Washington, D.C. – The stories can’t be ignored—tax reform is doing great things for American workers across the United States. But the positive effects of this legislation reach beyond employee bonuses or juiced up 401(k) plans. Last week, several public utilities filed requests with their local public service commissions to lower rates by passing the savings from tax reform onto their customers. Along with lower taxes and bigger paychecks, Americans can also expect to see the cost of heating and powering their home decrease as well. As the AP reported late last year, “America’s brutal cold snap highlights rising cost of energy.” With a hard winter hitting America, these rate reductions couldn’t come at better time.
Here are some utility companies with the news:
BGE to Provide Federal Tax Reduction Benefits to Customers
Baltimore, MD (Jan. 5, 2018) – Today BGE 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. The Tax Cuts and Jobs Act, which decreased the corporate tax rate from 35 percent to 21 percent, was signed into law on Dec. 22, 2017 and became effective on Jan. 1, 2018. 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.
“Reduced tax costs create an opportunity for BGE customers to benefit from further decreases in their total energy bills,” said Calvin G. Butler Jr, chief executive officer of BGE. “Even prior to the tax reductions, the long-term trends of customers using significantly less energy and the declining costs of natural gas and electricity commodities have resulted in the average BGE residential customer’s total monthly bill remaining lower than 2008 levels.”
While customer bills have decreased, BGE has continued to invest in the systems serving customers, delivering the record lows in the frequency and duration of power outages, accelerated modernization of the natural gas system, and more useful information through the smart grid that allows customers to use energy more efficiently.
Pepco Outlines Plans to Provide Federal Tax Reduction Benefits to Customers in the District of Columbia
Washington, D.C. (Jan. 5, 2018) – 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 savings are the result of federal tax reductions under the new Tax Cuts and Jobs Act, which was signed into law on Dec. 22, 2017, and became effective on Jan. 1, 2018. The decrease in the Corporate Tax Rate from 35 percent to 21 percent reduces the amount of federal income tax Pepco will have to pay.
“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.”
Ultimately, the Public Service Commission of the District of Columbia will determine how the tax benefits will be provided to customers.
ComEd Filing to Provide Savings to Customers from Corporate Tax Decrease
Chicago, IL (January 5, 2018) – 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.
The Tax Cuts and Jobs Act (TCJA), which was signed into law on Dec. 22, 2017 and became effective on Jan. 1, 2018, decreased the corporate tax rate from 35 percent to 21 percent, reducing the amount of federal income tax ComEd will have to pay.
A new rate case process, established by the Illinois General Assembly in 2011 with passage of the Smart Grid law, ensures that cost savings such as these are passed on to ComEd customers. The ICC is moving expeditiously to oversee the process so customers can obtain the lower costs beginning in the first quarter 2018, rather than 2020.
“ComEd is able to promptly provide Illinois customers with the benefits of the federal tax reduction as a result of the fast action of the Illinois Commerce Commission and the new rate case design introduced by the Illinois General Assembly in the 2011 Smart Grid law. The Smart Grid law has delivered best on record reliability, thousands of jobs and now the prompt return of tax reduction benefits to Illinois consumers,” said Anne Pramaggiore, ComEd President and CEO.
Assuming approval by the Commission, ComEd will begin to reflect the benefits of the tax savings as early as first quarter 2018 through reduced costs on bills.
Eversource, Instead of Raising Rates, Plans to Reduce Rates for Western Massachusetts Customers Because of Tax Cuts
Massachusetts (January 4, 2018) -The newly passed federal tax law reduces the amount of taxes Eversource will be paying by millions of dollars and today the energy company has informed the Department of Public Utilities of its decision to voluntarily pass those savings along to customers.
“We believe it’s important that our customers reap the benefit of a lower tax rate,” said Eversource Massachusetts Electric Operations President Craig Hallstrom. “As a regulated power company our rates are based on our costs, including federal taxes, so if taxes are reduced ultimately costs are reduced and that benefits our customers.”
For example, customers in the company’s Eastern Massachusetts service territory will see a reduction in taxes of $47.6 million. This will cause a rate reduction of approximately $35.4 million, rather than the approved increase of $12.2 million (per the rate case decision Nov 30th). For Western Massachusetts, customers will benefit from a reduction in taxes of $8.3 million, reducing the approved increase of approximately $24.8 million to $16.5 million.
Given the complexity of the newly enacted law, over the next several months the company will be conducting a full evaluation by its tax department to calculate the exact amount that will be returned to customers and to see if there are further forthcoming reductions. If so, those changes would be reflected in rates effective January 1, 2019.
Eversource is asking the DPU to both recalculate the approved revenue requirements and to incorporate the reductions due to the modification of the federal income-tax rate for corporations from 35 percent to 21 percent effective when new rates go into effect in February.