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Shareholders in New York’s utility companies won’t reap a tax windfall from the new federal tax law under a plan from Gov. Andrew M. Cuomo (D).
Cuomo ordered the state Public Service Commission (PSC) Jan. 9 to take steps to ensure that any windfall from a reduction in federal corporate income taxes be returned to utility customers.
The move is the latest effort by Cuomo to fight back against the federal tax bill ( Pub. L. No. 115-97). Until now, he has been focused on alleviating the impact of the reduction in the state and local tax deduction, threatening to sue the federal government, among other possibilities.
“We will do everything in our power to keep this windfall from lining the pockets of the top 1 percent, and deliver savings directly to hardworking New Yorkers,” Cuomo said in a statement.
A number of other states have taken—or are considering taking—similar steps, including Illinois, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Missouri, Rhode Island, and South Dakota.
Cuomo said the PSC action will impact at least six major electric and gas companies and a utility industry with some $24.5 billion in annual operating revenue. A portion of the potential tax windfall would normally be turned over to ratepayers in PSC rate cases, but the new action would ensure that all of the windfall is returned, according to Cuomo.
“As we’ve pointed out many times before, customers will see lower bills if you lower taxes and fees that typically make up one-third of their monthly utility bills,” Michael S. Clendenin, a spokesman for Consolidated Edison Inc., told Bloomberg Tax in an email. “The expected savings from federal income tax reductions will be passed onto customers and help lower their bills, in a manner determined by the Public Service Commission.”
With assistance from Michael J. Bologna (Chicago), Christopher Brown (St. Louis), Alex Ebert (Columbus, Ohio), Nushin Huq (Houston), and Aaron Nicodemus (Boston).
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Text of the PSC order instituting proceeding is at http://src.bna.com/vuZ.
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