JEFFERSON CITY, Mo. – Following years of gridlock in Washington, D.C., Missourians were thrilled to see real, meaningful federal tax relief signed into law. These tax cuts are already producing higher wages and billions in much needed economic investment. But, for this tax relief to be fully realized by Missouri families and businesses, there are additional steps state government can and must take.
As a result of the federal tax legislation, State Sen. Ed Emery, R-Lamar, introduced an amendment to Senate Bill 564, the rate cap bill, which is pending before the Missouri Senate. The proposed amendment helps maximize federal tax cuts for Missourians. This amendment, contained in SB 564’s Senate Substitute, would cut electric bills by more than $100 million per year and put that money back into Missourians’ pockets in a matter of weeks, not years.
“Because the federal legislation cut the corporate income tax rate from roughly 39 percent to 21 percent, regulated utilities in Missouri will pay less in taxes,” stated Sen. Emery. “This money should go back to customers who are paying utility rates based on the old tax brackets. States with newer, more efficient regulatory models, are able to quickly refund these dollars back to utility customers. In fact, due to grid modernization language passed in Illinois in 2011, utility customers in Illinois will soon see millions in rate cuts.”
Unfortunately, under Missouri’s outdated, century-old regulatory mode, there is no mechanism to quickly refund these dollars to ratepayers. While the Missouri Public Service Commission (PSC) has opened a docket to study the issue, any rate reductions that might occur could be years away, and even then customers may not receive the full tax benefit from the federal tax change.
This proposed amendment gives the PSC one-time authority to change rates within 90 days for electric utilities not currently in a rate case. This means Missourians could receive more than $100 million in rate relief by mid-year. Without this amendment, customers may not receive full tax benefits, and any benefits they ultimately receive would be substantially delayed.
“I look forward to working with all of my colleagues in the Missouri General Assembly to ensure that Missourians see a substantial amount of rate relief by this summer,” stated Sen. Emery.
For more on this bill and others sponsored by Sen. Emery, visit http://www.senate.mo.gov/emery/.