Arkansas Public Service Commission pressed over utilities' tax paybacks

Attorneys for large industrial businesses and for the attorney general's office told the Arkansas Public Service Commission on Wednesday that the state's utilities have been mandated to repay excess income taxes to customers as soon as possible.

Congress passed the federal Tax Cuts and Jobs Act in December, reducing the maximum corporate tax rate from 35 percent to 21 percent.

On Jan. 11, Gov. Asa Hutchinson asked the commission to pass on benefits of the reduction in the federal corporate tax rate to Arkansas ratepayers "as expeditiously as possible."

The state attorney general recommended that the commission pass the tax reduction benefits back to ratepayers in a timely manner, said Sarah Tacker, an attorney for the attorney general's office.

"A timely return of the funds is the only fair approach," Tacker argued before the commission on Wednesday.

For the most part, the investor-owned utilities in the state have been cooperative, Tacker said.

Entergy said in March that it would reduce its customers' bills by up to $466 million. That reduction began with April bills. The average monthly reduction in bills was 18.4 percent. That means that a customer with a monthly electric bill of $100 would see the bill drop to about $81.60.

The lower rates will continue until December 2019. The total savings for the 21 months for an average residential customer would be about $386.40.

No decision has yet been made on how much the tax reduction will impact the customer bills of other utilities, Ted Thomas, the commission's chairman, said in an interview.

"That hasn't been fixed yet because we don't know the numbers," Thomas said.

There will be a formula that will be applied to each utility, he said. First there will be an estimate and then more accurate figures will be available later, Thomas said.

The commission should render an order in the case in a few weeks, Thomas said.

Tacker complimented Entergy's efforts but added that the state's largest electric utility "has refused to address other changes" as a result of the federal tax cuts, Tacker said.

Entergy has already given back a "big pot of dollars," said Jordan Tinsley, who represents Arkansas Electric Energy Consumers and Arkansas Gas Consumers, associations for large industrial companies.

"But our argument is that the rest of the money [Entergy] owes to ratepayers ought to be given back in the same method that they [are using] to refund [the $466 million]," Tinsley said in an interview.

The rest of the money that Tinsley referred to is approximately $17 million. Entergy has argued that it is best to refund that money through its formula rate plan, a rider that Entergy uses to handle all of its expense items.

"So our position on those is they work themselves out through the normal course of business," David Palmer, Entergy's director of regulatory affairs, said in an interview. "Making adjustments outside of that runs afoul of that process."

The utilities included in the case are Entergy Arkansas, CenterPoint Energy, Black Hills Energy Arkansas, Arkansas Oklahoma Gas, Oklahoma Gas and Electric Co., Southwestern Electric Power Co., Empire District Electric Co. and Liberty Utilities, which is the water utility in Pine Bluff.

Business on 05/24/2018

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