As a result of the federal Tax Cuts and Jobs Act signed into law by President Donald Trump last month, state utility regulators are directing companies to track federal savings to benefit utility customers.
In part, the Tax Cuts and Jobs Act repealed the individual mandate required under the Affordable Care Act, limited deductions for state and local income taxes and property taxes and, most notably, reduced the corporate tax rate from 35 percent to 21 percent.
By law, the Washington Utilities and Transportation Commission has the authority to determine how much energy, telecom and water companies can earn as well as what rates the companies can charge to customers. In response to the recent tax revisions, the commission is requiring all regulated companies to report anticipated revenue impacts, according to a January 8 statement. Based on that information, the commission will establish new rate cases and pass on the savings to utility customers.
Already, Puget Sound Energy, Pacific Power and Light and Northwest Natural Gas have come forward to the commission with potential changes to 2018 taxes.
In the months ahead, the commission will continue collecting reports from regulated companies. Customers will not see reduced rates or bill credits right away, but are likely to when reduced rate proceedings go into effect.