Illinois Attorney General Kwame Raoul has asked state utility regulators to shorten the amount of time Ameren Illinois Co. and Commonwealth Edison Co. have to provide their electricity customers with refunds related to the companies' reduced federal tax rates.
In rehearing petitions filed with the Illinois Commerce Commission on Jan. 3, Raoul's office said the utilities should deliver refunds over five years, rather than over 35 years or more as allowed in decisions setting the companies' new electric delivery rates.
The refunds stem from the federal tax overhaul that took effect in 2018 and cut the federal corporate income tax rate from 35% to 21%. Because of the lower rate, Commonwealth Edison, or ComEd, and Ameren Illinois have excess tax money they collected from consumers, the attorney general said.
The commission in December 2019 approved new electric delivery service rates for both companies — a $17 million cut for ComEd (ICC docket 19-0387) and an overall $7.05 million decrease for Ameren Illinois (ICC docket 19-0436). New rates took effect Jan. 1.
Those decisions also allowed ComEd to return $385 million in "excess deferred income taxes" to customers over 38 years and Ameren Illinois to return $158 million to customers over 35 years. According to the attorney general, shortening the time frame for those refunds would result in an additional $62 million rate cut for ComEd customers and $20 million for Ameren customers each year for the next five years. While the cases were before the commission, Raoul's office unsuccessfully argued for the five-year schedule.
"Consumers paid public utility rates to ComEd and Ameren reflecting the higher federal tax rate, and now that the federal tax rate has lowered, fairness dictates that consumers should get that money back," Raoul said in a Jan. 6 statement. "Allowing an unreasonable refund period of close to 40 years nearly guarantees many customers will never get their fair share of the refunds."
ComEd, an Exelon Corp. subsidiary, on Jan. 7 said the approved schedule means customers "will realize the benefits of the lower deferred income taxes over the useful life of the underlying property that gave rise to these tax benefits." The company added that the approved approach also smooths out the impact on energy bills to avoid sudden increases over time.
Ameren Illinois spokesperson Marcelyn Love said the plan is in the best interest of customers.
"We feel our plan is more equitable: It gives customers the long-term benefit of reduced rates, whereas the Attorney General's approach would give customers a five-year benefit but result in a spike in rates in year six," Love said.
Ameren Illinois is a subsidiary of Ameren Corp.