COLUMBUS, OHIO (Nov. 28, 2018) – The Public Utilities Commission of Ohio (PUCO) today adopted a settlement agreement that adjusts Columbia Gas of Ohio’s rates to reflect the lower corporate tax rates enacted by the Tax Cuts and Jobs Act of 2017 (TCJA), and resolves the utility’s capital expenditure program case. A total expected tax benefit to Columbia customers is approximately $300 million.
“The Commission is pleased to approve a balanced agreement that credits Columbia’s customers with the effects of the TCJA,” stated PUCO Chairman Asim Z. Haque. “Rate impacts from important gas system work will be minimized thanks to the Commission’s strong stance on utility tax reform.”
Columbia will credit customers the amount it has over collected, plus interest, since Jan. 1, 2018 under the higher tax rate. The $22.5 million credit will be passed back to all customers over a 12-month period. Residential customers will see a $1.06 monthly credit on their bill.
Columbia will also reduce its base distribution rates by $121 million to reflect the reduction in corporate income tax rates. For residential customers, this results in a $1.06 monthly reduction in base distribution rates. The utility will also file a distribution rate case with the PUCO by July 2021.
Columbia will begin collecting deferred expenses related to its statutorily authorized capital expenditure program (CEP) through the CEP rider, totaling $74 million. The CEP rider will include annual rate caps to mitigate bill impacts related to ongoing capital expenditures. For residential customers, Columbia’s CEP rider will initially be set at $3.51 per month.
An ongoing proceeding regarding its infrastructure replacement program is expected to bring the total tax reductions to over $300 million, resulting in greater monthly savings for Columbia’s customers.
On Dec. 1, 2017, Columbia filed an alternative rate plan to recover its deferred costs related to capital expenditures the utility has made since 2011 and are not yet reflected in rates. The Commission previously authorized Columbia to defer collection of certain expenditures and to implement a CEP.
On Jan. 10, 2018, the Commission ordered an investigation to study the impacts of the TCJA on PUCO-regulated utilities and how best to pass on the benefits to customers, and directed utilities to set aside money in excess of the reduced tax rate to later be returned to customers.
On Sept. 14, 2018, the PUCO staff filed its report of investigation related to Columbia’s application.
On Oct. 25, 2018, a settlement agreement in Columbia’s CEP case, which includes adjustments to Columbia’s rates to reflect the TCJA, was signed by Columbia Gas of Ohio, PUCO staff, Ohio Consumers’ Counsel, Ohio Partners for Affordable Energy, Industrial Energy Users-Ohio, Ohio Energy Group, Ohio Manufacturers’ Association Energy Group, The Kroger Company, Interstate Gas Supply, and Retail Energy Supply Association.