SAN FRANCISCO (KPIX 5) — State regulators are calling on utility companies to pay it forward by passing on their savings from the tax law overhaul to customers, but Pacific Gas and Electric is pushing back.
The tax law President Trump signed last month cut the top corporate tax rate from 35 percent to 21 percent. That means a company like PG&E is estimated to save $500 million a year.
State Senator Jerry Hill, a longtime critic of PG&E and the state Public Utilities Commission, wants to make sure that money ends up back in customers’ hands.
Hill wrote the commission a letter stating the untold savings should be refunded to PG&E customers.
“It’s not going to be a windfall profit for ratepayers,” said Hill.”But whatever it is, it’s, frankly, better in our pockets than in theirs.”
The PUC quickly backed Sen. Hill’s proposal. It directed all electric and gas utility companies in California to track the savings in order to figure out the appropriate refund, and take action to refund customers sooner rather than later.
But PG&E says not so fast. It says it needs to recover costs associated with past winter storms and ongoing tree mortality issues saying in a statement “these costs are on a similar order of magnitude as the benefits of tax reform over the next couple of years.”
PG&E added it will work closely with commission staff to “stabilize rates and bills by using expected cost reductions like these to offset expected cost increases.”
But according to Hill, PG&E already has money allocated to pay for those kind of projects. Hill claims the savings from the tax cut equals pure profit, and it doesn’t belong to PG&E.
“This is a regulated monopoly. They are guaranteed a rate of return,” said Hill. “In PG&E’s case, it’s about ten-and-a-half percent, which is an extremely good return on your investment, and they shouldn’t get more than that.”
Realistically the soonest customers would see any refund is likely sometime next year. It will most likely come as a credit on customer’s bills, and the amount is yet to be determined.