By - Jim Vess

FERC asked by officials in 18 states to ensure that utility tax savings go to customers

Energize Weekly, January 17, 2018

Consumer advocates and attorneys general from 18 states are calling for federal energy regulators to ensure that hundreds of millions of dollars in tax savings utilities are likely to gain from the new federal tax law are passed on to consumers.

In letter to the Federal Energy Regulatory Commission (FERC), the state officials asked for “prompt Commission action to adjust the revenue requirements of public utilities subject to the Commission’s jurisdiction.”

“Unless the Commission adjusts the Public Utilities’ revenue requirements to reflect this federal corporate income tax reduction, utility customers nationwide will be overpaying for their electric and gas service by hundreds of millions of dollars,” the state officials said.

The commission has had experience in addressing the impact of federal tax reductions in customer rates, the letter said, citing the abbreviated rate filing procedure it adopted after the Tax Reform Act of 1986 to allow public utilities to file for rate decreases.

“We call on the Commission to use its experience and expertise, with stakeholder input, to determine appropriate procedural mechanisms to discover information about the scope of over-collections at issue, the types of voluntary rate reductions or refunds that can be implemented,” the letter said.

The state officials are seeking changes to rate formulas in advance to lower rates rather than waiting to true up accounts later, possibly with rebates. “Doing so would ensure that customers promptly receive the full economic benefit of the tax reduction,” the state officials said.

Some utilities are already adjusting their rates and in some states public utility commissions, have issued orders requiring utilities to report the impact of the new tax law on their revenue requirements, as well as calculating the excess amounts of future tax liability, the state officials said.

Among those states are Kentucky, Oklahoma, Michigan, Montana and South Dakota.

“We respectfully request that the Commission take action at the federal level to ensure that all charges on customers’ bills are just and reasonable,” the state officials.

Among the attorneys general signing the request were Maura Healey of Massachusetts, Ken Paxton of Texas, Eric Schneiderman of New York, Joshua Stein of North Carolina and Xavier Becerra of California.

Consumer advocates from Connecticut, Maine, Nevada, Vermont, Florida, Rhode Island and New Hampshire also signed the request.

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