Georgia is joining the list of states pressuring power companies to pass along savings from federal tax cuts along to customers.
Georgia Power would have until Feb. 20 to report to the Public Service Commission how much it will save now that corporate taxes have been slashed by one-third and recommendations for what to do with that money, according to a staff proposal the PSC is expected to approve on Tuesday.
“I’m delighted that our staff is working with the power company for the Feb. 20 challenge to see what’s going to happen, and we look forward to the results of that statement of interest as to where we will go with the consumers of Georgia Power in regards to a tax credit,” said Lauren “Bubba” McDonald Jr., chairman of the PSC Energy Committee, during discussion on Wednesday.
Regulated utilities like Georgia Power must consider taxes paid as part of their operating costs, so it is not unusual for them to discuss cutting rates when taxes go down. However, there is a chance companies could ask to spend the freed up money on other things, like capital improvements or infrastructure.
Georgia Power spokesman John Kraft said the company will make sure its 2.5 million customers benefit from the tax savings, but it has not been determined how that will happen. The company is now reviewing the new tax law to determine financial impacts.
McDonald pointed out that several energy companies in other states, many of them affiliates of Chicago-based Exelon Corporation, have submitted proposals to regulators about reducing rates because of the Tax Cuts and Jobs Act. The law, which reduced the corporate tax rate from 35 percent to 21 percent, became effective on Jan. 1.
In Maryland, BGE announced it will reduce customers’ rates as a result of $82 million in annual savings. Pepco unveiled a plan that would also lead to lower bills for 1.1 million customers in Maryland and the District of Columbia by the end of March. Commonwealth Edison filed a petition with the Illinois Commerce Commission asking for permission to pass along approximately $200 million in savings.
The Brookhaven City Council and Mayor John Ernst issued a statement on Tuesday requesting that the PSC require Georgia Power to rebate savings.
“If you apply the 2017 tax overhaul to Georgia Power’s bottom line in 2016, the result would be approximately $111 million in savings,” Ernst said in a news release. “Georgia Power can’t reduce its own rate, so the PSC should mandate a rebate, retroactive to Jan. 1. The people of Georgia deserve no less.”