6.1. ERMUSR 05-13-2008 - Laserfiche WebLink

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APPENDIX 1 METHODOLOGY AND DATA SOURCES FOR STUDY Study results for publicly owned utilities were calculated from two sources: data collected on APPA's "2006 Survey of Local Publicly Owned Electric Utilities Tax Payments and Contributions to State and Local Government," and data submitted by publicly owned utilities to the Department of Energy/Energy Information Administration (EIA) on Form EIA- 861, "Annual Electric Utility Report." A total of 382 utilities completed the APPA survey. Form EIA-861 provided information on electric operating revenue. Payments and contributions for TVA distributors include an amount equal to 5 percent of the estimated cost of power purchased from TVA---this payment is made by TVA---plus any payments in lieu of taxes or contributions made by the distribution utility. TVA's wholesale power contracts with municipalities limit payments in lieu of taxes to an amount not exceeding the state and local taxes that the system would pay if privately owned. Study results for investor-owned systems were calculated from data submitted on the 2006. Federal Energy Regulatory Commission (FERC) Form 1, "Annual Report of Major Electric Utilities, Licensees and Others." The report includes only distribution utilities that are defined here as those with approximately fifty percent or more of their total kilowatt-hour sales going to retail customers. The investor-owned systems included in the study provide 96 percent of all full- service kilowatt-hour sales to investor-owned utility customers, and the publicly owned systems included in the study provide 49 percent of all kilowatt-hour sales to publicly owned utility customers. Public .power's payments and contributions to state and local governments include taxes and fees such as gross receipts taxes, property taxes (generally on property outside the city limits), franchise fees, payments to state public utility commissions, environmental fees, and licenses. Also included are payments in lieu of taxes (also called transfers to the general fund), and the value of services, such as free or reduced cost electricity, the use of electric department employees and the use of electric department materials and equipment. Federal taxes, Social Security taxes, similar contributions to state unemployment insurance, and other payroll taxes are excluded. The value of free or reduced cost services contributed by the local government to the utility is deducted from total payments and contributions to arrive at net contributions. The net amount is then divided by electric utility revenue. Net taxes for investor-owned utilities include state and local taxes and fees as reported on pages 262-263 of FERC Form 1. Federal taxes, Social Security taxes, similar contributions to state unemployment insurance, and other payroll taxes are excluded. 10