Editorial: Utilities show signs of sharing windfall with consumers

August 23, 2018 GMT

Ever so reluctantly, it seems utility companies that serve West Virginians have begun to respond to calls from their residential and municipal customers to more directly pass on their tax cut savings to ratepayers.

Appalachian Power and Wheeling Power have filed a settlement agreement seeking to use tax reform funds to offset fuel and vegetation management costs, allowing customer rates to remain stable for two years. West Virginia American Water recently announced a proposal for its savings that would include the potential for lower water rates.

This spring, the utilities had requested rate increases - commonplace nowadays - to offset what their officials said were rising maintenance costs and lower usage rates, even as they stood to save millions from corporate tax reductions. Unsurprisingly, the move didn’t sit well with customers or local officials, who took their objections to the Public Service Commission of West Virginia, which will decide on the rates they can charge.


We understand that utility companies also have been met with rising maintenance and operating costs. But as the PSC meets again Friday to consider a revised plan put forth by the water company, we urge the commission to consider that significance, and what it would mean to customers - many struggling to afford their basic necessities as is - to have the tax savings applied more directly rather than the roundabout way the companies initially pitched.

Keeping rates stable for the next two years is preferable to the alternative, but still doesn’t provide the immediate relief ratepayers anticipated. We’d encourage the folks at Appalachian Power to go back to the drawing board to determine if more can be done to highlight the tax cuts savings in peoples’ pocketbooks.

One can appreciate the utility companies’ desire to invest in infrastructure improvements and other maintenance tasks to keep future utility rates from rising. However, economists at the Penn Wharton Budget Model at the University of Pennsylvania have predicted that the savings utilities will see from the tax cuts are expected to multiply by the billions over the next three years, according to The New York Times.

That time frame seems like it would hold plenty of opportunities to reward customers with at least a meager reduction in their bills now, while still applying the savings toward future needs and costs in the coming years.

“When you’re insulated from market competition and subject to regulation, the benefits should mostly pass through to consumers,” Jason Bordoff, director of Columbia University’s Center on Global Energy Policy, told the Times in January.


You’d be hard-pressed to find a West Virginian who doesn’t agree with that logic.

That monopoly utilities have in the state is the reason the PSC and its consumer advocates need to continue pinning down company officials for clear answers on how their tax cut savings are being passed on to those paying monthly bills.

Though it’s taken some cajoling, we’ve begun to see movement toward better allocation of the benefits of President Trump’s tax cuts act. Now it’s up to the PSC to maintain pressure over the state’s utility companies to ensure they do right by their customers - sooner, rather than later.