Contributions in Aid of Construction

Include all company assets in the Plant Detail section of the Market Value Report, regardless of how you acquired them. This includes property you own, lease, or use. 

Report the cost of property, or funds received to purchase property, as operating property. Only report property your company uses.

If you include proper documentation, we will remove property from the allocation process or excludable property calculation if it is: 

• Not subject to property tax
• Exempt from property tax
• Locally assessed 

If your company contributed to another entity, do not include that property on the Market Value Report. If you are unable to remove that CIAC you contributed from your plant in service, report it as excludable property. 

You can report the CIAC amount as excludable property on the Market Value Report if both are true:

• The money you paid or property you gave to another entity is for property you do not use or is not part of your operating property.
• The property is part of plant in service in the Plant Detail section of your Market Value Report.

You cannot report the CIAC as excludable property if either of these are true:

• It was not first included in your system plant
• It is money you received from another entity for property you use as operating property

Example 1:

A person is building a home on a site without electric service. They pay a utility company to build a distribution line to their home.

The payment the person made is a contribution in aid of construction. The utility company owns and operates the distribution line. The distribution line is taxable to the utility company as part of its operating property. This amount is not excludable property of the utility company because the person contributing the funds does not own or maintain the distribution line.

Example 2:

ABC Energy owns and operates a natural gas powered electric generating plant. They decided to increase the capacity of their plant but need a new pipeline feeding the plant to meet this goal. 

ABC Energy decides to pay 123 Gas Transmission in the form of CIAC to build a gas transmission pipeline to provide natural gas to the plant. While ABC Energy paid for the segment of pipeline, 123 Gas Transmission operates and owns the pipeline.

123 Gas Transmission must report the taxable operating property as part of plant in service in the Plant Detail section of their Market Value Report.

ABC Energy does not report the CIAC as part of plant in service in the Plant Detail section of their Market Value Report. 

Reporting CIAC as Excludable Property

Report excludable CIAC on its own row in the Depreciable Minnesota Excludable Property section of the Market Value Report. 

Only report non-taxable CIAC included in the plant in service in the Cost Information section of the report.

Utility and Pipeline Property Administration

Utility and Pipeline Property Types

Tax Rates for Utility and Pipeline Property

If your company files Federal Regulatory Commission Filing Form 1, 2, or 6 and paid for or gave property to another entity, you might be reporting those costs as intangible plant on your FERC Form. We allow you to report intangible plant as excludable property on its own row in the Depreciable Minnesota Excludable Property section on the Market Value Report.