APS customers will see lower bills starting in March, thanks to Donald Trump’s tax plan
Ryan Randazzo, The Republic | azcentral.com
Arizona Public Service Co. customers will see an average $5.40 drop in their monthly bills starting in March thanks to President Donald Trump’s tax cuts, officials said Thursday.
The Arizona Corporation Commission, which regulates APS and other utilities in the state, unanimously voted to approve the change.
APS asked for the rate cut in January, saying the president’s tax cuts would allow it to cut $119 million from its rates. The company now will be taxed at 21 percent, compared with 35 percent before the changes. APS passes its tax expenses on to customers.
The average residential APS customer uses 1,100 kilowatt-hours of electricity each month and will see a cut of $5.40.
The tax change would only reduce the cost of each kilowatt-hour of electricity used, and is not a flat cut to the bill. Homes using more than the average amount of electricity would see bigger savings.
Later this year, the tax changes will be recalculated and the rate cut could be increased.
The cut is separate from a rate increase the Corporation Commission approved in August on a 4-1 vote. That raised household bills an average of $6 a month.
As part of that increase, customers now must choose new rate plans with adjustments in their basic service fees, kilowatt-hour prices and other elements — such as the time-of-use hours.
APS serves more than 1.1 million customers across the state and serves about half the homes and businesses in the metro Phoenix area. The rest of the Phoenix area is served by Salt River Project, but those customers will not see any reductions due to the tax changes.
SRP is an Agricultural Improvement and Power District and does not collect federal income tax through its customers.
However, other Arizona electric, gas and water utilities could present similar plans. After the tax legislation passed Congress last month, Arizona Corporation Commissioner Justin Olson asked all regulated utilities in the state that collect tax revenue through customers to submit comments to the regulators on possible rate cuts.
Commissioner Boyd Dunn applauded APS moving so quickly.
“I think it has set a standard that I hope all other utilities will follow,” Dunn said.
Other states are taking similar measures to reduce rates because their utilities also pass tax expenses on to customers, and the change should warrant reductions for them.