Louisiana Gov. John Bel Edwards is urging that the Trump corporate tax cuts turn into savings for electricity users.
Ahead of his Friday budget meetings, the Democratic governor sent a letter to the state’s utility regulators to make sure the benefits of the president’s tax bill are passed onto consumers.
The state’s public service commission “sets utility rates based on a number of factors, including federal income tax rates,” the governor told the commission. “Given the reduction in federal corporate income tax rates from 35 percent to 21 percent in the new tax law, some Louisiana utility rates may merit a reduction.”
Edwards said he based his request on an announcement made by Virginia utility company Dominion Energy last week. The company said it would cut customer rates by an average of 5 percent because of the new tax law.
“Dominion Energy announced that it plans an average rate reduction of 5 percent for customers in South Carolina thanks in part to lower corporate taxes under the new federal tax law," he wrote. "We hope to hear similar news from Louisiana companies as they carefully review the impact of the federal tax legislation on their bottom lines.”
The tax reform bill that President Trump signed into law last month reduces the corporate tax rate from 35 percent to 21 percent, which affects energy and utility companies as well other businesses such as manufacturers.
Public utility commissions from Michigan, West Virginia, and Kentucky are also looking for power companies to reduce electric rates for customers because of the tax cuts.
The West Virginia utility commission directed all companies operating in the state to begin tracking customer rates in light of the tax cuts. It will hold a public hearing in May to discern the effects of the tax cuts on rates. It is also inviting groups from outside the power industry to submit comments as part of its assessment of the tax law's effect on regulated electricity companies.
Meanwhile, Dominion’s neighbor, Pepco, which serves the Washington area, is looking for regulators to let it bill its customers more.
Pepco, which was recently acquired by one of the largest utilities in the country, Exelon, asked Maryland utility regulators to approve a $41 million rate increase to pay for grid upgrades. It is not clear if the Maryland regulators will seek to move the utility in the direction of Dominion and urge it to consider the tax cuts it received from Trump’s bill instead.
Pepco is also asking D.C. regulators to increase its rates for consumers in the nation’s capital.