Electric Corporation To Use Cash From Tax Cut To Lower Energy Bills
Washington, D.C., based utility company Pepco recently announced they plan to use funds made available by the newly signed tax reform bill to lower customer’s energy bills, confirming the GOP talking point that savings from the legislation would trickle down to consumers.
The utility giant filed plans to provide a credit to some 296,000 electricity consumers in D.C. with the Public Service Commission of the District of Columbia, that will determine how the savings will ultimately be distributed to consumers.
“The tax law will result in lower bills for our customers and lower taxes for Pepco,” Dave Velazquez, President and CEO, Pepco Holdings, said in the Jan. 5 statement. “We are pleased to provide these savings to our customers, while at the same time ensuring we are making prudent investments in the local power grid to maintain the safe, reliable, and affordable service our customers have come to expect.”
The tax bill, signed into law on Dec. 22, dramatically reduced the corporate tax burden, lowering the rate from 35 to 21 percent.
The bottom line bolstering legislation has led a number of other utility companies, including Baltimore Gas & Electric and Oregon-based Pacific Power, to make similar vows to pass along tax savings to consumers.
Utility companies, which often enjoy effective negative tax rates due to generous government subsidies, also benefit from the bill’s deduction provision. Under the new legislation, utility firms are entitled to deduct 100 percent of a capital project expense in its first year, rather than in small increments over time, as was the case under the previous system.
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