Join the Campaign

23 February 2018News

Justin Olson: Utility customers should benefit from tax cuts

By Justin Olson Special to the Arizona Daily Star Jan 30, 2018

The Tax Cuts and Jobs Act signed by President Donald Trump last month has been great news for the economy. If I am successful in my effort at the Corporation Commission, this federal tax reform will not only lead to lower income taxes, it will also lead to lower monthly utility bills.

As a result of the legislation, many Arizona utility companies will see a significant reduction in their federal income tax bill. It is my desire that the tax savings be passed on to Arizona customers in the form of lower utility rates.

To accomplish this effort, I have scheduled a workshop at the Arizona Corporation Commission where I plan to propose an efficient process for passing these tax savings to consumers. The workshop takes place Wednesday at 10 a.m. at the commission office located at 1200 W. Washington St. in Phoenix. This public meeting will provide an opportunity for any interested party to speak in support or opposition to this proposal as the commission gathers public input to inform its decision on this issue.

If you can’t make it to the meeting, there will be a live broadcast feed at You can also find a past meeting archive there.

As a professional tax analyst, the possibility of federal tax reform captured my attention when I was appointed to the commission by Gov. Doug Ducey in October. I was very excited last month to see the congressional legislation succeed in making the United States’ income tax rates more competitive. Among other changes, the legislation dramatically lowers the corporate tax rate from 35 to 21 percent. This rate reduction will lead to significantly lower tax expense for many utilities whose rates are set by the commission.

The effect is not insignificant. Last year, the commission approved an adjustment provision in the APS rate case. I am very encouraged by the recent response from APS to lower customer bills by a total of $119 million a year. The estimate would reduce monthly residential bills by an average of $4.68 per month.

But this effort does not end with APS. I expect all for-profit electric, gas and water utilities to present similar plans. The day after the passage of the legislation, I requested our commission to open up a new docket on the tax reduction. Our commission was one of the first public utility commissions in the United States to call for an adjustment of the utility rates.

I am happy to report that my fellow commissioners, the commission staff, and many regulated utilities have been responsive to this effort. It is a significant task to adjust hundreds of utility rates in short order. But I am confident that, with the support of the consumers, the commission will be successful in passing these savings on to ratepayers.

The economic growth spurred by the federal tax reform is already evident. Adding utility rate cuts to the tax rate reduction will fuel that economic growth to even further heights.