Stop Overpaying For Your Energy

Just a few moments of your time, and TruEnergy will match you with the best electricity and gas plans at the best available rate.

Get A Quote For Your Business

Need a Residential Quote Instead?

Lower electricity bills for North Texans when Oncor shares tax-cut windfall with consumers

By: Jeff Mosier |

The company delivering electricity to most North Texans would likely save millions from the new corporate tax rate cut. But that entire windfall is expected to go back to consumers.

That’s the result of a recently completed rate case where the state’s largest regulated utility agreed to return all tax cut benefits to its customers.

The $1.5-trillion tax overhaul hadn’t been completed when Oncor’s rate negotiation with the regulator was settled. And the Public Utility Commission of Texas, the agency that regulates the operations of electricity-distribution companies like Oncor, made sure to cover the possibility of a tax cut.

“Oncor will work with the PUCT to determine the best way to distribute those savings back to customers,” said spokesman Geoff Bailey via email. “In short, we are capturing these tax savings for future refunds to our customers.

Oncor serves about 3.4 million homes and businesses, mostly in North Texas and West Texas. So residents in the coverage area would get a refund but when, and how much, are not certain.

In a 2017 rate review by the PUC, Oncor was projected to have a federal income tax bill of more than $245 million. The recent federal tax law overhaul slashed the corporate tax rate from 35 percent to 21 percent.

“How that math works out for residential rates, that’s up in the air,” said Michael Hoke, the PUC’s legislative director.

Oncor must submit documents with the state agency showing how much money would go back to customers. There is no deadline for that submission, but Hoke said Oncor doesn’t have unlimited time.

Similar provisions were used for El Paso Electric and Southwestern Electric Power Company or SWEPCO, both of which also had recent rate cases.

For other regulated utilities, the fates of their tax breaks aren’t clear.

“We’re trying to figure out how to reflect those decreased taxes in their rates as well,” Hoke said.

At a PUC meeting last week, chairwoman DeAnn T. Walker asked the agency’s legal staff to present commissioners with a list of options.

There are likely to be similar discussions at the Texas Railroad Commission, which has jurisdiction over residential natural gas providers such as Atmos.

“Customer rate changes must first be approved by the regulatory commissions in the jurisdictions we serve. We are engaged with regulators to determine how the effects of the new tax law will be reflected in our rates,” said Atmos spokeswoman Liz Beauchamp via email. “However, at this stage, it is too early to predict the exact amount and timing of those changes to our rates.”

The Texas Railroad Commission is scheduled to discuss this issue at a meeting Tuesday and possibly direct staff to analyze the tax impacts and “develop recommendations” to ensure “all gas utility customers in Texas receive the full benefit of the Act.”

At the PUC, any action would apply only to companies that own and operate electric transmission and distribution lines. Those companies have monopolies, and their rates are regulated by the state.

Retail electric providers — companies that sell electricity to homes and businesses — wouldn’t be affected by PUC decisions. Companies operating in Texas’ competitive electricity market could do whatever they wanted with the tax windfall.