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Assessors urge caution on 'in‑utility' pipeline formula; industry proposes reuse of throughput approach
Summary
Appraisal consultant Rodney Couritt, representing the Louisiana Assessors Association, urged the Tax Commission against adopting a commission‑promulgated in‑utility throughput formula for pipeline economic obsolescence, arguing assessors cannot verify throughput or capacity figures and the formula could misvalue idle or new lines.
Rodney Couritt, an appraisal consultant who said he represents the Louisiana Assessors Association, told the Louisiana Tax Commission on Aug. 20 that the commission should not adopt a promulgated in‑utility throughput formula to measure economic obsolescence for ‘other pipelines’ in chapter 13 of the personal‑property rules.
Couritt said assessors can use in‑utility approaches where appropriate, but making a specific throughput formula part of the commission’s rules would effectively make it the default method and could produce inaccurate valuations when assessors cannot verify throughput or capacity figures provided by taxpayers.
Couritt described three practical problems with a commission‑promulgated throughput formula: assessors often cannot verify the numerator (actual throughput) or denominator (capacity); throughput is a proxy that does not directly measure a pipeline’s economic performance; and the formula can produce unreasonable results for idle or very new pipelines unless floors are imposed. He noted a prior schedule and a 25% percent‑good floor existed before tax year 02/2009 and said that schedule was removed at that time.
Commissioner Romig asked whether financial statements could be used; Couritt replied that financials and in‑utility measures are different approaches: financials would analyze rate of return and company performance, which can be a direct indicator of economic obsolescence but are frequently unavailable for the private, non‑FERC pipelines covered by chapter 13.
Couritt said assessors should retain flexibility to use multiple methods — throughput ratios, financial evidence, historical rates of return or other appraisal techniques — rather than be constrained by a single cookbook formula in the rules.
No formal vote was taken on chapter 13 at the hearing; the commission will consider written comments and testimony in advance of a tentative Sept. 24, 2025 meeting.
