Utilities object to probe by PUCO to lower rates
At issue is whether tax cut benefits should be passed on to customers.
Ohio’s biggest electric utilities said they object to an investigation into whether the utilities should lower customer rates in the wake of recent federal tax cuts that largely benefit the companies.
In a Jan. 10 order, the Public Utilities Commission of Ohio said it wanted to examine whether power companies could “pass benefits resulting from the legislation (the tax package) on to rate payers.”
“Broadly speaking, the commission authorizes utilities to recover expenses from their customers, including federal tax obligations,” Asim Haque, the PUCO chairman, said in a statement. “If that federal tax obligation is reduced, then utility rates should also be reduced, creating savings for customers.”
Dayton Power & Light is among companies, including Ohio Power, Ohio Edison, Duke Energy Ohio, Cleveland Electric Illuminating, and the Toledo Edison Co. that filed a rare joint response that has numerous objections to the request.
The Office of the Ohio Consumers’ Counsel said it believes the investigation is needed.
“DP&L and other electric utilities have filed at the PUCO to prevent or limit reducing their rates to share federal corporate tax cuts with Ohio consumers,” the office said in a statement Tuesday. “Once again, the utilities are attempting to use Ohio’s 2008 energy law to favor themselves over consumers in the rate-setting process.”
The consumer counsel’s office thinks utility consumers should see lower charges as a result of the federal tax cuts.
One objection the utilities are raising in their PUCO filing is that lowering rates now would amount to “retroactive rate-making.”
Also citing a 2008 state law on “electric security plans,” they argue that the PUCO cannot reduce rates without the companies’ consent.
Though “electric security plans” were formed to protect utilities’ financial position in what was meant to be a more competitive environment, Bruce Weston, Ohio consumers’ counsel, has asked legislators to consider getting rid of them altogether.
“You would be solving a lot of problems and doing a lot of good for Ohioans by reforming the 2008 law to eliminate electric security plans,” Weston testified before the Ohio House Public Utilities Committee last month.
In a statement, a spokeswoman for DP&L said the company has prices that are “currently the lowest in the state.”
“Ohio utilities cannot raise or lower rates without approval through a formal regulatory process,” DP&L’s statement said. “We are committed to working with Ohio regulators to seek out the most effective way for our customers to realize any savings resulting from the new tax law.”
A spokesman for Duke Energy, which serves customers in Butler and Warren counties, said the PUCO’s Jan. 10 order demands clarity and a transparent process.
“From Duke Energy’s perspective, we remain committed to working with our Ohio regulators to determine the most practical way for our customers to realize the savings from the new tax law,” Duke spokesman Lee Freedman said in an email. “There are many ways to incorporate the savings, from decreasing rates to mitigating the impact of future increases.
“Like any changes to our rates, we must gain formal regulatory approval before implementing any customer savings from the new tax law,” he added.
A message was left with a spokesman for the PUCO.