Results at a Glance
- $66.3 million assessment reduction resulting in approximately $860,000 in tax savings
- Successfully challenged state-assessed utility valuation assumptions
- Achieved a more supportable and defensible assessment
Client
A regulated natural gas utility serving customers throughout the United States operates an extensive network of transmission and distribution infrastructure including pipelines, regulator stations, and related utility assets subject to state property tax assessment.
Challenge
When the utility received its 2025 state-assessed value, company stakeholders were concerned that the assessment did not reflect current economic realities.
The valuation was based on a complex state-assessment methodology that appeared inconsistent with the company’s declining income trends and increasing cost of capital. Because utility assessments often rely on specialized valuation models and regulatory considerations, challenging the value required a detailed understanding of both utility operations and state assessment practices.
The organization engaged DMA to review the assessment, evaluate the methodology used by the taxing authority, and determine whether a more supportable value could be established.
Solution
DMA conducted a comprehensive review of the state’s valuation approach, with particular focus on the income methodology used to derive the assessment.
Our team analyzed the assumptions underlying the valuation and identified concerns with capitalization calculations that did not appear aligned with the utility’s financial performance and market conditions. DMA then developed a detailed valuation analysis supporting a lower and more defensible assessment.
Working alongside the client, DMA:
- Evaluated the state’s assessment model and supporting calculations
- Reviewed income trends and capitalization assumptions
- Developed support for a more reasonable market value conclusion
- Presented technical valuation analyses during the appeal process
- Assisted throughout assessment review and negotiations
By combining utility valuation expertise with a deep understanding of state-assessed property tax systems, DMA helped position the client for a favorable outcome.
Result
DMA successfully reduced the utility’s state-assessed value from approximately $504.9 million to $438.6 million—a reduction of $66.3 million.
The outcome generated approximately $860,000 in estimated tax savings for the assessment year.
Beyond the immediate savings, the reduced assessment helped ensure that the property’s taxable value more accurately reflected the utility’s operating and financial circumstances.
Why DMA?
Utility property tax assessments often involve specialized methodologies that require industry-specific expertise to evaluate and challenge effectively.
DMA partners with utility organizations across North America to provide proactive assessment reviews, technical valuation analysis, and strategic appeal support. By understanding both the operational realities of utility assets and the valuation methods used by taxing authorities, our team helps clients identify opportunities to reduce risk, improve assessment accuracy, and achieve measurable tax savings.
For this client, that expertise transformed a significant assessment increase into a substantial savings opportunity while reinforcing confidence in the valuation process.
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Before making any decision or taking any action based upon information contained on this website, you should consult with a DMA professional.