MTPR

Regulators: Utilities Must Pass Tax Savings On To Customers

Dec 27, 2017

The Montana Public Service Commission wants the state’s regulated utilities to calculate the big reductions in taxes each company expects to pay starting next year. 

PSC Vice Chair, Travis Kavulla, says, “Consumers right now pay rates that reflect the old corporate tax rate of 35-percent. Its reduction of 21-percent, together with other changes Congress made, means consumers - when rates were re-evaluated - should be paying less.”

According to Kavulla, the PSC is essentially, “Blowing a whistle to call a stop to the play to make sure that utilities are accounting for the reduction – the tax benefit they received from this legislation – so it can be passed on to consumers in some way.”

Montana’s regulated utilities will have to present their findings to the PSC by March 31st. They’ll also need to have a plan in hand on how customers will benefit. Kavulla says there are a number of options on the table including consumer refunds and capital investments. In that case, he adds that money would not earn them a return on their investment because customers would be considered to have provided that capital rather than lenders or Wall Street.

Northwestern Energy’s gas and electric utilities are subject to the Commission’s order, as is the electric service of Montana-Dakota Utilities. Great Falls’ Energy West gas utility and MDU’s gas utility stand to have their rates adjusted in the wake of tax reform during pending rate cases filed in September.