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ARAM. The settlement agreement was made effective as of
January 1, 1988, but, because the agreement was not finalized
until August 30, 1988, credits that wholesale customers were
entitled to receive from January through August were not
reflected on those months’ bills. To compensate wholesale
customers for credits they did not receive, checks were issued to
each wholesale customer. The wholesale customers received
credits on their September, October, November, and December
bills.
No interest component was ever included with any refund.
Florida Power did not take a deduction for the credits and refund
checks. Instead, the credits and refund checks were netted
against taxable revenues for 1987 and 1988, thereby lowering
Florida Power’s gross income in both years. The amount of refund
that was returned to a particular retail customer was based on
the projected amount of electricity to be provided to that
customer during the refund period and was not determined by the
amount of excess deferred income tax paid, if any, by a
particular customer between 1975 and 1986. In addition, many
customers who paid excess deferred income tax between 1975 and
1986 did not receive any refund because they left Florida Power’s
service area, died, or otherwise terminated their accounts.
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Last modified: May 25, 2011