Information on the Cash Position of the Electric Utility Industry
RCED-88-76: Published: Dec 30, 1987. Publicly Released: Dec 30, 1987.
- Full Report:
In response to a congressional request, GAO examined the public utility industry's financial position to determine whether the industry's apparent improved cash position would enable it to return excess deferred taxes to utility ratepayers earlier than required under the Tax Reform Act of 1986.
GAO found that, from 1976 to 1985, the industry: (1) increased its liquidity after meeting major obligations; (2) increased its total cash from internal operations relative to cash it obtained through long-term borrowings and stock sales; (3) decreased the cash earmarked for construction; and (4) increased the cash it used to retire long-term debt and dividends. GAO believes that: (1) shortening the allowable time period to return the excess taxes would have an immediate financial impact on the industry; and (2) the financial impact of the flow-through approach to excess taxes would affect each utility according to its individual financial position.