FERC adopts rule requiring utilities' rates to reflect tax cuts

摘要

In another of a series of actions designed to ensure that the 2017 federal tax cuts are reflected in rates, the Federal Energy Regulatory Commission on Thursday issued a final rule requiring jurisdictional utilities with formula rates to revise those rates. The rates charged by some electric utilities, interstate natural gas pipelines and oil pipelines are set based on those entities' cost of service, which includes an income tax allowance. Thus, when the tax expenses decrease, so does the cost of service. Congress reduced the federal corporate income tax rate from 35% to 21% in late December 2017 — the first time that rate had been cut in more than 30 years. Responding to requests for FERC to detail how electric utilities should go about adjusting rates to pass on the benefits of tax reform to consumers, FERC in March 2018 issued a series of orders, some targeted at electric transmission companies and others at natural gas and oil pipelines.