Have 101 utilities cut their rates thanks to the GOP tax bill?

The statement

"101 utilities cut rates, credit GOP tax cuts."

President Donald Trump, June 7 in a tweet

The ruling

For months, President Donald Trump has been touting the benefits of the tax law he signed in December. But in June, he began expanding his argument beyond lower tax bills to lower energy bills.

His tweet linked to a Washington Examiner article that in turn cited research by Americans for Tax Reform, a group supportive of the tax cut.

The energy rate-cut list attracted the White House's attention not long after it hit its 100th item.

For the utilities on the group's list that provided an estimate of savings per customer, most said rate-payers would save about $1 to $4 on their bill per month.

Americans for Tax Reform cited a large number of company news releases and news articles, so we don't quarrel with the number (which had already grown to 102 a day later).

That said, we will provide some additional information.

It shouldn't be surprising to see a lot of investor-owned utilities lowering rates after the corporate tax reduction. And it also shouldn't be surprising that the companies specifically cited the tax changes as the reason for the rate cut. In most cases, experts said, utilities would have been required to do so by their regulators.

The tax law has an impact on privately owned utilities -- often called "investor-owned utilities," or IOUs for short -- but not on public utilities.

Investor-owned utilities pay corporate taxes, so the tax law's lowering of the top corporate rate from 35 percent to 21 percent should save this type of utility a substantial amount of money.

By contrast, publicly held utilities do not pay corporate taxes, so they are unaffected by this provision of the tax bill. Public utilities include rural electric cooperatives, municipally owned utilities, and federal or state power authorities.

Among electricity utilities, about two-thirds of Americans are served by investor-owned utilities, while about a third receive their power from public utilities. For water utilities, a few of which appear on the group's list, public utilities are dominant.

So while 101 utilities cutting their rates may seem like a large number, your ability to benefit from a rate cut depends on which utilities happen to serve your area.

It's also worth pointing out that many of these rate cuts were preordained by existing energy regulations.

"Utilities are natural monopolies, and because of that, they've been regulated for well over 100 years," said Manny Teodoro, a political scientist at Texas A&M University who has studied energy issues. "It's a recognition that a pure monopoly will result in a lack of competition and abusive pricing."

For that reason, under long-standing regulations, utilities need to go back to energy regulatory bodies whenever they seek to modify their rates, in order to provide reasons for the change. And if a utility happens to benefit from a tax change, there's a good chance it will be required under existing regulations to lower their rates to account for that.

"Rates are set by public utility commissions through ratemaking processes that would clearly identify the reasons for the rate change, up or down," said Billy Pizer, a Duke University public policy professor who studies energy.

This doesn't undercut the larger point of the tally, but it does suggest that the rate cuts required two elements to materialize -- the tax cut, which Trump touted, and the long-standing regulations that require companies to share the tax gains with ratepayers rather than just with shareholders. And the latter is an aspect Trump didn't get into.

We rate the statement Mostly True.