The U.S. Supreme Court agreed to decide whether three energycompanies are entitled to more than $500 million in tax credits forpayments their subsidiaries made to the U.K. government during the1990s.

The justices today said they will hear an appeal from PPL Corp.,which took a $39 million charge after a federal appeals court ruledagainst the company. Entergy Corp. is claiming a $234 millioncredit in a similar legal fight, winning a ruling from a differentappeals court.

American Electric Power Co. has yet to go to court in its fightover $285 million it paid in U.K. taxes. The company is seekingless than that in U.S. tax credits, said Kevin Kenworthy, anattorney for AEP.

The issue stems from a windfall tax paid in 1997 and 1998 byutilities in the U.K. that had recently become private companies.The question is whether those payments qualify under a U.S.provision that lets companies take a credit for income taxes theypay abroad.

The Obama administration joined Allentown, Pennsylvania-basedPPL in urging the Supreme Court to resolve the disagreement betweenthe appeals courts.

The case is PPL v. Commissioner of Internal Revenue Service,12-43.

Bloomberg News

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