Editorial: Utility companies' tax cut must yield rate break for N.C. consumers
Posted January 16, 2018 5:00 a.m. EST
Updated January 16, 2018 5:40 a.m. EST
CBC Editorial: Tuesday, Jan. 16, 2018; Editorial # 8259
The following is the opinion of Capitol Broadcasting Company
There’s a windfall in Republican’s federal tax cuts for corporate America that may actually help everyday North Carolinians – not that it was intended that way.
More so, it will take vigilance and determination on the part of the state’s regulators and consumer advocates to make sure North Carolina utility consumers don’t get short-changed.
You see utility companies like Duke Energy have a monopoly on providing electricity to most North Carolinians -- directly to homeowners and businesses or, indirectly by selling power to cooperatives and municipally-owned services.
State regulators, in North Carolina it’s the state Utilities Commission, allow these companies to charge rates that cover their costs and provide a return for investors. Those costs include production and distribution of the power, maintenance of equipment and transmission facilities, and the cost of paying taxes.
When the federal tax rate is slashed from 35 percent to 21 percent, the impact is huge.
How big? Well one utility company, Baltimore Gas and Electric, has already figured it is worth $82 million a year back to its 1.25 million electric and 650,000 natural gas customers in central Maryland. While there’s no estimate on how much might go to North Carolina consumers, Duke Energy has 3.3 million retail electric and 717,000 natural gas customers.
Because companies like Duke can pass the cost of federal taxes onto consumers it is only right that when those taxes consumers have been paying get cut, consumers should get the full benefit.
North Carolina Attorney General Josh Stein has joined a coalition of state attorneys general demanding the Federal Energy Regulatory Commission take immediate action to make sure the tax savings are rightly passed to ratepayers.
“Everybody is straining under the bills they are paying. Wages and salaries have been pretty static over the recent years,” Stein said during an interview last week. “It is essential we do everything in our power to make sure people don’t pay a dollar more than they are legally obligated to. That’s why I’m engaging both the federal and state regulators on the issue.”
In North Carolina, the big tax cuts for utilities will come up in key Duke Energy rate hike requests before the Utilities Commission. On Jan. 3, Commission Chairman Edward Finley issued an order to explore the impact of the tax cuts. Also, he said the portion of rates tied to federal corporate income taxes would be provisional, pending that detailed review.
Finley asked the utilities, and other interested parties including the commission's public staff, independent consumer advocates and Stein’s office, to file information and comments by Feb. 1.
Corporations have been taking advantage of a raging stock market, record profits and unheard of amounts of cash in their coffers. It is past time to extend this economic expansion to the other 99 percent of the nation.
“The benefit of those tax cuts should go to the consumers,” Stein said. “Otherwise it’s a windfall for the corporations that they don’t need or deserve. You can’t get reimbursed for a cost you don’t incur.”
Gov. Roy Cooper and the leadership in the General Assembly, if they truly believe in relief for ALL North Carolina taxpayers, should join Attorney General Stein’s efforts to be sure it is the CONSUMERS who should get, and deserve, this tax cut benefit. The Utilities Commission should deliver it, in full.
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