DENVER — The Public Utilities Commission (PUC) has responded to a letter sent by the Colorado Senate Republican caucus questioning the motives of Colorado’s public utility companies concerning rate hikes in light of federal tax reform.
The response, which was sent by Doug Dean, Director of the PUC, confirmed any rate reductions will likely be a PUC decision.
“No Colorado utility has voluntarily filed for approval of an immediate rate reduction,” Dean said in the letter.
The senators sent the letter last week after 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.
“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 read. “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.”
In October, Xcel filed a request to raise customer rates by 2 percent yearly through 2021.
“The commission has been actively addressing the potential impact of the Tax Cut and Jobs Act on Colorado utility rates since mid-December 2017. The commissioner is examining both rate mechanisms to return to customers the savings from materially lower corporate tax rates,” the letter said.
Commissioners are determining the best way to pass on the savings, adding there are various options and they have different implementation timelines.
Dean said sometime before Feb. 1, the PUC will open a formal statewide proceeding addressing the impact of the changes for the benefit of all of the state’s rate-regulated customers.
Dean also said Xcel, the PUC and large commercial rate payers are also working on proposals for rate reductions concerning Xcel’s most recent rate-change request.
Dean added that according to Xcel’s Jan. 11 filing with the Securities and Exchange Commission the company is expecting decreases in overall utility revenue requirements of $400 million, $35 million of that is attributed to its Colorado gas department.
“No similar estimate has been reported to the commission for the utility’s Colorado electric department,” Dean said.