AG seeks federal help with tax breaks
Oklahoma’s Attorney General continues to seek tax breaks for the state’s utility customers.
On Thursday, Attorney General Mike Hunter’s office announced he sent a letter to the Federal Energy Regulatory Commission urging it to require energy wholesalers to reduce the rates they charge for the electricity and natural gas they transport across the nation.
Hunter’s letter also asked the commission to begin tracking all excess accumulated deferred income tax breaks enjoyed by the wholesalers.
Requiring an accounting and refund of those breaks would ultimately help utility customers, he said, because those utilities’ fuel costs for electricity and natural gas would drop.
“We are asking the commissioners at the FERC to stand behind the agency’s mission to assist consumers in obtaining reliable, sustainable energy at reasonable costs,” Hunter stated, as
part of a release announcing the letter’s transmission.
“The corporate tax cuts have created a dividend for major corporations that should be passed on to customers.”
A FERC spokesperson said the commission has jurisdiction to approve the rates for wholesale sales of electricity and transmission in interstate commerce for jurisdictional utilities, power marketers, power pools, power exchanges and independent system operators — such as the Midcontinent Independent System Operator that serves the Midwest.
It does not have jurisdiction over retail rates that customers pay energy providers, she said.
New tax cut law prompts AG to act
Hunter embarked on his effort to capture savings for Oklahoma’s utility customers after Congress approved and President Donald Trump signed the Tax Cuts and Jobs Act in December.
The law reduced corporate tax rates from 35 to 21 percent, which prompted Hunter to propose that the Oklahoma Corporation Commission immediately require the utilities it regulates to lower their rates to compensate customers for the change.
A majority of commissioners
declined to follow that recommendation, however, and instead ordered the agency’s staff to work with the utilities to recover the savings through ongoing or new rate cases. They also ordered the utilities to file cases within four months of the date of their finding, if one already had not been filed.
So far, only one regulated utility has filed a new rate-making case. Earlier this month, Oklahoma Gas & Electric filed a $72 million rate increase request with the commission. But utility officials said the system’s residential customers wouldn’t see an increase on their bills because of the tax cut.
The rate case will be heard by an administrative
law judge at the commission. Public Service Co. of Oklahoma also has a rate case pending before the commission that was filed last year.
In Hunter’s letter to the Federal Energy Regulatory Commission, he urged it to address the issue soon.
“Without prompt action, retail customers will continue paying rates that include excessive, unjust and unreasonable wholesale electricity transmission and gas transportation rates,” he wrote. “The corporate tax cuts have created a dividend for major corporations that should be passed on to customers.
“We implore the commissioners to act quickly by doing their part at the wholesale level.”