Partner Janine G. Bauer recently represented AARP as a friend of the court (amicus curiae) in an appeal of a ruling by the New Jersey Board of Public Utilities (NJBPU), which had allowed utilities to reap income tax savings even where taxes were not paid by the utilities to the IRS—and the savings were not shared with utility consumers.
The rule adopted by the NJBPU (N.J.A.C 14:1-5.12) allowed utilities that file consolidated returns with their affiliates to take advantage of losses, in terms of taxes owed, without sharing the benefit with the consumer that pay the utilities’ rates including monies collected for tax payments. The Appellate Division overturned the rule following an appeal by NJ’s Ratepayer Advocate, AARP, and large energy users.
Janine argued the NJBPU did not identify a sufficient rationale for its reduction of tax savings passed on to utility consumers. Under the prior policy, 50% of the tax saving benefit was passed on to utility customers while the new rule reduced the benefit to 25% without adequate justification.
“Older persons and retirees live on fixed incomes and cannot afford spiraling utility rates,” commented Janine, who has represented AARP on more than a dozen rate cases over the years. “The idea that utilities could collect taxes from ratepayers and then not pay the IRS, and also not pass on savings from filing consolidated returns to ratepayers, was just unfair.”
Janine Bauer’s practice helps individuals, businesses, non-profit organizations, local governments and others achieve their goals in the areas of energy and environmental law, transportation, land use, zoning, redevelopment and historic preservation. To contact Janine, please call (609) 275-0400 or email her directly at jbauer@szaferman.com.
