Utility CFOs: Treat Tax Strategy Like Infrastructure Strategy

Previously, I wrote about the regulatory challenges utilities face as capital programs double in size. Here’s the layer underneath that most finance conversations still aren’t having: tax strategy. Utility CFOs who win in the next decade are starting now to treat tax strategy like infrastructure strategy.

Significant Opportunity and Risk for Utilities

The utilities deploying capital at historic scale right now have a significant opportunity — and significant risk — embedded in how they manage tax compliance and strategy across that investment:

• accelerated tax depreciation
• repair deductions
• normalization requirements
• deferred tax management
• CAMT considerations
• cost segregation
• property tax exemptions

At the scale of programs being executed today, these are strategic financial levers that directly affect cash flow, revenue requirements, and rate case outcomes. They shouldn’t be treated as year-end accounting exercises; rather, tax teams should maintain consistent, close strategic partnership with their financial planning counterparts to take full advantage of these opportunities.

EEI projects member utilities will invest more than $1.1 trillion between 2025 and 2029 to support growing demand from AI, data centers, and electrification. The CFO’s tax leaders who can optimize tax positions continuously — asset by asset, project by project, as capital is deployed — will generate materially better financial outcomes than those treating tax as a compliance function that runs behind the capital program.

Wrangling the Data

The good news is that the data required to do this well is the same data required to support rate cases and regulatory filings. It all flows from the same source: clean, granular, traceable project cost and asset records. However, when that data is fragmented across systems, tax optimization happens late, partially, and with audit exposure. The opportunity is that when it’s unified, the same data that supports a rate case filing also drives tax strategy — and vice versa.

EEI told federal regulators in March that utilities are already working to connect more than 80 large load projects nationwide, with large load tariffs, service regulations, and contractual terms all serving as tools in a broader strategy to reduce risk and protect customers. The financial and tax infrastructure to support that strategy has to be equally deliberate.

The capital program is being built. The question is whether the financial strategy running underneath it is built to match.

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PowerPlan NXT is the only platform purpose-built to unify capital project data, asset accounting, tax optimization, and regulatory compliance for asset-intensive utilities — giving finance and tax teams a single source of truth that works as hard as the infrastructure itself. At PowerPlan, we work with the largest regulated utilities in the country. We know what this workload looks like. PowerPlan is built for exactly this moment. Start the conversation with us today.