Ohio regulators, utilities spar over tax cut savings
State argues customer rates should go down
COLUMBUS (AP) — Ohio’s four big electric utilities joined forces this month to challenge a request by state regulators to return proceeds from the federal tax cut to customers by reducing rates.
The Public Utilities Commission of Ohio in January instructed American Electric Power, Dayton Power & Light, Duke Energy and FirstEnergy to treat any tax savings received after Jan. 1, 2018, as potential consumer savings.
The commission ordered the companies to begin tracking how much they are over-collecting when using delivery rates developed under the previous 35-percent federal tax rate, rather than using the new 21-percent rate.
The companies pushed back in an unusual joint filing Feb. 9. They argued that the PUCO’s order lacks specifics, potentially violates a rule against retroactive utility refunds and falls outside the normal rate-making process.
“This is a significant and complex undertaking, and the (companies) urge the commission to methodically pursue the task in a thorough manner using a process that is fair and deliberate for each utility,” the companies said in the filing.
President Donald Trump signed a $1.5 trillion tax cut package into law in December that provides generous tax cuts for corporations, including the utilities.
The law’s corporate tax rate reduction affects regulated utilities because taxes are an expense that the companies pass along to consumers. If taxes go down, PUCO argues, the reimbursement for the expense also should be reduced.
Faced with the utilities’ objections, the Ohio Consumers’ Counsel, the lawyer for ratepayers, urged the commission to immediately launch a formal investigation into whether the utility rates figured off the old tax rate are now “unreasonable.”
The office argued such an investigation is allowed under the law.
“Our view is that utility consumers should see reduced charges from the federal corporate tax cuts, and sooner rather than later,” Ohio Consumers’ Counsel Bruce Weston said in a statement.
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