January 24, 2019

Ruling: CT utility ratepayers will see tax-cut savings

Photo | Contributed
Photo | Contributed
An Eversource gas crew working in Griswold.

Connecticut's various electric, gas and water utilities will return their savings from the federal tax cuts to customers, regulators said in a final ruling Wednesday.

The Public Utilities Regulatory Authority (PURA) wrapped its year-long review of how utilities must treat their collective savings totaling tens of millions of dollars from the tax cuts passed by Congress in late 2017 -- which reduced the federal income tax from 35 percent to 21 percent.

Utilities recover their tax expenses and many other costs from customers through ratemaking, a complex process overseen by PURA.

Several utilities argued to PURA that changing rates now that were in effect last year could amount to illegal "retroactive ratemaking" -- a position with which PURA ultimately disagreed, ruling that the tax cuts were "extraordinary" and "unanticipated," and therefore an exception to retroactive ratemaking laws.

A number of utilities had already reached various settlements last year that accounted for the tax savings, while PURA directed others to account for a regulatory liability on their books and return the tax savings to customers in their next rate case.

Attorney General William Tong praised the final decision on Thursday.

"Ratepayers shoulder the burden of utility taxes, and the Office of the Attorney General fought to ensure every dollar saved due to corporate tax cuts will be used to drive down rates," Tong said in a statement. "My office will continue to fight on behalf of Connecticut ratepayers and to identify any and all avenues to recover savings and lower costs."

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