The newly passed tax law could save Americans billions of dollars on their utility bills.
In recent days, electric companies in Massachusetts, Illinois, Oregon and other states have announced plans to pass their tax cuts on to customers through lower rates. On Tuesday, Pepco, which provides power to nearly 300,000 customers in Washington, D.C., said it would cut rates beginning in the current quarter.
Other utilities might be forced to follow suit. In much of the country, investor-owned utilities have a monopoly on providing electricity and gas to homes and businesses. State regulators allow them to charge rates high enough to recoup their costs — including the cost of paying taxes — and to provide a guaranteed return to their shareholders. Those regulators periodically scrutinize rates to ensure that they are reasonable. When taxes go down, so should customers’ utility bills.
State regulators across the country have said they will make sure that actually happens. And in a letter to the Federal Energy Regulatory Commission on Tuesday, the attorneys general of several states, including Massachusetts, Texas and New York, asked the agency to act as well.
