The parties disputed whether and, if so, how the addition of Section 1301.1(a) into Subchapter A of Chapter 13 of the Public Utility Code Code, requiring inclusion of “income tax deductions and credits” in rate calculations, should apply to the “distribution system improvement charges” (“DSICs”) rate adjustment mechanism. The Public Utility Commission ruled in favor of the utilities. The Commonwealth Court reversed. The Pennsylvania Supreme Court concluded that 66 Pa.C.S. § 1301.1(a) applies to DSICs and requires the utilities to revise their DSIC calculations to include income tax deductions and credits to reduce rates charged to consumers. Accordingly, the Court affirmed the Commonwealth Court’s orders, although based in part upon a different analysis.
