Virginia Attorney General Mark R. Herring wants Virgjnia utilities to pass on federal tax savings to consumers.
Herring has joined a bipartisan coalition of 18 state attorneys general, state agencies, and consumer advocates in calling on the Federal Energy Regulatory Commission (FERC) to take immediate steps to ensure that public utility companies do not receive a major windfall at the expense of their customers. He will also argue at the State Corporation Commission for the maximum appropriate refund or rate reduction for Virginia customers of utilities whose rates are set at the state level.
“I’m going to do all that I can to make sure that savings and benefits are passed onto customers, as they should be, not just tacked onto the bottom lines of the utility companies,” said Herring. “If these companies are going to reap a windfall from changes in federal law, their rates need to reflect that.”
Current rates justified?
In a letter sent to FERC, Herring and his colleagues request that an investigation be opened into whether the current rates for federally regulated utilities – electric transmission and interstate natural gas and oil pipeline owners – are justified following the recent passage of the new federal tax law, or whether they should be reduced. Without action by FERC, utility companies may simply transfer savings from the new tax law to investors instead of reducing rates for customers.
As Herring and his colleagues note in their letter, FERC has experience in adjusting customers’ rates to reflect a reduction in federal income taxes. In 1987, FERC allowed electric utilities to file for rate decreases after the corporate tax rate was reduced from 46 to 34 percent.
“We call on the Commission to use its experience and expertise, with stakeholder input, to determine appropriate procedural mechanisms to discover information about the scope of over-collections at issue, the types of voluntary rate reductions or refunds that can be implemented by the Public Utilities in an expedited manner under existing Commission rules and precedent, and the best way to ensure that customers are not harmed by any delay in making the appropriate changes,” the letter states.
At the state level, Herring and his Division of Consumer Counsel will be advocating for the interests of Virginia customers and for the maximum appropriate refund or rate adjustment during Virginia State Corporation Commission proceedings.
The SCC, the body that regulates utilities in Virginia and sets rates, has notified utilities that they should begin accounting for cost savings and prepare to pass those on to ratepayers. The exact amount for each utility will be determined by the SCC in future proceedings that will include active participation and consumer advocacy by Consumer Counsel.