Pennsylvania Public Utility Commission orders utilities to credit customers for tax reform savings

The Pennsylvania Public Utility Commission (PUC) recently issued an order requiring 17 utilities to provide their customers with a monthly credit to refund savings from tax changes under the Tax Cuts and Jobs Act (TCJA) of 2017.

The refunds from all 17 electric, natural gas, and water and wastewater utilities total more than $320 million per year.

“As economic regulators, it is the Commission’s responsibility to ensure that utility rates are just and reasonable,” PUC Chair Gladys M Brown said. “Further, it is necessary for utility rates to reflect relevant tax expenses. I believe this work (by PUC staff) has resulted in an innovative answer by this Commission to effectively flow-through the benefits of the TCJA back to customers.”

The PUC will also consider the impacts of tax reform on seven other public utilities as part of rate cases that have already been filed or are expected to be filed by August 1.

One Pennsylvania public utility, the commission noted, saw no financial impact or an increased federal tax liability as the result of TCJA. The order directs Columbia Water Company to file a tariff or tariff supplement within 10 days to replace their current rates. A PUC action in March declared the current rates to be temporary.

For two utilities that were determined to have received only a small increased tax liability from TCJA. The temporary rates for these utilities, Peoples Natural Gas Company LLC and Newtown Artesian Water Company, will continue subject to annual reconciliation.