Tax Reform: Lower Utility Rates

‘Regulators From Montana To Kentucky Have Ordered Utilities To Act Now To Ensure Ratepayers Share In The Windfall From The Tax Bill’
SEN. MITCH McCONNELL (R-KY): “All around the country, utility companies that will benefit from our new tax cuts are already discussing plans to pass their savings on to consumers. Major power companies in Illinois, Maryland, and Massachusetts are already proposing plans to give their customers tens of millions of dollars in relief by lowering the rates they charge for energy. And get this – according to CNBC, a South Carolina electric and gas utility is planning to give a cash payment directly to its customers — averaging $1,000 per household. More are following suit. In Montana, Louisiana, and Indiana, regulators are already working with utilities to determine how households will benefit from the tax savings. In my own state of Kentucky, the Public Service Commission directed a number of electric, gas, and water companies to track their savings and make plans to cut rates for customers. As any mother or father who has to balance a checkbook and pay bills every month can attest, this is welcome news for middle-class families. And these reductions will be especially helpful to the most vulnerable in our society.” (Sen. McConnell, Floor Remarks, 1/10/2018)

In Many Parts Of The County, Utility Bills Are Expected To Decrease Due To Tax Reform
“Regulators from Montana to Kentucky have ordered utilities to act now to ensure ratepayers share in the windfall from the tax bill signed into law by President Donald Trump ... ‘It is consumer money,’ said David Springe, executive director of the National Association of State Utility Consumer Advocates. ‘Everybody is focused on making sure this doesn’t just vanish.’”
(“Trump Tax Reform Has States Hungry for Lower Utility Bills,” Bloomberg, 1/5/2018)

• “Exelon Corp., the biggest U.S. utility owner by sales, is already offering to reduce bills.” (“Trump Tax Reform Has States Hungry for Lower Utility Bills,” Bloomberg, 1/5/2018)

SOUTH CAROLINA: “A $7.9 billion deal between utility companies Dominion Energy and Scana includes an unusual term loosely related to the tax bill that passed Congress at the end of 2017. All residential customers of Scana's South Carolina Electric & Gas utility will get an average cash payment of $1,000 within 90 days of the deal being completed, the companies said in a statement. … Scana and Dominion are one of the first companies to explicitly say they will give their customers a credit as a result of the tax bill.” (“Customers Of This South Carolina Utility Will Get $1,000 In Cash As Part Of A Merger Deal,” CNBC, 1/3/2018)

MARYLAND: “Today [Baltimore Gas and Electric Company] will file with the Maryland Public Service Commission (PSC) to pass approximately $82 million in annual tax savings to customers, resulting from federal tax cost reductions. If approved by the PSC, the average BGE residential electric customer can expect to see an estimated $2.31 decrease on their monthly bill, and the average residential combined natural gas and electric customer can expect an estimated $4.27 monthly reduction, effective in February 2018.” (BGE, Press Release, 1/5/2018)

ILLINOIS: “Today ComEd is filing a petition with the Illinois Commerce Commission (ICC) seeking approval to pass along approximately $200 million in tax savings to its customers in 2018. If approved by the ICC, the average ComEd residential customer can expect to see an estimated $2-$3 decrease on their monthly bill related to the tax reduction.” (ComEd, 1/5/2018)

KENTUCKY: “The Kentucky Public Service Commission (PSC) has ordered for-profit utilities to track their savings under lower corporate tax rates that took effect yesterday, paving the way for those savings to be passed on to customers in the form of lower electric, gas or water rates. In two orders issued Wednesday, Dec. 27, 2017, the PSC noted that investor-owned utilities recover their federal tax expenses from ratepayers. Under the federal tax law enacted last month, the corporate income tax rate will decline from 35 percent to 21 percent this year, substantially reducing the tax burden on for-profit, investor-owned utilities. ‘Since ratepayers are required to pay through their rates the tax expenses of a utility, any reduction in tax rates must be timely passed through to ratepayers,’ the PSC said in the orders.” (Kentucky Public Service Commission, Press Release, 1/2/2018)

MISSOURI: “Investor-owned utilities in Missouri have until Jan. 31 to report how much money they will save from recently enacted federal tax cuts, the Missouri Public Service Commission ordered today, the first step toward a potential rate cut for consumers. The commission voted 5-0 to require for-profit electric and gas providers, and the Missouri American Water Company, to answer five questions focusing on the financial impact of the tax bill that cut the corporate income tax from 35 to 21 percent. Three questions ask for suggestions on the best way to pass the financial benefits to ratepayers, including in pending rate cases, and another asks whether the different types of corporations should be treated differently.” (“Tax Cut Prompts PSC To Look At Electric, Gas Rates,” Columbia Daily Tribune, 1/4/2018)

MONTANA: “The Montana Public Service Commission today took the first step to ensure that utility customers realize benefits from sweeping tax reform signed into law last week. The Commission directed regulated utilities in the state to calculate the change in tax liability that each company expects to receive under the new tax bill and to come forward with a proposal for how to apply those benefits by the end of March. ‘Consumers are currently paying more in taxes through utility rates than the actual tax expense that utilities will incur next year,’ he said. ‘The Commission wants to ensure that this money is not simply captured by shareholders, but instead is directed in a way that provides a long-term benefit to the consumer.’” (Montana Public Service Commission, Press Release, 12/27/2017)

WASHINGTON, D.C.: “Pepco today announced they will file with the Public Service Commission of the District of Columbia in early February, outlining plans to provide annual tax savings to more than 296,000 electric customers in the District of Columbia. If approved, Pepco would plan to begin providing a credit lowering customer bills starting in the first quarter of 2018. … ‘The tax law will result in lower bills for our customers and lower taxes for Pepco,’ said Dave Velazquez, President and CEO, Pepco Holdings, which includes Pepco. ‘We are pleased to provide these savings to our customers, while at the same time ensuring we are making prudent investments in the local power grid to maintain the safe, reliable, and affordable service our customers have come to expect.’” (Pepco, Press Release, 1/5/2018)

MASSACHUSETTS: “Eversource’s customers in eastern Massachusetts will see a reduction in rates of around $35.4 million instead of an approved increase of $12.2 million; its customers in western Massachusetts also stand to gain.” (“Trump Tax Reform Has States Hungry for Lower Utility Bills,” Bloomberg, 1/5/2018)

OREGON & WASHINGTON: “Pacific Power says they are committed to passing the benefit of this tax cut on to customers. ‘We strive to provide our customers reliable service while keeping rates low,’ said Stefan Bird, President and CEO of Pacific Power. ‘The benefit of this tax cut should be passed on to our customers – and we will work with our regulators and stakeholders on the best way to do that.’” (“Pacific Power Says They Will Lower Rates With Tax Cuts,” My Columbia Basin, 1/3/2018)

UTAH, WYOMING, & IDAHO: “Rocky Mountain Power says it plans to pass some of its federal tax savings on to customers. But, the company isn't sure how much or when. ‘We strive to provide our customers reliable service while keeping rates low,’ said Cindy Crane, President and CEO of Rocky Mountain Power. ‘The benefit of this tax cut should be passed on to our customers — and we will work with our regulators and stakeholders on the best way to do that.’” (“Rocky Mountain Power Promises To Share Tax Windfall,” Local New 8, 1/4/2018)


‘Poor Americans Have Some Of The Highest Electricity Bills’
MICHELLE MOORE, Groundswell’s CEO: “We can’t afford the social cost of leaving economically challenged communities behind. The people who can least afford the cost are paying the biggest electricity bills.” (“Why Poor Americans Have Some Of The Highest Electricity Bills,” The Atlantic, 4/18/2016)

“For many of the poorest households in the U.S., though, the [electric] bill is disproportionately high—precisely because they are poor.” (“Why Poor Americans Have Some Of The Highest Electricity Bills,” The Atlantic, 4/18/2016)

• “…the share of income that low-earning households spend on electricity rose by one-third in the last decade, according to a new analysis by the nonprofit renewable-energy advocacy group Groundswell. In fact, the bottom 20 percent of earners spend almost 10 percent of their income on electricity, more than seven times the portion of income that the top 20 percent pays.” (“Why Poor Americans Have Some Of The Highest Electricity Bills,” The Atlantic, 4/18/2016)

---

Tags: Tax Reform, utility companies, lower utlity rates To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service and "Like" Facebook Page - Thanks!