States to US: Pass along utilities' tax savings to customers
Elected officials, consumer advocates and regulators in 18 states are pushing for the Federal Energy Regulatory Commission to ensure that utility customers see a reduction in their bills thanks to windfalls utilities will reap from corporate tax cuts included in the federal tax overhaul.
In a letter sent to the commission on Tuesday, the coalition called for an investigation into the "justness and reasonableness" of utility rates now that the tax cuts approved by Congress last month reduce the corporate income tax rate from 35 percent to 21 percent.
The attorneys general from 12 states signed the letter: New York, California, Connecticut, Illinois, Kentucky, Maryland, Massachusetts, Nevada, North Carolina, Rhode Island, Texas and Virginia. Public consumer advocacy offices and state regulatory agencies from Connecticut, Florida, Maine, Nevada, New Hampshire, Rhode Island and Vermont also are involved.
While a typical household may see its monthly utility bills reduced by just a few dollars, the overall savings across the nation could be significant.
"Consumers at some point should expect to see some reduction," in their monthly bills, said David Springe, executive director of the National Association of State Utility Consumer Advocates, a Silver Spring, Maryland-based advocacy group that supports the states' efforts.
"It won't be huge for any given customers, but if you add it up across all customers it will in the billions of dollars," he said Wednesday.
Passage of the Republican-sponsored tax cut plan prompted leaders in some states to take measures toward reducing utility rates that already were in place before the overhaul bill was signed into law by Republican President Donald Trump on Dec. 22.
In Massachusetts, Democratic Attorney General Maura Healey urged the state's utility regulators to recalculate Eversource's recently approved rate hike to reflect the reduction in the federal tax rate that took effect Jan. 1. Last week, Healy announced that the utility agreed to use the corporate savings to lower rates for its 1.4 million Massachusetts customers.
She and officials in other states are pushing to have rates for all major electricity, gas, and water companies recalculated to reflect the lower corporate tax rate.
"Our bipartisan coalition is sending a clear message to FERC: act now to protect consumers and ensure customer bills are reduced in line with the massive tax cut corporations are receiving," said New York Attorney General Eric Schneiderman, a Democrat.
Several other utilities have announced they'll cut rates:
—Maryland: Providers Baltimore Gas & Electric, Pepco and Delmarva Power said last Friday they'll file requests with state regulators to reduce their utility rates. BGE estimated the savings being passed on to customers to be more than $80 million.
—Illinois: Commonwealth Edison has asked state officials to approve passing along about $200 million in tax savings to its customers this year.
—West Coast: Pacific Power said it will pass the tax cut savings to its customers in California, Oregon and Washington state, although it's expected to take several months to calculate the amount.
"Electric companies are now working to determine how the new law will affect them individually, and will be in discussions with regulators at the state level and FERC to ensure that customers benefit from tax reform," said Eric Grey, senior director of government relations for the Washington, D.C.-based Edison Electric Institute, which represents investor-owned electric companies.
Rep. Kevin Brady, R-Texas, head of the tax-writing House Ways and Means Committee, said the savings being passed along to ratepayers is one of the results of "providing American job creators with the ability to keep more of their income to use for the benefit of their companies, their workers, and their communities."