AG: Tax changes should flow to NC utility customers
Posted December 18, 2013
Raleigh, N.C. — Changes to state taxes that affect utilities should result in lower power rates for consumers, Attorney General Roy Cooper told the North Carolina Utilities Commission in a filing this week.
Increases in certain taxes paid by utilities should be more than offset by reductions in other taxes, and the savings should be passed along to utility customers, Cooper argued in comments filed by the Attorney General’s Office late Monday.
“Overall, lower taxes paid by utilities ought to mean lower bills for their customers,” Cooper said in a statement. “We’re asking the Utilities Commission to make sure that’s the case.”
Changes that take effect Jan. 1 will reduce the state income tax rate, repeal the gross receipt taxes paid by utilities, increase the effective tax rate paid on sales of electricity from 3 percent to 7 percent and require utilities to pay corporate franchise taxes.
State law directs the Utilities Commission to adjust rates to reflect some, but not all, of the tax changes. Cooper said he wants the commission to use its authority to make sure all tax changes are applied in a way that results in lower rates for consumers.
“It would seem inequitable, for example, to increase customer rates for the corporate franchise tax that will apply to certain utilities, given that this increase will be offset by the reduction in the income tax paid by those utilities,” Cooper said in the filing.
The commission should use “any tax reductions as benefits to consumers in the form of rate decreases so that utility rates for consumers are set as low as possible,” he argued.
Cooper already is fighting rate increases the commission has approved for Duke Energy and the former Progress Energy.