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system upgrade on May 12, 1986. According to another report of
construction action, the instrument air system upgrade was put in
service on April 27, 1989.
With respect to the installation of the instrument air
upgrade, petitioner incurred capitalized costs (tax basis) of
$1,541,741, $1,717,941, and $316,912 for equipment placed in
service in the 1988, 1989, and 1990 taxable years, respectively.
G. St. John’s River Power Park (SJRPP)
The Jacksonville Electric Authority (JEA) and FPL entered
into an agreement, dated April 2, 1982, to jointly own and
operate the St. John’s River Power Park (SJRPP). FPL owns a 20-
percent interest, and the JEA owns an 80-percent interest of the
SJRPP as tenants in common. FPL claims ITCs for the SJRPP
equipment in the 1988, 1989, and 1990 taxable years.
The SJRPP burns coal to generate steam to turn the turbines
that generate electricity. The major components of the SJRPP
include: Hyperbolic cooling towers, bore houses, turbine houses,
steam generators, switcher, precipitators, scrubbers, chimney,
and coal facilities. SJRPP Units 1 and 2 each had their own
boiler, turbine, and control panel. The SJRPP includes a water-
borne coal terminal, which is connected to the main part of the
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