UTILITIES

savings received after Jan. 1. This has to do with how the money is treated from an accounting standpoint.

The companies say the instructions run the risk of violating Ohio’s precedent of disallowing retroactive utility refunds.

“This is a significant and complex undertaking, and the (electricity companies) urge the commission to methodically pursue the task in a thorough manner using a process that is fair and deliberate for each utility,” the companies said in the joint filing.

Several other groups were surprised that the four electricity companies were able to coordinate their efforts

enough to submit the filing. They also saw the filing as an attempt to steer the debate before other participants had made their arguments.

“AEP and the other Ohio electric utilities have filed at the PUCO to prevent or limit reducing their rates to share federal corporate tax cuts with Ohio consumers,” said Ohio Consumers’ Counsel Bruce Weston in a statement.

“Our view is that utility consumers should see reduced charges from the federal corporate tax cuts, and sooner rather than later. And, in general, utility regulation in Ohio should be reformed,” he said.

Marc Reitter, AEP Ohio’s vice president for regulatory and finance, said his company’s request is a reasonable one.

“AEP Ohio customers will

benefit from tax reform,” he said in an email. “Our request asks the PUCO to provide clearer instructions so we can answer their request. We want to ensure that the effort to address this issue is done in a fair and deliberate manner that complies with Ohio law so our customers can realize the benefits of tax reform.”

The new federal tax law includes a reduction the corporate tax rate from 35 percent to 21 percent. This affects regulated utilities because taxes are an expense that the companies pass along to consumers. If taxes go down, then the reimbursement for the expense also should go down, according to the PUCO.

The panel opened the investigation on Jan. 3, and there is no timetable for deciding the outcome.

Weston’s office, the state’s consumer advocate on utility issues, is suggesting that the PUCO resist possible attempts by the companies to minimize what parts of the savings should be counted. The federal tax cut “provides a rare opportunity for acrossthe-board rate reductions for Ohio utility consumers,” his office says in its filing.

In addition to their joint testimony last week, the major electricity utilities submitted separate documents on Thursday with their views of the best ways to handle the tax cuts. The specifics vary, but there is broad agreement by the companies that the process should be done through separate cases for each utility.

Natural gas utilities also submitted comments. Columbia Gas of Ohio suggests that it will “pass back all base-rate overcollections resulting from the change in tax rate,” but also says that it would like to delay a reduction in base rates until the company can determine the full effect of the tax cut.

In arguing their case, several of the utilities referenced the way the PUCO handled federal tax changes in 1987. That led to separate cases in which each utility company had the opportunity to suggest an approach.

In some cases, that led to rate cuts. In others, the companies agreed to use some of the money on programs that would provide a non-financial benefit to customers.