Judges recommend rebates for utility corporate tax savings
OKLAHOMA CITY (AP) — Administrative law judges recommended Jan. 4 that five Oklahoma utilities use any savings they receive from new federal corporate tax rates to issue rebates totaling as much as $100 million to their customers, a deputy state attorney general said.
The rulings were handed down following legal arguments before administrative law judges appointed by the Oklahoma Corporation Commission to hear Attorney General Mike Hunter’s request that consumer rates be reduced to reflect lower tax rates that went into effect on Jan. 1.
The new law lowers the highest corporate income tax rate from 35 percent to 21 percent, and Hunter’s office has estimated that customer savings could be $100 million a year not including any savings from the utilities’ excess accumulated deferred income tax accounts, Deputy Attorney General Dara Derryberry said. The accounts are used to reflect utility companies’ past use of tax breaks to defer tax bills.
The five utilities affected by the recommendations are Oklahoma Gas & Electric, Public Service Company of Oklahoma, Oklahoma Natural Gas, CenterPoint Energy and Arkansas Oklahoma Gas.
The judges recommended that the three-member commission, which regulates public utilities in the state, grant Hunter’s request that each of the five utilities make any income tax savings they receive from the new law subject to ratepayer rebates, Derryberry said.
The judges instructed the commission’s staff to prepare proposed orders by Jan. 5 and the commission could consider whether to grant the rebate orders as early as Jan. 8, she said.
“The attorney general is urging swift action by the commission,” Derryberry said.
Utility officials have said they were already working with the commission on possible rate changes and shared Hunter’s goal to keep rates affordable. OG&E spokesman Brian Alford has said the utility is still trying to determine the impact of the tax bill and will conduct its own rate review regardless of what the commission decides.
Hunter’s office has estimated that OG&E’s corporate tax savings from the new law will be $51.7 million a year, more than the other four utilities combined.
Hunter’s office asked the commission to pass the savings onto consumers last month after President Donald Trump signed the sweeping overhaul of federal tax law.
“These companies will begin seeing major savings after the tax cut is implemented,” Hunter said at the time. “Oklahomans who are customers of these companies should immediately retain the benefits.”