ST. PAUL, MN—In an effort to lower electric and natural gas rates for customers throughout Minnesota, State Representative Nolan West, R-Blaine, is sponsoring legislation that would lead to refunds and smaller monthly bills by making savings for investor-owned utilities resulting from the recent federal tax bill retroactive to January 1, 2018. The bill will be co-authored by Rep. Pat Garofalo, R-Farmington, Chair of the House Job Growth and Energy Affordability Committee.
According to documents filed with the Public Utilities Commission (PUC), Minnesota ratepayers could see more than $200 million in savings annually.
“As part of the federal tax reform bill, Minnesotans will see lower energy rates and we have an opportunity to put even more money back in the pockets of millions of Minnesota families and businesses,” West said. “If we do nothing, a huge windfall will almost certainly stay in the pockets of the energy companies. But if my legislation is approved, qualifying Minnesota’s ratepayers will see every penny of the more than $200 million in expected savings.”
With the Federal corporate income tax rate falling from 35 percent to 21 percent, West said utility rates will need to be reduced to reflect utilities’ lowered liabilities. Investor-owned electric utilities and natural gas companies regulated by the state’s Public Utilities Commission (PUC) build into consumer prices the full amount of federal corporate income taxes.
"In addition to the bonuses and pay raises Minnesotans are already seeing as a result of the federal tax bill, it's great that thousands of Minnesota ratepayers will pay less for their energy bill each month," added Chair Garofalo.
West said that under current regulatory practice, new rate prices can likely only be implemented going forward, which is why his bill would allow the PUC to refund rates retroactive to January 1, 2018 when the federal tax law was implemented.
“We want to put as much of this money as possible back in the hands of Minnesotans,” West said.
Actual reduction amounts will vary depending on each ratepayer’s usage, but West said schools, businesses and other large energy users will see the most significant savings.
Only those utilities that are investor-owned and regulated by the PUC would be affected, including Xcel Energy, Minnesota Power, Otter Tail Power, CenterPoint Energy, Great Plains Natural Gas and Minnesota Energy Resources. Rural electric coops and city-owned utilities would not be impacted.
The PUC met Tuesday morning to discuss the impact of the federal tax bill on utility rates. Additional action by the PUC could come later this month.
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