Wisconsin consumer advocates are asking investor-owned utilities to return more than $100 million in tax savings as soon as possible to rate payers.
The Citizens Utility Board, along with the Wisconsin Industrial Energy Group and the Wisconsin Paper Council, submitted comments this week calling on state regulators to order any 2018 savings be returned “as expeditiously as possible” in bill credits.
Electricity rates have “not been just and reasonable” since the law went into effect Jan. 1.
“The reality is customers are ready to see savings and shouldn’t have to wait,” said Tom Content, executive director of the Citizens Utility Board, which represents residential and small business customers. “Customers deserve something now.”
Passed in December, the Tax Cuts and Jobs Act lowered the corporate tax rate from 35 percent to 21 percent, lowering costs for the utilities. Because utility rates are based on expenses, including taxes, those savings — estimated at more than $150 million for the five largest for-profit utilities — should result in lower rates.
Utilities have taken different stances on how to handle the windfall.
Xcel Energy, which estimates it will save up to $30 million next year for 247,500 electric customers in western Wisconsin, has proposed to apply that to its 2020 rates, saying it will take time to calculate customer impacts and other implications of the bill. Xcel expects an additional one-time net savings of up to $20 million relating to long-term cleanup projects.
We Energies proposed a similar approach to returning more than $100 million in expected savings for its two electric utilities.
Wisconsin Power and Light and Madison Gas & Electric both proposed to return at least some savings in bill credits this year.
Utilities expect to see additional savings once the Federal Energy Regulatory Commission rules on how to apply tax savings for electric transmission and natural gas pipeline charges.
The customer groups argue that utilities not due for a 2019 rate adjustment, such as Xcel, should provide customers a refund next year as well.
It will ultimately be up to the three-member Public Service Commission to determine how customers of the state’s investor-owned utilities reap the benefits. The Minnesota Public Utilities Commission is also looking at how to distribute the savings and has given utilities until March 2 to submit comments.
Customers of municipal and cooperative utilities won’t see a similar savings as those utilities operate as nonprofit companies.
Xcel Energy, which estimates it will save up to $30 million in taxes next year for 247,500 electric customers in western Wisconsin, has proposed to apply that to its 2020 rates.