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Pa. regulators adjust rates due to tax reform impacts

The Pennsylvania Public Utility Commission on May 17 issued an order for electric, natural gas and water utilities to pass along to customers more than $320 million in benefits through temporary rates as a result of the federal tax overhaul.

Electric distribution utilities will see a total net decrease in their annual revenue requirement of $210.8 million, large gas utilities will see a decrease of $66.2 million annually, and water utilities will see a decrease of $48.8 million annually, according to the order.

Electric utilities required to begin returning federal tax savings to customers include Citizens' Electric Co. of Lewisburg; Pike County Light & Power Co.; PPL Corp. subsidiary PPL Electric Utilities Corp.; Wellsboro Electric Company Inc.; and FirstEnergy Corp. subsidiaries West Penn Power Co., Pennsylvania Electric Co., Pennsylvania Power Co. and Metropolitan Edison Co.

Gas utilities in this category are Exelon Corp. subsidiary PECO Energy Co.'s gas division; National Fuel Gas Distribution Corp.; Peoples Gas Co. LLC; Peoples Natural Gas Co.; and UGI Corp. subsidiaries UGI Central Penn Gas Inc., UGI Penn Natural Gas Inc. and UGI Utilities Inc.

Utilities with pending rate cases this year will not be required to set temporary rate adjustment but will address the issue in rate proceedings. Utilities in this category include UGI Utilities' electric division; NiSource Inc. subsidiary Columbia Gas of Pennsylvania Inc.; Duquesne Light Holdings Inc. subsidiary Duquesne Light Co.; PECO Energy's electric division; The York Water Co.; Suez Water Pennsylvania Inc.; and Aqua America Inc. subsidiary Aqua Pennsylvania Inc.

The commission ordered Columbia Water Co. to file a tariff or tariff supplement within 10 days of the order because it has made no claim for federal taxes in its rates and saw no financial impact or increased federal tax liability as a result of the tax changes.

In February, the commission sought comments from utilities on how best to assess the impacts of federal tax reform on distribution rates. (Docket No. M-2018-2641242) Though most utilities asked for a change in the base rate case filed in 2018 or in the future, the commission opted to return tax benefits to customers.