Michigan utilities given deadlines to pass on federal tax law savings to ratepayers
The Michigan Public Service Commission (MPSC) this week laid out deadlines by which state utilities must calculate and pass on corporate income tax savings from updated federal tax laws.
Of Michigan’s 13 utilities, 10 stand to see their current and future long-term deferred tax payments reduced by nearly $3.7 billion. Under the new MPSC determination, a three date process must be followed, by which utilities will pass on their savings to ratepayers. The first deadline is set for March 30, which time utilities must calculate their rate reductions to be put into effect in July. Those changes will last until their next rate case and will represent the majority of savings for ratepayers. This applies to most utilities, but several have had that deadline held up due to pending rate cases, including Michigan’s two biggest suppliers: Consumers Energy and DTE Electric.
All 13 state utilities must file a calculation by Aug. 30 that will set tax savings due to ratepayers from Jan.1 through June 30, however. This will be followed, lastly, by an Oct. 1 deadline by which each utility must file applications to calculate the impact of things like excess deferred taxes or bonus depreciation, at which time the Commission will determined how ratepayers can be further reimbursed.
“The Commission appreciates the input that helped to craft this approach to provide rate relief to customers in an accelerated manner without sacrificing accuracy or opportunity for stakeholder participation,” MPSC Commissioner Rachael Eubanks said. “We are expediting the simplest calculations so that customers will see the benefit from the tax reduction as quickly as prudently possible.”
