A.G. Schneiderman, Bipartisan Coalition of State AGs and Advocates Call on FERC to Give Tax Savings to Customers, Not Federally Regulated Utilities

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
January 10, 2018

Attorney General’s Press Office / 212-416-8060
nyag.pressoffice@ag.ny.gov
Twitter: @AGSchneiderman 

A.G. SCHNEIDERMAN, BIPARTISAN COALITION OF STATE AGS AND ADVOCATES CALL ON FERC TO GIVE TAX SAVINGS TO CUSTOMERS, NOT FEDERALLY REGULATED UTILITIES 

Following the reduction of the federal corporate tax rate, New York Attorney General Eric T. Schneiderman today joined a bipartisan coalition of 18 state attorneys general, state agencies, and consumer advocates in calling on the Federal Energy Regulatory Commission (FERC) to take immediate steps to ensure that public utility companies do not receive a major windfall at the expense of their customers. 

In a letter sent to FERC, the coalition requests that an investigation be opened into whether the current rates for federally regulated utilities – including electric, natural gas, and oil companies – are justified following the recent passage of the new federal tax law that reduces the corporate tax rate from 35 to 21 percent.

“It’s unacceptable to create a huge windfall for utility companies at the expense of regular New Yorkers,” said Attorney General Schneiderman. “Our bipartisan coalition is sending a clear message to FERC: act now to protect consumers and ensure customer bills are reduced in line with the massive tax cut corporations are receiving.” 

The coalition is specifically concerned about the impact the new federal tax law has on the level of corporate income tax expenses that are incorporated into a public utilities’ rates, and the amount of money that utilities are holding in reserve to pay future tax bills. The letter requests that FERC act as quickly as possible to make any necessary changes to utilities’ rates to ensure that customers’ bills are reduced. The letter also calls on FERC to set an immediate date to refund utility customers for any over-collection resulting from delays.  

As the coalition notes in the letter, FERC has experience in adjusting customers’ rates to reflect a reduction in federal income taxes. In 1987, FERC allowed electric utilities to file for rate decreases after President Ronald Reagan lowered the corporate tax rate from 46 to 34 percent. “We call on the Commission to use its experience and expertise, with stakeholder input, to determine appropriate procedural mechanisms to discover information about the scope of over-collections at issue, the types of voluntary rate reductions or refunds that can be implemented by the Public Utilities in an expedited manner under existing Commission rules and precedent, and the best way to ensure that customers are not harmed by any delay in making the appropriate changes,” the letter states.

Joining AG Schneiderman in sending today’s letter are the attorneys general of California, Connecticut, Illinois, Kentucky, Maryland, Massachusetts, Nevada, North Carolina, Rhode Island, Texas, Virginia, as well as the Connecticut Office of Consumer Counsel, the Florida Office of Public Counsel, the Maine Office of the Public Advocate, the Nevada Bureau of Consumer Protection, the New Hampshire Office of the Consumer Advocate, the Rhode Island Division of Public Utilities and Carriers, and the Vermont Department of Public Service.