WV customers shouldn’t miss out on utility savings

July 2, 2018 GMT

Republicans and Republican-leaning groups have been busy touting what they call the benefits of the Tax Cuts and Jobs Act since it was passed last year. One factor they cite is that many consumers have seen or will soon see lower monthly bills for their utilities — such as for power, natural gas and water — because those companies will be paying sharply lower income taxes.

Indeed, in most states that has been the case. U.S. House Speaker Paul Ryan, R-Wis., recently noted on his website that at least some utilities in 48 states and the District of Columbia have agreed to reduce rates and lower their customers’ monthly bills. And the website of Americans for Tax Reform, a politically conservative U.S. taxpayer advocacy group, has a long list of utilities across the country that have agreed to reduce rates and charge their customers less each month.

But is hasn’t happened yet in West Virginia. In fact, hundreds of thousands of customers are looking at the prospect of paying higher monthly electricity and water bills because some major utilities — Appalachian Power, Wheeling Power and West Virginia American Water — are seeking rate increases. And their proposals supposedly have factored in the tax savings they will reap from tax reform. No wonder many West Virginians are crying foul.

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After the tax reform act was passed, West Virginia’s Public Service Commission directed all privately owned utility companies to file by May 30 an explanation of the impact of the federal tax cuts and a plan on how the utilities’ savings should be shared with customers.

Even before that deadline arrived, requests for rates increases were already made. American Electric Power subsidiaries in West Virginia, Appalachian Power Co. and Wheeling Power, proposed a rate increase that would boost residential customers’ bills by 11 percent, or nearly $15 each month. West Virginia American Water filed a rate request seeking to charge its residential customers an average of $10.22 more a month.

According to the AEP filing, Appalachian Power and Wheeling Power project savings from federal tax reform of $235 million in West Virginia. However, instead of returning any of that money directly to customers through lower monthly bills, the company proposes to apply it to a variety of other expenses. For example, the company wants to use part of the savings for unrecovered fuel and vegetation management costs, even though it has been granted increases in the past to accommodate vegetation management. Some other savings would go toward an economic development program, while $51 million would be applied to fuel costs in the future.

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Beyond those savings, however, the two AEP subsidiaries are asking to charge customers a total of $115 million more. In essence, the company wants to extract a combined $350 million more from its customers, based on the savings it is realizing and NOT returning to customers and the additional amount it is requesting. Please note, that total is nearly three times the amount the company was allowed in 2016 during its last AEP rate case.

Let’s hope the Public Service Commission won’t be fooled by what could be viewed as an attempt at misdirection by the utilities. It should separate any proposed rate hikes from the companies’ plans to pass savings along to customers and base its decisions on the merits of each.

The public still has an opportunity to weigh in on the utilities’ proposals to return savings to their customers. The utilities’ filings are available on the PSC’s website docket at http://www.psc.state. wv.us/WebDocket/default.htm. People have until Monday, July 2, to make comments. We urge them to do so.