Duke Energy says it will pass along to customers some of the savings from new federal tax cuts that took effect Jan. 1. In filings with utilities regulators in the Carolinas, Florida and Kentucky, the company says federal tax windfalls will go to reducing bills and offsetting future rate increases.
The new federal law reduces corporate tax rates from 35 percent to 21 percent while also eliminating some deductions. Duke estimates the new tax law will save it $276 million annually in taxes in North Carolina.
In its North Carolina filing Thursday, Duke says "customers will receive the benefits of tax reform," though it doesn't say how much. The company also says it plans to incorporate the savings into its pending rate hike requests in the state.
The North Carolina Utilities Commission has ordered utilities to detail the amount of tax savings they expect, and say how they plan to use it. Attorney General Josh Stein also has said the customers should benefit from the tax savings, not utilities.
On Thursday, Stein applauded Duke's announcement. “The rates we pay utilities have been set assuming higher taxes. It would be wrong for us to pay the utilities for an expense they are not incurring," he said.
Duke Energy's North Carolina president, David Fountain, said in a statement Thursday: "This is a unique opportunity that allows us to reduce customer bills in the short term while also helping to offset future rate increases."
But hinting that consumers might not see all of the savings, Fountain added: "With a balanced approach, our customers can benefit from a reduction in the corporate income tax rate, while we continue to make smart investments on behalf of our customers."
Besides applying an unspecified amount of the tax cut to reduce its current North Carolina rate increase requests, Duke said in the statement that it would:
- Avoid billing customers for storm-related and environmental compliance costs.
- Accelerate the depreciation of assets, such as smart meters or coal plants, which would reduce future requests to include these investments in customer rates.
See the full Duke filing at the NCUC.net website, NCUC.net