Following the reduction of the federal corporate tax rate, Attorney General Peter F. Kilmartin today joined a bipartisan coalition of 18 state attorneys general, state agencies, and consumer advocates in calling on the Federal Energy Regulatory Commission (FERC) to take immediate steps to ensure that public utility companies do not receive a major windfall at the expense of their customers.
The Rhode Island Division of Public Utilities and Carriers (RIDPUC) joined Kilmartin in the request to FERC.
In a letter sent to FERC, the coalition requests that an investigation be opened into whether the current rates for federally regulated utilities – including electric, natural gas and oil companies – are justified following the recent passage of the new federal tax law that reduces the corporate tax rate from 35 to 21 percent.
"Savings achieved through the tax reform by public utilities should be passed on to the ratepayer," said Attorney General Peter F. Kilmartin. "While utility companies are seeking rate increases year after year, especially here on the East Coast, it's only right and fair that the ratepayers benefit from the anticipated tax windfall, rather than it pad the bottom line of the utility companies."
The coalition is specifically concerned about the impact the new federal tax law has on the level of corporate income tax expenses that are incorporated into a public utilities' rates, and the amount of money that utilities are holding in reserve to pay future tax bills. The letter requests that FERC act as quickly as possible to make any necessary changes to utilities' rates to ensure that customers' bills are reduced. The letter also calls on FERC to set an immediate date to refund utility customers for any over-collection resulting from delays.
As the coalition notes in the letter, FERC has experience in adjusting customers' rates to reflect a reduction in federal income taxes. In 1987, FERC allowed electric utilities to file for rate decreases after President Ronald Reagan lowered the corporate tax rate from 46 to 34 percent. "We call on the Commission to use its experience and expertise, with stakeholder input, to determine appropriate procedural mechanisms to discover information about the scope of over-collections at issue, the types of voluntary rate reductions or refunds that can be implemented by the Public Utilities in an expedited manner under existing Commission rules and precedent, and the best way to ensure that customers are not harmed by any delay in making the appropriate changes," the letter states.
Joining Attorney General Kilmartin in sending today's letter are the attorneys general of California, Connecticut, Illinois, Kentucky, Maryland, Massachusetts, Nevada, New York, North Carolina, Texas, Virginia, as well as the Connecticut Office of Consumer Counsel, the Florida Office of Public Counsel, the Maine Office of the Public Advocate, the New Hampshire Office of the Consumer Advocate, the Rhode Island Division of Public Utilities and Carriers, and the Vermont Department of Public Service.