-000