Illinois Commerce Commission Orders Five Major Illinois Utilities to Share Tax Savings with Customers

Illinois — The Illinois Commerce Commission Thursday approved tariffs requiring Peoples Gas, North Shore Gas, Nicor Gas, Ameren Gas and Illinois-American Water Company to pass on to their customers the savings from reductions in federal corporate income taxes. The five companies are among the largest utilities in the State of Illinois. Customers of these companies will begin seeing credits to their utility bills in the coming months.

Utilities, including Peoples Gas, North Shore, Nicor, Ameren and Illinois-American collect tax expenses through their rates. The Federal Tax Cuts and Jobs Act of 2017 (TCJA), effective January 1, 2018, reduced the corporate income tax rate from 39% to 21%.

“The Commission’s orders Thursday will ensure that tax savings will be passed on to utility customers,” said Commission Executive Director Cholly Smith. “In light of steep reductions in corporate taxes it was vital to find a way to promptly pass savings to consumers. The Commission’s action does exactly that.”

The impact of the tax changes will vary based on the size of the company, but are expected to result in 2018 savings that range from an estimated $3.3 million for North Shore customers to over $30 million per year for Peoples Gas.

The Commission approved Variable Income Tax Adjustment Riders (“Riders VITA”) for each of the utilities. The Riders require each utility to begin crediting consumers for the estimated tax savings, beginning with each utility’s next billing cycle. At the end of each year, the Companies will file a proceeding with the Commission to reconcile the estimated tax savings with the actual savings recognized by the Company. This reconciliation will ensure that all tax savings are reflected in customer rates.

The Commission’s Staff worked closely with Nicor, Peoples, North Shore, Ameren and Illinois American, the Citizens Utility Board, the Office of the Illinois Attorney General and other interested parties to develop the tax refund tariffs that were approved by the Commission.

In January Nicor Gas released a statement say they plan to file testimony with the Illinois Commerce Commission (ICC) seeking approval to pass along tax reduction savings to its 2.2 million natural gas customers in Illinois. If the new program is approved, Nicor Gas will begin providing a credit to lower customers’ bills.

“Every customer deserves reliable energy at a price they can afford,” said Melvin D. Williams, Nicor Gas president. “The benefits of new tax law will lower costs for the company, which we are pleased to share with our customers.”

Earlier this year the Commission approved requests from Commonwealth Edison Company and Ameren electric to begin including estimated credits for the tax changes on customers’ bills.


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