Madison Gas & Electric Co. v. Commissioner

Held: 1. Since petitioner's computation of cost of coal consumed in generating electric power on the basis of average monthly cost per ton of coal purchased clearly reflected its income because, except on rare occasions, petitioner used each month the same amount of coal purchased that month, respondent abused his discretion in changing petitioner's method of computing cost of coal consumed to in effect an inventory method on a first-in, first-out basis. 2. Petitioner's agreement with two other electric utility companies for construction and operation of a nuclear power plant created a…