AG: Utilities must pass tax cuts on to NC consumers
Posted December 9, 2014
Raleigh, N.C. — Attorney General Roy Cooper has appealed a decision by the North Carolina Utilities Commission that resulted in some utilities benefiting from corporate state income tax cuts without passing the savings along to consumers.
“Lower overall taxes paid by utilities should mean more money in consumers’ pockets,” Cooper said in a statement. “Instead, utilities can pocket the tax savings while most families, small businesses and other utility customers see higher taxes on their power bills, and that’s not right.”
The lower income tax rate is part of the tax reform package the General Assembly passed in 2013. The package also raised taxes paid by consumers on their utility bills.
In May, the Utilities Commission determined that it had the authority "to reduce utility rates to reflect income tax rate changes," Cooper said. But the panel reversed itself in October, after Dominion North Carolina Power and Public Service Company of North Carolina challenged that stance. In a 4-3 decision, the commission, without further hearings, decided that it could not lower customers’ rates to reflect lower taxes paid by utilities.
“[U]tility shareholders were allowed to pocket the cost savings associated with the reduced state corporate income taxes while most customer bills increased from the combined effect of the other tax changes," the Attorney General's Office said in its Monday filing with the state Court of Appeals.
Dominion is currently the only utility that says it intends to keep the proceeds from the commission's October ruling.
The appeal alleges that the commission changed its decision without giving proper notice or any opportunity for a hearing, which would be a violation of state law and due process. He also contends that the commission wrongly used the same law and facts cited in its May decision to reach a different conclusion in October without any change in circumstances or public interest that would trigger a need to revisit the initial ruling.
Cooper has successfully fought rate increases by utilities in recent years, arguing that the Utilities Commission didn't factor in the impact of high rates on consumers still struggling after the recession.