Calls Grow for Capturing Utilities’ Tax Savings
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The number of state officials and utilities announcing actions because of the Tax Cut and Jobs Act signed by President Trump last month keeps growing.

The number of state officials and utilities announcing actions because of the Tax Cut and Jobs Act signed by President Trump last month keeps growing.

The bill cut the federal corporate tax rate from 35% to 21%, and many public officials want to make sure utilities pass their savings from the bill on to their customers.

As of Jan. 8, regulatory bodies in at least 11 states had opened proceedings or taken other actions related to the tax bill, and elected officials in at least two other states had called for them to. Also, at least nine electric and gas utilities had said they planned to pass their savings on to their customers. (See Utilities Likely to Pass Tax Bill Gains to Customers.)

Since then, a coalition of elected officials, consumer advocacy officials and utility regulators from 18 states has written FERC a letter calling for an investigation into the “justness and reasonableness” of utility rates considering the tax act. (See “States Asking FERC to Investigate Rates in Light of Tax Cut,” Federal Briefs.)

The Organization of MISO States joined the chorus on Monday. (See related story, OMS Urges FERC to Pass Tax Cut Benefit to Ratepayers.)

At Thursday’s open meeting, Commissioner Robert Powelson expressed his support for a pass-through of utilities’ savings. “I hope we do our part to make sure these tax benefits are accrued to energy users here in America,” he said.

Chairman Kevin McIntyre told reporters after the meeting that he agreed with Powelson’s sentiment and that the commission was considering its options.

Also, the Texas Public Utility Commission has taken its first steps in determining how to share the tax cuts with ratepayers. (See PUCT Briefs: Regulators Begin Addressing Utility Tax Savings.)

Here’s a round-up of other recent actions by regulators and companies:

Midwest

The North Dakota Public Service Commission on Jan. 10 ordered Montana-Dakota Utilities, Otter Tail Power and Xcel Energy to let it know by Feb. 15 their savings from the tax bill so it can return the money to ratepayers.

Ameren Illinois said it filed a petition with the Illinois Commerce Commission to be allowed to pass its tax bill savings on to its natural gas customers and planned to file one to be allowed to pass them on to its electric customers too.

Oklahoma Gas & Electric said savings it realizes from the tax act will cover about $68 million of a $72 million rate increase it asked for on Jan. 16.

Kansas City Power & Light and Westar Energy said they will file requests with their state regulators to be allowed to pass their savings on to their customers. Kansas City Power & Light’s parent, Great Plains Energy, and Westar Energy are continuing to pursue their merger. (See Great Plains, Westar File Revised Merger Plan.)

East

The Delaware Public Service Commission on Jan. 16 approved a petition filed by the state’s Public Advocate to make sure consumers receive the benefits of any savings realized by utilities. The order directs utilities to estimate the impact of the new tax law on their cost of service, and to propose procedures for reducing their rates to reflect those impacts by March 31.

Delmarva Power, which had already committed to pass along its savings from the tax bill to Maryland ratepayers, said it would adjust its natural gas and electric rate increase requests in Delaware to reflect its savings from the bill.

Dominion Energy said Jan. 2 if its deal to purchase SCANA goes through, it will reduce the rates of SCANA’s South Carolina Electric & Gas subsidiary by more than $7/month with some of the money coming from savings from the tax bill.

Public Service Enterprise Group said in an 8-K filing Jan. 11 that it will realize a one-time benefit of $660 million to $850 million from the tax bill. A day later its Public Service Electric and Gas subsidiary asked New Jersey regulators to approve a 1% increase in its base electric and gas rates, which it said reflects the fact that it is “passing along savings from recent tax law changes.”

National Grid said on Jan. 11 it would reduce its request for an electric and gas base distribution rate in Rhode Island from $71 million to $45 million because of savings from the tax bill.

The company on Monday said its Niagara Mohawk Power subsidiary has filed a request with the New York Public Service Commission to boost its revenue by $206 million in 2018-2019, before the impact of deferred credits. The request includes an estimated customer savings of $76 million from the tax cuts.

West

Pacific Power said Jan. 3 it will work with its regulators and stakeholders to pass its savings from the tax bill on to its customers.

Arizona Public Service said Jan. 9 it wants to use its savings from the tax bill to reduce its average residential customer’s monthly bill by about $4.70.

Green Mountain Power CEO Mary Powell said Jan. 10 that the company would pass along all its savings from the tax bill to its customers.

South

The Mississippi Public Service Commission has asked its Public Utilities Staff to consider possible rate reductions available to residents.

The Georgia Public Service Commission on Jan. 16 ordered Georgia Power to submit a report to it by Feb. 20 detailing how the utility will be affected by the tax bill.

Florida Power & Light said Jan. 16 it plans to use its savings from the tax bill to cover its $1.3 billion in Hurricane Irma restoration costs and may be able to use them to delay future rate increases.

— Peter Key

ArizonaCAISO/WEIMDelawareERCOTFERC & FederalISO-NEMISOMississippiNew JerseyNorth DakotaNYISOOregonPJMSPP/WEISTexasVermont

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