By: Alexander Soule |
Avangrid stated it will pass to its electricity and gas customers the full benefit of savings it will realize from the federal Tax Cuts and Jobs Act, with the Orange-based company’s service area covering portions of the New Haven and Bridgeport areas.
Avangrid issued a statement Wednesday night confirming the policy as “a matter of fairness,” more than a week after the Connecticut Public Utilities Regulatory Authority stated it would review Avangrid’s rates and those of other Connecticut electricity and gas utilities, with federal taxes a factor in the rates approved by PURA.
Avangrid subsidiaries include United Illuminating, Southern Connecticut Gas and Connecticut Natural Gas, as well as Central Maine Power and Maine Natural Gas; Berkshire Gas in Massachusetts; and New York State Electric & Gas and Rochester Gas & Electric.
On Tuesday, Connecticut Attorney General George Jepsen and counterparts from New York and 10 other states wrote the Federal Energy Regulatory Commission to request similar action on entities subject to FERC jurisdiction to prevent utilities from reaping a windfall in the reduction of their federal corporate income tax rates.
“Changing the appropriate formulas now, rather than waiting to true-up later … would ensure that customers promptly receive the full economic benefit of the tax reduction,” the state attorneys general wrote in the FERC letter. “In addition, we request that (FERC) investigate the justness and reasonableness of amounts currently held in reserve for future tax liabilities.”
Under the new tax law, U.S. companies will pay a 21 percent rate on their corporate income taxes, down from 35 percent. In December, PURA approved electricity rates for United Illuminating amounting to $375 million in 2018. The new federal tax rate would reduce that total by between $10 million and $11 million, according to Rich Sobolewski, supervisor of utility financial analysis for the office of Connecticut Consumer Counsel Elin Swanson, wiping out nearly the entirety of an $11.5 million distribution increase PURA had approved for this year.
Sobolewski calculated at between $6 million and $7 million this year’s tax benefit for customers of Southern Connecticut Gas.