Washington state utility regulators direct utilities to pass federal tax cut savings on to customers
The Washington Utilities and Transportation Commission (UTC) recently directed regulated companies regulated companies to track savings resulting from the passage of the federal Tax Cuts and Jobs Act to ensure those savings will benefit utility customers.
The 2017 federal tax overhaul reduced the corporate tax rate from 35 percent to 21 percent. This reduction will impact many of the UTC’s regulated companies.
“Investor-owned utilities expect to see reduced taxes as a result of the tax legislation, and we expect them to pass those benefits on to Washington customers,” UTC Chair Dave Danner said. “UTC staff is still working through the changes brought about by the tax law, but utilities are on notice that we expect customers will reap the benefits.”
The utilities’ expected tax savings will be determined and reconciled with commission-set revenue requirements during regular tariff and rate case filings. Customers may see reduced rates as these proceedings take place.
Two energy companies, Avista and Cascade Natural Gas, have rate cases pending before the commission, which will take into account tax-related changes.
Puget Sound Energy, Pacific Power and Light and Northwest Natural Gas have filed petitions with the UTC describing the potential changes to their 2018 taxes and estimating any potential excess earnings. The UTC will assess these filings and incorporate the results into future rate cases.
