March 8, 2018 • EPE Related News
El Paso Times: El Paso Electric proposes refunding $27 million to Texas customers for past tax deductions
El Paso Electric has made it official: It wants to return $27 million to El Paso area customers in the next 12 months due to lower federal corporate tax rates that took effect in January.
Under the company's request filed Thursday with Texas regulators, residential customers in Texas would see their electric bills decrease an average $3.83 per month, or an average 4.4 percent decrease, for one year beginning April 1.
The federal tax refunds will wipe out the company's $14.5 million rate increase that took effect in July.
The filing came only two days after El Paso Electric officials told the El Paso Times that they estimated the company would return $21 million to $25 million to Texas customers due to federal tax deductions the company took under the old federal corporate tax laws.
Company officials filed the request before their original April target because the documents were completed sooner than originally expected, a company official said.
Every customer class would see a tax refund on monthly electric bills, including small commercial customers, who would see an average monthly bill decrease of 4.6 percent. Those customers already had a 2.6 percent reduction in rates under the new rates approved last year.
The company had no dollar estimates for bill reductions for the other customer classes.
"One of the important provisions of our rate case settlement last year was to create a mechanism to pass-through the tax savings stemming from the reduction in the federal statutory income tax rate that was recently enacted,” El Paso Electric Chief Executive Officer Mary Kipp said in a statement.
"We worked with all the parties in the case to set up a means to pass that savings along to our customers quickly and efficiently," Kipp said.
The company expects to provide a monthly tax refund on electric bills beyond April 2019, and it will update the bill-reduction amounts annually, according to its filing. The tax refunds will continue until the company establishes new rates under a future rate case. It did not state in the filing when the next rate case is expected.
The company's proposal must be approved by the Texas Public Utility Commission, the city of El Paso, and other municipalities in its West Texas service area before it can be implemented, officials noted in a news release.
The company is working with the New Mexico Public Regulation Commission to determine how refunds would be made to the company's customers in the Las Cruces area, company officials said earlier this week. The company hasn't yet determined the refund amounts in New Mexico.
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