Attorney General Mike Hunter has filed five motions with the Oklahoma Corporation Commission (OCC), asking for an immediate reduction in customer rates from the state’s leading utility companies.
The attorney general’s request came the day that a sweeping overhaul of federal income taxes was signed into law, to take effect Jan. 1. The new law lowers the highest corporate income tax rate from 35 percent to 21 percent.
The estimated annual savings for Oklahoma Gas & Electric, Public Service Company of Oklahoma, Oklahoma Natural Gas, CenterPoint Energy and Arkansas Oklahoma Gas is approximately $100 million, not including additional savings from other affected utility accounts.
Hunter said he is requesting customer rates be reduced by an amount reflecting lower federal corporate income tax rates.
“These companies will begin seeing major savings after the tax cut is implemented on Monday,” Attorney General Hunter said. “Oklahomans who are customers of these companies should immediately retain the benefits of the savings from the tax cut in the form of lower rates. We urge the OCC to act quickly and in the best interests of customers, not company shareholders.”
Also in the motions, the attorney general is requesting the OCC protect customers’ ability to receive excess accumulated deferred income tax, which is used to reflect utility companies’ past use of tax breaks to defer tax bills. With lower tax rates enacted, a portion of accumulated deferred income tax would be unnecessary to cover future taxes–creating an “excess” portion.
Without OCC action, utility companies could retain the entire benefit of excess accumulated deferred income tax, so the attorney general is requesting that the OCC create a temporary protection.
The actual treatment of the excess could then be addressed at the time of the final order, where the attorney general would request a refund to ratepayers.
“There is no reason to delay creating a regulatory liability for excess accumulated deferred income tax,” Hunter wrote in the motions. “Without doing so, customers may permanently lose the benefits of any portion of excess accumulated deferred income tax drawn down during the pendency of this cause.”