Customers of Puget Sound Energy (PSE), Northwest Natural Gas and other regulated private utilities operating in Washington could see rate reductions due to corporate tax cuts passed last month by Congress.
In a directive released Monday, the Washington Utilities and Transportation Commission asked all utilities to report the tax savings expected by the new law that lowered corporate rates from 35 percent to 21 percent.
Dave Danner, the state commission’s chair, said that “utilities are on notice that we expect customers will reap the benefits.”
PSE, the state’s largest utility, agrees that any savings from the tax bill should be passed on to customers. Utility officials are still reviewing the impacts the measure will have on customers, according to Kathie Barnard, the utility’s director of revenue requirements and regulatory compliance.
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Consumers may not see any credits showing up on their bills until year’s end, according to the Washington Utilities and Transportation Commission.
The Washington push to pass on the tax savings to utility customers is part of a broader movement unfolding across the country.
“If new legislation significantly decreases income tax expense paid by regulated utilities to the federal government, shouldn’t ratepayers therefore get lower rates?” wrote Oklahoma corporate commissioner Bob Anthony in the online bulletin of the National Association of Regulatory Utility Commissioners. His commentary was headlined “Immediate Action Required to Protect Ratepayers.”
In Washington state, it will take time for the state commission to figure out which utilities should lower their rates – and by how much. Consumers may not see any credits showing up on their bills until year’s end, according to Amanda Maxwell, a commission spokeswoman.
The Washington commission’s regulatory reach includes investor-owned electric utilities as well as natural gas, water, garbage-collection and telecommunication companies.
The commission sets the return on equity that private utilities can earn in Washington state. They are required by state law to be “fair, just, reasonable, and sufficient” for both consumers and companies.
Since Congress passed the tax legislation in December, some corporations have announced they would give bonuses to their workers. Alaska Airlines, for example, will pay $1,000 bonuses to some 20,000 employees at the end of January.