Will Idaho Utilities Share Fed Tax Break?

It will be interesting to see if the electric, water, telephone, and gas companies in Idaho plan to share the trump income tax break which has been reduced by 14% for corporations. (see COMMENT below for detailed explanation of math that is actually a 40% tax cut)

The Idaho Public Utilities Commission which regulates those providers wants to know if we get a break since taxes are a component of rates. Here is the PUC press release:

The Idaho Public Utilities Commission has opened an investigation to determine whether regulated utilities’ rates and charges should be adjusted to reflect the impact of the federal tax law passed in late 2017.

The Tax Cuts and Jobs Act of 2017 reduced the federal corporate tax rate from 35 percent to 21 percent, a significant reduction that will reduce the tax bill for many utilities.

Since tax expenses are a factor in determining rates and charges, the Commission wants to protect Idahoans from paying rates calculated on an inflated tax rate.

The first step in the investigation is to require regulated utilities to report the financial benefits gained from the tax rate reduction by March 30. Each report must include proposed tariff schedules to account for the changes in federal tax law.

Once a report is filed, Commission staff will audit the utility and report the results to the Commission within 60 days.

If Commission staff disagrees with a utility’s proposed tariffs of rates and charges, and recommends changes, the Commission would issue an order directing the utility to demonstrate why the recommendations should not be heeded.

The Commission’s order applies to all regulated utilities in Idaho except water companies with fewer than 200 customers and the small electric utility Atlanta Power.

The Commission adopted a similar approach decades ago to determine the effects of the federal Tax Reform Act of 1986.

Comments & Discussion

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  1. It’s all in the accounting.

  2. chicago sam
    Jan 18, 2018, 2:45 pm

    With revenues of over 1 Billion from electricity sales and total income taxes last year of 34 million (state and federal) as shown on their statements a reduction to the individual account is going to be almost invisible altho every little bit helps. getting rid of the subsidy’s for alternative energy contracts would have far more effect.
    This is for Idacorp. only.

  3. LOL, Share with who? Internally, at high levels, you bet.

    No doubt they will send us a colorful bullshit letter with the next bill explaining how they used the tax windfall to hire an additional bullshit letter writer.

  4. A reduction from 35% to 21%. Sure the math says 14, but the tax will be “reduced by 40%”.

    As in, 21 is 40% less than 35.

    If your income was $35,000 and dropped to $21,000 you would say, “My income dropped 40%”.

    Corporations got a 40% reduction in the deal not 14%.

    Idaho Power company pays over half their profits into dividends, that yield has been increasing in recent years. That still leaves A LOT of cash- WAY more than their tax bill. If Directors (or IPUC) wanted to keep rates lower while maintaining financial stability for the utilities, they could have easily done that for past years.

    No reduction in rates, no credits for accounts, but NO increases in the near future either.

    Flat. Unless you are an over-paid employee of the utilities or own their stock. Stock price goes up and the dividend payout increases to keep pace.

    For Idaho Power, that tax savings ought to be somewhere between 12 – 18 million. Easy to absorb that amount into exec bonuses, deferred comp plans, and morsels for the employees- “we have to be competitive to attract top employees.”

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