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ICC orders utilities to return tax savings to customers

The Illinois Commerce Commission Thursday approved tariffs requiring Ameren Gas, Illinois-American Water Co., Peoples Gas, North Shore Gas and Nicor Gas 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. Customers will begin seeing credits to their utility bills in the coming months.

illinoiscommercecommissionlogoUtilities collect tax expenses through their rates. The Federal Tax Cuts and Jobs Act of 2017, effective Jan. 1, 2018, reduced the corporate income tax rate from 39 percent to 21 percent.

“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 ICC staff worked closely with the five utilities, as well as the Citizens Utility Board, the Office of the Illinois Attorney General and other interested parties to develop the tax refund tariffs that were approved.

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


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