Major West Virginia utility companies are calling for rate increases, despite saving millions of dollars through the Republican federal tax cuts.|
Ralph Smith, a senior regulatory consultant at Michigan-based Larkin & Associates, filed testimony Monday with the state Public Service Commission on behalf of the CAD. The testimony is for the PSCís investigation into how the Tax Cuts and Jobs Act, which lowered the corporate federal income tax rate from 35 percent to 21 percent starting this year, will affect utilities and their customers.
The gas, electric and water utilities are pressing forward to increase their rates following the windfall.
Smith provided overarching and specific recommendations for West Virginia utilities, like Appalachian Power and West Virginia American Water, on how to help ratepayers benefit from the tax savings.
The first phase would be refunding customers or reducing their rates based on the savings from the start of 2018 ó when the tax cuts went into effect.
Appalachian Power, which expects to save $235 million from the tax cuts, has asked the PSC for a rate increase that would raise residential bills by an estimated 11 percent a month.
Appalachian Power is proposing to use the tax savings to offset costs for a tree-trimming and removal program, construction surcharges, an economic development program and more ó leaving $30.1 million in savings to go directly to customers.
Meanwhile, West Virginia American Water said it expects to save customers an estimated $11.4 million a year via the tax cuts. In May, the company requested a rate increase that would hike customer bills by roughly 24 percent a month.
They say the proposed rate increase already factors in the savings, according to the company.
Kanawha County Commission President Kent Carper and Charleston Mayor Danny Jones filed their own testimony in the proceedings, reiterating that customers should see the full benefits of the tax cuts.