Power Companies Got a Tax Cut. Will Your Bill Reflect It?

By District Energy posted 8 days ago

  

A Pepco crew repairing power lines in Washington. The company said it will cut customers’ rates because of its savings from the new tax law. CreditMandel Ngan/Agence France-Presse — Getty Images

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.


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