6.1 ERMUSR HANDOUT 02-13-2018 HANDOUT AT MEETING - PROVIDED BY CHAIR DIETZ
Tax cut could change utilityrates
The old,higher rates resentatives. 35% is expected to
were factored in when Utility regulators in many Old tax rate pre-file a bill
deciding how much other states are doing similar later this week
investigations,as rates across 21% for the upcom-
companies could charge. the country have been set New taxrate ing legislative
assuming the old corporate session.
By MIKE HUGHLETT tax rate of 35 percent.That $200M Savings
mike.hughlett@startribune.com rate has been lowered to 21 Amount passed down
percent. Minnesota's to individual
Minnesota regulators are Several Minnesota utili- utilities residential
looking at passing down to ties have made filings with could save ratepayers will
ratepayers some of the mil- the PUC over the past month be moderate
lions of dollars in savings that that offer few hard numbers —i.e.,don't expect a windfall ,
regulated utilities would get on savings.However,savings on your electric bill.
fromthenewfederaltaxcuts. could total around$200 mil- It's not substantial when
The Minnesota Public lion,said Rep.Pat Garofalo, you break it down to individ-
Utilities Commission(PUC) R Farmington, chairman of nal ratepayers'monthly bill,"
opened an investigation in the Minnesota House Job said DavidSpringe,executive
late December on how the Growth and Energy Afford- director ofthe NationalAsso-
2017 Federal Tax Act affects ability Committee. ciation of State Utility Con-
electric and natural gas utility The state Legislature must sumer Advocates."But it is a
rates and services.The PUC pass a bill to make utility say- big number whenyou look at
is scheduled Tuesday to hear Ings from the tax cut retroac- it in the aggregate."
preliminary reviews of the tive to Jan.1,Garofalo said. The "vast majority of
law's effects from utility rep- Rep.Nolan West,R-Blaine, See TAX RATES on D3 I.
DOW 24,345.75 V 117'1.21 I S&P 500 2,648.94 V 113.19 I NASDAQ 6,967.53 V -3.78 I 10-YR T-NO'
State rethinks utility rate
4 TAX RATES from IN builds up deferred taxes.The
states"have begun some sort new tax law could allow utili-
of process to return part or all ties to recognize deferred tax
of those aggregate savings to expenses at a lower rate than
ratepayers,Springe said. when they were incurred—an
For most companies,say- issue regulators are also likely
ings from the tax cuts would to address.
simply be extra income they The Minnesota attorney
could give back to sharehold- general's office,which advo-
ers,invest in new equipment cates for ratepayers,hasn't
or use for worker raises.But yet weighed in on the tax cuts
since most utilities are monop- with the PUC.
olies,theirincomeisregulated. "We anticipate filing
Lower taxes could essentially comments that any savings
give utilities a higher rate of utilities get from these cuts
return than prescribed by should be passed on to rate-
regulators. payers,"said Ben Wogsland,
Plus, many utilities have a spokesman for the office.
been using accelerated depre-
elation for several years,which Mike Hughlett•612-673-7003