The Changing Structure of the Electric Power Industry 2000: An ... - EIA

Major Federal Legislation Affecting the Electric Power Industry (Continued)
Pacific Northwest Electric Power Planning and Conservation Act of 1980
(Public Law 96-501)
This Act created the Pacific Northwest Electric Power and Conservation Council to coordinate the conservation and resource
acquisition planning of the Bonneville Power Administration (BPA). The Act also provides for BPA to purchase and exchange
electric power with Northwest utilities at the “average system cost.” Approval of the methodology for determining “average
system cost” is required. This Act also gave the BPA the authority to plan for and acquire additional power to meet its growing
load requirements.
Economic Recovery Tax Act of 1981
(Public Law 97-34)
This Act introduced a new methodology for determining allowable tax depreciation deductions. The new methodology, the
Accelerated Cost Recovery System (ACRS), set forth rules enabling taxpayers to claim generous depreciation deductions based
on the system’s permitted depreciable life, method, and salvage value assumptions. The generation, transmission, and
distribution plants of regulated electric utilities were categorized as public utility property. Public utility property under ACRS was
assigned relatively long depreciable lives.
Electric Consumers Protection Act of 1986 (ECPA)
(Public Law 99-495)
This Act was the first significant amendment to the hydro licensing provisions of the FPA since 1935. “The amendments have
made four principal changes to Part I of the FPA. First, the municipal preference on relicensing has been eliminated. Second,
the importance of environmental considerations in the licensing process has been greatly increased and the role of the State
and Federal fish and wildlife agencies is expanded. Third, PURPA benefits for hydroelectric projects at new dams and diversions
were eliminated unless the projects satisfy stringent environmental conditions. Finally, FERC’s enforcement powers have been
increased substantially.” f
Tax Reform Act of 1986
(Public Law 99-514)
Under this Act, ACRS was replaced with the Modified Accelerated Cost Recovery System (MACRS). Under MACRS, the disparity
in treatment of property between regulated and nonregulated taxpayers was eliminated. The investment credit was also repealed.
The investment credit of the Federal income tax law was a dollar-to-dollar offset against the taxes payable by the taxpayer. The
investment credit was available for regulated and nonregulated taxpayers and was intended to encourage capital investment
by the Nation’s businesses. The credit continues to be of importance to regulated utilities, however, because it is generally
amortized for ratemaking and financial reporting purposes over the regulatory life of the related property that gave rise to the
credit.
Clean Air Act Amendments of 1990 (CAAA)
(Public Law 101-549)
These Amendments established a new emissions-reduction program. The goal of the legislation was to reduce annual sulfur
dioxide emissions by 10 million tons and annual nitrogen oxide emissions by 2 million tons from 1980 levels for all man-made
sources. Generators of electricity will be responsible for large portions of the sulfur dioxide and nitrogen oxide reductions. The
program instituted under the Clean Air Act Amendments of 1990 employs a unique, market-based approach to sulfur dioxide
emission reductions, while relying on more traditional methods for nitrogen oxide reductions.
Energy Policy Act of 1992 (EPACT)
(Public Law 102-486)
This Act created a new category of electricity producer, the exempt wholesale generator, which narrowed PUHCA's restrictions
on the development of nonutility electricity generation. The law also authorized FERC to open up the national electricity
transmission system to wholesale suppliers.
36
Energy Information Administration/ The Changing Structure of the Electric Power Industry 2000: An Update