PSC Approves $82 million in Customer Benefits from Federal Tax Reform Law for Atlanta Gas Light Customers
Action avoids potential increases in 2018 and 2019 by freezing rates, funds safety & compliance investments, and credits $16 million to customers
ATLANTA, May 15, 2018 /PRNewswire/ -- The Georgia Public Service Commission (PSC) today voted to approve a stipulation reached between its staff and Atlanta Gas Light Company (Atlanta Gas Light) that provides for $82 million in customer benefits stemming from the Tax Cuts and Jobs Act (TCJA) of 2017, including $16 million in rate credits to be passed on to Atlanta Gas Light customers beginning in July.
"We are committed to providing efficient and effective energy solutions to our communities," said Bryan Batson, president of Atlanta Gas Light. "The PSC's order strikes the proper balance of allowing Atlanta Gas Light to continue making important safety and modernization investments in infrastructure programs while returning the net benefits of tax reform to customers."
The stipulation recognizes the benefits of the federal tax reform law, including the lowering of the federal corporate income tax rate from 35 to 21 percent. It also factors in the negative impacts to utilities, such as the loss of bonus deprecation and cash flow shortfall caused by the change in tax rates. To compensate for that loss in working capital, the PSC agreed to adjust the Company's equity ratio, which should benefit the utility and customers by helping protect credit ratings and preserve lower borrowing costs.
In December, prior to the passage of the TCJA, Atlanta Gas Light had proposed a base rate increase of approximately $22 million beginning in June of this year (see release here) and approximately $25 million next year to fund critical long term infrastructure programs and other compliance initiatives. The savings produced from the lower tax rates eliminates the need to raise rates for the next two years, credits $16 million to customers, and reduces by approximately $19.5 million the balance owed by customers that covers the cost of a previously completed pipeline replacement program.
Rates will remain at current levels for the next two years under the approved stipulation and Atlanta Gas Light must file a full rate case by June 2019. Customers will receive $8.52 in credits split evenly between their July and October bills issued by natural gas marketers.
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