PUCO approves Duke Energy Ohio tax cut electric rate reductions
Duke Energy Ohio reduces rates by approx. $260 million
COLUMBUS, OHIO (Feb. 20, 2019) – The Public Utilities Commission of Ohio (PUCO) today authorized Duke Energy Ohio to establish a credit on electric customer bills to reflect the Tax Cuts and Jobs Act (TCJA) of 2017 into its rates.
“The Commission is pleased to approve the reduction in bills for Duke’s electric customers,” stated PUCO Chairman Asim Z. Haque. “The Commission has been pursuing rate reductions from the day the TCJA went into effect, and today’s action settles the issue for three out of four of Ohio’s regulated-electric utilities, while the fourth is in the settlement process.”
Duke will credit customers the amount it has over collected, plus interest, since Jan. 1, 2018 under the high tax rate. The $8.1 million credit will be passed back to all electric customers over a 12-month period.
Duke will return to customers annually approximately $4.7 million, which reflects the remaining tax savings not currently accounted for in rates, on a going-forward basis, until the Commission approves updated rates through a distribution rate case. Duke is expected to file an application with the PUCO for its next distribution rate case in 2024.
Duke will return to customers normalized accumulated deferred income tax (ADIT), estimated by the utility to be approximately $149.4 million, over a federally prescribed time period of approximately 25 years.
Duke will credit customers non-normalized excess deferred income tax (EDIT), estimated by the utility to be approximately $74.9 million, over approximately a 10-year period.
A residential customer using 1,000 kilowatt hours (kWh) per month would see a reduction of approximately $2.13 in their monthly bill.
On Jan. 10, 2018, the Commission ordered an investigation to study the impacts of the TCJA on PUCO-regulated utilities and how best to pass on the benefits to customers, and directed utilities to set aside money in excess of the reduced tax rate to later be returned to customers.
The TCJA was signed into law on Dec. 22, 2017, which among other things, reduced the federal corporate income tax rate from 35 to 21 percent, effective Jan. 1, 2018.
On April 25, 2018, the Commission denied legal arguments jointly filed by Ohio’s electric distribution utilities challenging the PUCO’s January order directing utilities to set aside money in excess of the reduced corporate tax rate during the pendency of the Commission’s investigation.
On July 25, 2018, Duke filed an application to adopt a new tariff to pass to customers the savings due to the TCJA.
On Dec. 17, 2018, PUCO staff filed its review and recommendations.
A copy of today’s finding and order can be found on the PUCO website by clicking the link for Docketing Information System (DIS) and searching for case 18-1186-EL-ATA.
The Public Utilities Commission of Ohio (PUCO) is the sole agency charged with regulating public utility service. The role of the PUCO is to assure all residential, business and industrial consumers have access to adequate, safe and reliable utility services at fair prices while facilitating an environment that provides competitive choices. Consumers with utility-related questions or concerns can call the PUCO Call Center at (800) 686-PUCO (7826) and speak with a representative.
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