January 11, 2018 11:12:04 AM
Slim Smith - [email protected]
The first results of the new tax law passed by Congress in December may show up in an unexpected place: monthly gas bills.
Although most of the effects of the new law won't materialize until next year, when Americans file their taxes, the cuts to the corporate tax rate are likely to mean lower utility bills for customers of for-profit utility companies.
Wednesday, Mississippi Public Service Commission Chairman Brandon Presley said all savings earned by for-profit utilities will be passed along to the consumers.
Under the new law, the corporate tax rate is reduced from 35 percent to 21 percent.
"Since utility companies pass all of their federal income tax along to their consumers in their monthly bills, we expect all of those savings to be given back to the customers," Presley said. "Right now, we are trying to calculate how much that would be."
Presley's announcement follows a pattern that is emerging throughout the country. Utility companies in Maryland and Washington, D.C. have announced they will unilaterally pass the savings from the new corporate tax rate directly to their customers.
In the Golden Triangle, the only utility company that will be affected is Atmos Energy, which is the only for-profit utility in the area.
"The tax law changes enacted in the Tax Cuts and Job Act will benefit our customers," said Robert Lesley, public affairs director for Atmos Energy in Mississippi. "Customer rate changes must first be approved by the regulatory commissions in the jurisdiction we serve."
Presley said for-profit utilities such as Entergy and Mississippi Power, which serve customers in other parts of the state, also will be affected by the change.
"In some areas, the savings will be significant," Presley said.
Presley said he was uncertain of exactly when customers could see the lower bills.
"I think it will be a matter of months, if not sooner," Presley said. "I'd say there's a good chance this would happen by the end of the winter."
Lesley, however, said it is too early in the process for Atmos to nail down those details.
"We are engaged with regulators to determine how the effects of the new tax law will be reflected in our rates," Lesley said. "However, at this stage, it is too early to predict the exact amount and timing of those changes in our rates."
Presley said the PSC staff is investigating how the new rates will be adjusted and the commissioners expect to discuss the subject during its next meeting on Tuesday.
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected]