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With respect to the installation of wastewater
neutralization treatment system, petitioner incurred capitalized
costs (tax basis) of $241,469 and $233,742 for equipment placed
in service in the 1988 and 1989 taxable years, respectively.
2. PCB Transformers
Polychlorinated biphenyls (PCBs) are a hydrocarbon that has
been chlorinated. PCBs have been identified by environmental
regulators as a potential risk to human health and the
environment. The Toxic Substance Control Act of 1976, Pub. L.
94-469, 90 Stat. 2003, current version at 15 U.S.C. sec. 2605
(2000), prohibits the manufacture, processing, or distribution in
commerce or use of PCBs in any manner other than in a totally
enclosed manner. FPL previously used PCBs in its fossil fuel
power plant transformers. FPL claims ITCs for the replacement of
PCB transformers in the 1988, 1989, and 1990 taxable years.
In 1982, the EPA promulgated a rule, 40 C.F.R. sec. 761
(1982) (the PCB rule), that regulates the use of PCBs. The PCB
rule, inter alia: (1) “Prohibits the use of PCB Transformers and
PCB-filled electromagnets (with a PCB concentration of 500 ppm or
greater) * * * after October 1, 1985, and requires a weekly
inspection of this equipment for leaks of dielectric fluid until
that date”; (2) “Authorizes the use of all other PCB Transformers
35(...continued)
according to the specific conditions of the TOPs.
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