Valuation of a Utility Power Plant for Tax Assessment Purposes
In In re PP&L, Inc., 838 A.2d 1, 9 (Pa. Cmwlth. 2003) this Court affirmed a decision of a court of common pleas that rejected the possible use of an income-based valuation of one of PP&L's electric-generating facilities on the ground that there was no reasonable method of separating the portion of the income stream attributable to the taxable real estate from the income stream attributable to the business enterprise located on that real estate.
In PP&L, the taxing authorities raised arguments that the income approach must be considered under Pennsylvania law, that it is the most appropriate for appraising property typically purchased as an investment because such property is valued based on its ability to produce income and that F & M Schaeffer is distinguishable.
In rejecting these arguments based upon F & M Schaeffer, we noted that the court of common pleas did not err in selecting an approach to valuation "which focuses on the tax parcels themselves, as distinguished from the enterprise operating on the parcels, from the "value-in-use" of the parcels ... and other intangible assets associated with the parcels." PP&L, 838 A.2d at 10-11.
In addition, in Allegheny Energy Supply Co. v. Greene County Bd. of Assessment Appeals, 837 A.2d 665 (Pa. Cmwlth. 2003), appeal denied, 578 Pa. 710, 853 A.2d 363 (2004), another case involving the valuation of a utility's power plant for tax assessment purposes, this Court affirmed a decision of the court of common pleas that refused to consider either the current use of the property as a power plant, or the value of the power plant to the current owner, on the ground that it was not relevant to a determination of the fair market value of the property.
In affirming, the Court noted that the court of common pleas properly accepted the testimony of the taxpayer's expert, who viewed the property as an industrial use and excluded the value of the power plant's productivity.