Lower corporate taxes could yield utility bill savings
Among other changes, the new federal tax code set to take effect next week could result in lower utility bills for some ratepayers.
The bill reduces the corporate tax rate from 35 percent to 21 percent in 2018, which will result in millions of dollars in cost savings for investor-owned utilities such as Xcel Energy, which serves about 257,000 customers in western Wisconsin.
Because the electric and gas rates set by state regulators are based on estimated expenses, those savings should be passed on to consumers, said Tom Content, executive director of the Citizens Utility Board, which represents residential and small commercial ratepayers.
“This is customer money,” he said. “Taxes should flow right back.”
Content said Wisconsin’s investor-owned utilities could see savings of tens of millions of dollars.
Xcel spokeswoman Christine Ouellette said the company has not yet estimated its savings or how that will affect customer bills.
Earlier this month the Public Service Commission approved a 2018 rate request that will result in an increase of about $2 a month for the average Xcel residential electric bill and about $4.75 more for natural gas.
PSC staff will be talking with utilities next week and directing them to calculate the change in their expected tax bills and to defer the savings “until the commission directs how the savings are applied in the ratepayer’s best interest,” said PSC spokesman Matthew Spencer.
Because of its nonprofit status, La Crosse-based Dairyland Power Cooperative will not benefit from the tax law changes, said company spokeswoman Deb Mirasola.