Lawmakers: Corporate tax savings should go to utility rate payers
Thanks to the new federal tax law, Minnesota's investor-owned utilities are seeing their corporate income tax rate drop from 35 percent to 21 percent.
Early estimates put the savings at $200 million annually. So where does that savings go?
"As regulated monopolies, we need to make sure that money is returned to the rate payers and not used for any other purpose," said Rep. Nolan West, R-Blaine, during a news conference Tuesday. West and Rep. Pat Garofalo, R-Farmington, announced legislation that would direct the tax savings to utility rate payers retroactive to Jan. 1.
The Minnesota Public Utilities Commission is seeking information on the impact of the new federal tax law. It's early in the process, but so far some utilities have suggested alternatives to rate refunds, such as increasing capital investments or paying down debts sooner. Others have said they are still analyzing the tax law's impact and how the tax savings could be spent.
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Garofalo said lower gas and electricity rates can create jobs in Minnesota.
"This means more money in the pockets of small businesses, families, even large energy users. This is going to mean more money into Minnesota's economy, and it's going to provide more affordable rates for our customers," he said.
The Minnesota Department of Commerce is also planning to weigh in on the discussion of how the utilities' tax savings should be handled.
"Commerce's role is to protect rate payers and wants to make sure Minnesotans aren't paying more than they should on their utility bills," spokeswoman Julia Miller said.