Utilities to save millions due to federal tax cuts
MINNEAPOLIS (AP) — Xcel Energy has notified regulators that its revenue needs will be reduced by about $140 million this year due to federal tax cuts.
The 2017 Tax Cuts and Jobs Act reduced the corporate income tax rate from 35 percent to 21 percent. The Minnesota Public Utilities Commission started an investigation in December into how the law would impact electric and natural gas utility rates and services.
But it remains to be seen how much of that savings will be passed to utility customers. In a filing with the commission, Xcel said customers would “receive the full value of the tax reform benefits,” but didn’t offer specifics.
Xcel said the commission could decide to use the tax savings to pursue ways to reduce greenhouse gases.
“We believe the savings from tax reform can help us keep customers’ bills low and allow for ongoing investment in clean, reliable and low-cost energy,” the company said.
Xcel has 1.3 million customers in Minnesota and is the state’s largest electric utility company.
Minnesota’s largest gas utility, CenterPoint Energy, said it plans to return any savings to its customers. The savings could be applied to the utility’s current rate hike request of 6.4 percent, the Star Tribune reported.
CenterPoint’s filing with the commission said the corporate tax cut reduced its federal income taxes by $4.4 million. The filing didn’t estimate savings from other utility-related tax changes. The Houston-based utility has 840,000 Minnesota customers.
Meanwhile, Minnesota Power, based in Duluth, said its $23 million in savings could be used to cover costs.
“While the company agrees that impacts of the tax legislation should flow to customers, those impacts should not be treated in isolation from other operating costs,” the filing said.
It recently announced cost-cutting plans that are likely to include layoffs. Minnesota Power serves 145,000 customers in northeast and north central Minnesota.
Information from: Star Tribune, http://www.startribune.com