Adam Laxalt
Adam Laxalt and 17 other state Attorneys General have asked the Federal Energy Regulatory Commission to ensure public utility rates in their states are reduced to reflect the tax reform law that sharply reduced corporate taxes.
The law signed Dec. 22 cuts the federal corporate income tax rate from 35 to 21 percent.
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. Adding, rates must be reduced, “to prevent utilities from reaping a windfall from the reduction in federal corporate income tax rates.”
The Nevada Public Utilities Commission has already issued statements indicating it is aware of the issue and agrees the rates charged by Nevada Power will have to come down.
Nevada Power provides electric services statewide.
The letter asks FERC to consider changing formulas that are applied to many utilities now rather than waiting to “true up” later.
“Doing so would ensure that customers promptly receive the full economic benefit of the tax reduction,” the letter states.
No information was available to indicate how much those rates might eventually be reduced and how much that would save different classes of residential and commercial customers.
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.
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.”