Pennsylvania PUC seeks comments on impacts of federal corporate income tax changes
The Pennsylvania Public Utility Commission (PUC) recently announced that it is seeking comments from utilities and other interested parties on how reductions in utilities’ federal taxable income due to the federal Tax Cuts and Jobs Act (TCJA) may impact ratepayers.
President Trump signed TCJA into law on Dec. 22 and it became effective on Jan. 1. The law reduces the corporate Federal Income Tax (FIT) rate from 35 percent to 21 percent.
Taxes that Commission-regulated public utilities pay to the federal and state governments is reflected in the rates they charge customers. These utilities currently pay a state Corporate Net Income (CNI) tax rate of 9.99 percent based on their federal taxable income.
With a Secretarial Letter, the PUC is commencing the process by which it will seek to determine the impact of the law on the tax liabilities of Commission-regulated public utilities and the feasibility of reflecting these impacts in the rates charged to Pennsylvania utility ratepayers.
The Secretarial Letter asks specific utilities in the electric, gas and water industries to respond to data requests and asks interested parties are asked to submit comments.
The PUC also plans to examine the impact of the tax reforms on telecommunications utilities and smaller public utilities not listed on the initial request for comments.
