OKLAHOMA CITY – The Oklahoma Corporation Commission has voted in favor of an alternative proposal, requiring utility companies to track savings received from the federal income tax cut.
The initial proposal requesting immediate rate cuts was denied by a vote of 2-1. Commissioner Bob Anthony was the only vote in support of the immediate cuts through five motions filed in late December by Attorney General Mike Hunter.
“I’m very disappointed that I didn’t get a second vote. I think the attorney general, the AARP, the consumer groups are correct. We need an immediate rate reduction. We don’t need to let companies keep a windfall cash gain at the expense of consumers,” Anthony said. “The alternative seems to be to give a promise, an IOU, that maybe sometime in the future, that you would have some accrued benefit and we’ll pay that later. That’s pie in the sky.”
On December 22, Hunter filed the motions regarding five of Oklahoma’s leading utility companies: Oklahoma Gas & Electric, Public Service Company of Oklahoma, Oklahoma Natural Gas, CenterPoint Energy, and Arkansas Oklahoma Gas. This came after an overhaul on federal income taxes was signed into law, lowering the highest corporate income tax rate from 35 percent to 21 percent.
According to Hunter, the five companies would save $100 million annually under the new law. He argued consumer rates should be reduced to amounts that reflect that.
The commissioners returned for a second vote Tuesday afternoon to consider revisions. They agreed money should be refunded, but the process determining how much will differ between companies. It must be started within four months.
“We appreciate the commission acting quickly on our motions,” Hunter said in a statement . “While we would have preferred customers see immediate savings, putting the money aside and distributing it at a later date will give Oklahomans future relief. We hope the OCC will press forward without delay in completing its review of the amount to be refunded to customers, and in lowering customers’ rates going forward. The Utility Regulation Unit in the Attorney General’s Office remains committed to working with both the OCC and the utility companies to ensure Oklahomans will see the full benefit of the companies’ tax relief.”
The order also instructed companies to create an account for the savings received and refund those savings to customers at a later date.
“At that point, the commission would then review it. We would have an opportunity to review the estimate provided, and the commission would control the pace at which customers would eventually receive those savings,” said deputy AG Dara Derryberry.
Brandy Wreath, director of the Public Utility Division for the Oklahoma Corporation Commission, told the commissioners Tuesday he recommended an approach that would give consumers immediate protection; however, there was one primary concern.
“If we force refunds based on dated information which would happen in most of these incidences, there could be the unintended consequences of not just under-earning from profits’ standpoint but a disruption in cashflow that could have unintended consequences on public safety,” Wreath said. “Our duty in PUD is the balance of interests for rate payers but also ensuring safe and reliable service.”
Utility companies have three days to file a motion for the commission to reconsider; however, they must begin tracking customer savings immediately.