Water Industry News

Amended utility laws pass on more charges

The News Journal


Artesian Water Co. collected money to pay income taxes, even though its parent company, Artesian Resources Inc., has not paid any in two years.

When the Public Service Commission tried to do something about it, it was overruled by lawmakers, who rushed to aid the biggest water company in the state.

Last year, the company applied for permission to raise rates. One of the items it claimed as an expense, as is customary, was income tax. Related to that expense was a $1.4 million alternative minimum tax burden the company said it had built up, Artesian Senior Vice President Joseph DiNunzio said.

The company said that under Delaware law, it could factor the $1.4 million into rates.

Commission experts disagreed. Because Artesian's parent company, Artesian Resources, had paid no taxes for two years, commission experts wanted to exclude the alternative minimum tax charge.

General Assembly takes action

When the commission ruled against the company in April 2005, Artesian went to the Delaware Legislature. Three months later, lawmakers changed state utility laws, requiring the commission to include Artesian's alternative minimum tax claim.

Last month, a Public Service Commission hearing examiner urged the commission to consider basing all future utility rates on the actual taxes that companies pay.