Industrial Customers of Northwest Utilities v. Public Utility Commission

Under Oregon law, a public utility is allowed to build into its rates the amount that the utility expects to pay in income taxes. There was, for a long while, no regulatory mechanism to subsequently verify whether the utilitys tax projections — and the amount assumed in rates — bore any relationship to the amount of taxes actually paid by the utility. In 2005, the Oregon legislature passed a law intended to close that loophole, thereby prohibiting public utilities from charging ratepayers for taxes far in excess of what the utilities actually pay. The law requires a public utility to annually…