DENVER — Colorado energy customers may soon see refunds and rate reductions on their natural gas and electric bills.
The Colorado Public Utilities Commission (PUC) has ordered Colorado’s investor-owned natural gas and electric providers to record and track the differences between their deferred tax liabilities based on the old corporate tax rate of 35 percent and the new rate of 21 percent enacted on Dec. 22 under the federal Tax Cut and Jobs Act (TCJA) tax reform.
Complete Colorado has been following the developments after reporting that Senate Republicans contacted the PUC with concerns about the process.
Federal income tax liabilities for utilities are part of the overall calculation used to determine energy rates. Current rates were established under the projection of a 35 percent tax liability.
The order, which was mailed Feb. 1 to seven companies — Public Service Company of Colorado (Xcel Energy), Black Hills/Colorado Electric Utility, Black Hills/Colorado Gas Utility, Black Hills/Colorado Distribution, Rocky Mountain Natural Gas, Atmos Energy Corporation, and Colorado Natural Gas, Inc. — requires that the companies submit their findings no later than Feb. 21 to the PUC, along with proposals for implementing any refund due to customers from the changes as well as updated revenue requirements that reflect future impacts on energy rates under the new tax rates.
Passage of the TCJA required the revaluation of federal deferred tax assets and liabilities, however, energy providers across the county were voluntarily offering refunds soon after President Donald Trump signed the act.
“The primary purpose of this proceeding is to ensure that Colorado utility customers benefit from the reduction in the federal corporate incomes taxes through lower rates,” the commission wrote in the order.
The order came just one week after the PUC responded to concerns by the Colorado Senate Republican Caucus that Colorado energy companies and the PUC were behind other states in investigating the matter.
In January, 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.
In addition to the seven companies and the PUC board and staff, the Colorado Office of Consumer Council (OCC) also filed a motion to become a party to the case on behalf of Colorado’s rate payers.
The “primary purpose of the OCC’s efforts has been to ensure that Colorado utility consumers benefit from the reduction in the federal corporate income taxes through lower rates that become effective on January 1, 2018, the date the TCJA took effect,” the motion reads. … “Activity in this proceeding will directly affect the public interest, which the OCC is mandated to represent, and the constituency that the OCC is statutorily directed to represent, namely the specific interests of residential consumers, agricultural consumers, and small business consumers.”