Utilities Alert: Current views on Phase-in Plans: The application of FAS 92 (ASC 980-340)

In this newsletter, we outline the complexity of applying FAS 92 (ASC 980-340) requirements to Phase-in plans. A phase-in plan is a rate-making method applied by a regulator to a utility company with a newly completed plant that defers the recoverability of allowable costs to periods beyond what those costs would be expensed under US generally accepted accounting principles. This newsletter highlights our current view of the applicability of FAS 92 to utility companies whose rates are determined using deferred depreciation methods and are within the scope of the standard.