DENVER — Members of the Colorado Senate GOP are urging the Public Utilities Commission (PUC), the Office of Consumer Counsel (OCC) and the Office of Attorney General to consider the federal tax reform as part of the overall consideration of rates for Xcel Energy and Black Hills Energy consumers.
“Recent news reports show that regulators and elected officials across the country have asked regulated utilities in their states how they plan to pass along the savings due to the lowering of the corporate tax rate from 35 to 21 percent,” the letter reads. “Some utilities are voluntarily passing along those savings and we commend them. Unfortunately, we have not seen or heard anything from Colorado regulators or our utilities.”
The letter, which was sent Monday, is signed by 17 of the 18 Republican Senators. Only Sen. Ray Scott did not sign the letter. Scott was not present during the discussion, and Senate Majority Whip, John Cooke, who wrote the letter, said he did not want to sign Scott’s name without his permission.
Earlier this month, energy providers in Washington D.C., Delaware, Maryland, Washington, Oregon, California, Utah, Wyoming, Idaho, Illinois, Michigan and many others announced rate cuts, all citing tax reform as a reason. Most of the cuts range from 3 to 4 percent.
In October, Xcel filed a request to raise customer rates by 2 percent yearly through 2021.
Cooke, who represents Greeley, is a member of the Agriculture, Natural Recourses and Energy committee. He said because energy providers recover the cost of taxes through their ratepayers, a reduction in taxes should equal a reduction in rates.
“We’ve seen a lot of companies giving bonuses to their employees and utilities cutting rates,” Cooke said. The tax rate went from 31 to 25 percent. So why shouldn’t Xcel and Black Hills not cut rates. Other states have. Otherwise it’s a windfall profit for them. They should be giving that back to their ratepayers.”
Xcel Energy had not responded to request for comment by press time. Complete will update the story when it hears from Xcel.
In the letter, lawmakers called for the regulatory agencies to let lawmakers in on any progress.
“We assume plans to pass along the savings are being made but are not yet completed,” the letter read. “In that spirit, please provide us an update on the status of rate reductions for Colorado ratepayers. Please include any information on how the lower tax rate will impact Xcel Energy’s latest rate increase request.”
PUC commissioners discussed how to deal with the new tax rate at its regular meeting on Wednesday. Commissioners Frances Koncilja and Wendy Moser both expressed disappointment with the utilities not coming forward already with a plan.
Koncilja said she believed it was likely than if tax rates increased the utilities would be asking for a single-issue rate increase while Moser added the companies better figure out how to handle the new tax law, suggesting they may find themselves paying interest.