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PUC orders utilities to return money saved from federal tax reduction to consumers
The Pennsylvania Public Utility Commission is ordering 17 major utilities to provide monthly credits to consumers totaling more than $320 million per year.
The ordered refunds, announced in a news release Thursday, May 17, are in direct response to a decrease in the federal corporate rates under the Tax Cuts and Jobs Act of 2017.
The 17 electric, natural gas and water/wastewater utilities include local providers Met Ed and PPL, according to the news release.
Beginning July 1, Met Ed and PPL users will be receiving 8.55 percent and 0.56 percent reductions, respectively, in their monthly distribution charges in the form of a credit.
For example, if a Med Ed user was charged $100 per month in distribution charges, that user would now see a credit for $8.55 in their monthly statements, requiring them to pay just $91.45.
PUC spokesman Nils Hagen-Frederiksen emphasized that these reductions will be automatic and consumers don't need to do anything to receive the savings.
The monthly credits will continue every year until each utility has its next rate case conducted before the commission.
Seven other utilities including Columbia Gas of Pennsylvania and York Water Co. are not required to take similar actions immediately because they have pending rate cases before the commission that require further investigation of other factors that could affect rates charged to consumers.
Hagen-Frederiksen noted that utility distribution rates are set by the PUC, and this order isn't the result of any wrongdoing by any of the utility companies.
Based purely on the impact of the federal tax changes, Columbia Gas and York Water Co. would need 4.11 percent and 2.05 percent reductions in distribution charges, according to a commission analysis.
State Rep. Seth Grove, R-Dover Township, sent a letter to the PUC in March urging the commission to reduce energy rates.
Grove said he decided to send the letter after seeing a tweet from House Speaker Paul Ryan, R-Wisconsin, mentioning that 39 other states had reduced their energy rates following the federal tax changes.
Hagen-Frederiksen said the commission has been conducting a detailed investigation into the effect of the tax act on each utility since January, though Grove said he wasn't aware of that investigation when he decided to send his letter.
Grove noted that taxpayers should benefit more than just from their own utility rate reductions because public facilities such as schools and municipal buildings will also see these reductions.
Each public entity should be considering these savings as they analyze their future budget needs, he said.
— Reach David Weissman at firstname.lastname@example.org or on Twitter at @DispatchDavid.